Ms. Angela Parr reports
BARRICK REPORTS FIRST QUARTER 2016 RESULTS
Barrick Gold Corp. has released its first quarter 2016 results (all amounts are in U.S. dollars).
Highlights:
- Barrick reported adjusted net earnings of $127-million (11 cents per
share)(1) and a net loss of $83-million (seven cents per share) in the first
quarter.
- The company generated $181-million in free cash flow(1) in the first
quarter, marking four consecutive quarters of positive free cash flow.
First quarter earnings before interest, taxes, depreciation and amortization were $696-million(1).
- Gold production in the first quarter was 1.28 million ounces at all-in
sustaining costs (AISC) of $706 per ounce(1).
- The company reduced all-in sustaining costs by 24 per cent and cash costs by 14
per cent compared with the first quarter of 2015, reflecting the impact of
continuing operating and capital cost savings initiatives, as well as lower
fuel prices and foreign exchange gains.
- All-in sustaining cost guidance for 2016 has been reduced to $760 to $810
per ounce, down from original guidance of $775 to $825 per ounce. The company continues to expect gold production of five million to 5.5 million ounces for the
year.
- The company has reduced total debt by $842-million year to date and it remains
on track to achieve its $2-billion debt-reduction target for the year.
- During the quarter, the company established a growth group, comprising Rob
Krcmarov, Catherine Raw and Kevin Thomson, to develop and advance
strategies that will grow free cash flow per share over the long term.
Barrick Gold reported adjusted net earnings of $127-million (11 cents per share) for the first quarter and a net loss of $83-million (seven cents per share). The net loss for the quarter primarily reflects the impact of one-time foreign currency losses. First quarter free cash flow was $181-million and EBITDA was $696-million.
Production in the first quarter was 1.28 million ounces of gold at all-in sustaining costs of $706 per ounce. Cash costs were $553 per ounce(1). The company continues to expect full-year production of five million to 5.5 million ounces of gold at lower all-in sustaining costs of $760 to $810 per ounce.
Operations performed well in the first quarter as the company began to deliver on its 2016 priorities, including progress on lowering free cash flow break-even gold price to $1,000 per ounce, reducing total debt by $2-billion, implementing best in class to improve efficiency and productivity across all operations, and maintaining strict capital discipline.
Strategic framework
After a year of renewal that laid the foundation to create long-term value for the company's owners, every action the company takes is focused on one overarching objective: growing free cash flow per share. The company is doing this through the pursuit of three strategic goals. The first is a profound commitment to building partnerships of real depth and trust with host governments, local communities, non-governmental organizations, indigenous people and others. The second goal is to produce the leading margins in the industry by operating in a way that is gold price agnostic. Whatever the gold price, the company is constantly pushing itself to reduce costs by being first in productivity and efficiency. That means a continuous, relentless cycle of improvement and innovation, such that the company should weather gold price volatility better than any other miner, while growing free cash flow per share over the long term. The third goal is superior portfolio management. The company measures its production in quality, not quantity. While the company produces fewer ounces than it has in recent years, it is generating significantly more free cash flow per share. The company will manage its portfolio to grow its cash margin over growing ounces, and it will assess existing and new opportunities, both internal and external, with that goal in mind.
Restoring a strong balance sheet
Strengthening the balance sheet remains one of the company's top priorities. In 2016, the company intends to reduce its total debt by at least $2-billion by drawing on existing cash balance, delivering free cash flow from operations, selling additional non-core assets, and creating new joint ventures and partnerships.
So far this year, the company has reduced its total debt by $842-million, representing 42 per cent of the debt-reduction target for the year. Since the start of 2015, the company has reduced its total debt by $3.95-billion, or roughly 30 per cent. This is expected to reduce the company's interest payments by approximately $180-million on an annualized basis.
The company's liquidity position is strong and continues to improve, underpinned by stronger free cash flow generation across the business, and modest near-term debt repayment obligations. At the end of the first quarter, Barrick had a consolidated cash balance of approximately $2.3-billion(2). The company has less than $200-million in debt due before 2018 and about $5-billion of its outstanding debt of $9.1-billion does not mature until after 2032(3).
In the medium term, the company aims to reduce its debt to below $5-billion. Philosophically, the goal is to have no debt at all. The company will continue to pursue debt reduction with discipline, taking only those actions that make sense for the business, on terms it considers favourable to shareholders.
Financial discussion
Free cash flow for the first quarter was $181-million, marking four consecutive quarters of positive free cash flow after a prolonged period of negative free cash flow. This reflects the company's driving focus on maximizing free cash flow through greater capital discipline, improved operational efficiency and stronger cost management.
The company generated $696-million of EBITDA in the first quarter compared with $793-million in the prior-year period. First quarter adjusted net earnings were $127-million (11 cents per share) compared with $62-million (five cents per share) in the prior-year period. Higher adjusted net earnings compared with the prior-year period were driven by lower cash costs, higher sales volumes (excluding the impact of divested sites), as well as lower exploration and evaluation costs, in part reflecting lower spending at Pascua-Lama. The net loss for the quarter was $83-million (seven cents per share) compared with net earnings of $57-million (five cents per share) in the prior-year period. Lower net earnings primarily reflect the impact of lower production as a result of asset sales completed in the second half of 2015 and the first quarter of 2016, combined with lower realized prices.
Significant adjusting items (net of tax and non-controlling interest effects) in first quarter 2016 include:
- $119-million in foreign currency translation losses, including deferred
currency translation losses released as a result of the disposal and
reorganization of certain Australian entities, and unrealized foreign
currency translation losses primarily related to the devaluation of the
Argentine peso on value-added tax receivables;
- $26-million in losses on the extinguishment of debt;
- $17-million adjustment reflecting the impact of a decrease in the
discount rate used to calculate the provision for environment
remediation at closed mines.
Despite lower gold prices, operating cash flow was $451-million compared with $316-million in the prior-year period, reflecting the impact of lower energy and fuel prices, as well as the impact of reduced labour and contracting costs, and other operational efficiencies driven by best in class.
Operating highlights
The overarching objective as a business is to grow free cash flow per share in any foreseeable gold price environment. In support of this objective, the company intends to achieve and maintain industry-leading margins by improving the productivity and efficiency of its operations. This means a continuous, relentless cycle of improvement and innovation underpinned by the company's recently launched best-in-class program. The company's aspiration is to achieve all-in sustaining costs below $700 per ounce by 2019.
The company is making progress. In the first quarter of 2016, Barrick produced 1.28 million ounces of gold at all-in sustaining costs of $706 per ounce, compared with 1.39 million ounces at all-in sustaining costs of $927 per ounce in the prior-year period. When excluding the impact of divested mines, gold production for the quarter actually increased, driven by higher production at Cortez, Goldstrike and Pueblo Viejo.
Cash costs were $553 per ounce in the first quarter of 2016, compared with $642 per ounce in the first quarter of 2015. This represents a 24-per-cent reduction in all-in sustaining costs and a 14-per-cent reduction in cash costs, compared with first quarter of 2015. These savings were driven by the impact of continuing cost-saving initiatives, including lower sustaining capital spending and lower operating costs. First quarter costs also benefited from lower fuel prices and foreign exchange gains, primarily associated with the devaluation of the Argentine peso.
The company continues to expect full-year gold production of five million to 5.5 million ounces. The company has reduced its all-in sustaining cost guidance for 2016 to $760 to $810 per ounce, down from original guidance of $775 to $825 per ounce, reflecting the impact of lower fuel costs, favourable foreign exchange rates, and early best-in-class productivity and efficiency initiatives. The company has also lowered the top end of its capital expenditure guidance, now expected to be $1.35-billion to $1.55-billion, adjusted from original guidance of $1.35-billion to $1.65-billion.
As the company continues to embed best in class across the portfolio, it expects to identify additional savings opportunities over the course of the year.
GUIDANCE
Current Original
First 2016 2016
Gold quarter 2016 guidance guidance
Production (koz)(4) 1,280 5,000-5,500 5,000-5,500
AISCs ($ per ounce) 706 760-810 775-825
Cash costs ($ per ounce) 553 540-580 550-590
Copper
Production (Mlb)(4) 111 370-410 370-410
AISCs ($ per pound) 1.97 1.95-2.25 2.05-2.35
C1 cash costs ($ per pound)(1) 1.47 1.35-1.65 1.45-1.75
Total capital expenditures ($M)(5) 215 1,350-1,550 1,350-1,650
Cortez
The Cortez mine produced 247,000 ounces of gold in the first quarter at lower all-in sustaining costs of $469 per ounce. Lower costs primarily reflect the impact of higher sales volumes, combined with lower cash costs and lower sustaining capital spend, in part driven by progress on best-in-class initiatives. The company continues to anticipate 2016 production of 900,000 to one million ounces of gold. All-in sustaining cost guidance for the year has been reduced to $580 to $640 per ounce, down from $640 to $710 per ounce.
Priority best-in-class initiatives in execution at Cortez for 2016 are focused on reducing open-pit mining costs by improving the productivity and efficiency of open-pit operations. This includes optimizing haul truck loading and increasing haul truck availability by compressing preventive maintenance downtime, improving handover times and reducing unplanned maintenance. The mine is also targeting a reduction in long-duration shovel maintenance times to further improve open-pit mining productivity.
Following the completion of prefeasibility studies in late 2015, the company has moved two significant growth projects in the Cortez district to the feasibility study phase. This includes a feasibility study for expanded underground mining in the Deep South zone, below currently permitted areas of the Cortez Hills underground mine(6). The project has the potential to contribute average underground production of more than 300,000 ounces per year between 2023 and 2027, at average all-in sustaining costs of approximately $580 per ounce. Initial capital costs for Deep South are estimated to be $153-million. Barrick is also advancing a feasibility study for an underground mine at the company's Goldrush deposit, located six kilometres from the Cortez Hills mine. The prefeasibility study contemplates a mine life of 21 years, with average annual production of 440,000 ounces of gold in the first full five years of operation, at all-in sustaining costs of $665 per ounce. Initial capital costs are estimated to be approximately $1-billion.
On March 28, 2016, Barrick filed an updated National Instrument 43-101 technical report for the Cortez property. The capital expenditure estimates included in the report were based on the life-of-mine plan in place at Cortez in support of the year-end 2015 mineral reserve statement. Following subsequent optimization work, the company has made improvements to the Cortez mine plan that resulted in the deferral of certain capital expenditures. This optimized plan is reflected in the capital expenditure guidance provided by the company on Feb. 17, 2016, for the years 2016, 2017 and 2018.
Goldstrike
The Goldstrike mine contributed 249,000 ounces in the first quarter at all-in sustaining costs of $709 per ounce. Lower all-in sustaining costs primarily reflect lower sustaining capital spend in the quarter. Optimization of contract labour also helped to reduce underground mining costs by $22 per ounce compared with the prior-year period. The company continues to expect 2016 gold production of 975,000 to 1,075,000 ounces at all-in sustaining costs of $780 to $850 per ounce.
Major best-in-class initiatives in execution include increasing tonnes mined from the underground through improvements to dispatch systems and better paste-fill utilization. Goldstrike is also targeting an increase in overall equipment availability at the thiosulphate leaching plant through maintenance and reliability improvements.
Pueblo Viejo (60 per cent)
Barrick's 60-per-cent share of production from Pueblo Viejo for the first quarter was 172,000 ounces at all-in sustaining costs of $496 per ounce. Lower all-in sustaining costs were driven by lower cash costs, reflecting lower maintenance, contractor and energy costs, and a reduction in sustaining capital expenditures. The company continues to expect attributable production of 600,000 to 650,000 ounces of gold in 2016. All-in sustaining cost guidance for the year has been reduced to $550 to $590 per ounce, down from $570 to $620 per ounce.
Best-in-class priorities include a project to increase revenue by selling excess power generated by Pueblo Viejo's Quisqueya power plant to the national energy grid. The mine is also pursuing an opportunity to increase gold recoveries through adjustments to freshwater and reclaimed water use upstream and downstream from the autoclaves.
Lagunas Norte
The Lagunas Norte mine contributed 100,000 ounces at all-in sustaining costs of $551 per ounce in the first quarter. Higher all-in sustaining costs compared with the prior-year period primarily reflect the impact of lower production and lower grades as the operation nears the end of its existing mine life, in addition to higher capital expenditures, driven by higher capitalized stripping costs. Production in 2016 is expected to be 410,000 to 450,000 ounces at all-in sustaining costs of $570 to $640 per ounce.
Priority best-in-class initiatives in execution include efforts to increase production by improving the efficiency of the carbon-in-column circuit through incremental reductions in the residual amount of gold in barren solution returning to the leach pad. In addition, the mine has reduced operating costs through an initiative to renegotiate major contracts. This year, Lagunas Norte will also focus on improving equipment availability and lowering maintenance costs by reducing costs of replacement components, extending the life of components and reducing unplanned maintenance activities.
The company is now advancing a two-phase feasibility study on a plan to extend the life of Lagunas Norte by approximately nine years by mining the refractory material below the oxide orebody in the current open pit(6). This requires the installation of a grinding-flotation autoclave and carbon-in-leach processing circuit to treat the refractory material. The prefeasibility study, completed in late 2015, contemplates average annual production of 240,000 ounces of gold in the first five years at all-in sustaining costs of $625 per ounce. Initial capital costs are estimated to be approximately $640-million.
Veladero
The Veladero mine produced 132,000 ounces of gold in the first quarter at all-in sustaining costs of $675 per ounce. Lower all-in sustaining costs reflect a decrease in sustaining capital expenditures combined with lower cash costs, driven by cost-saving initiatives and the impact of local currency devaluation, including lower labour, maintenance and diesel costs. Production guidance for 2016 is unchanged at 630,000 to 690,000 ounces of gold. All-in sustaining cost guidance for the year has been reduced to $790 to $860 per ounce, down from $830 to $900 per ounce.
Best-in-class initiatives in execution for 2016 include more efficient contractor demand management, improvements in mine productivity through more efficient drilling, loading and hauling, completing more maintenance tasks in house, and improved planning and load sharing of auxiliary equipment.
The mine is also focused on improving its long-term business plan through optimizing crushing and conveying activities, selective high wall steepening to reduce costs, more efficient leach pad construction, maintenance cost reductions, and savings in supply chain.
Turquoise Ridge (75 per cent)
The Turquoise Ridge mine contributed 50,000 ounces of gold to Barrick in the first quarter at all-in sustaining costs of $728 per ounce. The company continues to expect production of 200,000 to 220,000 ounces in 2016 at all-in sustaining costs of $770 to $850 per ounce.
Best-in-class initiatives in execution at Turquoise Ridge include the implementation of an operator competency and training management system designed to drive greater consistency of production rates and sustainable increases in production over time. The mine is also implementing a project to improve the efficiency and effectiveness of ground support rehabilitation activities, while maintaining a focus on safety. In addition, Turquoise Ridge is targeting maintenance improvements for mining equipment to improve availability and utilization.
The company has completed a feasibility study for the development of a third shaft at Turquoise Ridge, which has the potential to increase output to an average of 500,000 ounces per year (100-per-cent basis) at all-in sustaining costs of $625 to $675 per ounce. The project would require initial capital expenditures of approximately $300-million to $325-million (100-per-cent basis) for additional underground development and shaft construction. Given the positive impact of early best-in-class efforts, the company has determined the optimal path forward is to defer the construction of an additional shaft in favour of a three-phase approach for the development of Turquoise Ridge. The first phase, under way now, contemplates additional improvements to sustain a throughput rate of 1,825 tonnes per day at the lowest possible cost. In support of this goal, the company is pursuing greater productivity through continuous mining, additional ventilation modifications and other alternative mining methods. The second phase contemplates the installation of a new ventilation shaft. Adding a ventilation shaft would allow Turquoise Ridge to maintain throughput of 1,825 tonnes per day as mining moves deeper and farther away from the existing shaft and ventilation infrastructure. The third phase, representing full implementation of the feasibility study, contemplates the conversion of the ventilation shaft into a full production shaft. Additional processing capacity would be required for production rates above 1,850 tonnes per day.
Other mines
Barrick's other mines -- consisting of Golden Sunlight, Hemlo, KCGM and Porgera -- contributed 208,000 ounces at all-in sustaining costs of $764 per ounce in the first quarter.
Acacia Mining (63.9 per cent)
Barrick's share of first quarter production was 122,000 ounces of gold at all-in sustaining costs of $959 per ounce. The company continues to expect its share of 2016 production from Acacia to be 480,000 to 500,000 ounces at all-in sustaining costs of approximately $950 to $980 per ounce.
Copper
Copper production in the first quarter was 111 million pounds at all-in sustaining costs of $1.97 per pound. For 2016, the company continues to anticipate copper production of 370 million to 410 million pounds. Reflecting the impact of successful best-in-class cost-reduction initiatives at Lumwana, the company has lowered its copper all-in sustaining cost guidance to $1.95 to $2.25 per pound, down from the original range of $2.05 to $2.35 per pound.
In April, 2016, the Zambian government introduced legislation that would replace the current 9-per-cent royalty on mining operations with a sliding-scale royalty rate, ranging from 4 per cent at copper prices below $2.04 per pound, 5 per cent at copper prices between $2.04 and $2.72 per pound, and 6 per cent at a copper price of $2.72 per pound and above. Legislation has also been introduced to remove the 15-per-cent variable profit tax on income from mining companies. The company expects these changes to be enacted in the second quarter of 2016, with an effective date of April 1, 2016.
The Jabal Sayid project, a 50/50 joint venture with Saudi Arabian Mining Company (Ma'aden), is expected to achieve commercial production in the second quarter of 2016, ramping up to a production rate of about 100 million pounds per year in the second half of 2017, as additional underground development is completed.
Creation of growth group
The company's overarching objective is to grow its free cash flow per share. Planning for and managing this future growth are critical. Achieving it relies on many groups working together, including mine exploration, global exploration, business development, the reserves and resources team, and finance. It also requires close collaboration with the company's general managers and executive directors. To support this effort, the company has created a new growth group at the most senior levels of the company. The group comprises Rob Krcmarov, executive vice-president, exploration and growth; Catherine Raw, executive vice-president and chief financial officer; and Kevin Thomson, senior executive vice-president, strategic matters.
The growth group will evaluate strategies to optimize the development of the company's existing reserves and resources, while adding new resources through exploration. It will also play a central role in assessing external acquisitions and earn-in opportunities, all with the objective of growing free cash flow per share over the long term. The group will serve as a central clearing house to ensure strategic alignment and appropriate co-ordination of all major growth initiatives across the company.
Exploration partnership
During the first quarter, Barrick formed a new exploration partnership with Alicanto Minerals Ltd. at the Arakaka gold project in Guyana. The Arakaka project is located in a relatively underexplored area of the highly prospective Guiana Shield. The project has a strike length of 12 kilometres, of which less than 5 per cent has been drill tested. As part of the agreement, Barrick has the option to earn a 65-per-cent interest in the project after meeting $10-million in financing requirements, including $8-million in exploration expenditures over four years, and $2-million paid to Alicanto upon completion of the exploration earn-in expenditures. Initial drill testing under this agreement is scheduled to commence in the second quarter.
UPDATED 2016 OPERATING AND CAPITAL EXPENDITURE GUIDANCE
GOLD PRODUCTION AND COSTS
Production AISCs(7) Cash costs(7)
(Moz) ($ per ounce) ($ per ounce)
Cortez 0.900-1.000 580-640 430-470
Goldstrike 0.975-1.075 780-850 560-610
Pueblo Viejo (60%) 0.600-0.650 550-590 420-450
Lagunas Norte 0.410-0.450 570-640 380-420
Veladero 0.630-0.690 790-860 520-570
Subtotal 3.500-3.900 660-730 470-520
Porgera (47.5%) 0.230-0.260 990-1,080 700-750
Acacia (63.9%) 0.480-0.500 950-980 670-700
KCGM (50%) 0.350-0.365 670-700 610-630
Hemlo 0.200-0.220 790-870 600-660
Turquoise Ridge (75%) 0.200-0.220 770-850 560-620
Golden Sunlight 0.030-0.045 1,000-1,050 920-990
Total gold 5.000-5.500(8) 760-810 540-580
COPPER PRODUCTION AND COSTS
Production AISCs C1 cash costs
(Mlb) ($ per pound) ($ per pound)
Zaldivar (50%) 100-120 2.20-2.40 1.70-1.90
Lumwana 270-290 1.80-2.10 1.20-1.50
Total copper 370-410 1.95-2.25 1.35-1.65
CAPITAL EXPENDITURES
(In millions)
Mine site sustaining 1,200-1,350
Project(9) 150-200
Total 1,350-1,550
2016 OUTLOOK ASSUMPTIONS AND ECONOMIC SENSITIVITY ANALYSIS
2016 Impact on
guidance Hypothetical Impact on EBITDA
assumption change AISCs (millions)
Gold revenue, net of
royalties $1,200/oz +/- $100/oz n/a $410
Copper revenue, net of
royalties $2.15/lb +/- $0.50/lb n/a $92
Gold all-in sustaining
costs
Gold royalties and
production taxes $1,200/oz $100/oz ($3)/oz $12
WTI crude oil
price(10,11) $34/bbl $10/bbl ($2)/oz $7
Australian dollar
exchange rate(10) 0.73:1 +10% $4/oz ($17)
Australian dollar
exchange rate(10) 0.73:1 -10% ($4)/oz $17
Canadian dollar
exchange rate 1.35:1 +10% ($5)/oz $21
Canadian dollar
exchange rate 1.35:1 -10% $6/oz ($26)
Copper all-in sustaining
costs
WTI crude oil
price(10,11) $34/bbl $10/bbl ($0.02)/lb $4
Chilean peso exchange
rate 691:1 +10% ($0.03)/lb $6
Chilean peso exchange
rate 691:1 -10% $0.04/lb ($7)
End notes
(1) Adjusted net earnings, free cash flow, EBITDA, all-in sustaining costs per ounce/pound, cash costs per ounce and C1 cash costs per pound are non-generally accepted accounting principles financial performance measures with no standardized definition under international financial reporting standards. For further information and detailed reconciliations, please see pages 35 to 40 of Barrick's first quarter 2016 report.
(2) Total includes $534-million held at Acacia and Pueblo Viejo, which may not be readily deployed outside of Acacia and/or Pueblo Viejo.
(3) Amount excludes capital leases and includes project financing payments at Pueblo Viejo (60-per-cent basis) and Acacia (100-per-cent basis).
(4) Barrick's share.
(5) Barrick's share on a 100-per-cent accrued basis.
(6) Scientific and technical information relating to the Cortez expanded underground mining project and the Lagunas Norte refractory ore mine life extension project contained in this press release has, in each case, been reviewed and approved by Rick Sims, registered member SME, senior director, resources and reserves of Barrick; Steven Haggarty, PEng, senior director, metallurgy, of Barrick; and Patrick Garretson, registered member SME, senior director, life-of-mine planning of Barrick. Each of Mr. Sims, Mr. Haggarty and Mr. Garretson is a qualified person as defined in National Instrument 43-101. For further information with respect to the key assumptions, parameters and risks associated with these projects, and other related technical information, please refer to the updated National Instrument 43-101 technical reports filed on SEDAR and EDGAR on March 28, 2016, for each of Barrick's Cortez and Lagunas Norte mines.
(7) Total gold cash costs and all-in sustaining costs per ounce exclude the impact of hedges and/or costs allocated to non-operating sites.
(8) Operating unit guidance ranges reflect expectations at each individual operating unit, but do not add up to corporate-wide guidance range total.
(9) The company has combined its previous capital expenditure categories of mine site expansion and projects into one category called project.
(10) Due to its hedging activities, which are reflected in these sensitivities, the company is partially protected against changes in these factors.
(11) Impact on EBITDA only reflects contracts that mature in 2016.
KEY STATISTICS
(In U.S. dollars)
Three months ended March 31,
2016 2015
Operating results
Gold production (thousands of ounces)(1) 1,280 1,390
Gold sold (thousands of ounces)(1) 1,306 1,385
Per-ounce data
Average spot gold price $ 1,183 $ 1,218
Average realized gold price(2) 1,181 1,219
Cash costs(2) 553 642
All-in sustaining costs(2) 706 927
All-in costs(2) 758 1,024
Cash costs (on a co-product basis)(2) 577 671
All-in sustaining costs (on a co-product basis)(2) 730 956
All-in costs (on a co-product basis)(2) 782 1,053
Copper production (millions of pounds)(3) 111 118
Copper sold (millions of pounds) 103 121
Per-pound data
Average spot copper price $ 2.12 $ 2.64
Average realized copper price(2) 2.18 2.55
C1 cash costs(2) 1.47 1.84
All-in sustaining costs(2) 1.97 2.40
Financial results (millions)
Revenues $ 1,930 $ 2,245
Net income (loss)(4) (83) 57
Adjusted net earnings(2) 127 62
Adjusted EBITDA(2) 697 798
Total project capital expenditures(5) 40 103
Total capital expenditures -- sustaining(5) 175 353
Operating cash flow 451 316
Free cash flow(2) 181 (198)
Per-share data (dollars)
Net income (loss) (basic and diluted) (0.07) 0.05
Adjusted net earnings (basic)(2) 0.11 0.05
(1) Production includes Acacia on a 63.9-per-cent basis and Pueblo Viejo on
a 60-per-cent basis, both of which reflect the company's equity share of
production. It also includes production from Bald Mountain and Round
Mountain up to Jan. 11, 2016, the effective date of sale of the assets. Two
thousand fifteen includes production from Porgera on a 95-per-cent basis,
whereas 2016 figures are on a 47.5-per-cent basis reflecting the sale of 50
per cent of Porgera in third quarter 2015. Sales include the company's
equity share of gold sales from Acacia and Pueblo Viejo.
(2) Realized price, cash costs, all-in sustaining costs, all-in costs, cash
costs (on a co-product basis), all-in sustaining costs (on a co-product
basis), all-in costs (on a co-product basis), C1 cash costs, adjusted net
earnings, adjusted EBITDA and free cash flow are non-GAAP financial
performance measures with standard definition under IFRS. Refer to the
non-GAAP financial performance measures section on pages 34 to 39 of the
company's management's discussion and analysis.
(3) Reflects production from Jabal Sayid and Zaldivar on a 50-per-cent
basis, which reflects the company's equity share of production. Two thousand
fifteen production includes Zaldivar on a 100-per-cent basis prior to the
sale of 50 per cent of the mine in fourth quarter 2015.
(4) Net income (loss) represents net income attributable to the
equityholders of the company.
(5) Amounts presented on a 100-per-cent accrued basis. Project capital
expenditures are included in the company's calculation of all-in costs, but
not included in its calculation of all-in sustaining costs.
PRODUCTION AND COST SUMMARY
Gold production
(attributable ounces) All-in sustaining
(000) costs(5) ($/oz)
Three months ended Three months ended
March 31, March 31,
2016 2015 2016 2015
Gold
Goldstrike 249 207 $ 709 $ 876
Cortez 247 133 469 962
Pueblo Viejo(1) 172 135 496 675
Lagunas Norte 100 178 551 461
Veladero 132 149 675 991
Turquoise Ridge 50 49 728 709
Acacia(2) 122 116 959 1,117
Other mines -- gold(3) 208 423 764 1,009
Total 1,280 1,390 $ 706 $ 927
Copper production
(attributable
pounds)(4) (millions) C1 cash costs(5) ($/lb)
Three months ended Three months ended
March 31, March 31,
2016 2015 2016 2015
Total 111 118 $ 1.47 $ 1.84
Total gold production
costs ($/oz)
Three months ended
March 31,
2016 2015
Direct mining costs before impact of hedges at
market foreign exchange rates $ 526 $ 623
Losses realized on currency hedge and commodity
hedge/economic hedge contracts 23 13
Byproduct credits (24) (29)
Royalties 28 35
Cash costs(5) 553 642
Depreciation 252 237
Total production costs $ 805 $ 879
Cash costs(5) $ 553 $ 642
General and administrative costs 37 40
Rehabilitation -- accretion and amortization
(operating sites) 7 25
Mine on-site exploration and evaluation costs 4 4
Mine development expenditures 57 120
Sustaining capital expenditures 48 96
All-in sustaining costs(5) $ 706 $ 927
All-in costs(5) $ 758 $ 1,024
Total copper production
costs ($/lb)
Three months ended
March 31,
2016 2015
C1 cash costs(5) $ 1.47 $ 1.84
General and administrative costs 0.06 0.05
Royalties and inventory impairments 0.14 0.28
Rehabilitation -- accretion and amortization
(operating sites) 0.01 0.01
Mine development expenditures 0.24 0.16
Sustaining capital expenditures 0.05 0.06
All-in sustaining costs(5) $ 1.97 $ 2.40
(1) Reflects production from Pueblo Viejo on a 60-per-cent basis, which
reflects the company's equity share of production.
(2) Reflects production from Acacia on a 63.9-per-cent basis, which
reflects the company's equity share of production.
(3) In 2016, other mines -- gold includes Golden Sunlight, Hemlo, Cowal,
Ruby Hill, Porgera on a 47.5-per-cent basis and Kalgoorlie. Also includes
production from Bald Mountain and Round Mountain up to Jan. 11, 2016, the
effective date of sale of these assets. In 2015, other mines -- gold
included Bald Mountain, Round Mountain, Golden Sunlight, Hemlo, Pierina,
Cowal, Ruby Hill, Plutonic up to Jan. 31, Kanowna up to March 1, Marigold,
Porgera on a 95-per-cent basis and Kalgoorlie.
(4) In 2016, reflects production from Jabal Sayid on a 50-per-cent basis
and from Zaldivar on a 50-per-cent basis, which reflects the company's
equity share. In 2015, reflects production from Zaldivar on a 100-per-cent
basis.
(5) Cash costs, all-in sustaining costs, all-in costs and C1 cash costs
are non-GAAP financial performance measures with no standard meaning under
IFRS. Refer to the non-GAAP financial performance measures section on
pages 34 to 39 of the company's MD&A.
CONSOLIDATED STATEMENTS OF INCOME
(In millions of U.S. dollars, except per share)
Three months ended March 31,
2016 2015
Revenue $1,930 $2,245
------ ------
Costs and expenses (income)
Cost of sales 1,324 1,708
General and administrative expenses 58 67
Exploration, evaluation and project expenses 55 86
Impairment charges 1 5
Loss (gain) on currency translation 139 (2)
Closed mine rehabilitation 23 8
Gain from equity investees (5) -
(Gain) loss on non-hedge derivatives (4) 3
Other expense (income) 14 (18)
------ ------
Income before finance costs and income taxes 325 388
Finance costs, net (211) (194)
------ ------
Income before income taxes 114 194
Income tax expense (186) (105)
------ ------
Net income (loss) (72) 89
====== ======
Attributable to
Equityholders of Barrick Gold (83) 57
Non-controlling interests 11 32
====== ======
Earnings (loss) per share attributable to
equityholders of Barrick Gold
Net income (loss)
Basic (0.07) 0.05
Diluted (0.07) 0.05
We seek Safe Harbor.
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