Mr. Daniel Oh reports
BARRICK REPORTS 2016 FULL YEAR AND FOURTH QUARTER RESULTS
Barrick Gold Corp. has released its 2016 full-year and fourth quarter results. All amounts are expressed in U.S. dollars.
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For 2016, Barrick reported net earnings attributable to equity holders of Barrick (or net earnings) of $655-million (56 cents per share) and adjusted net earnings (1) of $818-million (70 cents per share).
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The company reported annual revenues of $8.56-billion, net cash provided by operating activities (or operating cash flow) of $2.64-billion and free cash flow (2) of $1.51-billion.
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Full-year gold production was 5.52 million ounces. Cost of sales applicable to gold was $798 per ounce, and all-in sustaining costs (3) were $730 per ounce.
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Barrick reported fourth quarter net earnings of $425-million (36 cents per share) and adjusted net earnings (1) of $255-million (22 cents per share).
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Fourth quarter revenue was $2.32-billion, operating cash flow was $711-million and free cash flow (2) was $385-million.
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Gold production in the fourth quarter was 1.52 million ounces, at a cost of sales applicable to gold of $784 per ounce and all-in sustaining costs (3) of $732 per ounce.
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Proven and probable gold reserves were 85.9 million ounces (4) as of Dec. 31, 2016.
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For 2017, production guidance is 5.60 million to 5.90 million ounces of gold, at a cost of sales applicable to gold of $780 to $820 per ounce and all-in sustaining costs (3) of $720 to $770 per ounce.
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Barrick intends to reduce its total debt by $2.9-billion, to $5-billion, by the end of 2018 -- half of which Barrick is targeting in 2017.
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The board of directors has approved an increase in Barrick's quarterly dividend from two cents per share to three cents per share.
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An operations and technical update will be webcast on Feb. 22 on Barrick's website. Please join Barrick for additional technical insights on its operations, projects and other priorities.
Barrick reported annual results that exceeded the company's key targets for the year. In 2016, Barrick's mines generated operating cash flow of $2.64-billion and free cash flow (2) of $1.51-billion -- a record level of annual free cash flow for the company. Barrick reduced its cost of sales applicable to gold to $798 per ounce, and its all-in sustaining costs (3) fell by 12 per cent, to $730 per ounce. Barrick continued to strengthen its balance sheet, cutting its total debt by $2.04-billion, or 20 per cent. Barrick also brought greater discipline and rigour to its capital allocation process with the appointment of the company's first-ever chief investment officer.
Strategic framework
Barrick's vision is the generation of wealth through responsible mining -- wealth for its owners, its people, and the countries and communities with which it partners. In support of this vision, Barrick's overarching objective is to grow its free cash flow per share.
Barrick is cultivating a high performance culture defined by the following principles: a deep commitment to partnership, consistent execution, operational excellence, disciplined capital allocation and continual self-improvement. Barrick is obsessed with talent, and seeks out fresh perspectives from other industries, challenging itself to think differently as it aims to transform itself into a leading 21st-century company.
Barrick will grow free cash flow per share over the long term by: maintaining and growing industry-leading margins, increasingly driven by innovation and Barrick's digital transformation; managing its portfolio and allocating capital with discipline and rigour; and leveraging its distinctive partnership culture as a competitive advantage.
Barrick's prospects for growing free cash flow per share build on a foundation of core mines that are among the longest-life, lowest-cost gold operations in the world. The company has the largest gold reserves and resources in the industry (5), including a deep pipeline of projects that provide extraordinary optionality and leverage to gold prices. Barrick's exploration programs have a demonstrated record of value creation. As well, Barrick is evaluating acquisitions and partnerships with the potential to improve the overall quality of its portfolio over the long term.
Growing free cash flow per share through industry-leading margins
Through its best-in-class approach, Barrick pursues industry-leading margins by continuously improving the productivity and efficiency of existing systems and operations. Equally, Barrick pursues step changes in performance by redesigning those systems and introducing new technologies, and it innovates to redefine what is possible.
As one example, Barrick is pursuing step changes in performance in Nevada by fully integrating the Cortez and Goldstrike operations. Over the past two years, these mines have benefited from increasing collaboration, including joint metal planning to optimize ore processing. By fully integrating the management of their assets, infrastructure and expertise, Barrick expects to further accelerate improvements in efficiency and productivity. For example, Barrick will fully integrate processing operations and create an integrated digital operations management centre that will serve both mines -- all under a single, site-based leadership structure. Barrick will also develop an integrated strategic plan for the combined operation that optimizes site resources and capital spending to maximize long-term value creation.
Barrick's digital transformation will be another best-in-class priority for 2017. Since announcing its partnership with Cisco in September, Barrick has completed proofs of concept for digital projects at Cortez, its pilot digital operation, and the company is now implementing them in the field. This work is supported from Barrick's digital innovation centre in Elko, Nev., where front-line operators are working with software programmers and other external partners to develop customized digital solutions.
The integration of Cortez and Goldstrike will also allow Barrick to further accelerate the implementation and impact of digital transformation in Nevada. As Barrick continues to demonstrate value in the field, it intends to expand digital solutions to other Barrick operations, starting at Veladero, with a focus on digital environmental management systems. Barrick will provide further updates on digital projects during its operations and technical update on Feb. 22.
While today's digital technologies are already helping to improve the productivity and efficiency of Barrick's operations, in 2017 the company will develop a long-term innovation strategy to redefine what is possible in mining, including an innovation road map for the company.
Growing free cash flow per share through superior portfolio management
In 2016, Barrick continued to strengthen its investment review and capital allocation process with the appointment of Mark Hill as the company's first chief investment officer. Mr. Hill was head of mining and led the evaluations group at Waterton Global Resource Management, a private investment firm with an outstanding record of capital allocation -- expertise he combines with earlier experience at Barrick. The chief investment officer is responsible for ensuring that a high degree of consistency and rigour is applied to all capital allocation decisions at the company -- whether at existing operations, development projects, exploration (both near-mine exploration and greenfield exploration), or potential acquisitions and divestments. As part of Barrick's revamped capital allocation system, all proposals go through a rigorous, independent peer-review process led by the evaluations team, before they go to the investment committee. They are then ranked, prioritized and sequenced to optimize capital spending over time on a strategic basis, allowing Barrick to anticipate and plan for financing requirements.
Barrick expects its portfolio to deliver a 10- to 15-per-cent return on invested capital through metal price cycles and, as such, all new capital spending is measured against a hurdle rate of 15 per cent, based on the company's long-term gold price assumption of $1,200 per ounce. Over time, assets that are unable to meet Barrick's return expectations will be divested. Barrick is also continuously evaluating external opportunities to increase the long-term value of its portfolio through acquisitions, joint ventures and other partnerships.
Growing free cash flow per share through partnerships
Barrick believes that an authentic partnership culture is its most distinctive and sustainable competitive advantage. For Barrick, partnership means a trust-based culture, and the currency of trust is transparency. It is a culture of peers. Those who are part of Barrick recognize that in general, the collective is stronger than the aggregation of individuals. By embracing these values, Barrick aims to be the preferred partner of host governments and communities, the most-sought-after employer among the world's best talent, and the natural choice for long-term investors.
Last year, Barrick created a program to make every Barrick employee -- from the rock face to the head office -- an owner of the company, with an initial allocation of 25 common shares per person. Barrick expects this to grow over time, in line with Barrick's performance. Barrick's goal is not simply to be aligned with its owners; it wants its people to be owners.
Barrick also created a new partnership with Cisco to drive Barrick's digital transformation. Working with Cisco and other technology partners, Barrick has begun to develop its flagship digital operation at the Cortez mine in Nevada -- embedding digital technology in every dimension of the mine to deliver better, faster and safer mining. This transformation will improve not only productivity and efficiency, but also environmental and safety performance -- which will allow Barrick to build and maintain greater trust with communities, governments, NGOs (non-governmental organizations) and other partners.
Barrick continues to strengthen its relationships with other external partners, including Zijin Mining, Ma'aden and Antofagasta PLC -- its joint venture partners at the Porgera, Jabal Sayid and Zaldivar mines. Barrick is also working to develop new partnerships with the potential to unlock value across its business, and grow free cash flow per share over the long term.
Outlook 2017 to 2019
In 2017, Barrick expects to produce 5.60 million to 5.90 million ounces of gold, at a cost of sales applicable to gold of $780 to $820 per ounce and all-in sustaining costs (3) of $720 to $770 per ounce. This represents an improvement over Barrick's previous 2017 guidance of 5.0 million to 5.5 million ounces of gold at all-in sustaining costs (3) of $740 to $790 per ounce. As Barrick did last year, the company's intention is to improve upon its plans as it advances its digital transformation and other best-in-class initiatives.
For 2017, Barrick is once again targeting a free cash flow break-even gold price of $1,000 per ounce, which should ensure that Barrick can generate cash in periods of lower gold prices, while generating a windfall when gold prices rise.
For 2018, Barrick expects to produce 4.80 million to 5.30 million ounces of gold, at a cost of sales applicable to gold of $790 to $840 per ounce and all-in sustaining costs (3) of $710 to $770 per ounce.
In 2019, Barrick expects to produce 4.60 million to 5.10 million ounces of gold, at a cost of sales applicable to gold of $800 to $870 per ounce and all-in sustaining costs (3) of $700 to $770 per ounce.
Based on Barrick's current asset mix, and subject to potential divestments, Barrick expects to maintain annual production of at least 4.5 million ounces of gold through 2021.
Financial highlights
Full-year net earnings were $655-million (56 cents per share), compared with a net loss of $2.84-billion ($2.44 per share) in 2015. In 2016, adjusted net earnings (1) were $818-million (70 cents per share), compared with $344-million (30 cents per share) in 2015.
This significant improvement in earnings was largely due to $3.9-billion of impairment charges recorded in 2015, compared with net impairment reversals of $250-million recorded in 2016. Higher earnings were also driven by higher gold and copper prices, combined with higher sales volumes (excluding the impact of divested sites), lower operating costs, and lower expenses for exploration, evaluation and projects.
After adjusting for items that are not indicative of future operating earnings, adjusted net earnings (1) of $818-million in 2016 were 138 per cent higher than in 2015. This improvement was primarily due to higher gold and copper prices, higher gold and copper sales volumes (excluding the impact of divested sites), and lower operating costs.
Significant adjusting items to net earnings (pretax and non-controlling interest effects) in 2016 include:
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$199-million in foreign currency translation losses, including deferred currency translation losses released as a result of the disposal and reorganization of certain Australian entities in the first quarter of 2016, and unrealized foreign currency translation losses related to the devaluation of the Argentine peso on VAT (value-added tax) receivables;
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$114-million in other expense adjustments primarily relating to losses on debt extinguishment, partly offset by insurance proceeds relating to the 2015 oxygen plant motor failure at Pueblo Viejo;
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$43-million in significant tax adjustments primarily relating to a tax provision in Acacia in the first quarter of 2016;
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$42-million in disposition losses primarily relating to the divestment of 50 per cent of Zaldivar.
The above are partially offset by $250-million in net impairment reversals at Veladero and Lagunas Norte in the fourth quarter of 2016, net of an impairment charge relating to the writedown of Barrick's retained equity method investment in Zaldivar.
Full-year revenues were $8.56-billion, compared with $9.03-billion in 2015. Operating cash flow in 2016 was $2.64-billion, compared with $2.79-billion in 2015. Free cash flow (2) for 2016 was $1.51-billion, compared with $471-million (6) in 2015.
Excluding the proceeds of the Pueblo Viejo streaming transaction in 2015, operating cash flow for 2016 was $456-million higher than the prior year, despite a $355-million reduction in operating cash flow associated with the divestment of non-core assets. Strong operating cash flow was driven by higher gold prices and lower direct mining costs, as a result of lower energy and fuel costs (despite being hedged on a significant portion of fuel consumption), combined with lower labour, consumable and contractor costs, and improved operating efficiencies driven by best-in-class initiatives, as well as lower cash interest paid.
Fourth quarter net earnings were $425-million (36 cents per share), compared with a net loss of $2.62-billion ($2.25 per share) in the prior-year period. Adjusted net earnings (1) for the fourth quarter were $255-million (22 cents per share), compared with $91-million (eight cents per share) in the prior-year period.
Net earnings in the fourth quarter reflect an increase in realized gold and copper prices, and lower cost of sales, in addition to $146-million (net of tax effects and non-controlling interests) in net impairment reversals, compared with impairment charges of $2.6-billion (net of tax effects and non-controlling interests) recorded in the fourth quarter of 2015.
Fourth quarter revenues were $2.32-billion, compared with $2.24-billion in the prior-year period. Operating cash flow in the fourth quarter was $711-million, compared with $698-million in the fourth quarter of 2015. Free cash flow (2) for the fourth quarter was $385-million, compared with $387-million in the prior-year period.
Restoring a strong balance sheet
Achieving and maintaining a strong balance sheet remains a top priority. In 2016, Barrick reduced its total debt by $2.04-billion, or 20 per cent, slightly exceeding its $2-billion target for the year.
At the end of the fourth quarter, Barrick had a consolidated cash balance of approximately $2.4-billion (7). Barrick has less than $200-million in debt due before 2019 (8). About $5-billion, or 63 per cent of the outstanding total debt of $7.9-billion, does not mature until after 2032.
Barrick intends to reduce its total debt by $2.9-billion, to $5-billion, by the end of 2018 -- half of which Barrick is targeting in 2017. Barrick will achieve this by using cash flow from operations, selling additional non-core assets, and creating new joint ventures and partnerships.
Operating highlights
Barrick's operations delivered progressively stronger performance over the course of 2016, with three consecutive quarters of improved all-in sustaining cost guidance and gold production at the high end of Barrick's annual production forecast. These results reflect Barrick's continuing focus on capital discipline and best-in-class improvements that are driving greater productivity and efficiency.
Barrick also improved its safety performance, achieving a total reportable injury frequency rate (TRIFR) (9) of 0.40 -- the best result in the company's history. Since 2009, Barrick has reduced its TRIFR by 67 per cent. Despite these improvements, Meckson Makompe, an employee at the Lumwana mine, lost his life in a workplace accident last year. Subsequently, Williams Garrido, a contractor working at the Pascua-Lama project, was involved in a fatal accident this month. Every person at Barrick must go home safe and healthy every single day, and Barrick will never be satisfied with its performance until it achieves this paramount goal.
In 2016, Barrick's mines produced 5.52 million ounces of gold, at a cost of sales applicable to gold of $798 per ounce. All-in sustaining costs (3) were $730 per ounce, a reduction of 12 per cent compared with 2015. Barrick also reduced its cash costs (3) by 8 per cent, from $596 per ounce in 2015 to $546 per ounce in 2016.
Gold production in the fourth quarter was 1.52 million ounces, at a cost of sales applicable to gold of $784 per ounce and all-in sustaining costs (3) of $732 per ounce, compared with 1.62 million ounces, at a cost of sales of $848 per ounce and all-in sustaining costs (3) of $733 per ounce, in the prior-year period.
Copper production in 2016 was 415 million pounds, at a cost of sales attributable to copper of $1.43 per pound and all-in sustaining costs (10) of $2.05 per pound, in line with Barrick's guidance for the year. This compares with 511 million pounds, at a cost of sales attributable to copper of $1.65 per pound and all-in sustaining costs (10) of $2.33 per pound in 2015.
The Jabal Sayid project, a 50-50 joint venture with Saudi Arabian Mining Co. (Ma'aden), commenced commercial production on July 1, 2016. Barrick's 50-per-cent share of production in 2017 is expected to be 30 million to 40 million pounds.
In 2016, capital expenditures on a cash basis were $1.12-billion, compared with $1.71-billion in 2015. A decrease of $327-million, excluding the impact of $260-million in capital expenditures associated with divested sites, was primarily due to lower capitalized stripping costs at Veladero, a decrease in leach pad expansion costs at Veladero and Lagunas Norte, and Barrick's continuing focus on capital discipline across the company. Lower capital costs also reflected lower project spending compared with 2015, mainly relating to the completion of the thiosulphate leaching circuit at Goldstrike and decreased capital expenditures at Pascua-Lama.
Fourth quarter 2016 Full-year 2016 2017 guidance
Gold
Production (000s of ounces) 1,516 5,517 5,600 to 5,900
Cost of sales applicable to gold ($ per ounce) 784 798 780 to 820
All-in sustaining costs ($ per ounce) (3) 732 730 720 to 770
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Copper
Production (millions of pounds) 101 415 400 to 450
Cost of sales applicable to copper ($ per pound) 1.45 1.43 1.50 to 1.70
All-in sustaining costs ($ per pound) (10) 2.04 2.05 2.10 to 2.40
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Total attributable capital expenditures ($ millions) 357 1,122 1,300 to 1,500
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Mineral resource management
Barrick manages the industry's largest inventory of gold reserves and resources (5), with a strong record of adding reserves and resources at its operations and projects through exploration.
The company's five core mines, which are expected to account for approximately 70 per cent of Barrick's production in 2017, have an average reserve grade of 1.84 grams per tonne -- more than double that of Barrick's peer group average (5). The majority of Barrick's reserves and resources are situated in regions where Barrick has proven operating experience, a critical mass of infrastructure, technical and exploration expertise, and established partnerships with suppliers, host governments and communities.
To calculate its 2016 reserves, Barrick has applied a short-term gold price assumption of $1,000 per ounce for the next four years, and a long-term gold price of $1,200 per ounce from 2021 onward, consistent with the company's approach in 2015.
As of Dec. 31, 2016, Barrick's proven and probable gold reserves were 85.9 million ounces (4), compared with 91.9 million ounces at the end of 2015. Approximately 1.9 million ounces were divested last year, and 6.8 million ounces were depleted through mining and processing. Barrick replaced approximately 60 per cent of the ounces it depleted through drilling and cost improvements at its operating mines. Significant additions included 1.1 million ounces at Lagunas Norte, 920,000 ounces at Hemlo and 640,000 ounces at the Goldstrike underground mine. Reserves at Pascua-Lama declined by 1.3 million ounces as a result of design modifications to enhance safety and environmental mitigation at the project. Reserves at Acacia's Bulyanhulu mine also declined by 430,000 ounces.
In 2016, measured, indicated and inferred resources were calculated using a gold price assumption of $1,500 per ounce. This compares with $1,300 per ounce in 2015.
Measured and indicated gold resources decreased to 75.2 million ounces (4) at the end of 2016, compared with 79.1 million ounces at the end of 2015. Approximately 4.3 million ounces of measured and indicated gold resources were divested in 2016, and 2.7 million ounces were upgraded to proven and probable gold reserves. Approximately 5.3 million ounces were added to measured and indicated resources as a result of using a $1,500-per-ounce gold price assumption.
Inferred gold resources increased to 30.7 million ounces (4) at the end of 2016, compared with 27.4 million ounces at the end of 2015. Approximately 3.2 million ounces were upgraded to measured and indicated resources. Approximately 5.3 million ounces were added through drilling, including 2.0 million ounces at Veladero, 1.3 million ounces at Hemlo and 1.1 million ounces at Alturas. Approximately 1.7 million ounces were added to inferred resources as a result of using a gold price assumption of $1,500 per ounce. The addition of 5.3 million ounces of inferred gold resources through drilling underscores the value of Barrick's investments in near-mine exploration, and sets the stage for replenishing and upgrading the company's reserve and resource portfolio in future years.
Proven and probable copper reserves were calculated using a short-term copper price of $2.25 per pound and a long-term price of $2.75 per pound. This compares with a short-term copper price of $2.75 per pound and a long-term price of $3.00 per pound in 2015.
Copper reserves, including copper within gold reserves, were 11.1 billion pounds (4) at the end of 2016, compared with 11.7 billion pounds at the end of 2015. Measured and indicated copper resources, including copper within measured and indicated gold resources, increased slightly to 9.7 billion pounds (4), compared with 9.6 billion pounds at the end of 2015.
Exploration and projects
Barrick has the largest gold reserves and resources in the industry (5), including some of the largest undeveloped gold projects in the world, giving Barrick significant optionality and leverage to gold prices. Barrick has a demonstrated record of creating value through exploration. Since 1990, Barrick has found 143 million ounces of gold for an overall discovery cost of $25 per ounce, or roughly half the average finding cost across the industry.
After several years of exploration focused primarily on existing core districts and projects, Barrick is increasing its budget and broadening its focus to include new greenfield opportunities.
Approximately 80 per cent of the total exploration budget of $185-million to $225-million is allocated to the Americas. The majority of the remaining budget is allocated to Acacia. Barrick's exploration programs balance high-quality brownfield projects, greenfield exploration and emerging discoveries that have the potential to become profitable mines.
In the short term, every one of Barrick's operating mines has the potential to identify new reserves and resources through near-mine exploration (MINEX). In many cases, these ounces can be quickly incorporated into mine plans, driving improvements in production, cash flow and earnings.
Over the medium term, Barrick is advancing a pipeline of high-confidence projects at or near its existing operations. These projects remain on track, with the potential to begin contributing new production to the portfolio beginning in 2021. This includes three significant projects in Nevada: the Cortez Deep South underground expansion; the potential development of an underground mine at Goldrush; and a significant expansion of throughput at the Turquoise Ridge mine. At the Lagunas Norte mine in Peru, Barrick is advancing a project to extend the life of the mine by mining the refractory material below the oxide orebody in the current open pit.
At the Alturas project in Chile, Barrick has added an additional 1.1 million ounces of inferred gold resources, bringing the total inferred resource to 6.8 million ounces (4). Barrick expects to complete a scoping study for Alturas in 2017. It has also initiated a prefeasibility study to evaluate the construction of an underground mine at Lama, on the Argentine side of the Pascua-Lama project. If the study concludes that a phased underground development option meets Barrick's risk and financial criteria, and is a more compelling investment proposition than the permitted binational open-pit plan, Barrick would expect to recalculate reserves and resources at Pascua-Lama to reflect an underground mine plan, likely resulting in a reduction to current reserves and resources at the project.
Barrick's successful record of greenfield exploration, combined with its existing pipeline of undeveloped projects, represents significant long-term value and optionality for shareholders.
Highlights of Barrick's greenfield exploration program for 2017 include the Fourmile target, adjacent to the company's Goldrush discovery in Nevada, and the Frontera district on the border of Argentina and Chile. Barrick has also formed new partnerships with Alicanto Minerals in Guyana and Osisko Mining in the Labrador Trough of Northern Quebec, where Barrick sees the potential to develop new core mineral districts.
Barrick's portfolio also contains a number of the world's largest undeveloped gold deposits, including Donlin Gold, Cerro Casale and Pascua-Lama. These projects contain nearly 31.5 million ounces of gold in proven and probable reserves (4) (Barrick's share) and 29.3 million ounces in measured and indicated resources (4) (Barrick's share).
At Donlin Gold, Barrick continues to advance through the permitting process. Barrick is also working with its joint venture partner on strategies to further optimize the project. This includes evaluating alternative development scenarios with the potential to lower capital intensity, as well as incorporating innovation, automation and other best-in-class opportunities to improve overall economics.
At Pascua-Lama, the initiation of a prefeasibility study for an underground mine at Lama in Argentina represents an opportunity to unlock the value of this deposit, and the wider district, through a phased approach that reduces execution risks and upfront capital requirements. Concurrently, the team in Chile remains focused on optimizing the Chilean components of the project.
Barrick will provide a detailed update on projects during its coming operations and technical update. Visit Barrick's website for webcast information and presentations on Feb. 22.
Filing of shelf prospectus
Shortly, Barrick intends to file an MJDS (multijurisdictional disclosure system) universal shelf prospectus qualifying for distribution of securities with a total offering amount of up to $4-billion with Canadian securities regulators and the U.S. Securities and Exchange Commission. The filing of a shelf prospectus is consistent with the practice of the majority of issuers included in the S&P/TSX 60 Index. The filing provides the company with increased financing flexibility over the next 25-month period. Barrick has no current intention to offer securities under the shelf prospectus.
Technical information
The scientific and technical information contained in this press release has been reviewed and approved by: Steven Haggarty, PEng, 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).
Endnotes
- "Adjusted net earnings" and "adjusted net earnings per share" are non-GAAP (generally accepted accounting principles) financial performance measures.
- "Free cash flow" is a non-GAAP financial performance measure which excludes capital expenditures from net cash provided by operating activities.
- "Cash costs" per ounce and "all-in sustaining costs" per ounce are non-GAAP financial performance measures.
- This is estimated in accordance with NI 43-101 as required by Canadian securities regulatory authorities.
- The comparison is based on the average overall reserve grade for Goldcorp Inc., Kinross Gold Corp., Newmont Mining Corp. and Newcrest Mining Ltd., as reported in each of the Kinross and Newmont reserve reports as of Dec. 31, 2015, as reported in the Goldcorp reserve report as of June 30, 2016, and as reported in the Newcrest reserve report as of Dec. 31, 2016.
- This excludes $610-million in proceeds related to the Pueblo Viejo streaming transaction.
- This includes $943-million cash primarily held at Acacia and Pueblo Viejo, which may not be readily deployed outside of Acacia and/or Pueblo Viejo.
- This amount excludes capital leases and includes project financing payments at Pueblo Viejo (60-per-cent basis) and Acacia (100-per-cent basis).
- Total reportable incident frequency rate (TRIFR) is a ratio calculated as follows: number of reportable injuries times 200,000 hours divided by the total number of hours worked. Reportable injuries include fatalities, lost-time injuries, restricted-duty injuries and medically treated injuries.
- "C1 cash costs" per pound and "all-in sustaining costs" per pound are non-GAAP financial performance measures.
- Due to Barrick's hedging activities, which are reflected in these sensitivities, Barrick is partially protected against changes in these factors.
- Using option collar strategies, the company has protected the downside of a portion of its expected 2017 copper production at an average floor price of $2.20 per pound, and can participate on the same amount up to an average price of $2.82 per pound. Its remaining copper production is subject to market prices.
KEY STATISTICS
(in U.S. dollars)
Three months ended 12 months ended
Dec. 31, Dec. 31,
2016 2015 2016 2015
Financial results (millions)
Revenues $ 2,319 $ 2,238 $ 8,558 $ 9,029
Cost of sales 1,454 1,768 5,405 6,907
Net earnings (loss) (1) 425 (2,622) 655 (2,838)
Adjusted net earnings (2) 255 91 818 344
Adjusted EBITDA (2) 1,049 722 3,827 3,187
Total project capital expenditures (3) 51 (49) 175 150
Total capital expenditures -- sustaining (3) 299 303 944 1,359
Net cash provided by operating activities 711 698 2,640 2,794
Free cash flow (2) 385 387 1,514 1,081
Per-share data (dollars)
Net earnings (loss) (basic and diluted) 0.36 (2.25) 0.56 (2.44)
Adjusted net earnings (basic) (2) 0.22 0.08 0.70 0.30
Operating results
Gold production (thousands of ounces) (4) 1,516 1,619 5,517 6,117
Gold sold (thousands of ounces) (4) 1,519 1,636 5,503 6,083
Per-ounce data
Average spot gold price 1,222 1,106 1,251 1,160
Average realized gold price (2) 1,217 1,105 1,248 1,157
Cost of sales (Barrick's share) (5) 784 848 798 859
All-in sustaining costs (2) 732 733 730 831
Copper production (millions of pounds) (6) 101 138 415 511
Copper sold (millions of pounds) 107 132 405 510
Per-pound data
Average spot copper price 2.39 2.22 2.21 2.49
Average realized copper price (2) 2.62 2.16 2.29 2.37
Cost of sales (Barrick's share) (7) 1.45 1.09 1.43 1.65
All-in sustaining costs (2) 2.04 2.15 2.05 2.33
1. Net earnings (loss) represent net earnings attributable to the equity holders of the company.
2. Adjusted net earnings, adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization), free cash flow, adjusted net earnings per share, realized gold price, all-in
sustaining costs and realized copper price are non-GAAP financial performance measures with no
standardized meaning under IFRS (international financial reporting standards) and therefore may
not be comparable with similar measures presented by other issuers.
3. Amounts presented on a 100-per-cent accrued basis. Project capital expenditures are included in
Barrick's calculation of all-in costs, but are not included in Barrick's calculation of all-in
sustaining costs.
4. Production includes Acacia on a 63.9-per-cent basis and Pueblo Viejo on a 60-per-cent basis, both
of which reflect Barrick's equity share of production. Also includes production from Bald Mountain
and Round Mountain up to Jan. 11, 2016, the effective date of sale of the assets. For 2015,
includes production from Porgera on a 95-per-cent basis up to August, 2015, and on a 47.5-per-cent
basis thereafter, whereas 2016 figures are on a 47.5-per-cent basis, reflecting the sale of 50 per
cent of Barrick's interest in Porgera in third quarter of 2015. Sales include Barrick's equity
share of gold sales from Acacia and Pueblo Viejo.
5. Cost of sales per ounce (Barrick's share) is calculated as cost of sales -- gold on an attributable
basis excluding Pierina divided by gold ounces sold.
6. In 2016, reflects production from Jabal Sayid and Zaldivar on a 50-per-cent basis, which reflects
Barrick's equity share of production, and 100 per cent of Lumwana. The 2015 production includes
Zaldivar on a 100-per-cent basis up to Nov. 30 and on a 50-per-cent basis therafter, and 100 per
cent of Lumwana.
7. Cost of sales per pound (Barrick's share) is calculated as cost of sales -- copper plus Barrick's
equity share of cost of sales attributable to Zaldivar and Jabal Sayid divided by copper pounds
sold.
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