21:37:48 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Barrick Gold Corp
Symbol ABX
Shares Issued 1,166,902,835
Close 2018-07-11 C$ 17.01
Market Cap C$ 19,849,017,223
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Barrick estimates Q2 production of 1.07 million oz Au

2018-07-11 17:10 ET - News Release

Mr. Deni Nicoski reports

BARRICK REPORTS PRELIMINARY SECOND QUARTER PRODUCTION RESULTS

Barrick Gold Corp. had preliminary second quarter production of 1.07 million ounces of gold and 83 million pounds of copper, as well as preliminary second quarter sales of 1.04 million ounces of gold and 74 million pounds of copper. The average market price for gold in the second quarter was $1,306 per ounce, while the average market price for copper was $3.12 per pound. All amounts are expressed in U.S. dollars.

Preliminary second quarter gold production of 1.07 million ounces was roughly in line with the first quarter of the year. Second quarter gold cost of sales per ounce (1) is expected to be slightly higher quarter over quarter, with cash costs per ounce (2) and all-in sustaining costs per ounce (2) approximately 5 to 7 per cent higher than the first quarter. This was primarily driven by planned maintenance at the Barrick Nevada roaster and the Pueblo Viejo autoclaves.

The company is maintaining its 2018 consolidated gold production guidance of 4.5 million to 5.0 million ounces, at a cost of sales of $810 to $850 per ounce (1), cash costs (2) of $540 to $575 per ounce and all-in sustaining costs (2) of $765 to $815 per ounce (3). The company expects gold production to be higher in the second half of the year following the completion of major planned maintenance shutdowns in the first half of 2018, along with reduced development and stripping in the second half of the year. Costs are expected to be lower in the second half of 2018, reflecting increased production from the company's lower-cost operations at Barrick Nevada and Pueblo Viejo, with higher grades and increased throughput following the completion of scheduled maintenance. Full processing capacity has also been restored at the Porgera joint venture earlier than the company's initial expectations, following the earthquake that struck Papua New Guinea on Feb. 26, 2018.

Preliminary copper production in the second quarter of 83 million pounds was slightly lower than the first quarter. The company expects a quarter-over-quarter increase in its consolidated copper cost of sales per pound (1) and C1 cash costs per pound (2) of approximately 17 to 19 per cent and 11 to 13 per cent, respectively, due to higher crusher repair costs. Capitalized stripping at Lumwana was also higher than first quarter, in line with the mine plan, leading to consolidated all-in sustaining costs per pound (2) that are approximately 15 to 17 per cent higher than the first quarter.

The company is adjusting its 2018 copper production guidance to 345 million to 410 million pounds, compared with the company's initial guidance of 385 million to 450 million pounds (3). The company also expects copper cost of sales per pound (1) to be $2 to $2.30, C1 cash costs (2) to be $1.80 to $2 per pound and all-in sustaining costs (2) to be $2.55 to $2.85 per pound (3). This compares with initial guidance of $1.80 to $2.10 per pound, $1.55 to $1.75 per pound and $2.30 to $2.60 per pound, respectively. The revisions to the company's copper production and cost guidance primarily reflect operational challenges at Lumwana in the first half of the year. The company expects higher production at Lumwana in the second half of 2018, driven by a steady improvement in grade and improved crusher reliability.

Barrick will provide additional discussion and analysis regarding second quarter production and sales when the company reports quarterly results on July 25, 2018, followed by a conference call and webcast on July 26 at 8 a.m. ET. The attached table includes preliminary gold and copper production and sales results from its operations.

                           PRODUCTION AND SALES

                                Three months ended              Six months ended
                                   June 30, 2018                 June 30, 2018 
                           Production          Sales     Production          Sales
Gold
(equity ounces
(000s))
Barrick Nevada (4)                464            444            935            906
Pueblo Viejo (60%)                123            125            264            273
Lagunas Norte                      65             65            131            134
Veladero (50%) (5)                 78             82            152            156
Turquoise Ridge (75%)              69             58            115            121
Acacia (63.9%)                     86             85            163            160
Kalgoorlie (50%)                   96             99            181            182
Porgera (47.5%)                    41             34             81             79
Hemlo                              38             37             78             81
Golden Sunlight                     7              8             16             16
Total gold                      1,067          1,037          2,116          2,108

Copper
(equity pounds
(millions))
Lumwana                            47             45             95             92
Zaldivar (50%)                     23             21             47             45
Jabal Sayid (50%)                  13              8             26             22
Total copper                       83             74            168            159

Technical information

The scientific and technical information contained in this press release has been reviewed and approved by Geoffrey Locke, PEng, manager, metallurgy of Barrick, who is a qualified person as defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

Second quarter 2018 results

Barrick will release its second quarter 2018 results on July 25, 2018, followed by a conference call and webcast on July 26 at 8 a.m. ET.

Toll-free (United States and Canada):  1-800-319-4610

International:  1-416-915-3239

The webcast and presentation materials will be available on Barrick's website. The conference call will be available for replay by phone at 1-855-669-9658 (U.S. and Canada toll-free), and 1-604-674-8052 (international), access code 2352.

Endnote 1

Cost of sales applicable to gold per ounce is calculated using cost of sales applicable to gold on an attributable basis (removing the non-controlling interest of 40 per cent for Pueblo Viejo and 36.1 per cent for Acacia from cost of sales), divided by attributable gold ounces. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper, including the company's proportionate share of cost of sales attributable to equity method investments (Zaldivar and Jabal Sayid), divided by consolidated copper pounds (including the company's proportionate share of copper pounds from the company's equity method investments).

Endnote 2

Cash costs per ounce and all-in sustaining costs per ounce are non-generally accepted accounting principle financial measures, which are calculated based on the definition published by the World Gold Council (WGC) (a market development organization for the gold industry composed of and financed by 24 gold mining companies from around the world, including Barrick). The WGC is not a regulatory organization. Management uses these measures to monitor the performance of the company's gold mining operations and its ability to generate positive cash flow, both on an individual site basis and an overall company basis.

Cash costs start with the company's cost of sales related to gold production, remove depreciation and the non-controlling interest of cost of sales, and include byproduct credits. All-in sustaining costs start with cash costs and include sustaining capital expenditures, general and administrative costs, mine site exploration and evaluation costs, and reclamation cost accretion and amortization. These additional costs reflect the expenditures made to maintain current production levels.

The company believe that its use of cash costs and all-in sustaining costs will assist analysts, investors and other stakeholders of Barrick in understanding the costs associated with producing gold, understanding the economics of gold mining, and assessing the company's operating performance and also the company's ability to generate free cash flow from current operations and to generate free cash flow on an overall company basis. Due to the capital-intensive nature of the industry and the long useful lives over which these items are depreciated, there can be a significant timing difference between net earnings calculated in accordance with international financial reporting standards and the amount of free cash flow that is being generated by a mine, and therefore the company believes these measures are useful non-GAAP operating metrics and supplement the company's IFRS disclosures. These measures are not representative of all of the company's cash expenditures as they do not include income tax payments, interest costs or dividend payments. These measures do not include depreciation or amortization.

Cash costs per ounce and all-in sustaining costs are intended to provide additional information only and do not have standardized definitions under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not equivalent to net income or cash flow from operations as determined under IFRS. Although the WGC has published a standardized definition, other companies may calculate these measures differently.

C1 cash costs per pound and all-in sustaining costs per pound are non-GAAP financial measures related to the company's copper mine operations. The company believes that C1 cash costs per pound enable investors to better understand the performance of the company's copper operations in comparison with other copper producers which present results on a similar basis. C1 cash costs per pound exclude royalties and non-routine charges as they are not direct production costs. All-in sustaining costs per pound are similar to the gold all-in sustaining costs, metric, and management uses this to better evaluate the costs of copper production. The company believes this measure enables investors to better understand the operating performance of the company's copper mines as this measure reflects all of the sustaining expenditures incurred to produce copper. All-in sustaining costs per pound include C1 cash costs, corporate general and administrative costs, mine site exploration and evaluation costs, royalties, environmental rehabilitation costs, and writedowns taken on inventory to net realizable value.

Barrick will provide a full reconciliation of the company's final non-GAAP financial measures when the company reports its quarterly results on July 25, 2018.

Endnote 3

Two thousand eighteen guidance is based on gold, copper, WTI (West Texas Intermediate) oil price and Brent oil price assumptions of $1,200 per ounce, $2.75 per pound, $65 per barrel and $70 per bbl, respectively, a U.S.-dollar/Australian-dollar exchange rate of 0.75 to 1, a Canadian-dollar/U.S.-dollar exchange rate of 1.25 to 1, an Argentine-peso/U.S.-dollar exchange rate of 18.35 to 1 and a Chilean-peso/U.S.-dollar exchange rate of 650 to 1.

Endnote 4

Includes the company's 60-per-cent equity share of South Arturo.

Endnote 5

Reflects the company's 50-per-cent equity share of Veladero.

We seek Safe Harbor.

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