TORONTO, ONTARIO--(Marketwired - Oct. 29, 2014) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the company) today reported third quarter net earnings of $125 million ($0.11 per share). Adjusted net earnings were $222 million ($0.19 per share). Operating cash flow was $852 million. The company reported strong quarterly results with solid production and lower than expected costs which drove the second reduction to annual all-in sustaining cost guidance this year.
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OPERATING HIGHLIGHTS AND GUIDANCE
Third Quarter Revised Previous
Gold 2014 2014 Guidance 2014 Guidance
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Production (000s of ounces) 1,649 6,100-6,400 6,000-6,500
All-in sustaining costs ($ per
ounce) 834 880-920 900-940
Adjusted operating costs ($ per
ounce) 589 580-630
Copper
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Production (millions of pounds) 131 440-460 410-440
C1 cash costs ($ per pound) 1.82 1.90-2.00 1.90-2.10
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Total Capital Expenditures ($
millions) 604 2,200-2,500
----------------------------------------------------------------------------"We are pleased to report another quarter of strong operating results, underpinned by a disciplined business model that prioritizes shareholder returns," said Kelvin Dushnisky, Co-President of Barrick. "We are focused on the best assets in the best regions, where we see the most potential to create value for shareholders, areas where we have already established distinctive geological and technical knowledge and strong partnerships. We will only invest in mines and development opportunities that can generate strong returns and free cash flow through commodity cycles. This is reflected in the priorities we have defined for Barrick."
"Operational excellence remains a top priority for Barrick. Our performance in the third quarter reflects the quality of our mines and our people," said Jim Gowans, Co-President of Barrick. "Our operating teams continue their relentless efforts to improve performance and cut costs. As a result, we were able to reduce annual cost guidance for the second time this year."
COMPANY PRIORITIES
This has been a year of transition for the leadership of Barrick. On April 30, 2014, John L. Thornton assumed the Chairman role and the Board of Directors was strengthened through the addition of four new independent directors. On July 16, 2014, the company announced a new executive management structure, including the appointment of Kelvin Dushnisky and Jim Gowans as Co-Presidents, to seamlessly drive the business and execute on Barrick's priorities. Since that time, two more independent directors have joined the Board of Directors and there have been additional changes to strengthen the executive team.
These changes have rejuvenated the leadership of Barrick and are directed at one overriding objective - to make Barrick the investment of choice among gold producers.
To achieve this objective, the company is focused on the following priorities to drive shareholder value:
-- Operational Excellence -- Excel in all areas of the company, including
delivering the full potential of its mines and resources. Put the best
people in key roles and enable them to deliver.
-- Best Assets and Regions -- Focus on assets with the most potential in
core regions.
-- Strong Partnerships -- Establish deep relationships with key
stakeholders such as governments, suppliers, and local communities for
performance and growth.
-- Financial Flexibility -- Restore the balance sheet to a position of
strength.
-- Focus on Returns -- Improve free cash flow generation and shareholder
returns through operating efficiencies and profitable growth, including
the prioritization of near mine opportunities. All investments must meet
return on investment thresholds.FINANCIAL HIGHLIGHTS
Third quarter 2014 adjusted net earnings were $222 million ($0.19 per share)(1) compared to $577 million ($0.58 per share) in the prior year period. The decrease was primarily due to lower gold and copper sales volumes and lower realized gold and copper prices, partially offset by lower cost of sales applicable to gold and copper. Net earnings for the third quarter were $125 million ($0.11 per share) compared to net earnings of $172 million ($0.17 per share) in the prior year quarter. Significant adjusting items for the quarter include:
-- $51 million in unrealized losses on non-hedge derivative instruments;
and
-- $42 million in unrealized foreign currency translation losses.Third quarter operating cash flow of $852 million compares to $1.2 billion in the prior year period. The decrease in operating cash flow primarily reflects lower sales volumes and lower gross margins, partially offset by a decrease in income tax payments.
FINANCIAL FLEXIBILITY
Barrick is committed to restoring its balance sheet to a position of strength. Maintaining financial flexibility will be a key driver of the company's future strategic direction. Barrick's strong underlying business underpins its liquidity. The company's five cornerstone mines produced 1.0 million ounces of gold at average all-in sustaining costs (AISC) of $696 per ounce(2) in the third quarter.
These mines are anticipated to contribute about 60 percent of production in 2014 at average AISC of $730-$780 per ounce, maintaining Barrick's position in the first quartile of the industry cost curve.
The company has a modest debt repayment schedule over the next three years with approximately $200 million maturing by the end of 2015 and less than $1.0 billion due by the end of 2017. Including the company's $4.0 billion undrawn credit facility and $2.7 billion of cash(3), Barrick had significant liquidity at the end of the third quarter.
GOLDRUSH AND OTHER OPPORTUNITIES IN NEVADA
The company is concentrating its efforts on the best regions where it has a competitive advantage. Barrick will accelerate the identification and advancement of profitable growth opportunities in these core regions. A regional strategy allows the company to leverage its competitive strengths, which include deep geological and technical expertise as well as strong local relationships. This will help identify the best prospects first and permit them as efficiently as possible, translating into less time to production.
Opportunities at or near existing operations will be the first priority, minimizing risk and maximizing return on invested capital. Accordingly, the company continues to focus its exploration and growth efforts on Nevada. It is among the regions of the world with the best geological potential for gold, has a well-established mining industry, and an area where Barrick has strong relationships with key stakeholders and a proven track record of success. Approximately 50 percent of Barrick's 2014 exploration budget(4) is allocated to Nevada, with a large majority allocated to advance Goldrush, the only significant greenfield discovery by a major gold producer in the past five years. Beyond Goldrush, Barrick has several other growth opportunities and projects in Nevada with the potential to meet company risk-adjusted return hurdles.
The Goldrush project, located about six kilometers from the Cortez mine, is progressing through a prefeasibility study which remains on schedule for completion in mid-2015. Infill drilling continues to demonstrate continuity of high grades. A number of development options are under consideration, including underground mining or a combination of both underground and open pit mining. The company is increasingly certain that there will be an underground mining component. Barrick submitted a permit application for twin exploration declines in the second quarter. The declines will help to better define the existing resource and allow the company to test for additional mineralization beyond the northern end of the deposit.
Turquoise Ridge contains over 5.0 million ounces (75 percent basis) in reserves at an average grade of 17.3 grams per tonne(5), and is the highest reserve grade deposit in the company's operating portfolio. Barrick believes Turquoise Ridge has the potential to become another core mine. The operation is currently restricted by haulage and ventilation constraints. One option being considered is an additional shaft which could increase production by up to 75 percent for five to eight years. Drilling of the northern extension of the deposit is exceeding expectations, and is supporting a prefeasibility study on the shaft scenario which is expected to be completed in early 2015.
At Cortez, the Lower Zone is characterized by strong and continuous ore zones. A prefeasibility study to evaluate deeper mining below the currently permitted level is expected to be completed by late 2015. Below this level, the Lower Zone is mostly oxide and higher grade than the zones above. Drilling has yet to determine the limits of the Lower Zone and recent drilling results have met or exceeded expectations. Based on these results, the Lower Zone exploration drift will be extended another 500 feet to the south in early 2015 to enable further step-out drilling.
The Spring Valley project, 70 percent owned by Barrick and approximately 60 miles west of Cortez, continues to advance through a prefeasibility study which is on track for completion in late 2015. This is a low capital cost, heap leach project with the potential to become a standalone mine. Barrick expects to report an initial resource estimate with its 2014 year-end results.
OPERATING HIGHLIGHTS
Cortez
The Cortez mine produced 273 thousand ounces at AISC of $589 per ounce in the third quarter. Production in 2014 is expected to be 880-920 thousand ounces, below previous guidance of 925-975 thousand ounces. This is primarily due to negative grade reconciliations which impacted production in the first half of 2014. AISC guidance remains at the high end of the $750-$780 per ounce range. In 2015, production is expected to be below one million ounces due to the sequencing and mining of ore and waste phases.
Goldstrike
Goldstrike produced 239 thousand ounces in the third quarter at AISC of $921 per ounce. Production benefited from higher processed grades. AISC were better than expected due to lower processing costs, mainly as a result of processing less acidic ore and lower sustaining capital. Modifications to the autoclave facility for the thiosulfate project are almost complete and will enable Goldstrike to accelerate the cash flow from about 4.0 million stockpiled ounces through the addition of a patented thiosulfate process. This is expected to contribute an average of 350-450 thousand ounces of annual production at similar AISC to the overall operation in the first full five years. First production is on track for the fourth quarter of 2014 at a total capital cost of approximately $620 million. Lower production is expected in the fourth quarter in part from an autoclave shutdown to facilitate start-up of the thiosulfate project and also from expected lower grades as stripping begins for the next phase of the open pit. Production at Goldstrike in 2014 is expected to be 865-915 thousand ounces and AISC guidance has been reduced to $870-$900 per ounce as a result of lower lime consumption at the roaster. In 2015, production is expected to exceed 1.0 million ounces(6) with contributions from the thiosulfate process.
Pueblo Viejo
Barrick's 60 percent share of production from Pueblo Viejo in the third quarter was 168 thousand ounces at AISC of $551 per ounce. Production and recoveries were impacted by planned autoclave shutdowns for maintenance. Fourth quarter production is expected to benefit from higher grade ore. The copper circuit is in the commissioning phase and copper shipments are expected to commence in the first quarter of 2015. Production in 2014 is expected to be 600-700 thousand ounces at AISC of $510-$610 per ounce.
Lagunas Norte
Lagunas Norte produced 157 thousand ounces at AISC of $554 per ounce in the third quarter. Production was higher in the third quarter due to processing higher grade material and a faster leach cycle from stacking ore on the new area of the leach pad. Fourth quarter production is expected to benefit from higher grades. Production in 2014 is anticipated to be 570-610 thousand ounces and AISC guidance has been reduced to $590-$620 per ounce.
Veladero
The Veladero mine produced 178 thousand ounces at AISC of $822 per ounce in the third quarter. Production benefited from higher grades on positive grade reconciliations. This trend is expected to continue into the fourth quarter. Production guidance in 2014 has been increased to 680-720 thousand ounces and AISC guidance has been reduced to $890-$920 per ounce.
North America Portfolio
Barrick's other North American mines consist of Bald Mountain, Round Mountain, Turquoise Ridge, Golden Sunlight, Ruby Hill and Hemlo. This segment produced 213 thousand ounces in the third quarter at AISC of $980 per ounce. In 2014, production is now expected to be at the high end of the 795-845 thousand ounce range and AISC guidance has been reduced to $980-$1,000 per ounce.
Australia Pacific
Australia Pacific produced 292 thousand ounces at AISC of $855 per ounce in the third quarter. The Porgera mine contributed 137 thousand ounces at AISC of $928 per ounce and benefited from higher throughput and grades. Production guidance in 2014 has been increased to 1,050-1,125 thousand ounces and AISC guidance has been reduced to $885-$910 per ounce.
African Barrick Gold (ABG)
Third quarter attributable production from ABG was 122 thousand ounces at AISC of $1,098 per ounce. Barrick's share of 2014 production from ABG is anticipated to be above the high end of the 430-460 thousand ounce range and AISC at the low end of the $1,100-$1,175 per ounce range.
Global Copper
Copper production in the third quarter was 131 million pounds at C1 cash costs of $1.82 per pound(7). Copper production guidance for 2014 has been increased to 440-460 million pounds and C1 cash costs have been narrowed to $1.90-$2.00 per pound, primarily due to an earlier than expected re-start of operations at Lumwana in July.
Lumwana contributed 75 million pounds at C1 cash costs of $1.84 per pound. Subsequent to quarter end, the Zambian government proposed changes to the country's mining tax regime that would replace the current corporate income tax and variable profit tax with a 20 percent royalty, which, if approved, would take effect on January 1, 2015. The application of a 20 percent royalty rate compared to the 6 percent royalty the company is currently paying would challenge the economic viability of the mine.
The Zaldivar mine produced 56 million pounds in the third quarter at C1 cash costs of $1.79 per pound. The mine continues to be a steady generator of free cash flow.
In July, Barrick reached an agreement to form a joint venture with Saudi Arabian Mining Company (Ma'aden) to operate the Jabal Sayid copper mine. The transaction is expected to close in the fourth quarter of 2014. First shipments of concentrate are expected in early 2016. Once the mine reaches full production, the average annual output will be 100 million pounds per year, with the potential to increase to 130 million pounds, at first quartile C1 cash costs.
PASCUA-LAMA PROJECT
The project is currently on care and maintenance. A decision to re-start development will depend on improved economics and more certainty regarding legal and permitting matters. Barrick is in the final stages of preliminary engineering for the permanent water management system and is discussing the permitting requirements necessary to obtain approval for construction with Chilean regulators. The company is making progress on establishing a constructive dialogue with a group of 15 Diaguita indigenous communities and associations in Chile's Huasco province through a Memorandum of Understanding (MoU). Under the MoU, Barrick is providing these groups with technical and environmental information on Pascua-Lama along with financial resources and materials to facilitate their analysis of the information.
Barrick continues to explore opportunities to improve the project's risk-adjusted returns, including engineering optimization, strategic partnerships or royalty and other income streaming agreements.
(1) Adjusted net earnings and adjusted net earnings per share are non-GAAP financial performance measures with no standardized definition under IFRS. See pages 46-51 of Barrick's Third Quarter 2014 Report.
(2) All-in sustaining costs per ounce is a non-GAAP financial performance measure with no standardized definition under IFRS. See pages 46-51 of Barrick's Third Quarter 2014 Report.
(3) Includes $557 million held at African Barrick Gold and Pueblo Viejo, which may not be readily deployed outside of African Barrick Gold and Pueblo Viejo.
(4) Barrick's exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick.
(5) Turquoise Ridge reserve grade is 0.505 ounces per ton as of December 31, 2013. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 27-37 of Barrick's 2013 Form 40-F.
(6) Actual results will vary depending on how the ramp-up of the thiosulfate project progresses.
(7) C1 cash costs per pound is a non-GAAP financial performance measure with no standardized definition under IFRS. See pages 46-51 of Barrick's Third Quarter 2014 Report.
APPENDIX - 2014 Operating and Financial Guidance
OPERATING GUIDANCE
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Current Previous
Gold Production AISC Production AISC
(000's of ($ per ounce) (000's of ($ per ounce)
ounces) ounces)
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Cortez 880-920 750-780 925-975 750-780
(high end) (low end) (high end)
Goldstrike 865-915 870-900 865-915 920-950
(high end) (low end)
Pueblo Viejo 600-700 510-610 600-700 510-610
(60%) (high end)
Lagunas Norte 570-610 590-620 570-610 640-680
(high end) (low end)
Veladero 680-720 890-920 650-700 940-990
(high end) (low end)
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3,700-3,900 730-780 3,800-4,000 750-800
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North America 795-845 980-1,000 795-845 1,075-1,100
Portfolio (high end) (low end)
Australia 1,050-1,125 885-910 1,000-1,080 1,050-1,100
Pacific (high end) (low end)
African Barrick 430-460 1,100-1,175 430-460 1,100-1,175
Gold (above high (low end) (above high (low end)
end) end)
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Total Gold 6,100-6,400 880-920 6,000-6,500 900-940
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Copper Production C1 cash costs Production C1 cash costs
(millions of ($ per pound) (millions of ($ per pound)
pounds) pounds)
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Total Copper 440-460 1.90-2.00 410-440 1.90-2.10
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FINANCIAL GUIDANCE
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Current Previous
($ millions) ($ millions)
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G&A 380-400 380-400
Other expense 475-525 475-525
Finance costs 800-825 800-825
Exploration & evaluation 200-240 200-240
Capital expenditure
Mine site sustaining 1,800-2,000 1,800-2,000
Mine site expansion 300-375 300-375
Projects 100-125 100-125
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Total capex 2,200-2,500 2,200-2,500
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Effective income tax rate approx. 50% approx. 50%
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Key Statistics
Barrick Gold Corporation
Three months ended Nine months ended
(in United States dollars) September 30 September 30
----------------------------------------------
2014 2013 2014 2013
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Operating Results
Gold production (thousands of
ounces)(1) 1,649 1,845 4,722 5,453
Gold sold (thousands of
ounces)(1) 1,578 1,783 4,712 5,345
Per ounce data
Average spot gold price $ 1,282 $ 1,326 $ 1,288 $ 1,456
Average realized gold
price(2) 1,285 1,323 1,286 1,453
Adjusted operating costs(2) 589 573 588 564
All-in sustaining costs(2) 834 914 844 919
All-in costs(2) 975 1,182 951 1,269
Adjusted operating costs (on
a co-product basis)(2) 607 593 609 588
All-in sustaining costs (on a
co-product basis)(2) 852 934 865 943
All-in costs (on a co-product
basis)(2) 993 1,202 972 1,293
Copper production (millions of
pounds) 131 139 302 400
Copper sold (millions of
pounds) 112 135 296 385
Per pound data
Average spot copper price $ 3.17 $ 3.21 $ 3.15 $ 3.35
Average realized copper
price(2) 3.09 3.40 3.08 3.41
C1 cash costs(2) 1.82 1.69 1.98 1.94
Depreciation(3) 0.44 0.29 0.40 0.36
Other(4) 0.10 0.17 0.12 0.15
C3 fully allocated costs(2) 2.36 2.15 2.50 2.45
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Financial Results (millions)
Revenues $ 2,598 $ 2,985 $ 7,662 $ 9,585
Net earnings (loss)(5) 125 172 (56) (7,536)
Adjusted net earnings(2) 222 577 619 2,163
Operating cash flow 852 1,231 1,925 3,223
Adjusted operating cash
flow(2) 852 1,300 1,925 3,274
Per Share Data (dollars)
Net earnings (loss) (basic) 0.11 0.17 (0.05) (7.53)
Adjusted net earnings
(basic)(2) 0.19 0.58 0.53 2.16
Net earnings (loss) (diluted) 0.11 0.17 (0.05) (7.53)
Weighted average basic common
shares (millions) 1,165 1,001 1,165 1,001
Weighted average diluted
common shares (millions)(6) 1,165 1,001 1,165 1,001
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As at As at
September December
30, 31,
------------------------
2014 2013
----------------------------------------------------------------------------
Financial Position (millions)
Cash and equivalents $ 2,705 $ 2,404
Non-cash working capital 3,341 3,060
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(1) Production includes African Barrick Gold ("ABG") on a 73.9% basis until
February 28, 2014 and a 63.9% basis thereafter and Pueblo Viejo on a 60%
basis, both of which reflect our equity share of production. Also
includes production from Yilgarn South up to September 30, 2013,
Plutonic up to January 31, 2014, Kanowna up to March 1, 2014 and
Marigold up to April 4, 2014, the effective dates of sale of these
assets. Sales include our equity share of gold sales from ABG and Pueblo
Viejo.
(2) Realized price, adjusted operating costs, all-in sustaining costs, all-
in costs, adjusted operating 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, C3 fully allocated costs, adjusted net earnings
and adjusted operating cash flow are non-gaap financial performance
measures with no standard definition under IFRS. Refer to the Non-GAAP
Financial Performance Measures section of the Company's MD&A.
(3) Represents equity depreciation expense divided by equity pounds of
copper sold.
(4) For a breakdown, see reconciliation of cost of sales to C1 cash costs
and C3 fully allocated costs per pound in the Non-GAAP Financial
Performance Measures section of the Company's MD&A.
(5) Net earnings (loss) represents net earnings (loss) attributable to the
equity holders of the Company.
(6) Fully diluted includes dilutive effect of stock options.
Production and Cost Summary
Gold Production
(attributable ounces)
(000's) All-in sustaining costs(5) ($/oz)
--------------------------- ---------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
------------- ------------- ---------------- ----------------
2014 2013 2014 2013 2014 2013 2014 2013
---------------------------- ------------- ---------------- ----------------
Gold
Goldstrike 239 233 715 650 $ 921 $ 874 $ 846 $ 955
Cortez 273 333 717 1,093 589 470 663 416
Pueblo Viejo 168 113 488 331 551 770 575 743
Lagunas Norte 157 136 406 412 554 696 552 633
Veladero 178 154 525 499 822 874 786 785
North America
Portfolio(1) 213 222 641 627 980 1,246 967 1,250
Australia
Pacific(2) 292 497 865 1,409 855 920 851 1,001
African
Barrick
Gold(3) 122 122 354 352 1,098 1,270 1,111 1,411
Other(4) 7 35 11 80 3,025 1,027 2,424 1,218
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Total 1,649 1,845 4,722 5,453 $ 834 $ 914 $ 844 $ 919
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Copper Production
(attributable pounds)
(millions) C1 Cash Costs(5) ($/lb)
----------------------------- -------------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
-------------- -------------- ------------------ -----------------
2014 2013 2014 2013 2014 2013 2014 2013
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Total 131 139 302 400 $ 1.82 $ 1.69 $ 1.98 $ 1.94
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Total Gold Production Costs ($/oz)
-------------------------------------
Three months Nine months
ended ended
September 30, September 30,
------------------ ------------------
2014 2013 2014 2013
--------------------------------------------------------- ------------------
Direct mining costs before impact of
hedges at market foreign exchange
rates $ 585 $ 605 $ 592 $ 607
Gains realized on currency hedge and
commodity hedge/economic hedge
contracts (17) (39) (20) (44)
Other(6) - (4) - (11)
By-product credits (18) (20) (21) (24)
Royalties 39 31 37 36
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Adjusted operating costs(5) 589 573 588 564
Depreciation 198 208 198 205
Other(6) - 4 - 11
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Total production costs $ 787 $ 785 $ 786 $ 780
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Adjusted operating costs(5) $ 589 $ 573 $ 588 $ 564
General & administrative costs 41 50 46 44
Rehabilitation - accretion and
amortization (operating sites) 19 16 21 19
Mine on-site exploration and
evaluation costs 4 10 3 8
Mine development expenditures 94 157 109 162
Sustaining capital expenditures 87 108 77 122
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All-in sustaining costs(5) $ 834 $ 914 $ 844 $ 919
----------------------------------------------------------------------------
All-in costs(5) $ 975 $ 1,182 $ 951 $ 1,269
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Total Copper Production Costs ($/lb)
-------------------------------------
Three months Nine months
ended ended
September 30, September 30,
------------------ ------------------
2014 2013 2014 2013
--------------------------------------------------------- ------------------
C1 cash costs(5) $ 1.82 $ 1.69 $ 1.98 $ 1.94
Depreciation(7) 0.44 0.29 0.40 0.36
Other(8) 0.10 0.17 0.12 0.15
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C3 fully allocated costs(5) $ 2.36 $ 2.15 $ 2.50 $ 2.45
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(1) Includes production from Marigold up to April 4, 2014, the effective
date of sale of this asset.
(2) Includes production from Yilgarn South up to September 30, 2013,
Plutonic up to January 31, 2014 and Kanowna up to March 1, 2014, the
effective dates of sale of these assets.
(3) Figures relating to African Barrick Gold are presented on a 73.9% basis
until February 28, 2014 and a 63.9% basis thereafter, which reflects our
equity share of production.
(4) Production and all-in sustaining costs include Pierina.
(5) Adjusted operating costs, all-in sustaining costs, all-in costs, C1 cash
costs and C3 fully allocated costs are non-GAAP financial performance
measures with no standard meaning under IFRS. Refer to the Non-GAAP
Financial Performance Measures section of the Company's MD&A.
(6) Represents the Barrick Energy gross margin divided by equity ounces of
gold sold. Barrick Energy was divested in the third quarter of 2013.
(7) Represents equity depreciation expense divided by equity pounds of
copper sold.
(8) For a breakdown, see reconciliation of cost of sales to C1 cash costs
and C3 fully allocated costs per pound in the Non-GAAP Financial
Performance Measures section of the Company's MD&A.
Consolidated Statements of Income
Barrick Gold Corporation
(in millions of United States
dollars, except per share data) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2014 2013 2014 2013
----------------------------------------------------------------------------
Revenue (notes 5 and 6) $ 2,598 $ 2,985 $ 7,662 $ 9,585
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Costs and expenses (income)
Cost of sales (notes 5 and 7) 1,642 1,788 4,924 5,430
General and administrative
expenses (note 11) 98 100 283 297
Exploration and evaluation (note
8) 45 48 130 154
Other expense (income) (note
10A) 83 169 425 406
Impairment charges (note 10B) 18 13 542 9,345
Loss (gain) on non-hedge
derivatives (note 19D) 65 (19) - (74)
----------------------------------------------------------------------------
Income (loss) before finance
items and income taxes 647 886 1,358 (5,973)
Finance items
Finance income 3 2 9 7
Finance costs (note 12) (198) (122) (599) (391)
----------------------------------------------------------------------------
Income (loss) from continuing
operations before income taxes 452 766 768 (6,357)
Income tax expense (note 13) (275) (748) (687) (968)
----------------------------------------------------------------------------
Income (loss) from continuing
operations 177 18 81 (7,325)
Loss from discontinued
operations - (9) - (506)
----------------------------------------------------------------------------
Net income (loss) $ 177 $ 9 $ 81 $ (7,831)
----------------------------------------------------------------------------
Attributable to:
Equity holders of Barrick Gold
Corporation $ 125 $ 172 $ (56) $ (7,536)
Non-controlling interests (note
22) $ 52 $ (163) $ 137 $ (295)
----------------------------------------------------------------------------
Earnings (loss) per share data attributable to the equity holders of Barrick
Gold Corporation (note 9)
Income (loss) from continuing
operations
Basic $ 0.11 $ 0.18 $ (0.05) $ (7.02)
Diluted $ 0.11 $ 0.18 $ (0.05) $ (7.02)
----------------------------------------------------------------------------
Loss from discontinued
operations
Basic $ - $ (0.01) $ - $ (0.51)
Diluted $ - $ (0.01) $ - $ (0.51)
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Net income (loss)
Basic $ 0.11 $ 0.17 $ (0.05) $ (7.53)
Diluted $ 0.11 $ 0.17 $ (0.05) $ (7.53)
----------------------------------------------------------------------------The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
Barrick Gold Corporation
(in millions of United States
dollars) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2014 2013 2014 2013
----------------------------------------------------------------------------
Net income (loss) $ 177 $ 9 $ 81 $ (7,831)
Other comprehensive income
(loss), net of taxes
Items that may be reclassified
subsequently to profit or loss:
Unrealized gains (losses) on
available-for-sale ("AFS")
financial securities, net of
tax $nil, $nil, $nil and $4 (2) 4 20 (22)
Realized (gains) losses and
impairments on AFS financial
securities, net of tax $nil,
$nil, $nil and ($2) (7) 2 16 13
Unrealized gains (losses) on
derivatives designated as cash
flow hedges, net of tax $2,
($8), $3 and ($7) (35) 4 (7) (51)
Realized (gains) losses on
derivatives designated as cash
flow hedges, net of tax ($1),
$20, $nil and $61 (22) (60) (76) (242)
Currency translation
adjustments, net of tax $nil,
$nil, $nil and $nil (26) 24 (19) (74)
----------------------------------------------------------------------------
Total other comprehensive income
(loss) (92) (26) (66) (376)
----------------------------------------------------------------------------
Total comprehensive income
(loss) $ 85 $ (17) $ 15 $ (8,207)
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Attributable to:
Equity holders of Barrick Gold
Corporation
Continuing operations $ 33 $ 135 $ (122) $ (7,375)
Discontinued operations $ - $ 11 $ - $ (537)
Non-controlling interests $ 52 $ (163) $ 137 $ (295)
----------------------------------------------------------------------------The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flow
Barrick Gold Corporation
(in millions of United States
dollars) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2014 2013 2014 2013
----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) from
continuing operations $ 177 $ 18 $ 81 $ (7,325)
Adjusted for the following
items:
Depreciation 412 441 1,214 1,290
Finance costs 198 122 599 391
Impairment charges (note 10B) 18 13 542 9,345
Income tax expense (note 13) 275 748 687 968
Increase in inventory (12) (47) (7) (280)
Proceeds from settlement of
hedge contracts - - - 219
Loss (gain) on non-hedge
derivatives 65 (19) - (74)
Gain on sale of long-lived
assets/investments (14) (16) (37) (25)
Other operating activities
(note 14A) (120) 149 (345) (316)
----------------------------------------------------------------------------
Operating cash flows before
interest and income taxes 999 1,409 2,734 4,193
Interest paid (77) (36) (429) (253)
Income taxes paid (70) (141) (380) (767)
----------------------------------------------------------------------------
Net cash provided by operating
activities from continuing
operations 852 1,232 1,925 3,173
Net cash (used in) provided by
operating activities from
discontinued operations - (1) - 50
----------------------------------------------------------------------------
Net cash provided by operating
activities 852 1,231 1,925 3,223
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Property, plant and equipment
Capital expenditures (note 5) (653) (1,205) (1,885) (4,136)
Sales proceeds 18 - 55 3
Divestitures - 417 166 417
Investments sales 67 - 119 18
Other investing activities (note
14B) (2) (86) (81) (217)
----------------------------------------------------------------------------
Net cash used in investing
activities from continuing
operations (570) (874) (1,626) (3,915)
Net cash used in investing
activities from discontinued
operations - (7) - (64)
----------------------------------------------------------------------------
Net cash used in investing
activities (570) (881) (1,626) (3,979)
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds on exercise of stock
options - - - 1
Proceeds from divestment of 10%
of issued ordinary share
capital of ABG - - 186 -
Debt
Proceeds 6 124 139 5,234
Repayments (71) (565) (164) (3,836)
Dividends (59) (50) (175) (450)
Funding from non-controlling
interests 2 2 4 34
Other financing activities (note
14C) - (7) - (29)
----------------------------------------------------------------------------
Net cash (used in) provided by
financing activities from
continuing operations (122) (496) (10) 954
Net cash used in financing
activities from discontinued
operations - - - -
----------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (122) (496) (10) 954
----------------------------------------------------------------------------
Effect of exchange rate changes
on cash and equivalents (4) (1) (8) (12)
----------------------------------------------------------------------------
Net (decrease) increase in cash
and equivalents 156 (147) 281 186
Cash and equivalents excluding
assets classified as held for
sale at the beginning of period 2,549 2,422 2,404 2,097
Add: cash and equivalents of
assets classified as held for
sale at the beginning of period - 8 20 -
----------------------------------------------------------------------------
Cash and equivalents at the end
of period $ 2,705 $ 2,283 $ 2,705 $ 2,283
----------------------------------------------------------------------------
Less: cash and equivalents of
assets classified as held for
sale at the end of period - - - -
----------------------------------------------------------------------------
Cash and equivalents excluding
assets classified as held for
sale at the end of period $ 2,705 $ 2,283 $ 2,705 $ 2,283
----------------------------------------------------------------------------The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Balance Sheets
Barrick Gold Corporation
(in millions of United States dollars) As at As at
(Unaudited) September 30, December 31,
----------------------------------------------------------------------------
2014 2013
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and equivalents (note 19A) $ 2,705 $ 2,404
Accounts receivable 408 385
Inventories (note 15) 2,700 2,679
Other current assets 320 421
----------------------------------------------------------------------------
Total current assets (excluding assets
classified as held for sale) 6,133 5,889
Assets classified as held for sale 576 323
----------------------------------------------------------------------------
Total current assets 6,709 6,212
Non-current assets
Equity in investees 28 27
Other investments 33 120
Property, plant and equipment (note 16) 21,425 21,688
Goodwill (note 17) 5,519 5,835
Intangible assets 310 320
Deferred income tax assets 765 501
Non-current portion of inventory (note 15) 1,685 1,679
Other assets 1,016 1,066
----------------------------------------------------------------------------
Total assets $ 37,490 $ 37,448
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 1,661 $ 2,165
Debt (note 19B) 209 179
Current income tax liabilities 198 75
Other current liabilities 357 303
----------------------------------------------------------------------------
Total current liabilities (excluding
liabilities classified as held for sale) 2,425 2,722
Liabilities classified as held for sale 16 162
----------------------------------------------------------------------------
Total current liabilities 2,441 2,884
Non-current liabilities
Debt (note 19B) 12,885 12,901
Provisions 2,496 2,428
Deferred income tax liabilities 2,587 2,258
Other liabilities 1,058 976
----------------------------------------------------------------------------
Total liabilities 21,467 21,447
----------------------------------------------------------------------------
Equity
Capital stock (note 21) 20,863 20,869
Deficit (7,812) (7,581)
Accumulated other comprehensive loss (135) (69)
Other 321 314
----------------------------------------------------------------------------
Total equity attributable to Barrick Gold
Corporation shareholders 13,237 13,533
Non-controlling interests (note 22) 2,786 2,468
----------------------------------------------------------------------------
Total equity 16,023 16,001
----------------------------------------------------------------------------
Contingencies and commitments (notes 15, 16
and 23)
----------------------------------------------------------------------------
Total liabilities and equity $ 37,490 $ 37,448
----------------------------------------------------------------------------The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Changes in Equity
-----------------------------------------
Barrick Gold Attributable to equity holders of the
Corporation company
----------------------------------------------------------------------------
Accumulated
other
(in millions of United Common Retained comprehensive
States dollars) Shares (in Capital earnings income
(Unaudited) thousands) stock (deficit) (loss)(1)
----------------------------------------------------------------------------
At January 1, 2014 1,164,652 $ 20,869 $ (7,581) $ (69)
----------------------------------------------------------------------------
Net (loss) income - - (56) -
Total other
comprehensive loss - - - (66)
----------------------------------------------------------------------------
Total comprehensive
(loss) income - - (56) (66)
----------------------------------------------------------------------------
Transactions with
owners
Dividends - - (175) -
Issued on exercise of
stock options 18 - - -
Derecognition of
stock option expense - (6) - -
Recognized on
divestment of 10% of
African Barrick Gold - - - -
Funding from non-
controlling
interests - - - -
----------------------------------------------------------------------------
Total transactions
with owners 18 (6) (175) -
----------------------------------------------------------------------------
At September 30, 2014 1,164,670 $ 20,863 $ (7,812) $ (135)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
At January 1, 2013 1,001,108 $ 17,926 $ 3,269 $ 463
----------------------------------------------------------------------------
Net loss - - (7,536) -
Total other
comprehensive loss - - - (376)
----------------------------------------------------------------------------
Total comprehensive
loss - - (7,536) (376)
----------------------------------------------------------------------------
Transactions with
owners
Dividends - - (450) -
Issued on exercise of
stock options 44 1 - -
Recognition of stock
option expense - 8 - -
Funding from non-
controlling
interests - - - -
Other decrease in
non-controlling
interests - - - -
----------------------------------------------------------------------------
Total transactions
with owners 44 9 (450) -
----------------------------------------------------------------------------
At September 30, 2013 1,001,152 $ 17,935 $ (4,717) $ 87
----------------------------------------------------------------------------
Consolidated Statements of Changes in Equity
--------------------------
Barrick Gold Attributable to equity
Corporation holders of the company
-------------------------------------------------
Total equity
(in millions of United attributable Non-
States dollars) to controlling Total
(Unaudited) Other(2) shareholders interests equity
----------------------------------------------------------------------------
At January 1, 2014 $ 314 $ 13,533 $ 2,468 $ 16,001
----------------------------------------------------------------------------
Net (loss) income - (56) 137 81
Total other
comprehensive loss - (66) - (66)
----------------------------------------------------------------------------
Total comprehensive
(loss) income - (122) 137 15
----------------------------------------------------------------------------
Transactions with
owners
Dividends - (175) - (175)
Issued on exercise of
stock options - - - -
Derecognition of
stock option expense - (6) - (6)
Recognized on
divestment of 10% of
African Barrick Gold 7 7 174 181
Funding from non-
controlling
interests - - 7 7
----------------------------------------------------------------------------
Total transactions
with owners 7 (174) 181 7
----------------------------------------------------------------------------
At September 30, 2014 $ 321 $ 13,237 $ 2,786 $ 16,023
----------------------------------------------------------------------------
----------------------------------------------------------------------------
At January 1, 2013 $ 314 $ 21,972 $ 2,664 $ 24,636
----------------------------------------------------------------------------
Net loss - (7,536) (295) (7,831)
Total other
comprehensive loss - (376) - (376)
----------------------------------------------------------------------------
Total comprehensive
loss - (7,912) (295) (8,207)
----------------------------------------------------------------------------
Transactions with
owners
Dividends - (450) - (450)
Issued on exercise of
stock options - 1 - 1
Recognition of stock
option expense - 8 - 8
Funding from non-
controlling
interests - - 34 34
Other decrease in
non-controlling
interests - - (14) (14)
----------------------------------------------------------------------------
Total transactions
with owners - (441) 20 (421)
----------------------------------------------------------------------------
At September 30, 2013 $ 314 $ 13,619 $ 2,389 $ 16,008
----------------------------------------------------------------------------
(1) Includes cumulative translation losses at September 30, 2014: $99
million (September 30, 2013: losses of $61 million).
(2) Includes additional paid-in capital as at September 30, 2014: $283
million (December 31, 2013: $276 million; September 30, 2013: $276
million) and convertible borrowings - equity component as at September
30, 2014: $38 million (December 31, 2013: $38 million; September 30,
2013: $38 million).The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CST Trust Company
Brookfield Place, TD Canada Trust Tower P.O. Box 700, Postal Station B
Suite 3700 Montreal, Quebec, Canada H3B 3K3
161 Bay Street, P.O. Box 212 or
Toronto, Canada M5J 2S1 American Stock Transfer & Trust
Company, LLC
Tel: (416) 861-9911 Fax: (416) 861-0727 6201 - 15 Avenue
Toll-free throughout North America: 1- Brooklyn, NY 11219
800-720-7415
Email: investor@barrick.com Tel: 1-800-387-0825
Website: www.barrick.com Toll-free throughout North America
Fax: 1-888-249-6189
SHARES LISTED Email: inquiries@canstockta.com
ABX - The New York Stock Exchange Website: www.canstockta.com
The Toronto Stock ExchangeCAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained or incorporated by reference in this Third Quarter Report 2014, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intend", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel and electricity); changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States, Zambia and other jurisdictions in which the Company does or may carry on business in the future; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit rating; the impact of inflation; operating or technical difficulties in connection with mining or development activities; the speculative nature of mineral exploration and development; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; litigation; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the company; our ability to successfully integrate acquisitions or complete divestitures; employee relations; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed company.
In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this Third Quarter Report 2014 are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.
The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.