Mr. Mark Bristow reports

BARRICK Q2 2020 RESULTS: SOLID OPERATING PERFORMANCE MAINTAINS PRODUCTION WITHIN GUIDANCE

Barrick Gold Corp. was on track to achieve annual production within its 2020 guidance range, despite the impact of the COVID-19 pandemic, the company said today. All amounts are expressed in U.S. dollars.

Second quarter results show year-to-date gold production of 2.4 million ounces, at the midpoint of its 4.6-million-to-five-million-ounce annual guidance, driven by strong operating performances, particularly from Nevada Gold Mines (NGM) in the United States, Loulo-Gounkoto in Mali and Kibali in the Democratic Republic of the Congo. Barrick's copper portfolio continued to outperform with Lumwana in Zambia posting its best quarterly production in years.

Operating cash flow exceeded $1-billion for the quarter and free cash flow was $522-million. Net earnings per share were 20 cents. Adjusted net earnings per share were 23 cents, up 44 per cent from Q1 and well ahead of the market consensus, debt net of cash was reduced by almost 25 per cent to $1.4-billion from the end of Q1, and the quarterly dividend was increased by 14 per cent to eight cents per share. The quarterly dividend has more than doubled since the announcement of the merger between Barrick and Randgold in September, 2018. The non-core asset disposal strategy, which is continuing, has so far delivered value of $1.5-billion of which $1.25-billion was in cash.

Key performance indicators:

• Continued solid performance positions Barrick well within annual production guidance, despite COVID-19 challenges;
• Improvement in safety management following increased focus;
• Strong cash generation highlights quality of assets and leverage to gold price;
• Barrick continues to be vigilant in its approach to contain the impact of COVID-19;
• Higher gold prices also result in higher royalty payments and costs;
• Strong operating performance for copper with costs per pound at lower end of the guidance range;
• Operating cash flow in excess of $1.0-billion and free cash flow greater than $500-million for the quarter;
• Net debt down almost 25 per cent to $1.4-billion with no significant maturities until 2033;
• Net earnings per share of 20 cents; adjusted net earnings per share up 44 per cent to 23 cents for the quarter;
• Strong operating performance from Tier 1 assets, with Pueblo Viejo production impacted by planned maintenance shutdown;
• Veladero production impacted by Argentina's COVID-19 movement and social distancing restrictions;
• 30 per cent of stockpiled concentrate shipped from Tanzania and first $100-million paid to government;
• Agreement reached in Mali to extend the Loulo convention to 2038;
• Significant exploration drill results from Nevada, Dominican Republic, Mali and Tanzania;
• Pueblo Viejo expansion, Goldrush development, Turquoise Ridge shaft and other key projects remain on track despite COVID-19 challenges;
• Non-core asset disposal strategy delivers $1.5-billion value realization, including $1.25-billion in cash, with more to come;
• Barrick increases quarterly dividend by 14 per cent to eight cents per share.

                                 FINANCIAL AND OPERATING HIGHLIGHTS
 
Financial results                                       Q2 2020        Q1 2020        Q2 2019

Realized gold price ($ per ounce)                        $1,725         $1,589         $1,317
Net earnings ($ millions)                                   357            400            194
Adjusted net earnings ($ millions)                          415            285            154
Net cash provided by
operating activities ($ millions)                         1,031            889            434
Free cash flow ($ millions)                                 522            438             55
Net earnings per share ($)                                 0.20           0.22           0.11
Adjusted net earnings per share ($)                        0.23           0.16           0.09
Attributable capital expenditures ($ millions)              402            364            361

Operating results                                       Q2 2020        Q1 2020        Q2 2019

Gold
Production (thousands of ounces)                          1,149          1,250          1,353
Cost of sales (Barrick's share) ($ per ounce)            $1,075         $1,020           $964
Total cash costs ($ per ounce)                              716            692            651
All-in sustaining costs ($ per ounce)                     1,031            954            869
Copper
Production (millions of pounds)                             120            115             97
Cost of sales (Barrick's share) ($ per pound)              2.08           1.96           2.04
C1 cash costs ($ per pound)                                1.55           1.55           1.59
All-in sustaining costs ($ per pound)                      2.15           2.04           2.28

President and chief executive Mark Bristow said the strong cash generation demonstrated the quality of Barrick's assets, management's ability to capture the full benefit of higher gold prices, effective operational execution and the group's deft handling of the COVID-19 pandemic's impact.

"Our flattened and decentralized management structure was a major factor in contending with COVID-19 while at the same time continuing to meet short-term targets and making significant progress toward our strategic objectives. Our major projects, including the expansion of Pueblo Viejo, the Goldrush development and the Turquoise Ridge shaft, remain on track. The only exception was Veladero, where the heap leach and cross-border Chilean power line projects were impacted by the Argentine government's pandemic quarantine restrictions," Mr. Bristow said.

"We also maintained our strong environmental, social and governance focus during this difficult period. The lost-time injury frequency rate decreased by 15.6 per cent quarter on quarter, and we further reduced our carbon emissions and continued to improve our water recycling and reuse performance."

Dealing with the operations, Mr. Bristow said in North America, NGM, led by Cortez, trended toward the upper end of its guidance as the integrated structure allowed the management team to adjust ore routing through Carlin's processing facilities in real time, while at the restructured Hemlo in Canada, exploration was indicating support for extending the life of mine beyond 10 years at a production profile of around 220,000 ounces per year.

In the Africa and Middle East region, Loulo-Gounkoto and Kibali were also at the upper end of their guidance. The Tanzanian assets are still being resuscitated but exports of the stockpiled concentrate have resumed and the Bulyanhulu underground operation is being recommissioned. Mr. Bristow said between them, North Mara and Bulyanhulu were capable of producing more than 500,000 ounces annually for at least 10 years.

In Latin America, Pueblo Viejo's production was down as expected due to a planned plant maintenance shutdown, while production and costs at Veladero were impacted by a nationwide quarantine and severe winter weather.

Porgera in Papua New Guinea remains on care and maintenance while the issue of its special mining lease is before the court.

Mr. Bristow said during the quarter there had been significant exploration results from Nevada, the Dominican Republic, Mali and Tanzania, and the expectation was to add significant mineral resources at most operations this year.

Q2 2020 results presentation

Webinar and conference call

Mr. Bristow will host an interactive webinar on the results today at 11 a.m. Eastern Daylight Time/3 p.m. Co-ordinated Universal Time. The presentation will be linked to the webinar and conference call:

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

United Kingdom (toll-free):  0808-101-2791

International (toll):  1-416-915-3239

The Q2 2020 presentation materials will be available on Barrick's website and the webinar will remain on the website for later viewing.

Quarterly dividend increased by 14 per cent

Barrick's board of directors has declared a dividend for the second quarter of 2020 of eight cents per share, a 14-per-cent increase on the previous quarter's dividend, payable on Sept. 15, 2020, to shareholders of record at the close of business on Aug. 31, 2020.

Senior executive vice-president and chief financial officer Graham Shuttleworth said that Barrick's quarterly dividend has more than doubled since the announcement of the Barrick-Randgold merger in September, 2018, reflecting Barrick's continued strong financial performance.

"The board believes that the dividend increase is sustainable and reflects the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7-billion, including a cash balance of $3.7-billion at the end of the second quarter, and no material debt repayments due before 2033," said Mr. Shuttleworth.

Strong structure, partnership culture drive prompt and effective pandemic response

A fit-for-purpose management structure coupled with its deeply embedded health and welfare commitment enabled Barrick to buffer the impact of the COVID-19 pandemic on its business, people and communities as well as to provide vital support to its host governments.

Mr. Bristow said the company's flattened and regionally devolved management formation provided the ideal platform for immediate site-appropriate action and swift engagement with local stakeholders.

"Caring for the well-being of our employees and communities is a key characteristic of the Barrick DNA. Our financial strength, well-established prevention practices and procedures, and the experience we gained from dealing with two Ebola pandemics around our African operations stood us in good stead as we faced this new and unprecedented challenge," he said.

"At all our sites, strict access, screening, sanitation and isolation measures were implemented and through our community engagement channels, we also took the lead in introducing these protocols, supported by education programs, to our neighbours. The provision of rapid antibody testing kits to local clinics and hospitals was particularly valuable in helping them to manage the pandemic's initial onslaught."

Barrick's group sustainability executive, Grant Beringer, said that to date the company has provided more than $20-million in support to its host communities, much of it in the form of medical supplies and equipment. In addition, some of its businesses have prepaid taxes to ease the pandemic's pressure on their host countries' economies.

In the Dominican Republic, Pueblo Viejo prepaid $113-million to the tax authorities, bringing its total tax payments to the government to more than $2-billion since 2013. In Mali, the Loulo-Gounkoto complex made an early tax and royalty payment of $20-million and in Ivory Coast, Tongon prepaid $5-million. In Nevada, the state legislature has approved an offer by Nevada Gold Mines (NGM) to prepay net proceeds tax as a COVID-19 relief measure. Under this arrangement, NGM expects to pay $170-million to the state by March, 2021. In addition, NGM has chosen not to take up the option of deferring payroll tax payments amounting to $40-million. Deferral of these payments is allowed under U.S. legislation aimed at supporting businesses through the pandemic.

"We recognize the importance our tax contribution makes to Nevada's economy and NGM is stepping up to support the state at a time when other businesses there find themselves in financial distress," said Mr. Bristow.

"In Nevada, as elsewhere in our global operations, our aid has not been prompted by self-interested commercial considerations, but by Barrick's foundational philosophy of partnership, which in this time of crisis has again demonstrated its value to our stakeholders."

Mr. Beringer noted that Barrick operates in 12 countries, each with its own culture and at different stages of economic development. Consequently, aid was tailored to their particular needs in consultation with their governments.

"In Latin America, support has been focused on infrastructural and equipment needs. In Africa, the emphasis has been on improving existing health care facilities and capacity. Where financial donations were made, we engaged thoroughly with the governments to identify specific requirements and assisted them in sourcing equipment and supplies. In the DRC, we converted Kibali's Ebola isolation centre into a 100-patient COVID-19 treatment facility tailored to government guidelines. In North America we sought to stimulate local economies, for example by donating vouchers to employees that are only redeemable at stores and service providers in the local community. NGM has also established a fund to help local businesses impacted by the pandemic," he said.

"The commitments our sites made to community investment and development prior to the COVID-19 outbreak remain intact and are being fulfilled in conjunction with our pandemic support programs. These include major projects such as the Durba road in the DRC and the shift to local contractors and suppliers in Tanzania."

At the group level, all Barrick's significant expansion projects remain on track, with internal teams having been trained to lessen reliance on external contractors. Among these are the solar power programs in West Africa and Nevada, the expansion of Pueblo Viejo in the Dominican Republic, the Bulyanhulu underground project in Tanzania, and the Goldrush and Turquoise Ridge developments in Nevada.

Tanzania mines focus on social licence and rebuilding mining operations

When Barrick took over the Acacia assets in Tanzania in September last year, it was faced with a cleanup of Herculean proportions:

• Relations between the former management and the government as well as the community had broken down completely.
• North Mara had been closed under an environmental protection order.
• Bulyanhulu had been overrun by about 20,000 illegal miners and was no longer operating.
• The government had frozen all concentrate sales as well as the concentrate containers held under court order at port. There were hundreds of long-standing grievances, property disputes and accusations of human rights abuses at the mines.
• No geological block modelling, mineral resource management or mine planning had been done at the mines.
• Survey data were significantly incorrect, and capital allocation as well as executive decision making were haphazard at best.

The first priority of Africa and Middle East chief operating officer Willem Jacobs and his team was to regain the trust of the government, which they did so successfully that the framework agreement which had been in limbo for years, was swiftly finalized and signed at a ceremony attended by Tanzanian president John Magufuli and Mr. Bristow. This was followed by the establishment of Twiga Minerals Corp., a joint venture between Barrick and the government designed to oversee the management of the mines as well as the equal sharing of the economic benefits they create.

Greatly assisted by the Twiga board, Barrick and the affected communities soon agreed on a way forward to settle all the legacy land claims at North Mara.

Barrick's DNA was infused into Tanzania with the introduction of key staff from its Mali operations, after the change of all but two members of the former management.

Operationally, the team developed and implemented a new tailings and water management plan for North Mara. The mine could then resume production and the ban on dore sales was lifted. Getting to grips with the geology, a new block model that confirmed the acquisition assumptions and upside, was completed. Ten new exploration permits around North Mara have also been awarded by the government.

A study on restarting the Bulyanhulu mine projected the resumption of underground mining activities at the end of 2020, in line with guidance. Work on the structural integrity of the metallurgical plant commenced upon completion of the Acacia transaction, and refurbishment of the shaft is scheduled to start in August.

Another study to determine extensions at Buzwagi is under way and a local content plan has been submitted to the government.

Mr. Bristow said enormous progress has been made in fixing the Tanzanian situation, not least by concentrating on Barrick's stakeholder engagement and community relations, with a focus on building a real social licence at what were badly neglected but world-class assets.

"The foundation has been laid for delivery, and I can see North Mara and Bulyanhulu together eventually ranking as a Tier 1 complex, with annual production in excess of 500,000 ounces at a cost in the lower half of the industry curve, well beyond 10 years," he said.

Cortez leads the way in Nevada

Cortez continues to produce higher-than-planned ounces at a lower cost, confirming its status as Nevada Gold Mines' flagship as well as the leader in the general move from lower-grade open-pit operations to higher-grade underground mining.

Its outperformance is being driven by the underground operation, where improved efficiencies supported mining at higher production rates. On the back of this performance, the mineral resource management team has stepped up their game to test for geological extensions and the potential feeders of the known mineralization, which could significantly extend the life of mine, enabling it to maintain its Tier 1 status without the assistance of Goldrush.

During the past quarter, the Goldrush project team was integrated into the Cortez organization. Development of the Goldrush declines is ahead of plan and the transition from contractor to owner operation has been brought forward to 2020. The underground management team is currently developing operational readiness for the acceleration of the project, scheduled to expose first ore in the first half of 2021. Permits are expected in late 2021, paving the way for the start of final construction activities which Greg Walker, executive general manager, explains will further ensure the Cortez operations remains a long life, Tier 1 complex, one of three such operations in the Nevada Gold Mines portfolio.

In the meantime, Barrick's nearby Fourmile project, which has not yet been included in the Nevada Gold Mines portfolio, has reported very significant drill results confirming the impressive high-grade of the mineralization as well as its exciting future potential.

Exploration maintains Barrick's focus on the future

Despite the challenges presented by the COVID-19 pandemic, Barrick's exploration teams have continued to add to the mineral inventory that is needed to sustain a profitable mining enterprise.

During the past quarter, there were significant drill results from all regions. In Nevada, these included the high-grade intercepts at the Fourmile project, the highest grade ever intercept at North Leeville and the thick intercepts at Deep Post.

At Pueblo Viejo, in Dominican Republic, the first structural model and state-of-the-art geophysics have unlocked a new generation of targets, and at Loulo 3, in Mali, new intersections have confirmed that high-grade mineralization is still open down plunge. Also at Loulo, the high-grade Yalea transfer zone has been extended 480 metres beyond the 2019 block model and is still open down plunge. A greater-than-one-kilometre-long mineralized trend has been confirmed south of the Gounkoto open pit, also in Mali.

During the quarter, the exploration teams in Africa and the Middle East (AME) as well as Latin America (LatAm) were strengthened with the appointment of senior managers, Aoife McGrath as vice-president exploration for AME and Leandro Sastre as vice-president, exploration, for LatAm.

Ms. McGrath has worked with and led exploration teams in Africa, North and South America and Europe, and her experience spans the full spectrum of company size and exploration stages. Named as one of the global 100 inspirational women in mining, she has been involved in a number of major discoveries and brings strong commercial skills to her new role.

Mr. Sastre was previously mine operations and technical services manager at Veladero. His wide skills base ranges from exploration through ore control to resource modelling. He was closely involved with Exeter's discovery and delineation of the Caspiche orebody in Chile, now part of the company's Norte Abierto project, and the Cerro Moro orebody in Argentina, which is now an operating mine.

Recruiting and developing a new generation of leaders

Barrick employs more than 20,000 people along with another 21,000 contractors in 12 countries across the world, and its recruitment and development policies are designed to ensure that they can be the best of the best.

The company has a strong tradition of hiring locally for operational as well as management roles. In its Africa and Middle East (AME) region, 76 per cent of management positions are occupied by host country nationals. In North America (NA) that figure is 88 per cent and in Latin America and Asia Pacific (LatAm and AP) it is 51 per cent. Last quarter, only 10 foreign nationals were hired into management positions across all three regions.

To ensure that its people profile is aligned to societal and technological changes, Barrick is also driving the employment of younger candidates as well as women. In the year to date, new hire percentages under 30 years of age were 50 per cent in AME, 46 per cent in NA, and 42 per cent in LatAm and AP.

Mining is traditionally a male-dominated industry and Barrick is making a determined effort to recruit more women through targeted campaigns. In NA, 15 per cent of employees are women, and 25 per cent of new hires so far this year were women. In LatAm and AP, where 11 per cent of all positions are held by women, hiring rates were 18 per cent in Q1 and 33 per cent in Q2, reflecting the region's improving ability to source and employ women candidates. The AME region has cultural obstacles to the employment of women, but there too the position is improving, with new placements up to 10 per cent from a 6-per-cent base.

Each region has identified high-potential women for further career development at all levels of the business. Barrick also has partnered with leading universities to customize development programs designed to meet its specific needs.

In NA, 40 per cent of the current participants in Barrick's Greenfields talent program are women, who spend 12 months working in an operational environment, then lead a crew for six months as relief supervisor before taking up their technical positions with Nevada Gold Mines. The company's Compass development program offers cross-functional modules ranging from geology through production to health and safety. Of the current group of participants in this program, 36 per cent are women. Across AME, Barrick offers apprentice training leading to artisan status, and in NA, Nevada Gold Mines is the leading participant in the maintenance training co-operative program with Great Basin College.

"We want to have the right skills in the right jobs, but we also want to make sure that we have an appropriately diverse work force, and that by investing in young people, we are building a new generation of leaders to take Barrick into the future," said Mr. Bristow.

Pueblo Viejo awarded gold seal for gender equality

The gold seal is the highest level of a new gender equality certification and it was awarded to Pueblo Viejo (PV) following a meticulous review by the Dominican Institute for Quality (INDOCAL), the Dominican Republic's Ministry of Women and the United Nations Development Program (UNDP). At the same time, PV was also awarded the Nordom 775 certification for best practice in gender equality and equity.

The certifications reflect PV's commitment to equal rights, benefits and opportunities for all employees, regardless of gender, and confirm that its workplace policies align with the United Nation's sustainable development goals and the Dominican Republic's national development strategy with regard to reducing the gender pay gap and advancing women's representation in leadership positions.

                                      CONSOLIDATED STATEMENTS OF INCOME
                               (in millions of dollars, except per-share data) 

                                                 Three months ended June 30      Six months ended June 30
                                                         2020          2019           2020           2019

Revenue                                                $3,055        $2,063         $5,776         $4,156
Costs and expenses (income)
Cost of sales                                           1,900         1,545          3,676          3,035
General and administrative expenses                        71            59            111            113
Exploration, evaluation and project expenses               78            98            149            172
Impairment (reversals) charges                             23            12           (313)            15
Loss (gain) on currency translation                         2            (6)            18             16
Closed mine rehabilitation                                  7            16             97             41
(Income) from equity investees                            (61)          (50)          (115)           (78)
Other expense                                              73             7             38             33
Income before finance costs and income taxes              962           382          2,115            809
Finance (costs), net                                      (82)         (118)          (186)          (238)
Income before income taxes                                880           264          1,929            571
Income tax (expense)                                     (258)          (41)          (644)          (208)
Net income                                                622           223          1,285            363
Attributable to
equity holders of Barrick Gold                            357           194            757            305
Attributable to
non-controlling interests                                 265            29            528             58
Earnings per share data attributable
to the equity holders of Barrick Gold
Net income
Basic                                                    0.20          0.11           0.43           0.17
Diluted                                                  0.20          0.11           0.43           0.17

We seek Safe Harbor.