Mr. Mark Bristow reports

ANOTHER STRONG QUARTER POSITIONS BARRICK TO DELIVER ON ANNUAL PRODUCTION GUIDANCE

Capturing the benefit of higher gold prices through agile management and operational efficiency, Barrick Gold Corp. increased its operating cash flow by 80 per cent quarter on quarter to $1.9-billion and free cash flow by 151 per cent to $1.3-billion in the third quarter of 2020 -- a record level of quarterly free cash flow for the company. Net earnings per share were 50 cents, while adjusted net earnings per share were 78 per cent higher than the prior quarter at 41 cents. Debt net of cash was reduced by a further 71 per cent to $417-million, compared with $1.4-billion in the prior quarter, and the quarterly dividend was increased again, the third time in the past year, rising by 12.5 per cent to nine cents per share. All amounts are expressed in U.S. dollars.

President and chief executive Mark Bristow said that, two quarters into the COVID-19 pandemic, it was clear how effectively Barrick had been dealing with the impact of the virus on its business, its people and its communities.

"As today's results show, in the face of unprecedented challenges we have succeeded in beating our earnings consensus, reinforcing our 10-year plan and capitalizing on the gold price to maintain an industry-leading balance sheet. Our year-to-date gold production of 3.6 million ounces keeps Barrick on track to achieve our guidance of between 4.6 [million] and 5.0 million ounces for the year," he said.

Of the group's capital projects for the assets the company operates, only Veladero's cross-Andean power line and phase 6 expansion were stalled as a result of Argentina's COVID-19 response and further complicated by the onset of winter, with these projects now restarted. The construction of the third shaft at Turquoise Ridge, the twin declines at Goldrush and the underground mine at Gounkoto, as well as Hemlo's transition to contractor underground mining, the process plant and tailings expansion plan at Pueblo Viejo, the commissioning of the group's first solar power plant at Loulo and the resumption of underground mining at Bulyanhulu were not interrupted.

In October, Twiga Minerals Corp., the groundbreaking joint venture between Barrick and the government of Tanzania, paid a maiden dividend of $250-million. Mr. Bristow said the revived Tanzanian mines, North Mara and Bulyanhulu in combination, had the potential to become Barrick's seventh Tier 1 asset. A Tier 1 mine is defined as one that can produce more than 500,000 ounces of gold annually for at least 10 years in the lower half of the industry's cost curve.

Subsequent to the third quarter, Barrick and the government of Papua New Guinea announced that they had agreed in principle on the formation of a new partnership to operate the Porgera mine that is currently on care and maintenance. Under the conceptual agreement, which is still to be finalized, Barrick Niugini Ltd. will remain the operator, the government will acquire a major share of the equity, and the two sides will agree on a equitable sharing of economic benefits.

Mr. Bristow said Barrick's restructuring and portfolio rationalization had made it a more streamlined business with a much improved exploration strategy, particularly in its Latin American region, which should uncover new business opportunities. In the meantime, exploration around its Tier 1 assets continued to deliver organic growth and the company was expecting to grow mineral resources at most of its key assets.

"Barrick's consistently strong performance since the merger has more than validated our belief that a combination of the best assets with the best people would deliver the best returns. It also shows that a business flourishes when it is driven by a clear strategy and not by the whims of the market," Mr. Bristow said.

Key performance indicators:

• Another solid quarter positions Barrick to deliver on annual production guidance;
• Higher gold prices drive strong cash flow and increased royalty costs;
• Operating cash flow of $1.9-billion and record free cash flow of more than $1.3-billion;
• Debt net of cash reduced by 71 per cent to $400-million with no significant maturities until 2033;
• Strong operating performance across three quarters highlights asset quality;
• Agile organizational structure continues to minimize the impact of COVID-19;
• Consistent delivery from copper operations with costs tracking toward low end of guidance range;
• Net earnings per share of 50 cents; adjusted net earnings per share up 78 per cent to 41 cents for the quarter;
• Twiga partnership in Tanzania pays maiden dividend with all stockpiled concentrate sold;
• Continued improvement in safety across the group year on year for both lost-time and total injury frequency rates;
• Capital project teams remobilized in Argentina while all other capital projects remain on track;
• Focus on exploration and organic growth highlights upside potential across Tier 1 portfolio;
• Significant stratiform mineralization connects Goldrush to Fourmile;
• Continuing portfolio rationalization converts closure properties to value opportunities;
• Barrick declares nine-cent quarterly dividend per share.

                              FINANCIAL AND OPERATING HIGHLIGHTS
 
Financial results                                             Q3 2020       Q2 2020       Q3 2019

Realized gold price ($ per ounce)                              $1,926        $1,725        $1,476
Net earnings ($ millions)                                         882           357         2,277
Adjusted net earnings ($ millions)                                726           415           264
Net cash provided by operating activities ($ millions)          1,859         1,031         1,004
Free cash flow ($ millions)                                     1,311           522           502
Net earnings per share ($)                                       0.50          0.20          1.30
Adjusted net earnings per share ($)                              0.41          0.23          0.15
Attributable capital expenditures ($ millions)                    436           402           397

Operating results gold                                        Q3 2020       Q2 2020       Q3 2019

Production (000 of ounces)                                      1,155         1,149         1,306
Cost of sales (Barrick's share) ($ per ounce)                  $1,065        $1,075        $1,065
Total cash costs ($ per ounce)                                    696           716           710
All-in sustaining costs ($ per ounce)                             966         1,031           984
Copper
Production (millions of pounds)                                   103           120           112
Cost of sales (Barrick's share) ($ per pound)                    1.97          2.08          2.00
C1 cash costs ($ per pound)                                      1.45          1.55          1.62
All-in sustaining costs ($ per pound)                            2.31          2.15          2.58

Q3 2020 results presentation

Webinar and conference call

Mr. Bristow will host a virtual presentation on the results today at 11 a.m. Eastern Standard Time/4 p.m. Co-ordinated Universal Time, with an interactive webinar linked to a conference call. Participants will be able to ask questions:

U.S. and Canada (toll-free):  1-800-319-4610

U.K. (toll-free):  0-808-101-2791

International (toll):   1-416-915-3239

The Q3 2020 presentation materials will be available on Barrick's website and the webinar will remain on the website for later viewing.

Barrick declares increased dividend

Barrick today announced that its board of directors has declared a dividend for the third quarter of 2020 of nine cents per share, a 12.5-per-cent increase on the previous quarter's dividend, payable on Dec. 15, 2020, to shareholders of record at the close of business on Nov. 30, 2020.

Senior executive vice-president and chief financial officer Graham Shuttleworth said that this represents the third increase in the quarterly dividend in the past year and that Barrick's quarterly dividend has tripled since the announcement of the Barrick-Randgold merger in September, 2018, reflecting Barrick's continued strong financial performance.

"The board believes that the current dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $7.7-billion, including a cash balance of $4.7-billion, and a debt net of cash position of just $400-million as of the end of the third quarter, as well as no material debt repayments due before 2033," said Mr. Shuttleworth.

Anne Kabagambe appointed to Barrick's board

Barrick has appointed Ms. Kabagambe to its board of directors as an independent director.

Ms. Kabagambe has 35 years of experience spanning a diverse range of senior leadership positions in international institutions. She is a former executive director of the World Bank Group where she served from 2016 to 2020, representing the interests of 22 sub-Saharan African countries, including Tanzania and Zambia, where Barrick has gold and copper operations. While at the World Bank, she sat on the development effectiveness committee, the budget committee and the pension benefits committee. Ms. Kabagambe also co-chaired the World Bank board's gender working group and is a strong advocate for the advancement of women and a champion of diversity and inclusion.

Prior to the World Bank, she spent 27 years at the African Development Bank, where she built an extensive network within Africa and other parts of the world. During this time, she helped develop co-operative agreements with Asian countries and held the position of chief of staff for the African Development Bank president. Ms. Kabagambe has also served on the boards of the Africa American Institute (AAI) and Junior Achievement (JA) Africa.

She has an undergraduate degree from the University of California at San Diego (UCSD), master's degrees in public policy from Columbia University's School of International and Public Affairs and George Washington University, and also obtained postgraduate diplomas from Harvard University's John F. Kennedy School of Government and the Cranfield School of Management.

Barrick executive chairman John Thornton said Ms. Kabagambe would strengthen the board and bring an independent understanding of doing business internationally, informed by her experience in engaging with governments, the private sector and civil society and in particular her knowledge of the global resource, banking and education sectors.

Finding and developing the talent to take Barrick into the future

A modern mining business needs people who share its vision and its values, and are entrepreneurial, agile, alive to technological and societal changes, and profit orientated. That is why, in an industry traditionally dominated by aging males, Barrick is building an employee corps with its eye on the future.

Barrick has a long tradition of hiring locally for both operational and managerial roles, in recognition of its host countries' status as important stakeholders in the business. Current staffing levels of host country nationals in management roles are 80 per cent in Africa and Middle East (AME), 63 per cent in Latin America and Asia Pacific (LatAm and AP), and 97 per cent in North America (NA).

Barrick has now also embarked on a drive to recruit more young people and women. In the year to date, the proportion of new hires under the age of 30 was 22 per cent in AME, 31 per cent in NA, and 36 per cent in LatAm and AP. In NA, where 16 per cent of the employees are women, females accounted for 26 per cent of new hires year to date. In LatAm and AP, where 10 per cent of all positions are held by women, hiring rates were 18 per cent in Q1, 33 per cent in Q2 and 15 per cent in Q3, reflecting the region's improving ability to source and place women. The AME region has cultural obstacles to the employment of women but there too the situation is improving with new placements up to 8 per cent from a 6-per-cent base. It is worth noting that a high proportion of the female employees in this region hold managerial positions in geology, engineering and finance.

"We invest in developing our talent to position us for future growth," said group human resources executive Darian Rich. "We build their leadership skills and guide their career advancement through tailored executive and management development programs designed in partnership with leading universities in Africa, Europe and the U.S. During the pandemic, we have continued to offer these programs through remote learning courses."

Barrick promotes a culture of continuous learning through group-wide programs designed to develop a foundation of operational knowledge and management skills. These include:

• The compass program, which provides structured training and mentorship for early-career technical employees;
• The greenfields talent program, which provides new engineering graduates with underground mining experience;
• The finance for business leaders program, which encourages an ownership mindset and integrates commercial principles and technical skills.

While many companies have cancelled their internship programs, Nevada Gold Mines continued to secure the most talented graduates through attractive development opportunities, and strengthened its future pool of professional candidates, including 33 per cent females in this year's cohort.

Barrick also offers technical skills and apprenticeship training, developed in modules and constantly updated.

The executive team and senior leaders recently held a two-day talent and succession planning review to ensure that the group has the right skills in the right jobs to drive business priorities across the regions and sites. The review also identified potential future leaders for continuing performance assessment and access to individual development plans.

"Barrick's commitment to supporting education extends beyond its operations," said Mr. Rich. "Nevada Gold Mines recently announced a $2.2-million investment in digital education for schools in partnership with Discovery Education and the Nevada Department of Education. Access to Discovery's award-winning K-12 platform keeps students learning whether they are at home or at school."

World-class geologists lead Barrick's global drive

Since the Barrick-Randgold merger reintroduced geology as the foundation of the business, the company has launched a new exploration strategy that is being implemented by rebuilt and reinvigorated exploration teams in each of its regions.

Rod Quick, Barrick's mineral resource management and evaluation executive, explains that this strategy has multiple elements that all need to be in balance to deliver on the group's business plan for growth and long-term sustainability.

These include linking geology and mineral resource management closely to supply projects of a short- to medium-term nature that could help optimize life-of-mine plans and smooth out dips in the production profile.

Secondly, there is the hunt for the next addition to Barrick's Tier 1 portfolio, which already boasts six of these world-class mines. "Brownfields exploration optimizes our existing assets; a new discovery represents pure growth," said Mr. Quick.

Then there is also the optimization of the value of major undeveloped projects. A prime example of these is Donlin, where a rereview of the model, based on fundamental geological observations, will improve and derisk the resource model leading to an improved mine plan.

With competition for quality assets becoming more intense, the chase is on to find emerging opportunities early in their value chain and then to secure them by an earn-in or even outright purchase. Historically, Barrick has done well at this, with Goldstrike, Pierina, Loulo and Kibali all outstanding examples of geology-led acquisitions. But Rob Krcmarov, Barrick's exploration and growth executive, cautions that this only works if the characteristics of the underlying orebody are well understood and there is a real upside.

"Short- and long-term integrated planning is fundamental to our business culture, and we use the resource triangle as a tool to manage our deliverables," he said.

"In the final analysis, however, it's people and ideas that make discoveries, not an exploration process. That's why we expect more than technical excellence from our geologists. They also need to be entrepreneurial, imaginative and creative -- and, as they are often our first point of contact with potential host communities, they also have to grasp the social component of our licence to operate."

SAP implementation in Nevada marks an important milestone in Barrick's digital transformation

Barrick's new transactional system, SAP S4 HANA, has gone live at Nevada Gold Mines and will be rolled out across the entire group in the course of 2021.

The implementation lays one of the key foundations for the group to reap the benefits of becoming truly digital and will enable a new level of real-time decision making as well as a more agile and business-led approach to systems and data-driven initiatives.

The project stayed on track with a very ambitious timeline despite the obvious challenges presented by the pandemic, with the legacy Newmont sites going live on Aug. 1 and the rest of Nevada Gold Mines on Oct. 1. Head of group systems integration, Nico Hoffman, said that "by keeping the global design standardized and focused on getting the basics right, we have set up the rest of the implementations for success and paved the way for them to be completed on time."

Training adopted a new approach, formulated during Barrick's strategy sessions earlier this year. This involved identifying particularly talented individuals who were added to a pool of superusers inside the various business functions. These users take up ownership of the system by acting as the first line of support for issues as well as by driving continuous incremental improvement of the core application. Almost immediately they began delivering refinements and improvements which will be included in future rollouts.

"This project demonstrates the value of having both a very clear end goal and the correct level of executive functional sponsorship on board from the very beginning and we look forward to seeing the results of applying this to future developments," Mr. Hoffman said.

The SAP rollout coincides with the start of a number of equally ambitious initiatives including a common global data platform, a new financial reporting and planning system, as well as various operational technology enhancements, rationalizations and unifications. It also signals the end of siloed local customizations which previously stood in the way of one true global solution.

Global closure strategy: plan for the end before the beginning

The mining industry has traditionally dealt with the issue of mine closures by kicking the can down the road, delaying the inevitable for as long as possible, usually through a series of compliance adjustments.

This is clearly not a sustainable approach, said Mr. Bristow. "We believe that how we close our mines is as important as how we build and operate them, and that is why we plan their closure before we even start designing them, and integrate that plan across all the stages of their lives," he said.

Barrick has a number of legacy sites, in part acquired over the years through mergers and acquisitions. To ensure their successful closure in a consistent manner, the company has adopted a new global closure standard, which group sustainability executive Grant Beringer describes as the most progressive in the mining industry, noting that it has drawn not only from Barrick/Randgold's experience, but also from inputs and advice provided by multiple international authorities.

Its key objectives are to find passive solutions for long-term water management, to prepare sites for a beneficial alternative use and possible divestiture, and to ensure that tailings storage facilities meet or exceed international safety standards.

The new strategy has already delivered significant successes, including the sale of Barrick's interests in the Morila mine in Mali, the Eskay Creek mine in British Columbia, the Bullfrog mine in southern Nevada and mining claims in South Dakota. Other divestiture opportunities are being discussed.

These divestitures are expected to deliver value and add to the $1.5-billion that Barrick has already realized through its portfolio rationalization following the merger with Randgold. They are also allowing the company to tighten its focus on Tier 1 assets -- those mines capable of producing more than 500,000 ounces of gold annually for at least 10 years in the lower half of the industry's cost curve.

"It's worth noting that while the divestiture sites do not meet our investment criteria, they may have a geological potential that could be realized under different owners with the necessary technical and financial capacity. In those cases, the host country and communities will continue to reap economic benefits when these sites are returned to production by new operators," Mr. Bristow said.

Catherine Raw, chief operating officer for North America, explained: "The closure strategy has also created new business opportunities for Barrick, like the Golden Sunlight mine tailings reprocessing project. This involves the conversion of waste material into sulphur feedstocks for Nevada Gold Mines' roasters and autoclaves while using the leftover benign material as pit backfill. This innovative project will reduce environmental liabilities and thus cut closure costs at Golden Sunlight while creating more value for Nevada Gold Mines and other stakeholders."

In Peru, Barrick has signed a water transfer agreement with the Ministry of Agriculture under which the company will finance the construction of an $11-million pipeline from the White Andes to the communities around the Pierina mine. This will make these communities independent of the water supply from Pierina by 2024 -- yet another example of how a thoughtfully planned closure can leave a lasting benefit for its hosts.

Closed Barrick properties are also being used to conduct cutting-edge scientific research, including the fundamental neutrino and dark matter research at the Sanford underground research facility located in the underground workings of the former Homestake gold mine in Lead, S.D. Homestake was the largest and deepest gold mine in North America, producing approximately 41 million ounces of gold over its 126-year lifetime. The mine now provides a near-perfect environment for experiments that need to escape cosmic radiation that can interfere with the detection of rare physics events.

"Our global closure strategy is in fact a process of beneficial rationalization in which old problems are converted into new opportunities, benefiting all our stakeholders," Mr. Bristow said.

Managing by walking about

Mines cannot be managed effectively by remote control. That is why after last year's merger, Barrick's head office was converted into a much smaller corporate hub providing specialized services while operational management was transferred to the mines.

The new decentralized structure -- one of the flattest in the extractive industries for a business of Barrick's size -- means that senior executives directly engage with operations and employees, whom they learn to know personally by name as well as skill set. It also gives them a first-hand insight into the engine rooms that drive the business, a better perspective on the challenges and opportunities at each site, a chance for best practice sharing, and a forum for collective decision making.

For the employees, personal access to Barrick's leadership team provides a platform to propose suggestions, raise and debate issues, contribute to decision making, and reinforce their role in living Barrick's core values and delivering on its objectives.

Barrick executives visit all the operations in each of the regions at least once a quarter for an in-depth discussion with employees on business execution, safety and environmental performance and the status of key projects. They also use these visits as an opportunity to interface with community leaders.

During COVID-19, this engagement has continued -- both on a virtual basis and in person. It is these relationships that have played a significant part in Barrick's ability to ensure both prompt and effective responses to the pandemic across its portfolio of operations.

Pioneering Kibali continues to point the way

The Kibali mine is on track to deliver at the upper end of its 2020 guidance, said Mr. Bristow.

Kibali was the first underground gold mine in the Democratic Republic of the Congo and is one of the largest in the world. It is a global leader in automation and continues to improve efficiency and productivity through continuing technological innovation. In the third quarter it set a new ore delivery record from underground, exceeding nameplate for the first time since the shaft was commissioned in 2018.

"Automation is often associated with reduced employment but we use it as an opportunity to further upskill our workers and to reduce our need for expatriate specialists. It is worth noting that Kibali -- one of Barrick's elite corps of Tier 1 mines -- is led by a predominantly Congolese management team in line with our policy of employing and advancing host country nationals," Mr. Bristow said.

A Tier 1 mine is one capable of producing at least 500,000 ounces of gold annually for at least 10 years in the lower half of the industry's cost profile. Mr. Bristow said brownfields exploration was extending Kibali's life by replacing reserves depleted by mining. Barrick's exploration teams are also hunting for the next Kibali elsewhere in the DRC.

During the past quarter, battery technology was successfully integrated into the Kibali power grid to augment the mine's three hydropower stations and offset the cyclical load of the winder. In line with Barrick's global move to cleaner energy sources, the new technology will further reduce the mine's carbon footprint and use of thermal power.

Following a recent meeting with President Tshisekedi, Mr. Bristow said they had agreed that Kibali had brought a thriving local economy to what was previously one of the most deprived regions in the DRC.

"The continuing paved extension to the Durba road will provide construction work for local contractors for the next three years. Community support continues to be reinforced through other initiatives such as the Renzi agribusiness project and the planned palm oil project. We also remain committed to transferring skills to the community, and the upgrading of the Kokiza training centre for engineers is scheduled to start later this year," he said.

Additionally, utility buildings initially built as isolation wards during the Ebola outbreak and subsequently used as a quarantine centre for COVID-19 cases, will now be transitioned to a tropical disease centre to serve local communities.

Strong partnerships in Mali support robust production performance

The Loulo-Gounkoto complex remains on track to meet the upper end of its 2020 guidance in the face of multiple challenges including a military coup in Mali.

Mr. Bristow attributed this performance to the company's long-established relationships with partners in Mali and its philosophy of sharing the benefits it creates with its local stakeholders. Over the past 24 years, Barrick and its legacy company, Randgold Resources, have contributed $7.4-billion to the Malian economy in the form of taxes, royalties, salaries and payments to local suppliers. So far this year, Loulo-Gounkoto has spent $275-million with local contractors and suppliers.

The development of the complex's third underground mine at Gounkoto is on track to deliver its first ore tonnes in the second quarter of 2021. Meanwhile, Barrick's first solar power plant has been commissioned and is ramping up to deliver 20 megawatts into the microgrid, in line with the company's strategy of transitioning to cleaner forms of energy.

The complex has paid dividends totalling $160-million in the year to date with Loulo paying a maiden dividend in the quarter on the back of the mine's convention amendment.

Barrick has agreed to sell its other operation in Mali, Morila, to Mali Lithium with the government retaining its 20-per-cent stake. Morila was the mine that laid the foundation for Randgold's success, producing almost seven million ounces of gold over its life. Mr. Bristow said the transaction created the opportunity for Morila's infrastructure and assets to be redeployed for the benefit of its employees, surrounding communities and the country.

"We've always had great confidence in Mali and its people, hence our continuing commitment to the country. It's gratifying to note that Mali is dealing with its political challenges and has already returned to a civilian-led transitional government. We look forward to being part of its future," Mr. Bristow said.

We seek Safe Harbor.