Mr. Mark Bristow reports
AFTER A YEAR OF BUILDING A STRONG FOUNDATION, BARRICK LOOKS TO THE NEXT PHASE OF VALUE CREATION
In the first year since the merger with Randgold Resources, the restructured and refocused Barrick Gold Corp. has delivered a strong operational performance and has made significant progress toward its goal of becoming the world's most valued gold company, said the 2019 annual report,
published on March 25, 2020.
All amounts are expressed in U.S. dollars.
President and chief executive officer Mark Bristow said in the report that Barrick's new leadership started 2019 with a long and challenging to-do list and succeeded in ticking all the boxes and more. Highlights included gold production at the top end of the guidance range; copper production which exceeded its forecast; the consummation of the Nevada gold mines joint venture, majority-owned and operated by Barrick; the consolidation of the Tanzanian mines; and the disposal of some non-core assets. Net of depletion, proven and probable reserves increased year over year at a higher grade. Net earnings per share were $2.26 for 2019, adjusted net earnings rose by 46 per cent (1), net debt was halved to $2.2-billion and the quarterly dividend was increased three times during the year.
Behind the scenes, the corporate structure was flattened, general and administrative costs were reduced, executive management teams were established for each region, and responsibility for the orebodies was moved back to the operations. A strong geological and mineral resource management capacity was introduced throughout the organization to ensure the optimization of existing assets.
"The work we did in 2019 has equipped us well to take Barrick to the next level," said Mr. Bristow. "We stand on the strong foundation of our enormous organic growth potential, which will support a positive production profile and a very robust business, capable of generating a substantial cash flow for at least the next decade. There are also opportunities for growth outside our current ambit, which we continue to explore."
Included in the report is Barrick's 10-year production plan, which showcases a modern gold mining business capable of sustainably producing around five million ounces of gold per year and delivering significant free cash flow (2).
Bristow noted that, during the past year, environmental, social and governance (ESG) management had become a key investment criterion, and is now generally accepted as a critical measure of the sustainability of a business.
"The principles of ESG have long been embedded in the DNA of both legacy companies. Our long-term strategy recognizes that we operate in a changing world, where business is expected to meet the highest standards of behaviour and where ethical issues have become commercial considerations with serious consequences. We call this our social licence, and it is a core part of all our operations," he said.
"Barrick is also intent on being at the leading edge of digitalization and automation in the mining industry, and trials and projects designed to make our operations more efficient, as well as safer, are driving the increased use of technology across the group."
Also, in the annual report, executive chairman John Thornton noted that, since the year-end, Barrick has been pro-active in dealing with the COVID-19 pandemic, which he termed "a global disaster, which is changing the way we work and live in a radically disruptive process with currently no clear end in sight.
"Barrick is fully engaged in managing the impact of COVID-19 on our business and our people, and emergency response measures have been rolled out at all our sites and operations. Our new leadership's experience in managing pandemics and major crises, combined with Barrick's financial muscle and its long-established culture of caring for the welfare of its employees and communities, has placed us in a strong position to contend with this challenge," he said.
Barrick's 2019 annual report, annual information form and Form 40-F are now available on SEDAR and EDGAR, respectively. Updated National Instrument 43-101 technical reports for each of the Carlin complex and the Turquoise Ridge complex, current as of Dec. 31, 2019, are also available on SEDAR.
To access the above-mentioned documents, please visit the Barrick website. Shareholders may also receive a copy of Barrick's audited financial statements without charge upon request to Barrick's investor relations department, 161 Bay St., Suite 3700, Toronto, Ont., M5J 2S1, or to email@example.com.
Adjusted net earnings and adjusted net earnings per share are non-generally accepted accounting principle financial performance measures. Adjusted net earnings excludes the following from net earnings: certain impairment charges (reversals) related to intangibles, goodwill, property, plant and equipment, and investments; gains (losses) and other one-time costs relating to acquisitions or dispositions; foreign currency translation gains (losses); significant tax adjustments not related to current-period earnings; unrealized gains (losses) on non-hedge derivative instruments; and the tax effect and non-controlling interest of these items. The company uses this measure internally to evaluate its underlying operating performance for the reporting periods presented and to assist with the planning and forecasting of future operating results. Barrick believes that adjusted net earnings is a useful measure of its performance because these adjusting items do not reflect the underlying operating performance of its core mining business and are not necessarily indicative of future operating results. Adjusted net earnings and adjusted net earnings per share are intended to provide additional information only, do not have any standardized meaning under international financial reporting standards and may not be comparable with similar measures of performance presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For further details on these non-GAAP measures, please refer to page 63 to 64 of management's discussion and analysis accompanying Barrick's fourth quarter 2019 audited financial statements filed on SEDAR and on EDGAR.
Barrick is closely monitoring the global COVID-19 pandemic, and Barrick's guidance may be impacted if the operation or development of the company's mines and projects is disrupted due to efforts to slow the spread of the virus.
We seek Safe Harbor.
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