Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the
“company”) today reported preliminary first quarter sales of 1.22
million ounces of gold and 110 million pounds of copper as well as
preliminary first quarter production of 1.25 million ounces of gold
and 115 million pounds of copper.
President and Chief Executive Mark Bristow said
these results positioned Barrick well to achieve its guidance for
the year despite the impact of the global Covid-19 pandemic and the
resultant lockdowns1.
Bristow also said comprehensive programs to counter
the spread of Covid-19 were in action at all of Barrick’s
operations and it had taken the necessary steps to manage the
impact of the pandemic on its business. As announced earlier, the
company has provided financial aid and support to its host
countries to strengthen their campaigns against the virus.
The average market price for gold in the first
quarter was $1,583 per ounce, while the average market price for
copper in the first quarter was $2.56 per pound. The company’s
first quarter realized copper price2 is expected to be 12-14% below
the average first quarter market price for copper, primarily as a
result of provisional pricing adjustments3 that reflect the
downward trend in copper prices over the period.
First quarter gold costs, including cost of sales
per ounce4, total cash costs per ounce5 and gold all-in sustaining
costs per ounce5, are expected to be similar to the fourth quarter
of 2019. Preliminary first quarter copper production was in line
with the fourth quarter of 2019, while preliminary first quarter
copper sales improved from the previous quarter following the
completion of a major refurbishment at a third-party smelter that
processes a portion of Lumwana’s concentrate. First quarter copper
cost of sales per pound4 are expected to be 12-14% lower than the
prior quarter. C1 cash costs per pound5 and copper all-in
sustaining costs per pound5 are expected to be 17-19% and 27-29%
lower, respectively, than the fourth quarter of 2019, primarily due
to the increase in copper sales.
Barrick will provide additional discussion and
analysis regarding its first quarter production and sales when the
company reports its quarterly results before North American markets
open on May 6, 2020. Given our Covid-19 protocols, Mark Bristow
will host an interactive webinar on the results at 11:00 EDT/15:00
UTC. The presentation will be linked to the webinar and conference
call. Participants will be able to ask questions.
The following table includes preliminary gold and
copper production and sales results from Barrick's operations:
|
Three months ended |
|
March 31, 2020 |
|
Production |
Sales |
Gold (equity ounces (000s)) |
Carlin6 (61.5%) |
253 |
256 |
Cortez (61.5%) |
128 |
128 |
Turquoise Ridge (61.5%) |
84 |
87 |
Phoenix (61.5%) |
35 |
30 |
Long Canyon (61.5%) |
26 |
27 |
Nevada Gold
Mines (61.5%) |
526 |
528 |
Pueblo Viejo
(60%) |
143 |
144 |
Loulo-Gounkoto (80%) |
141 |
123 |
Kibali
(45%) |
91 |
88 |
Veladero
(50%) |
75 |
57 |
North Mara
(84%) |
65 |
70 |
Porgera
(47.5%) |
62 |
63 |
Tongon
(89.7%) |
61 |
58 |
Hemlo |
57 |
58 |
Buzwagi
(84%) |
22 |
24 |
Bulyanhulu (84%) |
7 |
7 |
Total Gold |
1,250 |
1,220 |
|
|
|
|
|
|
Copper (equity pounds (millions)) |
Lumwana |
64 |
63 |
Zaldívar
(50%) |
31 |
30 |
Jabal Sayid (50%) |
20 |
17 |
Total Copper |
115 |
110 |
First Quarter 2020 Results Announcement and
Webinar
Barrick will release its First Quarter 2020 results
before market open on May 6, 2020. Given our Covid-19 protocols,
President and CEO Mark Bristow will host an interactive webinar on
the results at 11:00 EDT/15:00 UTC. The presentation will be linked
to the webinar and conference call. Participants will be able to
ask questions.
WebinarUS and Canada
(toll-free) 1 800 319 4610UK (toll-free) 0808 101 2791International
(toll) +1 416 915 3239
The Q1 2020 presentation materials will be
available on Barrick’s website at www.barrick.com.
The webinar will remain on the website for later
viewing, and the conference call will be available for replay by
telephone at 1 855 669 9658 (US and Canada) and +1 604 674 8052
(international), access code 4363.
Enquiries
Analyst, Investor Relations and Corporate
AccessClaudia Pitre+1 416 307 5105 cpitre@barrick.com
Group Investor and Media Relations Kathy du
Plessis+44 20 7557 7738 barrick@dpapr.com
Technical Information
The scientific and technical information contained
in this news release has been reviewed and approved by: Steven
Yopps, MMSA, Manager of Growth Projects, Nevada Gold Mines; Chad
Yuhasz, P.Geo, Barrick’s Mineral Resource Manager, Latin America
and Australia Pacific; and Simon Bottoms, CGeol, Barrick's Mineral
Resources Manager, Africa and Middle East — each a “Qualified
Person” as defined in National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
Endnote 1
Barrick is closely monitoring the global Covid-19
pandemic and Barrick’s guidance may be impacted if the operation or
development of our mines and projects is disrupted due to efforts
to slow the spread of the virus.
Endnote 2
Copper realized price is a non-GAAP financial
measure which excludes from sales: (i) unrealized gains and losses
on non-hedge derivative contracts; (ii) unrealized mark-to-market
gains and losses on provisional pricing from copper sales
contracts; (iii) sales attributable to ore purchase arrangements;
and (iv) treatment and refining charges.
This measure is intended to enable management to
better understand the price realized in each reporting period for
copper sales because unrealized mark-to-market values of non-hedge
copper derivatives are subject to change each period due to changes
in market factors such as market and forward copper prices, so that
prices ultimately realized may differ from those recorded. The
exclusion of such unrealized mark-to-market gains and losses from
the presentation of this performance measure enables investors to
understand performance based on the realized proceeds of selling
copper production.
The gains and losses on non-hedge derivatives and
receivable balances relate to instruments/balances that mature in
future periods, at which time the gains and losses will become
realized. The amounts of these gains and losses reflect fair values
based on market valuation assumptions at the end of each period and
do not necessarily represent the amounts that will become realized
on maturity. For those reasons, management believes that this
measure provides a more accurate reflection of our company’s past
performance and is a better indicator of its expected performance
in future periods.
The realized price measure is intended to provide
additional information, and does not have any standardized
definition under IFRS and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. The measure is not necessarily indicative of sales as
determined under IFRS. Other companies may calculate this measure
differently.
Endnote 3
The sales price for Barrick’s copper production is
determined provisionally at the date of sale with the final price
determined based on market copper prices at a future date set by
the customer, generally one to three months after the initial date
of sale. Market prices for copper may fluctuate during this
extended settlement period. The prices of Barrick’s copper sales
are marked-to-market at the balance sheet date based on the forward
copper price for the relevant quotational period. All such
mark-to-market adjustments are recorded in copper sale revenues. If
the market price for copper declines, the final sale price realized
by the company at settlement may be lower than the provisional sale
price initially recognized by the company, requiring negative
adjustments to Barrick’s average realized copper price for the
relevant period.
Endnote 4
Cost of sales applicable to gold per ounce is
calculated using cost of sales applicable to gold on an
attributable basis (removing the non-controlling interest of 40%
Pueblo Viejo, 38.5% Nevada Gold Mines, 63.1% South Arturo, 20%
Loulo-Gounkoto, 16% North Mara, Bulyanhulu and Buzwagi and 10.3% of
Tongon and including our proportionate share of cost of sales
attributable to equity method investments (Kibali) in cost of
sales), divided by attributable gold ounces. Cost of sales
applicable to copper per pound is calculated using cost of sales
applicable to copper including our proportionate share of cost of
sales attributable to equity method investments (Zaldívar and Jabal
Sayid), divided by consolidated copper pounds (including our
proportionate share of copper pounds from our equity method
investments).
Endnote 5
Total cash costs per ounce, all-in sustaining costs
per ounce and all-in costs per ounce are non-GAAP financial
measures which are calculated based on the definition published by
the World Gold Council (a market development organization for the
gold industry comprised of and funded by 25 gold mining companies
from around the world, including Barrick). The WGC is not a
regulatory organization. Management uses these measures to monitor
the performance of our gold mining operations and its ability to
generate positive cash flow, both on an individual site basis and
an overall company basis.
Total cash costs start with our cost of sales
related to gold production and removes depreciation, the
non-controlling interest of cost of sales and includes by-product
credits. All-in sustaining costs start with total cash costs and
include sustaining capital expenditures, sustaining leases, general
and administrative costs, mine site exploration and evaluation
costs and reclamation cost accretion and amortization. These
additional costs reflect the expenditures made to maintain current
production levels.
We believe that our use of total cash costs, all-in
sustaining costs and all-in costs will assist analysts, investors
and other stakeholders of Barrick in understanding the costs
associated with producing gold, understanding the economics of gold
mining, assessing our operating performance and also our ability to
generate free cash flow from current operations and to generate
free cash flow on an overall company basis. Due to the
capital-intensive nature of the industry and the long useful lives
over which these items are depreciated, there can be a significant
timing difference between net earnings calculated in accordance
with IFRS and the amount of free cash flow that is being generated
by a mine and therefore we believe these measures are useful
non-GAAP operating metrics and supplement our IFRS disclosures.
These measures are not representative of all our cash expenditures
as they do not include income tax payments, interest costs or
dividend payments. These measures do not include depreciation or
amortization.
Total cash costs per ounce, all-in sustaining costs
and all-in costs are intended to provide additional information
only and do not have standardized definitions under IFRS and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures are
not equivalent to net income or cash flow from operations as
determined under IFRS. Although the WGC has published a
standardized definition, other companies may calculate these
measures differently.
C1 cash costs per pound and all-in sustaining costs
per pound are non-GAAP financial measures related to our copper
mine operations. We believe that C1 cash costs per pound enables
investors to better understand the performance of our copper
operations in comparison to other copper producers who present
results on a similar basis. C1 cash costs per pound excludes
royalties and production taxes and non-routine charges as they are
not direct production costs. All-in sustaining costs per pound is
similar to the gold all-in sustaining costs metric and management
uses this to better evaluate the costs of copper production. We
believe this measure enables investors to better understand the
operating performance of our copper mines as this measure reflects
all the sustaining expenditures incurred in order to produce
copper. All-in sustaining costs per pound includes C1 cash costs,
sustaining capital expenditures, sustaining leases, general and
administrative costs, minesite exploration and evaluation costs,
royalties and production taxes, reclamation cost accretion and
amortization and write-downs taken on inventory to net realizable
value.
Barrick will provide a full reconciliation of these
non-GAAP financial measures when the company reports its quarterly
results on May 6, 2020.
Endnote 6
Includes Nevada Gold Mines’ 60% equity share of
South Arturo.
Cautionary Statements Regarding Preliminary
First Quarter Production, Sales and Costs for 2020, and
Forward-Looking Information
Barrick cautions that, whether or not expressly
stated, all first quarter figures contained in this press release
including, without limitation, production levels, sales and
associated costs are preliminary, and reflect our expected first
quarter results as of the date of this press release. Actual
reported first quarter production levels, sales and associated
costs are subject to management’s final review, as well as review
by the company’s independent accounting firm, and may vary
significantly from those expectations because of a number of
factors, including, without limitation, additional or revised
information, and changes in accounting standards or policies, or in
how those standards are applied. Barrick will provide additional
discussion and analysis and other important information about its
first quarter production levels and sales and associated costs when
it reports actual results on May 6, 2020. For a complete picture of
the company’s financial performance, it will be necessary to review
all of the information in the company’s first quarter financial
report and related MD&A. Accordingly, readers are cautioned not
to rely solely on the information contained herein.
Finally, Barrick cautions that this press release
contains forward-looking statements with respect to: (i) Barrick’s
production; (ii) costs per ounce for gold and per pound for copper;
(iii) expectations regarding future production and financial
performance and other outlook or guidance; and (iv) preventative
measures implemented by Barrick to manage the impact of the
Covid-19 pandemic and Barrick’s engagement with local
communities.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions including material
estimates and assumptions related to the factors set forth below
that, while considered reasonable by the company as at the date of
this press release in light of management’s experience and
perception of current conditions and expected developments, 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, and undue reliance
should not be placed on such statements and information. 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, natural gas, and electricity); the
speculative nature of mineral exploration and development; changes
in mineral production performance, exploitation, and exploration
successes; risks associated with projects in the early stages of
evaluation, and for which additional engineering and other analysis
is required; disruption of supply routes which may cause
delays in construction and mining activities at Barrick’s more
remote properties; whether benefits expected from recent
transactions are realized; diminishing quantities or grades of
reserves; increased costs, delays, suspensions and technical
challenges associated with the construction of capital projects;
operating or technical difficulties in connection with mining or
development activities, including geotechnical challenges and
disruptions in the maintenance or provision of required
infrastructure and information technology systems; 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; uncertainty whether some or all of
targeted investments and projects will meet the company’s capital
allocation objectives and internal hurdle rate; 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; the impact of inflation; fluctuations in the
currency markets; changes in U.S. dollar interest rates; risks
arising from holding derivative instruments; 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,
and other jurisdictions in which the company or its affiliates do
or may carry on business in the future; lack of certainty with
respect to foreign legal systems, corruption and other factors that
are inconsistent with the rule of law; damage to the company’s
reputation due to the actual or perceived occurrence of any number
of events, including negative publicity with respect to the
company’s handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; risks associated
with illegal and artisanal mining; risks associated with new
diseases, epidemics and pandemics, including the effects and
potential effects of the global Covid-19 pandemic; litigation and
legal and administrative proceedings; 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, including our ability to successfully reintegrate
Acacia’s operations; risks associated with working with partners in
jointly controlled assets; employee relations including loss of key
employees; increased costs and physical risks, including extreme
weather events and resource shortages, related to climate change;
and availability and increased costs associated with mining inputs
and labor. Barrick also cautions that its 2020 guidance may be
impacted by the unprecedented business and social disruption caused
by the spread of Covid-19. 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
press release 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 more detailed discussion of
some of the factors underlying forward-looking statements and the
risks that may affect Barrick’s ability to achieve the expectations
set forth in the forward-looking statements contained in this press
release.
Barrick 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.
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