Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the
“Company”) today reported preliminary Q3 sales of 1.07 million
ounces of gold and 101 million pounds of copper, as well as
preliminary Q3 production of 1.09 million ounces of gold and
100 million pounds of copper. It remains on track to achieve
2021 guidance1, with both the Africa & Middle East and Latin
America & Asia Pacific regions continuing to trend to the
higher end of their regional gold guidance and North America at the
lower end.
As previously guided, Barrick’s Q4 gold production
is expected to be the strongest of 2021 following the repair of the
mill at Carlin’s Goldstrike roaster late in Q3. Consequently, for
Nevada Gold Mines (NGM) both Carlin and Cortez are expected to be
at the low end of their annual guidance ranges, whereas Phoenix and
Long Canyon are expected to be at the top end of their guidance
ranges. Furthermore, production at Turquoise Ridge is expected to
be below its annual guidance range, although full year production
is still expected to be higher than the prior year. Production at
Hemlo is also expected to be below its annual guidance range
following a slower ramp-up of underground development due to
Covid-19 movement restrictions.
The average market price for gold in Q3 was $1,790
per ounce, while the average market price for copper in Q3 was
$4.25 per pound. The Company’s Q3 realized copper price2 is
expected to be 5 to 7% below the average Q3 market price for
copper, primarily as a result of provisional pricing adjustments3
that reflect the downward trend in copper prices during the
quarter.
Preliminary Q3 gold production was higher than Q2,
with improved performance at NGM following planned maintenance
shutdowns in the previous quarter, the continuing ramp-up of
operations at Bulyanhulu and improved performance at Veladero
following the commissioning of the Phase 6 leach pad expansion in
Q2. Q3 gold cost of sales per ounce4 and total cash
costs per ounce5 are both expected to be flat to 2% higher and
all-in sustaining costs per ounce5 are expected to be 4 to 6% lower
than Q2.
Preliminary Q3 copper production was higher than
Q2, and Q4 is expected to be the strongest quarter of the year,
mainly driven by higher grades from Lumwana. Q3 copper cost of
sales per pound4 is expected to be 5 to 7% higher, C1 cash costs
per pound5 are expected to be flat to 2% higher and copper all-in
sustaining costs per pound5 are expected to be 4 to 6% lower than
Q2.
Barrick will provide additional discussion and
analysis regarding its third quarter production and sales when the
Company reports its quarterly results before North American markets
open on November 4, 2021.
The following table includes preliminary gold and
copper production and sales results from Barrick's operations:
|
Three months ended |
Nine months ended |
|
September 30, 2021 |
September 30, 2021 |
|
Production |
Sales |
Production |
Sales |
Gold (equity ounces (000)) |
|
|
Carlin6 (61.5%) |
209 |
202 |
628 |
625 |
Cortez (61.5%) |
130 |
126 |
340 |
338 |
Turquoise Ridge (61.5%) |
82 |
82 |
252 |
253 |
Long Canyon (61.5%) |
43 |
42 |
128 |
127 |
Phoenix (61.5%) |
31 |
33 |
84 |
85 |
Nevada Gold Mines (61.5%) |
495 |
485 |
1,432 |
1,428 |
Loulo-Gounkoto (80%) |
137 |
134 |
434 |
430 |
Pueblo Viejo (60%) |
127 |
125 |
381 |
384 |
Kibali (45%) |
95 |
93 |
272 |
272 |
North Mara (84%) |
66 |
65 |
191 |
187 |
Bulyanhulu (84%) |
53 |
49 |
121 |
113 |
Veladero (50%) |
48 |
44 |
111 |
123 |
Tongon (89.7%) |
41 |
41 |
137 |
138 |
Hemlo |
26 |
29 |
115 |
118 |
Buzwagi (84%) |
4 |
6 |
40 |
41 |
Total Gold |
1,092 |
1,071 |
3,234 |
3,234 |
|
|
|
|
|
|
|
|
|
|
Copper (equity pounds (millions)) |
|
|
Lumwana |
57 |
64 |
164 |
191 |
Zaldívar (50%) |
24 |
25 |
70 |
72 |
Jabal Sayid (50%) |
19 |
12 |
55 |
47 |
Total Copper |
100 |
101 |
289 |
310 |
Third Quarter 2021
Results
Barrick will release its Q3 2021 results before
market open on November 4, 2021. President and CEO Mark Bristow
will host a live presentation on the results that day in London,
UK, at 11:00 EDT / 15:00 GMT, with an interactive webinar linked to
a conference call. Participants will be able to ask questions.
Go to the webinarUS and Canada (toll-free) 1 800
319 4610UK (toll-free) 0808 101 2791International (toll) +1 416 915
3239
The Q3 2021 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 toll-free) and +1 604
674 8052 (international toll), access code 7781.
Enquiries:
Claudia PitreManager, Investor Relations and
Corporate Access+1 416 307 5105cpitre@barrick.com
Kathy du Plessis Investor and Media Relations+44 20
7557 7738barrick@dpapr.com
Website: www.barrick.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, Mineral Resource Manager, Latin America and Asia
Pacific; and Simon Bottoms, CGeol, MGeol, FGS, FAusIMM, 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
Porgera was placed on temporary care and
maintenance in April 2020 and is not currently included in our full
year 2021 guidance. On April 9, 2021, the Government of Papua New
Guinea and Barrick Niugini Limited, the operator of the Porgera
joint venture, signed a framework agreement in which they agreed on
a partnership for Porgera’s future ownership and operation. We
expect to update our guidance to include Porgera following both the
execution of definitive agreements to implement the framework
agreement and the finalization of a timeline for the resumption of
full mine operations.
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.
Barrick will provide a full reconciliation of this
non-GAAP financial measure when the Company reports its quarterly
results on November 4, 2021.
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
Gold cost of sales per ounce is calculated as cost
of sales across our gold operations (excluding sites in care and
maintenance) divided by ounces sold (both on an attributable basis
based on Barrick’s ownership share). Copper cost of sales per pound
is calculated as cost of sales across our copper operations divided
by pounds sold (both on an attributable basis based on Barrick’s
ownership share).
References to attributable basis means our 100%
share of Hemlo and Lumwana, our 89.7% share of Tongon, our 84%
share of North Mara, Bulyanhulu and Buzwagi, our 80% share of
Loulo-Gounkoto, our 61.5% share of Nevada Gold Mines, our 60% share
of Pueblo Viejo, our 50% share of Veladero, Zaldívar and Jabal
Sayid and our 45% share of Kibali.
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 (“WGC”) (a market development organization
for the gold industry comprised of and funded by 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, minesite 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 of 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 of 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 November 4, 2021.
Endnote 6
Includes Nevada Gold Mines' 60% equity share of
South Arturo.
Cautionary Statements Regarding Preliminary
Third Quarter Production, Sales and Costs for
2021, and Forward-Looking Information
Barrick cautions that, whether or not expressly
stated, all third quarter figures contained in this press release
including, without limitation, production levels, sales and
associated costs are preliminary, and reflect our expected third
quarter results as of the date of this press release. Actual
reported third 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
third quarter production levels, sales and associated costs when it
reports actual results on November 4, 2021. For a complete
picture of the Company’s financial performance, it will be
necessary to review all of the information in the Company’s third
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;
and (iii) realized price for copper.
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; the duration of the temporary suspension of operations
at Porgera and the timeline for the execution of definitive
agreements to implement the framework agreement, form a new joint
venture, and recommence operations at Porgera; 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; non-renewal of key
licenses by governmental authorities including Porgera’s Special
Mining Lease; 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 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 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; 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 2021 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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