All amounts expressed in U.S. dollars unless otherwise indicated
•Completed transformational merger with Randgold Resources Limited to create industry-leading gold company, effective January 1, 2019.
•Generated annual revenues of $7.24 billion, net cash provided by operating activities (“operating cash flow”) of $1.77 billion, and free cash flow1 of $365 million.
•Increased returns to shareholders with a 33 percent increase in annual dividend.
•Full-year gold production of 4.53 million ounces was within guidance, at a cost of sales2 of $892 per ounce, and all-in sustaining costs3 of $806 per ounce. Full-year copper production was 383 million pounds, also within guidance, at a cost of sales2 of $2.40 per pound, and all-in sustaining costs4 of $2.82 per pound.
•Q4 gold production was 1.26 million ounces, at a cost of sales2 of $980 per ounce, and all-in sustaining costs3 of $788 per ounce. Q4 copper production was 109 million pounds, at a cost of sales2 of $2.85 per pound, and all-in sustaining costs4 of $2.95 per pound.
•Q4 revenue was $1.90 billion, with operating cash flow of $411 million, and free cash flow1 of $37 million.
•Total attributable capital expenditures for 2018 were $1.41 billion, at the low end of guidance range.
•Full-year corporate administration costs of $212 million were significantly below 2018 guidance.
•The Company recorded a net loss attributable to equity holders (“net loss”) of $1.55 billion ($1.32 per share) for 2018, including a net loss of $1.20 billion ($1.02 per share) in the fourth quarter, reflecting the impact of impairment charges recorded during 2018.
•2018 adjusted net earnings5 were $409 million ($0.35 per share), with Q4 adjusted net earnings5 of $69 million ($0.06 per share).
•Total debt was reduced by 11 percent in 2018, with a year-end cash balance of $1.6 billion.6
•Achieved a 9 percent improvement in total reportable injury frequency rate7, and reduced reportable environmental incidents by 12.5 percent.
•Organic growth projects in Nevada and the Dominican Republic remain on schedule and in line with budget.
•Added an initial inferred resource at Fourmile, at an average grade of 18.6 grams of gold per tonne.8
•Declared proven and probable gold reserves of 62.3 million ounces8 as of December 31, 2018.
•Declared proven and probable copper reserves of 10.6 billion pounds8 as of December 31, 2018.

TORONTO — Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the “Company”) today reported fourth quarter and full year results for the period ending December 31, 2018. In 2018, our operations produced 4.53 million ounces of gold, at a cost of sales of $892 per ounce, and all-in sustaining costs3 of $806 per ounce—among the lowest of the senior gold peers.9

The Company generated annual revenue of $7.24 billion, operating cash flow of $1.77 billion, and free cash flow1 of $365 million. In 2018, our focus on capital discipline allowed us to increase investments in organic growth and significantly reduce our debt, while also increasing returns to shareholders.

Summarized 2018 Financial and Operating Results

Financial Results First Quarter Second Quarter Third Quarter Fourth
Quarter Full Year 2018
Average realized gold price ($ per ounce)10 1,332 1,313 1,216 1,223 1,267
Net earnings ($ millions) 158 (94 ) (412 ) (1,197 ) (1,545 )
Adjusted net earnings ($ millions)5 170 81 89 69 409
Operating cash flow ($ millions) 507 141 706 411 1,765
Free cash flow ($ millions)1 181 (172 ) 319 37 365
Net earnings per share ($) 0.14 (0.08 ) (0.35 ) (1.02 ) (1.32 )
Adjusted net earnings per share ($)5 0.15 0.07 0.08 0.06 0.35
Total Attributable Capital Expenditures ($ millions)11 326 332 346 409 1,413

Operating Results
Gold First
Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2018
Production (000s of ounces) 1,049 1,067 1,149 1,262 4,527
Cost of sales applicable to gold ($ per ounce)2 848 882 850 980 892
Cash Costs ($ per ounce)3 573 605 587 588 588
All-in sustaining costs ($ per ounce)3 804 856 785 788 806
Copper
Production (millions of pounds) 85 83 106 109 383
Cost of sales applicable to copper ($ per pound) 2.07 2.45 2.18 2.85 2.40
C1 Cash Costs ($ per pound)4 1.88 2.10 1.94 1.98 1.97
All-in sustaining costs ($ per pound)4 2.61 3.04 2.71 2.95 2.82


Our Nevada growth projects at Cortez, Goldrush, and Turquoise Ridge continued to advance according to schedule and within budget, underpinning the next generation of profitable production from this core region for Barrick. Exploration drilling continued to intersect high-grade mineralization at these properties, demonstrating the significant untapped geological potential of Barrick’s land position in Nevada, and supporting the evaluation of increasing processing capacity in the region. We also advanced studies and test work in support of an expansion to increase throughput at the Pueblo Viejo mine in the Dominican Republic by 50 percent, with positive initial results.12

Reflecting our commitment to shareholder returns, we increased our annual dividend by 33 percent, from 12 cents per share in 2017, to 16 cents per share in 2018. In addition, we continued to strengthen our balance sheet with the repurchase of $629 million in outstanding notes in July, bringing the Company’s total debt repayments to roughly $10 billion over the past five and a half years.

During 2018, Barrick also strengthened its partnership with Shandong Gold Group Co., Ltd., one of China’s leading mining companies. In July, the two companies announced an enhanced strategic cooperation agreement, focused on evaluating the Lama project in Argentina, and strengthening technical collaboration between the Barrick and Shandong teams. In September, Barrick and Shandong signed a mutual investment agreement, under which each Company agreed to purchase up to $300 million of shares in the other, further deepening the partnership.

The completion of Barrick’s transformational merger with Randgold on January 1, 2019, created an industry-leading gold company with a common vision for long-term value creation. It significantly strengthened Barrick’s position across key metrics relative to the senior gold peer group13, including: ownership of five of the world’s top 10 Tier One14 gold assets, and two potential Tier One gold assets under development; the lowest total cash costs15; high-quality gold reserves; and extensive land positions in many of the world’s most prolific gold districts, positioning the Company for sustainable growth.

As we move forward as one team, Barrick’s vision is to be the world’s most valued gold mining business. To achieve this, the Company will focus on optimizing our existing operations, pursuing new opportunities that meet strict investment criteria, and developing them with disciplined efficiency. By doing so, we aim to deliver sustainable returns to our owners, and real benefits to our partners, host countries, and communities.

Financial Comments

Our liquidity position is strong and continues to improve, with robust cash flow generation, modest near-term debt repayment obligations, a $3 billion undrawn credit facility, and a consolidated cash balance of approximately $1.6 billion. We reduced our total debt by $685 million, or 11 percent, in 2018, and with more than 85 percent of the Company’s outstanding debt due after 2032, Barrick now has one of the strongest balance sheets in the industry. In addition, as of December 31, 2018, Randgold had $0.7 billion of cash and cash equivalents, and no debt outstanding, bringing the cash position of the combined company to $2.3 billion as of January 1, 2019.

Barrick reported a net loss of $1.55 billion in 2018, primarily due to net impairment charges of $900 million relating to the Veladero and Lagunas Norte mines, and $742 million in significant tax adjustments. Adjusted net earnings5 of $409 million were lower than the prior year, primarily due to the impact of lower grades and recoveries, as anticipated, along with higher direct mining costs driven by increased energy prices and consumption, and the divestment of 50 percent of the Veladero mine on June 30, 2017. Earnings were also impacted by lower throughput at Acacia as a result of reduced operations at Bulyanhulu, lower tonnage processed at Lagunas Norte, and increased government imposts at Veladero. This was partially offset by lower income tax expense as a result of lower earnings and sales volumes, and lower depreciation.

Significant adjusting items to net earnings (pre-tax and non-controlling interest effects) in 2018 include:
•$900 million ($799 million net of tax and non-controlling interest) in net impairment charges primarily relating to Veladero and Lagunas Norte;
•$742 million in significant tax adjustments primarily relating to the de-recognition of deferred tax assets of $814 million, partially offset by a deferred tax recovery of $107 million on United States withholding taxes;
•Additional adjustments relating to the inventory impairment at Lagunas Norte of $166 million, a write-off of a Western Australia long-term stamp duty tax receivable of $43 million, and costs associated with the merger with Randgold of $37 million; partially offset by
•$68 million ($46 million net of tax and non-controlling interest) in disposition gains mainly relating to the sale of a non-core royalty asset at Acacia.

During the fourth quarter, the Company determined that the carbonaceous material project (CMOP) at Lagunas Norte does not currently meet the Company’s investment criteria, resulting in an inventory impairment of $166 million as described above. Barrick previously reported a non-current asset impairment of $405 million at Lagunas Norte in the third quarter, following the Company’s decision not to proceed with the refractory sulphide ore project (PMR). For more information, please see the Lagunas Norte project update on page seven of this press release. A non-current asset impairment of $246 million ($160 million net of tax), and a goodwill impairment of $154 million, were also recorded at the Veladero mine in the fourth quarter, reflecting an increase in the mine’s cost structure, related to increased government imposts and higher energy costs.

Refer to page 62 of Barrick’s fourth quarter MD&A for a full list of reconciling items between net earnings and adjusted net earnings for the current and prior year.

In 2018, we generated $1.77 billion in operating cash flow. Lower operating cash flow compared to 2017 primarily reflects lower sales volumes and increased direct mining costs (as described above). This was partially offset by a favorable movement in working capital, mainly as a result of increased drawdown of inventory and the timing of payments and changes in other current assets and liabilities. Operating cash flow also benefited from lower cash taxes paid, reflecting lower earnings and sales volume, and higher realized gold prices compared to 2017.

Capital expenditures were at the low end of our guidance range for the year, and in line with 2017, with an increase in project capital expenditures offset by a decrease in minesite sustaining capital expenditures. Free cash flow of $365 million was lower than the prior year, primarily driven by lower operating cash flows.

Over the course of 2018, we continued to realize savings resulting from the implementation of our decentralized operating model, as well as workforce reductions associated with the Randgold merger. Full-year corporate administration costs were $212 million, significantly below our original 2018 guidance of approximately $275 million.

Operations Comments

Ensuring the safety of people and the environment are our most important priorities. We continued to improve our safety performance in 2018, achieving a total reportable injury frequency rate (TRIFR)7 of 0.32—the best result in the Company’s history, and a nine percent improvement compared to 2017. Since 2014, Barrick has also achieved an 87 percent reduction in reportable environmental incidents, with seven incidents at our operations last year, down from eight in 2017, continuing a long-term improvement trend.

In 2018, our operations produced 4.53 million ounces of gold, at a cost of sales of $892 per ounce, and all-in sustaining costs3 of $806 per ounce. As anticipated, gold production improved over the second half of 2018, driven by stronger performance at Barrick Nevada and Pueblo Viejo, with gold production of 1.26 million ounces in the fourth quarter, compared to 1.15 million ounces in the third quarter. Higher costs compared to 2017 primarily reflect the impact of lower grades and recoveries, higher energy costs, and higher mine site sustaining capital expenditures on a per ounce basis.

As anticipated, copper production improved progressively over the third and fourth quarters, driven by a steady improvement in grade and crusher reliability at Lumwana. In 2018, our copper portfolio produced 383 million pounds, at a cost of sales of $2.40 per pound, and all-in sustaining costs4 of $2.82 per pound. Copper production in the fourth quarter was 109 million pounds, at a cost of sales of $2.85 per pound, and all-in sustaining costs4 of $2.95 per pound.

Please see page 44 of Barrick’s fourth quarter MD&A for individual operating segment performance details.

Mineral Resource Management

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