. All amounts expressed in U.S. dollars (Unaudited)
TORONTO — February 12, 2020 - Barrick Gold Corporation’s gold production for 2019 of 5,465,000 ounces was at the top end of its guidance range while copper production of 432 million pounds was above the guidance range, the company reported today.
Announcing its results for the fourth quarter and the year, the company reported net earnings per share of $2.26 for the year and noted that its adjusted net earnings per share1 were up 46% year on year while debt net of cash was halved from 2018 to $2.2 billion. The quarterly dividend was increased by 40% from Q3, to $0.07 cents per share, which was itself a 25% increase from Q2.
In a presentation here, president and chief executive Mark Bristow said the successful formation of the Nevada Gold Mines joint venture during the year had resulted in the North American operations delivering at the midpoint of its production and cost guidance ranges. There were also strong performances from Barrick’s Latin American, Asia Pacific and Africa Middle East operations.
“In the year since the completion of Barrick’s merger with Randgold Resources, we have transformed the new company while creating the world’s largest gold mining complex in Nevada in a transaction that had been unsuccessfully pursued for two decades. The Acacia minorities’ buy-out enabled us to settle that company’s long-running dispute with the Tanzanian government and to integrate its assets into our operations. We’ve also started selling off non-core assets with the disposal of our stakes in the Kalgoorlie gold mine in Australia and the agreed sale of the Massawa project in Senegal,” Bristow said.
“We started the year with five Tier One2 gold mines and ended it with six, thanks to the Nevada deal. We’ve also succeeded in replenishing our reserves and resources, net of depletion, at a higher grade.”
Bristow said the pace of these achievements was attributable to a flattened management structure and the transfer of responsibilities from the corporate office to the operations.
“We now have agile multi-disciplinary teams capable not only of executing complex, industry-leading corporate transactions but also of running our operations efficiently while pursuing new growth opportunities,” he said.
“The significant reduction in Barrick’s debt and the growth in its liquidity means that the company is now capable of managing its business and taking advantage of new opportunities independent of the vagaries of the capital markets. Our organic growth potential alone will support the 10-year production plan we’ll be sharing with the market in March and our exploration teams are stocking our future pipeline.”
Bristow noted that there was a strong focus on automation and clean energy across the group, while retaining and building on the operations’ social license remained a priority. Barrick’s commitment to sustainability is evidenced by the fact that more than 80% of the water used by our operations was recycled or reused.
“We believe that our ability to operate successfully depends on our ability to deliver long-term value to shareholders and other stakeholders, including the host countries, and on scrupulously managing our impact on the environment,” he said.
Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share
($ millions, except per share amounts in dollars)
For the three months ended For the years ended 12/31/19 9/30/19 12/31/19
Net earnings (loss) attributable to equity holders of the Company
1,387 2,277 3,969 (1,545) 1,438
Impairment charges (reversals) related to long-lived assetsa
Acquisition/disposition (gains) lossesb (414)(1,901)(2,327)(68)(911)
(Gain) loss on currency translation 53 40 109 136 72
Significant tax adjustmentsc 74 35 34 742 244
Other (income) expense adjustmentsd (845) 53(687) 366 178
Unrealized gains (losses) on non-hedge derivative instruments 0 1 0? 1 (1)
Tax effect and non-controlling intereste 611 631 1,227 (123) 68
Adjusted net earnings 300 264 902 409 876
Net earnings (loss) per sharef 0.78 1.30 2.26 (1.32) 1.23
Adjusted net earnings per sharef 0.17 0.15 0.51 0.35 0.75
a. Net impairment reversals for the current year primarily relate to non-current asset reversals at Pueblo Viejo, partially offset by impairment charges at Pascua-Lama in the fourth quarter of 2019. This was further impacted by non-current asset reversals at Lumwana in the third quarter of 2019. Net impairment charges for 2018 primarily relate to non-current asset impairments at Lagunas Norte and non-current asset and goodwill impairments at Veladero.
b. Acquisition/disposition gains for the current year primarily relate to the gain on the sale of our 50% interest in Kalgoorlie in the fourth quarter of 2019 and the gain on the remeasurement of Turquoise Ridge to fair value as a result of its contribution to Nevada Gold Mines in the third quarter of 2019.
c. Significant tax adjustments in 2018 primarily relate to the de-recognition of our Canadian and Peruvian deferred tax assets.
d. Other expense adjustments for the current year primarily relate to the gain on the de-recognition of the deferred revenue liability relating to our silver sale agreement with Wheaton Precious Metals Corp. and the gain on a tax settlement at Lumwana, both occurring in the fourth quarter of 2019.
e. Tax effect and non-controlling interest for the current year primarily relates to the impairment charges related to long-lived assets.
f. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
President and chief executive
In this report of unaudited results, “Adjusted net earnings” and “adjusted net earnings per share” are non-GAAP 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 our 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 our performance because these adjusting items do not reflect the underlying operating performance of our 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 and do not have any standardized meaning under IFRS and may not be comparable to 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. Further details on these non-GAAP measures are provided in the MD&A accompanying Barrick’s financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
A Tier One Gold Asset is a mine with a stated life in excess of 10 years, annual production of at least 500,000 ounces of gold and total cash costs per ounce over the mine life that are in the lower half of the industry cost curve