Toronto – Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) is built on a foundation of six Tier One1 gold mines with rolling 10-year plans which secure the company’s ability to generate substantial free cash flows2 for the next decade and beyond, says executive chairman John Thornton.
Writing in the company’s 2021 annual report, published today, Thornton notes that in September 2018, when the Randgold merger was announced, Barrick had net debt in excess of $4 billion. Since then it has not only moved into a net cash position but has returned $2.5 billion of cash to shareholders, including last year’s record distribution of $1.4 billion.
“As previously announced, after careful consideration of our capital allocation, the board has settled on a new dividend policy comprising a base dividend with an additional performance dividend linked to the net cash on the balance sheet, starting in 2022. We believe this will give our shareholders guidance on future dividend streams3,” he says.
“The board has also approved a $1 billion share buyback plan which will afford us the opportunity to acquire our shares when they are trading below what we consider to be their intrinsic value4.”
Endnote 1
A Tier One Gold Asset is an asset with a reserve potential to deliver a minimum 10-year life, 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.
Endnote 2
“Free cash flow” is a non-GAAP financial performance measure which deducts capital expenditures from net cash provided by operating activities. Management believes this to be a useful indicator of our ability to operate without reliance on additional borrowing or usage of existing cash. Free cash flow is intended to provide additional information only 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. Other companies may calculate this measure differently. Further details including a detailed reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure are incorporated by reference and provided on page 95 of the MD&A that accompanies Barrick’s 2021 financial statements, respectively, filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Endnote 3
The declaration and payment of dividends is at the discretion of the Board of Directors, and will depend on the company’s financial results, cash requirements, future prospects, the number of outstanding common shares, and other factors deemed relevant by the Board.
Endnote 4
The actual number of common shares that may be purchased, if any, and the timing of any such purchases, will be determined by Barrick based on a number of factors, including the company’s financial performance, the availability of cash flows, and the consideration of other uses of cash, including capital investment opportunities, returns to shareholders, and debt reduction.
Cautionary Statement on Forward-Looking Information
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