Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX) (“Barrick” or the
“Company”) today reported preliminary Q2 sales of 1.07 million
ounces of gold and 96 million pounds of copper, as well as
preliminary Q2 production of 1.04 million ounces of gold and
96 million pounds of copper. We remain on track to achieve
2021 guidance1, with both the Africa & Middle East and Latin
America & Asia Pacific regions trending to the higher end of
their regional gold guidance and North America to the lower end.
The average market price for gold in Q2 was $1,816
per ounce, while the average market price for copper in Q2 was
$4.40 per pound.
Preliminary Q2 gold production was lower than Q1,
with planned maintenance shutdowns at Nevada Gold Mines’ (“NGM”)
processing facilities further impacted by a mechanical mill failure
at Carlin’s Goldstrike roaster, as well as planned maintenance at
Pueblo Viejo. The Goldstrike roaster is currently operating at a
reduced rate and work to repair the mill is expected to be
completed in Q3, with actions being taken to mitigate the impact on
NGM’s full year production. As previously guided, Barrick’s gold
production in the second half of 2021 is forecast to be higher than
the first half. Q2 gold cost of sales per ounce2 is expected to be
2 to 4% higher, total cash costs per ounce3 are expected to be 1 to
3% higher and all-in sustaining costs per ounce3 are expected to be
6 to 8% higher than Q1.
Preliminary Q2 copper production was slightly
higher than Q1. Copper sales in Q2 were in line with production,
but 15% lower than the previous quarter, as Lumwana sold a higher
portion of its stockpiled concentrate in Q1 2021. We continue to
expect the Company’s copper production in the second half of 2021
to be stronger than the first half, mainly driven by higher grades
from Lumwana. Q2 copper cost of sales per pound2 is expected to be
14 to 16% higher, C1 cash costs per pound3 are expected to be 13 to
15% higher and copper all-in sustaining costs per pound3 are
expected to be 20 to 22% higher than Q1, largely due to lower sales
at Lumwana and maintenance at Zaldivar, as well as the impact of a
higher copper price translating into higher royalty costs.
Barrick will provide additional discussion and
analysis regarding its second quarter production and sales when the
company reports its quarterly results before North American markets
open on August 9, 2021.
The following table includes preliminary gold and
copper production and sales results from Barrick's operations:
|
Three months ended |
Six months ended |
|
June 30, 2021 |
June 30, 2021 |
|
Production |
Sales |
Production |
Sales |
Gold (equity ounces (000)) |
|
|
Carlin4 (61.5%) |
190 |
192 |
419 |
423 |
Cortez (61.5%) |
110 |
110 |
210 |
212 |
Turquoise Ridge (61.5%) |
78 |
79 |
170 |
171 |
Long Canyon (61.5%) |
46 |
46 |
85 |
85 |
Phoenix (61.5%) |
28 |
28 |
53 |
52 |
Nevada Gold Mines (61.5%) |
452 |
455 |
937 |
943 |
Loulo-Gounkoto (80%) |
143 |
145 |
297 |
296 |
Pueblo Viejo (60%) |
117 |
118 |
254 |
259 |
Kibali (45%) |
91 |
93 |
177 |
179 |
North Mara (84%) |
63 |
66 |
125 |
122 |
Tongon (89.7%) |
48 |
49 |
96 |
97 |
Hemlo |
42 |
42 |
89 |
89 |
Bulyanhulu (84%) |
35 |
36 |
68 |
64 |
Veladero (50%) |
31 |
48 |
63 |
79 |
Buzwagi (84%) |
19 |
18 |
36 |
35 |
Total Gold |
1,041 |
1,070 |
2,142 |
2,163 |
|
|
|
|
|
|
|
|
|
|
Copper (equity pounds (millions)) |
|
|
Lumwana |
56 |
58 |
107 |
127 |
Zaldívar (50%) |
22 |
20 |
46 |
47 |
Jabal Sayid (50%) |
18 |
18 |
36 |
35 |
Total Copper |
96 |
96 |
189 |
209 |
Second Quarter 2021
Results
Barrick will release its Q2 2021 results before
market open on August 9, 2021. President and CEO Mark Bristow will
host a virtual presentation on the results at 11:00 EDT / 15:00
UTC, with an interactive webinar linked to a conference call.
Participants will be able to ask questions.
Go to the webinar
US and Canada (toll-free) 1 800 319 4610
UK (toll-free) 0808 101 2791
International (toll) +1 416 915 3239
The Q2 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 7159.
Enquiries
Claudia Pitre Manager, 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
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 3
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 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 August 9, 2021.
Endnote 4
Includes Nevada Gold Mines' 60% equity share of
South Arturo.
Cautionary Statements Regarding
Preliminary Second Quarter Production, Sales and
Costs for 2021, and Forward-Looking Information
Barrick cautions that, whether or not expressly
stated, all second quarter figures contained in this press release
including, without limitation, production levels, sales and
associated costs are preliminary, and reflect our expected second
quarter results as of the date of this press release. Actual
reported second 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
second quarter production levels and sales and associated costs
when it reports actual results on August 9, 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 second
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) Barrick’s ability to achieve its guidance for the
year; and (iv) the expected timing for repairs at the Goldstrike
roaster.
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; 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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