Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the
“Company”) today reported preliminary Q2 sales of 1.04 million
ounces of gold and 113 million pounds of copper, as well as
preliminary Q2 production of 1.04 million ounces of gold and 120
million pounds of copper. As previously guided, Barrick’s gold
production in 2022 is expected to increase through the year, and
with the stronger Q2 performance, it remains on track to achieve
2022 gold and copper guidance1.
The average market price for gold in Q2 was $1,871
per ounce. The average market price for copper in Q2 was $4.32 per
pound, however the closing price at the end of Q2 was $3.83 per
pound. The Company’s second quarter realized copper price2 is
expected to be 13-15% below the average second quarter market price
for copper, primarily as a result of provisional pricing
adjustments3 that reflect the decrease in the copper price near the
end of Q2.
As expected, preliminary Q2 gold production was
higher than Q1 due to a stronger performance across the portfolio,
particularly at Carlin, Turquoise Ridge, Veladero, Bulyanhulu and
North Mara. This was partially offset by lower production at Cortez
due to mine sequencing as it transitions from the end of open pit
mining at Pipeline to a new phase at Crossroads, which is expected
to underpin stronger performance for the asset in the fourth
quarter of 2022. Compared to Q1, Q2 gold cost of sales per ounce4
is expected to be 1% to 3% higher, total cash costs per ounce5 are
expected to be 2% to 4% higher and all-in sustaining costs per
ounce5 are expected to be 3% to 5% higher.
Preliminary Q2 copper production was higher than
Q1, driven by Lumwana as planned, however Q2 copper sales were in
line with the prior quarter due to the timing of shipments.
Compared to Q1, Q2 copper cost of sales per pound4 is expected to
be 4 to 6% lower and C1 cash costs per pound5 are expected to be 5
to 7% lower. Copper all-in sustaining costs per pound5 are expected
to be in line to 2% higher than Q1.
Barrick will provide additional discussion and
analysis regarding its second quarter 2022 production and sales
when the Company reports its quarterly results before North
American markets open on August 8, 2022.
The following table includes preliminary gold and
copper production and sales results from Barrick's operations:
|
Three months endedJune 30, 2022 |
Six months endedJune 30, 2022 |
|
Production |
Sales |
Production |
Sales |
Gold (attributable ounces (000)) |
|
|
Carlin (61.5%) |
243 |
246 |
472 |
476 |
Cortez (61.5%) |
97 |
95 |
212 |
213 |
Turquoise Ridge (61.5%) |
75 |
76 |
142 |
140 |
Long Canyon (61.5%) |
21 |
21 |
46 |
46 |
Phoenix (61.5%) |
26 |
25 |
49 |
46 |
Nevada Gold Mines (61.5%) |
462 |
463 |
921 |
921 |
Loulo-Gounkoto (80%) |
140 |
141 |
278 |
278 |
Pueblo Viejo (60%) |
105 |
102 |
209 |
206 |
Kibali (45%) |
81 |
77 |
157 |
150 |
North Mara (84%) |
66 |
67 |
122 |
125 |
Veladero (50%) |
58 |
63 |
104 |
102 |
Bulyanhulu (84%) |
54 |
51 |
99 |
106 |
Tongon (89.7%) |
41 |
40 |
76 |
78 |
Hemlo |
36 |
36 |
67 |
67 |
Total Gold |
1,043 |
1,040 |
2,033 |
2,033 |
|
|
|
|
|
|
|
|
|
|
Copper (attributable pounds (millions)) |
|
|
Lumwana |
75 |
71 |
132 |
141 |
Zaldívar (50%) |
25 |
24 |
50 |
50 |
Jabal Sayid (50%) |
20 |
18 |
39 |
35 |
Total Copper |
120 |
113 |
221 |
226 |
Second Quarter 2022 Results
Barrick will release its Q2 2022 results before
market open on August 8, 2022. President and CEO Mark Bristow will
host a virtual presentation on the results that day at 11:00 EDT,
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 Q2 2022 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 9046.
Enquiries:
Claudia Pitre Manager, Investor
Relations and Corporate Access+1 416 307 5105cpitre@barrick.com
Kathy du PlessisInvestor 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: Craig
Fiddes, SME-RM, Manager - Resource Modeling, 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 has been on temporary care and maintenance
since April 2020 and is not currently included in our full year
2022 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. On
February 3, 2022, the Framework Agreement was replaced by the more
detailed Porgera Project Commencement Agreement (the “Commencement
Agreement”). We expect to update our guidance to include Porgera
following both the execution of definitive agreements to implement
the binding Commencement 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) sales attributable to ore
purchase arrangements; and (iii) treatment and refining
charges.
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 August 8, 2022.
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 August 8, 2022.
Cautionary Statements Regarding Preliminary
Second Quarter Production, Sales and Costs for 2022, 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, sales and associated costs when
it reports actual results on August 8, 2022. 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 and full year gold and copper guidance; and (ii) costs
per ounce for gold and per pound for copper.
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 Commencement 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; 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, including global
inflationary pressures driven by supply chain disruptions caused by
the ongoing Covid-19 pandemic and global energy cost increases
following the invasion of Ukraine by Russia; 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 2022 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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