Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) ('Barrick' or the
'Company') today reported preliminary Q3 sales of 1.00 million
ounces of gold and 120 million pounds of copper, as well as
preliminary Q3 production of 0.99 million ounces of gold and 123
million pounds of copper. Access to high grade ore that was
previously expected in late Q3 at Nevada Gold Mines is now
scheduled for Q4, which should drive a strong finish to the year.
Barrick remains on track to achieve 2022 production guidance1, with
gold expected to be at the low end of the range and copper expected
to be at the midpoint.
The average market price for gold in Q3 was
$1,729 per ounce and the closing price at the end of the quarter
was $1,672 per ounce. The average market price for copper in Q3 was
$3.51 per pound. The Company’s third quarter realized copper price2
is expected to be 7 to 9% below the third quarter average market
price for copper, primarily as a result of provisional pricing
adjustments3 that reflect the decrease in the copper price near the
end of Q3.
Preliminary Q3 gold production was lower than Q2
as a strong performance from Pueblo Viejo was offset by lower
production at Veladero, Carlin and Turquoise Ridge. In addition,
production at Long Canyon was lower than Q2 following the
completion of Phase 1 mining in May 2022, as previously disclosed.
Compared to Q2, Q3 gold cost of sales per ounce4 is expected to be
in line with the prior quarter, while total cash costs per ounce5
and all-in sustaining costs per ounce5 are both expected to be 3%
to 5% higher.
Preliminary Q3 copper production was higher than
Q2, driven by strong performance from Lumwana. Compared to Q2, Q3
copper cost of sales per pound4, C1 cash costs per pound5 and
all-in sustaining costs per pound5 are all expected to be 8 to 10%
higher, mainly due to slightly lower grade and a higher strip ratio
at Lumwana, as well as higher input costs at Zaldívar.
Barrick will provide additional discussion and
analysis regarding its third quarter 2022 production and sales when
the Company reports its quarterly results before North American
markets open on November 3, 2022.
The following table includes preliminary gold
and copper production and sales results from Barrick's
operations:
|
Three months ended |
Nine months ended |
|
September 30, 2022 |
September 30, 2022 |
|
Production |
Sales |
Production |
Sales |
Gold (attributable ounces (000)) |
|
|
Carlin (61.5%) |
229 |
226 |
701 |
702 |
Cortez (61.5%) |
98 |
99 |
310 |
312 |
Turquoise Ridge (61.5%) |
62 |
64 |
204 |
204 |
Long Canyon (61.5%) |
6 |
6 |
52 |
52 |
Phoenix (61.5%) |
30 |
29 |
79 |
75 |
Nevada Gold Mines (61.5%) |
425 |
424 |
1,346 |
1,345 |
Loulo-Gounkoto (80%) |
130 |
129 |
408 |
407 |
Pueblo Viejo (60%) |
121 |
124 |
330 |
330 |
Kibali (45%) |
83 |
88 |
240 |
238 |
North Mara (84%) |
71 |
70 |
193 |
195 |
Bulyanhulu (84%) |
48 |
50 |
147 |
156 |
Veladero (50%) |
41 |
44 |
145 |
146 |
Tongon (89.7%) |
41 |
41 |
117 |
119 |
Hemlo |
28 |
27 |
95 |
94 |
Total Gold |
988 |
997 |
3,021 |
3,030 |
|
|
|
|
|
|
|
|
|
|
Copper (attributable pounds (millions)) |
|
|
Lumwana |
82 |
79 |
214 |
220 |
Zaldívar (50%) |
23 |
24 |
73 |
74 |
Jabal Sayid (50%) |
18 |
17 |
57 |
52 |
Total Copper |
123 |
120 |
344 |
346 |
Third Quarter 2022
Results
Barrick will release its Q3 2022 results before
market open on November 3, 2022. President and CEO Mark Bristow
will host a live presentation of the results that day in London,
UK, at 11:00 EDT / 15:00 GMT, 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 Q3 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 9047.
Enquiries
Claudia PitreManager, 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 Resource Management and Evaluation Executive (Mr. Bottoms
held the title of Mineral Resources Manager: Africa & Middle
East until September 30, 2022, and was promoted to Mineral Resource
Management and Evaluation Executive effective October 1, 2022) —
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 November 3, 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 November 3, 2022.
Cautionary Statements Regarding
Preliminary Third Quarter Production, Sales and Costs for 2022, and
Forward-Looking Information
Barrick cautions that, whether or not expressly
stated, all third quarter figures contained in this press release
including, without limitation, production levels, sales and
associated costs are preliminary, and reflect our expected third
quarter results as of the date of this press release. Actual
reported third 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
third quarter production levels, sales and associated costs when it
reports actual results on November 3, 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 third 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; (ii)
anticipated higher gold grades at Nevada Gold Mines for Q4 2022 and
(iii) 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 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 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; 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; 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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