UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of March 2020

Commission File Number: 1-9059

 

 

Barrick Gold Corporation

(Registrant’s name)

 

 

Brookfield Place, TD Canada Trust Tower, Suite 3700

161 Bay Street, P.O. Box 212

Toronto, Ontario M5J 2S1 Canada

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☐            Form 40-F  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: March 25, 2020     BARRICK GOLD CORPORATION
    By:  

/s/ Richie Haddock

    Name:   Richie Haddock
    Title:   General Counsel


EXHIBIT INDEX

 

Exhibit

  

Description

99.1    Barrick Gold Corporation’s 2019 Annual Report
EX-99.1
Table of Contents

Exhibit 99.1

 

80 90 100 110 120 130 140 150 160 Dec 18 Jan 19 Barrick Feb 19 Gold Annual BestMar 19 price Best Apr 19 Best Gold Jun 19 Jul 19 Report Aug 19 Sep 19 Oct 19 Barrick Nov 19 People Assets 2019Corporation ReturnsDec 19


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Our vision is to be the world’s most valued gold mining business by finding, developing and operating the best assets with the best people to deliver the best returns, on a sustainable basis, to our owners and partners. We are committed to partnering with our host countries and communities to transform their natural resources into tangible benefits and mutual prosperity. CONTENTS 2 2019: A Year of Delivery 26 Gold Market Overview 152 Financial Statements 4 Our Business at a Glance 28 North America 157 Notes to the Financial Statements 6 Best Assets 30 Latin America and Asia Pacific 216 Shareholder Information 8 Best People 32 Africa and Middle East 218 Cautionary Statement on 10 Best Returns 34 Reserves & Resources Forward-Looking Information 12 Key Performance Indicators 36 Exploration 14 Executive Message from Chairman the 40 Sustainability Review Directors 45 Endnotes 16 Board of Message from the 46 Financial Report 18 47 Management Discussion and President and CEO Analysis 22 Executive Committee 138 Mineral Resources Reserves and Mineral 24 Financial Review Unless otherwise indicated, all amounts are expressed in US dollars. Barrick Gold Corporation www.barrick.com NYSE:GOLD•TSX:ABX


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On January 1, 2019, a new Barrick was born out of the merger between Barrick Gold Corporation and Randgold Resources. Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX. The merger created a sector-leading gold company which owned five of the industry’s Top 10 Tier Onei gold assets – Cortez and Goldstrike in Nevada USA (both 100%), Loulo-Gounkoto in Mali (80%), Kibali in the Democratic Republic of Congo (45%) and Pueblo Viejo in the Dominican Republic (60%) – as well as two with Tier One potential – Turquoise Ridge and the Goldrush/Fourmile project, both in Nevada USA. On July 1, 2019, Barrick combined its Nevada assets with those of Newmont to create Nevada Gold Mines (61.5% owned and operated by Barrick) resulting in Turquoise Ridge becoming the sixth Tier One mine in the Barrick portfolio. And in September it bought out the minority shareholders in Acacia and took over the management of its Tanzanian assets. Barrick has gold and copper mining operations and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. Its diversified portfolio spans many of the world’s prolific gold districts and is focused on high-margin, long-life assets. Annual Report 2019 1


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2019: A YEAR OF DELIVERY On Barrick January Gold 1, Corporation the merger and between In and a historic Newmont accord, agree Barrick to merge Mark President Bristow and meets chief executive Papua New official. Randgold Shares Resources in the became new negotiations their Nevada over assets. two Previous decades to Guinea’s James Marape new prime to discuss minister a NYSE company under start the trading symbol on GOLD the capture achieve synergies this. had all failed to 20-year special mining extension lease. to Porgera’s and remain on the TSX as ABX. 2019 Jan Feb Mar Apr May Jun The The restructuring corporate office process is downsized starts. An for Fourmile inaugural was resource declared, estimate reflected The new Barrick’s in its Q1 results, strong start which is and Regional management executive decentralized. teams and site demonstrating and continuing the growth prospectivity potential of show from operations gold production, and earnings net cash per mineral established. resource management the Cortez property. share significantly up trends and debt will net continue of cash down though – the following which three quarters. Executive chairman John L Thornton and Republic newly of elected Congo Democratic president Felix for Barrick a buy-out presents of the a proposal minority confirm Tshisekedi their meet mutual in Washington commitment and shareholders the long and paralyzing in Acacia, dispute to end to potential. developing the country’s mineral Tanzanian between that government. company and the 2 Barrick Gold Corporation


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The Nevada world’s Gold largest Mines gold is launched. Dividend increased per by share 25% to for $ 0.05, Q3 2019 The starts disposal with the of sale non-core of Barrick’s assets owned production and complex operated is by majority- Barrick. followed $0.07 for by Q4 a 2019. 40% increase to Australia stake in the for Kalgoorlie $750 million. mine in Jul Aug Sep Oct Nov Dec Dec Mark president Bristow Macky meets Sall Senegalese to negotiate The and Acacia Barrick deal teams becomes immediately effective partner Barrick and agree its to Senegalese a transaction JV to Massawa a joint approach project to to bringing account. the Also license move into to operate. Tanzania to On restore the same its in combine which they the Massawa have a 90% gold stake, project, Interior on this day, David US Bernhardt Secretary visits of the day, discovery Barrick at announces Fourmile in a Nevada. major Sabodala with Teranga gold Gold mine. Corporation’s Barrick will governor Nevada Gold Steve Mines. Sisolak Nevada and US participate combined asset in the through upside of the the 11% senator will later Catherine follow suit, Cortez demonstrating Masto transaction interest it acquires closed in in Teranga. Q1 2020. The state Barrick’s and strong federal partnership governments. with the Barrick Tanzania and announce the government that all past of disputes between the two parties owned have been company, resolved. Twiga A jointly Minerals, Barrick Quisqueya announces 1 power that plant the for Barrick and Acacia’s boards agree on the and is formed Barrick to agrees manage to the a 50/50 mines Pueblo natural gas Viejo shipment will receive in Q1 its first 2020, acquisition by Barrick of the Acacia minority government. benefit-sharing deal with the clean lowering and costs, efficient in line energy with strategy. its shareholder interest. Annual Report 2019 3


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OUR BUSINESS AT A GLANCE Barrick Donlin Gold ownership: 50% Hemlo Barrick ownership: 100% Golden Barrick ownership: Sunlight 100% 2019 production: 213koz Corporate office, Toronto Nevada Gold Mines1 Barrick ownership: 61.5% TurquoiseRidge2 2019 production: 504koz3 Carlin2 2019 production: 1.3Moz3 Cortez2 2019 production: 963koz3 Pueblo Viejo2 Barrick ownership: 60% Goldrush 2019 production: 983koz3 Barrick ownership: 61.5% Barrick Fourmile ownership: 100% Lagunas Norte Barrick ownership: 100% Pierina Barrick ownership: 100% Zaldívar Pascua-Lama Barrick ownership: 50% Norte Abierto 3 Barrick ownership: 100% 2019 production: 256Mlb Barrick ownership: 50% Veladero Alturas Barrick ownership: 50% Barrick ownership: 100% 2019 production: 548koz3 Gold producing Projects Copper producing In closure Care and maintenance Corporate office 4 Barrick Gold Corporation


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Loulo-Gounkoto2 Barrick ownership: 80% 2019 production: 715koz3 Barrick Morila ownership: 40% Tongon Barrick ownership: 89.7% 2019 production: 273koz3 Jabal Sayid Barrick ownership: 50% 2019 production: 132Mlb3 Kibali2 Barrick ownership: 45% Porgera 2019 production: 813koz3 Barrick ownership: 47.5% North Mara 2019 production: 597koz3 Barrick ownership: 84%5 2019 production: 334koz3 Massawa Bulyanhulu Barrick ownership: 83.25%4 Barrick ownership: 84%5 2019 production: 37koz3 Buzwagi Barrick ownership: 84%5 2019 production: 115koz3 Barrick Lumwana ownership: 100% 2019 production: 238Mlb 1 The Nevada Gold Mines joint venture was formed on July 1, 2019. Barrick’s Goldstrike and Newmont’s Carlin operation were contributed to the joint to venture the joint and venture are now and collectively are now collectively referred to as referred Carlin. to Additionally, as Turquoise Barrick’s Ridge. Turquoise As a result, Ridge amounts and Newmont’s presented for Twin Carlin Creeks on a operation 100% basis were for contributed 2019 include Goldstrike Newmont from results July for 1, the 2019 full onwards. year ended Similarly, December amounts 31, 2019 presented (including for South Turquoise Arturo) Ridge as well on a as 100% results basis for for the 2019 legacy include Carlin the operation legacy Barrick contributed Turquoise by Ridge July 1, operation 2019 onwards. for the full year ended December 31, 2019 as well as results from the legacy Twin Creeks operation contributed by Newmont from 2 Tier One mine. 3 Production is presented on a 100% basis. 4 In Q1 2020, Barrick sold its stake in Massawa to Teranga Gold Corporation and retained an 11% equity interest in Teranga. 5 The expected effective date of our 84% ownership interest is January 1, 2020. Annual Report 2019 5


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BEST ASSETS In line with its commitment to finding, developing and operating the best assets, Barrick is focused on high-margin, long-life operations and projects clustered in the world’s most prospective gold districts, and supporting these with a robust copper businessii. Barrick already operates six Tier One gold assets. To qualify for Tier One status, a mine has to have annual production in excess of 500,000 ounces, a life of at least 10 years, and total cash costs in the bottom half of the industry range. Continuing brownfields exploration is designed to support and where possible to extend the production rate as well as the Life of Mine. The company also owns mines and projects with the potential for promotion to Tier One, and its greenfields exploration teams are hunting for the next world-class discovery across Barrick’s global holdings. 6 Barrick Gold Corporation


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TIER ONE MINES Carlin Cortez 2019 Production1 1.3Moz 2019 Production1 963koz Carlin (including the former Goldstrike operation) consists of Cortez consists of the Pipeline open pit complex and the Cortez multiple open pit and underground mines and several processing Hills underground operation. Processing at Cortez consists of facilities, including two roasters, an autoclave and an oxide mill. an oxide mill and heap leach pads. Pouring its first gold over The Carlin trend is the most significant ore-controlling fault in 150 years ago, Cortez is expected to continue producing long Nevada and will be a key exploration focus at Barrick for many into the future through projects such as Deep South, Goldrush years. and potentially Fourmile. Kibali Loulo-Gounkoto 2019 Production1 813koz 2019 Production1 715koz Kibali is one of the largest gold mines in Africa, consisting of Loulo-Gounkoto comprises the Yalea and Gara underground an open pit and underground operation, as well as a 7.2Mtpa mines at Loulo, as well as the Gounkoto open pit. Production processing plant. First gold was poured in 2013 from open from Loulo started in 2005 as an open pit operation. Gounkoto, pit operations, while full underground commissioning was a greenfields discovery, poured first gold in 2011 with ore completed at the end of 2017. The successful Kalimva-Ikamva processed at Loulo. Development of the complex’s third open pit prefeasibility study will enhance production flexibility underground mine is scheduled to start in Q4 2020. and extend Kibali’s life well beyond 10 years. Pueblo Viejo Turquoise Ridge 2019 Production1 983koz 2019 Production1 504koz Pueblo Viejo consists of two open pits, Moore and Monte Negro, Turquoise Ridge (including the former Twin Creeks operation) with processing through autoclaves. Ongoing studies and test consists of multiple open pit and underground mines as well as work are supportive of a plant expansion and an additional an autoclave and oxide mill. The high-grade Turquoise Ridge tailings facility that would allow the mine to maintain average 2 underground mine is the value driver of the complex and construction annual gold production of 800koz after 2022 (100% basis) . of a third shaft at the operation is on schedule and within budget. 1 Production is presented on a 100% basis. Nevada Gold Mines is owned 61.5% by Barrick (the operator) and 38.5% by Newmont. Kibali is owned 45% by Government Barrick (the of operator), Mali. Pueblo 45% Viejo by AngloGold is owned 60% Ashanti by Barrick and 10% (the by operator) SOKIMO. and Loulo-Gounkoto 40% by Newmont. is owned 80% by Barrick (the operator) and 20% by the 2 For additional detail regarding Pueblo Viejo, see the Technical Report on the Pueblo Viejo mine, Sanchez Ramirez Province, Dominican Republic, dated March19,2018,andfiledonSEDARatwww.sedar.comandEDGARatwww.sec.govonMarch23,2018. Annual Report 2019 7


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BEST PEOPLE Barrick is committed to attracting, retaining and training the best people and developing them into multi-faceted management teams, who are capable of not only handling NATIONAL WORKFORCE1 complex corporate transactions but also % 100 running some of the world’s most remote and operationally-challenging mines. Barrick’s 80 policy of employing host country nationals and upskilling them to world-class operational 60 and managerial standards has equipped the 95% 97% company with a workforce and management 40 76% 76% team ranking among the finest in the global mining industry. Additionally, thanks to mining 20 digitalization and automation, as well as mentorships and internship programs, Barrick 0 2019 has opened new opportunities for women and Employees young people to excel in a career in mining. Senior management 1 Percentage of workforce that are host country nationals. 8 Barrick Gold Corporation


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People make a business To build a modern mining business at the top of its field, you need best-in-class people to run its portfolio of best-in-class assets. That is why Barrick promotes a culture of inclusion across the organization and at every level. Barrick has flattened its corporate structure to create a larger ownership base, it’s sharing its strategic vision with all employees and the roll-out of team effectiveness programs is reinforcing their understanding of and commitment to Barrick’s high-performance ethos. An on-going recruitment drive is successfully filling Barrick’s pipeline of future talent with people who come from a broad range of backgrounds but who all have the desire and the ability to buy into the company’s DNA. Developing a new generation of leaders who Barrick’s will serve human as capital its future focus leaders. is on the Many young of Barrick’s people and current vocational executives training are the bursaries product and of have Barrick’s been university with the company identify and since develop completing emerging their talent studies. from leading Barrick universities looks to extended and technical to a secondary institutes. school This approach level to ensure is now a robust being being pipeline built of top into talent a model is developed of what a and modern maintained. mining Barrick business is the should injection be, and of fresh its flexible, blood. agile management style requires Prioritizing local recruitment jobs Barrick for prioritizes more than local 21,869 recruitment host country and nationals training and in 2019. provided The jobs regions it creates where opportunities provide valuable are often training scarce. and employment The company in its recruits mines. wherever If it is unable possible to from find staff the communities with the appropriate nearest skills wider or region qualifications and neighbouring in the community, provinces Barrick and states looks before to the are considering required national to develop employees localization or expatriates. plans that identify, All its create mines and maximize work opportunities for local people. Talent management and training A continued commitment success to on-going and the company training provides is critical a to wide Barrick’s range of performance development organization programs with to build the right and skills maintain to deliver a high- its such business as skills strategy. shadowing These and include technical on-the-job training for development, specific job as functions; its Management formal training Development and development training at the programs, University such of Cape course; Town and and ongoing Finance educational for Non-Financial opportunities Managers through training universities apprenticeships, and technical tuition schools. assistance, Apprenticeships and scholarships and on- to many the-job local training people at Barrick’s to gain skills operations and find offer gainful opportunities employment for at our mines or in other industries. Annual Report 2019 9


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BEST RETURNS Since the announcement of the merger with Randgold Resources, Barrick’s share price increased by 78% – outperforming its peers, comparable indices and spot gold – in a year w h i c h s a w t h e m e r g e r w i t h R a n d g o l d consummated, the Nevada joint venture with Newmont established, the long-running dispute between Acacia and the government of Tanzania amicably resolved, and the integration of that company’s assets into Barrick’s portfolio. At the same time, Barrick has improved its cashflow, increased its dividend three times in 2019 and almost halved its net debt to $2.2 billion – its lowest level since 2007. It is also well advanced in realizing $1.5 billion through the sale of non-core assets. Believing that its success and growth should be shared equitably with all its stakeholders, Barrick paid $6.7 billion1 to its employees, its host countries and local suppliers in 2019. 1 On a 100% basis. 10 Barrick Gold Corporation


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2019 HIGHLIGHTS GROUP GOLD PRODUCTION NET EARNINGS DEBT, NET OF CASH % % % 21 357 47 5.5MOZ $3,969 MILLION $2,222 MILLION QUARTERLY DIVIDEND ADJUSTED NET EARNINGS NET CASH PROVIDED BY PER SHARE1 PER SHAREiii OPERATING ACTIVITIES % % % 133 46 61 TO $0.07 $0.51 $2,833 MILLION FREE CASH FLOWiii ENVIRONMENTAL INCIDENTS SHARE PRICE2 % ZERO % 210 78 $1,132 MILLION CLASS 1vi GOLD PROVEN AND PROBABLE RESERVES 1 From Q3 2018. % 2 Since the Barrick and Randgold merger was announced on September 24, 2018. 14.5 71MOZix Annual Report 2019 11


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KEY PERFORMANCE INDICATORS GOLD PRODUCTION GOLD COST OF SALESv GOLD TOTAL CASH GOLD AISCiii COSTSiii Moz $/oz $/oz $/oz 6.0 1,050 700 1,000 5.0 1,000 650 800 4.0 950 600 3.0 600 5.5 1,005 671 4.5 900 400 894 2.0 806 550 588 1.0 850 892 200 0 800 500 0 2018 2019 2018 2019 2018 2019 2018 2019 COPPER PRODUCTION COPPER COST OF COPPER C1 CASH COPPER AISCiii SALESv COSTSiii Mlb $/lb $/lb $/lb 450 2.50 2.00 2.85 2.40 1.90 2.75 425 2.30 1.80 2.65 400 2.82 432 2.40 1.97 2.20 1.70 2.55 375 2.52 383 2.10 1.60 2.45 2.14 1.69 350 2.00 1.50 2.35 2018 2019 2018 2019 2018 2019 2018 2019 12 Barrick Gold Corporation


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GROUP GOLD PRODUCTION: 4.8—5.2Moz Targeted for COST OF SALESv: $980—$1,030/oz TOTAL CASH COSTSiii: $650—$700/oz 2020 AISCiii: $920—$970/oz TOTAL ATTRIBUTABLE CAPEXx: $1,600—$1,900 million EPS ADJUSTED EPSiii NET CASH PROVIDED BY FREE CASH FLOWiii OPERATING ACTIVITIES $ $ $ million $ million 2.50 0.60 3,000 1,200 2.00 1,000 0.50 2,500 1.50 2.26 0.40 2,000 800 1.00 0.50 0.30 1,500 2,833 600 1,132 0.51 0 0.20 0.35 1,000 1,765 400 -0.50 -1.32 0.10 500 200 -1.00 365 -1.50 0 0 0 2018 2019 2018 2019 2018 2019 2018 2019 DIVIDEND PER SHARE1 DEBT, NET OF CASH GROUP SAFETY PERFORMANCE $ $ million 0.25 4,500 250 3.00 3,750 2.50 0.20 200 2.24 2.12 3,000 2.00 0.15 150 2,250 4,167 1.50 219 0.10 0.20 100 200 0.16 1,500 1.00 2,222 0.05 50 0.46 0.50 750 0.50 49 43 0 0 0 0 0 0 2018 2019 2018 2019 2018 2019 1 Paid in respect of the 2018 or Lost Time Injuries Reportable Injuries 2019 fiscal year. Fatalities LTIFR TRIFRiv Annual Report 2019 13


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MESSAGE FROM THE EXECUTIVE CHAIRMAN When I wrote to you last year, it was about the transformational merger with Randgold Resources and about the targets we had set ourselves in pursuit of Barrick’s new goal of becoming the world’s most valued gold company by owning the best assets, managed by the best people, to produce the industry’s best results. At that time, none of us could have foreseen the recent outbreak of the Covid-19 pandemic, a global disaster which is changing the way we live and work in a radically disruptive process with currently no clear end in sight. Barrick is fully engaged in managing the impact of Covid-19 on our business and our people, and emergency response measures have been rolled out at all our sites and operations. Our new leadership’s experience in managing pandemics and major crises, combined with Barrick’s financial muscle and its longestablished culture of caring for the welfare of its employees and communities, have placed us in a strong position to contend with this challenge. Turning now to the year under review, I am very pleased to report that under the leadership of Mark Bristow, who was appointed as President and Chief Executive Officer of the merged company, the new Barrick has made enormous progress in delivering on that promise in a year of intense activity. This achievement is directly attributable to a strengthened management team with clear strategic objectives, a fit for purpose structure, a renewed commitment to partnership and strictly defined investment criteria. Following the merger, this team moved quickly to conceive and consummate three additional value-creating transactions. In the first, Barrick and Newmont merged their Nevada assets in a new joint venture, Nevada Gold Mines, which is majorityowned and operated by Barrick. This business is already more than living up to our expectations. Then Barrick acquired the minority shares in Acacia Mining plc, integratedits mines into our operations, resolved its legacy issues with the Tanzanian government and established Twiga Minerals Corporation, a joint venture with the government, to manage our assets in that country and cement our partnership. Thirdly, in line with our policy of selling non-core assets, we sold our non-operated stake in Kalgoorlie Consolidated Gold Mines and banked $750 million at the end of November 2019 and sold our interest in the Massawa project in early March of this year for proceeds of up to $430 million. This strategic process is continuing. 14 Barrick Gold Corporation


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Internally, the new corporate executive team is supported by a slimmed-down but agile and highly competent technical, financial, commercial, communication and administration staff, and can exercise full oversight of our business and operations. Our global business was refocused into three geographical regions – North America, Latin America and Asia Pacific, and Africa and Middle East – where senior executive teams were installed in line with our policy of moving people and skills out of the corporate office and into the operations. We have made sure that each site has the geological, operational and technical abilities to meet its business objectives and introduced a system of parallel work streams that are integrated both laterally and vertically for optimum efficiency. At the same time, we are upgrading and combining the digital and information systems throughout the group to provide managers with real-time data for decision-making and planning. The impact of these measures is evident in the results for 2019, which delivered gold production at the top of the guidance range and copper above its range; adjusted net earnings per shareiii rose by 46%; net debt was halved to $2.2 billion; and the year ended with another increase in the quarterly dividend. Barrick’s focus on operational excellence is matched by a commitment to protecting the health and safety of our people and minimizing the effect of our operations on the environment. There were no fatalities or major environmental events across the group in 2019 but these are areas in which there is no room for complacency, and our sights are set on a zero-harm workplace target. There are also other goals yet to be achieved, but Barrick has already moved a long way towards building a modern gold mining business capable of sustainably producing around five million ounces of gold per year and delivering significant free cash flow. Our robust balance sheet and substantial liquidity will enable us to invest in our future, regardless of capital market vagaries. Our journey ahead is rich in value-creating opportunities, particularly in Nevada and Latin America, while Africa remains a place to find world-class deposits to add to our portfolio of Tier One mines. We are also looking closely at expanding our copper base, given that copper co-exists with and complements gold. We are strongly placed to take full advantage of these prospects under the leadership of Mark Bristow, who in 2019 clearly demonstrated that he is the right person to take Barrick to the next level. Following the merger with Randgold Resources, the Board of Directors was streamlined, and three of its standing committees – Audit & Risk, Corporate Governance & Nominating and Compensation – were reconstituted to enhance dialogue and promote accountability. Consistent with our commitment to increasing the Board’s diversity, in August 2019 we appointed Ms Loreto Silva, the former Chilean Minister of Public Works, to the Board and we are well advanced in our search for a second highly qualified female candidate who will enhance the mix of skills and perspectives the Board needs to address the challenges and opportunities facing the business today. John L Thornton Executive Chairman BARRICK: A STAND OUT VALUE PROPOSITION Indexed performance of gold against other asset classes 1,2,3 Source: Bloomberg Financial Markets. Barrick Other senior gold producers Spot gold S&P 500 US Agg. Bond index US Dollar index (DXY) Spot copper WTI oil +78% 50 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 75 100 125 150 175 200 +50% +26% +10% +8% +2% (4%) (14%) 1 Market data at December 31, 2019. Indexed (base = 100) at September 21, 2018, one working day before the Barrick Randgold transaction was announced. 2 Other Senior Gold Producers include Agnico Eagle, Newcrest, and Newmont, weighted by market capitalization. 3 US Aggregate Bond Index based on “Bloomberg Barclays Global-Aggregate Total Return Index”. Annual Report 2019 15


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BOARD OF DIRECTORS Director Nationality: since American February 2012 Chairman Mr Thornton of Barrick has been since Executive 2014. in He global has decades business, of finance, experience and a public director affairs. of numerous He has served public as Director since January 2019 Nationality: South African companies, including China John L Thornton Unicom, Ford, HSBC, Industrial NON-INDEPENDENT, Mr Bristow had been the Chief EXECUTIVE and Intel, Commercial and News Corporation. Bank of China, Executive of Randgold Resources CHAIRMAN OF Randgold since its incorporation was founded in on 1995. his BARRICK pioneering exploration work in led West the Africa company’s and he growth subsequently through Mark Bristow NON-INDEPENDENT, the of world-class discovery and assets. development He joined PRESIDENT AND CHIEF EXECUTIVE the Barrick merger in his in current January position 2019. with OFFICER BARRICK OF Nationality: Director since American December 2005 Chair of the Audit & Risk Committee, Audit Committee Financial Expert Member of the Compensation Committee Director since September 2003 J Brett Harvey Mr Inc’s Harvey Chairman was Emeritus CONSOL from Energy May Nationality: Venezuelan and INDEPENDENT LEAD DIRECTOR AND 2016 to May 2017, Chairman Spanish Executive from January Chairman 2015 to from May May 2016, Chair of the Corporate Governance & Nominating 2014 and CEO to January from June 2015, 2010 Chairman to May Committee 2014, and CEO from January Member of the Compensation 1998 to June 2010. Committee Gustavo A Cisneros INDEPENDENT of Mr Cisneros, Cisneros a is privately- the Chairman DIRECTOR held telecommunications, media, entertainment, and He consumer is a member products of Barrick’s organization. International is also a senior Advisory advisor Board. to RRE He Ventures firm. LLC, a venture capital 16 Barrick Gold Corporation


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Director Nationality: since British January 2019 Chair of the Compensation Committee Member of the Corporate Governance & Nominating Committee Christopher L Coleman Mr Coleman is the group head Director Nationality: since Canadian July 2014 INDEPENDENT and of banking has more at Rothschild than 25 years & Co of DIRECTOR experience in the financial services Member of the Audit & Risk sector, including corporate and Committee, Audit Committee private client banking and project Financial Expert finance. standing He involvement has had ain long- the mining Mr Evans is the President of sector in Africa and globally. Alibaba a position Group he has Holding held since Ltd, J Michael Evans INDEPENDENT President, August 2015. he was Prior an to independent becoming DIRECTOR director committee and of member Alibaba of Group the audit Nationality: Director since American July 2014 Holding Ltd. Member of the Corporate Governance & Nominating Committee Member of the Compensation Committee Brian L Greenspun Mr and Greenspun Editor of the is the Las Publisher Vegas Sun. Director since January 2019 INDEPENDENT Nationality: British DIRECTOR of He Greenspun is also Chairman Media and Group. CEO He Member of the Audit & Risk Presidential has been appointed Commissions. to two US Committee For 15 years, prior to his was retirement head of in Mining 2011, Mr Investment Quinn Andrew J Quinn Banking CIBC. He for has Europe over and 40 years Africa of at Director since August 2019 INDEPENDENT Nationality: Chilean DIRECTOR experience in the mining industry. Member of the Corporate Governance & Nominating Committee Ms the Silva Chilean serves law firm as a Bofill partner Escobar at Silva Abogados and is the current INDEPENDENT Loreto Silva chairwoman of the board of ENAP, Chile’s national petroleum DIRECTOR company. In 2010, she was Works appointed and Vice became Minister Minister of Public of the Ms department Silva has at been the end named of 2012. one of four Chile’s occasions. 100 woman leaders on Annual Report 2019 17


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MESSAGE FROM THE PRESIDENT AND CEO This is the first set of full-year results Barrick is publishing since its merger with Randgold Resources, and it is gratifying to report not only that we have delivered a strong, expectation-exceeding performance but also that we have made significant progress towards our goal of becoming the world’s most valued gold company. It’s measure been interesting value by in its this narrowest regard to metric: note that that some of analysts market A year of delivery In 2019, there was a strong performance across the group, ranging. capitalization. It encompasses Barrick’s definition the economic of value benefits is far more we deliver wide- led by Kibali, Veladero and Porgera, with North America, Loulo-Gounkoto and Pueblo Viejo also producing creditable to people, all our communities stakeholders; and the environments; care with which our we creation treat our of results. Collectively, our copper assets beat their production guidance and costs were at the lower end of the range. opportunities our strategic for focus advancement on long-term in countries sustainability; that lack and, them; of The only exceptions were Tongon, which just missed its guidance, Kalgoorlie Consolidated Gold Mines, which we’ve course, the returns we generate for our investors. sold, and Lagunas Norte, which is in care and maintenance while we consider its future. social The past and year governance has also seen (ESG) the as marked a key rise investment of environmental, criterion. The Nevada Gold Mines joint venture involved the belated Cynics have conversion questioned to a kinder the sincerity form of capitalism, of big business’s terming combination and integration of complex assets and was successfully achieved in a remarkably short time. In its first companies it “woke-washing”. but the principles Barrick cannot of ESG speak have for for other many mining years six months of operation, the new business delivered within its production and cost guidances. It also gave Barrick its long-term been embedded strategy in recognizes the DNA of that both we legacy operate companies. in a changing Our sixth Tier One gold mine. standards world where of behavior, business and is where expected ethical to issues meet have the become highest In line with our focus on Tier One assets, we continued to rationalize our portfolio, consolidating the Tanzanian mines, commercial call this our considerations social license with and serious it is a core consequences. part of all our We selling our stake in Kalgoorlie and agreeing to the sale of the Massawa project which closed in the first quarter of 2020. operations. 18 Barrick Gold Corporation


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of These approximately divestments $1.2 collectively billion and, generated as this strategic gross proceeds process Pueblo there is a Viejo plant had and a tailings very good expansion year but project the main which excitement will turn by continues, the end we of this expect year. it to have earned Barrick $1.5 billion what operation is already capable one of of maintaining the world’s largest an annual gold production mines into an of At a time when the global gold industry is at or near peak future. more than A long-life 800,000 Pueblo ounces Viejo on is a obviously 100% basis good well for into Barrick the production, in replacing it all is of worth our gold noting reserves that in 2019 depleted Barrick by mining, succeeded and and the mine it’s even provides more more beneficial than 20% for the of the Dominican country’s Republic corporate – at including a higher the grade. Randgold This merger was achieved and Nevada net of joint all changes, venture, tax revenue. our the minority interest in buyout Kalgoorlie, of Acacia the Mining reclassification plc, the of disposal Lagunas of Veladero work we put also into did redesigning well after struggling and replanning for years, the thanks operation. to the Norte pit pushback to mineral at Hemlo resources from and our the proven removal and of probable the Phase gold 6 Its pushback, Life of Mine and a has project been to extended link the mine beyond to clean 2030 grid by power a pit reserves statement. the across second the border half of in 2020. Chile is scheduled for commissioning in we Behind have the made scenes, the business as John Thornton fit for purpose noted by in his flattening message, the The El Indio Belt extends from Veladero in the north to Alturas costs, corporate establishing structure, reducing empowered general regional and administrative executive in and the Chile. south The and El Indio straddles Belt is the in a border particularly between well-endowed Argentina orebodies management back teams to the operations. and moving We responsibility have also introduced for the gold and holds province the which potential has for already much yielded more. 50 Barrick million controls ounces capacity a strong throughout geological the and organization mineral resource to ensure management that we permits known targets, over a including distance of the 100 giant kilometres Pascua-Lama with significant project in optimize our existing assets. resources the north as in the well Alturas/Del as almost Carmen nine million complex ounces in the of south. inferred Overview of the operations Porgera in Papua New Guinea has Tier One potential but Nevada business. Gold Already Mines the world’s is the value largest foundation gold mining of complex, Barrick’s faces many challenges in the form of legacy issues and an unruly neighborhood. Despite these, Porgera exceeded its is it holds the most enormous significant potential ore-controlling for growth. structural The Carlin corridor trend in production guidance for the year on the back of a particularly strong fourth quarter of 2019, and brownfields exploration Nevada, going to with be one open of mineralization our main hunting at many grounds points, in 2020 and and it is has identified a significant potential upside to the Life of Mine. We are negotiating a 20-year extension to Porgera’s of beyond. interest, Further ranging afield, from we walk-up have already drill targets identified to large new areas areas lease with the government. geological that are known features to but contain are largely prospective unexplored. stratigraphy Our fresh and Kibali continued to shine with a record-breaking performance for the third consecutive year. Gold production geology-focused mineral resource management approach of is integrating leading directly exploration to a host and was well above the top end of guidance and costs were in the lower half of the range. The successful Kalimva-Ikamva of new target areas. prefeasibility study prepares the way for an open pit project which will enhance production flexibility and potentially Cortez quarter was of 2019 one as of it the continued stand-out its performers transition to of athe mainly last extend Kibali’s life well beyond 10 years. underground to start contributing operation. later in Its 2020. Deep The South feasibility project study is on on track the Twiga Joint Venture is a new company jointly owned by Barrick and the Tanzanian government formed as part of Fourmile Goldrush project, project is it expected will eventually in 2021 be included and, together in the with Cortez the an agreement to settle Acacia Mining plc’s dispute with the authorities and to manage our assets in Tanzania. This complex, securing Cortez’s future as a Tier One asset. included a benefits-sharing deal designed to secure a genuine partnership between Barrick and the state. Since Turquoise Gold Mines’ Ridge performance was another and also big delivered driver of more Nevada than consolidating the Tanzanian mines after the minority buy-out of Acacia Mining plc, we have restarted normal operations $ operations 100 million following in synergy the establishment savings in the of first the six joint months venture. of at North Mara, where there is a lot of potential and we are focused on identifying opportunities for performance Construction schedule and within of a third budget. shaft at Turquoise Ridge is on enhancement as well as resource growth. Elsewhere in the while Lake we Victoria plan its goldfields, restart. Buzwagi Bulyanhulu is expected is running to on enter tailings care Hemlo modernizing has been and refocusing upgraded to the the operation, strategic phasing category out by and maintenance in 2021. the mining. open There pit and has transitioning been an encouraging to underground turnaround contract in its performance could be extended. and there are indications that its Life of Mine Annual Report 2019 19


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production Loulo-Gounkoto guidance. performed Its solar very power well project and exceeded – Barrick’s its venture, Following our the Nevada establishment exploration of our is Nevada well underway Gold Mines and early joint reducing first – is on operating track to costs add and 20 megawatts cutting carbon to its emissions power grid, by new versions areas of of unified interest, geological from walk-up models drill have targets already to vast identified tracts 40,000 underground tonnes mine per year. is scheduled Development to start of in the the complex’s fourth quarter third of and land geological that are features known to but contain have prospective had little to stratigraphy no drilling. complex’s of 2020, while asset ongoing base. drilling points to further growth in the While further it’s orebody early days, extensions we are as excited well as about new discoveries. the potential for remains Tongon ahas strong about cash two-and-a-half producer and we years continue of life to left look but for Likewise, the world’s we most also prolific have extensive gold districts land outside positions Nevada in many such of additional resources that could extend its life of mine. Birimian as the Andean goldfields, trend the in East South African America, Congo the Craton West and African the exceeded The copper their mines production had a very guidance. good year Their and performance collectively Pacific addition Rim. of exploration Our global programs footprint in has Tanzania, expanded the with Guiana the was conjunction led by Lumwana, with improvements where cost-reduction in plant availability initiatives and in search Shield and for opportunities more recently to in enhance Japan, our and pipeline we continue of quality to mining efficiency drove a big turnaround. prospects. One discoveries, We won’t wherever rest in they our may relentless be, confident pursuit of in Tier our Taking tech to the next level ability for our to investors continue and to stakeholders. make discoveries and generate value Barrick and automation is intent on in the being mining at the industry, leading and edge trials of digitalization and projects While 2019 was a year of building the foundations, I believe safer designed are driving to make the our increased operations use more of technology efficient across as well the as that we are now well placed to resume investing in our future through focused greenfields exploration driven by the clear group. understanding that it is exploration that ultimately drives our value train. autonomous Centres of excellence applications have for both been surface established and underground to advance operations and to eliminate the need for a range of sites Health, safety and the trialing project designed different systems. to enable the In Nevada, retrofitting the of an first autonomous stage of a environment During the past year, ESG management has become an system At Kibali, for which Carlin’s remains fleet has a world been completed leader in underground successfully. increasingly important factor in investment decisions, as it is a critical measure of the sustainability of a business. I have long automation, the same haulage multiple level. autonomous A trial to machines utilize this can technology operate on on argued that a good business should also be a good citizen. Particularly in emerging countries, mining companies have a single the production operator levels can now has control been completed up to three successfully machines acting and a moral obligation as well as a commercial motivation to minimize their impact on the environment, help develop economies and semi-autonomously which will provide in real-time different visibility zones. An of additional the underground system uplift communities through opportunity creation, skills transfer and quality of life improvement. If the mining industry is to currently operations, being including commissioned. personnel and equipment tracking, is survive in a changing world, it has to recognize society’s new value beyond priorities profitability. and adapt Acknowledging to behavioral that expectations the value that mining go With introduced the rapid a battery-powered development of development electric vehicles, drill at Hemlo we have as creates should be shared with all stakeholders is an important step in that direction. technology. a first step towards We are doing establishing the same the with potential a similar of trial this of new an Caring for the well-being of our employees is a top priority underground haul truck at Turquoise Ridge. and a key component of Barrick’s ESG programs. We are currently pandemic engaged on our in people managing and the our impacts business. of the Our coronavirus financial Investing in our future strength, established prevention practices and procedures, While exploration creates value, embedding our unique mineral resource management model as a core part of our pandemics and the experience around our we African gained operations, from dealing have with placed two Ebola us in operating culture ensures the responsible and sustainable stewardship of our orebodies to optimize and deliver their a very strong position to cope with this new challenge. value. In the first year following the merger, our focus has been on the fundamentals: optimizing and augmenting We safety constantly record and strive have for made the improvement some progress, of our but health still have and our geology teams, enhancing our mines’ geological databases, increasing our orebody knowledge through some sites held distance the ISO to go. 45001 At the health time of and the safety merger, certification all the Randgold but all extensive relogging campaigns, improving grade control and reconciliation practices, and generating significantly more the the end Barrick of 2021, operations all our did sites not. will We be certified are addressing under ISO this 45001. and by robust resource models. 20 Barrick Gold Corporation


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There All but were four no of major our mines environmental have the incidents ISO 14001 at our environmental sites in 2019. certification that certification. and by All the the end operations, of 2020, all apart of our from mines the will recently have programs consolidated and Tanzanian these will mines, be implemented have community in Tanzania development in the being course rolled of this out year. at those In addition, sites that biodiversity do not already action have plans them. are addressed, There are some notably environmental in Latin America, legacy but issues on this that front, remain too, to we be are making steady progress. Building the world’s most valued gold company happy We started to report 2019 that with by a long the end and of challenging 2019 we to-do had ticked list and all I am the boxes, possible and without then some. the support This achievement and guidance would of John not have Thornton been and companies the Board who of created Directors; a new the many Barrick people by uniting from in both one legacy team us with our one social mission; license our host and countries value us and as a communities partner; our who business grant are associates all stakeholders across the in globe; Barrick, and, and of the course, reason our we investors. go to work You each day is to create sustainable value for you. 2020 While will much be has another been busy achieved, year. much The work remains we to did be in done, 2019 and has equipped us well to take Barrick to the next level. We growth stand potential, on the strong which foundation will support of our a positive enormous production organic substantial profile and cash a very flow robust for at business, least the capable next decade. of generating There are a we also continue opportunities to explore. for growth All in outside all, I am our confident current ambit that we which are more world’s than most capable valued of gold delivering company. on our promise: to build the Mark Bristow President and Chief Executive Officer 10-YEAR GOLD PRODUCTION PLAN Moz 6,000 5,000 4,000 3,000 2,000 1,000 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 North America Latin America and Asia Pacific Africa and Middle East Barrick’s management 10-year initiatives gold production in execution. profile Additional is based asset on its optimization, current operating further asset exploration portfolio, growth, sustaining new project projects initiatives in progress and and divestitures exploration/mineral are not included. resource This The 10-year subsequent outlook is five subject years to is also change subject and is to based change on and the assumes same assumptions attributable as production the current from five-year Fourmile outlook (starting detailed in 2028) in endnote as well (viii) as exploration for the initial and five mineral years. resource management projects in execution at Nevada Gold Mines, Hemlo and Porgera. projects Barrick is is closely disrupted monitoring due to efforts the global to slow COVID-19 the spread pandemic of the and virus. Barrick’s guidance may be impacted if the operation or development of our mines and Annual Report 2019 21


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EXECUTIVE COMMITTEE Mark President Bristow and was Chief appointed Executive Graham Shuttleworth is a Officer of Barrick in January 2019, 25 chartered years of accountant mining industry with over following Randgold the Resources. merger with Previously, experience. Previously, he was he was the Chief Executive the Financial Financial Officer Director of Randgold and Chief Officer pioneering of Randgold exploration following work in his from July 2007, and prior to West Africa. He subsequently that head the of metals managing and director mining and led Randgold’s growth through for the Americas in the global Mark Bristow Graham Shuttleworth the discovery and development investment banking division of Barrick President of high quality assets into a Senior Executive HSBC. He became the Senior and Chief Executive major international gold mining Vice-President, Chief Executive Vice-President and Officer business. He played a pivotal Financial Officer role in promoting the emergence January CFO of Barrick 2019. with the merger in in of Africa, a sustainable and has mining a proven industry track record of delivering significant Kevin involved Thomson in all activities is intimately of shareholder value. He holds a Doctorate in Geology from the the strategic company, significance including to the University of KwaZulu-Natal. development with other mining of partnerships companies, investors, business partners, suppliers strategic and other Catherine responsible Raw for is the the North executive America legal issues, management of complex negotiations, as well as region. Financial She Officer was of formerly Barrick. Chief She Kevin Thomson development of corporate strategy Senior Executive and governance. as joined Executive the company Vice-President, in May 2015 Vice-President, Strategic Matters Business was previously Performance, co-manager and of BlackRock’s flagship mining responsible Willem Jacobs for is the the Africa executive and Catherine Raw funds. Middle East region. He joined Chief Operating Randgold in 2010 and was Officer, North America responsible for the establishment and of Randgold’s East Africa, activities specifically in Central in the He Democratic was appointed Republic COO, of Congo. Africa and Middle East after the merger Mark Hill is the executive Willem Jacobs in January 2019. responsible for the Latin America Chief Operating and Asia Pacific region. He was Officer, Africa and formerly Chief Investment Officer Middle East committee of Barrick, chairing and has its more investment than 25 years industry. of experience in the mining Mark Hill Chief Operating Officer, Latin America and Asia Pacific 22 Barrick Gold Corporation


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Rod MSc Quick and 24 is years’ a geologist experience with an Lois Wark joined Randgold when in the gold mining industry. He 1995 the company and headed was established its corporate in joined was involved Randgold in the in 1996, exploration, and communications function evaluation and production phases for has the assumed past 20 responsibility years. She Morila. of all of Randgold’s Rod was appointed projects to since as executive in charge of his current position following the Barrick’s communications global corporate and investor merger in January 2019. relations programs. Rod Quick Lois Wark Mineral Resource Group Corporate Management and Communications and Evaluation Executive Investor Relations Executive in With geology over 30 and years’ exploration, experience Grant Beringer oversees all sustainability related aspects for Rob team Krcmarov of geoscientists leads a and global the company and is a member of the environmental and social exploration are responsible professionals for the discovery who oversight committee. He holds an MSc in environmental of deposits a number in recent of the decades, largest gold management and has over 15 years’ experience in the including Goldrush, Lagunas Fourmile, Norte, Gounkoto, environmental and social consulting industry. Rob Krcmarov Massawa and Alturas. Grant Beringer Executive Vice- Group Sustainability President, Exploration Executive and Growth Darian than 25 Rich, years’ who experience has more in John Steele is the executive responsible for capital projects human was appointed resource Executive management, Vice- and provides operational and engineering oversight to the July President, 2014, Talent when he Management, was tasked in group. He joined Randgold in 1996 and was responsible for with developing attracting, exceptional retaining people. and the successful construction and commissioning Morila, Loulo, Tongon, of Randgold’s Gounkoto Darian Rich John Steele and Kibali mines. Human Resources Metallurgy, Executive Engineering and Capital Projects Executive Greg Executive Walker Managing has been Director the of Rich in 1997 Haddock and after joined progressing Barrick Nevada JV was formed Gold Mines in July since 2019. the through roles, was various appointed legal and General other Mines, Prior to he leading was Barrick’s Nevada Gold Senior Counsel roles at Barrick in 2014. included Non-legal Vice- Vice-President, Technical Excellence, Operational responsible and Regional President, President, Environment North and business for driving improvement transformational across in America. the mining With industry prior legal and roles as a Greg Walker Rich Haddock Barrick’s operations. partner in a major law firm, he Executive Managing General Counsel has over 35 years’ experience. Director, Nevada Gold Mines Annual Report 2019 23


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FINANCIAL REVIEW The 2019 year was a year of transformation for Barrick and this was borne out in our financial results. Four quarters of consistently solid operational performance resulted in a strong set of financial results for the year in every respect. Although the higher gold price was a key part of this, it was our operational delivery and stability which ensured that this benefit was fully captured and delivered to the bottom line. Net by operating earnings was activities $4.0 billion increased in 2019 by and 61% net to cash $2.8 provided billion In with terms our stated of the commitment increase in our to growing dividend, shareholder this is consistent returns from free cash the previous flow to year. $1.1 The billion significant represents improvement an increase in our of strong while we balance continue sheet. to invest Divestment in the proceeds business expected and maintain in the a 210% year on year with our adjusted EBITDA margin near term will further improve our flexibility to maintain strong increasing from 43% to 50%iii. Importantly, our gold shareholder returns while continuing to grow the business the AISC guidance and total ranges cash cost highlighting metrics were that in this the outcome lower half was of exploration. through the execution of our pipeline of growth projects and achieved through the disciplined delivery of our plansiii. This strong cash flow outcome allowed us to almost halve $ With 3.0 abillion cash balance accessible of $from 3.3 billion our at undrawn year end credit and another facility, our to increase net debt our to $quarterly 2.2 billion dividend in the space to 7 of cents 12 months per share, and our forecast total free liquidity cash at flow year generation end was $in 6.3 2020, billion. this Along will allow with an After increase considering of 75% the relative early repayment to the Q1 dividend of another of 4 tranche cents. Barrick by the vagaries to fund our of the immediate capital markets. growth plans unencumbered in of the our enviable public market position debt of in having January less 2020, than $ we 100 are million now At an individual site level, there were many stand-out a of remarkable public debt turnaround maturities from falling the due position before six 2033. years Quite ago performers Long Canyon with and Loulo-Gounkoto, Jabal Sayid all exceeding Kibali, Porgera, the top Veladero, end of when net debt was over $13 billion. at their the production top end of guidance their guidance ranges range. for 2019 and many more 24 Barrick Gold Corporation


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The significantly transformation lower corporate of the business administration was also cost. evident Relative in to a our have original now more guidance than halved for the our 2018 spend year with of $ 275 an outcome million, we of $ partly 130 million achieved for 2019 through (excluding the closure severance of satellite costs) . corporate This was offices substantial in Tucson, reductions San in Francisco other offices and such Buenos as Toronto Aires with and of Santiago our mine in keeping plans in with the our hands mantra of the of people putting closest the execution to the mine we eliminated site and eliminating redundant waste entities and in the inefficiency. group which In addition, has the benefit of further simplifying our business. The to our final Enterprise element Resource of our transformation Planning (ERP) has and been consolidation in relation former systems Randgold environment. entities Our into initial the focus Barrick was consolidation to bring the system to facilitate our quarterly reporting. Newmont’s Following the to combination create Nevada of our Gold Nevada Mines, operations we also added with we those will systems be using to SAP our integration as our transactional roadmap. Going system forward, for the group phases and of this we major have progressed two-year project the design according and totesting plan. This to capture will give further us better productivity insights efficiencies into our business, and enable allowing timely us decision-making. business Dealing with and risk is an effectively integral part is a ofsource how we for protect sustainable and create risk management value. During capabilities 2019, we to ensure made progress ownership with of risk our the was group. embedded We in implemented our business new at the procedures operations in across risk on management a risk aware and culture updated allowing operational risks to risk be registers managed to within focus also agreed introduced thresholds a combined in a proactive group and risk effective register to manner. allow for We a top that down we deal view with of key risk risks effectively facing in the all business our decision-making. and to ensure While first to 2019 acknowledge has been that a transformative more value is year, on the we horizon will be and the we upside will continue in order to our maintain unrelenting our position focus on as the the capture world’s of most this valued gold mining company. Graham Shuttleworth Senior Executive Vice-President, Chief Financial Officer BARRICK 5-YEAR PLANviii Gold production (attributable) koz Gold capital expenditure1 (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 6,000 1,200 5,000 1,000 4,000 800 3,000 600 2,000 400 1,000 200 0 0 2020 2021 2022 202 2024 North America Latin America and Asia Pacific Africa and Middle East Cost of salesv AISCiii Total cash costsiii Total capital expenditure 1 Gold capital expenditure includes project and sustaining capital expenditure across all gold operations but does not include capital expenditure related to the copper operations. Barrick projects is is closely disrupted monitoring due to efforts the global to slow COVID-19 the spread pandemic of the and virus. Barrick’s guidance may be impacted if the operation or development of our mines and Annual Report 2019 25


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GOLD MARKET OVERVIEW performance The gold price in 2019 had on a the strong back and of increasing sustained investor positive community, While there was overall strong demand appetite for for gold gold fell from modestly the investment in 2019, interest interest rates due in to large geopolitical economies, uncertainties, and a search for reductions investment in Pound as rising sterling, prices Japanese in non-US yen, currencies, Indian rupee including and the Chinese Euro, all-time alternatives highs. as many The global extension equity of markets these traded macroeconomic at or near coins. yuan, reduced In particular, consumer global demand jewelry demand for jewelry, was down bars and 6% gold themes price into performance. 2020 continues to provide a backdrop for robust compared over half the to world’s 2018, with jewelry China demand and India – down – responsible 7% and 9%, for The average price of gold in 2019 was $1,393/oz, a 10% of respectively. jewelry demand, However, the overall despite amount the decrease spent on in jewelry the volume in US the increase highest over annual the $ 1,268/oz average price average since in 2013 2018. and $1,393/oz represented was in dollar the gold terms price. actually increased due to the year-on-year rise the fourth straight year of average price increases. Gold demand for electronics and other industrial uses fell by September The gold price 2019 reached – a price a that six-year has been high exceeded of $1,557/oz in early in demand a modest and 2% production. in 2019 as trade An increase tensions in weighed demand on for global 5G an 2020. increase Gold of prices 18% ended since the 2019 end at of $ 2018. 1,515/oz, representing infrastructure Central bank purchases could help of to gold reverse were this once trend again going substantial forward. A reduction in global interest rates, including three 25-basis- in decrease 2019, totaling of 1% approximately year-on-year but 650 2019 tonnes. still This represented was a slight the 2019 point benchmark and a return rate to cuts negative by the 10-year US Federal yields in Reserve parts of in 50 second-largest years, with Turkey, year of Russia, net central China, bank and purchases Poland leading in the last the Europe, opportunity helped cost to of increase holding gold. the gold At the price beginning by reducing of 2019, the for way. 10 Central straight banks years as have they now look been to it net as a purchasers source of reserve of gold the increase market over expectation the course was of the for year, US so benchmark the resulting rates series to diversification. of despite rate cuts a US had dollar an especially that remained positive strong. impact on gold prices attributable Overall supply to a of rise gold in recycled in 2019 gold. increased Global mine by 2%, production mainly An increase in geopolitical tensions, including an escalation mine was down supply by since 1%, 2008 representing and potentially the first signaling annual decline that the in including of hostilities tariffs between put in the place US by and the Iran; US and trade China; disputes, and foreseeable mining industry future. has reached As gold peak prices gold have production increased for and the growth economic in China uncertainties, and Europe, including have concerns also seen over buyers the pace turn to of capital there is has evidence become of more increased readily spending available on in exploration recent years, by gold as a safe haven and store of value. mining the time companies, required for but environmental the costs of studies mine construction and permitting and Investor the World demand Gold Council for gold reporting was very that strong collective in 2019, ETF gold with a activities return to before sustained reaching global the production production stage growth means could that be reached holdings an grew all-time by high over of 400 approximately tonnes during 2,900 the tonnes year in and the delayed. all-time fourth quarter high during of 2019. 2019, COMEX a significant net longs reversal also of reached sentiment an The positively supply with of recycled the gold gold, price, which increased historically by 11% has in correlated 2019 as from the net short position that existed in late 2018. market. rising prices inspired sellers to bring their holdings to the 26 Barrick Gold Corporation


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OFFICIAL SECTOR NET PURCHASES AND GOLD PRICES 700 Tonnes, net $/oz 1,800 600 1,600 1,400 500 1,200 400 1,000 629.5 656.2 650.3 300 569.2 601.1 579.6 800 480.8 600 200 394.9 378.6 100 400 200 79.2 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Central banks and other institutions (tonnes, net) LBMA gold price ($/oz) ANNUAL MINE PRODUCTION 4,000 Tonnes 3,500 3,000 2,500 2,000 1,500 2,929 3,110 3,203 3,301 3,398 3,455 3,509 3,464 2,748 2,857 1,000 500 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ANNUAL DEMAND—ETFs & SIMILAR PRODUCTS Tonnes, net 800 600 400 200 384 541 401 0 256 245 271 76 -200 153 129 -400 875 -600 -800 -1,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: MetalsFocus,RefinitivGFMS,ICEBenchmarkAdministration,WorldGoldCouncil. Annual Report 2019 27


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NORTH AMERICA Nevada Gold Mines in Nevada, USA, is the single largest gold-mining complex in the world, producing approximately 3.5 million ounces a year. Owned 61.5% and operated by Barrick, it comprises three of the company’s Tier One assets, namely Carlin, Cortez and Turquoise Ridge, while the development of Barrick’s Goldrush-Fourmile project will secure Cortez’s Tier One status well into the future. Completing Barrick’s portfolio in the North America region is Hemlo in Ontario, Canada, which is being modernized and refocused to ensure its continued viability. 2019 NORTH AMERICA PRODUCTION1: 2.4Moz USA Barrick Donlin Gold ownership: 50% CANADA Hemlo Barrick ownership: 100% Barrick Golden ownership: Sunlight 100% 2019 production: 213koz Corporate office, Toronto Nevada Gold Mines2 Barrick ownership: 61.5% TurquoiseRidge3 USA 2019 production: 504koz4 Carlin3 2019 production: 1.3Moz4 Cortez3 Gold producing 2019 production: 963koz4 Projects Goldrush Barrick ownership: 61.5% Care and maintenance Corporate office Barrick Fourmile ownership: 100% 1 Attributable gold production excludes the impact of Golden Sunlight, which was placed on care and maintenance during 2019. 2 The Nevada Gold Mines joint venture was formed on July 1, 2019. Barrick’s Goldstrike and Newmont’s Carlin operation were contributed to the joint venture to the joint and venture are now and collectively are now collectively referred to as referred Carlin. to Additionally, as Turquoise Barrick’s Ridge. Turquoise As a result, Ridge amounts and Newmont’s presented for Twin Carlin Creeks on a operation 100% basis were for contributed 2019 include Goldstrike Newmont from results July for 1, the 2019 full onwards. year ended Similarly, December amounts 31, 2019 presented (including for South Turquoise Arturo) Ridge as well on a as 100% results basis for for the 2019 legacy include Carlin the operation legacy Barrick contributed Turquoise by Ridge July 1, operation 2019 onwards. for the full year ended December 31, 2019 as well as results from the legacy Twin Creeks operation contributed by Newmont from 3 Tier One mine. 4 Production is presented on a 100% basis. 28 Barrick Gold Corporation


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500 1,000 1,500 2,000 2,500 3,000 2020 2021 2022 2023 2024 Gold production (attributable) koz Gold capital expenditure (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 0 200 400 600 800 1,000 1,200 ATTRIBUTABLE MINERAL RESOURCES AND RESERVES1,ix 1 Mineral resources are inclusive of mineral reserves. 11 31 70 Hemlo Goldrush Other NGM Turquoise Ridge Cortez Carlin Total cost of salesv AISCiii Total cash costsiii Total capital expenditure “The formation, integration and operational delivery at Nevada Gold Mines was the crowning achievement for North America in 2019.” Catherine Raw, COO North America COST OF SALES, TOTAL CASH COSTS AND AISC2 2,431 2,300 to 2,450 943 851 660 to 710 900 to 950 970 to 1,020 2 Excludes the impact of Golden Sunlight, which was placed on care and maintenance during 2019. ATTRIBUTABLE PRODUCTION2 655 5-YEAR GOLD PRODUCTION FORECASTviii Total cash costsiii AISCiii Cost of salesv Barrick is closely monitoring the global COVID-19 pandemic and Barrick’s guidance may be impacted if the operation or development of our mines and projects is disrupted due to efforts to slow the spread of the virus. Annual Report 2019 29500 1,000 1,500 2,000 2,500 3,000 2020 2021 2022 2023 2024 Gold production (attributable) koz Gold capital expenditure (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 0 200 400 600 800 1,000 1,200 ATTRIBUTABLE MINERAL RESOURCES AND RESERVES1,ix 1 Mineral resources are inclusive of mineral reserves. 11 31 70 Hemlo Goldrush Other NGM Turquoise Ridge Cortez Carlin Total cost of salesv AISCiii Total cash costsiii Total capital expenditure “The formation, integration and operational delivery at Nevada Gold Mines was the crowning achievement for North America in 2019.” Catherine Raw, COO North America COST OF SALES, TOTAL CASH COSTS AND AISC2 2,431 2,300 to 2,450 943 851 660 to 710 900 to 950 970 to 1,020 2 Excludes the impact of Golden Sunlight, which was placed on care and maintenance during 2019. ATTRIBUTABLE PRODUCTION2 655 5-YEAR GOLD PRODUCTION FORECASTviii Total cash costsiii AISCiii Cost of salesv Barrick is closely monitoring the global COVID-19 pandemic and Barrick’s guidance may be impacted if the operation or development of our mines and projects is disrupted due to efforts to slow the spread of the virus. Annual Report 2019 29


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LATIN AMERICA AND ASIA PACIFIC While Nevada is Barrick’s value foundation, Latin America promises it growth. Pueblo Viejo in the Dominican Republic, another Tier One asset, offers enormous upside through an ambitious plant and tailings expansion project, while Veladero in Argentina has had its life extended by a pit pushback at Cuatro Esquinas. This region holds the potential for further world-class discoveries and Barrick’s exploration teams are hard at work in Argentina, Chile and Peru as well as in the Dominican Republic. Across the Pacific Ocean in Papua New Guinea, Barrick is in the process of negotiating a 20-year mining lease extension for Porgera, where there is lots of scope for Life of Mine extensions. 2019 LATIN AMERICA AND ASIA PACIFIC PRODUCTION1: 1.4Moz Gold producing Projects DOMINICAN REPUBLIC Copper producing Pueblo Viejo2 In closure Barrick ownership: 60% Care and maintenance 2019 production: 983koz3 Lagunas Barrick ownership: Norte 100% PERU Pierina Zaldívar Barrick ownership: 50% Barrick ownership: 100% 2019 production: 256Mlb3 Pascua-Lama Norte Barrick Abierto ownership: 50% Barrick ownership: 100% Barrick Veladero ownership: 50% 2019 production: 548koz3 Barrick Porgera ownership: Joint Venture 47.5% ARGENTINA CHILE 2019 production: 597koz3 PAPUA Barrick Alturas ownership: 100% NEW GUINEA 1 Attributable gold production excludes the impact of Lagunas Norte, which was placed in care and maintenance during the year. Barrick also sold its interest in Kalgoorie in 2019. 2 Tier One mine. 3 Production is presented on a 100% basis. 30 Barrick Gold Corporation


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200 400 600 800 1,000 1,200 1,400 2020 2021 2022 2023 2024 Gold production (attributable) koz Gold capital expenditure1 (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 0 200 400 600 800 1,000 1,200 1,400 0 200 400 600 800 1,000 2019 2020 (est) $/oz 1 Gold capital expenditure includes project and sustaining capital expenditure across the Latin America and Asia Pacific region but does not include capital expenditure related to Zaldĺvar. 0 300 600 900 1,200 1,500 2019 2020 (est) 000oz 2 Mineral resources are inclusive of mineral reserves. 5-YEAR GOLD PRODUCTION FORECASTviii Porgera Veladero Pueblo Viejo Total cost of salesv AISCiii Total cash costsiii Total capital expenditure ATTRIBUTABLE MINERAL RESOURCES AND RESERVES2,ix “2019 was a transformational year in the newly formed Latin America and Asia Pacific region where the new operating model was implemented with immediate positive results.” Mark Hill, COO Latin America and Asia Pacific COST OF SALES, TOTAL CASH COSTS AND AISC3 1,354 1,000 to 1,100 937 664 610 to 660 890 to 940 930 to 980 3 Excludes the impact of Lagunas Norte, which was placed on care and maintenance during 2019. Barrick also sold its interest in Kalgoorie in 2019. ATTRIBUTABLE PRODUCTION3 874 Total cash costsiii AISCiii Cost of salesv 18 22 71 0 10 20 30 40 50 60 70 80 Proven and probable reserves Measured and indicated resources Inferred resources Barrick is closely monitoring the global COVID-19 pandemic and Barrick’s guidance may be impacted if the operation or development of our mines and projects is disrupted due to efforts to slow the spread of the virus. Annual Report 2019 31


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AFRICA AND MIDDLE EAST Africa is the world’s largest gold producer with 22% of global production. Barrick is Africa’s largest gold miner and its assets on the continent continue to be a significant contributor to the company’s free cash flow. The Loulo-Gounkoto complex in Mali and Kibali in the Democratic Republic of Congo are both Tier One assets, and ongoing exploration work at Tongon in Côte d’Ivoire is aimed at extending that mine’s life. North Mara, Bulyanhulu and Buzwagi in Tanzania are the latest additions to Barrick’s African endowment and these assets are being swiftly brought back into full production under a benefit-sharing agreement with the Tanzanian government. 2019 AFRICA AND MIDDLE EAST PRODUCTION1: 1.5Moz Gold producing Loulo-Gounkoto2 Projects Barrick ownership: 80% Jabal Sayid 2019 production: 715koz3 Barrick ownership: 50% Copper producing 2019 production: 132Mlb3 Care and maintenance Barrick Morila ownership: 40% SAUDI MALI ARABIA Kibali2 Barrick ownership: 45% 2019 production: 813koz3 North Mara CÔTE Barrick ownership: 84%5 2019 production: 334koz3 D’IVOIRE DRC TANZANIA Tongon Barrick ownership: 89.7% Bulyanhulu ZAMBIA Barrick ownership: 84%5 2019 production: 273koz3 3 2019 production: 37koz Massawa Barrick ownership: 83.25%4 Buzwagi Barrick ownership: 84%5 2019 production: 115koz3 Barrick Lumwana ownership: 100% 2019 production: 238Mlb 1 Attributable gold production excludes the impact of Morila, which was placed in care and maintenance during the year. 2 Tier One mine. 3 Production is presented on a 100% basis. 4 In Q1 2020, Barrick sold its stake in Massawa to Teranga Gold Corporation and retained an 11% equity interest in Teranga. 5 The expected effective date of our 84% ownership interest is January 1, 2020. 32 Barrick Gold Corporation


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0 5 10 15 20 25 30 Proven and probable reserves Measured and indicated resources Inferred resources Moz 0 500 1,000 1,500 2,000 2019 2020 (est) 000oz 0 200 400 600 800 1,000 1,200 2019 2020 (est) $/oz 2 Mineral resources are inclusive of mineral reserves. 10 18 27 0 300 600 900 1,200 1,500 1,800 2020 2021 2022 2023 2024 Gold production (attributable) koz Gold capital expenditure1 (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 0 200 400 600 800 1,000 1,200 Tongon Buzwagi Bulyanhulu Kibali Loulo-Gounkoto Total cost of salesv AISCiii Total cash costsiii Total capital expenditure 1 Gold capital expenditure includes project and sustaining capital expenditure across the Africa and Middle East region but does not include capital expenditure related to Lumwana or Jabal Sayid. Barrick is closely monitoring the global COVID-19 pandemic and Barrick’s guidance may be impacted if the operation or development of our mines and projects is disrupted due to efforts to slow the spread of the virus. ATTRIBUTABLE MINERAL RESOURCES AND RESERVES2,ix North Mara COST OF SALES, TOTAL CASH COSTS AND AISC3 1,544 1,450 to 1,600 1,126 834 640 to 690 870 to 920 1,040 to 1,090 3 Excludes the impact of Morila, which was placed on care and maintenance during 2019. “We succeeded in returning Lumwana to profitability and integrating the former Acacia’s Tanzanian assets into our portfolio, beating our guidance and providing strong cash flows from both gold and copper production.” Willem Jacobs, COO Africa and Middle East ATTRIBUTABLE PRODUCTION3 Total cash costsiii AISCiii Cost of salesv 673 5-YEAR GOLD PRODUCTION FORECASTviii Annual Report 2019 330 5 10 15 20 25 30 Proven and probable reserves Measured and indicated resources Inferred resources Moz 0 500 1,000 1,500 2,000 2019 2020 (est) 000oz 0 200 400 600 800 1,000 1,200 2019 2020 (est) $/oz 2 Mineral resources are inclusive of mineral reserves. 10 18 27 0 300 600 900 1,200 1,500 1,800 2020 2021 2022 2023 2024 Gold production (attributable) koz Gold capital expenditure1 (attributable)x $ million Cost of sales, Total cash costs and AISC $/oz 0 200 400 600 800 1,000 1,200 Tongon Buzwagi Bulyanhulu Kibali Loulo-Gounkoto Total cost of salesv AISCiii Total cash costsiii Total capital expenditure 1 Gold capital expenditure includes project and sustaining capital expenditure across the Africa and Middle East region but does not include capital expenditure related to Lumwana or Jabal Sayid. Barrick is closely monitoring the global COVID-19 pandemic and Barrick’s guidance may be impacted if the operation or development of our mines and projects is disrupted due to efforts to slow the spread of the virus. ATTRIBUTABLE MINERAL RESOURCES AND RESERVES2,ix North Mara COST OF SALES, TOTAL CASH COSTS AND AISC3 1,544 1,450 to 1,600 1,126 834 640 to 690 870 to 920 1,040 to 1,090 3 Excludes the impact of Morila, which was placed on care and maintenance during 2019. “We succeeded in returning Lumwana to profitability and integrating the former Acacia’s Tanzanian assets into our portfolio, beating our guidance and providing strong cash flows from both gold and copper production.” Willem Jacobs, COO Africa and Middle East ATTRIBUTABLE PRODUCTION3 Total cash costsiii AISCiii Cost of salesv 673 5-YEAR GOLD PRODUCTION FORECASTviii Annual Report 2019 33


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RESERVES & RESOURCES Barrick’s reserves and resources for 2019 shows an attributable gold mineral reserve increase of approximately 15% in ounces at an 8% higher grade after depletion from mining, reflecting a busy year which included the incorporation of Randgold Resources, the formation of the Nevada Gold Mines joint venture with Newmont and the disposal of Kalgoorlie. Attributable reserves now stand at 1,300Mt at 1.68g/t for 71Moz of goldix. This reflects reserve additions greater than mining depletion at a number of the principal assets including Kibali, Loulo-Gounkoto, Veladero, Porgera, Goldstrike underground, the Leeville/Portal underground mines, Turquoise Ridge’s Mega pit, Turquoise Ridge underground and Phoenix. This was achieved through the refocus on geology as a core discipline within the business and cost improvements at the Nevada JV, which allowed for the lowering of cut-off grades and the increase in reserves. GLOBAL ATTRIBUTABLE CONTAINED GOLD GLOBAL ATTRIBUTABLE CONTAINED COPPER RESERVES1,ix RESERVES1,ix Moz Blb 80 16 6.0 5.9 4.5 70 13.4 14 0.1 60 12 2.9 0.6 0.6 50 10 40 8 71 13.5 30 62 6 10.6 20 4 10 2 0 0 total 2018 P&P Acquisitions/ disposal Depletion (at Change gains Change losses total 2019 P&P total 2018 P&P Acquisitions/ disposal Depletion (at Change gains Change losses total 2019 P&P reserves mineral year end) reserves mineral reserves mineral year end) reserves mineral 1 The year-on-year changes are stated up to one decimal point, which differs to the rounding applied to our year-end 2019 gold and copper reserve and resource statement (refer to endnote ix). 34 Barrick Gold Corporation


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Global depletion attributable with significant mineral inferred resources mineral also resource increased additions net of reserves Acquisition from and the disposal Randgold includes merger, the net the change formation to Barrick’s of the at moving Robertson these and new Fourmile projects in the up Cortez the resource district of Nevada, triangle. the Nevada disposal joint of venture, Kalgoorlie. the Acacia Total depletion minorities’ includes acquisition depletion and Goldrush, indicated and Robertson inferred and mineral Pueblo resources Viejo contain not currently significant in mineral from mining reserves which through was offset drilling by and gains cut-off due to grade extensions changes. to reserves reserve growth and are can the three be expected growth projects in the near from which future, further upon Losses Lagunas incurred Norte’s mineral comprise reserves primarily to mineral the reclassification resources and of completion and indicated of feasibility mineral resources, studies. Total now attributable reported inclusive measured of the removal of the Phase Six pit pushback at Hemlo. @ reserves 1.55g/t and for at 170Moz, a $1,500/oz with agold further price, 940Mt stand @ at 1.30g/t 3,400Mt for as All such assets copper are optimized and silver on are the reported full value as of dedicated the deposit mineral and 39Moz in the inferred category, highlighting the potential for resources and reserves for all assets where copper or silver growth in a higher gold price environmentix. All underground is produced and sold as a primary product or by-product. mineral resources are now reported within $1,500/oz stope Total attributable copper mineral reserves now stand at optimizer shells and as such have shown significant growth 1,600Mt @ 0.38% for 13 billion pounds of contained copperix. opportunity in ounces albeit at higher at a gold lower prices. grade, which better reflects the The by Lumwana, growth of due copper to the mineral reclassification reserves was and primarily remodeling driven of The group gold mineral reserve reconciliation on the previous additional the Chimiwungo contribution pit and from cost Zaldívar. improvements, with a small page explains the changes that occurred during the year. Total attributable silver mineral reserves are 900Mt @ 5.03g/t for 150Moz of contained silverix. Geologists at Kibali inspecting rock samples. Annual Report 2019 35


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EXPLORATION Successful exploration is the lifeline for any mining company, being to mining what R&D is to the pharmaceutical industry. Both Barrick and Randgold were built on pioneering exploration success as well as significant reserve additions that followed key acquisitions. 2020 REGIONAL EXPLORATION TRIANGLE Mines Reserve definition 3 15 26 Measured & indicated resources 21 6 14 Reserve and resource definition Inferred resources 18 16 18 Advanced targets 16 17 19 Exploration targets Follow-up targets 7 18 14 Identified targets 14 13 48 Identified geological anomalies Total 79 North 85 America 139 Latin Asia America Pacific and Middle Africa and East Strategy and portfolio logging has laid as the well foundations as geological for improved and grade geology control models models. which This management are critical for more reliable resource models to help optimize Barrick’s Consolidate strategy and is to: secure dominant land positions in its favored its mine future planning. through Barrick focused is now greenfields well placed exploration, to resume driven investing by the in operating into emerging districts new prospective and expand geological beyond current domains. jurisdictions the clear company’s understanding value that chain. it is exploration that ultimately drives Focus Collaborate on economically closely with feasible Mineral Tier One Resource discoveries. Managers to Barrick has active reconnaissance teams scouting for new operations. optimize and deliver value from existing orebodies and mining more Tier One recently opportunities in Japan inand Canada, Tanzania. the Guiana Its teams Shield, conduct and driven Establish teams. and develop motivated and highly agile discovery close new discoveries surveillance and of projects competitor where activity the full to potential identify emerging to yield a discovery has not yet been realized. Barrick’s exploration portfolio is managed through the resource triangle. Projects must pass a set of filters to advance, otherwise mineral The relationship resource management and integration (MRM) with model the company’s as a core unique part of they are eliminated. Barrick aims to ensure it is continually replenishing the resource triangle at all stages and keeping it its stewardship operating of culture, its valuable introduces orebodies responsible to optimize and sustainable and deliver balanced. who that value. work together Every to site ensure has an Barrick exploration updates and and MRM improves lead The company is already in many of the world’s most prospective gold districts, but it continues to look for emerging new gold identify its geological brownfields models potential and look for resource to immediate and ultimately, opportunities reserve to districts wherever they may be. additions. leaders that embrace Over the its past values year, and the culture company at all appointed sites. new on The improving first half ofBarrick’s 2019, inmine many geological instances, databases, was spent borehole focused 36 Barrick Gold Corporation


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NORTH AMERICA two The million Nevada acres Gold surrounding Mines joint the venture mines controls . A reinvigorated more than by During over 2019, 170% the to 1inferred .9Moz. resource Targeting at a projected Fourmile increased structural exploration holdings is effort well timed targeting to leverage the newly experience consolidated and skills land intersection the resource delivered and that a discovery new discovery was validated more than with 1km another from honed concealed at Fourmile, deposits the discovered latest in within a string the of Cortez high- district grade and . exceptional high-grade hole. Teams of discovery-driven explorers have been established The program Carlin focused Trend remains on merging a target massive rich environment datasets .in The support 2019 or geology reinforced models at of the the three newly main consolidated mining centres mining . Unifying districts of ranked geological target modeling concepts . Drilling as well was as establish initiated to a test geological highly is target a top delineation priority to and ensure testing a solid and geological will carry foundation forward to for all forward, framework the in priority Carlin areas Trend lacking will become drill information the most . Looking active aspects reflect extensive of the value data chain sets following from decades discovery of. diligent The models field exploration area in Barrick’s portfolio. been work and identified interpretation in addition . Multiple to highlighting walk-up extensive drill targets areas have of the At Turquoise focus following Ridge, consolidation unification of of the the district mining geology camp. was The prospective no drilling. Barrick stratigraphy is confident and geological that the features JV will continue with little to to work between to Turquoise date has Ridge successfully and Twin closed Creeks knowledge . As with other gaps extend years to mine come life . and make meaningful new discoveries in the districts, modeling targets to maximize will be the identified opportunity from high for success quality geological . At Fourmile, geological modeling became progressively North American geology mineralization more sophisticated were understood as drilling advanced . An improved and the understanding controls to of increasingly the vectors predictive, to mineralization and therefore means targeting will lead is to becoming the next discovery faster. NORTH AMERICA EXPLORATION FOCUSES ON NEVADA N Allochthon Getchell end T r Turquoise Ridge Carbonate windows Twin Creeks Wells Archean—Superior province South Arturo Carlin focus area Winnemucca Long Canyon Proterozoic sequences Goldstrike Elko Paleozoic—Platformal sequences in the East and partly covered Lone platformal sequences in Tree Battle Phoenix T Mountain Western US r BME Mesozoic—North American end Cordillera Robertson Carlin Cenozoic Pipeline Fourmile T r Cortez Hills Goldrush end Carbonate windows Autochthon 20km Annual Report 2019 37


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LATIN AMERICA AND ASIA PACIFIC Much reliable of fact-based the group’s geology 2019 exploration models focus which was are on forming rebuilding the insights foundations on the for higher controls confidence to mineralization resource garnered models. from The new this work The number have led of to drill the targets generation in our of resource new district triangle scale tripled targets. by replenish year-end. the The resource exploration triangle focus with is now new pivoting high-quality to grow projects and through generative and new business activities. at Drilling Veladero and successfully has the potential validating to unlock new and conceptual rejuvenate targets the district. Argentina, In Barrick the mining-friendly is establishing Salta a foothold Province in of this northern poorly evaluate explored properties gold-silver-copper in the province, district, and with continues the view to to establishing a large high-quality portfolio. interpreted At Pueblo high-grade Viejo, drilling controls is to mineralization. confirming the In parallel, newly the exploration bounds efforts of the have Pueblo begun Viejo for JV the permit. first time Barrick beyond has consolidated properties across and the initiated island. exploration on new greenfields and At Lagunas update the Norte, PMR the (refractory company’s sulphide) focus has orebody been model to drill and out whether evaluate it four can prospective add enough satellite value to oxide restart targets the mine to establish and add additional ore or sell it. infrastructure to process the refractory sulphide The class El discoveries, Indio Belt totaling has been some a prolific 50Moz generator gold over of the world last 40 prospecting years. Deposits and exploration were mostly techniques discovered and through leveraged classic remote associated sensing, with hydrothermal to recognize systems. large However, alteration the zones next by generation post mineral of discoveries cover rocks. will Barrick be partly is embarking or wholly concealed on a new wave through of modern four decades exploration, of discoveries applying and its evolved development knowledge and in the its advanced belief that technologies there are more available world-class today, discoveries and is optimistic to be made at El Indio. On targets the around Alturas-Del the 8.9Moz Carmen Alturas project, discovery drilling of is underway four satellite to contribute to an updated study in 2020. An are exploration some excellent re-evaluation growth of opportunities Porgera concluded which are that being there accelerated to establish a long-term vision for the mine. LATAM EXPLORATION FOCUS El Indio Belt: Prolific endowment and barely scratched the surface 38 Barrick Gold Corporation Archean Proterozoic Paleozoic Mesozoic Cenozoic Lagunas Norte Barrick deposits Area of interest Favorable alteration zones Cover rocks Veladero Pascua-Lama Au deposit < 1 Moz size 1-3 Moz 3-5 Moz 5-10 Moz >10 Moz


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AFRICA AND MIDDLE EAST which In Senegal, is part field-work of the 20Moz has Loulo restarted district. on Weathered the Bambadji and alluvial permit successfully At Kibali, the completed, Kalimva-Ikamva adding new prefeasibility open pit reserves study was and to material test structural can mask corridors underlying has mineralization. confirmed the An extension auger program of in- been extending an area the open of focus pit mine for ounce life to delivery 2030. Oere along has the also KZ situ a number anomalism of existing beneath isolated the weathered soil anomalies. material and The connected program underground North structure. potential Drilling at has the also old Gorumbwa confirmed high-grade mine and identified and initial the RC Gefa-Maliki drilling returned anomalous early, corridor strong results. over a 12km This strike is an exploration continues along the KZ structure. exciting development. Mara In Tanzania, has identified an updated significant geological upside model along for Gokona strike at in North both Across successfully the border extended in Mali, the brownfields high-grade work mineralization at Loulo-Gounkoto at Yalea, drilling directions was and sub-parallel in the footwall to folded of the lithological deposit, where contacts. previous This potential Gounkoto for and additional Loulo 3, underground where work ounces. continues In particular, to define the the deposit. new model New is being targets extended have also east been to cover generated the Nyabigena along the contribute transfer zone high-grade at Yalea has tonnes been to extended the Yalea over underground 300m, which mine. will highly-prospective +20km long Gokona mineralized trend. New greenfield targets were generated along the Yalea structure and the domain boundary to the south of Gounkoto with follow- Central and East Africa exploration focus up planned during 2020. CENTRAL REPUBLIC AFRICAN SOUTH SUDAN In drilling Côte at d’Ivoire, Djinni, optimization following the work completion on the updated of resource model conversion returned Kibali positive results with the deposit adding 139koz @ 2.30g/t to UGANDA Ngayu indicated resources and 92koz @ 2.4g/t to inferred resources1 Belt (on a 100% basis) and extending the Tongon Life of Mine by KENYA DEMOCRATIC almost a year. The Boundiali mineralization is currently under REPUBLIC OF review as a potential satellite feed supply for the Tongon mine. CONGO Lake Victoria North Mara RWANDA AFRICA EXPLORATION FOCUS Bulyanhulu West Africa exploration focus BURUNDI Gold deposits Buzwagi Exploration focus N Greenstone belt TANZANIA Silicalstic rocks Archean granitoid Siliclastic and volcanic rocks Phanerozoic East Plutonic and volcanic rocks Proterozoic African Saraya batholith Archean gneiss Rift Faleme batholith MALI 500km Barrick permits Exploration focus Loulo Complex SENEGAL West mobile African Yalea Corridor West East Saharan African zone SZ Metacraton ent Sansamba—Tolou Craton East Massawa2 KB orogenic African ranscurr Faraba Complex zone T Congo Uganda Main Gefa Craton Craton Craton Tanzania Bakolobi Bambadji Permits and Kaapvaal 50km Craton 2,000km Kenieba–Kedougou Inlier: A Tier One gold district 1 Djinni includes 1.8Mt at 2.30g/t Au for 139koz of indicated mineral resources and 1.2Mt at 2.4g/t Au for 92koz of inferred mineral resources. 2 In Q1 2020, Barrick sold its stake in Massawa to Teranga Gold Corporation and retained an 11% equity interest in Teranga. Annual Report 2019 39


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SUSTAINABILITY REVIEW It has been a significant year for Barrick. Following the completion of our merger with Randgold Resources we gained full control of new assets in Tanzania and the US and brought all of Barrick behind a new vision for sustainability. Our vision puts our contributions to social and economic development, health and safety, human rights and the environment at the heart of our business. We deliver this through deep and genuine partnerships with our stakeholders, including host governments, communities and our workforce. “We recognize that we must be a trusted long-term partner to be sustainable — and we must be sustainable to be successful.” Mark Bristow, President and CEO 40 Barrick Gold Corporation


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+$9 billion economic value distributed in 20191 Zero fatalities Approximately $ to 4 national billion suppliers1 Zero Class 1vi provided 21,869 to host jobs (high significance) environmental incidents country nationals 97% of employees Community investment for development 2019 from host countries 2%2 $22.9 million Committed to Water reused reducing GHG and recycled by at least to 73% 10% by 2030 1 On a 100% basis. 2 Compared with 2018. WATER AT OPERATIONS TOTAL ECONOMIC VALUE GROUP ENVIRONMENTAL REUSED AND RECYCLED CONTRIBUTED4 INCIDENTS % $ billion 10 35 100 Class 1vi Class 2vii 8 28 80 60 6 21 73 9.0 14 30 40 4 8.7 67 20 2 7 13 0 0 0 0 0 20183 2019 2018 2019 20183 2019 3 Consolidated figures for legacy Barrick and legacy Randgold in 2018. In July 2019, we formed and took operational control of Nevada Gold Mines, a Accordingly, joint venture data with Newmont from 2019 that reflects combined performance our mining from assets these in assets Nevada starting . In September July 1 and 2019, October we 1, took respectively control of . Therefore, the mining data assets year of- Acacia on-year Mining may not plc . be directly comparable. 4 Amount distributed to both host country and international stakeholders ($) (includes total payments to employees, total purchases, payments to governments and community investments). Figures are rounded and unaudited. Annual Report 2019 41


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OUR PRINCIPLES To translate our sustainability ambitions into practical steps on the ground we have identified seven key sustainability principles that guide our actions every day, at every site. We have also put governance in place to entrench the sound management of material environmental, social and governance issues in all our business decision-making. We put safety first Everyone on our mines, from a General Manager on a safety walk around to employees exercising their Stop Unsafe Work Authority, is part of an organization-wide goal of continuous improvement towards a zero-harm workplace. We conduct our business with integrity, transparency and fairness Our Code of Business Conduct and Ethics applies to all staff and contractors. We have zero tolerance of bribery and corruption in all forms. We transparently report on our sustainability performance and impacts. We build and maintain genuine partnerships We constantly work to form and maintain mutually beneficial and sustainable partnerships with our core stakeholders including governments, local communities, shareholders and suppliers. We prioritize local hiring and buying We build the skills and capacity of host country workers and vendors, to multiply our positive impact on local, regional and national economies. We empower local communities We invest in social and economic opportunities including education, water and healthcare and we form locally elected Community Development Committees to help host communities shape and deliver sustainable development on the ground. We reduce our environmental impacts Every site is expected to minimize energy and water use, manage waste and land safely and be a responsible steward of its natural environment. We plan for closure at all stages We rehabilitate our mine sites as we go and we invest in economic and environmental projects that can be sustained beyond the life of a mine. 42 Barrick Gold Corporation


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Bottom-up sustainability suffered In September, from when generally we took poor operational relations with control, surrounding the mine governance communities, so we prioritized the establishment of a CDC to Given each mine, the different we put social day-to-day and environmental ownership of sustainability contexts of oversee local community investment and start the long road to risks and opportunities in the hands of individual sites. Just Acacia rebuilding Mining trust plc, between the previous the mine owner and its of surrounding North Mara, residents. was also as technical each site capabilities must manage to meet its our geological, business operational objectives, and it locked in a dispute over taxes with the Tanzanian government. must also manage its own sustainability performance. To Since the government then, Barrick’s for the team resolution has reached of all disputes an agreement and gives with the incentivize the long-term performance incentives at in Barrick sustainability, will be tied in to 2020, sustainability- 25% of authorities full visibility of, and participation in, the benefits of the mine. By showing our commitment to creating shared value, related indicators. we are helping rebuild stakeholder relations in Tanzania. The one Environmental of our most senior and Social management-level (E&S) Oversight bodies, Committee, holds Catalyzing economic quarterly compliance meetings with sustainability to review our policies. sustainability The President performance and Chief and development Executive Officer, as chair of the E&S committee, connects site- thriving At Barrick, economies, we see especially our mines’ in ability low income to create areas, jobs as and the level ownership of sustainability with our Board through quarterly reviews of the reports of the E&S committee with the Board’s bedrock of our license to operate. Corporate Governance and Nominating Committee. Sites are also supported by regular interaction and weekly reporting with Barrick distributed over $9 billion in 2019 to our workforce, the Group Sustainability Executive and specialist regional leads suppliers, host communities and beyond1. And our in environment, health and safety and community engagement recruitment contribution and is training, not only and financial: provided we jobs prioritize for more local than and development. Our Board of Directors and its committees oversee our sustainability activities as part of their stewardship 21,869 local entrepreneurs host country saw nationals us spend in nearly 2019. $ 4 Our billion support on goods for of business strategy and risk management. funded and services local suppliers from host to country train in businesses best practice in standards 2019 and in we a Further details of our governance relating to sustainability is available in our annual Sustainability Report. range of sectors from catering to construction1. Our devolved management model extends beyond our projects Our investments also make in health a tangible and community-led impact on people’s development lives. mine gates, too. We are working to establish Community Development Committees (CDCs) at each of our mines, to This malaria year, in to our name Africa but and a few, Middle these East projects region, helped reopened tackle empower local communities to allocate a community investment budget to those projects and initiatives they believe are most the care Paiam facility hospital in the — Porgera the only Valley recognized in Papua tertiary-level New Guinea— health needed. Each CDC is elected and is made up of a mix of local leaders, community members, Barrick representatives and operate, and improved including educational North America outcomes through, in all the for example, countries the we representatives from local women’s and youth groups. Western Shoshone Scholarship Foundation in Nevada. late The 2019 success following of our the sustainability consolidation strategy of our was interest demonstrated in the North in Towards a zero harm workplace Mara gold mine in Tanzania. The sustainability of our business depends on a strong safety culture that protects people and nature. Mark Bristow at a mass community gathering at Loulo-Gounkoto. While Time Injuries we operated reduce with in the zero Africa fatalities and Middle in 2019 East and region, saw Lost our group-level safety performance was not good enough. Our Total Reportable Injury Frequency Rate (TRIFRiv) increased by (LTIFR) 5% year-on-year, rose from 0.46 and to our 0.50. Lost In Time analyzing Injury the Frequency incidents Rate and frequencies, in the North the America combination region did of assets impact into our Nevada performance, Gold Mines and to specific improve action its safety is being performance. implemented In at the 2020, Nevada we aim joint to venture take a significant certify the safety step towards management a zero-harm systems workplace at all operational by working mines to sites to the (Kibali, ISO 45001 Tongon standard and Loulo-Gounkoto) by the end of 2021. are certified Currently and three we group. will be launching our Journey to Zero Harm program across the 1 On a 100% basis. Annual Report 2019 43


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Protecting natural capital environmental Our safety-first management. mindset also Our extends mines have to our dedicated mines’ In Nevada, we are implementing a plan to convert our coal-fired TS power plant to natural gas usage to significantly teams any negative who work environmental to make impacts sure we from manage mining. and Where avoid reduce its carbon footprint. The company continues to work to identify new opportunities for further reductions, and will them impacts and/or cannot put be appropriate avoided, we rehabilitation act to minimize measures and mitigate in place regularly review and update its targets to integrate and reflect opportunities identified and realized. New solar projects are to resources help restore and the energy natural efficiently, environment. recycling By using waste, natural and currently under consideration in Nevada and in the Dominican Republic. working significant to cost protect savings and rehabilitate to our business, biodiversity, reduce we deliver future The tragic tailings dam collapse at Brumadinho a year ago was liabilities and help build strong stakeholder relationships. a stark reminder of the catastrophic consequences should a Tailings Storage Facility (TSF) fail and we have embraced Each in place, mine and has we a robust have a Environmental target for all Management these systems System to be the industry-wide call for greater transparency of tailings management. Barrick currently manages 70 TSFs, of which 2020. certified 76% to the of our ISO operational 14001:2015 sites standard are already by certified the end and of 22 are operating, 47 are closed facilities and one is inactive. During 2019, we reviewed the technical specifications of all ever during certification. 2019, our Lumwana The Jabal mine Sayid in mine Zambia in Saudi received Arabia its and first our TSFs and also undertook independent third-party reviews of the facilities at our Cortez, Goldstrike, Pueblo Viejo and the North three Mara) former in Tanzania Acacia are mines the (Buzwagi, remaining mines Bulyanhulu set to and be Hemlo operations and at our Giant Nickel, Nickel Plate, and El Indio closure sites. In 2020, independent reviews will be certified in 2020. conducted at our Carlin, Hemlo, Loulo-Gounkoto and Tongon mines, and again at Pueblo Viejo as well as the Giant Nickel We performed well against several key environmental and Nickel Plate closure sites. We are committed to making metrics in 2019. We had zero ‘Class 1vi’ (high significance) sure our tailings facilities meet global best practices for safety environmental incidents and 13 ‘Class 2vii’ (medium) and will continue to work across the industry and with civil incidents, a 56% decrease on 20181. We also surpassed society to improve global tailings management. withdrawn our target at to our recycle mine sites, or reuse achieving over 70% 73% for of the the group. water Managing of our sustainability water responsibly strategy. is one By of reducing the most the critical volume parts of Helping lead the industry on fresh water we use and protecting water quality, we reduce sustainability our stakeholder environmental support. footprint and maintain community and Throughout this noteworthy year, from the Democratic Republic of Congo to the Dominican Republic, we have We understand the important link between energy use continued to work to build our reputation as trusted partners and as an industry leader on mine-level management of and managing greenhouse our energy gas (“GHG”) use and emissions. implementing By renewable effectively sustainability related risks and opportunities, and we have collaborated with industry to develop global standards such as energy energy grids, solutions, reduce we our can GHG reduce emissions, our draw achieve from more local the World Gold Council’s Responsible Gold Mining Principles. We also continue to be recognized for our sustainability efficient company production has updated and its reduce GHG emissions direct mining reduction costs. target The performance – including being listed on the Dow Jones World Sustainability Index for the 12th consecutive year. 2018 to achieve baseline reductions that combines of at least legacy 10% Barrick by 2030 and (against Randgold a While many companies are freshly discovering the importance data) Barrick’s while actions maintaining to achieve a steady this target ounce include production increasing profile. the of ESG consideration for their business, this is business as usual for Barrick and we have been integrating these factors proportion energy mix of and renewable switching energy to cleaner sources energy in sources. the company’s into our business decisions for many years. As part of this work, we have developed a sustainability scorecard this year In 2019, we progressed the conversion of the Quisqueya I to rate our ESG performance including key performance indicators aligned to priority areas set out in the group’s heavy power fuel generation oil to natural facility gas. in the We Dominican expect the power Republic plant from to strategy. We intend to evolve the scoring methodology over time and rank ourselves regularly against our peers in each receive conversion its first will liquefied help reduce natural the gas mine deliveries site’s power in Q1 generation 2020. The indicator, rolling up our performance to an aggregate score. costs power and transmission GHG emissions project at by Veladero 30%. We to connect also advanced the mine a We will continue in the year ahead to work towards international best practices, to minimize our environmental impact and to to at clean Loulo-Gounkoto grid power and to reduce started construction usage of our of site a solar thermal plant maximize our economic contributions. power generation plant in 2020. We invite you to read more in our annual Sustainability Report. 1 During 2019, we reviewed and reclassified our 2018 environmental incidents against our new classification system. 44 Barrick Gold Corporation


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A i Tier One Gold Asset is a mine with a stated life in excess of 10 years, annual production mine life that of are at least in the 500,000oz lower half of of gold the industry and total cost cash curve costs . per ounce over the Currently ii consists of Barrick’s Lumwana mine and Zaldĺvar and Jabal Sayid copper joint ventures. These iii are non-GAAP financial performance measures with no standardized meaning presented under by other IFRS issuers and therefore . For further may information not be comparable and a detailed to similar reconciliation measures of please each see non pages -GAAP 107 measure to 132 to of the the most 2019 directly Financial comparable Report. IFRS measure, Total iv Reportable Injury Frequency Rate (“TRIFR”) is a ratio calculated as follows: number hours worked of reportable . Reportable injuries injuries x 1,000,000 include hours fatalities, divided lost by time the injuries, total number restricted of duty injuries, and medically treated injuries. Cost v of sales applicable to gold per ounce is calculated using cost of sales of applicable 40% Pueblo to gold Viejo, on 36 an .attributable 1% Tanzania basis until (removing September the 30, non 2019 -controlling (not with interest standing consolidated the completion our interest of in the Acacia Acacia and transaction recorded a on non September -controlling 17, interest 2019, of we 36 a matter .1% in of the convenience) income statement and 40% for South the entirety Arturo of from the third cost quarter of sales of (63 2019 .1% as of South Gold Mines)), Arturo from divided July by 1, attributable 2019 onwards gold as ounces a result . The of its non contribution -controlling to interest Nevada of sales 20% and Loulo our- proportionate Gounkoto and share 10.3% of of cost Tongon of sales is also attributable removed to from equity cost method of effective investments date (Kibali of the and Merger Morila) . Also is included removes commencing the non-controlling January interest 1, 2019, of 38 the .5% Nevada applicable Gold to copper Mines from per pound cost of is sales calculated from July using 1, 2019 cost of onwards sales applicable . Cost of to sales copper method including investments our (Zaldĺvar proportionate and Jabal share Sayid), of cost divided of sales by attributable consolidated to equity copper pounds method (including investments) our . proportionate share of copper pounds from our equity Class vi 1 - High Significance is defined as an incident that causes significant onto negative publicly impacts accessible on human land health and has or the the environment potential to cause or an incident significant that adverse extends impact to surrounding communities, livestock or wildlife. Class vii 2 - Medium Significance is defined as an incident that has the potential to cause anticipated negative to result impact in only on human localized health and or short the- term environment environmental but is reasonably or community impact requiring minor remediation. viii Key Assumptions 2020 2021+ Gold Price ($/oz) 1,350 1,200 Copper Price ($/lb) 2.75 2.75 Oil Price (WTI) ($/barrel) 65 65 AUD Exchange Rate (AUD:USD) 0.70 0.75 ARS Exchange Rate (USD:ARS) 65.00 75.00 CAD Exchange Rate (USD:CAD) 1.30 1.30 CLP Exchange Rate (USD:CLP) 725 680 EUR Exchange Rate (EUR:USD) 1.20 1.20 Barrick’s portfolio, sustaining five-year indicative projects outlook in progress is based and exploration/mineral on our current operating resource asset exploration management growth, initiatives new in project execution initiatives . Additional and divestitures asset optimization, are not included further . For this the group indicative gold outlook and copper is subject segments, to change and and where assumes applicable the for following: a specific region, The inclusion of synergies identified for Nevada Gold Mines; Production from Cortez Deep South by 2020, in-line with guidance; Production ramping-up from the third shaft at Turquoise Ridge by 2022, in-line with guidance; Production from Goldrush commencing in 2021, in-line with guidance; project Production by 2023, from the in-line proposed with guidance Pueblo. Viejo Our assumptions plant expansion are and subject tailings to change tailings project; following the combined feasibility study for the plant expansion and An 84% ownership interest in North Mara, Bulyanhulu and Buzwagi. At this time, we assume that Buzwagi will enter care and maintenance in 2021; A restart of mining operations at Bulyanhulu by the end of 2020; Tongon will enter care and maintenance during the 2022 year; A sale of stockpiled concentrate related to the Tanzania assets and Lumwana by the end of 2020; Production from the Zaldivar CuproChlor® Chloride Leach Project by 2022. Antofagasta is the operator of Zaldivar. This five-year indicative outlook excludes: Production from Fourmile; Production Lagunas Norte, from Morila assets and currently Golden in Sunlight; care and maintenance including Pierina, Production from long-term greenfield optionality from Donlin, Pascua-Lama, Norte Abierto or Alturas asset Barrick’s portfolio, 10-year sustaining gold production projects profile in progress is also and based exploration/mineral on its current operating resource exploration management growth, initiatives new in project execution initiatives . Additional and divestitures asset optimization, are not included further . This 10 as -the year current outlook five is- subject year outlook to change detailed and above is based for the on the initial same five years assumptions . The production subsequent from five years Fourmile is also (starting subject in 2028) to change as well and as assumes exploration attributable and mineral resource Porgera. management projects in execution at Nevada Gold Mines, Hemlo and Estimated ix in accordance with National Instrument 43-101 as required by 2019, Canadian unless securities otherwise regulatory noted. authorities Proven reserves . Estimates of 280Mt are as grading of December 2.42g/t,31, representing copper; and 150Mt 22Moz grading of gold; 4420Mt .31g/t, grading representing 0.4%, 21Moz representing of silver 3,700Mlb . Probable of grading reserves 0 of .38%, 1,000Mt representing grading 19,800Mlb .48g/t, representing of copper; and 49Moz 750Mlb of gold; grading 1,200Mt 5.18g/t, representing representing 120Moz 37Moz of of gold; silver 660Mt . Measured grading resources 0.38%, representing of 530Mt grading 5,500Mlb 2.21g/t, of copper; resources and of 350Mt 2,800Mt grading grading 12 1.52g/t, .43g/t, representing representing 140Moz 130Moz of of silver gold;. 2,400Mt Indicated 13 grading .44g/t, 0 .representing 38%, representing 870Moz 21,000Mlb of silver. of Inferred copper; resources and 2,000Mt of 940Mt grading grading 1 of. 3g/t, copper; representing and 460Mt 39Moz grading of gold; 3.20g/t, 430Mt representing grading 0 47Moz .2%, representing of silver. Complete 2,200Mlb as mineral the assumptions reserve and on resource which data, the mineral including reserves tonnes, for grades, Barrick and are reported ounces, as (on well an attributable basis), are set out in page 138 of this annual report. These x amounts are presented on the same basis as our guidance and include July our 60% 1, 2019 share onwards of Pueblo as a Viejo result and of South its contribution Arturo (36 to .9% Nevada of South Gold Arturo Mines), from our completion 63.9% share of the of Acacia Tanzania transaction until September on September 30, 2019 17, (notwithstanding 2019, we consolidated the our income interest statement in Acacia for and the entirety recorded of a the non third -controlling quarter of interest 2019 of as 36 a matter .1% in of the our convenience) 80% share and of Loulo our 50% -Gounkoto, share of 89 Zaldĺvar .7% share and of Jabal Tongon, Sayid 45% . Also share includes of Kibali Merger and 40% . Starting share of July Morila 1, 2019, commencing it also includes January our 1, 2019, 61.5% the share effective of Nevada date of Gold the Mines. The Technical scientific Information and technical information contained in this document has been reviewed Manager; and Chad approved Yuhasz, by P.Geo, Craig Mineral Fiddes, Resource North America Manager, Resource Latin America Modeling and Asia Manager: Pacific; Africa Simon and Bottoms, Middle East; CGeol, and MGeol, Rodney FGS, Quick, FAusIMM, MSc, Pr Mineral . Sci.Nat, Resources Mineral as Resource defined Management in National Instrument and Evaluation 43-101 Executive – Standards – each of Disclosure a “Qualified for Person” Mineral Projects. Annual Report 2019 45


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Financial Report for 2019 Contents Management’s Discussion and Analysis 47 / Mineral Reserves and Resources 138 / Financial Statements 152 Notes to Financial Statements 157 / Shareholder Information 216


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Management’s Discussion

and Analysis (“MD&A”)

 

Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Barrick Gold Corporation (“Barrick”, “we”, “our” or the “Company”), our operations, financial performance and the present and future business environment. This MD&A, which has been prepared as of February 20, 2020, should be read in conjunction with our audited consolidated financial statements (“Financial Statements”) for the year ended December 31, 2019. Unless otherwise indicated, all amounts are presented in US dollars.

For the purposes of preparing our MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares; (ii) there is a substantial likelihood that a reasonable investor

would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances, including potential market sensitivity.

Continuous disclosure materials, including our most recent Form 40-F/Annual Information Form, annual MD&A, audited consolidated financial statements, and Notice of Annual Meeting of Shareholders and Proxy Circular will be available on our website at www.barrick.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. For an explanation of terminology unique to the mining industry, readers should refer to the glossary on page 138.

 

 

Cautionary Statement on Forward-Looking Information

 

 

 

Certain information contained or incorporated by reference in this MD&A, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “target”, “plan”, “objective”, “assume”, “intend”, “intention”, “project”, “goal”, “continue”, “budget”, “estimate”, “potential”, “may”, “will”, “can”, “could”, “would” and similar expressions identify forward-looking statements. In particular, this MD&A contains forward-looking statements including, without limitation, with respect to: Barrick’s goal to be the world’s most valued gold mining business; Barrick’s forward-looking production guidance and estimates of future costs; cash flow forecasts; projected capital, operating and exploration expenditures; targeted debt and cost reductions; mine life and production rates; potential mineralization and metal or mineral recoveries; our ability to identify, invest in and develop potential Tier One, Tier Two and Strategic Assets; our strategies and plans with respect to environmental matters, including climate change; our future plans, growth potential, financial strength, investments and overall strategy; our plans and expected completion and benefits of our growth projects, including construction of twin exploration declines at Goldrush, the Turquoise Ridge Third Shaft, Pueblo Viejo plant expansion, Zaldívar chloride leach project, and Veladero power transmission project; our ability to convert resources into reserves; asset sales, joint ventures and partnerships, including expected closing of the sale of our interest in Massawa; expectations regarding future price assumptions, financial performance and other outlook or guidance.

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 MD&A 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; risks associated with projects in the early stages of evaluation and for which additional engineering and other analysis is required; the Company’s ability to successfully re-integrate Acacia’s operations; whether benefits expected from recent transactions are realized; disruption of supply routes which may cause delays in construction and mining activities at Barrick’s more remote properties; 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 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; adverse changes in our credit ratings; the impact of inflation; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices;

 

 

Financial Report 2019   47


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

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; risks associated with illegal and artisanal mining; the risks of operating in jurisdictions where infectious diseases present major health care issues; 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; litigation; 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; risks associated with the fact that certain of the initiatives described in this MD&A are still in the early stages and may not materialize; 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. 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 MD&A 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 MD&A. We disclaim 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.

Merger with Randgold Resources Limited

 

 

On January 1, 2019, Barrick acquired 100% of the issued and outstanding shares of Randgold Resources Limited (“Randgold”) for $7.9 billion based on the December 31, 2018 closing share price of Barrick’s common shares (the “Merger”). We began consolidating the operating results, cash flows and net assets of Randgold from January 1, 2019 and the results presented in this MD&A reflect that. Refer to note 4 of the Financial Statements for further details of this transaction.

Use of Non-GAAP Financial Performance Measures

 

 

We use the following non-GAAP financial performance measures in our MD&A:

  “adjusted net earnings”
  “free cash flow”
  “EBITDA”
  “adjusted EBITDA”
  “total cash costs per ounce”
  “C1 cash costs per pound”
  “all-in sustaining costs per ounce/pound”
  “all-in costs per ounce” and
  “realized price”

For a detailed description of each of the non-GAAP measures used in this MD&A and a detailed reconciliation to the most directly comparable measure under International Financial Reporting Standards (“IFRS”), please refer to the Non-GAAP Financial Performance Measures section of this MD&A on pages 107 to 132. Each non-GAAP financial performance measure has been annotated with a reference to an endnote on page 133. The non-GAAP financial performance measures set out in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Changes in Presentation of Non-GAAP Financial Performance Measures

Realized Price

Starting with this MD&A, we began adjusting for the cumulative catch-up adjustment to revenue relating to our streaming arrangements in our calculation of realized price. The prior periods have been restated to reflect this change. We believe that this additional information will assist analysts, investors and other stakeholders of Barrick to better understand our ability to generate revenue by excluding non-cash amounts from the calculation as they are not necessarily reflective of the underlying operating results for the periods presented.

Total cash costs

Starting from the first quarter of 2019, we have renamed “cash costs” to “total cash costs” when referring to our gold operations. The calculation of total cash costs is identical to our previous calculation of cash costs with only a change in the naming convention of this non-GAAP measure.

All-in sustaining costs and all-in costs

Starting from the first quarter of 2019, we have included sustaining capital expenditures and project capital expenditures on a cash basis instead of an accrual basis. As a result of adopting IFRS 16 Leases, the full lease amount is included in accrued capital expenditures on initial recognition. We believe that the change in capital expenditures from an accrual basis to a cash basis better reflects the timing of costs associated with our operations. The original World Gold Council (“WGC”) Guidance Note explicitly excluded certain financing activities from all-in sustaining costs and all-in costs. As a result of the new lease accounting standard, the WGC Guidance Note was updated to include both the principal and interest portion of the cash lease payment in the all-in sustaining costs and all-in cost metrics. We have updated our calculation accordingly. Prior periods have not been restated but would not be materially different.

 

 

48   Barrick Gold Corporation


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Index

              
     
50   Overview   102     Financial Condition Review
     
   

50

50

50

51

52

55

55

55

56

57

59

62

63

65

 

 

Our Vision

Our Business

Our Strategy

Sustainability

Financial and Operating Highlights

Safety

Environment

Climate Change

Reserves and Resources

Key Business Developments

Outlook for 2020

Risks and Risk Management

Market Overview

Production and Cost Summary

 

    102     Balance Sheet Review
      102   Shareholders’ Equity
      103   Financial Position and Liquidity
      103   Summary of Cash Inflow (Outflow)
      104   Summary of Financial Instruments
       
   

 

105

 

 

Commitments and Contingencies

         
   

 

106

 

 

Review of Quarterly Results

         
   

 

106

 

 

Internal Control over Financial Reporting and
Disclosure Controls and Procedures

         
   

 

107

 

 

 

IFRS Critical Accounting Policies and Accounting Estimates

 

 

67  

 

 

Operating Divisions Performance

 

 

107

 

 

 

Non-GAAP Financial Performance Measures

 

   

68  

    

    

    

    

76

78

80

82

84

86

88

89

90

91

 

 

Nevada Gold Mines

69  Carlin

71   Cortez

73  Turquoise Ridge

75   Other Nevada Gold Mines

Pueblo Viejo

Loulo-Gounkoto

Kibali

Veladero

Porgera

North Mara

Other Mines – Gold

Other Mines – Copper

Growth Projects

Exploration

 

 

 

132

 

 

 

Technical Information

 

   

 

133

 

 

 

Endnotes

 

   

 

137

 

 

 

Glossary of Technical Terms

 

   

 

138

 

 

 

Mineral Reserves and Mineral Resources

 

   

 

147

 

 

Management’s Responsibility

         
   

 

147

 

 

Management’s Report on Internal Control Over
Financial Reporting

   
           
       
       

 

94

 

 

Review of Financial Results

 

 

148

 

 

 

Independent Auditor’s Report

 

   

94

95

97

97

98

98

98

100 

 

Revenue

Production Costs

Capital Expenditures

General and Administrative Expenses

Exploration, Evaluation and Project Costs

Finance Costs, Net

Additional Significant Statement of Income Items

Income Tax Expense

 

 

152

 

 

 

Financial Statements

 

   

 

157

 

 

 

Notes to Consolidated Financial Statements

 

       
       
       
       
       

 

Financial Report 2019   49


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Overview

 

 

 

Our Vision

We strive to be the world’s most valued gold mining business by finding, developing and owning the best assets, with the best people, to deliver sustainable returns for our owners and partners.

Our Business

Barrick is one of the world’s leading gold mining companies with annual gold production and gold reserves that are among the largest in the industry. We are principally engaged in the production and sale of gold and copper, as well as related activities such as exploration and mine development. We hold interests in fifteen producing gold mines, including six Tier One Gold Assets1 and a diversified asset portfolio positioned for growth in many of the world’s most prolific gold districts. These gold mines are geographically diversified and are located in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Papua New Guinea, Tanzania and the United States. Our copper business includes a wholly-owned copper mine in Zambia and 50% interests in copper mines in Chile and Saudi Arabia. We also have exploration and development projects located throughout the Americas and Africa. We sell our production in the world market through the following distribution channels: gold bullion is sold in the gold spot market; and gold and copper concentrate is sold to independent smelting companies. Barrick shares trade on the New York Stock Exchange under the symbol GOLD and the Toronto Stock Exchange under the symbol ABX.

 

Our Strategy

Our strategy is to operate as business owners by attracting and developing world-class people who are informed and involved in the value chain of the business, act with integrity and are tireless in their pursuit of excellence. We are focused on returns to our stakeholders by optimizing free cash flow, managing risk to create long-term value for our shareholders and partnering with host governments and communities to transform their natural resources into sustainable benefits and mutual prosperity. We aim to achieve this through the following:

Asset Quality

  Grow and invest in a portfolio of Tier One Gold Assets1, Tier Two Gold Assets and Strategic Assets2 with an emphasis on organic growth. We will focus our efforts on identifying, investing in and developing assets that meet our investment criteria. With respect to Tier One Gold Assets, we are focused on assets with a reserve potential greater than 5 million ounces of gold that will generate an internal rate of return (IRR) of at least 15%. With respect to Tier Two Gold Assets, we are focused on assets with a reserve potential of greater than 3 million ounces of gold that will generate an IRR of at least 20% (in each case based on our long-term gold price assumptions).
  Focus on brownfields opportunities at Nevada Gold Mines LLC (“Nevada Gold Mines”) following the integration of Barrick’s and Newmont Corporation’s (“Newmont”) interests in Nevada through the creation of the joint venture, together with Pueblo Viejo, Loulo-Gounkoto and Kibali.
  Invest in exploration across extensive land positions in many of the world’s most prolific gold districts.
  Maximize the long-term value of our strategic Copper Business3.
  Sell non-core assets over time in a disciplined manner.

Operational Excellence

  Strive for zero harm workplaces.
  Operate a flat management structure with a strong ownership culture.
  Streamline management and operations, and hold management accountable for the businesses they manage.
  Leverage innovation and technology to drive industry-leading efficiencies.
  Build trust-based partnerships with host governments, business partners, and local communities to drive shared long-term value.

Sustainable Profitability

  Follow a disciplined approach to growth, emphasizing long-term value for all stakeholders.
  Increase returns to shareholders, driven by a focus on return on capital, internal rate of return and free cash flow.
 

 

50   Barrick Gold Corporation


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Sustainability

Barrick’s sustainability vision is to create long-term value for all our stakeholders. We contribute to the social and economic development of our host countries and communities. We protect the safety and health of our workforce. We respect human rights. And we manage our impacts on the natural environment, both today and with future generations in mind. We live our vision every day, by embedding environmental, social and economic considerations into all our business decisions, through partnerships with host governments and communities and by engaging respectfully with all our stakeholders.

Our approach to achieving these four ambitions is set out in a new overarching Sustainable Development Policy, which commits us to supporting the socio-economic development of host countries and communities. We have also published policies in the areas of Social Performance, which incorporates Community Development and Engagement, Occupational Health and Safety, and Environment and Human Rights. All policies meet or exceed the requirements of host country legislation and international standards such as the IFC Performance Standards or UN Guiding Principles on Business and Human Rights. Our updated Code of Conduct sets out the ethical behavior expected of everyone working at, or with, Barrick.

Day-to-day ownership of sustainability risks and opportunities is in the hands of individual sites – where our core business is located. Each operation’s General Manager, supported by dedicated teams on site, is accountable for putting Barrick’s vision into action at the site level. This includes maintaining an ISO-certified environmental and safety management system, building robust community engagement mechanisms and managing energy and water plans.

We anticipate that the social and environmental expectations of mining companies will become even higher in the future. We are clear that our ability to maintain our social license to operate will depend on our ability to meet these expectations. To meet this challenge, we will continue to embed environmental, social and economic considerations into our business decisions, engage respectfully with stakeholders and act on their concerns and continue to build deep partnerships with our communities, host governments and other partners.

 

 

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Financial and Operating Highlights

 

      For the three months ended     For the years ended  
      12/31/2019      9/30/2019      % Change     12/31/19      12/31/18     % Change     12/31/17  

Financial Results ($ millions)

                 

Revenues

     2,883        2,678        8%       9,717        7,243       34%       8,374  

Cost of sales

     1,987        1,889        5%       6,911        5,220       32%       5,300  

Net earnings (loss)a

     1,387        2,277        (39%     3,969        (1,545     357%       1,438  

Adjusted net earningsb

     300        264        14%       902        409       121%       876  

Adjusted EBITDAb

     1,562        1,297        20%       4,833        3,080       57%       4,115  

Adjusted EBITDA marginc

     54%        48%        13%       50%        43%       16%       49%  

Total minesite sustaining capital expendituresd

     394        406        (3%     1,320        968       36%       1,116  

Total project capital expendituresd

     46        96        (52%     370        425       (13%     280  

Total consolidated capital expendituresd,e

     446        502        (11%     1,701        1,400       22%       1,396  

Net cash provided by operating activities

     875        1,004        (13%     2,833        1,765       61%       2,065  

Net cash provided by operating activities marginf

     30%        37%        (19%     29%        24%       21%       25%  

Free cash flowb

     429        502        (15%     1,132        365       210%       669  

Net earnings (loss) per share (basic and diluted)

     0.78        1.30        (40%     2.26        (1.32     271%       1.23  

Adjusted net earnings (basic)b per share

     0.17        0.15        13%       0.51        0.35       46%       0.75  

Weighted average diluted common shares (millions of shares)

     1,778        1,756        1%       1,758        1,167       51%       1,166  

Operating Results

                 

Gold production (thousands of ounces)g

     1,439        1,306        10%       5,465        4,527       21%       5,323  

Gold sold (thousands of ounces)g

     1,413        1,318        7%       5,467        4,544       20%       5,302  

Market gold price ($/oz)

     1,481        1,472        1%       1,393        1,268       10%       1,257  

Realized gold priceb,g ($/oz)

     1,483        1,476        0%       1,396        1,270       10%       1,258  

Gold cost of sales (Barrick’s share)g,h ($/oz)

     1,046        1,065        (2%     1,005        892       13%       794  

Gold total cash costsb,g ($/oz)

     692        710        (3%     671        588       14%       526  

Gold all-in sustaining costsb,g ($/oz)

     923        984        (6%     894        806       11%       750  

Copper production (millions of pounds)i

     117        112        4%       432        383       13%       413  

Copper sold (millions of pounds)i

     91        65        40%       355        382       (7%     405  

Market copper price ($/lb)

     2.67        2.63        2%       2.72        2.96       (8%     2.80  

Realized copper priceb,i ($/lb)

     2.76        2.55        8%       2.77        2.88       (4%     2.95  

Copper cost of sales (Barrick’s share)i,j ($/lb)

     2.26        2.00        13%       2.14        2.40       (11%     1.77  

Copper C1 cash costsb,i ($/lb)

     1.90        1.62        17%       1.69        1.97       (14%     1.66  

Copper all-in sustaining costsb,i ($/lb)

     2.82        2.58        9%       2.52        2.82       (11%     2.34  
     

As at

12/31/19

    

As at

9/30/19

     % Change    

As at

12/31/18

     % Change    

As at

12/31/17

        

Financial Position ($ millions)

                 

Debt (current and long-term)

     5,536        5,560        0%       5,738        (4%     6,423    

Cash and equivalents

     3,314        2,405        38%       1,571        111%       2,234    

Debt, net of cash

     2,222        3,155        (30%     4,167        (47%     4,189          

 

a.

Net earnings (loss) represents net earnings (loss) attributable to the equity holders of the Company.

b.

Adjusted net earnings, adjusted EBITDA, free cash flow, adjusted net earnings per share, realized gold price, all-in sustaining costs, total cash costs, C1 cash costs and realized copper price are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

c.

Represents adjusted EBITDA divided by revenue.

d.

Amounts presented on a consolidated cash basis. Project capital expenditures are included in our calculation of all-in costs, but not included in our calculation of all-in sustaining costs.

e.

Total consolidated capital expenditures also includes capitalized interest.

f.

Represents net cash provided by operating activities divided by revenue.

g.

Includes Tanzania on a 63.9% basis until September 30, 2019 (notwithstanding the completion of the Acacia transaction on September 17, 2019, we consolidated our interest in Acacia and recorded a non-controlling interest of 36.1% in the income statement for the entirety of the third quarter of 2019 as a matter of convenience), Pueblo Viejo on a 60% basis, South Arturo on a 60% basis (36.9% from July 1, 2019 onwards as a result of its contribution to Nevada Gold Mines), and Veladero on a 50% basis, which reflects our equity share of production and sales. Also includes Loulo-Gounkoto on an 80% basis, Kibali on a 45% basis, Tongon on an 89.7% basis and Morila on a 40% basis, which reflects our equity share of production and sales, commencing January 1, 2019, the effective date of the Merger. Also removes the non-controlling interest of 38.5% Nevada Gold Mines from July 1, 2019 onwards.

h.

Gold cost of sales (Barrick’s share) is calculated as cost of sales – gold on an attributable basis (excluding sites in care and maintenance) divided by ounces sold.

i.

Amounts reflect production and sales from Jabal Sayid and Zaldívar on a 50% basis, which reflects our equity share of production, and Lumwana.

j.

Copper cost of sales (Barrick’s share) is calculated as cost of sales – copper plus our equity share of cost of sales attributable to Zaldívar and Jabal Sayid divided by pounds sold.

 

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a.

These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

b.

Cost of sales applicable to gold per ounce is calculated using cost of sales applicable to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Tanzania (notwithstanding the completion of the Acacia transaction on September 17, 2019, we consolidated our interest in Acacia and recorded a non-controlling interest of 36.1% in the income statement for the entirety of the third quarter of 2019 as a matter of convenience) and 40% South Arturo from cost of sales (63.1% of South Arturo from July 1, 2019 onwards as a result of its contribution to Nevada Gold Mines)), divided by attributable gold ounces. The non-controlling interest of 20% Loulo-Gounkoto and 10.3% of Tongon is also removed from cost of sales and our proportionate share of cost of sales attributable to equity method investments (Kibali and Morila) is included commencing January 1, 2019, the effective date of the Merger. Also removes the non-controlling interest of 38.5% Nevada Gold Mines from cost of sales from July 1, 2019 onwards. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments).

 

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Factors affecting net earnings and adjusted net earnings4 – three months ended December 31, 2019 versus September 30, 2019

Net earnings attributable to equity holders of Barrick (“net earnings”) for the three months ended December 31, 2019 were $1,387 million compared to $2,277 million in the prior quarter. The decrease was primarily due to a gain of $1.9 billion ($1.5 billion net of taxes) relating to the remeasurement of Turquoise Ridge to fair value as a result of its contribution to Nevada Gold Mines and an impairment reversal of $947 million ($663 million net of taxes) at Lumwana, both occurring in the prior quarter. In the current quarter, there were net impairment reversals of $566 million relating to an impairment reversal at Pueblo Viejo of $865 million ($277 million net of taxes and non-controlling interest) and an impairment charge at Pascua-Lama of $296 million (no tax impact). Net earnings in the current quarter were further impacted by a $628 million gain on the de-recognition of the deferred revenue liability relating to our silver sale agreement with Wheaton Precious Metals Corp., a gain of $408 million resulting from the sale of our 50% interest in Kalgoorlie, and a gain of $216 million on a settlement of customs duty and indirect taxes at Lumwana. After adjusting for items that are not indicative of future operating earnings, adjusted net earnings4 of $300 million for the three months ended December 31, 2019 were $36 million higher than the prior quarter, due to an increase in revenue resulting from higher sales volume and marginally higher realized prices4, partially offset by higher cost of sales resulting from the increased sales volume.

Significant adjusting items (pre-tax and excluding non-controlling interest effects) in the three months ended December 31, 2019 include:

  $845 million in other income adjustments, primarily related to a $628 million gain on the de-recognition of the deferred revenue liability relating to our silver sale agreement with Wheaton Precious Metals Corp. and a gain of $216 million on a settlement of customs duty and indirect taxes at Lumwana;
  $566 million in net impairment reversals, relating to Pueblo Viejo, partially offset by impairment charges at Pascua-Lama; and
  $414 million in acquisition/disposition gains, primarily resulting from the sale of our 50% interest in Kalgoorlie.

Refer to page 108 for a full list of reconciling items between net earnings and adjusted net earnings4 for the current and previous periods.

Factors affecting net earnings and adjusted net earnings4 – year ended December 31, 2019 versus December 31, 2018

Net earnings for the year ended December 31, 2019 were $3,969 million compared to a loss of $1,545 million in the same prior year period. The significant increase was mainly due to a gain of $1.9 billion ($1.5 billion net of taxes) relating to the remeasurement of Turquoise Ridge to fair value as a result of its contribution to Nevada Gold Mines and a gain of $408 million resulting from the sale of our 50% interest in Kalgoorlie. This was combined with impairment reversals at Lumwana of $947 million ($663 million net of taxes) and at Pueblo Viejo of $865 million ($277 million net of taxes and non-controlling interest), partially offset by an impairment charge at Pascua-Lama of $296 million (no tax impact). In addition to these impacts, there were significant tax adjustments relating to the de-recognition of deferred tax assets of $814 million occurring in the prior year, a $628 million gain on the de-recognition of the deferred revenue liability relating to our silver sale agreement with Wheaton Precious Metals Corp., and a gain of $216 million on a settlement of customs duty and indirect taxes at Lumwana. After adjusting for items that are not indicative of future operating earnings, adjusted net earnings4 of $902 million for the year ended December 31, 2019 were $493 million higher than the same prior year period. The increase in adjusted net earnings was primarily due to higher sales

volumes as a result of the Merger and the formation of Nevada Gold Mines. Excluding the impact of the Merger and the formation of Nevada Gold Mines, the increase in adjusted net earnings was primarily due to an increase in realized gold prices4.

Significant adjusting items (pre-tax and excluding non-controlling interest effects) in the year December 31, 2019 include:

 

  $2,327 million in acquisition/disposition gains mainly relating to the remeasurement of Turquoise Ridge to fair value as a result of its contribution to Nevada Gold Mines and a gain of $408 million resulting from the sale of our 50% interest in Kalgoorlie;

 

  $1,423 million in net impairment reversals, relating to Lumwana and Pueblo Viejo, partially offset by impairments at Pascua-Lama; and

 

  $687 million in other income adjustments, primarily related to a $628 million gain on the de-recognition of the deferred revenue liability relating to our silver sale agreement with Wheaton Precious Metals Corp. and a gain of $216 million on a settlement of customs duty and indirect taxes at Lumwana, partially offset by severance costs as a result of the implementation of a number of organizational reductions.

Refer to page 108 for a full list of reconciling items between net earnings and adjusted net earnings4 for the current and previous periods.

Factors affecting Operating Cash Flow and Free Cash Flow4 – three months ended December 31, 2019 versus September 30, 2019

In the three months ended December 31, 2019, we generated $875 million in operating cash flow, compared to $1,004 million in the prior quarter. The decrease of $129 million was primarily due to an increase in interest paid as a result of the timing of interest payments on our public market debt, partially offset by an increase in gold and copper sales volumes of 7% and 40%, respectively. This was further impacted by higher gold and copper realized prices4 of $1,483 per ounce and $2.76 per pound, respectively, for the three months ended December 31, 2019, compared to $1,476 per ounce and $2.55 per pound, respectively, in the prior quarter.

Free cash flow4 for the three months ended December 31, 2019 was $429 million, compared to $502 million in the prior quarter, reflecting lower operating cash flows, partially offset by lower capital expenditures. In the three months ended December 31, 2019, capital expenditures on a cash basis were $446 million compared to $502 million in the prior quarter primarily due to lower project capital expenditures with the most significant change related to Cortez due to decreases at the Cortez Hills Underground Rangefront project.

Factors affecting Operating Cash Flow and Free Cash Flow4 – year ended December 31, 2019 versus December 31, 2018

For the year ended December 31, 2019, we generated $2,833 million in operating cash flow, compared to $1,765 million in the same prior year period. The increase of $1,068 million was primarily due to higher sales volume as a result of the Merger and the formation of Nevada Gold Mines. This was combined with higher realized gold prices4 of $1,396 per ounce in 2019 compared to $1,270 per ounce in 2018 and, partially offset by higher cost of sales per ounce5.

For 2019, we generated free cash flow4 of $1,132 million compared to $365 million in 2018. The increase primarily reflects higher operating cash flows, partially offset by higher capital expenditures. In 2019, capital expenditures on a cash basis were $1,701 million compared to $1,400 million in the same prior year period. Higher capital expenditures of $301 million were primarily due to an increase in minesite sustaining capital expenditures as a result of the Merger and the consolidation impact of Nevada Gold Mines, partially offset by lower project capital expenditures at Cortez due to decreasing Crossroads dewatering activities and Rangefront project expenditures.

 

 

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Safety

Our safety vision is “Every person going home safe and healthy every day.” In 2019, although we operated with zero fatalities, our Total Reportable Injury Frequency Rate6 (“TRIFR”) increased by 5%, from 2.12 to 2.24, year-over-year. In analyzing the incidents and frequencies, the combination of assets into Nevada Gold Mines in the North America region did have an impact on our performance. The Africa and Middle East region improved year-on-year in both Lost Time Injuries (“LTIs”) and TRIFR.

Barrick is fully committed to the safety, health and well-being of our people, their families and the communities in which we operate. We review safety performance and incidents, share lessons learned and communicate best practices across our business during weekly Executive Committee Review meetings, the main forum for senior management to review our current safety performance. We will continue our efforts to further reduce injury occurrences.

Every site has its own site-specific safety procedures, management plans and systems in place, in line with international best practice. Our goal is for the safety management systems at all operational mines to be certified to the internationally recognized ISO 45001 standard by the end of 2021.

Our renewed focus on safety and reaffirmed commitment to prevent fatalities has led to the company-wide roll out of new controls including our ten Fatality Prevention Commitments to help eliminate fatalities and serious injuries. Our Fatality Prevention Commitments align with the International Council on Mining and Metal’s Life Saving Controls, which are based upon lessons learned from fatal incidents within the mining industry, including Barrick’s experience. Our Commitments and Unacceptable Behaviors guideline has also been implemented, which reaffirms our zero tolerance policy for behavior such as working on site under the influence of drugs or alcohol.

Environment

Barrick continues to rebuild its reputation for environmental excellence and aims to become the world’s most valued gold mining business by delivering sustainable returns for our owners and partners, including the host communities and countries in which we operate.

We have set a corporate goal for all sites to have their Environmental Management System (“EMS”) certified to the ISO 14001:2015 standard by the end of 2020. Currently, all operations, except the Jabal Sayid mine in Saudi Arabia and the Tanzanian assets, are certified to this standard.

In 2019, we introduced a new Environmental Incident Reporting and Investigation Standard to better define the classification, reporting, responsibility and investigation of environmental incidents at Barrick sites. As defined by our new system, we had zero Class 1 – High Significance7 incidents and 13 Class 2 – Medium Significance8 incidents in 2019.

Climate Change

Climate change, including shifts in temperature and precipitation and more frequent severe weather events, could affect the mining industry in a range of possible ways. Volatile climatic conditions can affect the stability and effectiveness of infrastructure and equipment; potentially impact environmental protection and site closure practices; lead to changes in the regulatory environment, including increased carbon tax regimes; and potentially impact the stability and cost of water and energy supplies. We therefore view climate change as a company, community, and global concern. In 2019, following our merger with Randgold and the formation of Nevada Gold Mines, we reviewed and updated the climate change strategy developed in 2017.

Barrick’s climate change strategy has three pillars: identify, understand and mitigate the risks associated with climate change; measure and reduce our impacts on climate change; and improve our disclosure on climate change. Action taken on each pillar in 2019 is described below.

Identify, understand and mitigate the risks associated with climate change

We continue to take steps to identify and manage risks and build resilience to climate change, as well as to position ourselves for new opportunities. In 2019, climate change-related factors continued to be incorporated into Barrick’s formal risk assessment process (for example, consideration is given to the availability of and access to water and the impact of increased precipitation, drought, or severe storms on operations as well as on communities near our operations). We have identified several climate-related risks and opportunities for our business: physical impacts of climate change, such as an increase in extended duration extreme precipitation events; an increase in regulations that seek to address climate change; and increased global investment in innovation and low-carbon technologies.

Measure and reduce the Company’s impact on climate change

Mining is an energy-intensive business, and we understand the important link between energy use and greenhouse gas (“GHG”) emissions. By effectively managing our energy use, we can reduce our draw from local energy grids, reduce our GHG emissions, achieve more efficient production, and reduce direct mining costs. In 2019, we progressed the conversion of the Quisqueya I power generation facility in the Dominican Republic from heavy fuel oil to natural gas. We expect the power plant to receive its first liquefied natural gas deliveries in first quarter 2020. The conversion will help reduce the mine site’s power generation costs and GHG emissions by 30%. We also advanced a power transmission project at Veladero to connect the mine to grid power and started construction of a solar plant at Loulo-Gounkoto. Each of these projects is expected to reduce the need for diesel generators, thereby reducing our emissions and power generation costs.

Improve our disclosure on climate change

In 2019, one of our first reporting activities as a merged Company was to complete the CDP (formerly known as the Carbon Disclosure Project) emissions questionnaire which makes investor-relevant climate data widely available.

Throughout 2019, the Board’s Corporate Governance & Nominating Committee, which met quarterly, was responsible for overseeing Barrick’s policies, programs, and performance relating to the environment, including climate change. The Audit & Risk Committee assisted the Board in overseeing the Company’s management of enterprise risks as well as the implementation of policies and standards for monitoring and mitigating such risks. Climate change is built into our formal risk management process, outputs of which were reviewed by the Audit & Risk Committee throughout 2019. In addition, the Audit & Risk Committee reviewed the Company’s approach to climate change in the context of Barrick’s public disclosure.

At the management level, in furtherance of its commitment to sustainability, Barrick established the Environmental and Social Oversight (“E&S”) Committee in 2019. The E&S Committee is chaired by the President and Chief Executive Officer, and includes each of the regional Chief Operating Officers, Mine General Managers and health, safety, and environment and closure leads, as well as the Group Sustainability Executive and an independent sustainability consultant. The E&S Committee meets each quarter

 

 

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to review the Company’s sustainability performance and compliance with its sustainability policies, as well as to identify concerns and opportunities at the Company’s operations at an early stage. The President and Chief Executive Officer reviews the reports of the E&S Committee with the Corporate Governance & Nominating Committee on a quarterly basis as part of the Committee’s mandate to oversee Barrick’s environmental, safety and health, corporate social responsibility, and human rights programs, policies and performance.

Further to the specific focus of the E&S Committee, regular Executive Committee review meetings throughout 2019 allowed for the discussion of opportunities and risks that may help or hinder the Company from achieving its objectives, including climate-related risks (e.g., spring snow melts, hurricanes, flooding, and mud slides).

We expect our climate change activities to continue into 2020 and beyond. Site-level climate-related risks and mitigation plans will continue to be reviewed in the context of the company-wide risk assessment, and site-level plans to reduce energy and GHG emissions will be strengthened. We also expect to continue providing our climate-related disclosure. Overall, based on the work completed, Barrick continues to build resilience to withstand the potential impacts of climate change and leverage potential opportunities as the global economy transitions to a low-carbon future.

Reserves and Resources

Gold

Barrick’s 2019 reserves were calculated using a gold price assumption of $1,200 per ounce, consistent with 2018. As of December 31, 2019, Barrick’s proven and probable gold reserves were 71 million ounces9 at an average grade of 1.68 g/t, compared to 62 million ounces10 at an average grade of 1.56 g/t in the previous year. Reserve replenishment was achieved across the majority of Barrick’s Tier One Assets1, including Kibali, Loulo-Gounkoto, Turquoise Ridge, together with Goldstrike and Leeville in the Carlin Complex.

There were several significant changes to mineral reserves year-on-year, including the Merger with Randgold, the formation of Nevada Gold Mines with Newmont, the acquisition of the minority interests in Acacia and the divestiture of Kalgoorlie, which had the net impact of adding 13.4 million ounces to attributable proven and probable mineral reserves. Successful mineral resource conversion added 5.9 million ounces to mineral reserves offsetting annual mining depletion of 6.0 million ounces of mining depletion.

In 2019, the principal addition to mineral reserves was through the Merger with Randgold, which added 13 million ounces at an average grade of 4.0 g/t to Barrick’s attributable proven and probable reserves. The Nevada Gold Mines transaction added a further 3.2 million ounces to attributable proven and probable reserves, net of the changes in ownership. Barrick’s acquisition of the minorities’ interest in Acacia and subsequent signing of the framework agreement with the Government of Tanzania (“GoT”), through which the GoT will acquire a 16% free-carried interest in the former Acacia sites, resulted in the addition of a further 1 million ounces in Barrick’s 84% attributable proven and probable reserves for North Mara, Bulyanhulu and Buzwagi. These additions from acquisition were partially offset by the removal of 3.7 million ounces of attributable proven and probable reserves from the divestment of Kalgoorlie.

In 2019, we also added 5.9 million ounces of attributable proven and probable reserves through the conversion of mineral resources as summarized below.

The Africa and Middle East region added 2.1 million ounces, of which Loulo-Gounkoto and Kibali were the primary contributors adding a combined 1.6 million ounces of attributable proven and probable reserves. This was principally from high-grade underground extensions at Yalea and KCD underground, as well as the addition

 

of the Kalimva-Ikamva open pit at Kibali. Additional contributions came from an increase in the gold price assumption used to estimate mineral reserves to $1,200 per ounce (from $1,000 per ounce) for the acquired Randgold assets. Notably, proven and probable mineral reserve grades at both Loulo-Gounkoto and Kibali have stayed relatively consistent year-on-year, highlighting the quality of these Tier One Assets.

North America added 2.8 million ounces of attributable proven and probable reserves, principally from high-grade underground extensions in Carlin and Turquoise Ridge. As expected, the elimination of the previous Toll Milling Agreement following the formation of Nevada Gold Mines allowed us to optimize the underground cut-off grade at Turquoise Ridge and contribute to the year-on-year increase in reserves. For further information on Goldrush and Fourmile, please refer to the Projects section of this MD&A.

Supporting their potential to become Tier One Assets, Veladero and Porgera added a combined 1.0 million ounces of attributable proven and probable reserves. This was mainly due to the conversion of mineral resources at Veladero and underground extensions at Porgera.

The additions described above were partially offset by mining depletion of 6.0 million ounces of attributable proven and probable reserves, other losses of 4.5 million ounces, which were primarily comprised of the removal of the Phase Six pushback at Hemlo and the reclassification of 3.8 million ounces from mineral reserves at Lagunas Norte to mineral resources, in line with our decision to put the property on care and maintenance in 2019.

In 2019, all mineral resources were calculated using a gold price assumption of $1,500 per ounce, consistent with 2018. Barrick’s mineral resources for 2019 are now reported on an inclusive basis, and include all areas that form mineral reserves, reported at a mineral resource cut-off grade and the assumed commodity price. All open pit mineral resources are contained within a Whittle shell, while all underground mineral resources are contained within stope optimizer shells. As of December 31, 2019, measured and indicated gold resources were 170 million ounces9 at an average grade of 1.55 g/t and inferred gold resources were 39 million ounces9 at an average grade of 1.3 g/t.

Copper

Copper mineral reserves for 2019 were calculated using a copper price of $2.75 per pound and mineral resources at $3.50 per pound, consistent with 2018. As of December 31, 2019, proven and probable copper reserves were 13 billion pounds9, compared to 11 billion pounds10 at the end of 2018. The growth of copper mineral reserves was primarily driven by Lumwana which added 2.2 billion pounds of proven and probable reserves. This was from a combination of reclassification and remodeling of the Chimiwungo pit and mine cost optimization. This optimization was a direct outcome of improved plant throughput and mining efficiency in 2019, resulting in a reduction of the cut-off grade at Lumwana.

Measured and indicated copper resources were 26 billion pounds9 at an average grade of 0.38% and inferred copper resources were 2.2 billion pounds9 at an average grade of 0.2% as of December 31, 2019. An increase in copper mineral resources at Zaldívar was driven by the inclusion of leachable primary sulfide ore. Zaldívar is jointly owned by Antofagasta and Barrick and is operated by Antofagasta.

The 2019 mineral reserves and mineral resources are estimated using the combined value of gold, copper and silver. Accordingly mineral reserves and mineral resources are reported for all assets where copper or silver is produced and sold as a primary product or a by-product.

 

 

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Key Business Developments

2019 Highlights

  Successful integration of former Randgold executive team and establishment of two additional regions modeled on the Africa regional team after transformational Merger completed on January 1, 2019
  Negotiation, completion and integration of former Barrick and Newmont operations in Nevada to form the Nevada Gold Mines joint venture – the single largest gold complex in the world and unlocking up to $500 million per annum in synergies
  Acquisition of Acacia minority shareholdings and finalization of agreement to end dispute with the Government of Tanzania and restore our license to operate
  Further rationalization of our portfolio to focus on Tier One Gold Assets1, Tier Two Gold Assets and Strategic Assets2 with the divestment of Kalgoorlie and pending sale of Massawa (expected to close in the first quarter of 2020)
  Full year gold production at upper end and copper production above guidance ranges
  Strengthened balance sheet through positive free cash flow, dispositions of non-core assets and debt repurchases
  Debt, net of cash, now at $2.2 billion, a 47% decrease from the prior year and the lowest level since 2007
  Increasing shareholder returns, having raised the quarterly dividend three times in respect of 2019 performance

Sale of Massawa

On December 10, 2019, Barrick announced that it and its Senegalese joint venture partner have reached an agreement to sell their aggregate 90% interest in the Massawa project (“Massawa”) in Senegal to Teranga Gold Corporation (“Teranga”) for total consideration of up to $430 million.

The consideration consists of an up-front payment of $380 million, including a cash payment of approximately $300 million and Teranga common shares, plus a contingent payment of up to $50 million which is based upon the average gold price for the three-year period immediately following closing.

Barrick will receive 92.5% of the total purchase price for its interest in the Massawa project, with the balance to be received by Barrick’s local Senegalese partner for its minority interest. Barrick is providing $25 million of the $225 million syndicated debt financing secured by Teranga in connection with the transaction.

The transaction is expected to close in the first quarter of 2020 and is subject to receipt of the Massawa exploitation license and residual exploration license from the Government of Senegal, certain other acknowledgments from the Government of Senegal and other customary closing conditions. Refer to note 4 to the Financial Statements for more information.

Sale of Kalgoorlie

On November 28, 2019, we completed the sale of our 50% interest in the Kalgoorlie mine in Western Australia to Saracen Mineral Holdings Limited for total cash consideration of $750 million. The transaction resulted in a gain of $408 million for the year ended December 31, 2019.

Pascua-Lama

In the fourth quarter of 2019, we completed a study of the Pascua-Lama project and concluded that we do not have a plan that meets our investment criteria under our current assumptions. This was an indicator of impairment and we concluded that the carrying value of Pascua-Lama exceeded the Fair Value Less Cost to Dispose (“FVLCD”) and we recorded a non-current asset impairment of $296 million, based on a FVLCD of $398 million. Refer to note 21 to the Financial Statements for more information.

We have also updated the liability for the silver stream agreement to align with the conclusions from the completion of the study. The deferred revenue liability was derecognized, and a current liability was recognized for the residual balance payable to Wheaton Precious Metals Corp. of $253 million under the agreement. This adjustment resulted in $628 million recorded in Other Income. Refer to notes 3 and 9 to the Financial Statements for more information.

In addition, a new closure plan and estimate supported by feasibility level engineering studies was finalized, which resulted in a decrease in the provision for environmental rehabilitation liability of $270 million.

Barrick’s intention is to update our geological understanding of the orebody and this process is expected to take a number of years to complete. The focus in 2020 at Pascua-Lama will be on addressing the gaps identified in the geological and geo-metallurgical understanding of the orebody, building upon the improved 3D geology model completed in 2019. This includes a drill program at the Penelope deposit of Lama, as well as column testing to assess the amenability of Penelope ore for heap leaching at Veladero. Refer to the Exploration section of the MD&A for more information.

Acacia Mining plc

On September 17, 2019, Barrick acquired all of the Acacia Mining plc (“Acacia”) shares we did not already own through a share-for-share exchange of 0.168 Barrick shares and any Acacia Exploration Special Dividends for each ordinary share of Acacia. The Acacia Exploration Special Dividends11 and any deferred cash consideration dividends (if applicable) will be paid as a consequence of a sales process to realize value from the sale of certain Acacia exploration properties to be undertaken during the two-year period following closing. This transaction resulted in the issuance of 24,836,876 Barrick common shares or approximately 1% of Barrick’s share capital. As a result, Acacia ceased trading on the London Stock Exchange and became a wholly-owned subsidiary of Barrick called Barrick TZ Limited. Refer to note 4 to the Financial Statements for more information.

Notwithstanding the completion of the Acacia transaction on September 17, 2019, we consolidated our interest in Acacia and recorded a non-controlling interest of 36.1% in the income statement for the entirety of the third quarter of 2019 as a matter of convenience. As at September 30, 2019, we derecognized the non-controlling interest on the balance sheet related to our former 63.9% ownership of Acacia to reflect our 100% interest at that time. The former Acacia mine sites (Bulyanhulu, North Mara and Buzwagi) will now be referred to individually in this report.

On January 24, 2020, Barrick announced that the Company had ratified the creation of Twiga Minerals Corporation (“Twiga”) at a signing ceremony with the President of Tanzania, formalizing the establishment of a joint venture between Barrick and the Government of Tanzania (“GoT”) and resolution of all outstanding disputes between Barrick and the GoT, including the lifting of the previous concentrate export ban, effective immediately. The GoT will receive a free carried shareholding of 16% in each of the former Acacia mines (Bulyanhulu, Buzwagi and North Mara), and will receive its half of the economic benefits from taxes, royalties, clearing fees and participation in all cash distributions made by the mines and Twiga, after the recoupment of capital investments. Twiga will provide management services to the mines.

The terms of the signed agreement are consistent with those previously announced, including the payment of $300 million to settle all outstanding tax and other disputes (the “Settlement Payment”);

 

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

the lifting of the concentrate export ban; the sharing of future economic benefits from the mines on a 50/50 basis; and a dispute resolution mechanism that provides for binding international arbitration. The 50/50 division of economic benefits will be maintained through an annual true-up mechanism, which will not account for the Settlement Payment.

Barrick and the GoT continue to fulfill their respective obligations to satisfy all conditions of the signed agreement, primarily with respect to the execution and delivery of formal termination documents for the settlement of all outstanding disputes between the two parties.

Operating results are included at 100% from October 1, 2019 up until the GoT’s 16% free-carried interest is made effective, which is expected to be as of January 1, 2020, and on an 84% basis thereafter.

Nevada Gold Mines LLC

On March 10, 2019, we entered into an implementation agreement with Newmont to create a joint venture, named Nevada Gold Mines, combining our respective mining operations, assets, reserves and talent in Nevada, USA. This includes Barrick’s Cortez, Goldstrike, Turquoise Ridge and Goldrush properties and Newmont’s Carlin, Twin Creeks, Phoenix, Long Canyon and Lone Tree properties. On July 1, 2019, the transaction closed and we began consolidating the operating results, cash flows and net assets of Nevada Gold Mines from that date forward. Barrick is the operator of the joint venture and owns 61.5%, with Newmont owning the remaining 38.5% of the joint venture.

As a result of this transaction, Barrick recognized a gain in our earnings for the third quarter of $1.9 billion on the remeasurement of our previous 75% interest of Turquoise Ridge. Refer to note 4 to the Financial Statements for more information.

Debt Management

On July 15, 2019, Barrick completed a make-whole repurchase of the $248 million of outstanding principal on our 4.95% Notes due 2020 and incurred a loss on debt extinguishment of $3 million in the third quarter of 2019. The debt repayment is expected to result in an annualized interest saving of $12 million.

Subsequent to year end, on January 31, 2020, Barrick completed a make-whole repurchase of the $337 million of outstanding principal on our 3.85% Notes due 2022 and a loss on debt extinguishment of $15 million will be recorded in the first quarter of 2020. The debt repayment is expected to result in an annualized interest saving of $13 million.

Debt, net of cash, has been reduced by 47% from the prior year to $2.2 billion.

Reko Diq Arbitration

On July 12, 2019, the World Bank International Centre for Settlement of Investment Disputes (“ICSID”) awarded $5.84 billion in damages to Tethyan Copper Company Pty Limited (“TCC”), a joint venture held equally by Barrick and Antofagasta plc, in relation to the arbitration claims filed against the Government of Pakistan (“GOP”) following the unlawful denial of a mining lease for the Reko Diq project in Pakistan in 2011.

Damages include compensation of $4.087 billion in relation to the fair market value of the Reko Diq project at the time the mining lease was denied, and interest until the date of the award of $1.753 billion. Compound interest continues to apply at a rate of US Prime +1% per annum until the award is paid.

In November 2019, the GOP applied to annul TCC’s damages award, which resulted in an automatic stay on TCC from pursuing enforcement action. ICSID has constituted a committee to hear the annulment application, consisting of a president from South Korea and additional members from Mexico and Finland. The committee appointed by ICSID to hear the application for annulment will also

determine whether the stay on enforcement proceedings should be extended or lifted while it considers the application for annulment. No decision on the GOP’s annulment application or the stay on enforcement proceedings has yet been made.

The proceeds of this award will not be recognized in our financial statements until any such proceeds have been collected. Refer to note 36 to the Financial Statements for more information regarding these and related matters.

Randgold Resources Limited Merger

On January 1, 2019, we acquired 100% of the issued and outstanding shares of Randgold. Each Randgold shareholder received 6.1280 common shares of Barrick for each Randgold share, which resulted in the issuance of 583,669,178 Barrick common shares. After this share issuance, Barrick shareholders owned 66.7%, while former Randgold shareholders owned 33.3%, of the shares of the combined company. We have determined that this transaction represents a business combination with Barrick identified as the acquirer. Based on the December 31, 2018 closing share price of Barrick’s common shares, the total consideration of the acquisition was $7.9 billion.

Randgold was a publicly traded mining company with ownership interests in the following gold mines: Kibali in the Democratic Republic of Congo; Tongon in Côte d’Ivoire; Loulo-Gounkoto and Morila in Mali; the Massawa project in Senegal and various exploration properties. We began consolidating the operating results, cash flows and net assets of Randgold from January 1, 2019.

In conjunction with the Merger, Barrick has a new management team, effective January 1, 2019. Mark Bristow is now President and Chief Executive Officer of Barrick. He was formerly the Chief Executive Officer of Randgold, a position he held since its incorporation in 1995. Graham Shuttleworth is now Senior Executive Vice-President and Chief Financial Officer of Barrick, having formerly served as Randgold‘s Chief Financial Officer since 2007. Kevin Thomson, Senior Executive Vice-President, Strategic Matters, continues in the role to which he was appointed at Barrick in October 2014.

In addition, Barrick is now managed by three regional Chief Operating Officers, each of whom reports to the President and Chief Executive Officer. Catherine Raw, formerly Barrick’s Chief Financial Officer, was appointed Chief Operating Officer, North America. Mark Hill, formerly Barrick’s Chief Investment Officer, was appointed Chief Operating Officer, Latin America and Asia Pacific. Willem Jacobs, formerly Randgold’s General Manager East and Central Africa, was appointed Chief Operating Officer, Africa and Middle East.

Following the closing of the Merger, Barrick’s Board of Directors was reconstituted with the following nine Directors: John Thornton (Executive Chairman), Brett Harvey (Lead Independent Director), Mark Bristow, María Ignacia Benítez, Gustavo Cisneros, Christopher Coleman, Michael Evans, Brian Greenspun, and Andrew Quinn. Regrettably, on February 28, 2019, María Ignacia Benítez passed away. Barrick’s Corporate Governance & Nominating Committee initiated a search for an equally compelling and qualified female candidate to fill the vacant Board position and on August 9, 2019, we announced the appointment of Loreto Silva to the Board of Directors as an independent director.

 

 

58   Barrick Gold Corporation


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Outlook for 2020

Operating Division Guidance

Our 2019 gold and copper production, cost of sales, total cash costs4, all-in sustaining costs4 and 2020 forecast gold and copper production, cost of sales, total cash costs4 and all-in sustaining costs4 ranges by operating division are as follows:

 

Operating Division

 

  

2019

attributable

production

(000s ozs)

 

    

2019 

        cost of 

salesa

($/oz) 

 

    

2019 

total 

cash 

        costsb

($/oz) 

 

    

2019 

all-in 

    sustaining 

costsb

($/oz) 

 

    

2020

forecast

        attributable

production

(000s ozs)

 

  

2020 

            forecast 

cost 

of salesa

($/oz) 

 

  

2020 

forecast 

total 

        cash costsb

($/oz) 

 

  

2020

forecast

all-in

sustaining

        costs($/oz)

 

Gold

                       

Carlin (61.5%)c,d

     968        1,004        746        984      1,000 – 1,050    920 – 970    760 – 810    1,000 – 1,050

Cortez (61.5%)c

     801        762        515        651      450 – 480    980 – 1,030    640 – 690    910 – 960

Turquoise Ridge (61.5%)c

     335        846        585        732      430 – 460    900 – 950    540 – 590    690 – 740

Phoenix (61.5%)c

     56        2,093        947        1,282      100 – 120    1,850 – 1,900    700 – 750    920 – 970

Long Canyon (61.5%)c

     58        1,088        333        681      130 – 150    910 – 960    240 – 290    450 – 500

Nevada Gold Mines (61.5%)

     2,218        924        634        828      2,100 – 2,250    970 – 1,020    660 – 710    880 – 930

Hemlo

     213        1,137        904        1,140      200 – 220    960 – 1,010    800 – 850    1,200 – 1,250

North America

     2,431        943        655        851      2,300 – 2,450    970 – 1,020    660 – 710    900 – 950

Pueblo Viejo (60%)

     590        747        471        592      530 – 580    840 – 890    520 – 570    720 – 770

Veladero (50%)

     274        1,188        734        1,105      240 – 270    1,220 – 1,270    670 – 720    1,250 – 1,300

Porgera (47.5%)

     284        994        838        1,003      240 – 270    890 – 940    770 – 820    960 – 1,010

Kalgoorlie (50%)e

     206        1,062        873        1,183                      

Latin America & Asia Pacific

     1,354        937        664        874      1,000 – 1,100    930 – 980    610 – 660    890 – 940

Loulo-Gounkoto (80%)

     572        1,044        634        886      500 – 540    1,050 – 1,100    620 – 670    970 – 1,020

Kibali (45%)

     366        1,111        568        693      340 – 370    1,030 – 1,080    600 – 650    790 – 840

North Maraf

     251        953        646        802      240 – 270    750 – 800    570 – 620    830 – 880

Tongon (89.7%)

     245        1,469        787        844      240 – 260    1,390 – 1,440    680 – 730    740 – 790

Bulyanhuluf

     27        1,207        676        773      30 – 50    1,210 – 1,260    790 – 840    1,110 – 1,160

Buzwagif

     83        1,240        1,156        1,178      80 – 100    850 – 900    820 – 870    850 – 900

Africa & Middle East

     1,544        1,126        673        834      1,450 – 1,600    1,040 – 1,090    640 – 690    870 – 920

Total Attributable Barrickg,h,i,j

     5,465        1,005        671        894      4,800 – 5,200    980 – 1,030    650 – 700    920 – 970

 

a.

Cost of sales applicable to gold per ounce is calculated using cost of sales applicable to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 20% of Loulo-Gounkoto, 10.3% of Tongon, 36.1% of Tanzania (notwithstanding the completion of the Acacia transaction on September 17, 2019, our results include our 63.9% share up until the end of the third quarter of 2019 as a matter of convenience) and 40% of South Arturo (63.1% of South Arturo from July 1, 2019 onwards as a result of its contribution to Nevada Gold Mines) from cost of sales and including our proportionate share of cost of sales attributable to our equity method investments in Kibali and Morila), divided by attributable gold ounces sold. Also removes the non-controlling interest of 38.5% Nevada Gold Mines from cost of sales from July 1, 2019 onwards. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to our equity method investments in Zaldívar and Jabal Sayid, divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments).

b.

Total cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 107 to 132 of this MD&A.

c.

These five operations are part of Nevada Gold Mines from July 1, 2019. Amounts include Cortez (100%), Goldstrike (100%) and Turquoise Ridge (75%), also known collectively as Barrick Nevada, from January 1, 2019 to June 30, 2019, and Cortez, Carlin (which includes Goldstrike), Turquoise Ridge (including Twin Creeks), Phoenix and Long Canyon on a 61.5% basis from July 1, 2019 onwards as a result of the formation of Nevada Gold Mines with Newmont on July 1, 2019.

d.

Includes our 60% share of South Arturo from January 1, 2019 to June 30, 2019 and 36.9% from July 1, 2019 onwards as a result of the formation of Nevada Gold Mines with Newmont on July 1, 2019.

e.

As a result of the sale of our 50% interest in Kalgoorlie on November 28, 2019, there is no guidance for 2020.

f.

Formerly known as Acacia Mining plc. On September 17, 2019, Barrick acquired all of the shares of Acacia it did not own. Operating results are included at 100% from October 1, 2019 (notwithstanding the completion of the Acacia transaction on September 17, 2019, we consolidated our interest in Acacia and recorded a non-controlling interest of 36.1% in the income statement for the entirety of the third quarter of 2019 as a matter of convenience) up until the GoT’s 16% free-carried interest is made effective, which is expected to be January 1, 2020, and on an 84% basis thereafter. As the GoT’s 16% free-carried interest is expected to be made effective as of January 1, 2020, our 2020 outlook represents our 84% share.

g.

Also includes Lagunas Norte, Golden Sunlight, and Morila (40%) and excludes Pierina which is mining incidental ounces as it enters closure. Due to the planned ramp down of operations, we have ceased to include production or non-GAAP cost metrics for Golden Sunlight or Morila after the second quarter and Lagunas Norte after the third quarter.

h.

Total cash costs and all-in sustaining costs per ounce include costs allocated to non-operating sites.

i.

Operating division guidance ranges reflect expectations at each individual operating division, and may not add up to the company-wide guidance range total. The company-wide 2019 results and guidance ranges exclude Pierina, which is mining incidental ounces as it enters closure, and Golden Sunlight and Morila after the second quarter of 2019 and Lagunas Norte after the third quarter of 2019 due to the planned ramp down of operations.

j.

Includes corporate administration costs.

 

Financial Report 2019   59


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

      


 

2019
attributable
production
(M lbs)

 

 
 
 
 

 

    

 

2019
cost of
sales

($/lb)

 

 
 
a  

 

 

   

 

2019
C1 cash
costs

($/lb)

 

 
 
b  

 

 

   

 

2019 all-in
sustaining
costs

($/lb)

 

 
 
b  

 

 

   


 

2020 forecast
attributable
production
(M lbs)

 

 
 
 
 

 

    

 

2020
    forecast cost

of sales

($/lb)

 

 
 

a 

 

 

   


 

2020

forecast
    C1 cash costs

($/lb)

 

 

 
b 

 

 

   


 

    2020 forecast
all-in

sustaining
costsb ($/lb)

 

 
 

 
 

 

Copper

                  

Lumwana

     238        2.13       1.79       3.04       250 – 280        2.20 – 2.40       1.50 – 1.70       2.30 – 2.60  

Zaldívar (50%)

     128        2.46       1.77       2.15       120 – 135        2.40 – 2.70       1.65 – 1.85       2.30 – 2.60  

Jabal Sayid (50%)

     66        1.53       1.26       1.51       60 – 70        1.75 – 2.00       1.40 – 1.60       1.50 – 1.70  

Total Copperc

     432        2.14       1.69       2.52       440 – 500        2.10 – 2.40       1.50 – 1.80       2.20 – 2.50  

 

a.

Cost of sales applicable to gold per ounce is calculated using cost of sales applicable to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 20% of Loulo-Gounkoto, 10.3% of Tongon, 36.1% of Tanzania (notwithstanding the completion of the Acacia transaction on September 17, 2019, our results include our 63.9% share up until the end of the third quarter of 2019 as a matter of convenience) and 40% of South Arturo (63.1% of South Arturo from July 1, 2019 onwards as a result of its contribution to Nevada Gold Mines) from cost of sales and including our proportionate share of cost of sales attributable to our equity method investments in Kibali and Morila), divided by attributable gold ounces sold. Also removes the non-controlling interest of 38.5% Nevada Gold Mines from cost of sales from July 1, 2019 onwards. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to our equity method investments in Zaldívar and Jabal Sayid, divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments).

b.

Total cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 107 to 132 of this MD&A.

c.

Operating division guidance ranges reflect expectations at each individual operating division, and may not add up to the company-wide guidance range total. The company-wide 2019 results and guidance ranges exclude Pierina, which is mining incidental ounces as it enters closure, and Golden Sunlight and Morila after the second quarter of 2019 and Lagunas Norte after the third quarter of 2019 due to the planned ramp down of operations.

Operating Division, Consolidated Expense and Capital Guidance

Our 2019 gold and copper production, cost of sales, total cash costs4, all-in sustaining costs4, consolidated expenses and capital expenditures and 2020 forecast gold and copper production, cost of sales, total cash costs4, all-in sustaining costs4, consolidated expenses and capital expenditures are as follows:

 

($ millions, except per ounce/pound data)

 

  

2019 Original
Guidance

 

    

Q3 2019
Guidance

 

    

    2019 Actual

 

   

    2020 Guidance

 

 

Gold production and costs

          

Production (millions of ounces)

     5.10 – 5.60        5.10 – 5.60        5.47       4.80 – 5.20  

Gold unit production costs

          

Cost of sales – gold ($ per oz)

     880 – 940        940 – 990        1,005       980 – 1,030  

Total cash costs ($ per oz)a

     650 – 700        650 – 700        671       650 – 700  

Depreciation ($ per oz)

     215 – 235        320 – 350        348       300 – 330  

All-in sustaining costs ($ per oz)a

     870 – 920        870 – 920        894       920 – 970  

Copper production and costs

          

Production (millions of pounds)

     375 – 430        375 – 430        432       440 – 500  

Copper unit production costs

          

Cost of sales – copper ($ per lb)

     2.30 – 2.70        2.30 – 2.70        2.14       2.10 – 2.40  

C1 cash costs ($ per lb)a

     1.70 – 2.00        1.70 – 2.00        1.69       1.50 – 1.80  

Depreciation ($ per lb)

     0.60 – 0.70        0.60 – 0.70        0.28       0.60 – 0.70  

Copper all-in sustaining costs ($ per lb)a

     2.40 – 2.90        2.40 – 2.90        2.52       2.20 – 2.50  

Exploration and project expenses

     280 – 340        280 – 340        342       280 – 320  

Exploration and evaluation

     160 – 170        170 – 180        212       210 – 230  

Project expenses

     120 – 150        120 – 150        130       70 – 90  

General and administrative expenses

     ~200        ~200        212       ~170  

Corporate administrationb

     ~140        ~140        148       ~130  

Stock-based compensationc

     ~40        ~40        37       ~40  

Acacia/Tanzaniad

     ~20        ~20        27       0  

Other expense (income)

     80 – 100        80 – 100        (3,100     80 – 100  

Finance costs, nete

     500 – 550        500 – 550        469       400 – 450  

Attributable capital expenditures:

          

Attributable minesite sustaining

     1,100 – 1,300        1,100 – 1,300        1,176       1,300 – 1,500  

Attributable project

     300 – 400        300 – 400        336       300 – 400  

Total attributable capital expendituresf

     1,400 – 1,700        1,400 – 1,700        1,512       1,600 – 1,900  

 

a.

Total cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 107 to 132 of this MD&A.

b.

2019 actual of $148 million includes $18 million of severance costs.

c.

2019 actual based on US$18.59 and 2020 guidance based on a three-month trailing average ending December 31, 2019 of US$17.51 per share.

d.

For 2019, Acacia/Tanzania general and administrative expenses were substantially comprised of stock-based compensation and severance costs related to Acacia prior to the acquisition of the non-controlling interest in September 2019.

e.

2019 actual includes a net loss on debt extinguishment of $3 million.

f.

Attributable capital expenditures are presented on the same basis as guidance, which includes our 61.5% share of Nevada Gold Mines, our 60% share of Pueblo Viejo, our 80% share of Loulo-Gounkoto, our 89.7% share of Tongon, our 84% share of North Mara, Bulyanhulu and Buzwagi and our 50% share of Zaldívar and Jabal Sayid. As the GoT’s 16% free-carried interest is expected to be made effective as of January 1, 2020, our 2020 outlook represents our 84% share of North Mara, Bulyanhulu and Buzwagi.

 

60   Barrick Gold Corporation


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

2020 Guidance Analysis

Estimates of future production, cost of sales, and total cash costs4 presented in this MD&A are based on mine plans that reflect the expected method by which we will mine reserves at each site. Actual gold and copper production and associated costs may vary from these estimates due to a number of operational and non-operational risk factors (see the “Cautionary Statement on Forward-Looking Information” on page 47 of this MD&A for a description of certain risk factors that could cause actual results to differ materially from these estimates).

Gold Production

We expect 2020 gold production to be in the range of 4.8 to 5.2 million ounces. As expected, gold production is lower year-over-year given the depletion of the high-grade Cortez Hills Open Pit deposit, divestment of Kalgoorlie and the decision to place Lagunas Norte, Morila and Golden Sunlight in care and maintenance in 2019. Based on mine sequencing and planned maintenance shutdowns, we expect gold production in the second half of 2020 to be slightly higher than the first half.

Gold Cost of Sales per ounce

On a per ounce basis, cost of sales applicable to gold5, after removing the portion related to non-controlling interests, is expected to be in the range of $980 to $1,030 per ounce in 2020. This is in line with the prior year resulting from a full year impact of the higher depreciation at Nevada Gold Mines offset by lower cost of sales primarily at Kibali and North Mara.

Gold Total Cash Costs per ounce4

Total cash costs per ounce4 are expected to be in the range of $650 to $700, unchanged from the 2019 range. We expect Cortez to have higher total cash costs per ounce4 than 2019 driven primarily by the cessation of the comparatively high-grade, low-cost Cortez Hills Open Pit in the first half of 2019. We also expect higher total cash costs per ounce4 at Pueblo Viejo in 2020 due to lower grades compared to the prior year, in line with the mine plan. Lower costs year-over-year at Veladero, Porgera, and North Mara are expected to offset these impacts on Barrick’s total cash costs per ounce4.

Gold All-In Sustaining Costs per ounce4

All-in sustaining costs per ounce4 are expected to be in the range of $920 to $970 for gold, slightly higher than 2019, and driven primarily by the increase in minesite sustaining capital expenditures as discussed below.

Copper Production and Costs

We expect 2020 copper production to be in the range of 440 to 500 million pounds, up from production of 432 million pounds in 2019. This increase is mainly driven by Lumwana following the sustainable improvements we have made to increase plant efficiency and availability through 2019. Together with cost rationalization, these performance improvements have driven a reduction in mining and processing costs per tonne and increased reserves.

In 2020, cost of sales applicable to copper5 is expected to be in the range of $2.10 to $2.40 per pound, in line with the $2.14 per pound outcome for 2019. C1 cash costs per pound4 guidance of $1.50 to $1.80 per pound for 2020 is also in line with 2019. Notably, we expect Lumwana C1 cash costs per pound4 of $1.50 to $1.70 to be lower year-over-year partially driven by the plant availability and efficiency improvements we have implemented at the mine as discussed earlier. Copper all-in sustaining costs per pound4 guidance of $2.20 to $2.50 for 2020 represents an improvement from $2.52 in 2019.

Exploration and Project Expenses

We expect to incur approximately $210 to $230 million of exploration and evaluation expenditures in 2020 which includes 100% of the expenditure for Nevada Gold Mines for the full year.

We expect to incur approximately $70 to $90 million of project expenses in 2020, compared to $130 million in 2019. In 2020, project expenses are mainly related to the ongoing site costs at Pascua-Lama and advancing the expansion project at Pueblo Viejo.

General and Administrative Expenses

In 2020, we expect corporate administration costs to be approximately $130 million, a decrease of $18 million compared to 2019. This mainly reflects the additional severance costs incurred in 2019 associated with our workforce reduction following the Merger. This is partially offset by one-off integration costs associated with Randgold, Nevada Gold Mines and Acacia.

Separately, stock-based compensation expense in 2020 is expected to be approximately $40 million.

Finance Costs, Net

In 2020, net finance costs of $400 to $450 million primarily represent interest expense on long-term debt, non-cash interest expense relating to the gold and silver streaming agreements at Pueblo Viejo, and accretion, net of finance income. We expect net finance costs in 2020 to be lower year-over-year from $469 million in 2019 due in part to lower interest expense following debt repayments of $248 million in 2019. This is combined with the absence of non-cash interest expense related to the silver streaming agreement at Pascua-Lama (refer to notes 3 and 9 to the Financial Statements for more information). Our 2020 forecast includes the loss on debt extinguishment of $15 million related to the make-whole repurchase in January 2020 of $337 million of outstanding principal on our 3.85% Notes due 2022.

Capital Expenditures

Total attributable gold and copper capital expenditures for 2020 are expected to be in the range of $1,600 to $1,900 million. We continue to focus on the delivery of our project capital pipeline and we expect attributable project capital expenditures to be in the range of $300 to $400 million, consistent with 2019.

More than half of our attributable project capital expenditures in 2020 relate to advancing the expansion project at Pueblo Viejo, the third shaft project at Turquoise Ridge and construction of the Goldrush twin exploration declines. The remainder of project capital expenditure is mainly associated with the Zaldívar Chloride Leach Project and the restart of mining operations at Bulyanhulu.

Attributable minesite sustaining capital expenditures are expected to be in the range of $1,300 to $1,500 million compared to $1,176 million in 2019. The increase is primarily a result of increased capitalized stripping and underground development at Loulo-Gounkoto, the Phase 6 leach pad expansion at Veladero, tailings capacity expansion at Hemlo, plant refurbishment at Bulyanhulu and the development of the Kalima-Ikamva pit project at Kibali.

Effective Income Tax Rate

At a gold price of $1,350/oz, our expected effective tax rate range for 2020 is between 30% to 35%. The rate is sensitive to the relative proportion of sales in high versus low tax jurisdictions, realized gold and copper prices, the proportion of income from our equity accounted investments and the level of non-tax affected costs in countries where we generate net losses.

 

 

Financial Report 2019   61


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Outlook Assumptions and Economic Sensitivity Analysis

 

 

      

 

2020 Guidance
Assumption

 

 
 

 

    

 

      Hypothetical  

Change  

 

 

 

 

  

 

 

 

 

        Impact on
EBITDA

(millions)

 

 

 
a 

 

 

 

 

 

 

 

Impact on

All-in

    Sustaining Costs

 

 

 

 

a 

 

Gold revenue, net of royalties

     $ 1,350/oz        +/- $ 100/oz        +/- $ 472       +/- $ 4/oz  

Copper revenue, net of royalties

     $    2.75/lb        +/- $ 0.50/lb        +/- $ 224       +/- $ 0.02/lb  

 

a.

EBITDA and all-in sustaining costs are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation, please see pages 107 to 132 of this MD&A.

 

Risks and Risk Management

Overview

The ability to deliver on our vision, strategic objectives and operating guidance depends on our ability to understand and appropriately respond to the uncertainties or “risks” we face that may prevent us from achieving our objectives. In order to achieve this we:

  Maintain a framework that permits us to manage risk effectively and in a manner that creates the greatest value;
  Integrate a process for managing risk into all our important decision-making processes so that we reduce the effect of uncertainty on achieving our objectives;
  Actively monitor key controls we rely on to achieve the Company’s objectives so that they remain in place and are effective at all times; and
  Provide assurance to senior management and relevant committees of the Board on the effectiveness of key control activities.

Board and Committee Oversight

We maintain strong risk oversight practices, with responsibilities outlined in the mandates of the Board and related committees. The Board’s mandate makes clear its responsibility for reviewing and discussing with management the processes used to assess and manage risk, including the identification by management of the principal risks of the business, and the implementation of appropriate systems to deal with such risks.

The Audit & Risk Committee of the Board of Directors assists the Board in overseeing the Company’s management of principal risks as well as the implementation of policies and standards for monitoring and modifying such risks, and monitoring and reviewing the Company’s financial position and financial risk management programs generally. The Corporate Governance & Nominating Committee assists the Board in overseeing the Company’s environmental, safety and health, corporate social responsibility, and human rights programs, policies and performance.

Management Oversight

Our weekly Executive Committee Review is the main forum for senior management to raise and discuss risks facing the operations and organization more broadly. At regularly scheduled meetings, the Board and the Audit & Risk Committee are provided with updates on the key issues identified by management at these weekly sessions.

Principal Risks

The following subsections describe some of our key sources of uncertainty and most important risk modification activities. The risks described below are not the only ones facing Barrick. Our business is subject to inherent risks in financial, regulatory, strategic and operational areas. For a more comprehensive discussion of those inherent risks, see “Risk Factors” in our most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities. Also see the “Cautionary Statement on Forward-Looking Information” on page 47 of this MD&A.

Financial position and liquidity

Our liquidity profile, level of indebtedness and credit ratings are all factors in our ability to meet short- and long-term financial demands. Barrick’s outstanding debt balances impact liquidity through scheduled interest and principal repayments and the results of leverage ratio calculations, which could influence our investment grade credit ratings and ability to access capital markets. In addition, our ability to draw on our credit facility is subject to meeting its covenants. Our primary source of liquidity is our operating cash flow, which is dependent on the ability of our operations to deliver projected future cash flows. The ability of our operations to deliver projected future cash flows, as well as future changes in gold and copper market prices, either favorable or unfavorable, will continue to have a material impact on our cash flow and liquidity.

Key risk modification activities:

  Continued focus on generating positive free cash flow by improving the underlying cost structures of our operations in a sustainable manner;
  Disciplined capital allocation criteria for all investments, to ensure a high degree of consistency and rigor is applied to all capital allocation decisions based on a comprehensive understanding of risk and reward;
  Preparation of budgets and forecasts to understand the impact of different price scenarios on liquidity, and formulate appropriate strategies;
  Reduced notional amount and lengthened average tenor of our outstanding debt through liability management activities; and
  Other options available to the Company to enhance liquidity include drawing on our $3.0 billion undrawn credit facility, asset sales, joint ventures, or the issuance of debt or equity securities.

Improving free cash flow4 and costs

Our ability to improve productivity, drive down operating costs and reduce working capital remains a focus in 2020 and is subject to several sources of uncertainty. This includes our ability to achieve and maintain industry-leading margins by improving the productivity and efficiency of our operations through automation.

 

 

62   Barrick Gold Corporation


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Key risk modification activities:

  Formation of Nevada Gold Mines joint venture to drive free cash flow through synergies without issuing shares;
  Weekly Executive Committee Review to assess and respond to risks in a timely manner;
  General and administrative costs halved in 2019 relative to 2018 guidance despite increase in asset base; and
  Implemented a flat, operationally focused, agile management structure with a tenet in ownership culture.

Social license to operate

At Barrick, we are committed to building, operating, and closing our mines in a safe and responsible manner. To do this, we seek to build trust-based partnerships with host governments and local communities to drive shared long-term value while working to minimize the social and environmental impacts of our activities. Geopolitical risks such as resource nationalism and incidents of corruption are inherent in the business of a company operating globally. Past environmental incidents in the extractive industry highlight the hazards (e.g., water management, tailings storage facilities, etc.) and the potential consequences to the environment, community health and safety. Our ability to maintain compliance with regulatory and community obligations in order to protect the environment and our host communities alike remains one of our top priorities. Barrick also recognizes climate change as an area of risk requiring specific focus.

Key risk modification activities:

  Obtaining full ownership of Acacia and resuming day-to-day management of the Tanzanian assets;
  Our commitment to responsible mining is supported by a robust governance framework, including a new overarching Sustainable Development Policy and refreshed policies in the areas of Biodiversity, Social Performance, Occupational Health and Safety, Environment and Human Rights;
  We also updated our Code of Business Conduct and Ethics which sets out the ethical behavior expected of everyone working at, or with, Barrick;
  We take a partnership approach with our home and host governments. This means we work to balance our own interests and priorities with those of our government partners, working to ensure that everyone derives real value from our operations;
  We open our social and environmental performance to third-party scrutiny, including through the ISO 14001 re-certification process, International Cyanide Management Code audits, and annual human rights impact assessments; and
  We continually review and update our closure plans and cost estimates to plan for environmentally responsible closure and monitoring of operations.

Resources and reserves and production outlook

Like any mining company, we face the risk that we are unable to discover or acquire new resources or that we do not convert resources into production. As we move into 2020 and beyond, our overriding objective of growing free cash flow per share continues to be underpinned by a strong pipeline of organic projects and minesite expansion opportunities in our core regions. Uncertainty

related to these and other opportunities exists (potentially both favorable and unfavorable) due to the speculative nature of mineral exploration and development as well as the potential for increased costs, delays, suspensions and technical challenges associated with the construction of capital projects.

Key risk modification activities:

  Focus on responsible mineral resource management, continuously improve ore body knowledge, and add to and upgrade reserves and resources;
  Grow and invest in a portfolio of Tier One Gold Assets1, Tier Two Gold Assets and Strategic Assets2 with an emphasis on organic growth; and
  Invest in exploration across extensive land positions in many of the world’s most prolific gold districts.

Market Overview

The market prices of gold and, to a lesser extent, copper are the primary drivers of our profitability and our ability to generate free cash flow for our shareholders.

Gold

The price of gold is subject to volatile price movements over short periods of time and is affected by numerous industry and macroeconomic factors. During 2019, the gold price ranged from $1,266 per ounce to $1,557 per ounce. The average market price for the year of $1,393 per ounce represented an increase of 10% versus 2018.

 

The price of gold rose significantly during the middle part of the year, reaching a six-year high in early September. During the year, the gold price was impacted by declining US dollar interest rates, global trade disputes and geopolitical tensions leading to increased investor interest.

 

 

Financial Report 2019   63


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MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Copper

During 2019, London Metal Exchange (“LME”) copper prices traded in a range of $2.50 to $3.00 per pound, averaged $2.72 per pound, and closed the year at $2.79 per pound. Copper prices are significantly influenced by physical demand from emerging markets, especially China.

Copper prices fell to the lows of the year in early September due to a strong US dollar, a weakening Chinese yuan, and concerns over global trade due to tariff actions before rising into the end of the year on low global stockpile levels and an easing in trade tensions between the US and China.

 

We have provisionally priced copper sales for which final price determination versus the relevant copper index is outstanding at the balance sheet date. As at December 31, 2019, we recorded 39 million pounds of copper sales still subject to final price settlement at an average provisional price of $2.80 per pound. The impact to net income before taxation of a 10% movement in the market price of copper would be approximately $11 million, holding all other variables constant.

Currency Exchange Rates

The results of our mining operations outside of the United States are affected by US dollar exchange rates. We have exposure to the Argentine peso through operating costs at our Veladero mine, and peso denominated VAT receivable balances. In addition, we have exposure to the Canadian and Australian dollars, Chilean peso, Papua New Guinea kina, Peruvian sol, Zambian kwacha, Tanzanian shilling, Dominican peso, West African CFA franc, Euro, South African rand, and British pound through mine operating and capital costs.

Fluctuations in the US dollar increase the volatility of our costs reported in US dollars. In 2019, the Australian dollar traded in a range of $0.67 to $0.73 against the US dollar, while the US dollar against the Canadian dollar, Argentine peso, and CFA franc ranged from $1.30 to $1.37 and ARS 36.85 to ARS 62.00, and XOF 568 to XOF 664, respectively. During the year, the US dollar traded strongly. Along with inflation pressures in Argentina and government actions, this led to a continued weakening of the Argentine peso during the year. During 2019, we did not have any currency hedge positions, and are unhedged against foreign exchange exposures as at December 31, 2019 beyond spot requirements.

Fuel

For 2019, the price of West Texas Intermediate (“WTI”) crude oil traded in a wide range between $44 and $67 per barrel, with an average market price of $57 per barrel, and closed the year at $61 per barrel. Oil prices were impacted by global trade tensions, geopolitical events, and the US dollar.

 

During 2019, we did not have any fuel hedge positions, and are unhedged against fuel exposures as at December 31, 2019.

US Dollar Interest Rates

After four years of benchmark rate increases by the US Federal Reserve, the benchmark rate was lowered by 75 basis points over the course of 2019 to a range of 1.50% to 1.75% in an effort to keep the economy stable during a period of slowing growth and global trade uncertainty. Further changes to short-term rates in 2020 are expected to be dependent on economic data.

At present, our interest rate exposure mainly relates to interest income received on our cash balances ($3.3 billion at December 31, 2019); the mark-to-market value of derivative instruments; the carrying value of certain long-lived assets and liabilities; and the interest payments on our variable-rate debt ($0.1 billion at December 31, 2019). Currently, the amount of interest expense recorded in our consolidated statement of income is not materially impacted by changes in interest rates, because the majority of debt was issued at fixed interest rates. The relative amounts of variable-rate financial assets and liabilities may change in the future, depending on the amount of operating cash flow we generate, as well as the level of capital expenditures and our ability to borrow on favorable terms using fixed rate debt instruments. Changes in interest rates affect the accretion expense recorded on our provision for environmental rehabilitation and therefore would affect our net earnings.

 

 

64   Barrick Gold Corporation


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Production and Cost Summary – Gold

 

     

For the three months ended

 

    

For the years ended

 

 
     

 

12/31/2019

 

    

 

9/30/2019

 

    

 

% Change 

 

    

 

12/31/19

 

    

 

12/31/18

 

    

 

% Change

 

   

 

12/31/17

 

 

Nevada Gold Mines (61.5%)a

                         

Gold produced (000s oz)

     585        535        9%         2,218        2,368        (6%     2,523  

Cost of sales ($/oz)

     1,038        1,027        1%         924        814        13%       786  

Total cash costs ($/oz)b

     711        693        3%         634        526        20%       467  

All-in sustaining costs ($/oz)b

     944        946        0%         828        664        25%       634  

Cortez (61.5%)c

                   

Gold produced (000s oz)

     133        126        6%         801        1,265        (37%     1,447  

Cost of sales ($/oz)

     945        829        14%         762        659        16%       657  

Total cash costs ($/oz)b

     681        570        19%         515        351        47%       300  

All-in sustaining costs ($/oz)b

     1,012        772        31%         651        430        51%       380  

Carlin (61.5%)d

                   

Gold produced (000s oz)

     276        278        (1%)        968        835        16%       780  

Cost of sales ($/oz)

     975        1,007        (3%)        1,004        1,054        (5%     1,024  

Total cash costs ($/oz)b

     766        775        (1%)        746        740        1%       721  

All-in sustaining costs ($/oz)b

     965        1,014        (5%)        984        983        0%       1,045  

Turquoise Ridge (61.5%)e

                   

Gold produced (000s oz)

     111        82        35%         335        268        25%       211  

Cost of sales ($/oz)

     971        1,077        (10%)        846        783        8%       715  

Total cash costs ($/oz)b

     625        622        0%         585        678        (14%     589  

All-in sustaining costs ($/oz)b

     800        840        (5%)        732        756        (3%     733  

Phoenix (61.5%)f

                   

Gold produced (000s oz)

     31        25        24%         56          

Cost of sales ($/oz)

     2,025        2,186        (7%)        2,093          

Total cash costs ($/oz)b

     902        1,010        (11%)        947          

All-in sustaining costs ($/oz)b

     1,034        1,622        (36%)        1,282          

Long Canyon (61.5%)f

                   

Gold produced (000s oz)

     34        24        42%         58          

Cost of sales ($/oz)

     1,026        1,170        (12%)        1,088          

Total cash costs ($/oz)b

     317        353        (10%)        333          

All-in sustaining costs ($/oz)b

     657        714        (8%)        681                            

Pueblo Viejo (60%)

                   

Gold produced (000s oz)

     179        139        29%         590        581        2%       650  

Cost of sales ($/oz)

     660        807        (18%)        747        750        0%       699  

Total cash costs ($/oz)b

     422        504        (16%)        471        465        1%       405  

All-in sustaining costs ($/oz)b

     517        631        (18%)        592        623        (5%     525  

Loulo-Gounkoto (80%)g

                   

Gold produced (000s oz)

     144        153        (6%)        572          

Cost of sales ($/oz)

     1,037        1,018        2%         1,044          

Total cash costs ($/oz)b

     631        630        0%         634          

All-in sustaining costs ($/oz)b

     917        966        (5%)        886                            

Kibali (45%)g

                   

Gold produced (000s oz)

     87        91        (4%)        366          

Cost of sales ($/oz)

     1,205        1,187        2%         1,111          

Total cash costs ($/oz)b

     608        554        10%         568          

All-in sustaining costs ($/oz)b

     740        703        5%         693                            

Kalgoorlie (50%)h

                   

Gold produced (000s oz)

     36        58        (38%)        206        314        (34%     368  

Cost of sales ($/oz)

     1,127        1,037        9%         1,062        899        18%       806  

Total cash costs ($/oz)b

     940        856        10%         873        732        19%       642  

All-in sustaining costs ($/oz)b

     1,172        1,170        0%         1,183        857        38%       729  

Tongon (89.7%)g

                   

Gold produced (000s oz)

     61        62        (2%)        245          

Cost of sales ($/oz)

     1,476        1,396        6%         1,469          

Total cash costs ($/oz)b

     803        793        1%         787          

All-in sustaining costs ($/oz)b

     867        869        0%         844                            

Porgera (47.5%)

                   

Gold produced (000s oz)

     82        75        9%         284        204        39%       235  

Cost of sales ($/oz)

     909        1,024        (11%)        994        996        0%       944  

Total cash costs ($/oz)b

     757        868        (13%)        838        796        5%       781  

All-in sustaining costs ($/oz)b

     894        1,053        (15%)        1,003        1,083        (7%     993  

 

Financial Report 2019   65


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

Production and Cost Summary – Gold (continued)

 

     

For the three months ended

 

   

For the years ended

 

 
     

 

12/31/2019

 

    

 

9/30/2019

 

    

 

% Change

 

   

 

12/31/19

 

    

 

12/31/18

 

    

 

% Change

 

   

 

12/31/17

 

 

Veladero (50%)i

                  

Gold produced (000s oz)

     71        58        22%       274        278        (1%     432  

Cost of sales ($/oz)

     1,138        1,243        (8%     1,188        1,112        7%       897  

Total cash costs ($/oz)b

     710        773        (8%     734        629        17%       598  

All-in sustaining costs ($/oz)b

     1,142        1,142        0%       1,105        1,154        (4%     987  

Hemlo

                  

Gold produced (000s oz)

     54        49        10%       213        171        25%       196  

Cost of sales ($/oz)

     1,632        1,083        51%       1,137        1,157        (2%     986  

Total cash costs ($/oz)b

     1,091        953        14%       904        1,046        (14%     841  

All-in sustaining costs ($/oz)b

     1,380        1,280        8%       1,140        1,318        (14%     1,092  

North Maraj

                  

Gold produced (000s oz)

     103        29        255%       251        215        17%       207  

Cost of sales ($/oz)

     1,021        907        13%       953        795        20%       683  

Total cash costs ($/oz)b

     675        603        12%       646        603        7%       509  

All-in sustaining costs ($/oz)b

     830        850        (2%     802        830        (3%     773  

Buzwagij

                  

Gold produced (000s oz)

     28        18        56%       83        93        (11%     172  

Cost of sales ($/oz)

     1,235        1,292        (4%     1,240        939        32%       643  

Total cash costs ($/oz)b

     1,144        1,202        (5%     1,156        916        26%       600  

All-in sustaining costs ($/oz)b

     1,169        1,220        (4%     1,178        947        24%       632  

Bulyanhuluj

                  

Gold produced (000s oz)

     9        6        50%       27        26        4%       112  

Cost of sales ($/oz)

     1,293        1,288        0%       1,207        1,231        (2%     1,309  

Total cash costs ($/oz)b

     752        729        3%       676        650        4%       848  

All-in sustaining costs ($/oz)b

     909        769        18%       773        754        3%       1,319  

Total Attributable to Barrickk

                  

Gold produced (000s oz)

     1,439        1,306        10%       5,465        4,527        21%       5,323  

Cost of sales ($/oz)l

     1,046        1,065        (2%     1,005        892        13%       794  

Total cash costs ($/oz)b

     692        710        (3%     671        588        14%       526  

All-in sustaining costs ($/oz)b

     923        984        (6%     894        806        11%       750  

 

a.

Represents the combined results of Cortez, Goldstrike (including our 60% share of South Arturo) and our 75% interest in Turquoise Ridge until June 30, 2019. Commencing July 1, 2019, the date Nevada Gold Mines was established, the results represent our 61.5% interest in Cortez, Carlin (including Goldstrike and 60% of South Arturo), Turquoise Ridge (including Twin Creeks), Phoenix and Long Canyon.

b.

These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

c.

On July 1, 2019, Cortez was contributed to Nevada Gold Mines, a joint venture with Newmont. As a result, the amounts presented are on a 100% basis up until June 30, 2019, and on a 61.5% basis thereafter.

d.

On July 1, 2019, Barrick’s Goldstrike and Newmont’s Carlin were contributed to Nevada Gold Mines and are now referred to as Carlin. As a result, the amounts presented represent Goldstrike on a 100% basis (including our 60% share of South Arturo) up until June 30, 2019, and the combined results of Carlin and Goldstrike (including our 60% share of South Arturo) on a 61.5% basis thereafter.

e.

Barrick owned 75% of Turquoise Ridge through to the end of the second quarter of 2019, with our joint venture partner, Newmont, owning the remaining 25%. Turquoise Ridge was proportionately consolidated on the basis that the joint venture partners that have joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The figures presented in this table are based on our 75% interest in Turquoise Ridge until June 30, 2019. On July 1, 2019, Barrick’s 75% interest in Turquoise Ridge and Newmont’s Twin Creeks and 25% interest in Turquoise Ridge were contributed to Nevada Gold Mines. Starting July 1, 2019, the results represent our 61.5% share of Turquoise Ridge and Twin Creeks, now referred to as Turquoise Ridge.

f.

These sites were acquired as a result of the formation of Nevada Gold Mines on July 1, 2019.

g.

These sites did not form a part of the Barrick consolidated results in 2018 and 2017 as these sites were acquired as a result of the Merger.

h.

On November 28, 2019, we completed the sale of our 50% interest in Kalgoorlie in Western Australia to Saracen Mineral Holdings Limited for total cash consideration of $750 million. Accordingly, these represent our 50% interest until November 28, 2019.

i.

On June 30, 2017, we sold 50% of Veladero; therefore, these represent results on a 100% basis from January 1 to June 30, 2017 and on a 50% basis from July 1, 2017 onwards.

j.

Formerly known as Acacia Mining plc. On September 17, 2019, Barrick acquired all of the shares of Acacia it did not own. Operating results are included at 100% from October 1, 2019 (notwithstanding the completion of the Acacia transaction on September 17, 2019, we consolidated our interest in Acacia and recorded a non-controlling interest of 36.1% in the income statement for the entirety of the third quarter of 2019 as a matter of convenience) up until the GoT’s 16% free-carried interest is made effective, which is expected to be January 1, 2020, and on an 84% basis thereafter.

k.

With the end of mining at Golden Sunlight and Morila in the second quarter and Lagunas Norte in the third quarter as previously reported, we have ceased to include production or non-GAAP cost metrics for these sites from July 1, 2019 and October 1, 2019, respectively, onwards although these sites are included in the Total Attributable to Barrick in the prior period comparatives.

l.

Cost of sales per ounce (Barrick’s share) is calculated as cost of sales – gold on an attributable basis (excluding sites in care and maintenance) divided by gold equity ounces sold.

 

66   Barrick Gold Corporation


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Production and Cost Summary – Copper

 

     

For the three months ended

 

           

For the years ended

 

        
     

 

12/31/2019

 

    

 

9/30/2019

 

    

 

% Change

 

   

 

12/31/19

 

    

 

12/31/18

 

    

 

% Change

 

   

 

12/31/17

 

 

Lumwana

                  

Copper production (millions lbs)

     63        65        (3%     238        224        6%       256  

Cost of sales ($/lb)

     2.22        2.04        9%       2.13        2.51        (15%     1.57  

C1 cash costs ($/lb)a

     2.10        1.83        15%       1.79        2.08        (14%     1.66  

All-in sustaining costs ($/lb)a

     3.41        3.66        (7%     3.04        3.08        (1%     2.35  

Zaldívar (50%)

                  

Copper production (millions lbs)

     36        32        13%       128        104        23%       114  

Cost of sales ($/lb)

     2.59        2.18        19%       2.46        2.55        (4%     2.15  

C1 cash costs ($/lb)a

     1.95        1.55        26%       1.77        1.97        (10%     1.66  

All-in sustaining costs ($/lb)a

     2.56        1.91        34%       2.15        2.47        (13%     2.21  

Jabal Sayid (50%)

                  

Copper production (millions lbs)

     18        15        20%       66        55        20%       43  

Cost of sales ($/lb)

     1.47        1.63        (10%     1.53        1.73        (12%     1.90  

C1 cash costs ($/lb)a

     1.29        1.42        (9%     1.26        1.53        (18%     1.70  

All-in sustaining costs ($/lb)a

     1.78        1.65        8%       1.51        1.92        (21%     2.30  

Total Copper

                  

Copper production (millions lbs)

     117        112        4%       432        383        13%       413  

Cost of sales ($/lb)b

     2.26        2.00        13%       2.14        2.40        (11%     1.77  

C1 cash costs ($/lb)a

     1.90        1.62        17%       1.69        1.97        (14%     1.66  

All-in sustaining costs ($/lb)a

     2.82        2.58        9%       2.52        2.82        (11%     2.34  

 

a.

These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

b.

Cost of sales per pound (Barrick’s share) is calculated as cost of sales – copper plus our equity share of cost of sales attributable to Zaldívar and Jabal Sayid divided by copper pounds sold.

Operating Divisions Performance

 

 

 

Review of Operating Divisions Performance

Following the Merger in the first quarter of 2019 and the events surrounding Nevada Gold Mines and Acacia in the third quarter of 2019 (refer to page 58 for further details), our presentation of reportable operating segments consists of nine gold mines (Cortez, Carlin, Turquoise Ridge, Pueblo Viejo, Loulo-Gounkoto, Kibali, Veladero, Porgera and North Mara). The remaining operating

segments, including our remaining gold mines, copper mines and projects, have been grouped into an “other” category and will not be reported on individually. Segment performance is evaluated based on a number of measures including operating income before tax, production levels and unit production costs. Certain costs are managed on a consolidated basis and are therefore not reflected in segment income.

 

 

Financial Report 2019   67


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Nevada Gold Mines (61.5% basis)a, Nevada USA

Summary of Operating and Financial Data

 

 

 

     For the three months ended     For the years ended  
               
     

12/31/2019

 

    

9/30/2019

 

    

% Change

 

   

12/31/19

 

    

12/31/18

 

    

% Change

 

   

12/31/17

 

 

Total tonnes mined (000s)

     53,267        52,528        1%       189,456        182,204        4%       211,733  

Open pit ore

     9,316        7,706        21%       26,942        20,605        31%       17,530  

Open pit waste

     42,623        43,572        (2%     157,868        157,960        0%       190,710  

Underground

     1,328        1,250        6%       4,646        3,639        28%       3,493  

Average grade (grams/tonne)

                  

Open pit mined

     0.82        0.77        6%       0.93        2.96        (69%     2.70  

Underground mined

     10.70        9.97        7%       10.52        10.96        (4%     10.58  

Processed

     1.96        2.02        (3%     2.29        3.47        (34%     3.45  

Ore tonnes processed (000s)

     11,586        10,211        13%       36,724        25,680        43%       24,366  

Oxide mill

     3,044        3,124        (3%     8,338        4,527        84%       4,562  

Roaster

     1,344        1,309        3%       5,377        5,104        5%       4,902  

Autoclave

     1,556        1,316        18%       5,656        5,338        6%       4,730  

Heap leach

     5,642        4,462        26%       17,353        10,711        62%       10,172  

Recovery rate

     80%        79%        1%       82%        83%        (1%     86%  

Oxide Mill

     71%        72%        (1%     76%        83%        (8%     91%  

Roaster

     86%        87%        (1%     87%        89%        (3%     89%  

Autoclave

     74%        79%        (6%     74%        69%        8%       62%  

Gold produced (000s oz)

     585        535        9%       2,218        2,368        (6%     2,523  

Oxide mill

     76        76        0%       336        590        (43%     957  

Roaster

     286        275        4%       1,070        1,120        (4%     929  

Autoclave

     155        112        39%       547        497        10%       459  

Heap leach

     68        72        (6%     265        161        65%       178  

Gold sold (000s oz)

     565        537        5%       2,223        2,359        (6%     2,579  

Revenue ($ millions)

     861        804        7%       3,128        2,986        5%       3,241  

Cost of sales ($ millions)

     573        552        4%       2,035        1,921        6%       2,028  

Income ($ millions)

     277        237        17%       1,050        1,011        4%       1,169  

EBITDA ($ millions)b

     440        403        9%       1,642        1,688        (3%     1,990  

EBITDA marginc

     51%        50%        2%       52%        57%        (7%     61%  

Capital expenditures ($ millions)d,e

     145        164        (12%     627        626        0%       620  

Minesite sustainingd

     124        110        13%       380        272        40%       392  

Projectd

     21        54        (61%     247        354        (30%     228  

Cost of sales ($/oz)

     1,038        1,027        1%       924        814        13%       786  

Total cash costs ($/oz)b

     711        693        3%       634        526        20%       467  

All-in sustaining costs ($/oz)b

     944        946        0%       828        664        25%       634  

All-in costs ($/oz)b

     982        1,048        (6%     938        814        15%       726  

 

a.

Represents the combined results of Cortez, Goldstrike (including our 60% share of South Arturo) and our 75% interest in Turquoise Ridge until June 30, 2019. Commencing July 1, 2019, the date Nevada Gold Mines was established, the results represent our 61.5% interest in Cortez, Carlin (including Goldstrike and 60% of South Arturo), Turquoise Ridge (including Twin Creeks), Phoenix and Long Canyon.

b.

These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

c.

Represents EBITDA divided by revenue.

d.

Presented on a cash basis as a result of adopting IFRS 16 Leases starting in the first quarter of 2019. Capital expenditures for 2018 and 2017 are presented on an accrued basis. Please refer to page 48 of this MD&A for more details.

e.

Amounts presented exclude capitalized interest.

 

As discussed on page 58, on July 1, 2019, Nevada Gold Mines was established which encompasses Barrick’s former Cortez, Goldstrike, Turquoise Ridge and Goldrush properties and Newmont’s former Carlin, Twin Creeks, Phoenix, Long Canyon and Lone Tree properties. Barrick is the operator of the joint venture and owns

61.5%, with Newmont owning the remaining 38.5% of the joint venture. Refer to the following pages for a detailed discussion of Cortez, Carlin (including Goldstrike) and Turquoise Ridge (including Twin Creeks) results.

 

 

68   Barrick Gold Corporation


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Carlin (61.5% basis)a, Nevada USA

Summary of Operating and Financial Data

 

 

 

     For the three months ended     For the years ended  
               
     

12/31/2019

 

    

9/30/2019

 

    

% Change

 

   

12/31/19

 

    

12/31/18

 

    

% Change

 

   

12/31/17

 

 

Total tonnes mined (000s)

     13,639        11,584        18%       49,343        59,605        (17%     76,587  

Open pit ore

     1,832        1,627        13%       4,773        4,626        3%       1,575  

Open pit waste

     10,966        9,145        20%       41,978        53,387        (21%     73,374  

Underground

     841        812        4%       2,592        1,592        63%       1,638  

Average grade (grams/tonne)

                  

Open pit mined

     1.84        1.44        28%       2.08        3.75        (44%     3.56  

Underground mined

     9.40        8.61        9%       9.09        9.39        (3%     8.88  

Processed

     3.65        3.33        10%       3.80        4.32        (12%     4.20  

Ore tonnes processed (000s)

     3,156        3,188        (1%     10,467        8,075        30%       8,041  

Oxide mill

     705        663        6%       1,368        n/a        n/a       n/a  

Roaster

     991        980        1%       3,627        3,341        9%       3,783  

Autoclave

     892        810        10%       4,169        4,734        n/a       4,258  

Heap leach

     568        735        (23%     1,303        n/a        n/a       n/a  

Recovery rate

     75%        76%        (1%     75%        74%        1%       77%  

Roaster

     86%        87%        (1%     86%        89%        (2%     88%  

Autoclave

     58%        63%        (9%     59%        53%        12%       62%  

Gold produced (000s oz)

     276        278        (1%     968        835        16%       780  

Oxide mill

     11        14        (21%     25        n/a        n/a       n/a  

Roaster

     205        213        (4%     694        606        15%       531  

Autoclave

     49        38        29%       225        229        (2%     248  

Heap leach

     11        13        (15%     24        n/a        n/a       n/a  

Gold sold (000s oz)

     275        272        1%       967        842        15%       868  

Revenue ($ millions)

     408        401        2%       1,355        1,066        27%       1,091  

Cost of sales ($ millions)

     268        274        (2%     971        886        10%       889  

Income ($ millions)

     133        121        10%       370        166        123%       186  

EBITDA ($ millions)b

     191        183        5%       609        428        42%       446  

EBITDA marginc

     47%        46%        3%       45%        40%        12%       41%  

Capital expenditures ($ millions)d,e

     51        56        (9%     211        186        13%       263  

Minesite sustainingd

     51        56        (9%     211        186        13%       263  

Projectd

     0        0        0%       0        0        0%       0  

Cost of sales ($/oz)

     975        1,007        (3%     1,004        1,054        (5%     1,024  

Total cash costs ($/oz)b

     766        775        (1%     746        740        1%       721  

All-in sustaining costs ($/oz)b

     965        1,014        (5%     984        983        0%       1,045  

All-in costs ($/oz)b

     965        1,014        (5%     984        983        0%       1,045  

 

a.

On July 1, 2019, Barrick’s Goldstrike operations and Newmont’s Carlin operations were contributed to Nevada Gold Mines and are now collectively referred to as Carlin. As a result, the amounts presented represent Goldstrike on a 100% basis (including our 60% share of South Arturo) up until June 30, 2019, and the combined results of Carlin and Goldstrike (including our 60% share of South Arturo) on a 61.5% basis thereafter.

b.

These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 107 to 132 of this MD&A.

c.

Represents EBITDA divided by revenue.

d.

Presented on a cash basis as a result of adopting IFRS 16 Leases starting in the first quarter of 2019. Capital expenditures for 2018 and 2017 are presented on an accrued basis. Please refer to page 48 of this MD&A for more details.

e.

Amounts presented exclude capitalized interest.

 

On July 1, 2019, Barrick’s Goldstrike operations and Newmont’s Carlin operations were contributed to Nevada Gold Mines and are now collectively referred to as Carlin. As a result, the amounts presented represent Goldstrike on a 100% basis (including our 60% share of South Arturo) up until June 30, 2019, and the combined

results of Carlin and Goldstrike (including our 60% share of South Arturo) on a 61.5% basis thereafter. As a result of this transaction, there is now a higher proportion of open pit ore mined and, consequently, the average grade processed is lower, which also aligns with the inclusion of a heap leach facility contributed by Newmont.

 

 

Financial Report 2019   69


Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Safety and Environment

Three LTIs were recorded during the quarter (at Goldstrike surface and Carlin) with an LTIFR of 1.27 per million hours worked versus 2.05 the previous quarter. Goldstrike underground reported zero LTIs during the fourth quarter. No Class 1 environmental incidents occurred during the quarter.

Financial Results

Q4 2019 compared to Q3 2019

Carlin’s income for the fourth quarter of 2019 increased by 10% primarily due to lower cost of sales per ounce5 and higher sales volumes resulting from higher grade ore mined and processed.

Gold production in the fourth quarter of 2019 was 1% lower compared to the prior quarter, mainly due to lower production from the roasters and oxide mill offset by higher autoclave production. The higher autoclave production is a result of higher throughput from processing Carlin stockpiles from Pete open pit, a synergy unlocked by the creation of Nevada Gold Mines.

Cost of sales per ounce5 and total cash costs per ounce4 in the fourth quarter of 2019 were 3% and 1% lower, respectively, than the prior quarter mainly due to a higher proportion of lower cost underground production in the feed mix. In the fourth quarter of 2019, all-in sustaining costs per ounce4 decreased by 5% compared to the prior quarter primarily due to lower minesite sustaining capital expenditures.

Capital expenditures in the fourth quarter of 2019 were 9% lower than the prior quarter due to lower underground development and equipment purchases, lower maintenance component replacements for the open pit and the completion of the autoclave brick re-line in the third quarter. Capital drilling also decreased due to the completion of drilling programs for the winter season.

2019 compared to 2018

Carlin’s income for 2019 reflects our 61.5% interest in Nevada Gold Mines and is inclusive of income from Newmont’s former Carlin operations and the Goldstrike operations from July 1, 2019. Income for Carlin for the first six months of 2019 and the twelve months of 2018 represents Barrick’s 100% interest in the Goldstrike operations (including the 60% interest in South Arturo) prior to the formation of Nevada Gold Mines. This was the primary driver of the 123% increase in Carlin’s income compared to 2018.

 

 

a.

The results represent Goldstrike on a 100% basis (including our 60% share of South Arturo) from January 1, 2017 to June 30, 2019 and on the combined results of Carlin and Goldstrike (including our 60% share of South Arturo) on a 61.5% basis from July 1, 2019 onwards.

Gold production for 2019 was 16% higher compared to the prior year, primarily due to the inclusion of Newmont’s former Carlin operations from July 1, 2019. Production in the first six months of 2019 was also higher due to scheduled roaster maintenance at Goldstrike in the first six months of 2018. This was partially offset by the reduction in Barrick’s interest in Goldstrike (including the 60% interest in South Arturo) from 100% to 61.5% from July 1, 2019.

 

 

a.

The results represent Goldstrike (including our 60% share of South Arturo) on a 100% basis from January 1, 2018 to June 30, 2019 and the combined results of Carlin and Goldstrike (including our 60% share of South Arturo) on a 61.5% basis from July 1, 2019 onwards.

Cost of sales per ounce5 was 5% lower than the prior year due to lower depreciation expense on a per ounce basis. Tota