Barrick Gold Corp (ABX)

[NYBob]

Preliminary Second Quarter Production Results


https://www.barrick.com/news/news-details/2018/Barrick-Reports-Preliminary-Second-Quarter-Production-Results/default.aspx

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Press Release
BARRICK REPORTS PRELIMINARY SECOND QUARTER PRODUCTION RESULTS
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JULY 11, 2018
ALL AMOUNTS EXPRESSED IN U.S. DOLLARS
TORONTO — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or the “Company”) today announced preliminary second quarter production of 1.07 million ounces of gold, and 83 million pounds of copper, as well as preliminary second quarter sales of 1.04 million ounces of gold, and 74 million pounds of copper. The average market price for gold in the second quarter was $1,306 per ounce, while the average market price for copper was $3.12 per pound.

Preliminary second quarter gold production of 1.07 million ounces was roughly in line with the first quarter of the year. Second quarter gold cost of sales per ounce1 is expected to be slightly higher quarter-over-quarter, with cash costs per ounce2 and all-in sustaining costs per ounce2 approximately 5-7 percent higher than the first quarter. This was primarily driven by planned maintenance at the Barrick Nevada roaster and the Pueblo Viejo autoclaves.

We are maintaining our 2018 consolidated gold production guidance of 4.5-5.0 million ounces, at a cost of sales of $810-$850 per ounce1, cash costs2 of $540-$575 per ounce, and all-in sustaining costs2 of $765-$815 per ounce.3 We expect gold production to be higher in the second half of the year following the completion of major planned maintenance shutdowns in the first half of 2018, along with reduced development and stripping in the second half of the year. Costs are expected to be lower in the second half of 2018, reflecting increased production from our lower-cost operations at Barrick Nevada and Pueblo Viejo, with higher grades and increased throughput following the completion of scheduled maintenance. Full processing capacity has also been restored at the Porgera Joint Venture earlier than our initial expectations, following the earthquake that struck Papua New Guinea on February 26, 2018.

Preliminary copper production in the second quarter of 83 million pounds was slightly lower than the first quarter. We expect a quarter-over-quarter increase in our consolidated copper cost of sales per pound1 and C1 cash costs per pound2 of approximately 17-19 percent and 11-13 percent, respectively, due to higher crusher repair costs. Capitalized stripping at Lumwana was also higher than first quarter, in line with the mine plan, leading to consolidated all-in sustaining costs per pound2 that are approximately 15-17 percent higher than the first quarter.

We are adjusting our 2018 copper production guidance to 345-410 million pounds, compared to our initial guidance of 385-450 million pounds.3 We also expect copper cost of sales per pound1 to be $2.00-$2.30, C1 cash costs2 to be $1.80-$2.00 per pound, and all-in sustaining costs2 to be $2.55-$2.85 per pound.3 This compares to initial guidance of $1.80-$2.10 per pound, $1.55-$1.75 per pound, and $2.30-$2.60 per pound, respectively. The revisions to our copper production and cost guidance primarily reflect operational challenges at Lumwana in the first half of the year. We expect higher production at Lumwana in the second half of 2018, driven by a steady improvement in grade and improved crusher reliability.

Barrick will provide additional discussion and analysis regarding second quarter production and sales when the Company reports quarterly results on July 25, 2018, followed by a conference call and webcast on July 26 at 8:00 am ET. The following table includes preliminary gold and copper production and sales results from our operations:

Three months ended
June 30, 2018 Six months ended
June 30, 2018
Production Sales Production Sales
Gold (equity ounces (000s))
Barrick Nevada4 464 444 935 906
Pueblo Viejo (60%) 123 125 264 273
Lagunas Norte 65 65 131 134
Veladero (50%)5 78 82 152 156
Turquoise Ridge (75%) 69 58 115 121
Acacia (63.9%) 86 85 163 160
Kalgoorlie (50%) 96 99 181 182
Porgera (47.5%) 41 34 81 79
Hemlo 38 37 78 81
Golden Sunlight 7 8 16 16
Total Gold 1,067 1,037 2,116 2,108
Copper (equity pounds (millions))
Lumwana 47 45 95 92
Zaldívar (50%) 23 21 47 45
Jabal Sayid (50%) 13 8 26 22
Total Copper 83 74 168 159


Investor Contact
Deni Nicoski
Senior Vice President
Investor Relations
Telephone: [phone]
Email: [e-mail]

Media Contact
Andy Lloyd
Senior Vice President
Communications
Telephone: [phone]
Email: [e-mail]

Technical Information
The scientific and technical information contained in this press release has been reviewed and approved by Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick who is a “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Second Quarter 2018 Results
Barrick will release its Second Quarter 2018 Results on July 25, 2018, followed by a conference call and webcast on July 26 at 8:00 am ET.

Toll Free (U.S. and Canada): 1-800-319-4610
International: [phone]

The webcast and presentation materials will be available on Barrick’s website. The conference call will be available for replay by phone at 1-855-669-9658 (U.S. and Canada toll free), and [phone] (international), access code 2352.

Endnote 1
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 and 36.1% Acacia from cost of sales), divided by attributable gold ounces. 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).

Endnote 2
Cash costs per ounce and all-in sustaining costs per ounce are non-GAAP financial measures which are calculated based on the definition published by the World Gold Council (“WGC”) (a market development organization for the gold industry comprised of and funded by 24 gold mining companies from around the world, including Barrick). The WGC is not a regulatory organization. Management uses these measures to monitor the performance of our gold mining operations and its ability to generate positive cash flow, both on an individual site basis and an overall company basis.

Cash costs start with our cost of sales related to gold production and removes depreciation, the non-controlling interest of cost of sales and includes by-product credits. All-in sustaining costs start with cash costs and include sustaining capital expenditures, general and administrative costs, minesite exploration and evaluation costs and reclamation cost accretion and amortization. These additional costs reflect the expenditures made to maintain current production levels.

We believe that our use of cash costs and all-in sustaining costs will assist analysts, investors and other stakeholders of Barrick in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall company basis. Due to the capital-intensive nature of the industry and the long useful lives over which these items are depreciated, there can be a significant timing difference between net earnings calculated in accordance with IFRS and the amount of free cash flow that is being generated by a mine and therefore we believe these measures are useful non-GAAP operating metrics and supplement our IFRS disclosures. These measures are not representative of all of our cash expenditures as they do not include income tax payments, interest costs or dividend payments. These measures do not include depreciation or amortization.

Cash costs per ounce and all-in sustaining costs are intended to provide additional information only and do not have standardized definitions under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not equivalent to net income or cash flow from operations as determined under IFRS. Although the WGC has published a standardized definition, other companies may calculate these measures differently.

C1 cash costs per pound and all-in sustaining costs per pound are non-GAAP financial measures related to our copper mine operations. We believe that C1 cash costs per pound enables investors to better understand the performance of our copper operations in comparison to other copper producers who present results on a similar basis. C1 cash costs per pound excludes royalties and non-routine charges as they are not direct production costs. All-in sustaining costs per pound is similar to the gold all-in sustaining costs metric and management uses this to better evaluate the costs of copper production. We believe this measure enables investors to better understand the operating performance of our copper mines as this measure reflects all of the sustaining expenditures incurred in order to produce copper. All-in sustaining costs per pound includes C1 cash costs, corporate general and administrative costs, minesite exploration and evaluation costs, royalties, environmental rehabilitation costs and write-downs taken on inventory to net realizable value.

Barrick will provide a full reconciliation of our final non-GAAP financial measures when the Company reports its quarterly results on July 25, 2018.

Endnote 3
2018 guidance is based on gold, copper, WTI oil price and Brent oil price assumptions of $1,200/oz, $2.75/lb, $65/bbl and $70/bbl respectively, a USD:AUD exchange rate of 0.75:1, a CAD:USD exchange rate of 1.25:1, a ARS:USD exchange rate of 18.35:1 and a CLP:USD exchange rate of 650:1.

Endnote 4
Includes our 60% equity share of South Arturo.

Endnote 5
Reflects our 50% equity share of Veladero.

Cautionary Statements Regarding Preliminary Second Quarter Production, Sales and Costs for 2018 and Forward-Looking Information
Barrick cautions that, whether or not expressly stated, all second quarter figures contained in this press release including, without limitation, production levels and sales and associated costs (including, costs of sales per ounce for gold and per pound for copper, all-in sustaining costs per ounce/pound, cash costs per ounce, and C1 cash costs per pound) are preliminary and reflect our expected second quarter results as of the date of this press release. Actual reported second quarter production levels and sales and associated costs are subject to management’s final review, as well as review by the Company’s independent accounting firm, and may vary significantly from those expectations because of a number of factors, including, without limitation, additional or revised information, and changes in accounting standards or policies, or in how those standards are applied. Barrick will provide additional discussion and analysis and other important information about its second quarter production levels and sales and associated costs when it reports actual results on July 25, 2018. For a complete picture of the Company’s financial performance, it will be necessary to review all of the information in the Company’s second quarter financial report and related MD&A. Accordingly, readers are cautioned not to rely solely on the information contained herein.

Finally, Barrick cautions that this press release contains forward-looking statements with respect to (i) Barrick’s forward-looking production guidance; (ii) estimates of future cost of sales per ounce for gold and per pound for copper, all-in sustaining costs per ounce/pound, cash costs per ounce, and C1 cash costs per pound; and (iii) expectations regarding operations during the second half of 2018 at Barrick Nevada, Pueblo Viejo, Porgera and Lumwana.

https://www.barrick.com/news/news-details/2018/Barrick-Reports-Preliminary-Second-Quarter-Production-Results/default.aspx

God Bless