For a full explanation of results, the Financial Statements and Management Discussion & Analysis, please see the
FIRST QUARTER REPORT 2012 For a full explanation of results, the Financial Statements MAY 2, 2012 and Management Discussion & Analysis, please see the Based on IFRS and expressed in US dollars Company’s website, www.barrick.com.
Barrick Reports First Quarter 2012 Financial and Operating Results
| Highlights | |
| First Quarter 2012 Financial Highlights • Reported net earnings of $1.03 billion ($1.03 per share), a three percent increase from $1.00 billion ($1.00 per share) in the first quarter of 2011 and adjusted net earnings of $1.09 billion ($1.09 per share)1, an eight percent increase from $1.00 billion ($1.01 per share) in same prior year period • EBITDA of $2.0 billion1, a nine percent increase from $1.83 billion in the first quarter of 2011 • Operating cash flow of $1.27 billion and adjusted operating cash flow of $1.37 billion1 compare to $1.44 billion for both reported and adjusted operating cash flow in the first quarter of 2011 First Quarter 2012 Operating Highlights • Gold and copper production of 1.88 million ounces and 117 million pounds, respectively • Gold total cash costs of $545 per ounce1 and net cash costs of $432 per ounce1 • Gold total cash margins of $1,146 per ounce1, up 20 percent from $952 per ounce in the first quarter of 2011 and net cash margins of $1,259 per ounce1, up 16 percent from $1,081 per ounce in the same prior year period • Copper C1 cash costs of $2.08 per pound1 and copper cash margins of $1.70 per pound1 Full Year 2012 Operating Outlook • Barrick maintains its full year 2012 gold production guidance of 7.3-7.8 million ounces at total cash costs of $520-$560 per ounce and net cash costs of $400-$450 per ounce2. • The company expects full year 2012 copper production of 550-600 million pounds at C1 cash costs of $1.90-$2.20 per pound. Increasing Gold and Copper Reserves through Exploration and Selective Acquisitions • The major exploration programs at Goldrush (formerly known as Red Hill-Goldrush) and Turquoise Ridge in Nevada and at the Lumwana mine in Zambia comprise about 40 percent of the 2012 budget of $450-$490 million. During the first quarter, Barrick made substantial drilling progress at each of these sites, and results to date continue to confirm expectations. Investing in and Developing High Return Projects • Barrick continued to advance construction at Pueblo Viejo and Pascua-Lama, with first production expected in mid-2012 and mid- 2013, respectively. Combined, Pueblo Viejo and Pascua-Lama are expected to generate average annual production of 1.5 million ounces to Barrick’s account with total average annual EBITDA of approximately $2.5 billion in their first full five years. Returning Capital to Shareholders • Consistent with Barrick’s practice of paying a progressive dividend, the Board of Directors has authorized a quarterly dividend of 20 cents per share, which equates to 80 cents per share on an annualized basis and represents a 33% increase from the previous quarterly dividend of 15 cents per share. The company’s strong earnings and operating cash flow, combined with its positive outlook on the gold price, enables it to continue to make high return investments in its projects and also increase its dividend. Over the last six years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividend by approximately 260%3 on a quarterly basis. Change in Senior Management • The company announced today the retirement of Executive Vice President and Chief Operating Officer (COO) Peter Kinver. Igor Gonzales, previously President of Barrick’s South America region, has been appointed Executive Vice President and COO effective May 2. Mr. Kinver will remain with the company until June 30 to assist in an orderly transition. He will also act as an advisor to Barrick for the duration of construction activities at the Pueblo Viejo and Pascua-Lama projects. |
1 Adjusted net earnings, EBITDA, adjusted operating cash flow, total cash costs and net cash costs per ounce, C1 cash costs per pound, gold total cash margins and net cash margins per ounce, and copper cash margins per pound are non-GAAP measures. See pages 37-41 of Barrick’s Q1 2012 Report. Copper “total cash costs per pound” have been replaced with “C1 cash costs per pound”. The primary difference between C1 cash costs per pound and the previous total cash costs per pound calculation is that royalties and non-routine charges are excluded from C1 cash costs per pound. See page 2 of Barrick’s Q1 2012 press release.
2 Based on an assumed realized copper price of $3.50 per pound in 2012.
3 Calculated based on converting the 2006 semi-annual dividend of 11 cents per share to a quarterly equivalent.
BARRICK FIRST QUARTER 2012 PRESS RELEASE
FINANCIAL AND OPERATING RESULTS per pound compare to $3.00 per pound in the prior “We made good progress on a number of areas in year period and reflect lower realized prices and the quarter,” stated Aaron Regent, Barrick’s higher C1 cash costs, primarily due to the inclusion President and Chief Executive Officer. “We had of production from the Lumwana mine. Realized good operating performance, which translated into copper prices in the first quarter benefited from solid financial results and further advanced our provisional pricing adjustments of about $0.19 per projects under construction with Pueblo Viejo and pound due to the increase in market copper prices Jabal Sayid to start producing this year and from year end 2011 levels.
Pascua-Lama in the middle of next year. We also First quarter gold production was 1.88 million progressed our exploration program, which ounces of gold at total cash costs of $545 per continues to increase our resource base, improved ounce and net cash costs of $432 per ounce. our liquidity and returned more capital back to Barrick maintains its full year gold production shareholders with a further increase in our guidance of 7.3-7.8 million ounces at total cash dividend.” costs of $520-$560 per ounce and net cash costs First quarter 2012 adjusted net earnings of $400-$450 per ounce.
increased eight percent to $1.09 billion, or $1.09 per Gold production in the second quarter is share, from $1.00 billion, or $1.01 per share, from expected to be lower than the first quarter, the same period last year, reflecting a higher primarily due to mine sequencing at Lagunas Norte average realized gold price. Reported net earnings and Cortez and planned maintenance of the roaster include $93 million in impairment charges primarily at Goldstrike. Gold production is expected to related to the write down of an investment in increase during the second half of 2012 mainly as a Highland Gold, partially offset by $36 million in result of Goldstrike and Lagunas Norte returning to gains from the sale of assets, foreign exchange higher production levels and the commencement of gains and unrealized gains on non-hedge derivative production at Pueblo Viejo. Second quarter total instruments. Adjusted net earnings for the quarter cash costs per ounce are expected to be higher translated to an annualized return on equity of than the first quarter as a result of lower approximately 18 percent4. anticipated production levels; total cash costs per EBITDA increased nine percent to $2.0 billion ounce are anticipated to decrease from second for the first quarter from $1.83 billion in the same quarter levels in the second half of 2012 as lower prior year period. Operating cash flow of $1.27 cost mines contribute to a greater proportion of billion and adjusted operating cash flow of $1.37 company production.
billion for the quarter compare to operating cash First quarter copper production was 117 million flow and adjusted operating cash flow of $1.44 pounds at C1 cash costs of $2.08 per pound, billion in the first quarter of 2011. Operating cash primarily due to lower production at Lumwana as a flow was reduced by an increase in working capital result of poor ground conditions from the wet balances, primarily due to the timing of gold sales season, which are also having an effect on the and increased income tax payments. second quarter. In addition, Q2 production is The realized gold price for the first quarter was anticipated to be impacted by planned maintenance $1,691 per ounce4, 22 percent higher than the same activities.
prior year period. Gold total cash margins Starting in the first quarter, the company has increased 20 percent to $1,146 per ounce from adopted the Brook Hunt & Associates C1 cash cost $952 per ounce in the first quarter of 2011. Net methodology for calculating copper cash costs per cash margins increased 16 percent to $1,259 per pound in order to conform its presentation to other ounce from $1,081 per ounce in the first quarter of significant copper producers. The primary 2011. First quarter copper cash margins of $1.70 difference between C1 cash costs and the previous total cash costs per pound calculation is that 4 Return on equity and average realized price per ounce/pound are non-GAAP financial measures. See pages 37-41 of Barrick’s Q1 2012 Report.
BARRICK FIRST QUARTER 2012 2 PRESS RELEASE
royalties and non-routine charges are excluded ounces at total cash costs of $461 per ounce. The from C1 cash costs as they are not direct Lagunas Norte operation contributed 0.21 million production costs. Based on the C1 cash cost ounces at total cash costs of $284 per ounce. The methodology, original copper guidance would have second quarter is expected to be the lowest been in the range of $1.80-$2.10 per pound. Due to production quarter of the year for Lagunas Norte, higher than expected production costs at Lumwana, primarily due to mine sequencing. Production will full year 2012 C1 cash costs are anticipated to be begin ramping up to higher levels starting in the $1.90-$2.20 per pound5. third quarter as the operation moves into a higher In the second half of the year, total copper grade area. In 2012, South America production is production is expected to increase, primarily due to expected to be 1.55-1.70 million ounces at total cash higher production at Lumwana and the start up of costs of $430-$480 per ounce.
Jabal Sayid. Full year copper production is anticipated to be 550-600 million pounds in 2012. Australia Pacific Regional Business Unit Australia Pacific produced 0.43 million ounces at PRODUCTION AND COSTS total cash costs of $748 per ounce in the first quarter. The Porgera mine produced 0.10 million North America Regional Business Unit ounces at total cash costs of $826 per ounce. North America produced 0.89 million ounces at Production from Porgera in the first quarter was total cash costs of $485 per ounce in the first impacted by operational disruptions, including quarter. Cortez production of 0.42 million ounces power supply interruptions. Porgera’s production at total cash costs of $304 per ounce in the first is expected to increase starting in the second quarter exceeded expectations on higher than quarter. Australia Pacific production is anticipated budgeted grades from the Cortez Hills to be 1.80-1.95 million ounces at total cash costs of underground.
$700-$750 per ounce in 2012.
Goldstrike produced 0.24 million ounces at total cash costs of $546 per ounce. During the first African Barrick Gold plc (ABG)
quarter, Goldstrike production was impacted by First quarter attributable production from ABG was increased maintenance activities and construction 0.11 million ounces at total cash costs of $925 per at the autoclaves in order to accommodate the ounce, reflecting expected mine sequencing for thiosulfate technology intended to extend their 2012. Increased production levels are anticipated operational life. Second quarter production is for the second half of the year. Barrick’s share of expected to be similar to the first quarter, primarily 2012 production is expected to be 0.500-0.535 due to planned maintenance at the roaster.
million ounces at total cash costs of $790-$860 per Goldstrike’s production is anticipated to be higher ounce.
in the second half of 2012, primarily due to the mine accessing higher grade underground ore. Full year Copper 2012 production for the North America region is The Zaldívar copper mine in Chile produced 76 expected to be 3.425-3.60 million ounces at total million pounds at C1 cash costs of $1.51 per pound in cash costs of $475-$525 per ounce.
the first quarter. The Lumwana mine in Zambia produced 41 million pounds at C1 cash costs of $3.15 South America Regional Business Unit per pound. Production and C1 cash costs at South America produced 0.45 million ounces at Lumwana were impacted by lower mining rates total cash costs of $421 per ounce in the first primarily as a result of poor ground conditions from quarter. The Veladero mine produced 0.21 million the wet season, which are also having an effect in the second quarter. In addition, Lumwana’s Q2 5 The company has also introduced the non-GAAP measure of “C3 fully allocated costs per pound” based on Brook Hunt’s methodology. C3 fully allocated costs per pound, which include C1 cash costs plus depreciation, royalties, exploration and evaluation expense, administration expense and non-routine charges, are expected to be $2.70-$3.00/lb in 2012.
BARRICK FIRST QUARTER 2012 3 PRESS RELEASE
production is anticipated to be impacted by planned In Nevada, over 50 drill rigs are operating mill maintenance. currently, 11 of which are located at Goldrush. More In the second half of the year, total copper than 20 percent of 2012 planned drilling has been production is expected to increase, primarily due to completed to date (101,000 feet of 468,000 the commencement of mining at the large planned). Drilling 400 feet west of Goldrush and Chimiwungo deposit at Lumwana and the start up 3,000 feet to the south has revealed good of Jabal Sayid. indicators of strong mineralization, and the limits of The company has floor protection on the mineralized system have not yet been defined. approximately half of its expected copper Infill drilling to upgrade the resource is in line with production for the remainder of 2012 at an average expectations.
floor price of $3.75 per pound6 and has full At the 75 percent-owned Turquoise Ridge participation to any upside in copper prices. operation in Nevada, resource definition drilling has ramped up to 14 drill rigs, which have completed Currency and Fuel Price Protection over 91,000 feet (22 percent) of planned 2012 Approximately 60 percent of Barrick’s consolidated drilling. Drilling in 2012 is targeting resource production costs are denominated in US dollars. upgrades and additions. This drilling is an The largest single currency exposure for the important component in evaluating the potential to company is the Australian dollar/US dollar develop a large scale open pit that would operate exchange rate. Barrick is substantially hedged on simultaneously with the high grade underground its remaining Australian operating and mine. The open pit project has the potential to administrative expenditures for 2012 at an effective significantly increase annual production. A average rate of $0.81. The company is also 84 prefeasibility study is expected to be completed by percent hedged on 2013 expected Australian the end of 2012.
operating expenditures at an effective average rate At Lumwana, drill rates have now doubled at of $0.79. Additional hedge coverage is also in the Chimiwungo deposit since the fourth quarter of place for 2014-2016 at levels below current rates. 2011. Approximately 35 percent of the 18 month The company also has mitigated the impact of drill program to the end of 2012 has been higher crude oil prices through the use of financial completed (109,000 meters of 314,000 meters contracts and production from Barrick Energy. The planned). Results to date are in line with Barrick Energy contribution, along with the expectations and continue to confirm and extend financial contracts, provides hedge protection for the size and thickness of the mineralized zones, approximately 80 percent of the expected including the thickened, high grade Equinox and remaining 2012 fuel consumption. Roan ore shoots. Drilling is expected to increase and will continue to focus on upgrading and adding INCREASING GOLD AND COPPER RESERVES resources. We expect to complete a prefeasibility THROUGH EXPLORATION AND SELECTIVE study by the end of 2012 on the expansion ACQUISITIONS opportunity, which has the potential to double The 2012 exploration budget increased to $450- processing rates.
$490 million from the prior year actual expenditure of $350 million as a result of exploration success in INVESTING IN AND DEVELOPING HIGH RETURN 2011. The major exploration programs at Goldrush, PROJECTS Turquoise Ridge and Lumwana comprise about 40 Barrick has targeted growth in gold production to percent of the budget. These programs have large about 9 million ounces7 in 2016, driven primarily by drill campaigns, which are expected to add and Pueblo Viejo and Pascua-Lama. Once at full upgrade gold and copper resources in 2012-2013.
7 The target of 9 Moz of annual production by 2016 reflects a current assessment of the expected production and timeline to complete and commission Barrick’s projects currently in construction (Pueblo Viejo and 6 The average realized price on total 2012 production is expected to be reduced by approximately $0.13 per Pascua-Lama) and the company’s current assessment of existing mine site opportunities, some of which are pound as a result of the net premium paid for these positions. sensitive to metal price and various capital and input cost assumptions.
BARRICK FIRST QUARTER 2012 4 PRESS RELEASE
capacity, these two mines are expected to annual gold production in the first full five years of contribute average annual gold production of operation is expected to average 625,000-675,000 approximately 1.5 million ounces. The company’s ounces at total cash costs of $300-$350 per total cash costs are also anticipated to benefit from ounce11.
new, low cost production from these two worldclass assets. Together, they are expected to Pascua-Lama generate average annual EBITDA of about $2.5 At the Pascua-Lama project, about 70 percent of billion8 in their first full five years. the previously announced mine construction capital of $4.7-$5.0 billion has been committed. First Pueblo Viejo production is anticipated in mid-2013. The project At the 60 percent-owned Pueblo Viejo project in is being impacted by labor and commodity cost the Dominican Republic, first production continues pressures, primarily as a result of: high inflation in to be expected in mid-2012. Overall construction is Argentina, and to a lesser extent, Chile, competition currently about 93 percent complete. At the end of for skilled labor and lower than expected labor the first quarter, approximately 90 percent of the productivity in underground development. Barrick mine construction capital of $3.6-$3.8 billion (100 has added experienced supervisors and miners percent basis) or $2.2-$2.3 billion (Barrick’s 60 from its North American and South American percent share) had been committed. About 15 regions to the project team, increased oversight of million tonnes of ore, representing approximately external contractors, accelerated procurement of 1.7 million contained gold ounces, have been long lead items and necessary equipment. In stockpiled to date. The tailings facility has now conjunction with these activities, the company received all necessary approvals to permit intends to complete a detailed capital cost and construction of the starter dam to its full design schedule review in the second quarter of 2012. height. With power being connected to the site in In Chile, earthworks construction was the first quarter, the first two autoclaves are now approximately 97 percent complete and in undergoing pre-commissioning testing and along Argentina, about 73 percent complete at the end of with the oxygen plant are expected to be the first quarter. During the quarter, the initial commissioned in the second quarter. As part of a phase of pioneering road construction was longer-term, optimized power solution for Pueblo completed, which will help enable the planned Viejo, the company has started construction of a commencement of pre-stripping in the second 215 MW dual fuel power plant at an estimated quarter. About 45 percent of the concrete has been incremental cost of approximately $300 million poured at the processing facilities in Argentina and (100 percent basis) or $180 million (Barrick’s 60 approximately 20 percent of the structural steel has percent share). The power plant would commence been erected to date. Occupancy of the operations utilizing heavy fuel oil, but have the construction camps in Chile and Argentina continues ability to subsequently transition to liquid natural to ramp up with 6,800 beds available by the end of gas. The new plant is expected to provide lower the first quarter. The camps are expected to reach cost, long term power to the mine. their full capacity of about 10,000 beds in mid-2012. Pueblo Viejo is expected to contribute Average annual gold production from Pascua-Lama approximately 100,000-125,000 ounces of gold to is expected to be 800,000–850,000 ounces in the Barrick at total cash costs of $400-$500 per first full five years of operation at negative total ounce starting mid-year 2012 as it ramps up to full cash costs of $225-$275 per ounce12 based on a production in 2013. Barrick’s 60 percent share of silver price of $25 per ounce. For every $1 per ounce increase in the silver price, total cash costs 8 Based on a $1,600 per ounce gold price, a $30 per ounce silver price and a $100/bbl oil price and estimated average annual production in the first full five years once both mines are at full capacity.
9 Based on gold and oil price assumptions of $1,300/oz and $100/bbl, respectively. 11 Based on gold and oil price assumptions of $1300/oz and $100/bbl, respectively. Does not include escalation 10 Based on gold and oil price assumptions of $1,700/oz and $100/bbl, respectively. The 2012 total cash cost for inflation.
estimate is dependent on the rate at which production ramps up after commercial levels of production are 12 Based on gold, silver and oil price assumptions of $1,300/oz, $25/oz, and $100/bbl, respectively and achieved. A change in the efficiency of the ramp up could have a significant impact on this estimate. assuming a Chilean peso f/x rate of 475:1. Does not include escalation for inflation.
BARRICK FIRST QUARTER 2012 5 PRESS RELEASE
are expected to decrease by about $35 per ounce Donlin Gold over this period. At the 50 percent-owned Donlin Gold project in Alaska, management is working to conclude Jabal Sayid negotiations on a surface land use agreement, at Overall construction of the Jabal Sayid copper which time, the Board of Donlin Gold LLC is project in Saudi Arabia was about 85 percent expected to accept the revised feasibility study. complete at the end of the first quarter. Subject to Mine construction capital is estimated to be receipt of final permitting approvals, the operation approximately $6.7 billion (100 percent basis) , is expected to enter production in the second half which includes a natural gas pipeline that is of 2012 at total mine construction capital of anticipated to lower long term power costs and approximately $400 million13, of which 80 percent offer a better environmental and operational had been committed at the end of the first quarter. solution for power. Donlin Gold is anticipated to Bulk earthworks were about 96 percent complete produce an average of about 1.5 million ounces of and approximately 214 thousand tons of gold annually (100 percent basis) in its first full five underground ore have been mined, representing years of operation.
about 10.6 million contained pounds of copper at the end of the first quarter. Jabal Sayid is expected Other Projects Prefeasibility studies are expected to be completed to produce 35-45 million pounds of copper in 2012 at C1 cash costs of $2.15-$2.50 per pound14. for the Turquoise Ridge open pit project and the Lumwana expansion by the end of 2012 and in the Average annual production from Lodes 2 and 4 is expected to be 100-130 million pounds over the first first quarter of 2013 for the Lagunas Norte deep full five years of operation at C1 cash costs of $1.50- sulfides and the Zaldívar deep sulfides.
$1.70 per pound15.
RETURNING CAPITAL TO SHAREHOLDERS PROJECTS IN FEASIBILITY Barrick continued to generate strong adjusted Cerro Casale operating cash flow of approximately $1.4 billion in At the Cerro Casale project in Chile, the the quarter, maintains the gold industry’s highest Environmental Impact Assessment (EIA) permitting credit rating and closed the quarter with a cash process is expected to be completed by the end of balance of about $2.7 billion. Barrick’s strong 2012. Following the approval of the EIA, Barrick will financial results, combined with its positive outlook consider a construction decision, commencement on the gold price, enable it to continue to make of detailed engineering and sectoral permitting. high return investments in its projects and also Barrick’s 75 percent share of average annual increase the dividend. The Board of Directors has production from Cerro Casale is anticipated to be authorized a quarterly dividend of 20 cents per 750,000-825,000 ounces of gold and 190-210 share, which represents a 33% increase from the million pounds of copper in the first full five years previous quarterly dividend. Over the last six years, of operation at total cash costs of $200-$250 per the company has had a consistent track record of ounce16. Estimated mine construction capital is returning capital to shareholders, increasing its approximately $6.0 billion (100 percent basis)16. dividend by about 260% on a quarterly basis18. The quarterly dividend is payable on June 15, 2012 to shareholders on record as of the close of business on May 31, 2012.
13 Based on copper and gold price assumptions of $3.50/lb and $1,700/oz, respectively.
14 Based on copper and gold price assumptions of $3.50/lb and $1,700/oz, respectively. The 2012 C1 cash cost estimate is dependent on the rate at which production ramps up after commercial levels of production are achieved. A change in the efficiency of the ramp up could have a significant impact on this estimate.
15 Based on copper and gold price assumptions of $3.50/lb and $1,700/oz, respectively. Does not include 17 Does not include escalation for inflation.
escalation for inflation. 18 The declaration and payment of dividends remains at the discretion of the Board of Directors and will 16 Based on gold, copper and oil prices of $1,300/oz, $3.25/lb and $100/bbl, respectively and assuming a depend on the Company’s financial results, cash requirements, future prospects and other factors deemed Chilean peso f/x rate of 475:1. Does not include escalation for inflation. relevant by the Board.
BARRICK FIRST QUARTER 2012 6 PRESS RELEASE
CHANGE IN SENIOR MANAGEMENT CONTINUALLY IMPROVING CSR PRACTICES The company announced today the retirement of During the first quarter, Barrick announced the Executive Vice President and COO Peter Kinver. establishment of its Corporate Social Responsibility Igor Gonzales, previously President of Barrick’s (CSR) Advisory Board and named five distinguished South America region, has been appointed individuals to serve as inaugural members. The Executive Vice President and COO effective May 2. Advisory Board will provide external advice and Mr. Kinver will remain with the company until June guidance to Barrick management on the company’s 30 to assist in an orderly transition. He will also act global CSR performance and evolving best as an advisor to Barrick for the duration of practices in CSR and also act as a sounding board construction activities at the Pueblo Viejo and on a broad range of CSR matters, including Pascua-Lama projects. community relations, sustainable development, the “Since joining in 2003, Peter has managed the environment, human rights and security and company’s operations through a period of stakeholder engagement.
significant growth. Under his leadership, Barrick Advisory Board members reflect a diversity of has met production guidance for nine consecutive CSR expertise and stakeholder groups. Members years, reflecting a strong focus on operational will provide advice in an individual capacity, rather excellence,” said Aaron Regent. “He oversaw the than on behalf of any organization or stakeholder construction of six new mines in five different group. They have been chosen based on their incountries and successfully led the integration depth knowledge of social and environmental best of Placer Dome’s operations into Barrick’s practices for international companies and their global portfolio.” understanding of the key issues affecting the Mr. Gonzales joined Barrick in 1998 and has mining industry.
served as President of the company’s South * * * * America region since 2005. He has more than 30 Barrick’s vision is to be the world’s best gold years of experience in the mining industry and has company by finding, acquiring, developing and played a key role in the successful growth of producing quality reserves in a safe, profitable and Barrick’s South American business unit. socially responsible manner. Barrick’s shares Mr. Gonzales and his team have also been integral are traded on the Toronto and New York to the development of the Pascua-Lama project. stock exchanges.
“Under Igor’s leadership, the South America region has consistently demonstrated strong performance in production, cost control, project development and in the corporate social responsibility arena where he has focused on building positive relationships with local communities, through increased engagement and new initiatives to promote sustainable economic development. His background and experience make him an ideal choice for this position,”
said Mr. Regent.
BARRICK FIRST QUARTER 2012 7 PRESS RELEASE
Key Statistics
Barrick Gold Corporation Three months ended (in United States dollars) March 31, (Unaudited) 2012 2011 Operating Results Gold production (thousands of ounces)1 1,881 1,957 Gold sold (thousands of ounces) 1,783 1,862 Per ounce data Average spot gold price $ 1,691 $ 1,386
| Average realized gold price2 | 1,691 | 1,389 |
| Net cash costs2 | 432 | 308 |
| Total cash costs2 | 545 | 437 |
| Depreciation3 | 178 | 142 |
Other4 14 16
| Total production costs | 737 | 595 |
| Copper credits | 113 | 129 |
| Copper production (millions of pounds) | 117 | 75 |
| Copper sold (millions of pounds) | 119 | 80 |
Per pound data Average spot copper price $ 3.77 $ 4.38 Average realized copper price2 3.78 4.25 C1 cash costs2 2.08 1.25 Depreciation3 0.46 0.24 Other5 0.13 (0.03)
C3 fully allocated costs2 2.67 1.46 Financial Results (millions)
Revenues $ 3,644 $ 3,087 Net earnings6 1,029 1,001
| Adjusted net earnings2 | 1,086 | 1,004 |
| EBITDA2 | 1,997 | 1,828 |
| Operating cash flow | 1,272 | 1,439 |
| Adjusted operating cash flow2 | 1,374 | 1,439 |
Per Share Data (dollars)
| Net earnings (basic) | 1.03 | 1.00 |
| Adjusted net earnings (basic)2 | 1.09 | 1.01 |
| Net earnings (diluted) | 1.03 | 1.00 |
| Weighted average basic common shares (millions) | 1,000 | 999 |
| Weighted average diluted common shares (millions)7 | 1,002 | 1,001 |
| Return on equity2 | 18% | 20% |
As at As at March 31, December 31, 2012 2011 Financial Position (millions)
Cash and equivalents $ 2,665 $ 2,745
| Non-cash working capital | 161 | 2,335 |
| Adjusted debt2 | 13,062 | 13,058 |
| Net debt2 | 10,411 | 10,320 |
| Average shareholders' equity | 23,767 | 21,418 |
1 Production includes our equity share of gold production at Highland Gold.
2 Realized price, net cash costs, total cash costs, C1 cash costs, C3 fully allocated costs, adjusted net earnings, EBITDA, adjusted operating cash flow, adjusted debt, net debt, and return on equity are non-GAAP financial performance measures with no standard definition under IFRS. See pages 37-41 of the Company's MD&A.
3 Represents equity amortization expense divided by equity ounces of gold sold or pounds of copper sold.
4 Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
5 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound on page 38 of the Company's MD&A.
6 Net earnings represents net income attributable to the equity holders of the Company.
7 Fully diluted includes dilutive effect of stock options.
BARRICK FIRST QUARTER 2012 8 8 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
Three months ended Three months ended March 31, March 31,
| (Unaudited) | 2012 | 2011 | 2012 | 2011 | ||
| North America | 888 | 862 | $485 $396 | |||
| South America | 451 | 498 | 421 | 340 | ||
| Australia Pacific | 426 | 459 | 748 | 585 | ||
| African Barrick Gold3 | 107 | 129 | 925 | 658 | ||
| Other | 9 | 9 | - | - | ||
| Total | 1,881 | 1,957 | $545 $437 |
Copper Production (attributable pounds) (Millions) C1 Cash Costs ($/lb)
Three months ended Three months ended March 31, March 31, (Unaudited) 2012 2011 2012 2011 Total 117 75 $ 2.08 $ 1.25
Total Gold Production Costs ($/oz)
Three months ended March 31, (Unaudited) 2012 2011 Direct mining costs at market foreign exchange rates $ 593 $ Gains realized on currency hedge and commodity hedge/economic hedge contracts (57) (46) Other2
(14) (16)
| By-product credits | (17) | (18) | |
| Copper credits | (113) | (129) | |
| Cash operating costs, net basis | 392 | 272 | |
| Royalties | 40 | 36 | |
| Net cash costs1 | 432 | 308 | |
| Copper credits | 113 | 129 | |
| Total cash costs1 | 545 | 437 |
D Depreciation i ti 178 178 142 Other2 14 16 737 $ Total production costs $
Total Copper Production Costs ($/lb) Three months ended March 31, (Unaudited) 2012 2011 2.08 $ 1.25 C1 cash costs $ Depreciation 0.46 0.24 Other4 0.13 (0.03) C3 fully allocated costs $ 2.67 $ 1.46
1 Total cash costs, net cash costs, C1 cash costs and C3 fully allocated costs are non-GAAP financial performance measures with no standard meaning under IFRS.
See page 37 of the Company's MD&A.
2 Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
3 Figures relating to African Barrick Gold are presented on a 73.9% basis, which reflects our equity share of production.
4 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound on page 38 of the Company's MD&A.
BARRICK FIRST QUARTER 2012 9 9 SUMMARY INFORMATION
Consolidated Statements of Income
Barrick Gold Corporation Three months ended (in millions of United States dollars, except per share data) (Unaudited) March 31,
Revenue (notes 4 and 5) $ 3,644 $ 3,087 Costs and expenses
| Cost of sales (notes 4 and 6) | 1,770 | 1,354 |
| Corporate administration | 48 | 42 |
| Exploration and evaluation (note 7) | 96 | 65 |
| Other expense (note 9A) | 94 | 130 |
| Impairment charges (note 9B) | 94 | - |
2,102 1,591
| Other income (note 9C) | 41 | 72 |
| Income (loss) from equity investees (note 13) | (4) | 1 |
| Gain (loss) on non-hedge derivatives (note 17D) | 34 | (31) |
| Income before finance items and income taxes | 1,613 | 1,538 |
Finance items (note 10)
| Finance income | 3 | 3 |
| Finance costs | (48) | (32) |
| Income before income taxes | 1,568 | 1,509 |
| Income tax expense (note 11) | (529) | (494) |
1,039 $ 1,015 Net income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 1,029 $ 1,001 Non-controlling interests (note 21) $ 10 $
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 8)
Net income Basic $ 1.03 $ 1.00 Diluted $ 1.03 $ 1.00
The notes to these unaudited interim consolidated financial statements, which are contained in the First Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK FIRST QUARTER 2012 10 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Comprehensive Income
Three months ended Barrick Gold Corporation (in millions of United States dollars) (Unaudited) March 31,
Net income $ 1,039 $ 1,015 Other comprehensive income, net of taxes
| Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $nil, $4 | 2 | 10 |
| Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax $2, $31 | (15) | 142 |
| Realized gains on derivatives designated as cash flow hedges, net of tax $29, $16 | (80) | (73) |
| Currency translation adjustments, net of tax $nil, $nil | 14 | 28 |
| Total other comprehensive income (loss) | (79) | 107 |
960 $ 1,122 Total comprehensive income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 950 $ 1,108 Non-controlling interests $ 10 $
The notes to these unaudited interim consolidated financial statements, which are contained in the First Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK FIRST QUARTER 2012 11 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Cash Flow
Barrick Gold Corporation Three months ended March 31, (in millions of United States dollars) (Unaudited)
2012 2011 OPERATING ACTIVITIES 1,039 $ 1,015 Net income $ Adjusted for the following items:
| Depreciation | 394 | 304 |
| Impairment charges (note 9B) | 94 | - |
| Income tax expense (note 11) | 529 | 494 |
| Increase in inventory | (212) | (56) |
| (Gain) loss on non-hedge derivatives | (34) | 31 |
| (Gain) on sale of long-lived assets/investments | (10) | (70) |
| Other (note 12A) | (146) | 29 |
| Operating cash flows before interest and income taxes | 1,654 | 1,747 |
| Gross interest paid | (21) | (20) |
| Income taxes paid | (361) | (288) |
| Net cash provided by operating activities | 1,272 | 1,439 |
INVESTING ACTIVITIES Property, plant and equipment
| Capital expenditures (note 4) | (1,315) | (1,071) |
| Sales proceeds | - | 30 |
| Acquisitions (note 3) | - | (25) |
Investments
| Purchases | - | (7) |
| Sales | 37 | 20 |
| Other investing activities (note 12B) | (55) | (14) |
| Net cash used in investing activities | (1,333) | (1,067) |
FINANCING ACTIVITIES Proceeds on exercise of stock options 4 21 Long-term debt
| Proceeds | - | 159 |
| Repayments | (7) | (2) |
| Dividends | (150) | (120) |
| Funding from non-controlling interests | 140 | 57 |
| Other financing activities (note 12C) | (14) | (15) |
| Net cash provided by (used in) financing activities | (27) | 100 |
| Effect of exchange rate changes on cash and equivalents | 8 | 3 |
| Net increase (decrease) in cash and equivalents | (80) | 475 |
| Cash and equivalents at beginning of period(note 17A) | 2,745 | 3,968 |
Cash and equivalents at end of period (note 17A) $ 2,665 $ 4,443
The notes to these unaudited interim consolidated financial statements, which are contained in the First Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK FIRST QUARTER 2012 12 FINANCIAL STATEMENTS (UNAUDITED)