Barrick Gold Production Increase To 1.15 Million Ounces

TORONTO — Barrick Gold Corporation reported third quarter results for the three-month period ending September 30, 2018. Gold production increased to 1.15 million ounces in the third quarter, while cost of sales on a per ounce basis was approximately four percent lower than the second quarter of 2018. All-in sustaining costs and cash costs were down by roughly eight percent and three percent, respectively, over the same period. Third quarter operating cash flow of $706 million, and free cash flow of $319 million, was significantly higher than the second quarter of 2018, driven by higher production and lower costs. Copper production and costs also improved in the third quarter, as expected. The Company remains on track to meet its full-year gold and copper production guidance.

During the third quarter, Barrick and Randgold Resources Ltd. announced a transformational all-share merger that will create an industry-leading gold company powered by a common vision of long-term value creation. The combined company will have the largest portfolio of tier one gold assets 6 in the industry, including five of the world’s top 10 tier one gold mines, and two potential tier one mines under development. With John Thornton as Executive Chairman, and Mark Bristow as President and CEO, the combined company will be led by a proven management team of owners with a successful track record in both complex and established jurisdictions. Superior operating metrics, including the highest adjusted EBITDA margin and the lowest total cash cost position among senior gold peers, will support sustainable investment in growth and shareholder returns.

Since the proposed merger was announced, Barrick and Randgold shares have risen by 25 percent and 28 percent, respectively, creating $4.8 billion in combined market value. Over the same period, the senior gold peers9 have risen by an average of approximately three percent.10 A special meeting of Barrick shareholders will be held on November 5 to approve the issuance of Barrick common shares in connection with the merger, as well as to approve the continuance of Barrick to the Province of British Columbia. Leading independent proxy advisory firms Institutional Shareholder Services and Glass Lewis have recommended that shareholders of both companies vote in favor of the proposed merger

The Company reported a net loss of $412 million in the third quarter, and adjusted net earnings1 of $89 million. The net loss primarily reflects a $405 million impairment charge at the Lagunas Norte mine in Peru. Lower adjusted net earnings compared to the prior-year period primarily reflect lower realized gold and copper prices11, increased direct mining costs primarily due to higher fuel consumption and prices, and planned maintenance activities at Pueblo Viejo during the third quarter. These declines were partially offset by insurance proceeds associated with the KCGM pit wall incident, a reduction in general and administrative expenses, and lower depreciation expense.

Significant adjusting items (pre-tax and non-controlling interest effects) in the third quarter of 2018 include: $431 million in net impairment charges primarily related to the asset impairment of Lagunas Norte; $62 million in foreign currency translation losses primarily related to the significant weakening of the Argentine peso; and $68 million in other expense adjustments, mainly relating to debt extinguishment costs of $29 million and the settlement of a supplier contract dispute of $27 million inherited as part of the Equinox acquisition in 2011.

Operating cash flow increased to $706 million, compared to $532 million in the third quarter of 2017, primarily due to a favorable change in working capital, and a decrease in interest expense as a result of debt reduction activities. This was partially offset by lower realized gold and copper prices.11 Stronger operating cash flow drove free cash flow of $319 million—a 42 percent increase compared to the prior-year period.

The company’s address is 161 Bay Street, Suite 3700, Toronto, ON M5J 2S1, (416) 861-9911, fax: (416) 861-2492, email: [email protected].