Barrick Reports Second Quarter 2014 Results

Marketwired

TORONTO, ONTARIO--(Marketwired - Jul 30, 2014) - Barrick Gold Corporation (ABX)(ABX.TO) (Barrick or the company) today reported a second quarter net loss of $269 million ($0.23 per share). Adjusted net earnings of $159 million ($0.14 per share) include an impairment charge of $514 million related to the Jabal Sayid copper project. Operating cash flow and adjusted operating cash flow was $488 million.

OPERATING HIGHLIGHTS AND GUIDANCE
Second Quarter Revised Previous
Gold 2014 2014 Guidance 2014 Guidance
Production (000s of ounces) 1,485 6,000-6,500
All-in sustaining costs ($ per ounce) 865 900-940 920-980
Adjusted operating costs ($ per ounce) 594 580-630 590-640
Copper
Production (millions of pounds) 67 410-440
C1 cash costs ($ per pound) 2.04 1.90-2.10
TOTAL CAPITAL EXPENDITURES ($ millions) 502 2,200-2,500 2,400-2,700

"Second quarter all-in sustaining costs of $865 per ounce in a lower production quarter clearly demonstrate our ongoing and relentless focus on company-wide cost management," said outgoing President and CEO, Jamie Sokalsky. "The commitment by our mine managers to cost reduction and capital efficiency has allowed us to lower our mid-year operating and capital cost guidance for the second year in a row."

"Going forward, we will build on the momentum we have today," said Co-President Kelvin Dushnisky. "Barrick will continue to focus on maximizing free cash flow and risk-adjusted returns, with a more nimble and entrepreneurial structure focused on developing internal and external partnerships that reflect the original DNA of the company."

"Barrick has some of the best assets in the gold industry and our operations are delivering strong results," added Co-President Jim Gowans. "We still see a lot of opportunities to surface additional value and improve efficiency across our portfolio as we pursue true operational excellence."

Operational Excellence is a Top Priority

  • Reduced 2014 all-in sustaining cost (AISC) guidance to $900-$940 per ounce1 and adjusted operating cost guidance to $580-$630 per ounce1
  • Reduced 2014 capital expenditure guidance range by $200 million to $2.2-$2.5 billion from $2.4-$2.7 billion
  • Maintaining 2014 gold production guidance of 6.0-6.5 million ounces
  • Copper guidance unchanged at 410-440 million pounds and C1 cash costs of $1.90-$2.10 per pound1
  • Five cornerstone mines produced 0.896 million ounces of gold at average AISC of $730 per ounce in the second quarter; these mines are anticipated to contribute about 60 percent of total production in 2014 at average AISC of $750-$800 per ounce

Progress on Portfolio Optimization

  • Since 2012, reduced the number of mines from 27 to 19 and divested non-core assets for proceeds in excess of $1.3 billion, the majority of which has been used to reduce debt
  • Ongoing process to further optimize the portfolio and reduce costs will focus on the delta between current and optimal performance and determine the quickest way to close this gap
  • In July 2014, reached an agreement to form a 50/50 joint venture with a local partner, Saudi Arabian Mining Company (Ma'aden), to operate the Jabal Sayid copper project and advance production from this first quartile cost operation

Improving Financial Flexibility

  • Increasing cash flow generation through capital and operating cost reductions
  • Cash and cash equivalents of $2.5 billion at June 30, 2014
  • Operating cash flow of $488 million in the second quarter of 2014
  • $4.0 billion available under undrawn credit facility
  • $0.3 billion of debt maturing through 2015 and approximately $1 billion due through 2017

New Executive Management Structure to Accelerate Initiatives and Foster Partnership Culture

  • Unveiled an executive management structure to respond to the distinct demands and challenges of the mining industry in today's environment
  • Structure places a greater emphasis on operational excellence, and acceleration of portfolio optimization and cost reduction initiatives, while fostering a partnership culture
  • Two Co-Presidents appointed to execute on operating plans and strategic priorities: Kelvin Dushnisky, formerly Senior Executive Vice President responsible for Corporate and Government Affairs and Chairman of African Barrick Gold plc, and Jim Gowans, formerly Executive Vice President and Chief Operating Officer
  • Emphasizes the critical importance of joint responsibility and accountability for the management of operations and Barrick's key relationships with host governments and local communities that afford the company its license to operate; the Co-Presidents are responsible for the seamless execution of both functions at all times
  • Ammar Al-Joundi, formerly Executive Vice President and Chief Financial Officer, has been promoted to Senior Executive Vice President and Chief Financial Officer, and will work with the Chairman on the development and execution of strategy
  • Darian Rich, formerly Senior Vice President, Human Resources, has been promoted to Executive Vice President, Talent Management, reflecting the critical requirement that any company seeking to be the leader in its field must attract, retain and develop exceptional people
  • Current President and Chief Executive Officer Jamie Sokalsky to step down effective September 15, 2014

Two New Independent Directors Appointed

  • The Board of Directors has appointed Mr. J. Michael Evans, former Vice Chairman of Goldman Sachs and Mr. Brian Greenspun, former Chairman and CEO of Greenspun Media Group and a prominent Nevada business leader, to serve as independent directors on Barrick's Board. See the Appendix on page 8 for additional biographical details.

FINANCIAL DISCUSSION

Second quarter 2014 adjusted net earnings were $159 million ($0.14 per share)2 compared to $663 million ($0.66 per share) in the prior year period. The decrease was primarily due to lower realized gold and copper prices and lower gold and copper sales volumes. The net loss for the second quarter was $269 million ($0.23 per share) compared to a net loss of $8.56 billion ($8.55 per share) in the prior year quarter.

Significant adjusting items for the quarter include:

  • $514 million impairment charge relating to the Jabal Sayid project, consisting of goodwill and asset impairment charges of $316 million and $198 million, respectively
  • $34 million in unrealized gains on non-hedge derivative instruments
  • $24 million in gains on sale of assets
  • $31 million in unrealized foreign currency translation losses

Second quarter operating cash flow of $488 million compares to $907 million in the prior year period. The decrease primarily reflects lower gross margin. Adjusted operating cash flow of $488 million2 compares to $815 million in the prior year period.

GOLDRUSH AND OTHER OPPORTUNITIES IN NEVADA

Barrick continues to focus its exploration and growth efforts on Nevada. It is one of the most stable jurisdictions in the world and the company has a strong track record of proving up reserves in the region. Approximately 50 percent of Barrick's 2014 exploration budget3 is allocated to Nevada with a large majority to be used to advance Goldrush, the only significant green-field discovery by a major gold producer in the past five years. Beyond Goldrush, Barrick has several other growth opportunities and projects in Nevada near its top tier mines, including Cortez and Goldstrike, with the potential to exceed company risk-adjusted return hurdles.

The Goldrush project is located about six kilometers from the Cortez mine. It is currently in the pre-feasibility stage and the study remains on schedule for completion in mid-2015. The company is evaluating a number of development options, including underground mining or a combination of underground and open pit mining. Infill drilling is confirming continuity of high grade mineralization and supporting an underground mining scenario. During the second quarter, Barrick submitted a permit application for an exploration decline, which will help to better define the existing resource and allow the company to test for additional mineralization beyond the northern end of the deposit.

At Cortez, drilling in the Lower Zone is in the final stages of a program to upgrade and expand the resources. The Lower Zone is characterized by strong and continuous ore zones. A pre-feasibility study to evaluate deeper mining below the currently permitted level is expected to be completed by late 2015. Below this level, the Lower Zone is mostly oxide and higher grade than the zones above. Drilling has yet to determine the limits of the Lower Zone and recent drilling results have met or exceeded expectations. Based on these results, the Lower Zone exploration drift will be extended another 500 feet to the south in early 2015 to enable further step-out drilling.

During the second quarter, an Environmental Impact Assessment and Plan of Operations were approved for the 60-percent owned South Arturo project, another near-mine discovery which is located approximately eight kilometers northwest of Goldstrike. South Arturo has 1.7 million ounces4 in reserves, 2.4 million ounces4 of measured and indicated resources and 0.4 million ounces4 of inferred resources (100 percent basis). Barrick plans to start development in late 2015 and mine the high grade, high return portion of the resource (approximately 0.44 million ounces on a 100 percent basis) in 2016 and 2017. The bulk of the ore will be processed through Goldstrike's refractory facilities. Due to its high grade, near surface nature, the project is expected to have lower capital development and operating costs than Goldstrike.

Turquoise Ridge contains over 6.7 million ounces (100 percent basis) in reserves at an average grade of 0.51 ounces per ton, and is the highest reserve grade deposit in the company's operating portfolio. The operation is currently restricted by haulage and ventilation constraints. One option being considered is an additional shaft to reduce haulage distances. This could increase production by 75 percent for five to eight years. A pre-feasibility study on this scenario is expected to be completed in late 2014.

PASCUA-LAMA RAMP-DOWN COMPLETE

During the fourth quarter of 2013, Barrick announced the temporary suspension of construction at Pascua-Lama, except for activities required for environmental and regulatory compliance. The ramp-down process has been completed on schedule and budget and the mine is now on care and maintenance. The company expects to incur costs of approximately $300 million5 this year, in-line with original guidance, related to the ramp-down, care and maintenance activities and social and environmental obligations.

A decision to restart development will depend on improved economics and reduced uncertainty related to legal and regulatory requirements. To improve execution and cost control, remaining development will take place in distinct stages with specific work programs and budgets. Barrick continues to explore opportunities to improve the project's risk-adjusted returns, including strategic partnerships or royalty and other income streaming agreements.

During the second quarter, Barrick signed a Memorandum of Understanding (MoU) with a group of 15 Diaguita indigenous communities and associations in Chile's Huasco province. The MoU marks a first step in establishing dialogue and working to build trust with members of this important stakeholder group. As part of the MoU, Barrick will make technical and environmental information about the Pascua-Lama project available to the communities and provide financial resources and materials required to support analysis of this information.

OPERATING RESULTS DISCUSSION

Cortez

The Cortez mine produced 0.22 million ounces at AISC of $754 per ounce in the second quarter. Production was impacted by negative grade reconciliations from mining in the GAP area; however, this shortfall is expected to be partially recovered in the second half of the year with a contribution of higher grade ounces from the Cortez Hills open pit. As a result, 2014 production is expected to be at the low end of the guidance range of 0.925-0.975 million ounces and AISC are expected to be at the high end of the range of $750-$780 per ounce.

Goldstrike

Goldstrike produced 0.21 million ounces in the second quarter at AISC of $886 per ounce. Costs benefited from higher than expected production on higher grades and recoveries from the open pit operation, and lower capital stripping related to ongoing optimization of the mine plan. The autoclave facility is undergoing modifications that will enable Goldstrike to accelerate the cash flow from about 4.0 million stockpiled ounces through the addition of a patented thiosulfate process. The modified autoclaves are forecast to contribute an average of 0.350-0.450 million ounces of annual production at a similar AISC to the overall operation in the first full five years following implementation of this process. First production is on track for the fourth quarter of 2014. Production at Goldstrike for 2014 is expected to be at the high end of the guidance range of 0.865-0.915 million ounces and AISC at the low end of the range of $920-$950 per ounce. In 2015, production is expected to exceed 1.0 million ounces6 with contributions from the modified autoclaves.

Pueblo Viejo

Barrick's 60 percent share of production from Pueblo Viejo in the second quarter was 0.16 million ounces at AISC of $587 per ounce. The autoclaves have achieved targeted and sustainable run rates but will undergo some planned downtime related to scheduled maintenance in the second half of the year. Production for 2014 is expected to be in the range of 0.600-0.700 million ounces and AISC to be at the high end of the range of $510-$610 per ounce as a result of higher sustaining capital expenditures, primarily due to an increase in capitalized stripping costs.

Lagunas Norte

Lagunas Norte produced 0.12 million ounces at AISC of $593 per ounce in the second quarter. Production was impacted by a construction delay on the new Phase 5 area of the leach pad, which resulted in ore being placed at higher levels of the existing leach pad. Higher grades are anticipated in the second half of the year, as well as faster recoveries from the new leach pad area which is expected to be in operation in the third quarter. Production for 2014 is expected to be at high end of the guidance range of 0.570-0.610 million ounces and AISC at the low end of the range of $640-$680 per ounce.

Veladero

The Veladero mine had a strong quarter, producing 0.19 million ounces at AISC of $740 per ounce. Costs benefited from higher silver credits in the first half of the year. AISC are expected to be higher in the second half of the year primarily due to the timing of sustaining capital expenditures and also from lower silver credits as ore will be sourced mainly from a different pit. Production in 2014 is anticipated to be at the high end of the guidance range of 0.650-0.700 million ounces and AISC at the low end of the range of $940-$990 per ounce.

North America Portfolio

Barrick's other North American mines consist of Bald Mountain, Round Mountain, Turquoise Ridge, Golden Sunlight, Ruby Hill and Hemlo. This segment produced 0.21 million ounces in the second quarter at AISC of $973 per ounce and is anticipated to produce 0.795-0.845 million ounces in 2014 at the low end of the AISC guidance range of $1,075-$1,100 per ounce.

Australia Pacific

Australia Pacific produced 0.27 million ounces at AISC of $856 per ounce in the second quarter. The Porgera mine contributed 0.12 million ounces at AISC of $959 per ounce. The KCGM and Cowal operations contributed strong results on higher grades and recoveries, and higher throughput, respectively. Production for Australia Pacific in 2014 is forecast at the high end of the guidance range of 1.000-1.080 million ounces and AISC at the low end of the range of $1,050-$1,100 per ounce.

African Barrick Gold (ABG)

Second quarter attributable production from ABG was 0.11 million ounces at AISC of $1,105 per ounce, demonstrating continued operational improvements. Barrick's share of 2014 production from ABG is anticipated to be above the high end of the guidance range of 0.430-0.460 million ounces and AISC at the low end of the range of $1,100-$1,175 per ounce.

Global Copper

Copper production in the second quarter was 67 million pounds at C1 cash costs of $2.04 per pound. Lumwana contributed 12 million pounds at C1 cash costs of $2.49 per pound, reflecting a partial collapse of the main conveyor in mid-April which suspended processing activities. The conveyor was repaired and normal plant operations resumed in July, ahead of schedule. The Zaldívar mine produced 55 million pounds in the second quarter at C1 cash costs of $1.83 per pound.

Copper guidance for 2014 continues to be expected at 410-440 million pounds and C1 cash costs of $1.90-$2.10 per pound.

In July, Barrick reached an agreement to form a joint venture with Saudi Arabian Mining Company (Ma'aden) to operate the Jabal Sayid copper project. The transaction is expected to close in the fourth quarter of 2014. First production is expected in late 2015 with average annual output of 100-130 million pounds of copper in concentrate at first quartile C1 cash costs during its first full five years of operation.

APPENDIX - Board Appointment Details

Mr. J. Michael Evans, New York, New York

J. Michael Evans served as Vice Chairman of Goldman Sachs from February 2008 until his retirement in December 2013. Mr. Evans was chairman of the firm's Asia operations from 2004 to 2013 and was the global head of Growth Markets from January 2011 to December 2013. He joined Goldman Sachs in 1993 and held various leadership positions within the firm's securities business, including global head of equity capital markets. Mr. Evans is also a nominee to the Board of Directors of Alibaba Group Holding Ltd., the board of which will be established in conjunction with the company's initial public offering. He was born in Toronto, Canada and received a bachelor's degree in politics from Princeton University in 1981. Mr. Evans won a gold medal for Canada at the 1984 summer Olympics in men's eight rowing.

Mr. Brian Greenspun, Las Vegas, Nevada

Brian Greenspun is a prominent Nevada businessman with strong relationships across the state's business and political community. As Chairman and CEO of the Greenspun Media Group from 1989 to 2010, he built a small family newspaper business into a diversified group of companies spanning publishing, cable television, internet and real estate. He is also Publisher and Editor of the Las Vegas Sun and an active supporter of youth programs and public education in Nevada. Mr. Greenspun was appointed by President Bill Clinton to the White House Commission on Small Business in the early 1990s. He was also a member of the Board of Directors of the Tribune Company from 2009 to 2012. Mr. Greenspun holds both a B.A. and a Law degree from Georgetown University.

1 All-in sustaining costs per ounce, adjusted operating costs per ounce, and C1 cash costs per pound are non-GAAP financial performance measures with no standardized definition under IFRS. See pages 46-51 of Barrick's Second Quarter 2014 Report.

2 Adjusted net earnings, adjusted net earnings per share and adjusted operating cash flow are non-GAAP financial performance measures with no standardized definition under IFRS. See pages 46-51 of Barrick's Second Quarter 2014 Report.

3 Barrick's exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick.

4 For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 27-37 of Barrick's 2013 Form 40-F.

5 About 25 percent is expected to be capitalized. Actual expenditures will be dependent on a number of factors, including environmental and regulatory requirements.

6 Actual results may vary depending on how the ramp-up of the thiosulfate project progresses.

Key Statistics
Barrick Gold Corporation Three months ended Six months ended
(in United States dollars) June 30, June 30,
2014 2013 2014 2013
Operating Results
Gold production (thousands of ounces)1 1,485 1,811 3,073 3,608
Gold sold (thousands of ounces)1 1,516 1,815 3,134 3,562
Per ounce data
Average spot gold price $ 1,288 $ 1,415 $ 1,291 $ 1,523
Average realized gold price2 1,289 1,411 1,287 1,518
Adjusted operating costs2 594 552 588 558
All-in sustaining costs2 865 910 849 922
All-in costs2 945 1,267 940 1,314
Adjusted operating costs (on a co-product basis)2 615 579 610 586
All-in sustaining costs (on a co-product basis)2 886 937 871 950
All-in costs (on a co-product basis)2 966 1,294 962 1,342
Copper production (millions of pounds) 67 134 171 261
Copper sold (millions of pounds) 73 135 184 250
Per pound data
Average spot copper price $ 3.08 $ 3.24 $ 3.14 $ 3.42
Average realized copper price2 3.17 3.28 3.08 3.41
C1 cash costs2 2.04 1.75 2.08 2.08
Depreciation3 0.37 0.42 0.37 0.38
Other4 0.11 0.10 0.14 0.15
C3 fully allocated costs2 2.52 2.27 2.59 2.61
Financial Results (millions)
Revenues $ 2,432 $ 3,201 $ 5,064 $ 6,600
Net loss5 (269 ) (8,555 ) (181 ) (7,708 )
Adjusted net earnings2 159 663 397 1,586
Operating cash flow 488 907 1,073 1,992
Adjusted operating cash flow2 488 815 1,073 1,974
Per Share Data (dollars)
Net loss (basic) (0.23 ) (8.55 ) (0.16 ) (7.70 )
Adjusted net earnings (basic)2 0.14 0.66 0.34 1.58
Net loss (diluted) (0.23 ) (8.55 ) (0.16 ) (7.70 )
Weighted average basic common shares (millions) 1,165 1,001 1,165 1,001
Weighted average diluted common shares (millions)6 1,165 1,001 1,165 1,001
As at As at
June 30, December 31,
2014 2013
Financial Position (millions)
Cash and equivalents $ 2,549 $ 2,404
Non-cash working capital 3,492 3,060
1 Production includes African Barrick Gold ("ABG") on a 73.9% basis until February 28, 2014 and a 63.9% basis thereafter and Pueblo Viejo on a 60% basis, both of which reflect our equity share of production. Also includes production from Yilgarn South up to September 30, 2013, Plutonic up to January 31, 2014, Kanowna up to March 1, 2014 and Marigold up to April 4, 2014, the effective dates of sale of these assets. Sales include our equity share of gold sales from ABG and Pueblo Viejo.
2 Realized price, adjusted operating costs, all-in sustaining costs, all-in costs, adjusted operating costs (on a co-product basis), all-in sustaining costs (on a co-product basis), all-in costs (on a co-product basis), C1 cash costs, C3 fully allocated costs, adjusted net earnings and adjusted operating cash flow are non-gaap financial performance measures with no standard definition under IFRS. Refer to the Non-GAAP Financial Performance Measures section of the Company's MD&A.
3 Represents equity depreciation expense divided by equity pounds of copper sold.
4 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound in the Non-GAAP Financial Performance Measures section of the Company's MD&A.
5 Net loss represents net loss attributable to the equity holders of the Company.
6 Fully diluted includes dilutive effect of stock options.
Production and Cost Summary
Gold Production (attributable ounces) (000's) All-in sustaining costs5 ($/oz)
Three months ended Six months ended Three months ended Six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013 2014 2013 2014 2013
Gold
Goldstrike 214 187 476 417 $ 886 $ 1,226 $ 808 $ 994
Cortez 217 417 444 760 754 376 706 392
Pueblo Viejo 161 122 320 218 587 635 587 725
Lagunas Norte 115 131 249 276 593 663 552 604
Veladero 189 140 347 345 740 768 768 724
North America Portfolio1 205 202 428 405 973 1,258 963 1,253
Australia Pacific2 268 465 573 912 856 1,016 850 1,046
African Barrick Gold3 114 122 232 230 1,105 1,404 1,118 1,483
Other4 2 25 4 45 2,794 1,383 2,266 1,383
Total 1,485 1,811 3,073 3,608 $ 865 $ 910 $ 849 $ 922
Copper Production (attributable pounds) (millions) C1 Cash Costs5 ($/lb)
Three months ended Six months ended Three months ended Six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013 2014 2013 2014 2013
Total 67 134 171 261 $ 2.04 $ 1.75 $ 2.08 $ 2.08
Total Gold Production Costs ($/oz)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
Direct mining costs before impact of hedges at market foreign exchange rates $ 600 $ 602 $ 595 $ 608
Gains realized on currency hedge and commodity hedge/economic hedge contracts (23 ) (42 ) (21 ) (46 )
Other6 - (14 ) - (14 )
By-product credits (21 ) (27 ) (22 ) (28 )
Royalties 38 33 36 38
Adjusted operating costs5 594 552 588 558
Depreciation 202 210 199 203
Other6 - 14 - 14
Total production costs $ 796 $ 776 $ 787 $ 775
Adjusted operating costs5 $ 594 $ 552 $ 588 $ 558
General & administrative costs 43 35 49 41
Rehabilitation - accretion and amortization (operating sites) 21 19 21 22
Mine on-site exploration and evaluation costs 4 9 3 8
Mine development expenditures 117 173 117 164
Sustaining capital expenditures 86 122 71 129
All-in sustaining costs5 $ 865 $ 910 $ 849 $ 922
All-in costs5 $ 945 $ 1,267 $ 940 $ 1,314
Total Copper Production Costs ($/lb)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
C1 cash costs5 $ 2.04 $ 1.75 $ 2.08 $ 2.08
Depreciation7 0.37 0.42 0.37 0.38
Other8 0.11 0.10 0.14 0.15
C3 fully allocated costs5 $ 2.52 $ 2.27 $ 2.59 $ 2.61
1 Includes production from Marigold up to April 4, 2014, the effective date of sale of this asset.
2 Includes production from Yilgarn South up to September 30, 2013, Plutonic up to January 31, 2014 and Kanowna up to March 1, 2014, the effective dates of sale of these assets.
3 Figures relating to African Barrick Gold are presented on a 73.9% basis until February 28, 2014 and a 63.9% basis thereafter, which reflects our equity share of production.
4 Production and all-in sustaining costs include Pierina.
5 Adjusted operating costs, all-in sustaining costs, all-in costs, C1 cash costs and C3 fully allocated costs are non-GAAP financial performance measures with no standard meaning under IFRS. Refer to the Non-GAAP Financial Performance Measures section of the Company's MD&A.
6 Represents the Barrick Energy gross margin divided by equity ounces of gold sold. Barrick Energy was divested in the third quarter of 2013.
7 Represents equity depreciation expense divided by equity pounds of copper sold.
8 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound in the Non-GAAP Financial Performance Measures section of the Company's MD&A.
Consolidated Statements of Income
Barrick Gold Corporation Three months ended Six months ended
(in millions of United States dollars, except per share data) (Unaudited) June 30, June 30,
2014 2013 2014 2013
Revenue (notes 5 and 6) $ 2,432 $ 3,201 $ 5,064 $ 6,600
Costs and expenses (income)
Cost of sales (notes 5 and 7) 1,590 1,832 3,282 3,642
General and administrative expenses (note 11) 82 99 185 197
Exploration and evaluation (note 8) 53 58 85 106
Other expense (income) (note 10A) 142 148 342 237
Impairment charges (note 10B) 512 9,327 524 9,332
Gain on non-hedge derivatives (note 19D) (44 ) (13 ) (65 ) (55 )
Income (loss) before finance items and income taxes 97 (8,250 ) 711 (6,859 )
Finance items
Finance income 3 2 6 5
Finance costs (note 12) (200 ) (161 ) (401 ) (269 )
(Loss) income from continuing operations before income taxes (100 ) (8,409 ) 316 (7,123 )
Income tax (expense) recovery (note 13) (123 ) 213 (412 ) (220 )
Loss from continuing operations (223 ) (8,196 ) (96 ) (7,343 )
Loss from discontinued operations - (505 ) - (497 )
Net loss $ (223 ) $ (8,701 ) $ (96 ) $ (7,840 )
Attributable to:
Equity holders of Barrick Gold Corporation $ (269 ) $ (8,555 ) $ (181 ) $ (7,708 )
Non-controlling interests (note 22) $ 46 $ (146 ) $ 85 $ (132 )
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 9)
Loss from continuing operations
Basic $ (0.23 ) $ (8.04 ) $ (0.16 ) $ (7.20 )
Diluted $ (0.23 ) $ (8.04 ) $ (0.16 ) $ (7.20 )
Loss from discontinued operations
Basic $ - $ (0.51 ) $ - $ (0.50 )
Diluted $ - $ (0.51 ) $ - $ (0.50 )
Net loss
Basic $ (0.23 ) $ (8.55 ) $ (0.16 ) $ (7.70 )
Diluted $ (0.23 ) $ (8.55 ) $ (0.16 ) $ (7.70 )
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
Barrick Gold Corporation Three months ended Six months ended
(in millions of United States dollars) (Unaudited) June 30, June 30,
2014 2013 2014 2013
Net loss $ (223 ) $ (8,701 ) $ (96 ) $ (7,840 )
Other comprehensive income (loss), net of taxes
Items that may be reclassified subsequently to profit or loss:
Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $nil, $2, nil and $4 5 (18 ) 22 (26 )
Realized (gains) losses and impairments on AFS financial securities, net of tax $nil, ($2), $nil and ($2) 17 13 23 11
Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax ($3), ($12), $1 and ($15) 13 (85 ) 28 (55 )
Realized (gains) losses on derivatives designated as cash flow hedges, net of tax $1, $23, $1 and $41 (31 ) (107 ) (54 ) (182 )
Currency translation adjustments, net of tax $nil, $nil, $nil and $nil 4 (77 ) 7 (98 )
Total other comprehensive income (loss) 8 (274 ) 26 (350 )
Total comprehensive loss $ (215 ) $ (8,975 ) $ (70 ) $ (8,190 )
Attributable to:
Equity holders of Barrick Gold Corporation
Continuing operations $ (261 ) $ (8,292 ) $ (155 ) $ (7,510 )
Discontinued operations $ - $ (537 ) $ - $ (548 )
Non-controlling interests $ 46 $ (146 ) $ 85 $ (132 )
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flow
Barrick Gold Corporation Three months ended Six months ended
(in millions of United States dollars) (Unaudited) June 30, June 30,
2014 2013 2014 2013
OPERATING ACTIVITIES
Net loss from continuing operations $ (223 ) $ (8,196 ) $ (96 ) $ (7,343 )
Adjusted for the following items:
Depreciation 400 453 802 849
Finance costs 200 161 401 269
Impairment charges (note 10B) 512 9,327 524 9,332
Income tax expense (recovery) (note 13) 123 (213 ) 412 220
(Increase) decrease in inventory (37 ) (69 ) 5 (233 )
Proceeds from settlement of hedge contracts - 219 - 219
Gain on non-hedge derivatives (44 ) (13 ) (65 ) (55 )
Gain on sale of long-lived assets/investments (22 ) (1 ) (23 ) (9 )
Other operating activities (note 14A) 16 (300 ) (225 ) (465 )
Operating cash flows before interest and income taxes 925 1,368 1,735 2,784
Interest paid (276 ) (170 ) (352 ) (217 )
Income taxes paid (161 ) (306 ) (310 ) (626 )
Net cash provided by operating activities from continuing operations 488 892 1,073 1,941
Net cash provided by operating activities from discontinued operations - 15 - 51
Net cash provided by operating activities 488 907 1,073 1,992
INVESTING ACTIVITIES
Property, plant and equipment
Capital expenditures (note 5) (616 ) (1,552 ) (1,232 ) (2,931 )
Sales proceeds 2 1 37 3
Divestitures 86 - 166 -
Investments sales 27 - 52 18
Other investing activities (note 14B) (39 ) (46 ) (79 ) (131 )
Net cash used in investing activities from continuing operations (540 ) (1,597 ) (1,056 ) (3,041 )
Net cash used in investing activities from discontinued operations - (12 ) - (57 )
Net cash used in investing activities (540 ) (1,609 ) (1,056 ) (3,098 )
FINANCING ACTIVITIES
Proceeds on exercise of stock options - - - 1
Proceeds from divestment of 10% of issued ordinary share capital of ABG - - 186 -
Debt
Proceeds - 3,060 133 5,110
Repayments (18 ) (2,066 ) (93 ) (3,271 )
Dividends (58 ) (200 ) (116 ) (400 )
Funding from non-controlling interests - 19 2 32
Other financing activities (note 14C) - (14 ) - (22 )
Net cash (used in) provided by financing activities from continuing operations (76 ) 799 112 1,450
Net cash used in financing activities from discontinued operations - - - -
Net cash (used in) provided by financing activities (76 ) 799 112 1,450
Effect of exchange rate changes on cash and equivalents 1 (9 ) (4 ) (11 )
Net (decrease) increase in cash and equivalents (127 ) 88 125 333
Cash and equivalents excluding assets classified as held for sale at the beginning of period 2,672 2,342 2,404 2,097
Add: cash and equivalents of assets classified as held for sale at the beginning of period 4 - 20 -
Cash and equivalents at the end of period $ 2,549 $ 2,430 $ 2,549 $ 2,430
Less: cash and equivalents of assets classified as held for sale at the end of period - 8 - 8
Cash and equivalents excluding assets classified as held for sale at the end of period $ 2,549 $ 2,422 $ 2,549 $ 2,422
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Balance Sheets
Barrick Gold Corporation
(in millions of United States dollars) (Unaudited) As at June 30, As at December 31,
2014 2013
ASSETS
Current assets
Cash and equivalents (note 19A) $ 2,549 $ 2,404
Accounts receivable 377 385
Inventories (note 15) 2,644 2,679
Other current assets 386 421
Total current assets (excluding assets classified as held for sale) 5,956 5,889
Assets classified as held for sale 578 323
Total current assets 6,534 6,212
Non-current assets
Equity in investees 28 27
Other investments 103 120
Property, plant and equipment (note 16) 21,377 21,688
Goodwill (note 17) 5,519 5,835
Intangible assets 311 320
Deferred income tax assets 774 501
Non-current portion of inventory (note 15) 1,704 1,679
Other assets 1,085 1,066
Total assets $ 37,435 $ 37,448
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 1,659 $ 2,165
Debt (note 19B) 187 179
Current income tax liabilities 105 75
Other current liabilities 306 303
Total current liabilities (excluding liabilities classified as held for sale) 2,257 2,722
Liabilities classified as held for sale 18 162
Total current liabilities 2,275 2,884
Non-current liabilities
Debt (note 19B) 12,973 12,901
Provisions 2,594 2,428
Deferred income tax liabilities 2,546 2,258
Other liabilities 1,053 976
Total liabilities 21,441 21,447
Equity
Capital stock (note 21) 20,862 20,869
Deficit (7,878 ) (7,581 )
Accumulated other comprehensive loss (43 ) (69 )
Other 321 314
Total equity attributable to Barrick Gold Corporation shareholders 13,262 13,533
Non-controlling interests (note 22) 2,732 2,468
Total equity 15,994 16,001
Contingencies and commitments (notes 15, 16 and 23)
Total liabilities and equity $ 37,435 $ 37,448
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Changes in Equity
Barrick Gold Corporation Attributable to equity holders of the company
(in millions of United States dollars) (Unaudited)Common Shares (in thousands) Capital stock Retained earnings (deficit) Accumulated other comprehensive income (loss)1 Other2 Total equity attributable to shareholders Non-controlling interests Total equity
At January 1, 20141,164,652$20,869 $(7,581)$(69)$314$13,533 $2,468 $16,001
Net (loss) income- - (181) - - (181) 85 (96)
Total other comprehensive income- - - 26 - 26 - 26
Total comprehensive (loss) income- - (181) 26 - (155) 85 (70)
Transactions with owners
Dividends- - (116) - - (116) - (116)
Issued on exercise of stock options18 - - - - - - -
Derecognition of stock option expense- (7) - - - (7) - (7)
Recognized on divestment of 10% of African Barrick Gold- - - - 7 7 177 184
Funding from non-controlling interests- - - - - - 2 2
Total transactions with owners18 (7) (116) - 7 (116) 179 63
At June 30, 20141,164,670$20,862 $(7,878)$(43)$321$13,262 $2,732 $15,994
At January 1, 20131,001,108$17,926 $3,269 $463 $314$21,972 $2,664 $24,636
Net loss- - (7,708) - - (7,708) (132) (7,840)
Total other comprehensive loss- - - (350) - (350) - (350)
Total comprehensive loss- - (7,708) (350) - (8,058) (132) (8,190)
Transactions with owners
Dividends- - (400) - - (400) - (400)
Issued on exercise of stock options44 1 - - - 1 - 1
Recognition of stock option expense- 6 - - - 6 - 6
Funding from non-controlling interests- - - - - - 32 32
Other decrease in non-controlling interests- - - - - - (14) (14)
Total transactions with owners44 7 (400) - - (393) 18 (375)
At June 30, 20131,001,152$17,933 $(4,839)$113 $314$13,521 $2,550 $16,071
1 Includes cumulative translation losses at June 30, 2014: $73 million (June 30, 2013: losses of $85 million).
2 Includes additional paid-in capital as at June 30, 2014: $283 million (December 31, 2013: $276 million; June 30, 2013: $276 million) and convertible borrowings - equity component as at June 30, 2014: $38 million (December 31, 2013: $38 million; June 30, 2013: $38 million).
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2014 available on our website are an integral part of these consolidated financial statements.
CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CST Trust Company
Brookfield Place, TD Canada Trust Tower P.O. Box 700, Postal Station B
Suite 3700 Montreal, Quebec, Canada H3B 3K3
161 Bay Street, P.O. Box 212 or
Toronto, Canada M5J 2S1 American Stock Transfer & Trust Company, LLC
Tel: (416) 861-9911 Fax: (416) 861-0727 6201 - 15 Avenue
Toll-free throughout North America: 1-800-720-7415 Brooklyn, NY 11219
Email: investor@barrick.com Tel: 1-800-387-0825
Website: www.barrick.com Toll-free throughout North America
Fax: 1-888-249-6189
SHARES LISTED Email: inquiries@canstockta.com
ABX - The New York Stock Exchange Website: www.canstockta.com
The Toronto Stock Exchange

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained or incorporated by reference in this Second Quarter Report 2014, 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", "contemplate", "target", "plan", "intend", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the company, 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. 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 and electricity); changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States and other jurisdictions in which the Company does or may carry on business in the future; 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; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; 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 rating;
the impact of inflation; operating or technical difficulties in connection with mining or development activities; the speculative nature of mineral exploration and development; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; 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; our ability to successfully integrate acquisitions or complete divestitures; employee relations; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed company. 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 Second Quarter Report 2014 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 discussion of some of the factors underlying forward-looking statements.

The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact:
INVESTOR CONTACT: Amy Schwalm
Vice President, Investor Relations
(416) 307-7422
aschwalm@barrick.com
MEDIA CONTACT: Andy Lloyd
Vice President, Communications
(416) 307-7414
alloyd@barrick.com

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