Barrick Gold Corporation
Annual Report 2015
Partnership.
Performance.
Value.
www.barrick.com
Barrick Gold Corporation
Head Office:
Brookfield Place
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Canada M5J 2S1
Tel: 416 861-9911
Toll-free throughout North America:
1 800 720-7415
Fax: 416 861-2492
Email: investor@barrick.com
barrick.com
B
a
r
r
i
c
k
G
o
l
d
C
o
r
p
o
r
a
t
i
o
n
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
5
@barrickgold
/barrick.gold.corporation
Our Vision
Scorecard
Our vision is the generation of wealth through responsible
mining—wealth for our owners, our people, and the
countries and communities with which we partner. We aim
to be the leading mining company focused on gold,
growing our cash flow per share by developing and operating
high-quality assets through disciplined allocation of human
and financial capital and operational excellence.
2015 was a watershed
“
year for Barrick in which we
delivered on our promises
and fulfilled our four strategic
priorities. We did what we
said we would do—we streamlined the business,
strengthened the balance sheet, generated free
cash flow, and further focused our portfolio
around our core mines in the Americas. In 2016,
we will continue to build on our achievements
as we focus our efforts on growing free cash
flow through further debt and cost reduction.”
Kelvin Dushnisky, President
Message from the Chairman 4 | Message from the President 8 | Board of Directors 14 | Corporate Governance and Committees
of the Board 15 | Executive Officers and Advisory Boards 16 | Partners 17 | Management’s Discussion and Analysis 18 |
Mineral Reserves and Resources 87 | Financial Statements 99 | Notes to Financial Statements 104 | Shareholder Information 171
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this
Annual Report 2015, 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”, “objective”
“aspiration”, “aim”, “intend”, “project”, “continue”, “budget”,
“estimate”, “potential”, “may”, “will”, “can”, “could”, and similar
expressions identify forward-looking statements. In particular, this
Annual Report 2015 contains forward-looking statements including,
without limitation, with respect to: (i) Barrick’s forward-looking
production guidance; (ii) estimates of future all-in sustaining costs
per ounce/pound, cash costs per ounce and C1 cash costs per pound;
(iii) cash flow forecasts; (iv) projected capital, operating and exploration
expenditures; (v) targeted debt and cost reductions; (vi) mine life and
production rates; (vii) potential mineralization and metal or mineral
recoveries; (viii) Barrick’s Best in Class program (including potential
improvements to financial and operating performance and mine life
that may result from certain Best in Class initiatives); (ix) expectations
regarding future price assumptions, financial performance and other
outlook or guidance; and (x) the estimated timing and conclusions of
technical reports and other studies. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by the company as at the date of this
news release in light of management’s experience and perception of
current conditions and expected developments, are inherently subject
to significant business, economic and competitive uncertainties
and contingencies. Known and unknown factors could cause
actual results to differ materially from those projected in the forward-
looking statements and undue reliance should not be placed on
such statements and information. Such factors include, but are not
limited to: fluctuations in the spot and forward price of gold, copper
or certain other commodities (such as silver, diesel fuel, natural gas
and electricity); the speculative nature of mineral exploration and
development; changes in mineral production performance, exploitation
and exploration successes; risks associated with the fact that certain
Best in Class initiatives are still in the early stages of evaluation and
additional engineering and other analysis is required to fully assess
their impact; diminishing quantities or grades of reserves; increased
costs, delays, suspensions and technical challenges associated with the
construction of capital projects; operating or technical difficulties in
connection with mining or development activities, including disruptions
in the maintenance or provision of required infrastructure and
information technology systems; failure to comply with environmental
and health and safety laws and regulations; timing of receipt of, or
failure to comply with, necessary permits and approvals; uncertainty
whether some or all of the Best in Class initiatives will meet the
company’s capital allocation objectives; 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
n
a
m
x
e
l
P
w
e
h
t
t
a
M
y
h
p
a
r
g
o
t
o
h
P
e
v
i
t
u
c
e
x
E
/
r
e
h
p
o
t
s
i
r
h
C
r
e
t
e
P
y
h
p
a
r
g
o
t
o
h
P
n
o
i
t
a
c
o
L
/
a
d
a
n
a
C
n
o
i
t
a
r
o
p
r
o
C
l
l
i
r
r
e
M
/
.
c
n
I
e
l
b
a
e
v
o
M
/
n
g
i
s
e
D
l
d
n
a
r
B
e
v
O
changes in our credit ratings; the impact of inflation; fluctuations in
the currency markets; changes in U.S. dollar interest rates; risks
arising from holding derivative instruments; changes in national and
local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and practices,
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;
damage to the company’s reputation due to the actual or perceived
occurrence of any number of events, including negative publicity with
respect to the company’s handling of environmental matters or dealings
with community groups, whether true or not; the possibility that
future exploration results will not be consistent with the company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socio-economic studies and investment; risk of loss due to acts of war,
terrorism, sabotage and civil disturbances; litigation; contests over
title to properties, particularly title to undeveloped properties, or over
access to water, power and other required infrastructure; business
opportunities that may be presented to, or pursued by, the company;
our ability to successfully integrate acquisitions or complete divestitures;
employee relations; increased costs and risks related to the potential
impact of climate change; 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 Annual Report 2015 are
qualified by these cautionary statements. Specific reference is made to
the most recent Form 40-F/Annual Information Form on file with the
SEC and Canadian provincial securities regulatory authorities for a more
detailed discussion of some of the factors underlying forward-looking
statements and the risks that may affect Barrick’s ability to achieve the
expectations set forth in the forward-looking statements contained in
this Annual Report 2015.
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.
1234
2015
Target
Implement
decentralized
model
Eliminate
regional layers
2015
Actual
2016
Progress
Target
Revised reporting and
communication lines
to reflect new model
Closed Salt Lake City
office
Implement
Best in Class
initiative
Reduce total debt
by $3b
Reduced total debt
by $3.1b
Reduce total debt
by at least $2b
Streamline
the Business
Strengthen the
Balance Sheet
Maximize Free
Cash Flow
Generate free
cash flow at
$1,100 gold
Generated $0.5b1, 2
of free cash flow
at a realized price
of $1,157
Focus on Best
Assets & Regions
Focus on core
mines in the
Americas
Sold 5 non-core
assets and 50% of
interest in 2 other
non-core mines
Formed 2 joint ventures
Production
(Moz)
AISC1
($/oz)
Cash Costs1
($/oz)
Fatalities
Total Reportable
Injury
Frequency Rate
6.2–6.6
6.123
860–895
600–640
0
0.6
831
596
3
0.5
1. Non-GAAP financial measure—see pages 76– 85 of the 2015 Financial Report.
2. Excludes $610m in proceeds related to the Pueblo Viejo streaming transaction.
3. Met revised guidance of 6.0–6.15 million ounces adjusted for asset sales and a mechanical event at Pueblo Viejo.
Generate
free cash flow at
$1,000 gold
Assess remaining
non-core assets
5.0–5.5
775–825
550–590
0
0.4
S
E
I
T
I
R
O
I
R
P
C
I
G
E
T
A
R
T
S
S
N
O
I
T
A
R
E
P
O
Y
T
E
F
A
S
Barrick Gold Corporation | Annual Report 2015
1
BARRICK AT-A-GLANCE
Golden Sunlight
Hemlo
NEVADA
Goldstrike
Cortez
Turquoise Ridge
Pueblo Viejo
Lagunas Norte
Pierina
Zaldívar
Veladero
2
Barrick Gold Corporation | Annual Report 2015
Americas-focused
Portfolio
Barrick has focused its operations on top-tier mines
in the Americas that will provide a platform for
disciplined growth in the future.
These assets are among the most attractive
in the industry, and contributed 62% of
production and 85% of adjusted EBITDA this
year at an average AISC of $660 per ounce.
Our gold reserves are of equally superior quality.
In 2015, we reported proven and probable reserves of
92 million ounces1—the industry’s largest—with an
average reserve grade of 1.32 grams per tonne.
The average reserve grade of our core mines is even
higher at 1.88 grams per tonne.
Our portfolio also contains a number of the world’s
largest undeveloped gold deposits, which offer
substantial leverage to higher gold prices.
Other
TANZANIA / ACACIA
Acacia (64%)
ZAMBIA
Lumwana (copper)
SAUDI ARABIA
Jabal Sayid JV
(copper, in commissioning)
PAPUA NEW GUINEA
Porgera JV
AUSTRALIA
Kalgoorlie JV
Americas
USA
Goldstrike
Cortez
Turquoise Ridge JV
Golden Sunlight
CANADA
Hemlo
DOMINICAN REPUBLIC
Pueblo Viejo JV
PERU
Lagunas Norte
Pierina (in closure)
CHILE
Zaldívar JV (copper)
ARGENTINA
Veladero
1. Mineral reserves are estimated in accordance with National Instrument 43-101 as
required by Canadian securities regulatory authorities. Complete mineral reserve and
mineral resource data for all mines and projects referenced in this Annual Report,
including tonnes, grades and ounces, can be found on pages 87–94.
Financial Highlights
(In millions of US dollars, except per share data)
2015
2014
2013
(Based on IFRS)
Revenues
Net earnings (loss)
per share
Adjusted net earnings1
per share1
Operating cash flow
Free cash flow1
EBITDA
Adjusted EBITDA1
Cash and equivalents
Dividends paid per share
Annualized dividend per share2
Gold production (000s oz)
Average realized gold price per ounce1
Cash costs per ounce3
All-in sustaining cash costs per ounce
Copper production (Mlbs)
Average realized copper price per pound1
C1 cash costs per pound1
All-in sustaining costs per pound1
Core Mines
$
$
$
$
$
$
$
9,029
(2,838)
(2.44)
344
0.30
2,794
1,081
(710)
3,187
2,455
0.14
0.08
6,117
1,157
596
831
511
2.37
1.73
2.33
$ 10,239
(2,907)
(2.50)
793
0.68
2,296
(136)
(295)
3,811
2,699
0.20
0.20
6,249
1,265
598
864
436
3.03
1.92
2.79
$
$
$
$
$
$
$ 12,527
(10,366)
(10.14)
2,569
2.51
4,239
(1,142)
(7,661)
5,026
2,424
0.50
0.20
7,166
1,407
566
915
539
3.39
1.92
2.74
$
$
$
$
$
$
2015 Production (000s oz)
2015 AISC ($/oz)
2015 EBITDA ($M)4
Goldstrike
Cortez
Veladero
1,053
Goldstrike
999
Cortez
658
603
Goldstrike
Cortez
600
630
602
Veladero
946
Veladero
324
Pueblo Viejo
572 60%
Pueblo Viejo
597
Pueblo Viejo
702
Lagunas Norte
560
Lagunas Norte
509
Lagunas Norte
454
1. Non-GAAP financial measure—see pages 76– 85 of the 2015 Financial Report.
2. Calculation based on annualizing the last dividend paid in the respective year.
3. Unchanged from the measure previously referred to as adjusted operating costs.
4. 100% basis.
Barrick Gold Corporation | Annual Report 2015
3
MESSAGE FROM THE CHAIRMAN
In 1989, Warren Buffett looked back
on a quarter century of investing,
and he asked himself what he had learned.
His most surprising discovery:
“…the overwhelming importance in business of an
unseen force that we might call ‘the institutional
imperative’,” namely, the tendency of companies to
“mindlessly imitate” their peers.
The most successful businesses are also the
most distinctive. They are those that consistently
find a way to resist the institutional imperative and
to set themselves apart. William Thorndike wrote
a compelling book, The Outsiders, which defined
what the best businesses had in common. Based
on research of fifty years of company results, he
found that the most successful businesses and their
leaders all share an “intelligent iconoclasm.” They
are “determinedly different, proudly eccentric”—
but always in thoughtful and highly strategic ways.
These businesses share a common trait: they
maintain their intelligent iconoclasm through a
relentless commitment to a core purpose and
shared values. They have the courage to be
different because they believe in something
greater than themselves.
At Barrick, we find that courage in the pursuit
of our core purpose: to create wealth not just
for our owners, but also for our people and the
communities with which we work.
This model is consistent with history’s most
successful businesses, all of which were effectively
run as partnerships. In the past fifty years, the
leaders who delivered the greatest returns saw their
job, almost exclusively, as allocating capital—both
human and financial. They found the right people to
run the right assets and left it to those managers to
grow free cash flow per share, which the business
leaders then invested to meet rigorous expectations
for returns.
Businesses run as partnerships generate the
greatest sustained returns because they tap the
deepest forces driving the engine of capitalism.
Those in business who claim that what matters
foremost is the gain of owners often justify their
view by pointing to Adam Smith’s theory of the
“invisible hand”: individuals pursuing their own
private interests will, without even intending to,
also promote broader social interests by generating
shared prosperity. Few seem to remember the
wider context of Smith’s theory. Smith observed
that people in commercial society are dramatically
interdependent. Even the making of a laborer’s
coat, he noted, takes the work of a great many
people. Every individual needs the help of countless
others—and the only way he or she can be assured
of getting their help is by appealing to their interest.
Market transactions therefore rest on a foundation
not only of private self-interest, but also of what
Smith called sympathy: our ability to see things from
another’s perspective and, in so doing, to make
their concerns our own. The principle of partnership
lies at the heart of Smith’s conception of capitalism
and his view of what makes it so successful.
Adam Smith also believed that the market can
function properly only within a broader institutional
and moral context, one that has become all the
more essential in today’s interdependent world.
Markets require the provision of public goods such
as education, defense, and infrastructure. They
also require certain values. As Amartya Sen, the
4
Barrick Gold Corporation | Annual Report 2015
John L. Thornton
Executive Chairman
Nobel Prize-winning economist, notes: “Commercial
exchange could not effectively take place until
business morality made contractual behavior
sustainable and inexpensive—not requiring constant
suing of defaulting contractors, for example.
Investment in productive businesses could not
flourish until the higher rewards from corruption
had been moderated. Profit-oriented capitalism has
always drawn on support from other institutional
values.”1 Chief among these values, Adam Smith
believed, is trust: the confidence that market
participants will in fact do what they say they will.
Without trust, confidence crumbles and transactions
become impossible. The freezing of credit during
the recent financial crisis was a vivid example.
The world is as interdependent as it has ever been,
which makes trust more vital than ever, and the
best means of fostering and maintaining trust is
through a commitment to partnership.
The mining industry is a perfect case study,
because mining is at heart a partnership business.
Companies must receive and maintain permission
from national, regional, and municipal governments
to extract resources. They must recruit, train, and
work with the members of the communities where
they operate. They must serve the broader societal
needs of those communities, including the health
and education of their workers’ families. They
must ensure the long-term sustainability of natural
ecosystems. They must leave behind an enduring
contribution. The situation could not be farther
from zero-sum, particularly when one considers
that every one of these relationships is a shared
enterprise that lasts decades. For a mining concern,
the interests of one’s partners just are one’s own
interests. In mining there is only “us.”
1. Amartya Sen. “Capitalism Beyond the Crisis.” New York Review of Books.
March 26, 2009.
A partnership culture is Barrick’s most authentic,
distinctive, and sustainable competitive advantage.
By treating our partners’ interests as our own, we
become the preferred partner of host governments
and communities, the most sought-after employer
among the world’s best talent, and the natural
choice for the most thoughtful long-term investors.
Our approach to every one of our relationships must
be to ask: How would we want this to go if the
positions were reversed?
The natural corollary of a commitment to
partnership is a focus on creating value sustainably
and for the long term. One does not create or
build trust overnight; it takes consistent fidelity to a
partner’s interests—both as they are today and as
they will be indefinitely into the future.
The perils of a short-term, self-interested
approach to mining are now painfully clear.
Throughout the decade-long bull market for gold,
companies made investments on the premise that
gold prices would rise indefinitely. The market, for
its part, rewarded growth in ounces, betting that
rising gold prices would make projects with low
rates of return more attractive over time. Leaders
were rewarded with cash payments in the short
term. A few years later, mines built at the height
of the boom were operating at a loss, followed by
large write-downs across the industry.
Barrick was no exception. We have been
working tirelessly to return to our tradition of
partnership and our commitment to creating long-
term value per share for all our partners. We are
intent on rebuilding confidence and trust.
Barrick Gold Corporation | Annual Report 2015
5
MESSAGE FROM THE CHAIRMAN
That starts with doing exactly what we say
we are going to do. In 2015, we achieved every
strategic objective we laid out at the beginning of
the year. We reduced our debt by $3 billion, nearly
a quarter of our total debt. We reduced our all-in
sustaining costs from $864 to $831 per ounce. We
simplified our head office, eliminated management
between it and the mines, and accelerated the
pace at which information flows between them.
We pared down our portfolio, implemented
a new system for allocating capital with strict
investment criteria, and sold, canceled, or deferred
investment in several assets that did not meet those
requirements. We renewed our talent among both
our management team and our Board.
The second step in rebuilding a partnership
culture is to make leaders owners. All of our
directors and partners will, over time, become
meaningful owners whose net worth is tied to the
shares of Barrick. It is our intention that, over time,
every person at Barrick will become a shareholder
and owner.
In the ensuing letter from our President, Kelvin
Dushnisky, you will read in some depth what one
might call the base case for how we will achieve
this overarching objective. In itself, that base case
is solid, impressive, and reassuring. It rests on
two foundational principles. One is a profound
understanding of and commitment to the idea that
in the 21st century, our core business is building
partnerships of real depth and trust with host
governments, local communities, NGOs, indigenous
people, and others. At their invitation and with their
support, we take their minerals out of their ground,
and in so doing create wealth for all. Two of our
recent appointments to the Board, Brian Greenspun
and Michael Evans, were made in meaningful part
because of their extensive experience doing exactly
that. The other principle is a relentless commitment
to operational excellence, reflected in our goal to
bring down our all-in sustaining costs to below
$700 per ounce by the end of 2019.
However, we must and we will go beyond that
base case. We will do so primarily in two ways.
Finally, being partners means being transparent.
One, we will, over time, prove to you that we
We will be straightforward and open with you, so
that you understand and believe in the process by
which we arrive at our decisions.
With that in mind, here is our vision for the
company going forward.
We start with one immutable truth—everything
we do is focused on one goal: creating value per
share for our owners, as measured by cash flow
per share.
are not only discerning sellers, as we began to
demonstrate this past year with the sale of various
interests in seven of our assets—accomplished,
as we all know, in difficult markets. We will
demonstrate that we are also discerning buyers,
capable of consistently creating value per share for
our owners.
6
Barrick Gold Corporation | Annual Report 2015
We start with one immutable truth–everything we
do is focused on one goal: creating value per share
for our owners, as measured by cash flow per share.
Two, we will also, over time, transform
Barrick into a mining company for this century by
re-conceptualizing the essence of how one builds
value in this industry.
We have already intentionally chosen a model
that is different from our peers. I am reminded of
John Templeton’s admonition, “If you want superior
performance, you must be different.” We agree. It
is who we are and who we were—until we lost our
way in recent years. It is Barrick’s authentic DNA.
We will embody that DNA in a way that is
all the more relevant by making the best use of
technology and data, embedding them into our
every fiber. They will make us better, they will
make us faster—and they will make us safer. We
will do this carefully, deliberately, and with an
uncompromising eye on return on invested capital.
But we will do it. In the end, we want to be among
the very best 21st century companies, not just in our
industry, but in any industry.
In the fullness of time, we believe Barrick will be
both the lowest-risk investment of its kind and the
one creating the most value.
The gold mining sector has yet to drag itself out
of the last century, and at Barrick we are restless.
We will be a 21st century mining company—one
doing business for all our owners, with conviction
and the courage to be different.
In 2004, the All Blacks—the New Zealand
national rugby team, which over the past hundred
years had statistically become the most successful
sports team in history—started to slip. Morale
was plummeting, and the team was in disarray.
The senior leadership developed a new plan: focus
not just on players’ performance, but on their
character, and do so by fostering a new set of
shared team values. Leadership was devolved to the
players, who were encouraged to take individual
responsibility and initiative. Coaches created a
culture of continuous learning and improvement.
Practices became even more brutal than games.
Most importantly, players developed ritual behaviors
around a new core narrative that connected the
team’s greatest traditions to the demands of the
present moment.
The results? Over the next seven years, the
team performed better than they ever had, beating
their historical record of achievement—already the
world’s greatest—by nearly 15 percent.
That is the kind of execution we will return
to the core of our work at Barrick. While we have
made progress and our performance is improving,
there is much more to do, and we consider it an
honor and privilege to do that work on behalf of
you, our partners and fellow owners.
John L. Thornton
Executive Chairman
Barrick Gold Corporation | Annual Report 2015
7
MESSAGE FROM THE PRESIDENT
Kelvin Dushnisky
President
In many respects, 2015
was a foundational
year for Barrick. We
started by setting out
a clear vision: to be the
leading mining company
focused on gold,
growing our cash flow
per share by developing
and operating
high-quality assets
through disciplined
capital allocation and
operational excellence.
Ultimately, we are focused on generating returns
for our shareholders in any foreseeable gold price
environment, and that is how we are running the
business today. But to deliver on this vision, we had
to make fundamental changes at the company,
changes that will set Barrick up for long-term success.
We began with four key priorities for 2015:
¡ Streamline the organization through the imple-
mentation of a lean, decentralized operating model
¡ Strengthen the balance sheet
¡ Maximize free cash flow through greater capital
discipline and cost management
¡ Re-focus the portfolio on high-quality assets in
our core regions
While there is still work to be done, we have
made substantive progress in each of these areas.
The decentralized operating model that once
characterized Barrick has been recreated and
updated. We further shrunk our Toronto office from
240 positions to 150 and closed or downsized a
number of regional offices, eliminating management
layers between the head office and the mines.
The result has been an unclogging of the arteries—
a leaner, nimbler, more efficient company.
Under the decentralized model, head office is
focused on setting strategy, allocating capital, and
managing talent, along with meeting the regulatory
8
Barrick Gold Corporation | Annual Report 2015
Streamline
the Business
requirements of running a public company. Our
operational leaders in the field are empowered to
think and act like business owners, and to maximize
free cash flow from their operations with a focus on
long-term value creation.
There is now a direct line of communication
between the mines and head office, which
means information is shared more quickly, and
problems are identified and resolved sooner.
We have built a technology-enabled network that
connects our leadership teams to one another and
effectively creates one company team with a shared
knowledge base. Rather than a few people at the
top of the company making decisions with limited
participation from the actual operations, we now
have our best operational minds working with one
another, free from bureaucratic constraint.
As a result of these improvements, our leadership
teams are displaying more initiative, ingenuity, and
emotional ownership. They make decisions faster
and more effectively, proactively share best practices
with one another, and innovate together.
Another key priority last year was to strengthen
our balance sheet. We committed to reducing our
debt by $3 billion in 2015 and we did so swiftly and
prudently. We achieved this through non-core asset
sales, joint ventures and partnerships, and free cash
flow generation. We sold the Cowal mine in Australia
and several non-core assets in Nevada at very
competitive valuations. We completed an innovative
streaming agreement on a portion of our gold and
silver production from the Pueblo Viejo mine in the
Dominican Republic. Lastly, we formed two new and
important partnerships, one with Zijin Mining at the
Porgera mine in Papua New Guinea and the other
with Antofagasta Minerals at the Zaldívar copper
mine in Chile.
Our joint-venture agreements not only contribute
to our debt reduction efforts, they offer significant
strategic advantages. Zijin is the largest gold producer
in China and a global leader in mining technology,
engineering, and construction; Antofagasta has
unrivaled knowledge of mining in Chile. On a
broader level, these agreements underscore our
recognition that we do not have to do it all ourselves.
Above: In a prime example of Barrick’s
original decentralized model in action,
Cortez beat its 2015 operating guidance
by collaborating with Goldstrike on a metal
plan to optimize cash flow from both mines
through Goldstrike’s processing facilities.
Barrick Gold Corporation | Annual Report 2015
9
1 MESSAGE FROM THE PRESIDENT
We can benefit from other companies with
expertise and experience and, at the same time,
share risks.
Altogether, we reduced our total debt by
$3.1 billion, or 24 percent, to $10 billion. We ended
2015 with $2.5 billion of cash and an additional
$4 billion available on our fully undrawn credit
facility. We also extended the termination date on
the majority of the funds in the credit facility, and
amended the financial covenant to better reflect
our deleveraging measures. Our debt repayment
schedule is modest, with less than $250 million due
before 2018, and about half of our outstanding
debt due after 2032.
Our goal is to have a strong, investment grade
rated balance sheet. We must continue to lower our
debt and we intend to do so by at least $2 billion
in 2016. We will do so through additional non-core
asset sales, joint ventures, and partnerships; by
increasing free cash flow from operations; and with
proceeds from asset sales that have already been
completed. In the medium term, we aim to reduce
our total debt to below $5 billion. We will pursue
debt reduction initiatives in a disciplined manner,
only taking actions that make sense for our business
and for our shareholders.
While restoring our balance sheet is critical to our
long-term success, so too is our ability to maximize
free cash flow from our operations. Indeed, Barrick’s
early success was rooted in its ability to generate
wealth by consistently growing free cash flow. It was
once our overriding priority. It is now our overriding
priority again—and we are beginning to see results.
Last year, we recorded $471 million in free cash
flow, marking the first year we have delivered free
cash flow since 2011. And we were free cash flow
positive despite a gold price drop of more than $100
per ounce in 2015. Gold, in fact, is down more than
$500 per ounce over the last three years, and the
following data point underscores the extent of our
transformation in the face of a challenging metal
price environment. To be free cash flow breakeven in
2012, we would have required a gold price of more
than $1,800 per ounce. In 2015, we generated free
cash flow at $1,157 per ounce—and this year we are
focused on improving our breakeven price down to
$1,000 per ounce.
We made substantial progress last year in
lowering our operating costs and becoming a more
efficient and innovative operator. We reduced our
all-in sustaining costs to $831 per ounce, well below
our original guidance of $860–$895 per ounce.
Strengthen
the Balance
Sheet
10
Barrick Gold Corporation | Annual Report 2015
2 Maximize
Free Cash
Flow
This year, we expect our all-in sustaining costs to
be $775–$825 per ounce, the lowest among
senior producers.
As a result of this disciplined approach—
including our 15 percent hurdle rate for any new
investment—we reduced attributable capital spending
by nearly $700 million last year. In total, capital
expenditures fell 32 percent in 2015 to $1.5 billion
from $2.2 billion a year earlier.
Our mine portfolio is now more focused than
ever and offers exceptional leverage to higher
gold prices, underpinned by our five core mines in
the Americas—Cortez, Goldstrike, Pueblo Viejo,
Lagunas Norte, and Veladero. Together, those
operations accounted for 62 percent of our 2015
production at average all-in sustaining costs of
$660 per ounce. At 1.88 grams per tonne, these
mines also have an average reserve grade more
than double that of our peers.
We produced 6.12 million ounces of gold in
2015, in line with our revised guidance. This year,
we are anticipating production of 5.0–5.5 million
ounces, and based on our current asset mix, we
expect to maintain production of at least 4.5 million
ounces through 2020.
Ultimately, our production will be defined by
quality, not quantity. We may produce fewer ounces,
but we will generate significantly more cash from
them. Our aspiration is to reduce our all-in sustaining
costs to below $700 per ounce by 2019. We intend
to achieve this by implementing our Best in Class
program—a data-driven system designed to
maximize value from our operations by improving
productivity and reducing costs across our portfolio.
It will require our leaders to find new and better
ways to do things, such as eliminate waste, improve
execution, optimize systems, and drive innovation.
It will also integrate existing improvement initiatives
associated with our value realization studies and
the $2 billion cash flow improvement target we
set last year.
Above: Growing free cash flow per share
for our owners is Barrick’s number one
priority. Our Goldstrike mine in Nevada is
a key contributor to this goal—the mine
posted another +1 million ounce year in 2015,
with its new TCM circuit reaching commercial
production in the third quarter.
Left: The Turquoise Ridge underground
operation in Nevada is Barrick’s highest grade
mine, with an average reserve grade of over
15 grams per tonne. Maximizing cash flow
from its high-quality operations is one of the
levers Barrick intends to use to reduce total
debt by a further $2 billion in 2016.
Barrick Gold Corporation | Annual Report 2015
11
3 MESSAGE FROM THE PRESIDENT
Focus on
Best Assets
and Regions
Looking ahead, we intend to build on the
strategic priorities that we set in 2015. Our long-
term strategy will be distinguished by a focus on
margin growth over ounce growth, transparent
priorities that govern the way capital is allocated,
and investment and operating behavior that is gold
price agnostic. I want to stress the last point. By
adhering strictly to our disciplined investment and
operating criteria, irrespective of the gold price, we
will be well positioned to endure periods of gold
price volatility and enjoy superior leverage to a rising
gold price. We have an asset portfolio that includes
the largest inventory of gold reserves and resources
in our industry—a large portion of which are
situated in our core regions in the Americas.
These are jurisdictions where we have proven
operating experience, a critical mass of
infrastructure, technical and operational expertise,
and established partnerships with suppliers, host
governments, and communities.
Above: Barrick sold seven non-core assets in
2015 to further focus our portfolio in the Americas
around top-tier mines like Pueblo Viejo—one of
the world’s largest and lowest cost gold mines
with 2015 AISC of $597 per ounce. Its four
autoclaves handle nearly three times the volume
of those Barrick pioneered at Goldstrike.
12
Barrick Gold Corporation | Annual Report 2015
Given the challenging metal price environment,
we felt it was prudent to calculate our reserves and
resources using a gold price assumption of $1,000
per ounce for 2016–2020 and a long-term gold
price of $1,200 per ounce thereafter, compared
to a flat price assumption of $1,100 per ounce in
2014. The near-term assumption underscores our
determination to maximize free cash flow and
shareholder returns in any metal price environment.
We closed 2015 with reserves of 92 million ounces,
down slightly from 93 million ounces in 2014, after
adding 5 million ounces from drilling and cost
reductions, and adjusting for depletion, the gold
price change, and asset divestments.
Exploration expertise remains a competitive
advantage for Barrick. Since 1990, we have
discovered 142 million ounces of gold at an overall
discovery cost of $25 per ounce, roughly half the
average industry finding cost. Approximately
85 percent of our original 2015 exploration budget
of $220–$260 million was allocated to our core
regions in the Americas, where our teams have
uncovered some of the largest gold discoveries in
recent decades, including Lagunas Norte in Peru
and Goldrush in Nevada.
The Goldrush project already contains 8.6 million
ounces of measured and indicated resources, and
1.6 million ounces of inferred resources, and we
4 Focus on
Best Assets
and Regions
upfront capital investment and substantially increase
returns. At Cerro Casale in Chile, our planners
are evaluating a scenario that would reduce the
initial capital investment while delivering double-
digit returns.
At Pascua-Lama, located on the Chilean-
Argentine border, we have been successful in
substantially reducing our holding costs while we
look to optimize the economics of the project.
Our temporary suspension plan has been approved
by the mining authorities in both countries. This
will enable us to complete the transition to deep
suspension and should allow us to further reduce
future holding costs.
Nothing is more important to Barrick than the
safety, health, and well-being of our colleagues
and their families. In 2015, we continued an
11-year trend of reducing our total reportable injury
frequency rate (TRIFR). Since 2005, our TRIFR has
improved by 84 percent from 2.79 to 0.46. While
we are pleased with this trend, this performance
was, tragically, overshadowed by three fatalities in
2015. One fatality is too many, let alone three, and
we pledge to redouble our efforts to live up to our
vision for every one of our people to go home safe
and healthy every day.
As I said at the outset of this letter, we are making
significant progress as we restore the character and
culture that helped make Barrick into a great company.
We demonstrated reliable execution in 2015 thanks
to the tireless dedication and commitment of our
people around the world, and we intend to make such
consistent, high-level delivery core to our culture in
2016 and the years ahead.
In closing, I want to thank our Board and our
Executive Chairman, John Thornton, for their counsel
and guidance through this foundational year for
Barrick. I would also like to thank our many investors,
both long-standing and those new to Barrick, for
their valuable feedback and support in 2015.
Kelvin Dushnisky
President
Barrick Gold Corporation | Annual Report 2015
13
are excited about its potential. Located only six
kilometers from our Cortez operation, we expect
to convert those ounces into reserves as we permit
and develop the underground exploration declines,
establish additional underground access, and
complete infill drilling.
Last year, we announced a significant new gold
discovery known as Alturas. Located in the Andes
Mountains in Chile, the project is situated in one of
the most fertile and exceptionally well mineralized
districts in the world. Technically, Alturas has some
traits similar to two of our core mines, Veladero and
Lagunas Norte. We have reported an initial inferred
resource of 5.5 million ounces of gold and expect to
progress to the prefeasibility stage later this year.
Our portfolio also includes some of the world’s
largest undeveloped gold deposits, including Donlin
Gold, Cerro Casale and Pascua-Lama. Our share
of these longer-term projects offers leverage to
higher gold prices with 33 million ounces of gold
in reserves and more than 28 million ounces in
measured and indicated resources.
We are working to optimize the economics
of these projects while spending the minimum
required to maintain them as potential development
options. At the Donlin Gold project in Alaska, for
example, we are working with our JV partners on a
scenario that could significantly reduce the project’s
BOARD OF DIRECTORS
Board of Directors
C. William D. Birchall
Non-Independent
Toronto, Ontario
Former Vice Chairman,
Barrick Gold Corporation
Gustavo A. Cisneros
Independent
Santo Domingo, Dominican Republic
Chairman,
Cisneros Group of Companies
Kelvin P.M. Dushnisky
Non-Independent
Toronto, Ontario
President, Barrick Gold Corporation
Directors Ernie Thrasher (left),
Brett Harvey and Steven Shapiro
14
Barrick Gold Corporation | Annual Report 2015
J. Michael Evans
Independent
New York, New York
President, Alibaba Group Holding Ltd.
Brian L. Greenspun
Independent
Henderson, Nevada
Publisher and Editor,
Las Vegas Sun and
Chairman and
Chief Executive Officer,
Greenspun Media Group
J. Brett Harvey
Independent
Canonsburg, Pennsylvania
Chairman, CONSOL Energy Inc.
Nancy H.O. Lockhart
Independent
Toronto, Ontario
Corporate Director
Dambisa Moyo
Independent
New York, New York
International Economist and
Commentator
Anthony Munk
Non-Independent
Toronto, Ontario
Senior Managing Director,
Onex Corporation
(Finance and Acquisitions)
J. Robert S. Prichard
Independent
Toronto, Ontario
Chairman, Bank of Montreal,
Torys LLP and Metrolinx
Directors Nancy Lockhart (center)
and William Birchall (right) toured
Goldstrike in December with a stop
overlooking the Betze-Post open pit.
Steven J. Shapiro
Independent
Silverthorne, Colorado
Corporate Director
John L. Thornton
Non-Independent
Palm Beach, Florida
Executive Chairman,
Barrick Gold Corporation
Ernie L. Thrasher
Independent
Latrobe, Pennsylvania
Chief Executive Officer and
Chief Marketing Officer,
Xcoal Energy & Resources
Directors Dambisa Moyo (left)
and John Thornton
CORPORATE GOVERNANCE AND COMMITTEES OF THE BOARD
Corporate Governance
Our Board is committed to acting in the best interests
of the company and its shareholders. Sound corporate
governance practices contribute to achieving our
strategic and operational plans, goals, and objectives.
The Board of Directors has approved a set of
Corporate Governance Guidelines to promote the
effective functioning of the Board of Directors and
its Committees and to set forth a common set of
expectations as to how the Board should manage its
affairs and perform its responsibilities. Barrick has also
adopted a Code of Business Conduct and Ethics that is
applicable to all directors, officers, and employees of
Barrick. In conjunction with the adoption of the Code,
Barrick established a compliance hotline to allow for
anonymous reporting by telephone or Internet portal
of any suspected Code violations, including concerns
Committees of the Board
Audit Committee
(S.J. Shapiro, D. Moyo, E.L. Thrasher)
Supports the Board in its oversight of Barrick’s financial
reporting process and the quality, transparency, and
integrity of Barrick’s financial statements and other
related public disclosures, the company’s internal
controls over financial reporting, the company’s
compliance with legal and regulatory requirements
relevant to financial reporting, the external auditor’s
qualifications and independence, and the performance
of the internal audit function and the external auditor.
Compensation Committee
(J.B. Harvey, G.A. Cisneros, J.R.S. Prichard,
S.J. Shapiro, E.L. Thrasher)
Supports the Board in designing, monitoring and
reviewing Barrick’s compensation policies and
practices, and administering Barrick’s share
compensation plans. The Committee is responsible for
reviewing and recommending director and executive
compensation.
regarding accounting, internal accounting controls
or other auditing matters. A copy of the Corporate
Governance Guidelines, the Code of Business Conduct
and Ethics, and the mandates of the Board of Directors
and each of the Committees of the Board is posted on
Barrick’s website at www.barrick.com/company/
governance and is available in print from the company
to any shareholder upon request.
Mr. J.B. Harvey is Barrick’s Lead Director. The Lead
Director facilitates the functioning of the Board independently
from management, serves as an independent leadership
contact for directors and executive officers, and assists in
maintaining and enhancing the quality of the company’s
corporate governance.
Corporate Governance & Nominating Committee
(G.A. Cisneros, N.H.O. Lockhart, B.L. Greenspun, D. Moyo)
Supports the Board in establishing Barrick’s corporate
governance policies and practices, identifying individuals
qualified to become directors, reviewing the composition
and functioning of the Board and its Committees, and
succession planning for senior executives.
Corporate Responsibility Committee
(N.H.O. Lockhart, C.W.D. Birchall, B.L. Greenspun,
E.L. Thrasher)
Supports the Board in overseeing Barrick’s programs and
performance relating to environmental, health and safety,
corporate social responsibility, and human rights matters.
Risk Committee
(J.M. Evans, C.W.D. Birchall, D. Moyo, A. Munk,
J.R.S. Prichard)
Supports the Board in overseeing the company’s
management of enterprise risks, and monitoring and
reviewing the company’s financial structure, and investment
and financial risk management programs.
Barrick Gold Corporation | Annual Report 2015 15
15
EXECUTIVE OFFICERS AND ADVISORY BOARDS
Executive Officers
John L. Thornton
Executive Chairman
Kelvin P.M. Dushnisky
President
Kevin J. Thomson
Senior Executive
Vice President,
Strategic Matters
Shaun A. Usmar
Senior Executive
Vice President and
Chief Financial Officer
Catherine Raw
Executive Vice President,
Business Performance
Darian K. Rich
Executive Vice President,
Talent Management
Richard J.E. Williams
Chief Operating Officer
Kathy Sipos
Chief of Staff
International Advisory Board
The International Advisory Board was established to provide advice to Barrick’s Board of Directors and management on
geo-political and other strategic issues affecting the company.
Chairman
The Right Honourable
Brian Mulroney
Canada
Prime Minister 1984 –1993
Members
His Excellency
José María Aznar
Spain
Prime Minister 1996 –2004
The Honourable
John R. Baird
Canada
Minister of Foreign Affairs
2011–2015
Gustavo A. Cisneros
Dominican Republic
Chairman, Cisneros Group
of Companies
Secretary
William S. Cohen
United States
Senator 1979 –1997 and
Secretary of Defense
1997–2001
The Honorable
Newt Gingrich
United States
Speaker of the House of
Representatives 1995 –1999
The Honourable
Karl-Theodor
zu Guttenberg
Germany
Federal Minister of Defense
2009 –2011
Vernon E. Jordan, Jr.
United States
Senior Counsel, Akin, Gump,
Strauss, Hauer & Feld, L.L.P.
Andrónico Luksic
Chile
Vice Chairman,
Banco de Chile
Peter Munk
Canada
Founder and Chairman
Emeritus, Barrick Gold
Corporation
Lord Charles Powell
of Bayswater KCMG
United Kingdom
Foreign Policy Advisor to
Prime Minister Margaret
Thatcher 1983 –1991
John L. Thornton
United States
Chairman, Barrick Gold
Corporation
Corporate Social Responsibility Advisory Board
Barrick’s Corporate Social Responsibility Advisory Board was formed in 2012 and acts as an external sounding board on a range
of corporate responsibility issues, including community relations, sustainable development, water, energy, climate change,
security and human rights.
Members
Aron Cramer
San Francisco, California
President and
Chief Executive Officer,
Business for Social
Responsibility (BSR)
Gare A. Smith
Washington, DC
Partner, Foley Hoag, LLP
Chair, Corporate Social
Responsibility and
Federal Affairs Practice
Robert Fowler
Ottawa, Ontario
Former Canadian public
servant; Deputy Minister
of National Defence
(1989–1995),
Ambassador and Permanent
Representative to
the United Nations
(1995–2000),
Ambassador to Italy
(2000 –2006)
Special Consultant
John G. Ruggie
Cambridge, Massachusetts
Berthold Beitz Professor
in Human Rights and
International Affairs,
Kennedy School of
Government
Affiliated Professor
in International
Legal Studies,
Harvard Law School
16
Barrick Gold Corporation | Annual Report 2015
Partners
In Barrick’s early years, the company’s founder, Peter Munk, led a small group of exceptional people who worked together
as a team. They knew each other well, and they trusted each other completely. They shared responsibility and accountability
for the company’s success and for its setbacks. Their personal wealth was tied to the company’s fortunes, which gave them
every incentive to work together as efficiently and effectively as possible.
To accelerate emotional and financial ownership among our people today, we have created a new Barrick partnership
that includes the most committed and passionate leaders across the company.
Mejico Angeles
Sam Ash
Nigel Bain
Rick Baker
Andrew Baumen
Michael Brown
Curtis Cadwell
John Cash
Gordon Chiu
Andy Cole
Jaco Crouse
Jonathan Drimmer
Kelvin Dushnisky
Mike Estes
Dave Forestell
Sergio Fuentes
Manuel Fumagalli
Matt Gili
Brian Grebenc
Rich Haddock
Andrew Hastings
Alanna Heath
George Joannou
Naomi Johnson
Rob Krcmarov
Woo Lee
Andy Lloyd
Bill MacNevin
Basie Maree
Melanie Miller
Marian Moroney
Giovanna Moscoso
Deni Nicoski
Calvin Pon
Catherine Raw
Darian Rich
François Robert
Manuel Rocha
Rick Sims
Peter Sinclair
Kathy Sipos
Ettiene Smuts
Kevin Thomson
Shaun Usmar
Johan Van Jaarsveld
Greg Walker
Cody Whipperman
James Whittaker
Richard Williams
Alex Wilson
Financial
Report
Management’s Discussion and Analysis 18 | Mineral Reserves and Resources 87
Financial Statements 99 | Notes to Financial Statements 104 | Shareholder Information 171
Barrick Gold Corporation | Financial Report 2015
17
Management’s Discussion
and Analysis (“MD&A”)
Management’s Discussion and Analysis (“MD&A”) is
intended to help the reader understand Barrick Gold
Corporation (“Barrick”, “we”, “our” or the “Company”),
our operations, financial performance and the present and
future business environment. This MD&A, which has
been prepared as of February 17, 2016, should be read
in conjunction with our audited consolidated financial
statements for the year ended December 31, 2015.
Unless otherwise indicated, all amounts are presented
in U.S. dollars.
For the purposes of preparing our MD&A, we
consider the materiality of information. Information is
considered material if: (i) such information results in, or
would reasonably be expected to result in, a significant
change in the market price or value of our shares; or
(ii) there is a substantial likelihood that a reasonable
investor would consider it important in making an
investment decision; or (iii) it would significantly
alter the total mix of information available to investors.
We evaluate materiality with reference to all relevant
circumstances, including potential market sensitivity.
Continuous disclosure materials, including our
most recent Form 40-F/Annual Information Form, annual
MD&A, audited consolidated financial statements,
and Notice of Annual Meeting of Shareholders and
Proxy Circular will be available on our website at
www.barrick.com, on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov. For an explanation of
terminology unique to the mining industry, readers
should refer to the glossary on page 86.
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by
reference in this MD&A, including any information as
to our strategy, projects, plans or future financial or
operating performance constitutes “forward-looking
statements”. All statements, other than statements of
historical fact, are forward-looking statements. The
words “believe”, “expect”, “anticipate”, “contemplate”,
“target”, “plan”, “objective”, “intend”, “project”,
“continue”, “budget”, “estimate”, “potential”, “may”,
“will”, “can”, “could” and similar expressions identify
forward-looking statements. In particular, this MD&A
contains forward-looking statements including, without
limitation, with respect to cash flow forecasts, projected
capital, operating and exploration expenditures, targeted
debt reductions and cash flow improvements, mine life
and production rates, potential mineralization and metal
or mineral recoveries, and expectations regarding future
price assumptions, financial performance and other
outlook or guidance. Forward-looking statements are
necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the
Company in light of management’s experience and
perception of current conditions and expected
developments, are inherently subject to significant
business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause
actual results to differ materially from those projected in
the forward-looking statements and undue reliance
should not be placed on such statements and information.
Such factors include, but are not limited to: fluctuations
in the spot and forward price of gold, copper or certain
other commodities (such as silver, diesel fuel, natural
gas and electricity); the speculative nature of mineral
exploration and development; changes in mineral
production performance, exploitation and exploration
successes; diminishing quantities or grades of reserves;
increased costs, delays, suspensions and technical
challenges associated with the construction of capital
projects; operating or technical difficulties in connection
with mining or development activities, including
disruptions in the maintenance or provision of required
infrastructure and information technology systems;
18
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS 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; the
impact of global liquidity and credit availability on the
timing of cash flows and the values of assets and liabilities
based on projected future cash flows; adverse changes in
our credit ratings; the impact of inflation; fluctuations
in the currency markets; changes in U.S. dollar interest
rates; risks arising from holding derivative instruments;
changes in national and local government legislation,
taxation, controls or regulations and/or changes in
the administration of laws, policies and practices,
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; damage to the
Company’s reputation due to the actual or perceived
occurrence of any number of events, including negative
publicity with respect to the Company’s handling of
environmental matters or dealings with community
groups, whether true or not; the possibility that future
exploration results will not be consistent with the
Company’s expectations; risks that exploration data may
be incomplete and considerable additional work may be
required to complete further evaluation, including but not
limited to drilling, engineering and socio-economic studies
and investment; risk of loss due to acts of war, terrorism,
sabotage and civil disturbances; litigation; contests
over title to properties, particularly title to undeveloped
properties, or over access to water, power and other
required infrastructure; business opportunities that may
be presented to, or pursued by, the Company; our ability
to successfully integrate acquisitions or complete
divestitures; risks associated with working with partners
in jointly controlled assets; employee relations; increased
costs and risks related to the potential impact of climate
change; 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
MD&A are qualified by these cautionary statements.
Specific reference is made to the most recent Form 40-F/
Annual Information Form on file with the SEC and
Canadian provincial securities regulatory authorities
for a more detailed discussion of some of the factors
underlying forward-looking statements and the risks that
may affect Barrick’s ability to achieve the expectations
set forth in the forward-looking statements contained
in this MD&A. We disclaim any intention or obligation
to update or revise any forward-looking statements
whether as a result of new information, future events
or otherwise, except as required by applicable law.
Index
20 Overview
20 Review of 2015 Results
27 Key Business Developments
31 Outlook for 2016
36 Risks and Risk Management
38 Market Overview
42 Review of Annual Financial Results
42 Revenue
42
Production Costs
43 Capital Expenditures
43 Additional Significant Statement of Income Items
45
Income Tax Expense
46 Financial Condition Review
Shareholders’ Equity
46 Balance Sheet Review
46
46 Comprehensive Income
47
Financial Position and Liquidity
Summary of Financial Instruments
49
49
Operating Segments Performance
73 Commitments and Contingencies
74
Review of Quarterly Results
75 Internal Control over Financial Reporting and
Disclosure Controls and Procedures
76 IFRS Critical Accounting Policies and Accounting Estimates
76 Non-GAAP Financial Performance Measures
86 Glossary of Technical Terms
19
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Overview
Review of 2015 Results
($ millions, except where indicated)
Financial Data
Revenue
Net earnings (loss)1
Per share (“EPS”)2
Adjusted net earnings3
Per share (“adjusted EPS”)2,3
Adjusted EBITDA
Total project capital expenditures4
Total capital expenditures – expansion4
Total capital expenditures – sustaining4
Operating cash flow5
Free cash flow3
Operating Data
Gold
Gold produced (000s ounces)6
Gold sold (000s ounces)6
Realized price ($ per ounce)3
Cash costs ($ per ounce)3
Cash costs on a co-product basis ($ per ounce)3
All-in sustaining costs ($ per ounce)3
All-in sustaining costs on a co-product basis ($ per ounce)3
All-in costs ($ per ounce)3
All-in costs on a co-product basis ($ per ounce)3
Copper
Copper produced (millions of pounds)
Copper sold (millions of pounds)
Realized price ($ per pound)3
C1 cash costs ($ per pound)3
All-in sustaining costs ($ per pound)3
For the three months ended
December 31
For the years ended
December 31
2015
2014
2015
2014
$ 2,238
(2,622)
(2.25)
91
0.08
722
(55)
6
303
698
$ 387
1,619
1,636
$ 1,105
547
566
733
752
719
$ 738
138
132
$ 2.16
$ 1.66
$ 2.15
$ 2,510
(2,851)
(2.45)
174
0.15
755
121
90
438
371
(176)
$
1,527
1,572
$ 1,204
628
648
925
945
1,094
$ 1,114
134
139
$ 2.91
$ 1.78
$ 2.40
$ 9,029
(2,838)
(2.44)
344
0.30
3,187
13
137
1,359
2,794
$ 1,081
6,117
6,083
$ 1,157
596
619
831
854
876
899
$
511
510
$ 2.37
$ 1.73
$ 2.33
$ 10,239
(2,907)
(2.50)
793
0.68
3,811
234
391
1,639
2,296
(136)
$
6,249
6,284
$ 1,265
598
618
864
884
986
$ 1,006
436
435
$ 3.03
$ 1.92
$ 2.79
1. Net earnings/loss represents net earnings/loss attributable to the equity holders of the Company.
2. Calculated using weighted average number of shares outstanding under the basic method.
3. These are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and detailed reconciliations, please see
pages 76 – 85 of this MD&A.
4. These amounts are presented on a 100%, accrued basis. Project and expansion capital expenditures are included in our calculation of all-in costs, but not included
in our calculation of all-in sustaining costs.
5. Operating cash flow includes a $610 million deposit received in third quarter 2015 related to the Pueblo Viejo gold and silver streaming transaction.
6. Gold and copper production and sales include our pro rata share of Acacia, Pueblo Viejo and Zaldívar.
20
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Full Year Financial and Operating Highlights
Strengthening the Balance Sheet
n We set a debt reduction target of $3 billion in 2015. We said we would achieve this through the disciplined sale
of non-core assets, the formation of new joint ventures and partnerships, and by maximizing free cash flow from
our operations. In 2015, we completed or announced asset sales, joint ventures, a streaming agreement and
partnerships valued at $3.2 billion. In 2015, despite lower gold prices, we recorded positive free cash flow for
the first time in four years, generating $471 million in free cash flow for the year (excluding the $610 million in
proceeds from the Pueblo Viejo streaming transaction), reflecting the impact of our efforts to maximize free
cash flow across the Company.
n In 2015, we reduced our total debt by $3.1 billion, or 24 percent, from $13.1 billion to $10 billion, over the same
period, exceeding our original target of $3 billion. We currently have less than $250 million in debt due before
2018 and approximately $5 billion of our $10 billion in outstanding debt matures after 2032. In addition, we
expect that the $3.1 billion in debt reduction will reduce pre-tax interest payments by approximately $135 million
on an annualized basis.
n Our liquidity position is strong and continues to improve, with robust cash flow generation, modest near-term
debt repayment obligations, a $4 billion undrawn credit facility that is now subject to a financial covenant that
better reflects Barrick’s ongoing deleveraging efforts and a consolidated cash balance of approximately $2.5 billion.
Subsequent to year-end, the Company received an additional $610 million in cash from the sale of Bald Mountain
and 50% of Round Mountain.
n We intend to reduce our total debt by at least $2 billion in 2016 through the following levers: drawing on our cash
balance; delivering free cash flow from operations; and selling additional non-core assets and creating new joint
ventures and partnerships.
Cost Reductions
n This year, we have taken significant actions to improve
our business plans, resulting in increasing positive
free cash flow in three consecutive quarters despite
lower gold prices, reflecting the impact of greater cost
and capital discipline across the Company. We remain
focused on improving productivity and driving down
costs to maximize free cash flow from our assets in
any gold price environment.
n In 2015, we exceeded our overhead cost reduction
target of $50 million for the year, and expect to reach
$100 million in annualized overhead savings in 2016.
We realized approximately $65 million in reductions
in gross functional general and administrative and
overhead costs compared to the prior year, allowing us
to meet our corporate administration expense target
of $145 million in 2015, after adjusting for severance
and other one-time costs.
n Our continued focus on disciplined capital allocation,
lower capital spending, combined with reductions in
corporate overhead and other operating cost savings,
helped us to achieve a $33 per ounce reduction in
our all-in sustaining costs for the year, from $864 per
ounce in 2014 to $831 per ounce in 2015, allowing us
to meet the lower end of our revised 2015 guidance
range of $830 to $870 per ounce.
ALL-IN SUSTAINING COSTS 2015 ($ per ounce)
895
to
860
880
to
840
870
to
830
831
Original
Guidance
2015
Revised Q2
Guidance
2015
Revised Q3
Guidance
2015
Actual 2015
CAPITAL EXPENDITURES 2015 ($ millions)
2,200
to
1,900
2,100
to
1,800
1,900
to
1,600
1,700
1,509
Original
Guidance
2015
Revised Q1
Guidance
2015
Revised Q2
Guidance
2015
Revised Q3
Guidance
2015
Actual 2015
21
5000
4000
3000
2000
1000
0
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS n In 2016, we have implemented a Best in Class
n Our temporary suspension plan for Pascua-Lama
program designed to maximize value creation from
our operations by driving improvements in efficiency
and productivity, as well as sustainable reductions
in costs, across our portfolio. The initiative will
bring together in a single system all of our existing
and future improvement initiatives – those already
identified in our Value Realization studies, as well
as those associated with our $2 billion cash flow
improvement target.
received approval by the mining authorities in Chile
and Argentina in late 2015. Our focus in 2016 will
remain on further reducing holding costs at the
project in line with the temporary suspension plan,
while advancing an optimized project plan, and as a
result we expect 2016 expenditures at Pascua-Lama
to be in the range of $80 million to $100 million.
Implementation of the temporary suspension plan
could require adjustments resulting from regulatory
and legal actions and weather conditions, which could
increase costs associated with the plan.
Operating Cash Flow, Free Cash Flow, Adjusted Net Earnings, Net Loss and Adjusted EBITDA
FACTORS AFFECTING ADJUSTED NET EARNINGS ($ millions)
Uncontrollable
Costs
2014
Adjusted
net earnings
Gold and
copper
realized
price
Gold and
copper
cash cost
per tonne
processed1
793
Income tax
expense
Overhead
costs2
+67
+379
Gold
657
Copper
337
(994)
+542
Gold
531
Copper
11
Controllable
Costs
Gold and
copper
sales volume
and grade
Grade
165
Vol 51
(216)
Hedges3
Depreciation4
Other5
2015
Adjusted
net earnings
+67
344
(171)
(123)
1. Excludes the impact of realized losses on hedges and overhead costs allocated to the sites.
2. Excludes the impact of severance, stock-based compensation, hedges, Acacia overhead costs and other one-off costs.
3. Excludes hedges on fuel as well as CAD, AUD and CLP.
4. Includes $28 million of catch-up depreciation relating to Australia.
5. Primarily consists of closure costs, exploration and project expense, and unrealized gains/losses on foreign exchange.
The net loss for 2015 was 1% lower than the prior year primarily due to a decrease in direct operating costs, a
reduction in overhead costs and a decrease in income tax expense combined with the impact of recognizing
$3.1 billion (net of tax and non-controlling interests) in impairment charges in 2015 compared to $3.4 billion (net of
tax and non-controlling interests) in 2014. The decrease in direct operating costs reflects the continuous improvements
made to our cost structure in 2015, which more than offset the impact of processing lower grade ore, lower realized
gold and copper prices and lower gold sales volume compared to the prior year. In terms of overhead costs, we
exceeded our cost reduction target of $50 million for the year, with $67 million in overhead cost savings in 2015. This
was partially offset by a 9% and 22% decrease in gold and copper realized prices, respectively, combined with the
22
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS realization of losses on fuel hedge contracts and lower gold sales volume. Adjusted net earnings of $344 million,
excluding impairment charges and other adjusting items, in 2015 was 57% lower than the prior year, primarily due to
the same factors negatively affecting the net loss. This was partially offset by cost reductions realized in general and
administrative expense and cost of sales, an increase in copper sales volume and a decrease in cost of sales applicable
to copper. For a full discussion of adjusting items impacting adjusted net earnings, see page 25 of this MD&A. For a
breakdown of goodwill and asset impairment charges recognized in 2015, see page 44 of this MD&A.
FACTORS AFFECTING FREE CASH FLOW ($ millions)
2014
Free cash
flow
Capital
expenditures
Overhead
costs1
Change in
working
capital
Income
taxes
Gold and
copper
sales volume
and grade
Other direct
operating
costs
Gold and
copper
realized
price
Other
2015
Free cash
flow2
+356
Cash Costs
345
C1 Costs
11
+223
Grade 165
Vol 51
(216)
+437
Divested
Sites
280
Other
Sites
157
Gold
657
Copper
337
(994)
+15
471
+719
Sustaining
211
Expansion
227
Projects
281
+67
Copper
11
(136)
1. Excludes the impact of severance, stock-based compensation, hedges, Acacia overhead costs and other one-off costs.
2. 2015 free cash flow excludes $610 million deposit relating to the Pueblo Viejo streaming agreement and is before dividends.
Operating cash flow for 2015 of $2,794 million was 22% higher compared to the prior year reflecting the impact of
improvements in our working capital mainly as a result of our efforts to optimize supply chain management combined
with the impact of the divestment of our Cowal mine and our 50% interest in the Porgera mine, which had a
favorable impact on working capital in 2015. Other factors positively impacting operating cash flow in 2015 was a
decrease in income taxes paid as well as the $610 million deposit received in third quarter 2015 relating to the gold
and silver streaming transaction on our Pueblo Viejo mine as described on page 28 of this MD&A. This was partially
offset by the previously mentioned movements in adjusted net earnings.
Free cash flow for 2015 was $1,081 million, or $471 million after excluding the deposit on the gold and silver
streaming agreement, reflecting an increase of 895% and 446%, respectively. This year, we have taken significant
actions to improve our business plans, resulting in increasing positive free cash flow in three consecutive quarters
despite lower gold prices, reflecting the impact of greater cost and capital discipline across the Company. The increase
in free cash flow compared to the prior year reflects the higher operating cash flows resulting from improvements in
working capital and a decrease in income taxes paid, combined with a decrease in direct operating costs resulting
from the continuous improvements made to our cost structure in 2015. Further contributing to the increase in free
cash flow was a reduction in capital expenditures in 2015 primarily as a result of lower minesite sustaining capital
expenditures, a 94% reduction in project capital expenditures due to lower Pascua-Lama project spend, as we
continue our efforts to reduce holding costs, combined with a decrease in minesite expansion capital expenditures.
5000
4000
3000
2000
1000
0
23
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Gold Production, Cash Costs and All-in Sustaining Costs
Gold production for 2015 was 2% lower than the prior
year primarily due to lower grades at Pueblo Viejo and
Veladero combined with the impact of the divestitures
that occurred in the second half of 2015. The divested
sites contributed an additional 135 thousand production
ounces in 2014 compared to 2015. This was partially
offset by an increase in production at Goldstrike, Cortez,
and Turquoise Ridge.
GOLD PRODUCTION (000s ounces)
7,166
6,249
6,117
5,000
to
5,500
2013
2014
2015
2016E
expenditures. The lower expansion capital expenditures
are primarily a result of a reduction in costs related to
the construction of the thiosulfate circuit at Goldstrike,
which entered commercial production in third
quarter 2015.
CASH COSTS AND ALL-IN SUSTAINING COSTS
($ per ounce)
915
566
864
598
831
596
775
to
825
550
to
590
2013
2014
2015
2016E
AISC
Cash costs
5000
COPPER PRODUCTION (millions of pounds)
4000
511
436
370
to
410
3000
539
2000
1000
0
2013
2014
2015
2016E
The initiatives we have taken in 2015 to decrease
costs resulted in a reduction in operating costs of
approximately $380 million. Cash costs of $596 per
ounce remained in line with the prior year, primarily
due to a $96 million decrease in capitalized stripping
costs, a $118 million increase in inventory impairment
charges, and $123 million in unfavorable metals
inventory movements compared to the prior year
combined with the impact of lower sales volumes on
unit production costs. This was partially offset by the
savings reflected in the lower direct mining costs.
All-in sustaining costs for 2015 of $831 per ounce
decreased 4% compared to the prior year primarily due
to a 17% reduction in minesite sustaining capital
expenditures, largely due to a decrease in capitalized
stripping costs, partially offset by the impact of lower
sales volume on unit production costs. All-in costs for
2015 were 11% lower than the prior year primarily due
to a reduction in expansion and project capital
Copper Production and C1 Costs
Copper production for 2015 increased 17% compared to
the prior year primarily due to higher production at
Lumwana, partially offset by a decrease in production at
Zaldívar. Production at Lumwana was higher primarily as
a result of the partial conveyor collapse that shut down
the mill and concentrate production for much of second
quarter 2014. The decreased production at Zaldívar
reflects the divestment of 50% of our ownership in the
mine that was completed on December 1, 2015. C1 cash
costs in 2015 were 10% lower than the prior year due to
the impact of higher sales volume on unit production
costs combined with a decrease in cost of sales.
24
5000
4000
3000
2000
1000
0
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Capital Expenditures
Capital expenditures for 2015 were 33% lower than the
prior year. In addition to the reduction in minesite
sustaining capital expenditures, the decrease was also a
result of a 94% reduction in project capital expenditures
resulting from a reduction in Pascua-Lama project spend
combined with a 65% decrease in minesite expansion
capital expenditures due to the completion of the
thiosulfate circuit at Goldstrike. For further details, refer
to page 43 of this MD&A. For the year ended
December 31, 2015, we incurred $1,509 million in
capital expenditures.
Significant Adjusting Items
Significant adjusting items (net of tax and non-controlling
interest effects) in 2015 include:
n $3.1 billion in impairment charges comprised of
$2.2 billion in goodwill impairments primarily relating
to our Goldstrike, Zaldívar and Pueblo Viejo mines and
$947 million in asset impairments primarily related to
our Pascua-Lama project and Pueblo Viejo mine;
n $177 million in unrealized foreign currency translation
losses primarily related to our VAT recoverable in
Argentina; and
n $118 million in costs arising from changes in the
obsolescence provision relating to mine supplies
inventory and inventory impairments at Buzwagi;
partially offset by
n $263 million of gains on the sale of assets primarily
related to the sale of our Cowal and Ruby Hill mines,
50% interest in our Porgera and Zaldívar mines and
Spring Valley project; and
n $50 million in gains on the extinguishment of debt.
CAPITAL EXPENDITURES ($ millions)
5,375
2,264
1,509
1,350
to
1,650
2013
2014
2015
2016E
Expansion
Project
Sustaining
NET LOSS TO ADJUSTED NET EARNINGS ($ millions)
3,119
177
59
9
81
344
(2,838)
s
s
o
l
t
e
N
5
1
0
2
s
e
g
r
a
h
c
t
n
e
m
r
i
a
p
m
I
s
e
s
s
o
l
y
c
n
e
r
r
u
c
i
n
g
e
r
o
f
d
e
z
i
l
a
e
r
n
U
s
t
n
e
m
t
s
u
d
a
j
x
a
T
n
o
s
e
s
s
o
l
d
e
z
i
l
a
e
r
n
U
s
e
v
i
t
a
v
i
r
e
d
e
g
d
e
h
-
n
o
n
263
s
t
e
s
s
a
f
o
e
a
s
l
n
o
n
a
G
i
r
e
h
t
O
i
s
g
n
n
r
a
e
t
e
n
j
d
e
t
s
u
d
A
5
1
0
2
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000
0
0
25
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Safety
Nothing is more important to Barrick than the safety,
health and well-being of workers and their families. In
2015, we continued a ten-year trend of improving our
total reportable injury frequency rate1 (“TRIFR”) and since
2005, there has been an 84 percent improvement in the
TRIFR (from 2.79 to 0.46). The foundation underpinning
this improvement continues to be our Courageous
Leadership program, which was updated in 2015 with a
new program called “Courage to Care”. Courage to
Care is designed to help Barrick make the next step in
safety performance through a team approach. In
addition we continue to focus on compliance on
elements of the Barrick “Safety and Health Management
System” with a significant improvement over the past
two years in execution of the Occupational Health and
Contractors Control elements of the system. Although
we are pleased with these trends, this performance was
overshadowed by the tragic occurrence of 3 fatal
incidents in 2015. All 3 fatalities were associated with
heavy mobile mining equipment operations. Barrick
continues to investigate safety improvements and
completed a trial of collision avoidance technology at the
Bald Mountain mine in October 2015. The results of this
trial were positive and we expect to pilot this technology
on a larger scale at one of our large North America
sites in 2016.
TOTAL REPORTABLE INJURY FREQUENCY
1.0
0.5
0.0
0.64
0.58
0.46
2013
2014
2015
Reserves and Resources
n To calculate our 2015 reserves, we have applied a
short-term gold price assumption of $1,000 per ounce
for the next five years, and a long-term gold price of
$1,200 per ounce from 2021 onwards. This approach
ensures a focus on maximizing free cash flow in the
near term, without sterilizing future reserves that will
be mined at gold prices in line with our long-term
price assumption. The price assumptions we have used
to calculate reserves are consistent with those we are
using for mine planning, impairment testing and for
the assessment of project economics.
n As of December 31, 2015, Barrick’s proven and
probable gold reserves were 91.9 million ounces2,
compared to 93.0 million ounces at the end of 2014.
Approximately 3.1 million ounces were divested last
year, and 6.8 million ounces were depleted through
production and processing. We added approximately
5.1 million ounces to reserves through drilling and
cost improvements, while 3.7 million ounces were
added as a result of the use of a long-term gold price
assumption of $1,200 per ounce, compared to a
single reserve price of $1,100 applied in 2014.
n Significant additions to our 2015 proven and probable
gold reserves include 3.5 million ounces at Veladero,
2.5 million ounces at Cortez and 1.6 million ounces at
Lagunas Norte. We also added reserves at Kalgoorlie,
Porgera, Hemlo and Pueblo Viejo.
n In 2015, measured, indicated and inferred resources
were calculated using a gold price assumption of
$1,300 per ounce. This compares to $1,400 per ounce
in 2014. Measured and indicated gold resources
were 79.1 million ounces2 at the end of 2015,
compared to 94.3 million ounces at the end of 2014.
Approximately 9 million ounces of measured and
indicated gold resources were divested in 2015 and
1. Total reportable incident frequency rate (TRIFR) is a ratio calculated as follows:
number of reportable injuries x 200,000 hours divided by the total number of
hours worked. Reportable injuries include fatalities, lost time injuries, restricted
duty injuries, and medically treated injuries.
2. Estimated in accordance with National Instrument 43-101 as required by
Canadian securities regulatory authorities. For a breakdown and additional
details on tonnes, grade and ounces, see pages 87 – 94. For United States
reporting purposes, Industry Guide 7 under the Securities and Exchange Act
of 1934 (as interpreted by Staff of the SEC), applies different standards in
order to classify mineralization as a reserve. Accordingly, for U.S. reporting
purposes, approximately 1.70 million ounces of proven and probable gold
reserves at Cortez and approximately 2.11 million ounces of proven and
probable gold reserves at Lagunas Norte are classified as mineralized material.
26
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS 8.8 million ounces have been upgraded to proven and
probable gold reserves. We added 8.5 million ounces
to measured and indicated resources as a result of
drilling and cost reductions, while 5.9 million ounces
were removed as a result of a change in the gold
price assumption.
n Inferred gold resources were 27.4 million ounces2 at
the end of 2015, compared to 29.3 million ounces at
the end of 2014. Approximately 2.8 million ounces
were divested in 2015 and 10.4 million ounces were
added as a result of drilling and cost reductions,
including an initial 5.5 million ounce inferred resource
at our Alturas discovery in Chile.
n Proven and probable copper reserves were calculated
using a short-term copper price assumption of
$2.75 per pound and a long-term price assumption
of $3.00 per pound. Copper reserves decreased
to 11.7 billion pounds2 at the end of 2015, from
14.9 billion pounds at the end of 2014, primarily
driven by the sale of 50 percent of Zaldívar. Measured
and indicated copper resources increased to 9.6 billion
pounds2 compared to 5.9 billion pounds at the end
of 2014, primarily driven by a reduction in Zambian
royalty rates from 20 percent to 9 percent.
Exploration and Projects
n We continue to add new reserves at existing
operations such as Cortez, Lagunas Norte and Hemlo,
and we continue to convert resources to reserves at
our operating mines. Looking farther ahead, there is
still significant potential to discover new deposits in
the Cortez district. We are currently exploring a target
known as Fourmile, located one kilometer north
of the Goldrush discovery, and six kilometers away
from the existing Cortez Hills operation. This area is
geologically similar to the high grade Deep Post and
Deep Star deposits in the Goldstrike area. Early drilling
has intersected mineralization well above the average
grade of the measured and indicated resources
at Goldrush.
n At Alturas in Chile, we have reported an initial inferred
resource of 5.5 million ounces2 of gold. In 2016, our
focus will be on continued infill drilling and step out
2. Estimated in accordance with National Instrument 43-101 as required by
Canadian securities regulatory authorities. For a breakdown and additional
details on tonnes, grade and ounces, see pages 87 – 94. For United States
reporting purposes, Industry Guide 7 under the Securities and Exchange Act
of 1934 (as interpreted by Staff of the SEC), applies different standards in
order to classify mineralization as a reserve. Accordingly, for U.S. reporting
purposes, approximately 1.70 million ounces of proven and probable gold
reserves at Cortez and approximately 2.11 million ounces of proven and
probable gold reserves at Lagunas Norte are classified as mineralized material.
drilling to expand the resource. In addition, we expect
to complete a scoping study in 2016. This deposit
is geologically similar to the nearby Veladero mine.
However, drilling results to date have yielded oxide
mineralization at higher grades than Veladero, and
preliminary leach tests appear favorable. We will
provide a further update on the Alturas project at our
upcoming Investor Day on February 22.
n Our portfolio contains a number of the world’s largest
undeveloped gold deposits, including Goldrush,
Donlin Gold, Cerro Casale and Pascua-Lama. These
projects offer leverage to higher gold prices, with
nearly 33 million ounces2 of gold in proven and
probable reserves (Barrick’s share) and 37 million
ounces2 in measured and indicated resources (Barrick’s
share). In the short term we will work to optimize
the economics of these projects, while spending the
minimum required to maintain them as development
options within our portfolio.
n We will provide a detailed update on projects at our
upcoming Investor Day on February 22.
Key Business Developments
Divestitures
As part of our debt reduction strategy discussed on
page 21 of this MD&A, we completed several divestitures
in the past year, the details of which are described below:
On January 11, 2016, we completed the sale of our
Bald Mountain mine and our 50% interest in the Round
Mountain mine to Kinross Gold Corporation for cash
consideration of $610 million. As at December 31, 2015,
all of the assets and liabilities of Bald Mountain and
Round Mountain were classified as held-for-sale. As the
agreed selling price is lower than the previously
recognized carrying values, we recorded an impairment
loss of $81 million in fourth quarter 2015.
On December 17, 2015, we completed the sale of
our Ruby Hill mine and our 70% interest in the Spring
Valley project to Waterton Precious Metals Fund II
Cayman, LP for cash consideration of $110 million. As
a result of the transaction, we recorded a gain on sale
of $110 million in fourth quarter 2015.
27
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS On December 1, 2015, we completed the sale of
50% of our Zaldívar copper mine in Chile to Antofagasta
Plc for total consideration of $1.005 billion. We received
$950 million upon closing of the transaction, net of
$10 million for working capital items, $20 million being
held in escrow pending finalization of the working
capital adjustment and the remaining $25 million will be
received over the next five years. As the agreed selling
price is lower than the previously recorded book value
of the Zaldívar cash generating unit, we recorded a
goodwill impairment charge of $427 million for the
full year 2015. The transaction resulted in a loss of
$16 million for the year ended December 31, 2015
based on movements in working capital from the date
of announcement until the date of completing the
transaction. The transaction remains subject to a net
working capital adjustment period to complete the
review of the working capital. The net working capital
of Zaldívar (on a 100% basis) was $522 million as at
December 1, 2015. We have determined that Zaldívar
will be accounted for as a joint venture and upon closing
we began accounting for our investment under the
equity method. The purchase price allocation underlying
our equity method investment and the ultimate gain/loss
on disposition of our 50% of Zaldívar will be finalized
when the working capital adjustment is finalized.
On August 31, 2015, we completed the sale of 50%
of our interest in the Porgera mine in Papua New Guinea
to Zijin Mining Group Company (“Zijin”) for cash
consideration of $298 million. As a result of the
transaction, we recorded a gain on sale of $24 million in
third quarter 2015. We have determined that Porgera
will be accounted for as a joint operation and have
recognized our share of the assets, liabilities, revenues
and expenses of the Porgera mine.
On July 23, 2015, we completed the sale of our
Cowal mine in Australia for cash consideration of
$550 million. As a result of the transaction, we recorded
a gain on sale of $28 million in third quarter 2015.
Streaming Transaction
On September 29, 2015, we closed a gold and silver
streaming transaction with Royal Gold, Inc. (“Royal
Gold”) for production linked to Barrick’s 60 percent
interest in the Pueblo Viejo mine. Royal Gold made an
upfront cash payment of $610 million and will continue
to make cash payments for gold and silver delivered
under the agreement. The $610 million upfront payment
is not repayable and Barrick is obligated to deliver gold
and silver based on Pueblo Viejo’s production. We have
accounted for the upfront payment as deferred revenue
28
and will recognize it in earnings, along with the ongoing
cash payments, as the gold and silver is delivered to
Royal Gold. We will also be recording accretion expense
on the deferred revenue balance as the time value of the
upfront deposit represents a significant component of
the transaction.
Under the terms of the agreement, Barrick will sell
gold and silver to Royal Gold equivalent to:
n 7.5 percent of Barrick’s interest in the gold produced
at Pueblo Viejo until 990,000 ounces of gold have
been delivered, and 3.75 percent thereafter.
n 75 percent of Barrick’s interest in the silver produced
at Pueblo Viejo until 50 million ounces have been
delivered, and 37.5 percent thereafter. Silver will be
delivered based on a fixed recovery rate of 70 percent.
Silver above this recovery rate is not subject to
the stream.
Barrick will receive ongoing cash payments from Royal
Gold equivalent to 30 percent of the prevailing
spot prices for the first 550,000 ounces of gold and
23.1 million ounces of silver delivered. Thereafter
payments will double to 60 percent of prevailing spot
prices for each subsequent ounce of gold and silver
delivered. Ongoing cash payments to Barrick are tied to
prevailing spot prices rather than fixed in advance,
maintaining exposure to higher gold and silver prices in
the future.
Debt Management
Debt repayments made in 2015 totaled $3.1 billion,
which exceeded our target as discussed on page 21 of
this MD&A. In addition to normal course repayments,
we undertook a number of early debt retirements as
detailed below:
n On September 9, 2015, the Company redeemed the
outstanding $229 million aggregate principal amount
of 2.90% notes due 2016 issued by Barrick.
n On October 15, 2015, the Company redeemed the
outstanding $264 million aggregate principal amount
of 5.75% notes due 2016 issued by a wholly-owned
subsidiary.
n On October 28, 2015, the Company repurchased
$834 million of principal relating to the 2.50% notes
due 2018, 6.95% notes due 2019 and 3.85% notes
due 2022 issued by Barrick.
n On December 30, 2015, the Company repurchased
approximately $1.25 billion of principal relating to the
2.50% notes due 2018, 3.85% notes due 2022 and
4.10% notes due 2023 issued by Barrick.
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Royalty Changes in Zambia
In July 2015, the Zambian government passed
amendments to the country’s mining tax regime that
replaced the recently adopted 20% gross royalty on
open pit mines with a 9% royalty, along with the
reintroduction of a 30% corporate income tax, a 50%
of taxable income limitation on the utilization of tax loss
carryforwards, and a 15% variable profits tax. In third
quarter 2015 we evaluated the potential for a reversal
of previous impairments recorded in fourth quarter
2014. The current mine plan, lower short-term copper
prices and a higher observable discount rate offset
the lower royalty rate and therefore no impairment
reversal was required.
Working with the Zambian Chamber of Mines,
we continue to participate in consultations with the
Government of Zambia on alternative royalty
arrangements that better reflect the current copper
price environment.
Zambia Power Reductions
In second quarter 2015, the Zambian power authority
(“ZESCO”) announced a reduction to power generation
necessitated by the low water levels in its reservoirs as a
result of the poor rainfall experienced during the recent
rainy season. We are continuing to work with ZESCO to
manage a monthly power cap and are focused on power
usage efficiencies and savings to minimize the impact
on production.
Jabal Sayid Financing Facility
On April 2, 2015, Ma’aden Barrick Copper Company
(our 50% Barrick-owned equity method investment)
signed a financing agreement with the Saudi British
Bank to finance the Jabal Sayid copper project for
SAR 750 million ($200 million USD). The proceeds are
being used to fund the expenditures remaining to bring
the mine into commercial production. At the end of
fourth quarter 2015, $60 million has been drawn on
the financing facility.
Pascua-Lama Chilean Environmental Court Ruling
On March 23, 2015, Chile’s Environmental Court ruled
that the Pascua-Lama project has not damaged glaciers
in the project area. The plaintiffs did not file an appeal
and the matter is now closed.
Pascua-Lama SMA Regulatory Sanctions and
Constitutional Protection Action
On April 22, 2015, Chile’s environmental regulator
(known as the SMA) reopened the administrative
proceeding against Compañía Minera Nevada (“CMN”),
Barrick’s Chilean subsidiary that holds the Chilean
portion of the Pascua-Lama project (the “Project”) in
accordance with the March 3, 2014 decision of the
Environmental Court of Santiago, Chile. On May 14,
2015, CMN filed a petition to limit the scope of the
new administrative proceeding to the original allegations
considered by the environmental regulator at the time
it issued the Resolution and to assert additional defenses.
CMN presented supporting documents and witness
testimony in January 2016 in response to an order
from the SMA. The SMA also conducted a site visit in
January 2016. A final resolution from the SMA in this
matter is pending.
Also on April 22, 2015, CMN was notified that the
SMA has initiated a new administrative proceeding for
alleged deviations from certain requirements of the
Project’s environmental approval, including with respect
to the Project’s environmental impact and a series of
monitoring requirements. In May 2015, CMN submitted
a compliance program to address certain of the
allegations and presented its defense to the remainder
of the alleged deviations. The SMA rejected CMN’s
proposed compliance program on June 24, 2015, and
denied CMN’s administrative appeal of that decision
on July 31, 2015. CMN appealed the SMA’s decision to
the Environmental Court, which held a hearing on
November 26, 2015. Decisions are pending from the
Environmental Court with respect to CMN’s appeal
and from the SMA with respect to CMN’s defense to
the remainder of the alleged deviations. The new
administrative proceeding against CMN is separate from
the original administrative proceeding described above,
and could result in additional sanctions including new
administrative fines and/or the revocation of the Project’s
environmental permit.
CMN filed a temporary and partial closure plan for
the Pascua-Lama project (the “Temporary Closure Plan”)
with the Chilean mining authority (Sernageomin) on
August 31, 2015. Sernageomin approved the Temporary
Closure Plan on September 29, 2015, and issued a
29
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS resolution requiring CMN to comply with certain closure-
related maintenance and monitoring obligations for a
period of two years. The Temporary Closure Plan does
not address certain facilities, including the Project’s water
management system, which remain subject to the
requirements of the Project’s original environmental
approval and other regulations.
On December 4, 2015, a constitutional protection
action was filed in the Court of Appeals of Santiago,
Chile by a group of local farmers and other individuals
against CMN and Sernageomin in order to challenge the
Temporary Closure Plan and the resolution that approved
it. The plaintiffs assert that the Temporary Closure Plan
cannot be approved until the water management system
for the Project has been completed in accordance with
the Project’s environmental permit. The action has been
admitted for review by the court, which is expected
to schedule a hearing in this matter prior to issuing
a decision.
Refer to Note 35 to the Financial Statements for
more information regarding these matters.
Hemlo Land Acquisition
In March 2015, Barrick acquired certain surface and
mineral lands adjacent to the Hemlo property in Ontario
from subsidiaries of Newmont Mining Corporation for
$37.5 million. The acquisition will enable Hemlo to
realize additional value through near-term, lower-cost
ounces, optimize its current operation, and increase
exploration potential, which will allow for potential mine
life extensions.
Alturas Gold Discovery
In first quarter 2015, we made a new gold discovery
located in the Andean region of Chile. The new discovery
is the result of a methodical re-evaluation of the El Indio
belt led by our exploration team. At the end of 2015, we
have reported an initial inferred resource of 5.5 million
ounces of gold. For further details, see page 27 of
this MD&A.
Exploration Partnership with QPX
In first quarter 2015, we formed a strategic partnership
with Quantum Pacific Exploration (“QPX”) to explore for
copper deposits on our land in northern Chile. Any gold
deposits located on Barrick land will remain 100 percent
Barrick-owned. If a copper deposit project is identified on
either Barrick or QPX land, it will be 50 percent owned
by each company. This agreement seeks to maximize the
value of our highly prospective land holdings where there
is currently little to no exploration taking place.
Management Structure Refinements
In August 2015, Kelvin Dushnisky, most recently
Co-President, was appointed President. Richard Williams,
previously Chief of Staff, was appointed Chief Operating
Officer and will report to Mr. Dushnisky. Basie Maree,
most recently Senior Vice President, Technical Services
was appointed Chief Technical Officer and Peter Sinclair,
most recently Senior Vice President, Corporate Affairs
was appointed Chief Sustainability Officer, both reporting
to Mr. Williams. Jim Gowans, who made significant
contributions to the company as Co-President, supported
the transition as a Senior Advisor to the Chairman until
his retirement from Barrick on December 31, 2015.
Board Resignations & Appointments
In 2015, the Board of Directors accepted the resignation
of Ned Goodman, Founder of Dundee Corporation, as
well as C. David Naylor, Professor of Medicine &
President Emeritus, University of Toronto. The Board of
Directors subsequently appointed J. Robert S. Prichard,
current Chairman of Torys LLP, BMO Financial Group and
Metrolinx, to serve as an independent director on
Barrick’s Board. The Board of Directors also appointed
Kelvin Dushnisky, current President of Barrick to the
Board on February 17, 2016.
30
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Outlook for 2016
Operating Unit Guidance
Our 2015 gold and copper production, cash costs, all-in sustaining costs and forecast gold production, cash costs and
all-in sustaining costs ranges by operating unit for 2016 are as follows:
2015
production
(000s ozs)
2015
cash costs
($/oz)
Operating unit
Gold
Cortez
Goldstrike
Pueblo Viejo (60%)
Lagunas Norte
Veladero
Total Core Mines
Turquoise Ridge (75%)
Porgera (47.5%)1
Kalgoorlie (50%)
Acacia (63.9%)
Hemlo
Golden Sunlight
999
1,053
572
560
602
3,786
217
436
320
468
219
68
Total Continuing Operations
5,514
Cowal
Round Mountain (50%)
Bald Mountain
Ruby Hill
Pierina
Total Divested/Closed Sites
Total Gold2
Total Consolidated Barrick
156
192
191
10
54
603
6,117
6,117
2015
all-in
sustaining
costs ($/oz)
$ 603
658
597
509
946
2016
forecast
production
(000s ozs)
900 – 1,000
975 – 1,075
600 – 650
410 – 450
630 – 690
2016
forecast
cash costs
($/oz)
2016
forecast
all-in sustaining
costs ($/oz)
$ 480 – $ 530
560 – 610
440 – 480
380 – 420
550 – 600
$ 640 – $ 710
780 – 850
570 – 620
570 – 640
830 – 900
$ 660
3,500 – 3,900
$ 490 – $ 540
$ 690 – $ 740
742
1,018
886
1,112
895
1,379
200 – 220
230 – 260
350 – 365
480 – 500
200 – 220
30 – 45
560 – 620
700 – 750
610 – 630
670 – 700
600 – 660
920 – 990
770 – 850
990 – 1,080
670 – 700
950 – 980
790 – 870
1,000 – 1,050
$ 761
5,000 – 5,500
$ 540 – $ 580
$ 725 – $ 775
621
910
1,132
696
1,411
$ 948
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$ 780
5,000 – 5,500
$ 540 – $ 580
$ 725 – $ 775
$ 831
5,000 – 5,5003
$ 550 – $ 590
$ 775 – $ 825
$ 486
522
467
329
552
$ 480
581
791
752
772
708
1,098
$ 566
560
710
628
628
880
$ 658
$ 575
$ 596
2015
production
(millions lbs)
2015
C1 cash
costs ($/lb)
2015
all-in
sustaining
costs ($/lb)
2016
forecast
production
(millions lbs)
2016
forecast
C1 cash
costs ($/lb)
2016
forecast
all-in sustaining
costs ($/lb)
Copper
Zaldívar4
Lumwana
Jabal Sayid
Total Copper
218
287
6
511
$ 1.74
1.72
–
$ 1.73
$ 2.11
2.42
–
100 – 120
270 – 290
–
$ 1.70 – $ 1.90
$ 1.35 – $ 1.60
–
$ 2.20 – $ 2.40
$ 1.90 – $ 2.20
–
$ 2.33
370 – 410
$ 1.45 – $ 1.75
$ 2.05 – $ 2.35
1. Porgera presented on a 95% basis until August 31, 2015 and a 47.5% basis thereafter.
2. Total gold cash costs and all-in sustaining costs per ounce exclude the impact of hedges and/or costs allocated to non-operating sites.
3. Operating unit guidance ranges reflect expectations at each individual operating unit, but do not add up to corporate-wide guidance range total.
4. Zaldívar presented on a 100% basis until November 30, 2015 and a 50% basis thereafter. Results from December 1, 2015 onwards are accounted for under the
equity method.
31
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Consolidated Expense and Capital Guidance
Our 2015 consolidated expenses and capital
expenditures and forecast consolidated expenses and
capital expenditures for 2016 are as follows:
($ millions, except per ounce/pound data)
2015 Actual
2016 Guidance
Depreciation:
Gold ($ per ounce)
Copper ($ per pound)
Exploration and project expenses
Exploration and evaluation
Project expenses
General and administrative:
Corporate administration
Stock based compensation1
Acacia2
Total general and administrative
Other expense/(income)
Finance costs3
Capital expenditures:
Minesite sustaining
Minesite expansion4
Projects5
Total capital expenditures
265
0.20
355
163
192
181
10
42
233
(113)
739
240 – 260
0.20 – 0.30
225 –275
125 – 155
100 – 120
~145
~45
~25
~215
20 – 40
690 – 730
1,331
120
61
1,512
1,200 – 1,400
100 – 150
50 – 100
1,350 – 1,650
1. 2015 actual includes restricted share units related to corporate while 2016
guidance figure includes global restricted share units.
2. 2015 actual includes $6 million of restricted share unit costs, which are not
forecasted as part of the 2016 guidance figure.
3. 2015 actual includes a net gain on debt extinguishment of $68 million.
Gross finance costs were $807 million.
4. 2015 actual excludes $17 million of capitalized interest.
5. 2015 actual excludes $81 million reversal of accruals for contract claims and
other project costs at Pascua-Lama.
2016 Guidance Analysis
Highlights
n Forecasted gold production to be in the range of
5.0 to 5.5 million ounces.
n All-in sustaining costs forecasted to be in the range
of $775 to $825 per ounce.
n Forecasted capital spending to be in the range of
$1.35 to $1.65 billion.
n Targeting to be free cash flow positive at our 2016
budget assumption of $1,000 per ounce.
Estimates of future production, cost of sales, cash costs
and all-in sustaining costs presented in this MD&A are
based on mine plans that reflect the expected method
by which we will mine reserves at each site. Actual gold
and copper production and associated costs may vary
from these estimates due to a number of operational
and non-operational risk factors (see the “Cautionary
Statement on Forward-Looking Information” on page 18
of this MD&A for a description of certain risk factors
that could cause actual results to differ materially from
these estimates).
32
Operating Outlook
We expect 2016 gold production to be in the range
of 5.0 to 5.5 million ounces. The first half of the year is
expected to average higher than the second half for
all-in sustaining costs, with the second quarter of the
year expected to be the weakest. Production will
be lower than 2015 as a result of the following
operating mines:
n The sale of Round Mountain and Bald Mountain in
first quarter 2016, and of Cowal, Ruby Hill, and 50%
of our interest in Porgera in 2015 (2015 aggregate
production of 985 thousand ounces).
n Lower production at Lagunas Norte (2015 production:
560 thousand ounces), as a result of the progressive
depletion of oxide ores, which are being replaced with
sulfide ore with lower kinetics and recoveries in 2016.
These production decreases are expected to be
partially offset by an increase in production at Pueblo
Viejo, Veladero, Kalgoorlie and Acacia as a result of
the following:
n Higher production at Pueblo Viejo (2015 production,
Barrick share: 572 thousand ounces) due to an
increase in expected throughput and plant availability
as compared to 2015, primarily due to overcoming
the issues related to the Oxygen Plant motor failures
which negatively impacted 2015 throughput,
combined with improved efficiency in 2016 through
ore blending optimization, increased autoclave
availability, and optimization of maintenance strategies.
n Higher production at Veladero (2015 production:
602 thousand ounces) primarily due to an increase in
expected ore grades in 2016 from Federico phase 3
and 4 combined with an expected improvement
in equipment availability.
n Higher production at Kalgoorlie (2015 production,
Barrick share: 320 thousand ounces) due to an
increase in total ore tons processed and higher
expected head grade in 2016.
n Higher production at Acacia (2015 production,
Barrick’s share: 468 thousand ounces) primarily due to
an expected 5% increase in production at North Mara
as a result of an increased proportion of mill feed
being sourced from the Gokona underground and a
forecasted 10% increase in production at Buzwagi
due to improved access to the main ore zone from
second quarter.
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Cash costs are expected to be in the range of $550 to
$590 per ounce, which is lower than $596 per ounce
in 2015 as a result of the following:
n Lower consolidated cash costs in 2016 resulting from
the sale of Round Mountain and Bald Mountain in
first quarter 2016, and 50% of our interest in Porgera,
and Ruby Hill in 2015, each of which carried a higher
average cost in 2015.
n Lower costs at Pueblo Viejo primarily due to the
positive impact of increased production on unit
production costs and higher silver by-product credits
as a result of higher expected silver recoveries in 2016.
n Lower cash costs at Acacia primarily due to higher
expected production which will contribute to lower
unit production costs, combined with a focus on
ongoing cost reduction measures in 2016.
n Lower cash costs due to the impact of lower expected
hedge losses from our currency and fuel hedging
programs in 2016. In 2015, we realized about $21 per
ounce in realized hedge losses from our currency and
fuel hedging programs.
These cash cost decreases are expected to be partially
offset by an increase in cash costs at Lagunas Norte as
a result of a decrease in expected production and sales
volumes, which negatively impacts unit production
costs, and higher cash costs at Goldstrike primarily due
to processing a full year of autoclave tonnes which are
processed at a higher cost per tonne compared to
the roaster. The modified autoclaves did not enter
commercial production until third quarter 2015 due to
the commissioning of the thiosulfate circuit.
All-in sustaining costs are expected to be in the
range of $775 to $825 per ounce for gold, which reflects
a decrease from $831 per ounce in 2015, primarily
due to lower expected cash costs from $596 per ounce
to our expected range of $550 to $590 per ounce,
combined with lower minesite development capital
expenditures due to a decrease in capitalized stripping
activities at Veladero and Kalgoorlie and lower
development capital expenditures resulting from the
sale of Round Mountain and Bald Mountain in first
quarter 2016, and Cowal, Ruby Hill, and 50% of our
interest in Porgera in 2015.
Depreciation
Depreciation applicable to gold is expected to be in the
range of $240 to $260 per ounce, which reflects a
decrease from $265 per ounce in 2015. The decrease in
2016 is primarily due to a decrease in depreciation at
Pueblo Viejo, Lagunas Norte and Golden Sunlight, as a
result of an expected increase in production over their
life of mine. This was partially offset by an expected
increase in depreciation at Cortez due to the planned
drawdown of work in process and stockpile inventory
combined with a higher proportion of mining expected
from the open pit in 2016, which carries a higher
depreciation rate, at Goldstrike due to a full year of
depreciation relating to the thiosulfate circuit, and
at Veladero.
Exploration and Evaluation Expenses
We expect to incur approximately $125 to $155 million
of exploration and evaluation (“E&E”) expenditures in
2016. This reflects a prudent level of spend over last
year’s expenditure and aligns with Barrick’s strategic
objective to be free cash flow positive in light of the gold
price environment. We continue to take advantage of
existing infrastructure and advance key growth projects
such as Goldrush, Cortez Hills Lower Zone and Alturas.
These expenditures will provide a near-term return on
investment by adding to and/or upgrading our reserve
and resource base, and in some cases may positively
impact production and mine life.
About 85% of the budget is allocated to our two
core regions (Nevada and the Andean region in South
America), of which 36% is allocated to Cortez and
Goldrush and 24% predominantly towards Chile.
Project Expenses
We expect to incur approximately $100 to $120 million
of project expenses in 2016. Project expenses primarily
relate to expenses at Pascua-Lama for water management
and monitoring activities as part of the temporary
suspension plan, and other project expenditures
associated with Cerro Casale, Donlin Gold and Reko Diq.
General and Administrative Expenses
In 2015, we exceeded our overhead cost reduction
target of $50 million for the year, and expect to reach
$100 million in annualized overhead savings in 2016. We
realized approximately $65 million in reductions in gross
33
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS functional general and administrative and overhead costs
compared to the prior year, allowing us to meet our
corporate administration expense target of $145 million
in 2015, after adjusting for severance and other one-
time costs. Corporate administration costs in 2016 are
expected to be about $145 million.
Finance Costs
Finance costs primarily represent interest expense on
long-term debt. We expect finance costs in 2016 to be
lower than 2015 levels primarily due to lower interest
expense in 2016 following $3.1 billion of debt
repayments in 2015, partially offset by a decrease in
capitalized interest in 2016 due to the cessation of
interest capitalization upon completion of the thiosulfate
circuit at Goldstrike. In 2015, finance costs included the
recognition of a $68 million net gain on extinguishment
arising from the debt repurchases that occurred in fourth
quarter 2015. We do not expect to capitalize significant
interest costs in 2016.
Capital Expenditures
Total capital expenditures for 2016 are expected to be
in the range of $1.35 to $1.65 billion, compared
to $1.51 billion in 2015, which reflects a decrease in
minesite development capital expenditures, partially
offset by an increase in other minesite sustaining
capital expenditures.
Minesite sustaining capital expenditures reflect the
capital spending required to support current planned
production levels and those which do not meet our
definition of non-sustaining capital. This includes
capitalized production phase stripping costs at our open
pit mines, underground mine development and E&E
expenditures that meet our criteria for capitalization.
Minesite sustaining capital expenditures are expected
to decrease slightly from 2015 expenditure levels of
$1,331 million to a range of about $1,200 to
$1,400 million mainly due to a decrease in minesite
development capital expenditures at Veladero and
Kalgoorlie in 2016 and lower development capital
expenditures resulting from the sale of Round Mountain,
Bald Mountain, 50% of our interest in Porgera, Cowal,
Ruby Hill and 50% of Zaldívar in 2015. Lower
development capital expenditures are expected to be
partially offset by an increase in minesite sustaining
capital expenditures at Goldstrike, Cortez, Pueblo Viejo
and Pierina.
At Goldstrike, sustaining capital expenditures are
expected to increase primarily due to planned tailings
expansions scheduled in 2016, the addition of
dewatering wells associated with the underground water
management plan and a shift in timing of underground
equipment replacements from fourth quarter 2015 to
2016. At Cortez, sustaining capital is expected to be
higher in 2016 primarily due to planned hydrology,
dewatering and other water management projects
scheduled to occur in 2016 combined with a shift in
timing of haul truck capitalized maintenance originally
planned for fourth quarter 2015 that will not be required
until 2016. At Pueblo Viejo, sustaining capital is expected
to increase primarily due to a shift in timing of project
expenditures from 2015 to 2016 combined with
acceleration of the tailings extension into 2016. At
Pierina, sustaining capital is expected to increase in 2016
primarily due to completion of the phase 7 leach pad
expansion in 2016 which commenced in fourth quarter
2015. The phase 7 leach pad expansion is scheduled to
be completed in third quarter 2016 and is expected
to produce approximately 200 thousand ounces over
the next three years.
Minesite development capital expenditures are
expected to be lower in 2016 due to a decrease in
production phase stripping activities at Veladero and
Kalgoorlie and lower development capital expenditures
resulting from the sale of Round Mountain and Bald
Mountain in first quarter 2016, and 50% of our interest
in Porgera, Cowal, Ruby Hill and 50% of Zaldívar
in 2015.
At Veladero, development capital expenditures are
expected to decrease due to a reduction in capitalized
stripping in the Federico phase 4 pit as compared to
2015. At Kalgoorlie, the decrease in development capital
expenditures is primarily due to lower capitalized
stripping in the open pit in line with the mine plan.
34
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Minesite expansion capital expenditures include
non-sustaining capital expenditures at new projects and
existing operations that are related to discrete projects
that significantly increase the net present value of the
mine and are not related to current production activity.
Expansion capital expenditures are expected to be in the
range of $100 to $150 million in 2016, in line with 2015
expenditure levels of $120 million, which mainly reflects
an increase in expansion capital expenditures at Cortez,
offset by a decrease at Goldstrike in 2016. Cortez
expansion capital expenditures are expected to be higher
in 2016 due to an increase in feasibility and development
expenditures related to Lower Zone expansion projects
combined with an increase in pre-stripping activities
at Crossroads compared to 2015.
Expansion capital expenditures at Goldstrike are
expected to be lower in 2016 following completion of
the thiosulfate circuit at the autoclave which was
commissioned in 2015.
Project capital expenditures reflect capital
expenditures related to the initial construction of the
project and include all of the expenditures required to
bring the project into operation and achieve commercial
Outlook Assumptions and Economic Sensitivity Analysis
production levels. In 2016, we expect our share of
project capital costs to be in the range of $50 to
$100 million, which reflects ongoing pre-stripping
activities at South Arturo due to the acceleration of
planned mining into 2016 and capitalized costs related
to permitting, engineering and construction activities
related to the temporary solution for water management
at Pascua-Lama.
Effective Income Tax Rate
At a gold price of $1,000 per ounce in 2016, our
expected effective tax rate is 74% on all income
excluding expenses from non-operating entities, which
do not have a present source of gold production or
taxable income. These expenses cannot be recognized
as a deferred tax asset, and therefore there is no tax
recovery recorded on these expenses. The effect of these
expenses in our income statement, with no corresponding
tax effect, is to increase our effective rate on total net
income to 133%. In the event that there will be sources
of taxable income in the future, we may recognize some
or all of these deferred tax assets.
Gold revenue, net of royalties
Copper revenue, net of royalties
Gold all-in sustaining costs
Gold royalties & production taxes
WTI crude oil price2,3
Australian dollar exchange rate2
Australian dollar exchange rate2
Canadian dollar exchange rate
Canadian dollar exchange rate
Copper all-in sustaining costs
WTI crude oil price2,3
Chilean peso exchange rate
Chilean peso exchange rate
2016 Guidance
Hypothetical
assumption
change
Impact on
AISC
$ 1,000/oz
+/-$ 100/oz
$ 2.00/lb +/-$ 0.50/lb
$ 1,000/oz
$ 50/bbl
0.72 : 1
0.72 : 1
1.40 : 1
1.40 : 1
$ 100/oz
$ 10/bbl
+10%
-10%
+10%
-10%
n/a
n/a
$ (3)/oz
$ (1)/oz
$ 4/oz
$ (4)/oz
$ (6)/oz
$ 7/oz
$
50/bbl
715 : 1
715 : 1
$ 10/bbl
+10%
-10%
$ (0.01)/lb
$ (0.02)/lb
$ 0.03/lb
1. EBITDA is a non-GAAP financial performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation,
please see page 84 of this MD&A.
2. Due to our hedging activities, which are reflected in these sensitivities, we are partially protected against changes in these factors.
3. Impact on EBITDA only reflects contracts that mature in 2016.
EBITDA1
(millions)
$ 536
$ 178
$ 16
$
8
$ (21)
$ 21
$ 28
$ (34)
$
$
$
4
8
(9)
35
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Risks and Risk Management
Overview
The ability to deliver on our vision, strategic objectives
and operating guidance depends on our ability to
understand and appropriately respond to the uncertainties
or “risks” we face that may prevent us from achieving
our objectives. In order to achieve this we:
n Maintain a framework that ensures we manage
risk effectively and in a manner that creates the
greatest value;
n Integrate a process for managing risk into all our
important decision-making processes so that we
reduce the effect of uncertainty on achieving
our objectives;
n Ensure that the key controls we rely on to achieve the
company’s objectives are actively monitored so that
they remain in place and are effective at all times; and
n Provide assurance to the Executives and relevant
Committees of the Board of Directors on the
effectiveness of key control activities.
Board and Committee Oversight
We maintain strong risk oversight practices, with
responsibilities outlined in the Board’s and related
committees’ mandates. The Board’s mandate makes clear
the responsibility for reviewing and discussing with
management the processes used to assess and manage
risk, including the identification by management of the
principal risks of the business, and the implementation
of appropriate systems to deal with such risks.
The Risk Committee of the Board of Directors assists
the Board in overseeing the Company’s management
of principal risks as well as the implementation of policies
and standards for monitoring and modifying such
risks, and monitoring and reviewing the Company’s
financial position and financial risk management
programs generally. The Audit Committee and Corporate
Social Responsibility Committee also provide oversight
focusing on financial and operational (e.g. Safety &
Health, Environmental, Community, Security, etc.) risk
exposures, respectively.
Management Oversight
On a weekly basis, the global leadership team, including
the executive team, representatives from each of Barrick’s
country offices, minesites and corporate functions,
participate in a Business Plan Review (“BPR”) meeting.
This forum allows for the timely identification of key risks
that may prevent the Company from achieving its
objectives. It also fosters a culture of transparent,
real-time risk management as a collective and enables
a learning organization.
Principal Risks
The following subsections describe some of our key
sources of uncertainty and relevant risk modification
activities. The risks described below are not the only ones
facing Barrick. Our business is subject to inherent risks in
financial, regulatory, strategic and operational areas.
For a more fulsome discussion of those inherent risks,
see “Risk Factors” in our most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian
provincial securities regulatory authorities. Also see
the “Cautionary Statement on Forward-Looking
Information” on page 18.
Financial Position and Liquidity
Our liquidity profile, level of indebtedness and credit
ratings are all factors in our ability to meet short- and
long-term financial demands. Barrick’s outstanding debt
balances impact liquidity due to interest payments and
elevated leverage ratios, which could impact our
investment grade credit rating and ability to access
capital markets. In addition, Barrick’s ability to draw on
its credit facility is subject to meeting its covenants. Our
primary source of liquidity is our operating cash flow,
which is dependent on the ability of our operations to
deliver projected future cash flows. The ability of our
operations to deliver projected future cash flows within
the context of a reduced production profile, as well as
future changes in gold and copper market prices, either
favorable or unfavorable, will continue to have a material
impact on our cash flow and liquidity.
Risk Modification Approach:
n Continued focus on generating positive free cash flow
by improving the underlying cost structures of our
operations in a sustainable manner;
n Lengthened tenor of the average maturity of our
outstanding debt through liability management
activities;
n Preparation of budgets and forecasts to understand
the impact of different price scenarios on liquidity, and
formulate appropriate strategies;
n Disciplined capital allocation criteria for all investments;
n Proactive cash flow management to ensure funds are
available to meet financial obligations;
36
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS n Recent introduction of the Dividend Reinvestment Plan
(the “DRIP”);
n Discretion on the declaration and payment of dividends;
n Replaced the financial covenant tied to our credit
facility that required Barrick to maintain a minimum
consolidated tangible net worth with a new financial
covenant that requires us to maintain a net debt to
total capitalization ratio of less than 0.60, which
better reflects our deleveraging measures and future
expected debt reduction;
n Other options include:
n Draw on our $4.0 billion undrawn credit facility;
n Further non-core asset sales, joint venture or
partnership opportunities;
n Issuance of debt or equity securities in the public
markets or to private investors.
Improving Free Cash Flow and AISC
Our ability to improve productivity, drive down operating
costs and reduce working capital is a focus in 2016 and
subject to several sources of uncertainty. These range
from our ability to successfully complete the ramp up of
the thiosulfate circuit at Goldstrike to our ability to
execute key business improvement programs aimed at
improving productivity and cost in a sustainable manner.
Risk Modification Approach:
n Formal project management protocols are established
around these business transformation programs.
The status of these projects is reviewed on a weekly
basis during the BPR meetings to ensure the timely
identification of key risk exposures that may affect
their successful delivery;
n Implementing a program aimed at simplifying and
n Benchmarking the performance of each mine to other
Barrick mines and to other external companies;
n Educating staff on the linkage between key
operating metrics and value creation;
n Identifying gaps and design changes to
management processes such as planning,
compensation and reporting to align goals with
improving the measurement scorecard;
n Identifying a standardized way of setting targets to
become Best in Class in the mining industry; and
n Developing a roadmap to achieve targets at each
mine including the evaluation of several Value
Realization initiatives.
Social License to Operate
At Barrick, we are committed to building, operating, and
closing our mines in a safe and responsible manner. To
do this, we develop long-term and mutually-beneficial
relationships with host governments and communities
while working to minimize the social and environmental
impacts of our activities. Recent environmental incidents
in the extractive industry emphasize the hazards (e.g.
water management, tailings storage facilities, etc.) and
the potential consequences to both the environment and
community health and safety. As a result, our industry is
likely to face both additional public and regulatory scrutiny.
Risk Modification Approach:
n Our external Corporate Social Responsibility
Advisory Board was formed in 2012 and advises
the Company on a range of corporate responsibility
matters, including community relations, sustainable
development, water, energy, climate change, security
and human rights;
integrating business processes across the organization
with a focus on improving visibility to key performance
drivers, delivering insight and underpinning informed
decision making;
n Barrick’s community relations, environment, safety
and health, and security management systems set
expectations, define performance standards and
provide the necessary tools to modify the related risks;
n Implementing a Best in Class program encompassing:
n Forming a Business Improvement group to ensure
the rapid implementation and management of the
Best in Class program;
n Developing a standardized, performance-oriented,
measurement scorecard linking top operational and
economic measures;
n We take a partnership approach with all our
stakeholders, including with our home and host
governments. This means we work to balance
our own interests and priorities with those of our
government partners, working to ensure that
everyone derives real value from our operations;
37
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS AVERAGE MONTHLY SPOT GOLD PRICES
AVERAGE MONTHLY SPOT GOLD PRICES
$/oz
2,000
1,750
1,300
1,200
1,100
1,000
900
800
700
USD
90
85
80
75
70
65
60
55
50
n As part of this approach, we work closely with
The price of gold is subject to volatile price movements
USD Index
2009
2010
2011
Average Spot Price
over short periods of time and is affected by numerous
industry and macroeconomic factors. During the year,
the gold price ranged from $1,046 per ounce to
$1,308 per ounce. The average market price for the
year of $1,160 per ounce represented a decrease
of 8% versus 2014.
AVERAGE MONTHLY SPOT GOLD PRICES
(dollars per ounce)
2,000
1,750
1,500
1,250
1,000
750
500
2011
2012
2013
2014
2015
The decline in the price of gold in 2015 primarily
occurred as a result of a strengthening US dollar over
the course of the year. US dollar strength was largely
due to increasing economic strength in the United States
versus concerns over economic performance in Europe
and China, leading to a divergence in monetary policies,
as the United States entered a rate hike cycle amidst an
ongoing easing cycle in Europe and China. Investor
sentiment regarding gold remained muted, particularly
90
in the Western world, as was evidenced by decreased
85
holdings in global Exchange Traded Funds (“ETFs”) of
80
4 million ounces, versus a decrease in holdings of
5 million ounces in 2014 and 29 million ounces in 2013.
75
However, physical demand for jewelry and other uses,
70
particularly in China and India, remained strong and
continued to be a significant driver of the overall
gold market.
60
65
55
50
governments, international NGOs and advocacy
organizations to develop appropriate standards and
guidelines for our industry.
Resources and Reserves, Growth and
Production Outlook
Like any mining company, we face the risk that we are
unable to discover or acquire new resources or that we
do not convert resources into production. As we move
into 2016 and beyond, our overriding objective of
growing free cash flow per share is underpinned by a
strong pipeline of organic projects and minesite
expansion opportunities in our core regions. Uncertainty
related to these opportunities exists (potentially both
favorable and unfavorable) due to the speculative nature
of mineral exploration and development as well as the
potential for increased costs, delays, suspensions and
technical challenges associated with the construction of
capital projects.
Risk Modification Approach:
n Exploration activities including minesite exploration
and global programs;
n Strategic business development activities;
n Enhance project design to stagger capital outlay and
optimize timing of cash flows;
n Identify opportunities to improve project economics;
n Leverage existing or develop new business
partnerships with those who share a mutual interest in
achieving the Company and project objectives;
n Defer, cancel, or sell projects that cannot achieve
desired capital allocation targets.
Market Overview
Gold
The market prices of gold, and, to a lesser extent, copper
are the primary drivers of our profitability and our ability
to generate free cash flow for our shareholders.
90
85
80
75
70
65
60
55
50
38
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Copper
During 2015, London Metal Exchange (“LME”) copper
prices traded in a range of $2.02 to $2.94 per pound,
averaged $2.49 per pound, and closed the year at
$2.09 per pound. Copper prices are significantly
influenced by physical demand from emerging markets,
especially China.
The decline in the copper price over the course of
the year was largely due to disappointing economic
results out of China, which is by far the largest single
market for copper demand, an overall decline in
commodity prices, and a declining cost structure as a
result of lower oil prices and US dollar strength.
AVERAGE MONTHLY SPOT
COPPER PRICES (dollars per pound)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
2011
2012
2013
2014
2015
We have provisionally priced copper sales for which final
price determination versus the relevant copper index is
outstanding at the balance sheet date. As at December 31,
2015, we recorded 55 million pounds of copper sales
subject to final settlement at an average provisional price
of $2.10 per pound. The impact to net income before
taxation of a 10% movement in the market price of
copper would be approximately $11 million, holding all
other variables constant.
AVERAGE MONTHLY SPOT
COPPER PRICES (dollars per pound)
Silver
Silver traded in a range of $13.65 to $18.49 per ounce in
2015, averaged $15.68 per ounce and closed the year at
2,000
$13.82 per ounce. The silver price is driven by factors
similar to those influencing investment demand for gold.
1,750
1,500
1,250
1,000
750
500
2007
2008
2009
2010
2011
Silver prices do not significantly impact our current
operating earnings, cash flows or gold cash costs. Silver
prices, however, will have a significant impact on the
overall economics for our Pascua-Lama project.
AVERAGE MONTHLY SPOT
SILVER PRICES (dollars per ounce)
45
40
35
30
25
20
15
10
5
2011
2012
2013
2014
2015
Currency Exchange Rates
The results of our mining operations outside of the
United States are affected by US dollar exchange rates
with non-US denominated currencies comprising
approximately 25% of our operating and capital cost
exposures. Although we have made dispositions, we
continue to have exposure to the Australian and
Canadian dollars through a combination of mine
operating and corporate administration costs, as well
as exposure to the Chilean peso through expected
future capital and operating costs at our Pascua-Lama
project and mine operating costs at Zaldívar. We also
have exposure to the Argentinean peso through
operating costs at our Veladero mine, peso denominated
VAT receivable balances and expected future capital
and operating costs at our Pascua-Lama project. In
addition, we have exposure to the Papua New Guinea
kina, Peruvian sol, Zambian kwacha, Tanzanian shilling
and Dominican peso through mine operating and
capital costs.
AVERAGE MONTHLY SPOT
SILVER PRICES (dollars per ounces)
625
675
575
525
475
425
2009
2010
2011
39
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Fluctuations in the US dollar increase the volatility
of our costs reported in US dollars, subject to positions
that we have put in place through our currency hedging
program. In 2015, the Australian dollar traded in a
range of $0.69 to $0.83 against the US dollar, while
the US dollar against the Canadian dollar and Chilean
peso ranged from $1.16 to $1.40 and CLP593 to
CLP718, respectively.
Due to expectations of a strengthened US dollar, in
recent years we have reduced our overall foreign
currency derivative positions, whether by closing out
positions before maturity or limiting the addition of new
positions. As a result, our foreign currency derivative
contracts in place beyond 2015 currently consist only of
AUD $85 million of contracts maturing in 2016.
During the year, we recorded losses in earnings of
approximately $87 million from our Australian dollar,
Canadian dollar and Chilean peso hedges, primarily
impacting our operating and corporate administration
costs (2014: $97 million gain; 2013: $279 million gain).
Assuming December 31, 2015 market exchange rate
curves and year-end spot prices, we expect to realize
Australian dollar currency hedge losses of approximately
$35 million against operating, administrative and capital
costs in 2016. Despite potential future losses on currency
derivative positions, a strengthening US dollar versus our
key currency exposures is beneficial to our cost structure
in 2016 as we are less than fully hedged against such
exposures. As at December 31, 2015, we no longer
have any Canadian dollar or Chilean peso currency
hedges outstanding.
AUD Currency Contracts
AVERAGE MONTHLY AUD SPOT AND HEDGE RATES
AVERAGE MONTHLY AUD SPOT AND HEDGE RATES
1.10
1.10
1.00
1.00
0.90
0.90
0.80
0.80
0.70
0.70
0.60
0.60
2011
2012
2013
2014
2011
2012
Average Spot Rate
2013
2014
Average Hedge Rate
Average Spot Rate
Average Hedge Rate
2015
2015
AVERAGE MONTHLY CAD SPOT AND HEDGE RATES
AVERAGE MONTHLY CAD SPOT AND HEDGE RATES
1.40
1.40
1.30
1.30
1.20
1.20
1.10
1.10
1.00
1.00
0.90
0.90
2011
2012
2013
2014
2011
2012
Average Spot Rate
2013
2014
Average Hedge Rate
2015
2015
Contracts
Effective
average
(AUD hedge rate
(AUDUSD)
millions)
% of total
expected
AUD
exposure1
hedged
% of
expected
operating
Crystallized
cost gain/(loss) in
OCI2 (USD
millions)
exposure
hedged
Average Spot Rate
Average Hedge Rate
AVERAGE MONTHLY CLP SPOT AND HEDGE RATES
2016
85
0.91
20%
23%
(14)
1. Includes all forecasted operating, administrative, sustainable and eligible
project capital expenditures.
2. To be reclassified from Other Comprehensive Income (“OCI”) to earnings
when indicated.
750
700
650
600
550
500
450
40
2011
2012
2013
2014
2015
Average Spot Rate
Average Hedge Rate
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.7
0.6
0.6
1.4
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
750
700
650
600
550
500
450
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.7
0.6
0.6
1.4
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
750
700
650
600
550
500
450
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Financial Fuel Hedge Summary
Barrels
(thousands)
Average
price
% of
expected
exposure
Impact of $10
change on pre-
tax earnings
(USD millions)1
2016
2017
2018
2,933
2,093
1,080
85
81
79
70%
55%
33%
1. Includes the impact of hedges currently in place.
13
17
22
US Dollar Interest Rates
Beginning in 2008, in response to the contraction of
global credit markets and in an effort to spur economic
activity and avoid potential deflation, the US Federal
Reserve reduced the range for its benchmark rate to
between 0% and 0.25%. The benchmark was kept at
this level until December 2015, when the range was
increased by 25 basis points. As economic conditions in
the US continue to normalize, we expect incremental
increases to short-term rates to continue in 2016.
At present, our interest rate exposure mainly relates
to interest receipts on our cash balances ($2.5 billion at
December 31, 2015); the mark-to-market value of
derivative instruments; the fair value of and ongoing
payments under US dollar interest-rate swaps; the
carrying value of certain long lived assets and liabilities;
and to the interest payments on our variable-rate debt
($0.6 billion at December 31, 2015). Currently, the
amount of interest expense recorded in our consolidated
statement of income is not materially impacted by
changes in interest rates, because the majority of debt
was issued at fixed interest rates. The relative amounts of
variable-rate financial assets and liabilities may change in
the future, depending on the amount of operating cash
flow we generate, as well as the level of capital
expenditures and our ability to borrow on favorable
terms using fixed rate debt instruments.
Fuel
For 2015, the price of West Texas Intermediate (“WTI”)
crude oil traded in a wide range between $34 and
$63 per barrel, averaged $49 per barrel and closed the
year at $37 per barrel. During 2015, the price of crude
oil decreased significantly as a result of concerns over
global economic growth, limiting expectations for
demand, at the same time that global oil supply has
been increasing due in part to advances in extraction
technology.
CRUDE OIL MARKET PRICE (WTI) (dollars per barrel)
$120
$100
$80
$60
$40
$20
2011
2012
2013
2014
2015
In 2015, we recorded hedge losses in earnings of
$19 million on our fuel hedge positions (2014: $4 million
loss and 2013: $9 million gain). Assuming December 31,
2015 market forward curves and year-end spot prices,
we expect to realize fuel hedge losses of approximately
$110 million against operating, administrative and
capital costs in 2016. A significant portion of these
losses have already been recorded in the consolidated
120
statements of income as an unrealized loss on non-
hedge derivatives. Beginning in January 2015, upon early
100
adoption of IFRS 9, Barrick’s fuel hedges qualified for
hedge accounting and unrealized gains and losses will be
recorded in Other Comprehensive Income.
80
60
40
20
41
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Review of Annual Financial Results
Revenue
($ millions, except per ounce/pound
data in dollars)
For the years ended December 31
Gold
000s oz sold1
Revenue
Market price2
Realized price2,3
Copper
millions lbs sold1
Revenue
Market price2
Realized price2,3
Other sales
435
510
519
$ 1,002 $ 1,224 $ 1,651
3.32
3.39
299
$ 214 $ 271 $
3.11
3.03
2.49
2.37
1. Includes our equity share of gold ounces from Acacia and Pueblo Viejo and
copper pounds from Zaldívar.
2. Per ounce/pound weighted average.
3. Realized price is a non-GAAP financial performance measure with no standard
meaning under IFRS. For further information and a detailed reconciliation,
please see page 84 of this MD&A.
In 2015, gold revenues were down 11% compared to
the prior year primarily due to a lower realized gold price
combined with a decrease in gold sales volume. Copper
revenues for 2015 were down 18% compared to the
prior year primarily due a lower realized copper price and
$67 million in negative provisional pricing adjustments,
partially offset by an increase in sales volume.
Realized gold prices for 2015 were down $108 per
ounce compared to the prior year. The decrease in
realized gold prices reflects the lower market gold prices
in 2015, down 8% compared to 2014. In 2015, the
realized copper price was down $0.66 per pound
compared to 2014, due to the 20% decline in market
copper prices over the prior year and the negative
provisional pricing adjustments recognized in 2015.
In 2015, gold production was 2% lower than the
prior year primarily due to a decrease in production at
Pueblo Viejo, Lagunas Norte, and Veladero combined
with the impact of the asset sales that occurred in the
second half of 2015. The divested sites contributed an
additional 135 thousand production ounces in 2014
compared to 2015. This was partially offset by an
increase in production at Goldstrike, Cortez, and
Turquoise Ridge.
42
2015
2014
2013
7,174
6,083 6,284
$ 7,813 $ 8,744 $ 10,670
1,160 1,266
1,411
$ 1,157 $ 1,265 $ 1,407
Copper production for 2015 increased by 17%
compared to the prior year due to higher production at
Lumwana, partially offset by lower production at Zaldívar.
Production at Lumwana was higher primarily as a result
of the partial conveyor collapse that shut down the mill
and concentrate production for much of second quarter
2014. The decreased production at Zaldívar reflects the
divestment of 50% of our ownership in the mine that
was completed on December 1, 2015.
Production Costs
($ millions, except per ounce/pound
data in dollars)
For the years ended December 31
Cost of sales
Direct mining costs
Depreciation
Royalty expense
Community relations
Cost of sales – gold1
Cash costs2,3
All-in sustaining costs – gold2,3
Cost of sales – copper1
C1 cash costs2,3
All-in sustaining costs per pound2,3
2015
2014
2013
$ 4,738 $ 4,803 $ 5,205
1,732
1,648
1,771
321
303
336
71
76
62
6,220
5,794
5,897
566
598
596
915
864
831
1,100
954
814
1.92
1.92
1.73
$ 2.33 $ 2.79 $ 2.74
1. 2014 and 2013 figures restated to include community relations costs.
2. Per ounce/pound weighted average.
3. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial
performance measures with no standard meaning under IFRS. For further
information and a detailed reconciliation, please see pages 78 – 83 of
this MD&A.
In 2015, cost of sales applicable to gold was 2% higher
than the prior year due to an increase in depreciation
expense, partially offset by lower direct mining and gold
royalty costs resulting from decreased sales volumes.
Gold cash costs for 2015 were in line with the prior
year as the benefit of lower direct mining costs and
reduced royalty expense was offset by realized losses
on our foreign currency and fuel hedge contracts,
movements in inventory and the allocation of shared
services to the operating sites in 2015 combined with the
impact of lower sales volume on unit production costs.
In 2015, all-in sustaining costs were down $33 per ounce
compared to the prior year primarily due to a reduction
in minesite sustaining capital expenditures, partially
offset by the impact of lower sales volume on unit
production costs.
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2015, cost of sales applicable to copper decreased
$140 million compared to the prior year primarily due to
lower depreciation expense as a result of the impairment
charges recorded in fourth quarter 2014 combined with
the impact of ceasing depreciation of the Zaldívar assets
in third quarter 2015 as a result of reclassifying the
mine’s assets as held-for-sale. This was partially offset by
higher royalty expense at Lumwana in first quarter 2015
resulting from the increase in the royalty rate from 6% to
20%, subsequently lowered to 9% in third quarter 2015.
C1 cash costs per pound for 2015 were 10% lower
than the prior year reflecting the impact of higher sales
volume on unit production costs. All-in sustaining costs
per pound were 16% lower than the prior year primarily
reflecting the effect of the above factors on C1 cash
costs combined with a decrease in minesite sustaining
capital expenditures at Lumwana and Zaldívar.
Capital Expenditures1
($ millions)
For the years ended December 31
Project capital expenditures2
Minesite sustaining
Mine development
Minesite expansion2
Capitalized interest
2015
2014
2013
$
13 $ 234 $ 2,137
1,150
764
1,317
874
468
362
303
30
632
727
120
17
Total consolidated capital expenditures
$ 1,509 $ 2,264 $ 5,375
1. These amounts are presented on a 100% accrued basis.
2. Project and expansion capital expenditures are included in our calculation of
all-in costs, but not included in our calculation of all-in sustaining costs.
In 2015, capital expenditures decreased 33% compared
to the prior year. The decrease is primarily due to a
decrease in minesite sustaining and development capital
expenditures combined with lower minesite expansion
and project capital expenditures. The decrease in
minesite sustaining capital expenditures is primarily due
to our disciplined capital allocation approach. This was
partially offset by an increase in costs at Veladero relating
to the phase 4B and 5A leach pad expansions combined
with the capitalization of costs committed by the mine to
improve leach pad facilities as a result of the cyanide
incident that occurred in third quarter 2015. The 17%
reduction in minesite development capital expenditures
in 2015 is due to lower capitalized stripping costs,
primarily at Goldstrike and Cortez, partially offset by an
increase in those costs at Porgera and Bald Mountain.
Minesite expansion capital expenditures decreased 67%
and capitalized interest decreased by $13 million
compared to the prior year as a result of the completion
of the thiosulfate circuit at Goldstrike, which entered
commercial production in third quarter 2015.
Additional Significant Statement of Income Items
($ millions)
For the years ended December 31
General & administrative expenses
Corporate administration1
Operating segment administration2
Stock-based compensation
Acacia
Other expense/(income)
Exploration, evaluation & project costs
Finance costs
Finance income
Impairments
2015
2014
2013
390
$ 233 $ 385 $
188
$ 181 $ 212 $
162
– $ 124 $
$
4
5 $
10 $
$
36
44 $
42 $
$
56
(14) $
$ (113) $
680
$ 355 $ 392 $
657
$ 739 $ 796 $
9
11 $
$
$ 3,897 $ 4,106 $ 12,687
13 $
1. For the year ended December 31, 2015, corporate administration costs
include approximately $29 million of severance costs (2014: $24 million).
2. In 2015, operating segment administration costs have been allocated to our
operating sites and are now included in cost of sales.
General and Administrative Expenses
General and administrative expenses were $152 million
lower than the prior year, primarily related to transferring
functional services costs to minesites reflecting services
they require to run their business. Also contributing
to the decrease was a reduction of approximately
$65 million in overhead costs, excluding severance,
stock-based compensation and Acacia corporate
administration costs, which was recorded within general
and administrative and cost of sales, exceeding our
$50 million reduction target for the year. For further
information regarding the allocation of shared services
costs, refer to page 49 of this MD&A.
43
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Impairment Charges
For the years ended December 31
2015
2014
2013
($ millions)
Goodwill
Goldstrike
Zaldívar
Pueblo Viejo
Cortez
Lagunas Norte
Jabal Sayid
Lumwana
Bald Mountain
Round Mountain
Australia Pacific
Copper
Capital projects
Acacia
Post-tax Post-tax Post-tax
(our
share)
(our
share)
(our
share)
$ 730 $
427
412
355
247
–
–
–
–
–
–
–
–
– $
712
–
–
–
316
214
131
36
–
–
–
–
–
–
–
–
–
– 1,200
– 1,033
397
–
185
–
Total goodwill impairment charges
$ 2,171 $ 1,409 $ 2,815
Asset impairments
Pascua-Lama
Pueblo Viejo
Buzwagi
Round Mountain/Bald Mountain
Lagunas Norte
Cerro Casale
Lumwana
Jabal Sayid
Porgera
Cortez
Veladero
North Mara
Pierina
Kalgoorlie
Exploration sites
Granny Smith
Marigold
Ruby Hill
Kanowna
Plutonic
Darlot
AFS investments
Other
$ 399 $ 382 $ 6,007
–
439
51
–
–
–
704
595
–
300
125
98
–
94
73
39
33
41
26
25
23
57
386
30
53
26
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
53
–
–
–
–
778
720
198
(160)
29
–
–
–
9
7
–
–
–
–
–
–
18
4
Total asset impairment charges
$ 947 $ 1,985 $ 8,730
Tax effects and NCI
779
712 1,142
Total impairment charges (100%)
$ 3,897 $ 4,106 $ 12,687
Other Expense (Income)
Other income for 2015 increased by $99 million compared
to the prior year. The increase is primarily due to the
realization of gains on the sale of our Cowal mine and
50% of our interest in the Porgera mine, which closed
in third quarter 2015. These gains were partially offset
by $30 million in office closure costs primarily related
to the exiting of leases at our Toronto and Salt Lake City
offices and $27 million in minesite severance and
non-operational costs primarily related to the end of
surface mining at our Golden Sunlight mine. For a
further breakdown of other expense (income), refer to
note 9 to the Financial Statements.
Exploration, Evaluation and Project Costs
Exploration, evaluation and project costs for 2015
decreased $37 million compared to the prior year. The
decrease is primarily due to a $22 million decrease in
global exploration costs combined with a $30 million
decrease in project costs at Jabal Sayid. This was partially
offset by a $26 million increase in corporate development
costs relating to projects. For a further breakdown of
exploration, evaluation and project costs, refer to note 8
to the Financial Statements.
Finance Costs
In 2015, finance costs were $57 million lower than
the prior year primarily due to the recognition of
a $68 million net gain on extinguishment arising from
the debt repurchases that occurred in fourth quarter
2015, partially offset by a decrease in capitalized interest
due to the cessation of interest capitalization upon
completion of the thiosulfate circuit at Goldstrike.
Interest costs incurred were in line with the prior year.
For a further breakdown of finance costs/income, refer
to note 13 to the Financial Statements.
44
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2015, primarily as a result of a decrease in the metal
price assumptions used for our annual impairment test,
we recognized goodwill impairment losses of $2.2 billion
(net of non-controlling interests) and $947 million (net
of tax and non-controlling interests) of impairment losses
for non-current assets compared to goodwill and
non-current asset impairment losses of $1.4 billion and
$2 billion (net of tax and non-controlling interests),
respectively, in the prior year. Refer to note 20 to the
consolidated financial statements for a full description of
impairment charges, including pre-tax amounts and
sensitivity analysis.
Income Tax Expense
Reconciliation to Canadian Statutory Rate
($ millions)
For the years ended December 31
At 26.5% statutory rate
Increase (decrease) due to:
Allowances and special tax deductions1
Impact of foreign tax rates2
Expenses not tax deductible
Goodwill impairment charges not
tax deductible
Impairment charges not recognized
in deferred tax assets
Net currency translation losses on deferred
tax balances
Current year tax losses not recognized
in deferred tax assets
Internal restructures
De-recognition of a deferred tax asset
Non-recognition of US AMT credits
Adjustments in respect of prior years
Increase to income tax related
contingent liabilities
Impact of tax rate changes
Other withholding taxes
Mining taxes
Other items
2015
2014
$ (833)
$ (703)
(103)
(110)
55
(93)
18
96
736
373
246
334
62
46
56
(116)
20
19
44
13
–
12
(125)
(7)
20
(112)
–
43
(8)
–
20
40
227
5
Income tax expense (recovery)
$ (31)
$ 306
1. We are able to claim certain allowances and tax deductions unique to
extractive industries that result in a lower effective tax rate.
2. We operate in multiple foreign tax jurisdictions that have tax rates different
than the Canadian statutory rate.
The more significant items impacting income tax expense
in 2015 and 2014 include the following:
Currency Translation
Deferred tax balances are subject to remeasurement for
changes in currency exchange rates each period. The
most significant balances are Argentinean deferred tax
liabilities. In 2015 and 2014, tax expense of $62 million
and $46 million, respectively, primarily arose from
translation losses due to the weakening of the
Argentinean peso against the US dollar. These losses
are included within deferred tax recovery/expense.
Internal Restructures
In fourth quarter 2015, a deferred tax recovery of
$116 million arose from a loss that was realized
on internal restructuring of subsidiary corporations.
This resulted in a net increase in deferred tax assets.
In second quarter 2014, a deferred tax recovery of
$112 million arose from a restructure of internal debt to
equity in subsidiary corporations, which resulted in the
release of a deferred tax liability and a net increase in
deferred tax assets.
De-recognition of a Deferred Tax Asset
In second quarter 2015, we recorded a deferred tax
expense of $20 million related to de-recognition of a
deferred tax asset in Pueblo Viejo.
Non-Recognition of US Alternative Minimum Tax
(AMT) Credits
In fourth quarter 2015 and 2014, we recorded a
deferred tax expense of $19 million and $43 million,
respectively, related to US AMT credits which are not
probable to be realized based on our current life of
mine plans.
Tax Rate Changes
In third quarter 2014, a tax rate change was enacted in
Chile, resulting in a current tax expense of $2 million.
In fourth quarter 2014, a tax rate change was
enacted in Peru, reducing corporate income tax rates.
This resulted in a deferred tax expense of $18 million
due to recording the deferred tax asset in Peru at the
lower rates.
45
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Financial Condition Review
Summary Balance Sheet and Key Financial Ratios
($ millions, except ratios and share amounts)
As at December 31
Total cash and equivalents
Current assets
Non-current assets
Total Assets
Current liabilities excluding short-term debt
Non-current liabilities excluding long-term debt
Debt (current and long-term)
Total Liabilities
Total shareholders’ equity
Non-controlling interests
Total Equity
Total common shares outstanding (millions of shares)1
Key Financial Ratios:
Current ratio2
Debt-to-equity3
2015
2014
$ 2,455
3,013
20,840
$ 2,699
3,451
27,729
$ 26,308
$ 33,879
$ 1,644
5,241
9,968
$ 2,154
5,782
13,081
$ 16,853
$ 21,017
7,178
2,277
10,247
2,615
$ 9,455
$ 12,862
1,165
1,165
2.77:1
1.05:1
2.47:1
1.02:1
1. Total common shares outstanding do not include 2.9 million stock options.
2. Represents current assets (excluding assets held-for-sale) divided by current liabilities (including short-term debt and excluding liabilities held-for-sale)
as at December 31, 2015 and December 31, 2014.
3. Represents debt divided by total shareholders’ equity (including minority interest) as at December 31, 2015 and December 31, 2014.
Balance Sheet Review
Total assets were $26.3 billion at December 31, 2015,
$7.6 billion lower than at December 31, 2014, primarily
reflecting our 2015 dispositions as well as $3.9 billion of
impairment charges recognized in 2015. Our asset base
is primarily comprised of non-current assets such as
property, plant and equipment and goodwill, reflecting
the capital intensive nature of the mining business and
our history of growing through acquisitions. Other
significant assets include production inventories, indirect
taxes and other government receivables, and cash and
equivalents. We typically do not carry a material accounts
receivable balance, since only sales of concentrate
and copper cathode have a settlement period. Total
liabilities at December 31, 2015 totaled $16.9 billion,
approximately $4.2 billion lower than at December 31,
2014, reflecting $3.1 billion of debt repayments made
during the year combined with a decrease in accruals.
Shareholders’ Equity
As at February 8, 2016
Common shares
Stock options
Number of shares
1,165,081,379
2,558,335
Comprehensive Income
Comprehensive income consists of net income or
loss, together with certain other economic gains and
losses, which, collectively, are described as “other
comprehensive income” or “OCI”, and excluded from
the income statement.
For 2015 other comprehensive income was a loss
of $67 million on an after-tax basis. The loss reflected
losses of $177 million on hedge contracts designated
for future periods, caused primarily by changes in
currency exchange rates, copper prices, and fuel prices,
$56 million in losses for currency translation adjustments,
and $11 million of losses recorded as a result of changes
46
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
in the fair value of investments held during the quarter,
partially offset by reclassification adjustments totaling
$131 million for losses on hedge contracts designated
for 2015 (or lost hedge effectiveness in 2015) that were
transferred to earnings or PPE in conjunction with the
recognition of the related hedge exposure, a $20 million
gain due to tax recovery on the overall decrease in OCI,
$18 million of gains recorded as a result of realized
changes on equity investments, and $8 million actuarial
gains on our pension liability.
Included in accumulated other comprehensive
income at December 31, 2015 were unrealized pre-tax
losses on currency, commodity and interest rate hedge
contracts totaling $140 million. The balance relates to
fuel and currency hedge contracts that are designated
against operating costs and capital expenditures,
primarily over the next few years, including $14 million
remaining in crystallized hedge losses related to our
Australian dollar contracts that were settled in third
quarter 2012 or closed out in the second half of 2013
and $16 million in crystallized hedge gains related to
our silver contracts. These hedge gains/losses are
expected to be recorded in earnings at the same time
the corresponding hedged operating costs/depreciation
are recorded in earnings.
Financial Position and Liquidity
Our capital structure comprises a mix of debt and
shareholders’ equity. As at December 31, 2015, our total
debt was $10 billion (debt net of cash and equivalents
was $7.5 billion) and our debt-to-equity ratio was
1.05:1. This compares to debt as at December 31, 2014
of $13.1 billion (debt net of cash and equivalents was
$10.4 billion), and a debt-to-equity ratio of 1.02:1. Our
$4.0 billion revolving credit facility is fully undrawn and
$3.66 billion expires in January 2021 with the remaining
amount expiring in January 2020.
At the beginning of 2015, we set a debt reduction
target of $3 billion and we achieved that goal through a
series of debt repayments totaling $3.1 billion. Total debt
has been reduced by 24 percent over the same period,
from $13.1 billion to $10 billion, significantly reducing
our near-term debt repayment obligations. We currently
have less than $250 million in debt due before 2018 and
approximately $5 billion of our $10 billion in outstanding
debt matures after 2032.
Our primary source of liquidity is our operating cash
flow, which is dependent on the ability of our operations
to deliver projected future cash flows. In July 2015, the
company’s Board of Directors reduced the quarterly
dividend by 60 percent to $0.02 per share as a prudent
measure to increase financial flexibility in light of current
market conditions3. The Board of Directors also approved
a Dividend Reinvestment Plan (the “DRIP”), which
was made available to eligible shareholders for the first
time with payment of the above-mentioned dividend
on September 15, 2015 to shareholders of record on
August 31, 2015. The DRIP allows registered or beneficial
holders of Barrick’s common shares who reside in
Canada or the United States to reinvest cash dividends
paid on their common shares in additional common
shares at a discount to the average market price (as
defined in the DRIP), currently set at 3% and subject
to change at the discretion of the Board of Directors.
Other options to enhance liquidity include drawing the
$4.0 billion available under our credit facility (subject to
compliance with covenants and the making of certain
representations and warranties, this facility is available
for drawdown as a source of financing); further non-core
asset sales or joint venture opportunities; and issuance
of debt or equity securities in the public markets or to
private investors, which could be undertaken for liquidity
enhancement and/or in connection with establishing a
strategic partnership. Many factors, including but not
limited to, general market conditions and then prevailing
metals prices could impact our ability to issue securities
on acceptable terms, as could our credit ratings. Moody’s
and S&P currently rate our long-term debt Baa3 and
BBB-, respectively, after our credit ratings were
downgraded during the year by S&P on March 2, 2015
to BBB- (stable) and by Moody’s on August 12, 2015 to
Baa3 (stable), both of which are the lowest investment
grade ratings. On January 21, 2016, Moody’s placed
Barrick’s long-term debt rating on review for downgrade.
Further changes in our ratings could affect the trading
prices of our securities and our cost of capital. If we were
to borrow under our credit facility, the applicable interest
rate on the amounts borrowed would be based, in part,
on our credit ratings at the time. The key financial
covenant in our fully undrawn credit facility requires
Barrick to maintain a net debt to total capitalization
ratio of less than 0.60:1. Barrick’s net debt to total
capitalization was 0.44:1 as at December 31, 2015.
3. The declaration and payment of dividends is at the discretion of the Board of
Directors and will depend on the Company’s financial results, cash requirements,
future prospects and other factors deemed relevant by the Board.
47
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS change in operating cash flow is market gold and copper
prices. The ability of our operations to deliver projected
future cash flows within the parameters of a reduced
production profile, as well as future changes in gold and
copper market prices, either favorable or unfavorable,
will continue to have a material impact on our cash flow
and liquidity. The principal uses of operating cash flow
are to fund our capital expenditures and interest.
Cash inflows from investing activities in 2015
amounted to $250 million compared to $1,950 million
of cash outflows in the prior year. The increase of
$2,200 million compared to 2014 is primarily due to
$1,904 million of proceeds from the divestiture of our
Cowal mine and 50% of our interest in the Porgera mine
in third quarter 2015 and our Ruby Hill mine, Spring
Valley project and 50% of our interest in the Zaldívar
mine in fourth quarter 2015 combined with a decrease
in capital expenditures. In 2015, capital expenditures
on a cash basis were $1,713 million compared to
$2,432 million in 2014. The decrease of $719 million
is primarily due to a decrease in project capital
expenditures due to a reduction in costs related to our
Pascua-Lama project as it entered deep suspension in
2015 combined with a decrease in minesite expansion
capital expenditures due to a reduction in costs related
to the construction of the thiosulfate circuit at
Goldstrike, which entered commercial production in
third quarter 2015.
Net financing cash outflows for 2015 amounted to
$3,275 million, compared to $60 million of cash outflows
in the prior year. The net financing cash outflows in 2015
primarily consist of $3,142 million of debt repayments as
we achieved our debt reduction goal for 2015 compared
to $188 million in debt repayments in 2014.
Cash and Equivalents and Cash Flow
Total cash and cash equivalents as at December 31,
2015 was $2.5 billion4. Our cash position consists of a
mix of term deposits, treasury bills and money market
investments and is primarily denominated in US dollars.
Summary of Cash Inflow (Outflow)
($ millions)
For the years ended December 31
Operating inflows
Investing activities
Capital expenditures1
Divestitures
Other
2015
2014
$ 2,794
$ 2,296
$ (1,713)
1,904
59
$ (2,432)
166
316
Total investing inflows/(outflows)
$
250
$ (1,950)
Financing activities
Net change in debt
Dividends
Proceeds from divestment of 10% of issued
ordinary share capital of Acacia
Other
$ (3,133)
(160)
$
(47)
(232)
–
18
186
33
Total financing inflows/(outflows)
$ (3,275)
$
(60)
Effect of exchange rate
(13)
(11)
Increase/(decrease) in cash
and equivalents
$
(244)
$
275
1. The amounts include capitalized interest of $17 million for the year ended
December 31, 2015 (2014: $29 million).
In 2015, we generated $2,794 million in operating cash
flow, compared to $2,296 million of operating cash flow
in the prior year. The increase in operating cash flow
primarily reflects a $610 million deposit received in third
quarter 2015 relating to the Pueblo Viejo gold and silver
streaming arrangement, partially offset by lower realized
gold and copper prices. The most significant driver of the
4. Includes $621 million cash held at Acacia and Pueblo Viejo, which may not be
readily deployed outside of Acacia and/or Pueblo Viejo.
48
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Summary of Financial Instruments
As at December 31, 2015
Financial
Instrument
Cash and equivalents
Accounts receivable
Other investments
Accounts payable
Debt
Restricted share units
Deferred share units
Derivative instruments – currency contracts
Derivative instruments – energy contracts
Principal/
Notional Amount
Associated
Risks
n Interest rate
$ 2,455 million
n Credit
n Credit
$ 275 million
n Market
n Market
$ 8 million
n Liquidity
$ 1,158 million
n Liquidity
$ 10,045 million
n Interest rate
$ 39 million
n Market
$ 4 million
n Market
AUD
87 million
n Interest rate
Diesel
6 million bbls
n Market/liquidity
n Credit
n Interest rate
Derivative instruments – interest rate contracts
Receive float interest rate swaps $ 128 million
n Market/liquidity
Operating Segments Performance
Review of Operating Segments Performance
Barrick’s business is organized into fourteen individual
minesites, one publicly traded company and one project.
Barrick’s Chief Operating Decision Maker (“CODM”),
the President, reviews the operating results, assesses
performance and makes capital allocation decisions at
the minesite, Company and/or project level. Therefore,
each individual minesite and Acacia are operating
segments for financial reporting purposes. For segment
reporting purposes, we present our reportable operating
segments as follows: eight individual gold mines, two
individual copper mines, Acacia and our Pascua-Lama
project. The remaining operating segments have been
grouped into an “other” category consisting of our
remaining gold mines. The prior periods have been
restated to reflect the change in presentation.
Segment performance is evaluated based on a
number of measures including operating income before
tax, production levels and unit production costs. Certain
costs are managed on a consolidated basis and are
therefore not reflected in segment income. Starting
January 1, 2015, we transferred most of the functional
services to minesites in order to hold the minesites
directly accountable for the cost of the functional
services they require to run their business, resulting in
the allocation of our general and administration costs
to individual minesites.
49
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Summary of Operations
For the years ended December 31
Cortez
Goldstrike
Pueblo Viejo (60%)
Lagunas Norte
Veladero
2015
20141
Gold
produced
(ozs)
Gold
sold
(ozs)
Cash
All-in
sustaining
costs
($/oz) costs ($/oz)
Gold
produced
(ozs)
999
1,053
572
560
602
982
999
597
565
629
$ 486
522
467
329
552
$
603
658
597
509
946
902
902
665
582
722
Gold
sold
(ozs)
865
908
667
604
724
Cash
costs
($/oz)
All-in
sustaining
costs ($/oz)
$ 498
571
446
379
566
$ 706
854
588
543
815
Total Core Mines
3,786
3,772
$ 480
$
660
3,773
3,768
$ 500
$ 716
Turquoise Ridge (75%)
Porgera (47.5%)2
Kalgoorlie (50%)
Acacia (63.9%)3
Hemlo
Round Mountain (50%)4
Bald Mountain4
Golden Sunlight
217
436
320
468
219
192
191
68
202
426
315
461
216
190
202
76
$ 581
791
752
772
708
710
628
1,098
$
742
1,018
886
1,112
895
910
1,132
1,379
195
493
326
470
206
164
161
86
200
507
330
459
223
171
161
83
$ 473
915
817
732
829
936
724
893
$ 628
996
1,037
1,105
1,059
1,170
1,070
1,181
Total Continuing Operations
5,897
5,860
$ 573
$
779
5,874
5,902
$ 607
$ 827
Cowal
Pierina
Ruby Hill
Kanowna
Plutonic
Marigold (33%)
156
54
10
–
–
–
158
53
12
–
–
–
$ 560
880
628
–
–
–
Total Divested/Closed Sites
220
223
$ 640
Total Gold5
6,117
6,083
$ 575
Total Consolidated Barrick
6,117
6,083
$ 596
621
$
1,411
696
–
–
–
$
$
$
813
780
831
268
17
33
39
7
11
270
19
33
37
8
15
$ 608
1,419
637
641
1,120
1,001
$ 787
2,278
713
674
1,206
1,197
375
382
$ 680
$ 869
6,249
6,284
$ 612
$ 830
6,249
6,284
$ 598
$ 864
Zaldívar6
Lumwana
Jabal Sayid
Total Copper
Copper Copper
sold
(lbs)
produced
(lbs)
All-in
C1 cash
costs
sustaining
($/lb) costs ($/lb)
Copper Copper
sold
(lbs)
produced
(lbs)
C1 cash
costs
($/lb)
All-in
sustaining
costs ($/lb)
218
287
6
215
295
–
$ 1.74
1.72
–
$ 2.11
2.42
–
222
214
–
222
213
–
$ 1.79
2.08
–
$ 2.30
3.15
–
511
510
$ 1.73
$ 2.33
436
435
$ 1.92
$ 2.79
1. 2014 cash costs per ounce for individual minesites have been restated to exclude the impact of hedges.
2. Porgera presented on a 95% basis until August 31, 2015 and a 47.5% basis thereafter.
3. Acacia presented on a 73.9% basis until February 28, 2014 and a 63.9% basis thereafter.
4. Round Mountain and Bald Mountain were divested in first quarter 2016.
5. Total gold cash costs and all-in sustaining costs per ounce exclude the impact of hedges and/or costs allocated to non-operating sites.
6. Zaldívar presented on a 100% basis until November 30, 2015 and a 50% basis thereafter.
50
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Cortez, Nevada USA
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)2
Minesite sustaining
Minesite expansion
2015
2014
% Change
2013
151,357
22,406
1.73
999
982
$ 826
$ 486
$ 603
$ 650
2015
$ 287
$ 630
$ 148
$ 101
$ 47
152,146
25,957
1.34
902
865
$ 687
$ 498
$ 706
$ 728
(1%)
(14%)
29%
11%
14%
20%
(2%)
(15%)
(11%)
134,007
19,999
2.59
1,337
1,371
$ 636
$ 229
$ 440
$ 536
2014
% Change
2013
$ 393
$ 648
$ 189
$ 170
$ 19
(27%)
(3%)
(22%)
(41%)
147%
$ 1,289
$ 1,610
$ 396
$ 264
$ 132
1. These are non-GAAP financial performance measures; for further information and a detailed reconciliation, please see pages 76 – 85 of this MD&A.
2 Amounts presented exclude capitalized interest.
Financial Results
Segment EBIT for 2015 was 27% lower than the prior
year primarily due to a lower realized gold price and
higher depreciation, partially offset by an increase in
sales volume.
In 2015, gold production was 11% higher than the
prior year primarily due to the processing of higher grade
ore from the open pit combined with higher recoveries
due to the shift in 2015 towards processing higher grade
refractory ore through the roaster. Further contributing
to the favorable variance was an increase in underground
production. This was partially offset by fewer tonnes
processed due to a decrease in ore placed on the leach
pad due to the concentration of mining in Cortez Hills
phase 4, which was primarily low grade leach ore,
combined with the processing of lower grade stockpile
ore, whereas higher grade ore from Cortez Hills phase 3
was available for processing in the prior year.
We made a commitment towards continuous
improvement of our cost structure by increasing
operational efficiency from underground operations
and reducing contractor services costs across the site,
which is reflected in part in the lower cash costs per
ounce. In 2015, cost of sales was 20% higher than the
prior year primarily due to the recognition of $75 million
in inventory write-downs in the first half of 2015 as a
result of the mining of lower grade ore combined with
the impact of a high depreciation base and ounces
mined from the Cortez Hills open pit, as well as the
impact of lower capitalized stripping costs from Cortez
Hills phase 4, which was in a stripping phase for most
of 2014. This was partially offset by a $28 per ounce
decrease in open pit costs resulting from a reduction in
fuel costs, improved fleet efficiency, as well as lower
labor costs. Total savings in open pit costs for 2015
900
to
1,000
2016E
$ 640
to
$ 710
2016E
51
PRODUCTION
(000s ounces)
1,500
750
902
999
0
2014
2015
AISC
($ per ounce)
$ 706
$ 603
2014
2015
1,000
500
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
was $40 million, of which $12 million is reflected in
capitalized stripping costs and the change in inventory
for the year. Processing costs were also lower due
to the processing of fewer tonnes in comparison to
the prior year.
Cash costs were $12 per ounce lower than the
prior year primarily due to the impact of higher sales
volume on unit production costs, partially offset by the
higher cost of sales. All-in sustaining costs decreased
by $103 per ounce from the prior year primarily due to
a reduction in minesite sustaining capital expenditures
as a result of lower capitalized stripping costs combined
with the impact of the lower cash costs.
In 2015, capital expenditures decreased by 22%
from the prior year. The decrease was primarily due to a
reduction in minesite sustaining capital expenditures due
to lower capitalized stripping costs, partially offset by
an increase in minesite expansion capital expenditures
relating to Lower Zone expansion projects.
Outlook
At Cortez we expect 2016 gold production to be in the
range of 900 to 1,000 thousand ounces, which is in line
with 2015 production levels. The underground ore grade
is expected to decline as the mine transitions to lower
grade ore zones deeper in the deposit. This is offset by
an increase in open pit production, primarily from leach,
as the open pit encounters larger volumes of this
material in the 2016 mine plan.
In 2016, we expect cash costs to be in the range of
$480 to $530 per ounce, which is consistent with 2015.
All-in sustaining costs are expected to be in the range
of $640 to $710 per ounce, higher than 2015, primarily
due to higher sustaining capital expenditures due to
planned hydrology, dewatering and other water
management projects scheduled to occur in 2016
combined with a shift in timing of open pit haul truck
capitalized maintenance from 2015 to 2016.
52
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Goldstrike, Nevada USA
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)1
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
1. Includes tonnes mined relating to South Arturo.
Financial Results
Segment EBIT for 2015 was 18% lower than the prior
year primarily due to a lower realized gold price and
higher depreciation expense, partially offset by an
increase in sales volume.
In 2015, gold production was 17% higher than the
prior year primarily as a result of higher production
from the autoclave due to the commissioning of the
thiosulfate circuit in third quarter 2015 combined with
the processing of higher grade ore from the Banshee
zone of the underground.
We made a commitment towards continuous
improvement of our cost structure by focusing our
efforts on incremental improvements in the allocation of
sustaining capital by directing spend towards projects
with high returns and in lowering underground
contractor services costs through the use of insourcing.
These efforts are reflected in part in the lower 2015 cash
costs per ounce. In 2015, cost of sales was 11% higher
primarily due to an increase in tonnes mined from the
North Betze layback, as it was in a stripping phase in
2014, resulting in a reduction in capitalized development
costs, combined with an increase in depreciation expense
in part as a result of the commissioning of the thiosulfate
circuit in 2015. This was partially offset by a decrease in
the open pit and underground mining costs driven by a
reduction in fuel costs and fuel consumption as a result
2015
2014
% Change
2013
72,304
6,752
6.01
1,053
999
$ 722
$ 522
$ 658
$ 691
2015
$ 408
$ 600
$ 143
$ 110
$ 33
81,410
5,307
6.28
902
908
$ 651
$ 571
$ 854
$ 1,170
(11%)
27%
(4%)
17%
10%
11%
(9%)
(23%)
(41%)
2014
% Change
$ 496
$ 628
$ 532
$ 245
$ 287
(18%)
(5%)
(73%)
(55%)
(89%)
87,350
6,829
5.01
892
887
$ 662
$ 618
$ 913
$ 1,165
2013
$ 581
$ 693
$ 474
$ 251
$ 223
of shorter hauls combined with lower contractor services
costs due to an increase in the use of internal labor.
Savings on fuel costs in 2015 were $21 million, all of
which is reflected in capitalized stripping costs and the
change in inventory for the year. Cash costs were
$49 per ounce lower than the prior year primarily due to
PRODUCTION
(000s ounces)
902
1,053
2014
2015
1,500
750
0
AISC
($ per ounce)
$ 854
$ 658
975
to
1,075
2016E
$ 780
to
$ 850
2014
2015
2016E
53
1,000
500
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
the impact of higher sales volume on unit production
costs, which more than offset the increase in cost of
sales. All-in sustaining costs decreased $196 per ounce
compared to the prior year primarily due to a reduction
in minesite sustaining capital expenditures combined
with the impact of the lower cash costs.
In 2015, capital expenditures decreased by 73%
compared to the prior year. The decrease was primarily
due to a reduction in minesite expansion capital
expenditures as a result of a reduction in costs associated
with the thiosulfate circuit, as it entered commercial
production in third quarter 2015, combined with a
reduction in capitalized stripping costs relating to the
North Betze layback, as ore was reached and stripping
activities ended in first quarter 2015.
Outlook
At Goldstrike we expect 2016 production to be in the
range of 975 to 1,075 thousand ounces, which is in line
with 2015 production levels. Contribution from open
pit production is expected to increase as the thiosulfate
circuit reaches design capacity in third quarter 2016
and due to the acceleration of mining at Arturo.
Underground production is anticipated to be marginally
lower due to an increase in underground development.
In 2016, we expect cash costs to be in the range
of $560 to $610 per ounce, slightly higher than 2015,
and all-in sustaining costs to be $780 to $850 per ounce,
an increase from 2015 due to higher sustaining capital
expenditures for tailings expansions, water management
projects, process improvements, and timing of
underground equipment replacements.
54
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Pueblo Viejo (60% basis), Dominican Republic
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales (100%) ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT (100%) ($ millions)
Segment EBITDA (100%) ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Project capex
Financial Results
Segment EBIT for 2015 was 36% lower than the prior
year primarily due to a lower realized gold price combined
with a decrease in sales volume, partially offset by a
lower cost of sales.
In 2015, gold production was 14% lower than
the prior year primarily due to lower ore grades and
recoveries as the ore mined in 2015 was from the upper
benches of Montenegro and Moore phase 2, which
contain a higher proportion of carbonaceous ore which
has lower recoveries. Production was also negatively
impacted by a mechanical failure at the Oxygen Plant in
fourth quarter 2015 which resulted in lower tonnes
milled. The mine’s swift reaction to this incident, quickly
sourcing a temporary solution and replacement,
minimized the overall impact.
We made a commitment towards continuous
improvement of our cost structure by focusing on
increasing autoclave availability, assessing alternatives to
reduce energy costs, and improving gold and silver
recoveries through improvements in pit design and
targeting, as well as continued use of contracted services
re-handling resulting in more efficient use of the loaders.
Despite these efforts, in 2015 cost of sales was 2%
2015
2014
% Change
2013
22,736
4,150
4.94
572
597
$ 904
$ 467
$ 597
$ 597
2015
$ 425
$ 702
$ 61
$ 61
–
–
21,055
4,027
5.53
665
667
$ 885
$ 446
$ 588
$ 588
8%
3%
(11%)
(14%)
(10%)
2%
5%
2%
2%
2014
% Change
$ 669
$ 912
$ 80
$ 80
–
–
(36%)
(23%)
(24%)
(24%)
–
–
9,192
2,658
6.14
488
444
$ 574
$ 561
$ 735
$ 800
2013
$ 430
$ 569
$ 101
$ 73
–
$ 28
higher than the prior year, driven in part by the mechanical
failures that occurred in fourth quarter 2015, partially
offset by lower processing costs including lower energy
and diesel costs. Cash costs were $21 per ounce higher
PRODUCTION
(000s ounces)
665
572
600
to
650
2014
2015
2016E
$ 588
$ 597
2014
2015
$ 570
to
$ 620
2016E
55
1,000
500
0
AISC
($ per ounce)
1,000
500
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
than the prior year primarily due to the impact of the
lower sales volume on unit production costs. All-in
sustaining costs increased by $9 per ounce compared to
the prior year primarily due to the higher cash costs,
partially offset by a reduction in minesite sustaining
capital expenditures.
In 2015, capital expenditures decreased by 24%
compared to the prior year. The decrease was primarily
due to the deferral and cancellation of non-critical
minesite sustaining capital expenditures in 2015.
Outlook
At Pueblo Viejo, we expect our equity share of 2016 gold
production to be in the range of 600 to 650 thousand
ounces, higher than 2015 production levels. In 2016,
we expect improved throughput and plant availability as
compared to 2015 primarily due to overcoming the
issues related to the Oxygen Plant motor failures which
negatively impacted 2015 throughput. In addition, we
are currently focusing on improving efficiency and
throughput through projects such as ore blending
optimization, increasing autoclave availability, and
optimization of maintenance strategies.
World’s largest autoclaves
220 tonnes per hour;
further optimization
potential exists
We expect cash costs to be in the range of $440 to
$480 per ounce and all-in sustaining costs to be $570 to
$620 per ounce. Cash costs and all-in sustaining costs
are expected to be lower than in 2015 primarily due
to an increase in gold ounces sold, and higher silver
by-product credits, as silver recoveries are expected
to improve in 2016 due to improvements in the
Lime Boil Circuit.
56
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Lagunas Norte, Peru
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Financial Results
Segment EBIT for 2015 was 35% lower than the prior
year primarily due to a lower realized gold price
combined with a lower sales volume and increased
depreciation, partially offset by a reduction in direct
operating costs.
In 2015, gold production was 4% lower than the
prior year primarily due to the processing of lower
recovery ore as the life of the mine progresses to more
complex sulfide ore, partially offset by the acceleration in
the recovery of ounces as a result of the new leach pad
and increased capacity provided by the carbon-in-circuit
and Merrill-Crowe plants, which were both
commissioned at the end of 2014, combined with
the processing of higher grade ore.
We made a commitment towards continuous
improvement of our cost structure by focusing our
efforts on improving capital productivity, reducing
general and administrative costs, improving contract
sourcing, and reducing explosives consumption, which is
reflected in part in the lower cash costs per ounce. In
2015, cost of sales was 13% higher than the prior year
primarily due to an increase in depreciation expense
arising from the depreciation of the carbon-in-circuit
plant and new phase 5 leach pad and related facilities as
well as the newly commissioned water treatment plant.
This was partially offset by lower mining costs primarily
due to a reduction in fuel costs as a result of the decline
in fuel prices, and lower labor costs. Cash costs were
2015
49,126
21,880
1.02
560
565
$ 378
$ 329
$ 509
$ 509
2015
$ 285
$ 454
$ 67
$ 67
–
2014
% Change
2013
50,030
22,110
0.99
582
604
$ 335
$ 379
$ 543
$ 543
(2%)
(1%)
3%
(4%)
(6%)
13%
(13%)
(6%)
(6%)
2014
% Change
$ 439
$ 531
$ 81
$ 81
–
(35%)
(15%)
(17%)
(17%)
–
36,934
21,089
1.06
606
591
$ 281
$ 361
$ 627
$ 627
2013
$ 548
$ 602
$ 139
$ 139
–
$50 per ounce lower than the prior year primarily due to
the above reductions in fuel and labor costs combined
with a decrease in royalty expense, which more than
offset the impact of decreased sales volume on unit
production costs. All-in sustaining costs decreased by
$34 per ounce from the prior year primarily due to a
reduction in minesite sustaining capital expenditures
combined with the impact of the lower cash costs.
410
to
450
2016E
$ 570
to
$ 640
2016E
57
PRODUCTION
(000s ounces)
1,000
500
0
AISC
($ per ounce)
582
560
2014
2015
$ 543
$ 509
2014
2015
1,000
500
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2015, capital expenditures decreased by 17%
compared to the prior year primarily due to the
completion in 2014 of the carbon-in-circuit plant, water
treatment plants and the new phase 5 leach pad and
related facilities. Capital expenditures in 2015 primarily
related to the construction of the phase 6 leach pad.
In 2008, the government of Peru adopted more
stringent environmental water quality standards,
including some that exceed international standards. In
2012, the Lagunas Norte mine submitted a compliance
plan in respect of the new water quality standards,
including a request for relief from certain parameters
exceeding international standards, along with a
description of the required additional water treatment
infrastructure and its implementation schedule.
In December 2015, the government modified the 2008
water quality standards in various respects, including to
better align with international standards and provided a
new implementation schedule. In 2016, the Lagunas
Norte mine intends to develop and submit an updated
compliance plan in accordance with the new regulations.
Outlook
At Lagunas Norte we expect 2016 production to be in
the range of 410 to 450 thousand ounces, lower than
2015 production levels, as a result of the progressive
depletion of oxide ores, which are being replaced with
sulfide ore with lower kinetics and recoveries.
In 2016, we expect cash costs to be in the range
of $380 to $420 per ounce and all-in sustaining costs to
be in the range of $570 to $640 per ounce. The increase
in all-in sustaining costs in comparison with 2015 is
driven mainly by the decrease in production, while
sustaining capital expenditures maintain a similar level of
$67 million, as phase 6 of the leach pad expansion will
be completed in 2016. Cost increases will be partially
offset by operational improvements including equipment
rental reductions, lower consumption ratios, mobile
equipment cycle optimization as well as lower royalties
and a reduction in costs associated with employee
profit sharing.
58
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Veladero, Argentina
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Financial Results
Segment EBIT for 2015 was 35% lower than the prior
year primarily due to a decrease in sales volume
combined with a lower realized gold price, partially offset
by a decrease in cost of sales.
In 2015, gold production was 17% lower than the
prior year primarily due to lower ore grades from Federico
phase 3 combined with a decrease in ore tonnes
processed due to adverse climate conditions, partially
offset by an increase in recoveries.
We made a commitment towards continuous
improvement of our cost structure by focusing our
efforts on optimizing capital allocation and recovery of
ounces from inventory through management of the
leach pad. In 2015, cost of sales was 10% lower than
the prior year primarily due to lower operating costs
resulting from a reduction in fuel and power costs
combined with an increase in capitalized stripping costs.
This was partially offset by an increase in the allocation
of shared services costs to the site, lower silver credits
and the recognition of costs related to the management
of the cyanide incident that occurred in third quarter
2015. In 2015, cash costs were $14 per ounce lower
than the prior year primarily due to the lower cost of
sales, partially offset by the impact of the lower sales
volume on unit production costs. All-in sustaining costs
2015
2014
% Change
2013
83,409
28,385
0.82
602
629
$ 499
$ 552
$ 946
$ 946
2015
$ 216
$ 324
$ 242
$ 242
–
67,686
29,500
1.00
722
724
$ 554
$ 566
$ 815
$ 815
23%
(4%)
(17%)
(17%)
(13%)
(10%)
(2%)
16%
16%
2014
% Change
$ 330
$ 446
$ 173
$ 173
–
(35%)
(27%)
40%
40%
–
78,592
29,086
0.94
641
659
$ 568
$ 501
$ 833
$ 833
2013
$ 354
$ 522
$ 208
$ 208
–
increased by $131 per ounce over the prior year due to
an increase in minesite sustaining capital expenditures
relating primarily to an increase in capitalized stripping
costs combined with the incurrence of costs to improve
leach facilities, partially offset by the lower cash costs.
630
to
690
2016E
$ 830
to
$ 900
2016E
59
PRODUCTION
(000s ounces)
722
602
2014
2015
1,000
500
0
AISC
($ per ounce)
$ 815
$ 946
2014
2015
1,500
750
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2015, capital expenditures increased by 40%
compared to the prior year primarily due to an increase
in capitalized stripping costs combined with capitalization
of costs committed by the mine to improve leach pad
facilities as a result of the cyanide incident that occurred
in third quarter 2015.
Lowering costs by improving
inventory management,
maintenance, mining
productivity and energy costs
On September 13, 2015, a valve on a leach pad
pipeline at the Company’s Veladero mine in San Juan
Province, Argentina failed, resulting in a release of
cyanide-bearing process solution into a nearby waterway
through a diversion channel gate that was open at
the time of the incident. Minera Argentina Gold S.A.
(“MAGSA”), Barrick’s Argentine subsidiary that operates
the Veladero mine, notified regulatory authorities of
the situation. Environmental monitoring was conducted
by MAGSA and independent third parties following
the incident. The Company believes this monitoring
demonstrates that the incident posed no risk to human
health at downstream communities. A temporary
restriction on the addition of new cyanide to the mine’s
processing circuit was lifted on September 24, 2015, and
mine operations have returned to normal. Monitoring
and inspection of the minesite will continue in
accordance with a court order.
On October 9, 2015, the San Juan mining authority
initiated an administrative sanction process against
MAGSA for alleged violations of the mining code relating
to the valve failure and release of cyanide-bearing
process solution. MAGSA submitted its response to these
allegations in October 2015 and provided additional
information in January 2016. This process is expected to
result in a fine. A decision from the San Juan mining
authority is pending.
Outlook
At Veladero we expect 2016 production to be in the
range of 630 to 690 thousand ounces, higher compared
to 2015 production levels. The increase is primarily as
a result of higher mined grade, with advancing phases
in both Federico 3 and 4, improved mining productivity
delivering more ore to the crusher and run-of-mine
(ROM) combined with an improved inventory draw-down
relative to 2015 through better operational management
of the leach pad.
We expect cash costs in 2016 to be in the range of
$550 to $600 per ounce and all-in sustaining costs to be
$830 to $900 per ounce, lower than 2015 levels mainly
due to the increase in gold production, driving higher
sales and lower operating and non-operating costs. At
Veladero, a number of initiatives are underway to reduce
operating costs mainly in the areas of supply chain and
inventory management, maintenance practices, mining
productivity and energy costs. Operating costs at
Veladero are highly sensitive to local inflation and
fluctuations in foreign exchange rates. We have assumed
an average ARS:USD exchange rate of 13:1 for the
purposes of preparing our cash cost and all-in sustaining
cost guidance for 2016; however, we do expect further
devaluation of the Argentinean peso which we believe
will generally improve competitiveness in Argentina and
will also have a significant positive impact on our local
labor costs, contractor pricing and therefore our cash
costs and all-in sustaining costs. Managing potential pass
through effects of devaluation to inflation to sustain
gained competitiveness is paramount.
Veladero continues to be subject to restrictions that
affect the amount of leach solution. Government
regulations set a level limit for the leach solution pond,
reducing storage capacity, impacting operational capacity
to manage solution balance and reducing leaching
kinetics, as ore has to be placed on upper levels of the
leach pad under certain conditions to maintain pond
level. These restrictions are considered in our 2016
operating guidance.
60
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Turquoise Ridge (75% basis), Nevada USA
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Financial Results
Segment EBIT for 2015 was 34% lower than the prior
year primarily due to a lower realized gold price
combined with an increase in cost of sales, partially
offset by a slight increase in sales volume.
In 2015, gold production was 11% higher than the
prior year primarily due to an increase in tonnes mined
and processed resulting from increased manpower and
improved equipment availability combined with higher
productivity due to the transitioning to fully mechanized
topcuts in first quarter 2015, which were then processed
in the subsequent quarters. This was partially offset by
lower ore grades.
We made a commitment towards continuous
improvement of our cost structure by focusing our
efforts on improving productivity by using larger
excavation dimensions, increasing truck haulage
capacities which has improved rock flow in the mine and
deferring capital drifting in order to add manpower to
support growth in the Footwall Pond Ore area of the
mine as opposed to preserving the development area
where crews were struggling to achieve expected
advance rates. In 2015, cost of sales was 27% higher
than the prior year. The increase was primarily due to
2015
2014
% Change
2013
349
390
18.82
217
202
$ 141
$ 581
$ 742
$ 742
2015
$ 92
$ 115
$ 32
$ 32
–
312
335
19.62
195
200
$ 111
$ 473
$ 628
$ 628
12%
16%
(4%)
11%
1%
27%
23%
18%
18%
2014
% Change
$ 139
$ 156
$ 30
$ 30
–
(34%)
(26%)
7%
7%
–
305
340
16.29
167
162
$ 109
$ 586
$ 928
$ 928
2013
$ 115
$ 129
$ 55
$ 55
–
a decrease in capitalized development costs, higher
underground mining costs resulting from increased
labor costs as a result of adding manpower to support
production growth, combined with an increase in
PRODUCTION
(000s ounces)
195
2014
217
2015
500
250
0
AISC
($ per ounce)
1,000
500
$ 628
$ 742
200
to
220
2016E
$ 770
to
$ 850
2014
2015
2016E
61
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
maintenance costs due to the timing of planned
replacement of major components in an effort to
improve equipment availability, and higher consumable
costs arising from the mining of increased ore tonnes.
Cash costs were $108 per ounce higher compared to the
prior year primarily due to the higher cost of sales and
reduction in capitalized stripping costs, partially offset
by the impact of higher sales volume on unit production
costs. All-in sustaining costs increased by $114 per
ounce over the prior year due to the higher cash costs.
In 2015, capital expenditures increased by 7%
compared to the prior year primarily due to higher
minesite sustaining capital expenditures for an
optimization study and ventilation costs, partially
offset by a decrease in capitalized development
costs compared to 2014.
Outlook
At Turquoise Ridge we expect 2016 production to be in
the range of 200 to 220 thousand ounces (Barrick’s
share), in line with 2015 production levels, as mine
productivity is expected to improve in 2016. Turquoise
Ridge has completely transitioned to mechanized topcuts
and standardized equipment allowing for greater mining
flexibility with higher reliability and less equipment.
Capital and waste development requirement increases in
2016 should not impact ounce delivery.
We expect cash costs in 2016 to be in the range of
$560 to $620 per ounce, consistent with 2015, and all-in
sustaining costs to be in the range of $770 to $850 per
ounce. All-in sustaining costs in 2016 are expected to be
higher than 2015 due to increased spend on sustaining
capital for the water treatment plant and timing of
equipment replacement.
62
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Porgera, Papua New Guinea1
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
1. Porgera is presented on a 95% basis until August 31, 2015 and 47.5% basis thereafter.
2015
2014
% Change
2013
17,527
5,006
3.59
436
426
$ 375
$ 791
$ 1,018
$ 1,018
2015
$ 125
$ 162
$ 93
$ 93
–
15,719
5,584
3.10
493
507
$ 545
$ 915
$ 996
$ 996
12%
(10%)
16%
(12%)
(16%)
(31%)
(14%)
2%
2%
2014
% Change
$ 84
$ 164
$ 33
$ 33
–
49%
(1%)
182%
182%
–
18,628
5,354
3.22
482
465
$ 524
$ 965
$ 1,361
$ 1,361
2013
$ 116
$ 190
$ 171
$ 171
–
Financial Results
Segment EBIT for 2015 was 49% higher than the prior
year primarily due to a decrease in cost of sales, partially
offset by a lower realized gold price combined with a
decrease in sales volume, reflecting the divestment of
50% of our ownership in Porgera that was completed on
August 31, 2015.
In 2015, gold production was 12% lower than the
prior year reflecting the lower production attributable to
Barrick as a result of the divestment that occurred on
August 31 combined with a decrease in recoveries
compared to the prior year. Also negatively impacting
production in 2015 were prolonged dry conditions and
power issues. This was partially offset by the processing
of higher grade ore driven by the improved performance
from both open pit and underground operations.
Cost of sales for 2015 was 31% lower than the
prior year primarily due to lower direct operating costs
as a result of lower processing costs, including fuel and
power costs, the impact of the devaluation of the
Australian dollar, as well as an increase in capitalized
stripping costs. Cash costs were $124 per ounce lower
than the prior year primarily due to a significant increase
in capitalized stripping costs, partially offset by the
impact of lower sales volume on unit production costs.
All-in sustaining costs increased by $22 per ounce
over the prior year due to an increase in minesite
sustaining capital expenditures, partially offset by the
lower cash costs.
PRODUCTION
(000s ounces)
1,000
500
0
AISC
($ per ounce)
493
2014
436
2015
$ 996
$ 1,018
230
to
260
2016E
$ 990
to
$ 1,080
2014
2015
2016E
63
1,500
750
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2015, capital expenditures increased by 182%
compared to the prior year. The increase was primarily
due to a significant increase in capitalized stripping costs
as a result of a change in the 2015 mine plan that
increased open pit mining activity, combined with an
increase in minesite sustaining capital expenditures due
to the commencement of a concentrate export project as
well as a gas turbine power management system and
controls project.
Outlook
At Porgera we expect 2016 gold production to be in the
range of 230 to 260 thousand ounces (Barrick’s 47.5%
share). Production is expected to be in line with 2015
levels. Processed tonnes are expected to increase in 2016
when compared to 2015, partially offset by lower
expected head grade. The commencement of concentrate
export will allow for stored concentrate to be reclaimed
and additional revenue generated during 2016.
Well established asset
Highly prospective region
Extensive infrastructure
Proven technology & team
In 2016, we expect cash costs to be in the range of
$700 to $750 per ounce which is lower than 2015 cash
costs of $791 per ounce, primarily due to an increase in
capitalized stripping in the open pit and underground
development. 2016 all-in sustaining costs are expected
to be in the range of $990 to $1,080 per ounce, which
is higher when compared to 2015, mainly due to the
increase in capitalized stripping and sustaining capital,
in line with the new mine plan and creation of
new infrastructure.
64
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Kalgoorlie (50% basis), Australia
Summary of Operating Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Financial Results
Segment EBIT for 2015 was 58% lower than the prior
year primarily due to a lower realized gold price and
a reduction in sales volume, partially offset by a decrease
in the cost of sales.
In 2015, gold production was 2% lower than the
prior year primarily due to lower recoveries combined
with a decrease in ore tonnes processed resulting from
decreased throughput. The decreased throughput was
due to increased maintenance time on the SAG mill as
well as operational downtime as a result of issues
relating to the conveyor and lube system. This was
partially offset by improved ore grades when compared
to 2014.
We made a commitment towards continuous
improvement of our cost structure by focusing our
efforts on improving mine grade through full potential
pit sequencing initiatives combined with focused grade
control practices, delivering positive grade reconciliation
against ore reserves. In 2015, cost of sales was 1% lower
than the prior year primarily due to the devaluation of
the Australian dollar combined with lower operating
costs resulting from lower fuel and power costs. Cash
costs were $65 per ounce lower than the prior year
2015
2014
% Change
2013
36,989
5,775
2.28
320
315
$ 307
$ 752
$ 886
$ 886
2015
$ 45
$ 119
$ 34
$ 34
–
34,644
5,809
2.01
326
330
$ 309
$ 817
$ 1,037
$ 1,037
7%
(1%)
13%
(2%)
(5%)
(1%)
(8%)
(15%)
(15%)
2014
% Change
$ 106
$ 148
$ 66
$ 66
–
(58%)
(20%)
(48%)
(48%)
–
36,445
5,924
1.97
315
330
$ 309
$ 846
$ 1,070
$ 1,070
2013
$ 154
$ 182
$ 66
$ 66
–
primarily due to the reduction in cost of sales, partially
offset by a reduction in capitalized stripping costs and
the impact of lower sales volume on unit production
costs. All-in sustaining costs decreased by $151 per
PRODUCTION
(000s ounces)
326
320
350
to
365
2014
2015
2016E
500
250
0
AISC
($ per ounce)
$ 1,037
$ 886
2014
2015
$ 670
to
$ 700
2016E
65
1500
750
0
600
400
200
0
-200
1500
-400
750
-600
0
600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
ounce from the prior year reflecting the impact of the
lower cash costs combined with a decrease in minesite
sustaining capital expenditures.
In 2015, capital expenditures decreased by 48%
compared to the prior year primarily due to a reduction
in capitalized stripping costs at Golden Pike combined
with the completion of an emissions reduction program
in early 2015.
Outlook
At Kalgoorlie we expect 2016 production to be in the
range of 350 to 365 thousand ounces (Barrick’s share),
higher than 2015 production levels. The total ore
processed in 2016 is expected to be higher than 2015
and an increase in head grade is expected to result in
higher production levels. We are also expecting an
increase in sales in 2016, resulting in lower cash costs
and all-in sustaining costs. Kalgoorlie’s mine plan reflects
a slightly lower mined grade from Golden Pike in the
open pit and an associated lower feed grade and mill
recovery, partially offset by higher processed tonnes due
to an increase in throughput rates in the Fimiston circuit.
In 2016, we expect cash costs to be in the range of
$610 to $630 per ounce and all-in sustaining costs to be
in the range of $670 to $700 per ounce, lower than
2015, mainly due to the expected decrease in the
AUD:USD exchange rate, lower mining costs due to the
fall in the price of diesel and reduced sustaining capital
expenditures in 2016.
66
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Acacia Mining plc1, Africa
Summary of Operating Data
100% basis
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Cost of sales ($ millions)2
Cash costs (per oz)
All-in sustaining costs (per oz)
All-in costs (per oz)
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
2015
2014
% Change
2013
41,390
9,268
2.80
732
721
$ 837
$ 772
$ 1,112
$ 1,111
2015
$
(1)
$ 142
$ 177
$ 178
(1)
$
41,684
8,413
3.00
719
704
$ 693
$ 732
$ 1,105
$ 1,190
(1%)
10%
(7%)
2%
2%
21%
5%
1%
(7%)
2014
% Change
$ 191
$ 320
$ 251
$ 195
$ 56
(101%)
(56%)
(29%)
(9%)
(102%)
54,100
7,980
2.86
641
650
$ 756
$ 812
$ 1,346
$ 1,519
2013
$ 115
$ 275
$ 385
$ 272
$ 113
1. Formerly African Barrick Gold plc.
2. Cost of sales includes $109 million of impairments relating to supplies inventory and the long-term stockpile.
Financial Results
Segment EBIT for 2015 was 101% lower than the prior
year primarily due to a lower realized gold price
combined with an increase in cost of sales, partially
offset by an increase in sales volume.
In 2015, gold production was 2% higher than the
prior year primarily due to an increase in production at
Bulyanhulu and North Mara, partially offset by decreased
production at Buzwagi. In 2015, production at
Bulyanhulu increased 17% compared to the prior year
primarily due to increased production from the new
CIL plant, which was commissioned in fourth quarter
2014, combined with higher recoveries as a result
of improvements in the elution circuit, partially offset
by slightly lower grade from the underground. The
increased production at North Mara in 2015 was
primarily due to increased grades from the underground
combined with marginally improved throughput and
recoveries, partially offset by the mining of lower grade
ore from the Nyabirama pit and moving away from
the main higher grade ore zone of the Gokona pit.
Production at Buzwagi decreased 19% compared to the
prior year primarily due to a reduction in grade as the
mine focused its efforts in 2015 on movement of waste
in order to open access to higher grade areas of the pit
to be mined in 2016.
Cost of sales for 2015 was 21% higher than the
prior year primarily due to a decrease in capitalized
development and stripping costs combined with an
increase in contractor services costs. This was partially
offset by lower labor costs as a result of headcount
PRODUCTION (Barrick’s Share)
(000s ounces)
470
468
480
to
500
2014
2015
2016E
500
250
0
AISC
($ per ounce)
$ 1,105
$ 1,112
2014
2015
$ 950
to
$ 980
2016E
67
1,500
750
0
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
reductions, the impact of the devaluation of the
Tanzanian shilling on local labor costs, and lower energy
and fuel costs due to a decrease in fuel prices. Cash costs
per ounce were 5% higher than the prior year primarily
reflecting the higher cost of sales, partially offset by the
impact of higher sales volume on unit production costs.
All-in sustaining costs were 1% higher than the prior
year as the higher cash costs were partially offset by a
decrease in minesite sustaining capital expenditures.
Increasing production
at reduced all-in
sustaining costs
In 2015, capital expenditures decreased by 29%
compared to the prior year. The decreases were primarily
due to a reduction in minesite expansion capital
expenditures attributable to lower costs relating to the
CIL plant, which was commissioned in fourth quarter
2014, combined with a decrease in minesite sustaining
capital expenditures arising from a reduction in
capitalized stripping costs.
Outlook
We expect Acacia’s 2016 gold production to be in the
range of 480 to 500 thousand ounces (Barrick’s share),
which is higher than 2015 production levels. Acacia’s
production is expected to be higher than 2015 mainly
due to an expected increase at Buzwagi due to improved
access to the main ore body from second quarter 2016
combined with an expected increase in production at
North Mara as the Gokona underground is fully ramped
up and a second access portal is developed to provide
additional flexibility. At Bulyanhulu production is
expected to be in line with 2015 production levels
as a result of realizing the benefit of operational
improvements made over the past two years, including
the mechanization of the mine and increase in
workforce productivity.
In 2016, we expect cash costs to be in the range of
$670 to $700 per ounce, which is lower than 2015 cash
costs of $772 per ounce, primarily due to further cost
reductions at Bulyanhulu. All-in sustaining costs are
expected to be $950 to $980 per ounce, which is lower
compared to 2015 mainly due to a reduction in
sustaining capital in 2016.
68
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Zaldívar, Chile1
Summary of Operating Data
For the years ended December 31
Copper produced (millions of lbs)
Copper sold (millions of lbs)
Cost of sales ($ millions)
C1 cash costs (per lb)
All-in sustaining costs (per lb)2
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Project capex
2015
2014
% Change
218
215
$ 424
$ 1.74
$ 2.11
2015
$ 104
$ 154
$ 85
$ 85
–
–
222
222
$ 488
$ 1.79
$ 2.30
(2%)
(3%)
(13%)
(3%)
(8%)
2014
% Change
$ 224
$ 297
$ 111
$ 111
–
–
(54%)
(48%)
(23%)
(23%)
–
–
2013
279
279
$ 545
$ 1.65
$ 1.98
2013
$ 436
$ 520
$ 80
$ 80
–
–
1. Zaldívar is presented on a 100% basis until November 30, 2015 and a 50% basis thereafter.
2. This is a non-GAAP financial performance measure; for further information and a detailed reconciliation, please see pages 76 – 85 of this MD&A.
Financial Results
Segment EBIT for 2015 was 54% lower than the prior
year primarily due to a lower realized copper price
combined with a decrease in sales volume resulting from
the divestment of 50% of our ownership in Zaldívar that
was completed on December 1, 2015, partially offset by
a decrease in cost of sales.
In 2015, copper production was 2% lower than the
prior year primarily due to lower production from the
heap leach as a result of a severe rain event at the end of
first quarter 2015 and subsequent flooding at the mine,
which negatively impacted production in the first half of
the year. The decrease in 2015 also reflects the lower
production attributable to Barrick as a result of the
divestment that occurred on December 1, 2015.
Cost of sales for 2015 was 13% lower than the
prior year primarily due to a reduction in consumable
costs resulting mainly from a decline in fuel prices and
power costs combined with a decrease in depreciation
expense resulting from the impact of ceasing
depreciation of the Zaldívar assets upon reclassifying
them as held-for-sale in third quarter 2015, partially
offset by an increase in capitalized stripping costs. In
2015, C1 cash costs were 3% lower than the prior
year primarily due to the lower cost of sales, partially
offset by the impact of lower sales volume on unit
production costs. All-in sustaining costs per pound were
$0.19 per pound lower compared to the prior year,
PRODUCTION
(millions pounds)
500
250
0
222
2014
218
2015
C1 Cash Costs
($ per pound)
$ 1.79
$ 1.74
100
to
120
2016E
$ 1.70
to
$ 1.90
2014
2015
2016E
69
2.50
1.25
0.00
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
primarily reflecting the effect of the above factors on
C1 cash costs combined with the decrease in minesite
sustaining capital expenditures.
In 2015, capital expenditures decreased by 23%
compared to the prior year primarily due to a reduction
in minesite sustaining capital expenditures due to the
deferral of expenditures, partially offset by an increase
of capitalized stripping costs.
Outlook
At Zaldívar, copper production is expected to be in the
range of 100 to 120 million pounds (Barrick’s share),
at C1 cash costs in the range of $1.70 to $1.90 per
pound and all-in sustaining costs per pound of $2.20
to $2.40 per pound. As a result of the divestment,
effective December 1, 2015, Zaldívar is accounted for
using the equity method of accounting.
70
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Lumwana, Zambia
Summary of Operating Data
For the years ended December 31
Copper produced (millions of lbs)
Copper sold (millions of lbs)
Cost of sales ($ millions)
C1 cash costs (per lb)
All-in sustaining costs (per lb)1
Summary of Financial Data
For the years ended December 31
Segment EBIT ($ millions)
Segment EBITDA ($ millions)
Capital expenditures ($ millions)
Minesite sustaining
Minesite expansion
Project capex
2015
287
295
$ 440
$ 1.72
$ 2.42
2015
$ 53
$ 113
$ 99
$ 99
–
–
2014
% Change
2013
214
213
$ 470
$ 2.08
$ 3.15
34%
38%
(6%)
(17%)
(23%)
2014
% Change
$ 40
$ 138
$ 181
$ 181
–
–
33%
(18%)
(45%)
(45%)
–
–
260
240
$ 567
$ 2.29
$ 2.81
2013
$ 87
$ 188
$ 262
$ 262
–
–
1. This is a non-GAAP financial performance measure; for further information and a detailed reconciliation, please see pages 76 – 85 of this MD&A.
Financial Results
Segment EBIT for 2015 was 33% higher than the prior
year primarily due to an increase in sales volume resulting
from the mill shutdown that occurred in second quarter
2014 as a result of the partial collapse of the terminal
end of the main conveyor that negatively impacted
production combined with a decrease in cost of sales,
partially offset by a lower realized copper price.
In 2015, capital expenditures decreased by 45%
compared to the prior year due to a reduction in
capitalized stripping costs combined with the deferral
of minesite sustaining expenditures.
In July 2015, the Zambian government passed
amendments to the country’s mining tax regime that
replaced the recently adopted 20 percent gross royalty
on open pit mines with a nine percent royalty, along with
In 2015, copper production was 34% higher than
the prior year primarily due to the conveyor collapse
mentioned above combined with improved wet weather
preparation in the mine and an increase in operating
efficiency compared to the prior year.
Cost of sales for 2015 was 6% lower than the
prior year primarily due to cost saving initiatives and
improvements in operating efficiencies resulting in lower
mining and maintenance costs, as well as a decrease in
depreciation expense resulting from the impairment
charge taken in 2014 combined with the impact of the
devaluation of the Zambian kwacha in 2015. In 2015,
C1 cash costs were 17% lower than the prior year
primarily reflecting the impact of increased sales volume
on unit production costs and a continued positive trend
in mining and processing efficiency resulting in a lower
unit cost. All-in sustaining costs per pound were $0.73
per pound lower than the prior year primarily reflecting
the lower C1 cash costs combined with a decrease in
minesite sustaining capital expenditures.
270
to
290
2016E
$ 1.35
to
$ 1.60
2016E
71
PRODUCTION
(millions pounds)
500
250
0
214
2014
287
2015
C1 Cash Costs
($ per pound)
$ 2.08
$ 1.72
2014
2015
2.50
1.25
0.00
600
400
200
0
-200
-400
600
-600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
the reintroduction of a 30 percent corporate income tax,
a 50% of taxable income limitation on the utilization of
tax loss carryforwards, and a 15 percent variable profits
tax. In third quarter 2015, we evaluated the potential for
a reversal of previous impairments recorded in fourth
quarter 2014. The current mine plan, lower short-term
copper prices and a higher observable discount rate
offset the lower royalty rate and therefore no impairment
reversal is required at the current time.
Also in second quarter 2015, the Zambian power
authority (“ZESCO”) announced a reduction to power
generation necessitated by the low water levels in its
reservoirs as a result of the poor rainfall experienced
during the recent rainy season. We continue to focus on
power usage efficiencies and are working closely with
ZESCO to manage the power usage within the monthly
power cap. This has minimized the impact of power
restrictions on operational production in both the mining
and processing areas.
Outlook
At Lumwana copper production is expected to be in the
range of 270 to 290 million pounds, in line with 2015
production levels, primarily due to an increase in
expected total tonnes mined and ore tonnes processed,
partially offset by a decrease in expected grade
compared to the prior year.
C1 cash costs are expected to be $1.35 to $1.60
per pound, compared to $1.72 per pound in 2015, and
all-in sustaining costs are expected to be in the range
of $1.90 to $2.20 per pound, compared to $2.42 for
2015. C1 cash costs are expected to be lower than 2015
due to cost reductions and improvements in equipment
productivities, and the impact of favorable exchange rate
movements in the local currency. All-in sustaining costs
are expected to be lower than 2015 due to the cost
reductions combined with a lower royalty rate than the
20% rate experienced in the first half of 2015.
72
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Commitments and Contingencies
Litigation and Claims
We are currently subject to various litigation proceedings
as disclosed in note 35 to the Financial Statements, and
we may be involved in disputes with other parties in the
future that may result in litigation. If we are unable to
resolve these disputes favorably, it may have a material
adverse impact on our financial condition, cash flow and
results of operations.
Contractual Obligations and Commitments
($ millions)
As at December 31, 2015
Debt1
Repayment of principal
Capital leases
Interest
Provisions for environmental rehabilitation2
Operating leases
Restricted share units
Pension benefits and other post-retirement benefits
Derivative liabilities3
Purchase obligations for supplies and consumables4
Capital commitments5
Social development costs6
Payments due
2016
2017
2018
2019
2020
2021 and
thereafter
Total
$ 162
41
535
80
36
11
20
160
518
94
10
$ 123
37
535
60
33
21
20
70
226
8
2
$
744
30
530
57
28
4
20
32
137
6
3
$
594
16
470
98
20
5
20
2
83
4
3
$ 503
9
436
104
14
–
20
–
73
4
3
$ 7,766
20
5,827
1,833
30
–
371
–
114
4
198
$ 9,892
153
8,333
2,232
161
41
471
264
1,151
120
219
Total
$ 1,667
$ 1,135
$ 1,591
$ 1,315
$ 1,166
$ 16,163
$ 23,037
1. Debt and Interest – Our debt obligations do not include any subjective acceleration clauses or other clauses that enable the holder of the debt to call for early
repayment, except in the event that we breach any of the terms and conditions of the debt or for other customary events of default. The debt and interest amounts
include 100% of the Pueblo Viejo financing, even though our attributable share is 60 percent of this total, consistent with our ownership interest in the mine.
We are not required to post any collateral under any debt obligations. Projected interest payments on variable rate debt were based on interest rates in effect
at December 31, 2015. Interest is calculated on our long-term debt obligations using both fixed and variable rates.
2. Provisions for Environmental Rehabilitation – Amounts presented in the table represent the undiscounted uninflated future payments for the expected cost of
provisions for environmental rehabilitation.
3. Derivative Liabilities – Amounts presented in the table relate to derivative contracts disclosed under note 24C to the Financial Statements. Payments related to
derivative contracts may be subject to change given variable market conditions.
4. Purchase Obligations for Supplies and Consumables – Includes commitments related to new purchase obligations to secure a supply of acid, tires and cyanide
for our production process.
5. Capital Commitments – Purchase obligations for capital expenditures include only those items where binding commitments have been entered into.
6. Social Development Costs – Includes Pascua-Lama’s commitment related to the potential funding of a power transmission line in Argentina of $114 million, which
is not expected to be paid prior to 2021.
73
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Review of Quarterly Results
Quarterly Information1
($ millions, except where indicated)
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
2015
2014
Revenues
Realized price per ounce – gold3
Realized price per pound – copper3
Cost of sales
Net earnings (loss)
Per share (dollars)2,3
Adjusted net earnings3
Per share (dollars)2,3
Operating cash flow
Free cash flow3
1,190
2.66
1,689
1,125
2.18
1,742
$ 2,238 $ 2,315 $ 2,231 $ 2,245
1,219
1,105
2.16
2.55
1,708
1,768
57
(2,622)
0.05
(2.25)
62
91
0.05
0.08
316
698
26 $ (198)
(9)
(0.01)
60
0.05
525
(264)
(0.23)
131
0.11
$ 387 $ 866 $
1,255
$ 2,510 $ 2,624 $ 2,458 $ 2,647
1,285
1,204
3.03
2.91
1,719
1,799
88
(2,851)
0.08
(2.45)
238
174
0.20
0.15
585
371
(31)
(176) $ 199 $
1,289
3.17
1,631
(269)
(0.23)
159
0.14
488
(128) $
1,285
3.09
1,681
125
0.11
222
0.19
852
$
1. Sum of all the quarters may not add up to the annual total due to rounding.
2. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
3. Realized price, adjusted net earnings, adjusted EPS and free cash flow are non-GAAP financial performance measures with no standard meaning under IFRS.
For further information and a detailed reconciliation, please see pages 76 – 85 of this MD&A.
Our recent financial results reflect a trend of declining
spot gold prices, and as a result of an emphasis on cost
control and maximizing free cash flow, costs have also
decreased. Our adjusted net earnings and operating
cash flow levels have fluctuated with gold and copper
realized prices and production levels each quarter. In
fourth quarter 2015, we recorded asset and goodwill
impairments of $2.6 billion (net of tax effects and
non-controlling interests), primarily related to our Pueblo
Viejo and Goldstrike mines and Pascua-Lama project. In
third quarter 2015, we recorded a goodwill impairment
charge of $476 million relating to our Zaldívar mine
upon reclassification of the mine’s net assets as held-for-
sale as the agreed selling price is lower than previously
recognized carrying values. In fourth quarter 2014, we
recorded asset and goodwill impairments of $2.8 billion
(net of tax effects and non-controlling interests),
primarily at Lumwana, Zaldívar and Cerro Casale. The net
loss in second quarter 2014 reflected asset and goodwill
impairment charges of $514 million relating to Jabal
Sayid as a result of classifying the project as held-for-sale.
Fourth Quarter Results
In fourth quarter 2015, we reported a net loss and
adjusted net earnings of $2.6 billion and $91 million,
respectively, compared to a net loss and adjusted net
earnings of $2.9 billion and $174 million, respectively, in
fourth quarter 2014. The net loss in fourth quarter 2015
reflects the recording of $2.6 billion (net of tax effects
and non-controlling interests) in impairment charges
compared to impairment charges of $2.8 billion (net
of tax effects and non-controlling interests) recorded in
fourth quarter 2014.
The lower net loss reflects an increase in gold sales
volume and lower cost of sales in fourth quarter 2015
combined with the recognition of lower impairment
charges compared to the same prior year period. The
decrease in adjusted net earnings reflects the lower
realized gold and copper prices and decrease in copper
sales volume in fourth quarter 2015 compared to the
same prior year period. This was partially offset by an
increase in gold sales volumes compared to fourth
quarter 2014.
In fourth quarter 2015, gold and copper sales were
1.64 million ounces and 132 million pounds, respectively,
compared to 1.57 million ounces and 139 million
pounds, respectively, in fourth quarter 2014. Revenues
in fourth quarter 2015 were lower than the same prior
year period, reflecting lower market prices for gold and
copper and lower copper sales volumes. In fourth quarter
2015, cost of sales was $1.7 billion, a decrease of
$31 million compared to the same prior year period,
reflecting lower direct mining costs, partially offset by
an increase in depreciation expense. Cash costs were
$547 per ounce, a decrease of $81 per ounce, primarily
due to higher production levels combined with the lower
74
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
direct mining costs. C1 cash costs were $1.66 per pound
for copper, a decrease of $0.12 per pound from the
same prior year period due to lower direct mining costs
and lower depreciation expense.
In fourth quarter 2015, operating cash flow was
$698 million, up 88% from the same prior year period.
The increase in operating cash flow primarily reflects a
decrease in income tax payments, partially offset by
lower realized gold and copper prices.
Internal Control Over Financial Reporting and Disclosure Controls and Procedures
Management is responsible for establishing and
maintaining adequate internal control over financial
reporting and disclosure controls and procedures.
Internal control over financial reporting is a framework
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements in accordance with IFRS. The
Company’s internal control over financial reporting
framework includes those policies and procedures that (i)
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements
in accordance with IFRS, and that receipts and
expenditures of the Company are being made only in
accordance with authorizations of management and
directors of the Company; and (iii) provide reasonable
assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on
the Company’s consolidated financial statements.
Disclosure controls and procedures form a broader
framework designed to ensure that other financial
information disclosed publicly fairly presents in all
material respects the financial condition, results of
operations and cash flows of the Company for the
periods presented in this MD&A and Barrick’s Annual
Report. The Company’s disclosure controls and
procedures framework includes processes designed to
ensure that material information relating to the
Company, including its consolidated subsidiaries, is made
known to management by others within those entities
to allow timely decisions regarding required disclosure.
Together, the internal control over financial reporting
and disclosure controls and procedures frameworks
provide internal control over financial reporting and
disclosure. Due to its inherent limitations, internal control
over financial reporting and disclosure may not prevent
or detect all misstatements. Further, the effectiveness of
internal control is subject to the risk that controls may
become inadequate because of changes in conditions,
or that the degree of compliance with policies or
procedures may change.
The management of Barrick, at the direction of
our President and Chief Financial Officer, evaluated the
effectiveness of the design and operation of internal
control over financial reporting as of the end of the
period covered by this report based on the framework
and criteria established in Internal Control – Integrated
Framework (2013) as issued by the Committee of
Sponsoring Organizations (COSO) of the Treadway
Commission. Based on that evaluation, Management
concluded that the Company’s internal control over
financial reporting was effective as of December 31, 2015.
Barrick’s annual management report on internal
control over financial reporting and the integrated audit
report of Barrick’s auditors for the year ended
December 31, 2015 will be included in Barrick’s 2015
Annual Report and its 2015 Form 40-F/Annual
Information Form on file with the US Securities and
Exchange Commission (“SEC”) and Canadian provincial
securities regulatory authorities.
75
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS IFRS Critical Accounting Policies and Accounting Estimates
Management has discussed the development and
selection of our critical accounting estimates with the
Audit Committee of the Board of Directors, and the
Audit Committee has reviewed the disclosure relating
to such estimates in conjunction with its review of this
MD&A. The accounting policies and methods we utilize
determine how we report our financial condition and
results of operations, and they may require management
to make estimates or rely on assumptions about matters
that are inherently uncertain. The consolidated financial
statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards
Board (“IASB”) under the historical cost convention,
as modified by revaluation of certain financial assets,
derivative contracts and post-retirement assets. Our
significant accounting policies are disclosed in note 2
Non-GAAP Financial Performance Measures
Adjusted Net Earnings and Adjusted Net
Earnings per Share
Adjusted net earnings is a non-GAAP financial measure
which excludes the following from net earnings:
n Impairment charges (reversals) related to intangibles,
goodwill, property, plant and equipment,
and investments;
n Gains/losses and other one-time costs relating to
acquisitions/dispositions;
n Foreign currency translation gains/losses;
n Significant tax adjustments not related to current
period earnings;
n Costs related to restructuring/severance arrangements,
care and maintenance and demobilization costs, and
other expenses not related to current operations;
n Unrealized gains/losses on non-hedge derivative
instruments; and
n Change in the measurement of the provision for
environmental rehabilitation (“PER”) at closed sites.
of the consolidated financial statements, including
a summary of current and future changes in
accounting policies.
Critical Accounting Estimates and Judgments
Certain accounting estimates have been identified
as being “critical” to the presentation of our financial
condition and results of operations because they require
us to make subjective and/or complex judgments about
matters that are inherently uncertain; or there is a
reasonable likelihood that materially different amounts
could be reported under different conditions or using
different assumptions and estimates. Our significant
accounting judgments, estimates and assumptions
are disclosed in note 3 of the accompanying
financial statements.
Management uses this measure internally to evaluate
our underlying operating performance for the reporting
periods presented and to assist with the planning and
forecasting of future operating results. Management
believes that adjusted net earnings is a useful measure
of our performance because tax adjustments not related
to the current period; impairment charges, gains/losses
and other one-time costs relating to asset acquisitions/
dispositions and business combinations; and project costs
related to restructuring/severance arrangements, project
care and maintenance and demobilization costs, do not
reflect the underlying operating performance of our
core mining business and are not necessarily indicative
of future operating results. We also adjust for changes
in PER discount rates relating to our closed sites as they
are not related to our current operating sites and not
necessarily indicative of underlying results. Furthermore,
foreign currency translation gains/losses and unrealized
gains/losses from non-hedge derivatives are not
necessarily reflective of the underlying operating results
for the reporting periods presented.
76
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS As noted, we use this measure for internal purposes.
Management’s internal budgets and forecasts and public
guidance do not reflect potential impairment charges,
potential gains/losses on the acquisition/disposition
of assets, foreign currency translation gains/losses, or
unrealized gains/losses on non-hedge derivatives.
Consequently, the presentation of adjusted net earnings
enables investors and analysts to better understand the
underlying operating performance of our core mining
business through the eyes of Management. Management
periodically evaluates the components of adjusted net
earnings based on an internal assessment of performance
measures that are useful for evaluating the operating
performance of our business segments and a review of
the non-GAAP measures used by mining industry analysts
and other mining companies.
Adjusted net earnings is intended to provide additional
information only and does not have any standardized
definition under IFRS and should not be considered in
isolation or as a substitute for measures of performance
prepared in accordance with IFRS. The measures are
not necessarily indicative of operating profit or cash flow
from operations as determined under IFRS. Other
companies may calculate these measures differently.
The following table reconciles these non-GAAP measures
to the most directly comparable IFRS measure.
Reconciliation of Net Earnings to Adjusted Net Earnings and Adjusted Net Earnings per Share1
For the years
ended Dec. 31
For the three months
ended Dec. 31
($ millions, except per share amounts in dollars)
2015
2014
2013
2015
2014
Net earnings (loss) attributable to equity holders
of the Company
Impairment charges related to intangibles, goodwill,
property, plant and equipment, and investments2
Acquisition/disposition (gains)/losses3
Foreign currency translation (gains)/losses4
Tax adjustments5
Other expense adjustments6
Unrealized losses/(gains) on non-hedge derivative instruments7
$ (2,838)
$ (2,907)
$ (10,366)
$ (2,622)
$ (2,851)
3,119
(263)
177
59
81
9
3,394
(48)
169
(49)
97
137
11,536
442
233
297
483
(56)
2,639
(183)
186
47
23
1
2,848
(13)
(17)
63
6
138
Adjusted net earnings
$
344
$
793
$ 2,569
$
91
$
174
Net earnings (loss) per share8
Adjusted net earnings per share8
(2.44)
0.30
(2.50)
0.68
(10.14)
2.51
(2.25)
0.08
(2.45)
0.15
1. Amounts presented in this table are after-tax and net of non-controlling interest.
2. Impairment charges for the three months and year ended December 31, 2015 is presented net of tax and non-controlling interest ($767) million and ($779) million
benefit, respectively (2014: ($716) million and ($712) million benefit, respectively; 2013: ($1,150) million benefit).
3. Acquisition/disposition losses for the three months and year ended December 31, 2015 is presented net of tax and non-controlling interest $77 million and
$76 million expense, respectively (2014: nil and $2 million expense, respectively; 2013: ($38) million benefit).
4. Foreign currency translation losses for the three months and year ended December 31, 2015 is presented net of tax and non-controlling interest $11 million expense
and ($5) million benefit, respectively (2014: ($6) million and ($8) million benefit, respectively; 2013: $4 million expense).
5. Tax adjustments for the three months and year ended December 31, 2015 is presented net of non-controlling interest $5 million and $13 million, respectively
(2014: nil; 2013: $135 million).
6. Other expense adjustments for the three months and year ended December 31, 2015 is presented net of tax and non-controlling interest ($17) million and
($53) million benefit, respectively (2014: ($3) million and ($22) million benefit, respectively; 2013: ($76) million benefit).
7. Unrealized losses/(gains) on non-hedge derivative instruments for the three months and year ended December 31, 2015 is presented net of tax and non-controlling
interest ($5) million and ($3) million benefit, respectively (2014: ($45) million and ($44) million benefit, respectively; 2013: ($6) million benefit).
8. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
77
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Free Cash Flow
Free cash flow is a measure which excludes capital
expenditures from operating cash flow. Management
believes this to be a useful indicator of our ability to
operate without reliance on additional borrowing or
usage of existing cash.
Free cash flow is intended to provide additional
information only and does not have any standardized
definition under IFRS and should not be considered in
Reconciliation of Operating Cash Flow to Free Cash Flow
isolation or as a substitute for measures of performance
prepared in accordance with IFRS. The measure is
not necessarily indicative of operating profit or cash flow
from operations as determined under IFRS. Other
companies may calculate this measure differently. The
following table reconciles this non-GAAP measure to
the most directly comparable IFRS measure.
($ millions)
Operating cash flow
Settlement of currency and commodity contracts
Non-recurring tax payments
Adjusted operating cash flow
Capital expenditures
Free cash flow
For the years
ended Dec. 31
For the three months
ended Dec. 31
2015
2014
2013
$ 2,794
–
–
$ 2,794
(1,713)
$ 2,296
–
–
$ 2,296
(2,432)
$ 4,239
64
56
$ 4,359
(5,501)
$ 1,081
$
(136)
$ (1,142)
2015
$ 698
–
–
$ 698
(311)
$ 387
2014
$ 371
–
–
$ 371
(547)
$ (176)
Cash Costs per ounce, All-in Sustaining Costs per
ounce, All-in Costs per ounce, C1 Cash Costs per pound
and All-in Sustaining Costs per pound
Beginning with our 2012 Annual Report, we adopted a
non-GAAP “all-in sustaining costs per ounce” measure
based on the expectation that the World Gold Council
(“WGC”) (a market development organization for the
gold industry comprised of and funded by 18 gold
mining companies from around the world, including
Barrick) was developing a similar metric. The WGC is
not a regulatory organization. In June 2013, the WGC
published its definition of “adjusted operating costs”,
“all-in sustaining costs” and also a definition of “all-in
costs” and in second quarter 2013, Barrick voluntarily
adopted the definition of these metrics. The “all-in
sustaining costs” measure is similar to our presentation
in reports prior to second quarter 2013, with the
exception of the classification of sustaining capital. In
our previous calculation, certain capital expenditures
were presented as mine expansion projects, whereas
they meet the definition of sustaining capital
expenditures under the WGC definition, and therefore
these expenditures have been reclassified as sustaining
capital expenditures. Starting in fourth quarter 2014,
the non-GAAP “adjusted operating costs” was renamed
“cash costs”. The manner in which this measure is
calculated was not changed.
Our “all-in costs” measure starts with “all-in
sustaining costs” and adds additional costs which reflect
the varying costs of producing gold over the life-cycle of
a mine, including: non-sustaining capital expenditures
(capital expenditures at new projects and capital
expenditures at existing operations related to projects
that significantly increase the net present value of the
mine and are not related to current production) and
other non-sustaining costs (primarily exploration and
evaluation (“E&E”) costs, community relations costs and
general and administrative costs that are not associated
with current operations). This definition recognizes that
there are different costs associated with the life-cycle of
a mine, and that it is therefore appropriate to distinguish
between sustaining and non-sustaining costs. We believe
that our use of “all-in sustaining costs” and “all-in 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
78
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
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. In the current market
environment for gold mining equities, many investors
and analysts are more focused on the ability of gold
mining companies to generate free cash flow from
current operations, and consequently 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.
“All-in sustaining costs” and “all-in 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.
In addition to presenting these metrics on a
by-product basis, we have calculated these metrics on
a co-product basis. Our co-product metrics remove the
impact of other metal sales that are produced as a
by-product of our gold production from cost per ounce
calculations, but does not reflect a reduction in costs
for costs associated with other metal sales.
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. Starting
in this MD&A, we have replaced the non-GAAP measure
“C3 fully allocated costs per pound” for our copper
mines with “all-in sustaining costs per pound”. Similar
to the gold all-in sustaining costs metric, management
uses this to better evaluate the costs of copper
production. We believe this change will enable 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.
79
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Reconciliation of Gold Cost of Sales to Cash Costs per ounce, All-in Sustaining Costs per ounce and All-in Costs per ounce
For the years
ended Dec. 31
For the three months
ended Dec. 31
($ millions, except per ounce information in dollars)
Reference
2015
2014
2013
2015
2014
Cost of sales
Cost of sales applicable to non-controlling interests1
Cost of sales applicable to ore purchase arrangement
Cost of sales applicable to power sales
Other metal sales
Realized (gains)/losses on hedge and non-hedge
Non-recurring items2
Treatment and refinement charges
Total production costs
Depreciation
Impact of Barrick Energy
Cash costs
General & administrative costs
Rehabilitation – accretion and amortization (operating sites)
Mine on-site exploration and evaluation costs
Mine development expenditures3
Sustaining capital expenditures3
All-in sustaining costs
Community relations costs not related to current operations
Rehabilitation – accretion and amortization not related
to current operations
Exploration and evaluation costs (non-sustaining)
Non-sustaining capital expenditures3
Pascua-Lama
Cortez
Goldstrike thiosulfate project
Bulyanhulu CIL
Pueblo Viejo
Hemlo
Arturo
Other
A
B
C
D
E
F
G
H
I
J
K
L
L
M
J
K
L
L
L
L
L
L
L
L
$ 5,897
(620)
–
(32)
(169)
128
(151)
14
$ 5,794
(514)
–
(72)
(183)
(8)
–
11
$ 6,220
(387)
(46)
(15)
(189)
(20)
–
6
$ 1,573
(174)
–
(6)
(40)
51
(90)
4
$ 1,508
(132)
–
(17)
(45)
4
–
3
$ 5,067
$ 5,028
$ 5,569
$ 1,318
$ 1,321
$ (1,441)
–
$ (1,267)
–
$ (1,453)
(57)
$ (424)
–
$
(332)
–
$ 3,626
$ 3,761
$ 4,059
$ 894
$ 989
180
132
39
549
522
299
123
20
653
569
298
136
61
1,101
904
44
23
9
88
142
81
29
6
141
208
$ 5,048
$ 5,425
$ 6,559
$ 1,200
$ 1,454
12
12
114
(81)
47
33
(1)
–
39
80
16
29
11
152
195
19
287
29
–
–
14
27
23
10
117
1,998
132
223
83
29
–
–
24
(1)
3
23
(81)
5
–
–
–
1
24
2
19
3
44
103
5
65
4
–
–
–
22
All-in costs
$ 5,319
$ 6,188
$ 9,198
$ 1,176
$ 1,719
Ounces sold – consolidated basis (000s ounces)
Ounces sold – non-controlling interest (000s ounces)1
Ounces sold – equity basis (000s ounces)
Total production costs per ounce4
Cash costs per ounce4
Cash costs per ounce (on a co-product basis)4,5
All-in sustaining costs per ounce4
All-in sustaining costs per ounce (on a co-product basis)4,5
All-in costs per ounce4
All-in costs per ounce (on a co-product basis)4,5
6,793
(709)
6,083
6,960
(676)
6,284
7,604
(430)
7,174
1,801
(165)
1,636
1,741
(169)
1,572
$
$
$
$
$
$
$
833
596
619
831
854
876
899
$
$
$
$
$
800
598
618
864
884
$
$
$
$
$
776
566
589
915
938
$
986
$ 1,006
$ 1,282
$ 1,305
$ 806
$ 839
$ 547
$ 566
$ 733
$ 752
$ 719
$ 738
$ 628
$ 648
$ 925
$ 945
$ 1,094
$ 1,114
1. Relates to interest in Pueblo Viejo and Acacia held by outside shareholders.
2. Non-recurring items consist of $10 million of severance costs from the closure of our Golden Sunlight mine, $116 million of costs arising from a change in our
supplies inventory obsolescence provision and inventory impairments at Buzwagi, and $24 million in abnormal costs at Pueblo Viejo and at Veladero. These costs
are not indicative of our cost of production and have been excluded from the calculation of cash costs.
3. Amounts represent our share of capital expenditures.
4. Total production costs, cash costs, all-in sustaining costs, and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding.
5. Amounts presented on a co-product basis remove the impact of other metal sales (net of non-controlling interest) from cost per ounce calculations that are
produced as a by-product of our gold production.
80
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce information in dollars)
2015
2014
2013
2015
2014
For the years
ended Dec. 31
For the three months
ended Dec. 31
References
A Cost of sales – gold
Cost of sales (statement of income)
Less: cost of sales – copper
Direct mining, royalties and community relations
Depreciation
Hedge gains
Add: Barrick Energy depreciation
Less: cost of sales – non-operating sites
Less: cost of sales – corporate
$ 6,907
(834)
730
104
–
–
–
(176)
$ 6,830
(951)
787
171
(7)
–
(11)
(74)
$ 7,329
(1,098)
926
188
(16)
43
(6)
(48)
$ 1,768
(136)
112
24
–
–
–
(59)
$ 1,799
(272)
221
53
(2)
–
(4)
(15)
Total Cost of Sales – Gold
$ 5,897
$ 5,794
$ 6,220
$ 1,573
1,508
B Cost of sales applicable to non-controlling interests
Cost of sales applicable to Acacia (Note 5)
Direct mining, royalties and community relations
Depreciation
Total related to Acacia
Portion attributable to non-controlling interest
Cost of sales applicable to Pueblo Viejo (Note 5)
Direct mining, royalties and community relations
Depreciation
Total related to Pueblo Viejo
Portion attributable to non-controlling interest
Cost of sales applicable to non-controlling interests
C Cost of sales applicable to power sales
$
$
$
$
$
$
$
694
143
837
291
627
277
904
329
620
$
$
$
$
$
$
$
564
129
693
225
642
243
885
289
514
$
$
$
$
$
$
$
596
160
756
192
420
139
559
195
387
$
$
$
$
$
$
$
259
44
303
107
142
55
197
$ 158
35
$ 193
$
66
$ 156
56
$ 212
67
$
66
174
$ 132
Equal to the cost of sales related to power sales from our Pueblo Viejo mine that are included in consolidated cost of sales but excluded from
cash costs. These figures cannot be tied directly to the financial statements or notes.
D Other metal sales
By-product revenues from metals produced in conjunction with gold are deducted from the costs incurred to produce gold (Note 6). By-product
revenues from metals produced net of copper, power revenues and non-controlling interest for the three months and year ended December 31,
2015 were $26 million and $109 million, respectively (2014: $34 million and $137 million, respectively; 2013: $167 million).
E Realized gains/losses on hedge and non-hedge
Realized (gains)/losses on non-hedge derivatives
Realized (gains)/losses on hedge derivatives
Realized (gains)/losses on hedge and non-hedge
F Treatment and refinement charges
$
22
106
$
$
128
$
(8)
–
(8)
$
(20)
–
$
(20)
$
$
11
40
51
$
$
4
–
4
Treatment and refinement charges, which are recorded against concentrate revenues, for the three months and year ended December 31, 2015
were $4 million and $14 million, respectively (2014: $3 million and $11 million, respectively; 2013: $6 million).
G Depreciation – gold
Depreciation (Note 7)
Less: copper depreciation
Less: NCI portion
Add: Barrick Energy
Less: Depreciation – corporate assets
Total depreciation – gold
$ 1,771
(104)
(168)
–
(58)
$ 1,648
(174)
(135)
–
(72)
$ 1,732
(188)
(90)
43
(44)
$
499
(24)
(37)
–
(14)
$ 434
(56)
(31)
–
(15)
$ 1,441
$ 1,267
$ 1,453
$
424
$ 332
81
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
For the years
ended Dec. 31
For the three months
ended Dec. 31
($ millions, except per ounce information in dollars)
2015
2014
2013
2015
2014
H Impact of Barrick Energy
Revenue related to Barrick Energy
Less: Cost of sales related to Barrick Energy
Add: Barrick Energy depreciation
Impact of Barrick Energy
I General & administrative costs
Total general & administrative costs (statement of income)
Less: non-gold and non-operating general & administrative costs
Less: NCI portion
Add: World Gold Council fees
Less: non-recurring items
$
$
$
–
–
–
–
233
(23)
(15)
–
(15)
$
$
$
–
–
–
–
385
(58)
(16)
3
(15)
$
93
(79)
43
$
57
$
390
(58)
(10)
8
(32)
$
$
$
–
–
–
–
52
(4)
(3)
–
(1)
$
$
–
–
–
–
$ 102
(16)
(5)
1
(1)
Total general & administrative costs
$
180
$
299
$
298
$
44
$
81
J Rehabilitation – accretion and amortization
Includes depreciation (Note 7) on the assets related to rehabilitation provisions of our gold operations of $12 million and $89 million for the
three months and year ended December 31, 2015, respectively (2014: $17 million and $72 million, respectively; 2013: $88 million) and
accretion (Note 11) on the rehabilitation provision of our gold operations of $14 million and $55 million for the three months and year ended
December 31, 2015, respectively (2014: $15 million and $66 million, respectively; 2013: $61 million).
K Exploration and evaluation costs
Exploration and evaluation costs (Note 8)
Less: exploration and evaluation costs – non-gold & NCI
$
163
(10)
$
184
(12)
$
208
(30)
Total exploration and evaluation costs – gold
$
153
$
172
$
178
Exploration & evaluation costs (sustaining)
Exploration and evaluation costs (non-sustaining)
39
114
20
152
61
117
Total exploration and evaluation costs – gold
$
153
$
172
$
178
L Capital expenditures
Gold segments (Note 5)
Pascua-Lama operating unit (Note 5)
Other gold projects
$ 1,290
(81)
116
$ 1,708
195
63
$ 2,558
2,226
177
$
$
$
$
35
(3)
32
9
23
32
$
54
(4)
$
50
6
44
$
50
250
(81)
36
$ 444
103
45
Capital expenditures – gold
$ 1,325
$ 1,966
$ 4,961
$
205
$ 592
Less: NCI portion
Less: capitalized interest (Note 11)
Total capital expenditures – gold
Mine development expenditures
Sustaining capital expenditures
Non-sustaining capital expenditures
Total capital expenditures – gold
M Community relations costs
Community relations costs (Note 7)
Less: community relations costs relating to current operations
(104)
(17)
(143)
(30)
(170)
(297)
(24)
–
(36)
(8)
$ 1,204
$ 1,793
$ 4,494
$
181
$ 548
549
522
133
653
569
571
1,101
904
2,489
88
142
(49)
141
208
199
$ 1,204
$ 1,793
$ 4,494
$
181
$ 548
$
62
(50)
$
76
(47)
$
71
(48)
$
13
(14)
$
24
(5)
Community relations costs not related to current operations
$
12
$
29
$
23
$
(1)
$
19
82
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Reconciliation of Copper Cost of Sales to C1 Cash Costs per pound and All-in Sustaining Costs per pound
($ millions, except per pound information in dollars)
2015
2014
2013
2015
2014
For the years
ended Dec. 31
For the three months
ended Dec. 31
Cost of sales
Depreciation/amortization
Treatment and refinement charges
Cost of sales applicable to equity method investments1
Less: royalties
Non-routine charges
Other metal sales
Other2
C1 cash cost of sales
General & administrative costs
Rehabilitation – accretion and amortization
Royalties
Mine on-site exploration and evaluation costs
Mine development expenditures
Sustaining capital expenditures
Inventory write-downs
$ 814
(109)
178
23
(101)
–
(1)
72
$ 954
(171)
120
–
(39)
(1)
(1)
(27)
$ 1,100
(184)
126
–
(48)
5
(1)
–
$ 116
(23)
49
23
(16)
–
–
72
$ 272
(52)
42
–
(14)
–
–
–
$ 876
$ 835
$ 998
$ 221
$ 248
21
6
101
–
126
51
–
40
8
39
1
162
132
1
37
11
48
–
170
173
(5)
4
–
16
–
31
13
–
$ 285
132
$ 10
2
14
–
8
52
–
$ 334
139
All-in sustaining costs
$ 1,181
$ 1,218
$ 1,432
Pounds sold – consolidated basis (millions pounds)
510
435
519
C1 cash cost per pound3
$ 1.73
$ 1.92
$ 1.92
$ 1.66
$ 1.78
All-in sustaining costs per pound3
$ 2.33
$ 2.79
$ 2.74
$ 2.15
$ 2.40
1. 2015 figures include $23 million of costs related to our 50% share of Zaldívar due to the divestment of 50% of our interest in the mine on December 1, 2015
and subsequent accounting as an equity method investment.
2. 2015 figures include a $50 million insurance recovery related to the conveyor collapse at Lumwana. 2014 figures include $17 million related to copper cathode
purchases and $10 million of abnormal costs related to the conveyor collapse at Lumwana. These costs are not indicative of our normal production costs.
3. C1 cash costs per pound and all-in sustaining costs per pound may not calculate based on amounts presented in this table due to rounding.
EBITDA and Adjusted EBITDA
EBITDA is a non-GAAP financial measure, which excludes
the following from net earnings:
n Income tax expense;
n Finance costs;
n Finance income; and
n Depreciation.
Adjusted EBITDA removes the effect of “impairment
charges”. These charges are not reflective of our ability
to generate liquidity by producing operating cash flow
and therefore this adjustment will result in a more
meaningful valuation measure for investors and analysts
to evaluate our performance in the period and assess our
future ability to generate liquidity.
EBITDA and adjusted EBITDA are intended to provide
Management believes that EBITDA is a valuable indicator
of our ability to generate liquidity by producing operating
cash flow to: fund working capital needs, service debt
obligations, and fund capital expenditures. Management
uses EBITDA for this purpose. EBITDA is also frequently
used by investors and analysts for valuation purposes
whereby EBITDA is multiplied by a factor or “EBITDA
multiple” that is based on an observed or inferred
relationship between EBITDA and market values to
determine the approximate total enterprise value of
a company.
additional information to investors and analysts and
do not have any standardized definition under IFRS and
should not be considered in isolation or as a substitute
for measures of performance prepared in accordance
with IFRS. EBITDA and adjusted EBITDA exclude the
impact of cash costs of financing activities and taxes,
and the effects of changes in operating working capital
balances, and therefore are not necessarily indicative of
operating profit or cash flow from operations as
determined under IFRS. Other companies may calculate
EBITDA and adjusted EBITDA differently.
83
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
($ millions, except per share information in dollars)
2015
2014
2013
2015
2014
For the years
ended Dec. 31
For the three months
ended Dec. 31
Net earnings (loss)
Income tax expense
Finance costs1
Finance income
Depreciation
EBITDA
Impairment charges
Adjusted EBITDA
Reported as:
Cortez
Goldstrike
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Porgera
Kalgoorlie
Acacia
Zaldívar
Lumwana
Other
Impairment charges
EBITDA
Impairment charges
Adjusted EBITDA
$ (3,113)
(31)
676
(13)
1,771
$ (2,959)
306
721
(11)
1,648
$ (10,603)
630
589
(9)
1,732
$ (2,941)
(361)
127
(7)
499
$ (3,040)
(381)
180
(2)
434
(710)
$
3,897
$
(295)
4,106
$
(7,661)
$ 12,687
$ (2,683)
3,405
$ (2,809)
3,564
$ 3,187
$ 3,811
$ 5,026
$
722
$
755
$
630
600
702
454
324
115
162
119
142
154
113
(328)
(3,897)
$
648
628
912
531
446
156
164
148
320
297
138
(577)
(4,106)
$ 1,610
693
569
602
522
129
190
182
275
519
188
(454)
(12,687)
$
257
205
139
88
77
27
28
29
(33)
23
75
(193)
(3,405)
$
96
114
197
152
120
30
31
35
73
71
72
(236)
(3,564)
(710)
$
3,897
$
(295)
4,106
$
(7,661)
$ 12,687
$ (2,683)
3,405
$ (2,809)
3,564
$ 3,187
$ 3,811
$ 5,026
$
722
$
755
1. Finance costs exclude accretion.
Realized Price
Realized price is a non-GAAP financial measure which
excludes from sales:
n Unrealized gains and losses on non-hedge
derivative contracts;
n Unrealized mark-to-market gains and losses on
provisional pricing from copper and gold sales
contracts;
n Sales attributable to ore purchase arrangements;
n Treatment and refining charges; and
n Export duties.
This measure is intended to enable Management to
better understand the price realized in each reporting
period for gold and copper sales because unrealized
mark-to-market values of non-hedge gold and copper
derivatives are subject to change each period due to
changes in market factors such as market and forward
gold and copper prices so that prices ultimately realized
may differ from those recorded. The exclusion of such
unrealized mark-to-market gains and losses from the
presentation of this performance measure enables
investors to understand performance based on the
realized proceeds of selling gold and copper production.
The gains and losses on non-hedge derivatives and
receivable balances relate to instruments/balances that
mature in future periods, at which time the gains and
losses will become realized. The amounts of these gains
and losses reflect fair values based on market valuation
assumptions at the end of each period and do not
necessarily represent the amounts that will become
realized on maturity. We also exclude export duties
84
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
that are paid upon sale and netted against revenues as
well as treatment and refining charges that are paid to
the refiner on gold and copper concentrate sales that
are netted against revenues. We believe this provides
investors and analysts with a more accurate measure
with which to compare to market gold prices and to
assess our gold sales performance. For those reasons,
management believes that this measure provides a
more accurate reflection of our past performance and
is a better indicator of its expected performance in
future periods.
Reconciliation of Sales to Realized Price per ounce/pound
The realized price measure is intended to provide
additional information, and does not have any
standardized definition under IFRS and should not be
considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS.
The measure is not necessarily indicative of sales as
determined under IFRS. Other companies may calculate
this measure differently. The following table reconciles
realized prices to the most directly comparable
IFRS measure.
($ millions, except per ounce/pound information in dollars)
For the years ended December 31
Sales
Sales applicable to non-controlling interests
Sales attributable to ore purchase agreements
Sales applicable to equity method investments1
Realized non-hedge gold/copper derivative (losses) gains
Treatment and refinement charges
Export duties
Other2
Gold
Copper
2015
2014
2013
2015
2014
2013
$ 7,813
(826)
–
–
–
14
34
–
$ 8,744
(851)
–
–
1
11
48
–
$ 10,670
(589)
(46)
–
1
6
51
–
$ 1,002
–
–
26
–
178
–
–
$ 1,224
–
–
–
(11)
120
–
(17)
$ 1,651
–
–
–
(22)
126
–
–
Revenues – as adjusted
$ 7,035
$ 7,953
$ 10,093
$ 1,206
$ 1,316
$ 1,755
Ounces/pounds sold (000s ounces/millions pounds)
6,083
6,284
7,174
510
435
519
Realized gold/copper price per ounce/pound3
$ 1,157
$ 1,265
$ 1,407
$ 2.37
$ 3.03
$ 3.39
1. Represents sales applicable to our 50% equity method investment in Zaldívar effective December 1, 2015 and subsequent accounting as an equity
method investment.
2. Revenue related to copper cathode purchases made in second quarter 2014.
3. Realized price per ounce/pound may not calculate based on amounts presented in this table due to rounding.
85
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS
Glossary of Technical Terms
ALL-IN SUSTAINING COSTS: A measure of cost per ounce/pound
for gold/copper. Refer to page 80 of this MD&A for further
information and a reconciliation of the measure.
AUTOCLAVE: Oxidation process in which high temperatures and
pressures are applied to convert refractory sulfide mineralization
into amenable oxide ore.
BY-PRODUCT: A secondary metal or mineral product recovered
in the milling process such as silver.
C1 CASH COSTS: A measure of cost per pound for copper.
Refer to page 83 of this MD&A for further information and a
reconciliation of the measure.
CASH COSTS: A measure of cost per ounce for gold. Refer to
page 80 of this MD&A for further information and a
reconciliation of the measure.
CONCENTRATE: A very fine, powder-like product containing the
valuable ore mineral from which most of the waste mineral
has been eliminated.
CONTAINED OUNCES: Represents ounces in the ground before
reduction of ounces not able to be recovered by the applicable
metallurgical process.
DEVELOPMENT: Work carried out for the purpose of opening up
a mineral deposit. In an underground mine this includes shaft
sinking, crosscutting, drifting and raising. In an open pit mine,
development includes the removal of overburden.
DILUTION: The effect of waste or low-grade ore which is
unavoidably included in the mined ore, lowering the
recovered grade.
DORÉ: Unrefined gold and silver bullion bars usually consisting
of approximately 90 percent precious metals that will be further
refined to almost pure metal.
DRILLING:
Core: drilling with a hollow bit with a diamond cutting rim to
produce a cylindrical core that is used for geological study and
assays. Used in mineral exploration.
In-fill: any method of drilling intervals between existing holes,
used to provide greater geological detail and to help establish
reserve estimates.
EXPLORATION: Prospecting, sampling, mapping, diamond-drilling
and other work involved in searching for ore.
FREE CASH FLOW: A measure that reflects our ability to generate
cash flow. Refer to page 78 of this MD&A for a definition.
GRADE: The amount of metal in each tonne of ore, expressed as
troy ounces per ton or grams per tonne for precious metals and
as a percentage for most other metals.
Cut-off grade: the minimum metal grade at which an ore
body can be economically mined (used in the calculation of
ore reserves).
Mill-head grade: metal content of mined ore going into a mill
for processing.
Recovered grade: actual metal content of ore determined
after processing.
86
Reserve grade: estimated metal content of an ore body, based
on reserve calculations.
HEAP LEACHING: A process whereby gold/copper is extracted
by “heaping” broken ore on sloping impermeable pads and
continually applying to the heaps a weak cyanide solution/
sulfuric acid which dissolves the contained gold/copper.
The gold/copper-laden solution is then collected for gold/
copper recovery.
HEAP LEACH PAD: A large impermeable foundation or pad used
as a base for ore during heap leaching.
MERRILL-CROWE PROCESS: A separation technique for removing
gold from a cyanide solution.
MILL: A processing facility where ore is finely ground and
thereafter undergoes physical or chemical treatment to extract
the valuable metals.
MINERAL RESERVE: See pages 87 to 94 – Summary Gold/
Copper Mineral Reserves and Mineral Resources.
MINERAL RESOURCE: See pages 87 to 94 – Summary Gold/
Copper Mineral Reserves and Mineral Resources.
MINING RATE: Tonnes of ore mined per day or even specified
time period.
OPEN PIT: A mine where the minerals are mined entirely from
the surface.
ORE: Rock, generally containing metallic or non-metallic
minerals, which can be mined and processed at a profit.
ORE BODY: A sufficiently large amount of ore that can be
mined economically.
OUNCES: Troy ounces of a fineness of 999.9 parts per 1,000 parts.
RECLAMATION: The process by which lands disturbed as a result
of mining activity are modified to support beneficial land use.
Reclamation activity may include the removal of buildings,
equipment, machinery and other physical remnants of mining,
closure of tailings storage facilities, leach pads and other mine
features, and contouring, covering and re-vegetation of waste
rock and other disturbed areas.
RECOVERY RATE: A term used in process metallurgy to indicate
the proportion of valuable material physically recovered in
the processing of ore. It is generally stated as a percentage
of the material recovered compared to the total material
originally present.
REFINING: The final stage of metal production in which
impurities are removed from the molten metal.
STRIPPING: Removal of overburden or waste rock overlying
an ore body in preparation for mining by open pit methods.
Expressed as the total number of tonnes mined or to be mined
for each ounce of gold or pound of copper.
TAILINGS: The material that remains after all economically and
technically recoverable precious metals have been removed
from the ore during processing.
Barrick Gold Corporation | Financial Report 2015MANAGEMENT’S DISCUSSION AND ANALYSIS Mineral Reserves and Mineral Resources
The tables on the next seven pages set forth Barrick’s interest in the total proven and probable gold and copper
reserves and in the total measured, indicated and inferred gold, copper and nickel resources and certain related
information at each property. For further details of proven and probable mineral reserves and measured, indicated and
inferred mineral resources by category, metal and property, see pages 88 to 94.
The Company has carefully prepared and verified the mineral reserve and mineral resource figures and believes
that its method of estimating mineral reserves has been verified by mining experience. These figures are estimates,
however, and no assurance can be given that the indicated quantities of metal will be produced. Metal price fluctuations
may render mineral reserves containing relatively lower grades of mineralization uneconomic. Moreover, short-term
operating factors relating to the mineral reserves, such as the need for orderly development of ore bodies or the
processing of new or different ore grades, could affect the Company’s profitability in any particular accounting period.
Definitions
A mineral resource is a concentration or occurrence of
diamonds, natural solid inorganic material, or natural solid
fossilized organic material including base and precious
metals, coal, and industrial minerals in or on the Earth’s
crust in such form and quantity and of such a grade or
quality that it has reasonable prospects for economic
extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are
known, estimated or interpreted from specific geological
evidence and knowledge. Mineral resources are
sub-divided, in order of increasing geological confidence,
into inferred, indicated and measured categories.
An inferred mineral resource is that part of a mineral
resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited
sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on
limited information and sampling gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes.
An indicated mineral resource is that part of a
mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics, can be
estimated with a level of confidence sufficient to
allow the appropriate application of technical and
economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration
and testing information gathered through appropriate
techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be
reasonably assumed.
A measured mineral resource is that part of a
mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics are so well
established that they can be estimated with confidence
sufficient to allow the appropriate application of
technical and economic parameters, to support
production planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed
and reliable exploration, sampling and testing
information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm
both geological and grade continuity.
Mineral resources, which are not mineral reserves,
do not have demonstrated economic viability.
A mineral reserve is the economically mineable
part of a measured or indicated mineral resource
demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining,
processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that
economic extraction can be justified.
A mineral reserve includes diluting materials and
allowances for losses that may occur when the material
is mined. Mineral reserves are sub-divided in order of
increasing confidence into probable mineral reserves and
proven mineral reserves. A probable mineral reserve is
the economically mineable part of an indicated and, in
some circumstances, a measured mineral resource
demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining,
processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that
economic extraction can be justified.
A proven mineral reserve is the economically
mineable part of a measured mineral resource
demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining,
processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that
economic extraction is justified.
87
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES Gold Mineral Reserves1
As at December 31, 2015
Based on attributable ounces
North America
Goldstrike Open Pit
Goldstrike Underground
Goldstrike Property Total
Pueblo Viejo (60.00%)
Cortez
Bald Mountain2
Turquoise Ridge (75.00%)
Round Mountain (50.00%)2
South Arturo (60.00%)
Hemlo
Golden Sunlight
South America
Cerro Casale (75.00%)
Pascua-Lama
Veladero
Lagunas Norte
Australia Pacific
Porgera (47.50%)3
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Other
Proven
Probable
Total
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
57,874
2,789
60,663
55,526
14,393
13,525
4,433
19,531
304
1,016
492
2.92
11.34
3.31
2.97
2.24
0.98
15.80
0.72
6.86
2.76
1.26
5,440
1,017
6,457
5,295
1,037
426
2,252
454
67
90
20
11,199
2,163
13,362
38,351
138,839
35,558
4,131
13,541
985
12,175
562
1,471
4.09
611
8.79
2,082
4.85
2.97
3,665
2.26 10,092
716
0.63
1,962
14.77
282
0.65
166
5.24
827
2.11
54
2.99
69,073
4,952
74,025
93,877
153,232
49,083
8,564
33,072
1,289
13,191
1,054
6,911
3.11
1,628
10.23
8,539
3.59
2.97
8,960
2.26 11,129
1,142
0.72
4,214
15.30
736
0.69
233
5.62
917
2.16
74
2.18
172,276
31,934
24,821
23,444
0.65
1.84
0.78
1.54
3,586
1,887
622
1,164
725,926
292,692
252,112
40,197
0.59 13,848
1.43 13,497
6,922
0.85
2,565
1.98
898,202
324,626
276,933
63,641
0.60 17,434
1.47 15,384
7,544
0.85
3,729
1.82
1,028
69,886
9.08
0.96
300
2,153
13,443
30,952
3.87
2.01
1,671
2,001
14,471
100,838
4.24
1.28
1,971
4,154
889
3,277
5,225
163
10.25
2.00
0.97
0.38
293
211
163
2
16,599
11,408
4,157
12,333
6.82
2.87
1.77
0.26
3,637
1,051
236
105
17,488
14,685
9,382
12,496
6.99
2.67
1.32
0.27
3,930
1,262
399
107
Total
502,826
1.64 26,479
1,657,323
1.23 65,379
2,160,149
1.32 91,858
Copper Mineral Reserves1
As at December 31, 2015
Proven
Probable
Total
Based on attributable pounds
Zaldívar (50.00%)4
Lumwana
Jabal Sayid (50.00%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
187,066
147,015
163
0.553 2,281.3
0.542 1,755.8
7.8
2.171
40,596
99,657
12,333
0.532
475.7
0.598 1,313.0
690.3
2.539
227,662
246,672
12,496
0.549 2,757.0
0.564 3,068.8
698.1
2.534
Total
334,244
0.549 4,044.9
152,586
0.737 2,479.0
486,830
0.608 6,523.9
1. See accompanying footnote #1.
2. See accompanying footnote #2.
3. See accompanying footnote #3.
4. See accompanying footnote #4.
88
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Gold Mineral Resources1,2
As at December 31, 2015
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable ounces
North America
Goldstrike Open Pit
Goldstrike Underground
Goldstrike Property Total
Pueblo Viejo (60.00%)
Cortez
Goldrush
Bald Mountain3
Turquoise Ridge (75.00%)
Round Mountain (50.00%)3
South Arturo (60.00%)
Hemlo
Golden Sunlight
Donlin Gold (50.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Veladero
Lagunas Norte
Alturas
Australia Pacific
Porgera (47.50%)4
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Nyanzaga (63.90%)
Other
Total
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Contained
ounces
(000s)
Tonnes Grade
(gm/t)
(000s)
Contained
ounces
(000s)
800
1,402
2,202
6,738
3,429
132
34,286
15,753
7,312
34
246
810
3,865
17,217
14,772
4,119
2,092
–
3.27
12.73
9.29
2.51
1.64
11.31
0.83
6.30
0.55
1.83
3.41
1.54
2.52
84
574
658
544
181
48
4,316
2,705
7,021
91,143
40,280
25,034
916 138,186
59,236
13,767
124
42,500
13,996
313 266,803
3,193
129
2
27
40
320
2.31
808
9.29
1,128
5.00
7,187
2.45
1,969
1.52
8,509
10.57
2,782
0.63
8,233
4.32
213
0.48
5
1.25
1,424
1.04
1.45
651
2.24 19,190
404
1,382
1,786
7,731
2,150
8,557
3,698
11,426
342
7
1,451
691
19,503
458
2.78
1,236 10.29
8.26
1,694
1.96
2,333
1.43
18,779
9.00
5,695
0.50
21,348
5.03
23,965
0.45
8,103
2.39
13
3.01
3,160
1.30
4,176
2.02
46,108
41
409
450
147
861
1,647
345
3,872
117
1
306
175
2,997
0.30
1.49
0.40
1.37
–
167 205,268
710 142,693
71,109
35,461
–
53
92
–
0.36
1.25
0.54
1.36
–
2,362
5,749
1,234
1,552
–
2,529
6,459
1,287
1,644
–
371,580
19,486
5,633
1,692
136,384
0.38
1.56
0.45
0.88
1.25
4,493
975
82
48
5,501
146
5,024
6.60
1.16
31
188
9,298
10,426
5.45
0.75
1,629
251
1,660
439
8,476
142
3.65
2.85
994
13
41
1,686
121
–
6.07
2.42
1.54
–
8
131
6
–
14,118
6,413
28,092
62,208
7.03
2.72
1.35
1.31
3,193
561
1,215
2,621
3,201
692
1,221
2,621
12,716
3,162
2,336
1,944
9.23
4.60
1.34
0.93
3,772
468
101
58
–
–
–
19
–
–
–
246
0.25
2
120,025
1.93
7,437 1,283,195
1.74 71,658
79,095
699,171
1.22 27,425
Copper Mineral Resources1,2
As at December 31, 2015
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable pounds
Zaldívar (50.00%)5
Lumwana
Jabal Sayid (50.00%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
45,490
105,065
–
0.431
14,975
432.5
0.478 1,107.7 573,056
19
–
0.432
142.6
0.527 6,663.0
0.6
1.432
575.1
7,770.7
0.6
3,012 0.608
232 0.430
246 2.747
40.4
2.2
14.9
Total
150,555
0.464 1,540.2
588,050
0.525 6,806.2
8,346.4
3,490 0.747
57.5
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying footnote #1.
3. See accompanying footnote #2.
4. See accompanying footnote #3.
5. See accompanying footnote #4.
89
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3
For the years ended December 31
2015
2014
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
69,073
5,116
4,952
4,107
74,025
9,223
93,877
97,881
153,232
43,709
–
25,166
49,083
172,472
8,564
74,989
33,072
21,079
1,289
158
–
–
13,191
42,746
–
–
1,054
14,806
–
270,668
898,202
222,485
324,626
157,465
276,933
75,228
63,641
37,553
6,911
3.11
404
2.46
1,628
10.23
1,382
10.47
8,539
3.59
1,786
6.02
8,960
2.97
7,731
2.46
2.26 11,129
2,150
1.53
–
–
8,557
10.58
1,142
0.72
3,698
0.67
4,214
15.30
4.74 11,426
736
0.69
342
0.50
233
5.62
7
1.38
–
–
–
–
917
2.16
1,451
1.06
–
–
–
–
74
2.18
691
1.45
–
–
2.24 19,503
0.60 17,434
0.35
2,529
1.47 15,384
6,459
1.28
7,544
0.85
1,287
0.53
3,729
1.82
1,644
1.36
74,192
4,496
6,661
3,740
80,853
8,236
87,522
74,748
153,821
38,925
–
68,122
60,477
206,947
8,199
81,206
27,299
23,766
1,711
32,420
1,566
188,345
12,267
36,930
–
62,369
2,281
5,610
–
270,668
898,202
222,485
324,626
157,465
172,003
171,971
69,650
19,383
3.24
1.90
8.83
11.60
3.70
6.30
3.31
2.62
1.99
2.81
–
7,724
274
1,890
1,395
9,614
1,669
9,318
6,301
9,851
3,513
–
4.83 10,574
1,361
0.70
4,160
0.63
4,458
16.91
4.64 12,111
690
0.79
440
0.58
242
4.40
1,525
1.46
24
0.48
3,923
0.65
820
2.08
1,671
1.41
–
–
1,326
0.66
127
1.73
281
1.56
–
–
2.24 19,503
0.60 17,434
0.35
2,529
1.47 15,384
6,459
1.28
4,737
0.86
3,872
0.70
2,833
1.27
429
0.69
Based on attributable ounces
North America
Goldstrike Open Pit
Goldstrike Underground
Goldstrike Property Total
Pueblo Viejo (60.00%)
Cortez
Goldrush
Bald Mountain4
Turquoise Ridge (75.00%)
Round Mountain (50.00%)4
South Arturo (60.00%)
Ruby Hill (0.00%)5
Hemlo
Spring Valley (0.00%)5
Golden Sunlight
Donlin Gold (50.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Veladero
Lagunas Norte
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying footnote #1.
3. Measured plus indicated resources.
4. See accompanying footnote #2.
5. See accompanying footnote #5.
90
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3
For the years ended December 31
2015
2014
Based on attributable ounces
Australia Pacific
Porgera (47.50%)4
Kalgoorlie (50.00%)
Cowal (0.00%)5
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Nyanzaga (63.90%)
Other
Total
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying footnote #1.
3. Measured plus indicated resources.
4. See accompanying footnote #3.
5. See accompanying footnote #6.
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
14,471
9,444
100,838
15,450
–
–
17,488
14,159
14,685
8,099
9,382
28,213
–
62,208
12,496
19
4.24
5.47
1.28
0.88
–
–
6.99
7.03
2.67
2.66
1.32
1.35
–
1.31
0.27
–
1,971
1,660
4,154
439
–
–
3,930
3,201
1,262
692
399
1,221
–
2,621
107
–
17,049
34,256
89,067
23,634
41,470
48,915
24,769
7,923
15,114
11,477
13,267
30,885
–
62,208
12,422
239
5.49
3.68
1.22
1.51
1.17
1.09
7.65
8.49
2.69
2.87
1.35
1.30
–
1.31
0.27
0.13
3,008
4,050
3,482
1,146
1,555
1,708
6,090
2,163
1,308
1,060
574
1,289
–
2,621
107
1
2,160,149
1,403,220
1.32 91,858
1.75 79,095
2,113,635
1,889,133
1.37 93,017
1.55 94,324
91
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Reserves1
For the year ended
December 31, 2015
In proven
gold reserves
In probable
gold reserves
Total
Based on attributable ounces
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Lagunas Norte
Veladero
Africa
Bulyanhulu (63.90%)
Tonnes Grade
(gm/t)
(000s)
Contained
ounces
(000s)
Tonnes Grade
(gm/t)
(000s)
Contained
ounces
(000s)
Tonnes Grade
(gm/t)
(000s)
Contained Process
ounces recovery
%
(000s)
55,526 18.703
33,388
38,351 16.83
20,757
93,877 17.94
54,145 52.6%
172,276 1.907
31,934 69.840
18,574 3.574
16,276 12.550
10,565
71,705
2,134
6,567
725,926
33,451
1.43
292,692 64.09 603,137
7,634
5.91
252,112 14.47 117,257
40,197
1.52
898,202
44,016 69.0%
324,626 64.66 674,842 81.7%
9,768 28.2%
268,388 14.35 123,824 10.1%
58,771
5.17
870
6.54
183
12,415
7.71
3,078
13,285
7.63
3,261 65.0%
Total
295,456 13.11 124,542
1,361,693 17.94
785,314
1,657,149 17.08
909,856 69.0%
1. Silver is accounted for as a by-product credit against reported or projected gold production costs.
Contained Copper Within Reported Gold Reserves1
For the year ended
December 31, 2015
In proven
gold reserves
In probable
gold reserves
Total
Based on attributable pounds
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Africa
Bulyanhulu (63.90%)
Buzwagi (63.90%)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained Process
lbs recovery
%
(millions)
55,526 0.087
106.5
38,351 0.105
89.1
93,877 0.095
195.6 27.7%
172,276 0.190
31,934 0.094
721.3
66.1
725,926 0.226
292,692 0.069
3,613.3
447.8
898,202 0.219
324,626 0.072
4,334.6 87.4%
513.9 38.5%
870 0.417
5,225 0.070
8.0
8.1
12,415 0.539
4,157 0.137
147.6
12.6
13,285 0.531
9,382 0.100
155.6 90.0%
20.7 64.7%
Total
265,831 0.155
910.0
1,073,541 0.182
4,310.4
1,339,372 0.177
5,220.4 80.4%
1. Copper is accounted for as a by-product credit against reported or projected gold production costs.
92
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Resources1
For the year ended December 31, 2015
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable ounces
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Lagunas Norte
Veladero
Africa
Bulyanhulu (63.90%)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
Ounces
(000s)
Tonnes
(000s)
Contained
ounces
(000s)
Grade
(gm/t)
6,738
16.05
3,478
91,143
14.05 41,172
44,650
2,333
13.93
1,045
17,217
14,772
2,092
4,119
1.19
661 205,268
26.37 12,525 142,658
35,461
257
71,109
863
3.82
6.52
1.06
6,985
22.28 102,178
4,267
11.67 26,675
3.74
7,646 371,580
114,703 19,476
6,774
5,633
4,524
27,538
1.04 12,379
20.13 12,607
203
1,836
0.93
10.14
41
5.31
7
14,118
5.92
2,689
2,696 12,716
6.31
2,580
Total
44,979
12.30 17,791 559,757
10.22 183,966
201,757 418,512
2.28 30,650
1. Resources which are not reserves do not have demonstrated economic viability.
Contained Copper Within Reported Gold Resources1
For the year ended December 31, 2015
In measured (M)
gold resources
In indicated (I)
gold resources
(M) + (I)
Inferred
Based on attributable pounds
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (75.00%)
Pascua-Lama
Africa
Buzwagi (63.90%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
6,738
0.083
12.3
91,143
0.083
166.1
178.4
2,333
0.041
2.1
17,217
14,772
0.132
0.072
50.1
23.5
205,268
142,693
0.164
0.061
743.8
193.4
793.9 371,580
19,486
216.9
0.192 1,570.2
17.3
0.040
121
0.150
0.4
28,092
0.127
78.6
79.0
2,336
0.136
7.0
Total
38,848
0.101
86.3
467,196
0.115 1,181.9
1,268.2 395,735
0.183 1,596.6
1. Resources which are not reserves do not have demonstrated economic viability.
Nickel Mineral Resources1
For the year ended December 31, 2015
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable pounds
Africa
Kabanga (50.00%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
6,905
2.490
379.0
11,705
2.720
701.9
1,080.9
10,400
2.600
596.1
1. Resources which are not reserves do not have demonstrated economic viability.
93
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES
Mineral Reserves and Resources Notes
1. Mineral reserves (“reserves”) and mineral resources (“resources”) have been estimated as at December 31, 2015 in accordance with National Instrument 43-101
as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 under the Securities and Exchange Act of
1934 (as interpreted by Staff of the SEC), applies different standards in order to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes,
approximately 1.70 million ounces of proven and probable gold reserves at Cortez and approximately 2.11 million ounces of proven and probable gold reserves
at Lagunas Norte are classified as mineralized material. In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required
pursuant to National Instrument 43-101, the U.S. Securities and Exchange Commission does not recognize such terms. Canadian standards differ significantly
from the requirements of the U.S. Securities and Exchange Commission, and mineral resource information contained herein is not comparable to similar
information regarding mineral reserves disclosed in accordance with the requirements of the U.S. Securities and Exchange Commission. U.S. investors should
understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal
feasibility. In addition, U.S. investors are cautioned not to assume that any part or all of Barrick’s mineral resources constitute or will be converted into reserves.
Calculations have been prepared by employees of Barrick, its joint venture partners or its joint venture operating companies, as applicable, under the supervision
of Rick Sims, Senior Director, Resources and Reserves, of Barrick, Steven Haggarty, Senior Director, Metallurgy, of Barrick and Patrick Garretson, Director, Life of
Mine Planning, of Barrick. Except as noted below, reserves have been estimated based on an assumed gold price of US$1,000 per ounce for 2016 through 2020
and US$1,200 per ounce from 2021 onwards, an assumed silver price of US$15.00 per ounce for 2016 through 2020 and US$16.50 from 2021 onwards, and
an assumed copper price of US$2.75 per pound for 2016 through 2020 and US$3.00 per pound from 2021 onwards (for more information about Barrick’s two-
tiered approach to estimating reserves, see page 26 of the Annual Report 2015) and long-term average exchange rates of 1.31 CAD/US$ and 0.72 US$/AUD.
Reserves at Round Mountain have been estimated using an assumed long-term average gold price of US$1,200. Reserves at Kalgoorlie assumed a gold price of
AUD$1,400 and Bulyanhulu, North Mara and Buzwagi assumed a gold price of US$1,100. Reserve estimates incorporate current and/or expected mine plans
and cost levels at each property. Varying cut-off grades have been used depending on the mine and type of ore contained in the reserves. Barrick’s normal data
verification procedures have been employed in connection with the calculations. Verification procedures include industry-standard quality control practices.
Resources as at December 31, 2015 have been estimated using varying cut-off grades, depending on both the type of mine or project, its maturity and ore types
at each property. For a breakdown of reserves and resources by category and for a more detailed description of the key assumptions, parameters, and methods
used in estimating Barrick’s reserves and resources, see Barrick’s most recent Annual Information Form/Form 40-F on file with Canadian provincial securities
regulatory authorities and the U.S. Securities and Exchange Commission.
2. On January 11, 2016, the Company divested the Bald Mountain mine and its interest in the Round Mountain mine. For additional information regarding this
matter, see page 27 of Barrick’s Annual Report 2015.
3. On August 31, 2015, the Company divested 50% of its interest in the Porgera mine. For additional information regarding this matter, see page 27 of Barrick’s
Annual Report 2015.
4. On December 1, 2015, the Company divested 50% of its interest in the Zaldívar mine. For additional information regarding this matter, see page 27 of Barrick’s
Annual Report 2015.
5. On December 17, 2015, the Company divested the Ruby Hill mine and its interest in the Spring Valley project. For additional information regarding this matter,
see page 27 of Barrick’s Annual Report 2015.
6. On July 23, 2015, the Company divested the Cowal mine. For additional information regarding this matter, see page 27 of Barrick’s Annual Report 2015.
94
Barrick Gold Corporation | Financial Report 2015MINERAL RESERVES AND MINERAL RESOURCES Management’s Responsibility
Management’s Responsibility for Financial Statements
The accompanying consolidated financial statements have been prepared by and are the responsibility of the Board
of Directors and Management of the Company.
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board and reflect Management’s best estimates and
judgments based on currently available information. The Company has developed and maintains a system of internal
controls in order to ensure, on a reasonable and cost effective basis, the reliability of its financial information.
The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered Accountants.
Their report outlines the scope of their examination and opinion on the consolidated financial statements.
Shaun A. Usmar
Senior Executive Vice President
and Chief Financial Officer
Toronto, Canada
February 17, 2016
95
MANAGEMENT’S RESPONSIBILITYBarrick Gold Corporation | Financial Report 2015 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management’s Report on Internal
Control Over Financial Reporting
Barrick’s management is responsible for establishing and maintaining internal control over financial reporting.
Barrick’s management assessed the effectiveness of the Company’s internal control over financial reporting as at
December 31, 2015. Barrick’s Management used the Internal Control – Integrated Framework (2013) as issued by
the Committee of Sponsoring Organizations (COSO) of the Treadway Commission to evaluate the effectiveness of
Barrick’s internal control over financial reporting. Based on management’s assessment, Barrick’s internal control over
financial reporting is effective as at December 31, 2015.
The effectiveness of the Company’s internal control over financial reporting as at December 31, 2015 has
been audited by PricewaterhouseCoopers LLP, Chartered Accountants, as stated in their report which is located on
pages 97 – 98 of Barrick’s 2015 Annual Financial Statements.
96
Barrick Gold Corporation | Financial Report 2015 Independent Auditor’s Report
Independent Auditor’s Report
February 17, 2016
To the Shareholders of
Barrick Gold Corporation
We have completed integrated audits of Barrick Gold Corporation’s (the company) 2015 and 2014 consolidated
financial statements and its internal control over financial reporting as at December 31, 2015. Our opinions, based on
our audits, are presented below.
Report on the consolidated financial statements
We have audited the accompanying consolidated financial statements of Barrick Gold Corporation, which comprise
the consolidated balance sheets as at December 31, 2015 and December 31, 2014 and the consolidated statements
of income, comprehensive income, cash flow and changes in equity for the years then ended, and the related notes,
which comprise a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB) and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Canadian generally accepted auditing standards also require that we comply with ethical requirements.
An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles and
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis
for our audit opinion on the consolidated financial statements.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Barrick Gold Corporation as at December 31, 2015 and December 31, 2014 and its financial performance and its cash
flows for the years then ended in accordance with IFRS as issued by the IASB.
97
INDEPENDENT AUDITOR’S REPORTBarrick Gold Corporation | Financial Report 2015 INDEPENDENT AUDITOR’S REPORT
Emphasis of matter
As discussed in Note 2 to the consolidated financial statements, on January 1, 2015, Barrick Gold Corporation
adopted International Financial Reporting Standard 9, Financial Instruments. Our opinion is not modified with respect
to this matter.
Report on internal control over financial reporting
We have also audited Barrick Gold Corporation’s internal control over financial reporting as at
December 31, 2015, based on criteria established in Internal Control − Integrated Framework (2013), issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management’s responsibility for internal control over financial reporting
Management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control over Financial Reporting.
Auditor’s responsibility
Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our
audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects.
An audit of internal control over financial reporting includes obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control, based on the assessed risk, and performing such other procedures as we consider
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our audit opinion on the company’s internal control over
financial reporting.
Definition of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Inherent limitations
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance with the policies or procedures
may deteriorate.
Opinion
In our opinion, Barrick Gold Corporation maintained, in all material respects, effective internal control over financial
reporting as at December 31, 2015, based on criteria established in Internal Control − Integrated Framework (2013)
issued by COSO.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
98
Barrick Gold Corporation | Financial Report 2015 Consolidated Statements of Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars, except per share data)
Revenue (notes 5 and 6)
Costs and expenses
Cost of sales (notes 5 and 7)
General and administrative expenses (note 10)
Exploration, evaluation and project expenses (notes 5 and 8)
Impairment charges (note 9b)
Loss on currency translation
Closed mine rehabilitation
Loss from equity investees (note 15)
Loss on non-hedge derivatives (note 24e)
Other expense (income) (note 9a)
Loss before finance items and income taxes
Finance items
Finance income
Finance costs (note 13)
Loss before income taxes
Income tax recovery (expense) (note 11)
Net loss
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests (note 31)
2015
2014
$ 9,029
$ 10,239
6,907
233
355
3,897
120
3
7
38
(113)
6,830
385
392
4,106
132
83
–
193
(14)
(2,418)
(1,868)
13
(739)
(3,144)
31
11
(796)
(2,653)
(306)
$ (3,113)
$
(2,959)
$ (2,838)
(275)
$
$
$
(2,907)
(52)
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 12)
Net loss
Basic
Diluted
$
$
(2.44)
(2.44)
$
$
(2.50)
(2.50)
The accompanying notes are an integral part of these consolidated financial statements.
99
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Consolidated Statements
of Comprehensive Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Net loss
Other comprehensive income (loss), net of taxes
Movement in equity investments fair value reserve:
Net unrealized changes on equity investments, net of tax $nil and $nil
Net realized changes on equity investments, net of tax $nil and $nil
Impairment losses on equity investments, net of tax $nil and $nil
Items that may be reclassified subsequently to profit or loss:
Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax $43 and $6
Realized (gains) losses on derivatives designated as cash flow hedges, net of tax ($20) and ($1)
Actuarial gain (loss) on post-employment benefit obligations, net of tax ($3) and $10
Currency translation adjustments, net of tax $nil and $nil
Total other comprehensive loss
Total comprehensive loss
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests
The accompanying notes are an integral part of these consolidated financial statements.
2015
2014
$ (3,113)
$
(2,959)
(11)
18
–
(134)
111
5
(56)
(67)
18
–
18
(35)
(88)
(19)
(43)
(149)
$ (3,180)
$
(3,108)
$ (2,905)
(275)
$
$
$
(3,056)
(52)
100
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Consolidated Statements of Cash Flow
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Operating Activities
Net loss
Adjustments for the following items:
Depreciation
Finance costs (note 13)
Impairment charges (note 9b)
Income tax (recovery) expense (note 11)
(Increase) decrease in inventory
Loss on non-hedge derivatives (note 24e)
Gain on sale of non-current assets/investments
Deposit on gold and silver streaming agreement (note 28)
Other operating activities (note 14a)
Operating cash flows before interest and income taxes
Interest paid
Income taxes paid
Net cash provided by operating activities
Investing Activities
Property, plant and equipment
Capital expenditures (note 5)
Sales proceeds
Proceeds from joint venture agreement of Jabal Sayid (note 4e)
Divestitures (note 4)
Investment sales
Other investing activities (note 14b)
Net cash provided by (used in) investing activities
Financing Activities
Proceeds from divestment of 10% of issued ordinary share capital of Acacia (note 4g)
Debt (note 24b)
Proceeds
Repayments
Dividends (note 30)
Funding from non-controlling interests (note 31)
Disbursements to non-controlling interests (note 31)
Other financing activities (note 14c)
Net cash used in financing activities
Effect of exchange rate changes on cash and equivalents
Net increase (decrease) in cash and equivalents
Cash and equivalents at beginning of year (note 24a)
Add: cash and equivalents of assets classified as held-for-sale at the beginning of year
Cash and equivalents at the end of year
Less: cash and equivalents of assets classified as held-for-sale at the end of year (note 4)
2015
2014
$ (3,113)
$
(2,959)
1,771
739
3,897
(31)
24
38
(187)
610
15
3,763
(677)
(292)
1,648
796
4,106
306
(78)
193
(52)
–
(442)
3,518
(707)
(515)
2,794
2,296
(1,713)
43
–
1,904
33
(17)
(2,432)
72
216
166
120
(92)
250
(1,950)
–
186
9
(3,142)
(160)
40
(90)
68
(3,275)
(13)
(244)
2,699
–
141
(188)
(232)
24
–
9
(60)
(11)
275
2,404
20
$ 2,455
$ 2,699
–
–
Cash and equivalents excluding assets classified as held-for-sale at the end of year (note 24a)
$ 2,455
$ 2,699
The accompanying notes are an integral part of these consolidated financial statements.
101
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Consolidated Balance Sheets
Barrick Gold Corporation
(in millions of United States dollars)
Assets
Current assets
Cash and equivalents (note 24a)
Accounts receivable (note 17)
Inventories (note 16)
Other current assets (note 17)
Total current assets (excluding assets classified as held-for-sale)
Assets classified as held-for-sale (note 4)
Total current assets
Non-current assets
Equity in investees (note 15)
Property, plant and equipment (note 18)
Goodwill (note 19a)
Intangible assets (note 19b)
Deferred income tax assets (note 29)
Non-current portion of inventory (note 16)
Other assets (note 21)
Total assets
Liabilities and Equity
Current liabilities
Accounts payable (note 22)
Debt (note 24b)
Current income tax liabilities
Other current liabilities (note 23)
Total current liabilities (excluding liabilities classified as held-for-sale)
Liabilities classified as held-for-sale (note 4)
Total current liabilities
Non-current liabilities
Debt (note 24b)
Provisions (note 26)
Deferred income tax liabilities (note 29)
Other liabilities (note 28)
Total liabilities
Equity
Capital stock (note 30)
Deficit
Accumulated other comprehensive loss
Other
Total equity attributable to Barrick Gold Corporation shareholders
Non-controlling interests (note 31)
Total equity
Contingencies and commitments (notes 2, 16, 18 and 35)
Total liabilities and equity
The accompanying notes are an integral part of these consolidated financial statements.
Signed on behalf of the Board,
John L. Thornton, Chairman
Steven J. Shapiro, Director
102
As at
As at
December 31, December 31,
2014
2015
$ 2,455
275
1,717
263
4,710
758
5,468
1,199
14,434
1,371
271
1,040
1,502
1,023
$ 26,308
$ 1,158
203
–
337
1,698
149
1,847
9,765
2,102
1,553
1,586
$ 2,699
418
2,722
311
6,150
–
6,150
206
19,193
4,426
308
674
1,684
1,238
$ 33,879
$ 1,653
333
84
417
2,487
–
2,487
12,748
2,561
2,036
1,185
16,853
21,017
20,869
(13,642)
(370)
321
7,178
2,277
9,455
20,864
(10,739)
(199)
321
10,247
2,615
12,862
$ 26,308
$ 33,879
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Consolidated Statements
of Changes in Equity
Attributable to equity holders of the Company
Barrick Gold Corporation
(in millions of United States dollars)
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, 2015
1,164,670
$ 20,864 $ (10,739)
$ (199) $ 321
$ 10,247 $ 2,615 $ 12,862
Impact of adopting IFRS 9 on
January 1, 2015 (note 24)
–
–
99
(99)
–
–
–
–
At January 1, 2015 (restated)
1,164,670
$ 20,864 $ (10,640)
$ (298) $ 321
$ 10,247 $ 2,615 $ 12,862
Net loss
Total other comprehensive income (loss)
Total comprehensive loss
Transactions with owners
–
–
–
–
–
(2,838)
5
–
(72)
–
–
(2,838)
(67)
(275)
–
(3,113)
(67)
$
– $ (2,833)
$
(72) $
–
$ (2,905) $ (275) $ (3,180)
Dividends
Dividend reinvestment plan
Recognition of stock option expense
Funding from non-controlling interests
Other decrease in non-controlling interests
Other decreases
–
411
–
–
–
–
–
3
2
–
–
–
(160)
(3)
–
–
–
(6)
–
–
–
–
–
–
–
–
–
–
–
–
(160)
–
2
–
–
(6)
–
–
–
41
(104)
–
(160)
–
2
41
(104)
(6)
Total transactions with owners
411
$
5 $
(169)
$
– $
–
$
(164) $
(63) $
(227)
At December 31, 2015
1,165,081
$ 20,869 $ (13,642)
$ (370) $ 321
$ 7,178 $ 2,277 $ 9,455
At January 1, 2014
1,164,652
$ 20,869 $ (7,581)
$
(69) $ 314
$ 13,533 $ 2,468 $ 16,001
Net loss
Total other comprehensive loss
Total comprehensive loss
Transactions with owners
Dividends
Issued on exercise of stock options
De-recognition of stock option expense
Recognized on divestment of 10%
of Acacia Mining plc
Funding from non-controlling interests
Other decrease in non-controlling interests
–
–
–
–
18
–
–
–
–
–
–
(2,907)
(19)
–
(130)
–
–
(2,907)
(149)
(52) (2,959)
(149)
–
$
– $ (2,926)
$ (130) $
–
$ (3,056) $
(52) $ (3,108)
–
–
(5)
(232)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7
–
–
(232)
–
(5)
–
–
–
(232)
–
(5)
7
–
–
174
29
(4)
181
29
(4)
Total transactions with owners
18
$
(5) $
(232)
$
– $ 7
$
(230) $ 199 $
(31)
At December 31, 2014
1,164,670
$ 20,864 $ (10,739)
$ (199) $ 321
$ 10,247 $ 2,615 $ 12,862
1. Includes cumulative translation adjustments as at December 31, 2015: $178 million loss (2014: $122 million).
2. Includes additional paid-in capital as at December 31, 2015: $283 million (December 31, 2014: $283 million) and convertible borrowings – equity component
as at December 31, 2015: $38 million (December 31, 2014: $38 million).
The accompanying notes are an integral part of these consolidated financial statements.
103
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Notes to Consolidated Financial Statements
Barrick Gold Corporation. Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to A$, ARS, C$, CLP,
DOP, EUR, GBP, PGK, SAR, TZS, ZAR, and ZMW are to Australian dollars, Argentinean pesos, Canadian dollars, Chilean pesos, Dominican pesos,
Euros, British pound sterling, Papua New Guinea kina, Saudi riyal, Tanzanian shillings, South African rand, and Zambian kwacha, respectively.
1 Corporate Information
Barrick Gold Corporation (“Barrick” or the “Company”)
is a corporation governed by the Business Corporations
Act (Ontario). The Company’s head and registered office
is located at Brookfield Place, TD Canada Trust Tower,
161 Bay Street, Suite 3700, Toronto, Ontario, M5J 2S1.
We are principally engaged in the production and sale of
gold and copper, as well as related activities such as
exploration and mine development. Our producing gold
mines are located in Canada, the United States, Peru,
Argentina, Australia, and the Dominican Republic. We hold
a 50% equity interest in Barrick Niugini Limited (“BNL”),
which owns a 95% interest in Porgera, a gold mine
located in Papua New Guinea. We also hold a 63.9%
equity interest in Acacia Mining plc (“Acacia”), formerly
African Barrick Gold plc, a company listed on the London
Stock Exchange that owns gold mines and exploration
properties in Africa. We have a copper mine that is
located in Zambia, a 50% interest in a copper mine in
Saudi Arabia, and a 50% interest in Zaldívar, located in
Chile. We also have various gold projects located in
South America and North America. We sell our gold and
copper production into the world market.
2 Significant Accounting Policies
a) Statement of Compliance
These consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”)
under the historical cost convention, as modified by
revaluation of derivative contracts and certain financial
assets. Accounting policies are consistently applied to all
years presented, unless otherwise stated. Certain items
within the statement of income have been reclassified
in the current year. The prior periods have been restated
to reflect the change in presentation. These consolidated
financial statements were approved for issuance by the
Board of Directors on February 17, 2016.
b) Basis of Preparation
Subsidiaries
These consolidated financial statements include the
accounts of Barrick and its subsidiaries. All intercompany
balances, transactions, income and expenses, and
profits or losses have been eliminated on consolidation.
We consolidate subsidiaries where we have the ability
to exercise control. Control of an investee is defined to
exist when we are exposed to variable returns from
our involvement with the investee and have the ability
to affect those returns through our power over the
investee. Specifically, we control an investee if, and only
if, we have all of the following: power over the investee
(i.e., existing rights that give us the current ability to
direct the relevant activities of the investee); exposure,
or rights, to variable returns from our involvement with
the investee; and the ability to use our power over the
investee to affect its returns. For non wholly-owned,
controlled subsidiaries, the net assets attributable to
outside equity shareholders are presented as “non-
controlling interests” in the equity section of the
consolidated balance sheet. Profit or loss for the period
that is attributable to non-controlling interests is
calculated based on the ownership of the minority
shareholders in the subsidiary.
Joint Arrangements
A joint arrangement is defined as one over which
two or more parties have joint control, which is the
contractually agreed sharing of control over an
arrangement. This exists only when the decisions about
the relevant activities (being those that significantly
affect the returns of the arrangement) require the
unanimous consent of the parties sharing control. There
are two types of joint arrangements, joint operations
(“JO”) and joint ventures (“JV”).
A JO is a joint arrangement whereby the parties
that have joint control of the arrangement have rights
to the assets and obligations for the liabilities, relating
to the arrangement. In relation to our interests in joint
operations, we recognize our share of any assets,
liabilities, revenues and expenses of the JO.
104
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 A JV is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the
net assets of the joint venture. Our investments in JVs are
accounted for using the equity method.
On acquisition, an equity method investment is initially
recognized at cost. The carrying amount of equity method
investments includes goodwill identified on acquisition, net
of any accumulated impairment losses. The carrying
amount is adjusted by our share of post-acquisition net
income or loss, depreciation, amortization or impairment
of the fair value adjustments made on the underlying
balance sheet at the date of acquisition, dividends, cash
contributions and our share of post-acquisition movements
in Other Comprehensive Income (“OCI”).
Associates
An associate is an entity over which the investor has
significant influence but not control or joint control.
Significant influence is presumed to exist where the
Company has between 20% and 50% of the voting
rights, but can also arise where the Company has less
than 20% if we have the power to be actively involved
and influential in policy decisions affecting the entity.
Our share of the net assets and net income or loss is
accounted for in the consolidated financial statements
using the equity method of accounting.
Outlined below is information related to our joint arrangements and entities other than 100% owned Barrick
subsidiaries at December 31, 2015:
Place of business
Entity type
Economic interest1
Method2
Turquoise Ridge Mine3
Kalgoorlie Mine
Acacia Mining plc4
Pueblo Viejo4
Cerro Casale Project4
Donlin Gold Project
Jabal Sayid5
Kabanga Project5,6
Round Mountain Mine7
Porgera Mine8
Zaldívar5,9
South Arturo4
United States
Australia
Tanzania
Dominican Republic
Chile
United States
Saudi Arabia
Tanzania
United States
Papua New Guinea
Chile
United States
JO
JO
Subsidiary, publicly traded
Subsidiary
Subsidiary
JO
JV
JV
JO
JO
JV
Subsidiary
75%
50%
63.9%
60%
75%
50%
50%
50%
50%
47.5%
50%
60%
Our share
Our share
Consolidation
Consolidation
Consolidation
Our share
Equity Method
Equity Method
Our share
Our share
Equity Method
Consolidation
1. Unless otherwise noted, all of our joint arrangements are funded by contributions made by their partners in proportion to their economic interest.
2. For our JOs, we recognize our share of any assets, liabilities, revenues and expenses of the JO.
3. We have joint control given that decisions about relevant activities require unanimous consent of the parties to the joint operation.
4. We consolidate our interests in Pueblo Viejo, Cerro Casale, Acacia and South Arturo and record a non-controlling interest for the 40%, 25%, 36.1% and 40%,
respectively, that we do not own.
5. Barrick has commitments of $471 million relating to its interest in the joint ventures in 2015.
6. Our JV is an early stage exploration project and, as such, does not have any significant assets, liabilities, income, contractual commitments or contingencies.
Expenses are recognized through our equity pick-up (loss). Refer to note 15 for further details.
7. We divested our interest in Round Mountain subsequent to year-end.
8. We divested 50% of our interest in Porgera during the year, bringing our interest down from 95% to 47.5%.
9. We divested 50% of our interest during the year.
c) Business Combinations
On the acquisition of a business, the acquisition method
of accounting is used, whereby the purchase consideration
is allocated to the identifiable assets and liabilities on the
basis of fair value at the date of acquisition. Provisional
fair values allocated at a reporting date are finalized as
soon as the relevant information is available, within a
period not to exceed twelve months from the acquisition
date with retroactive restatement of the impact of
adjustments to those provisional fair values effective as
at the acquisition date. Incremental costs related to
acquisitions are expensed as incurred.
When the cost of the acquisition exceeds the
fair values of the identifiable net assets acquired, the
difference is recorded as goodwill. If the fair value
attributable to Barrick’s share of the identifiable net
assets exceeds the cost of acquisition, the difference
is recognized as a gain in the consolidated statement
of income.
Non-controlling interests represent the fair value
of net assets in subsidiaries, as at the date of acquisition
that are not held by Barrick and are presented in the
equity section of the consolidated balance sheet.
105
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
d) Non-Current Assets and Disposal Groups
Other assets and liabilities using the closing exchange
Held-for-Sale and Discontinued Operations
Non-current assets and disposal groups are classified as
assets held-for-sale (“HFS”) if it is highly probable that
the value of these assets will be recovered primarily
through sale rather than through continuing use. They
are recorded at the lower of carrying amount and fair
value less cost of disposal. Impairment losses on initial
classification as HFS and subsequent gains and losses on
remeasurement are recognized in the income statement.
Once classified as held-for-sale, property, plant and
equipment are no longer amortized. The assets and
liabilities are presented as held-for-sale in the consolidated
balance sheet when the sale is highly probable, the asset
or disposal group is available for immediate sale in its
present condition and management is committed to the
sale, which should be expected to be completed within
one year from the date of classification.
A discontinued operation is a component of the
Company that can be clearly distinguished from the rest
of the Company and represents a major line of business
or geographic area, and the value of this component is
expected to be recovered primarily through sale rather
than continuing use.
Results of operations and any gain or loss from
disposal are excluded from income before finance items
and income taxes and are reported separately as income/
loss from discontinued operations.
e) Foreign Currency Translation
The functional currency of the Company, for each
subsidiary of the Company, and for joint arrangements
and associates, is the currency of the primary economic
environment in which it operates. The functional
currency of all of our operations is the US dollar. We
translate non-US dollar balances for these operations
into US dollars as follows:
Property, plant and equipment (“PP&E”), intangible
assets and equity method investments using the rates
at the time of acquisition;
Fair value through other comprehensive income
(“FVOCI”) equity investments using the closing
exchange rate as at the balance sheet date with
translation gains and losses permanently recorded in
Other Comprehensive Income (“OCI”);
Deferred tax assets and liabilities using the closing
exchange rate as at the balance sheet date with
translation gains and losses recorded in income
tax expense;
106
rate as at the balance sheet date with translation gains
and losses recorded in other income/expense; and
Income and expenses using the average exchange
rate for the period, except for expenses that relate
to non-monetary assets and liabilities measured at
historical rates, which are translated using the same
historical rate as the associated non-monetary assets
and liabilities.
f) Revenue Recognition
We record revenue when evidence exists that all of the
following criteria are met:
The significant risks and rewards of ownership of the
product have been transferred to the buyer;
Neither continuing managerial involvement to the
degree usually associated with ownership, nor
effective control over the goods sold, has been
retained;
The amount of revenue can be reliably measured;
It is probable that the economic benefits associated
with the sale will flow to us; and
The costs incurred or to be incurred in respect of the
sale can be reliably measured.
These conditions are generally satisfied when title passes
to the customer.
Gold Bullion Sales
Gold bullion is sold primarily in the London spot market.
The sales price is fixed at the delivery date based on the
gold spot price. Generally, we record revenue from gold
bullion sales at the time of physical delivery, which is also
the date that title to the gold passes.
Concentrate Sales
Under the terms of concentrate sales contracts with
independent smelting companies, gold and copper sales
prices are provisionally set on a specified future date
after shipment based on market prices. We record
revenues under these contracts at the time of shipment,
which is also when the risk and rewards of ownership
pass to the smelting companies, using forward market
gold and copper prices on the expected date that final
sales prices will be determined. Variations between the
price recorded at the shipment date and the actual final
price set under the smelting contracts are caused by
changes in market gold and copper prices, which result
in the existence of an embedded derivative in accounts
receivable. The embedded derivative is recorded at fair
value each period until final settlement occurs, with
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 changes in fair value classified as provisional price
adjustments and included in revenue in the consolidated
statement of income.
Copper Cathode Sales
Under the terms of copper cathode sales contracts,
copper sales prices are provisionally set on a specified
future date based upon market commodity prices plus
certain price adjustments. Revenue is recognized at the
time of shipment, which is also when the risks and
rewards of ownership pass to the customer. Revenue is
provisionally measured using forward market prices on
the expected date that final selling prices will be
determined. Variations occur between the price recorded
on the date of revenue recognition and the actual final
price under the terms of the contracts due to changes
in market copper prices, which result in the existence of
an embedded derivative in accounts receivable. This
embedded derivative is recorded at fair value each period
until final settlement occurs, with changes in fair value
classified as provisional price adjustments and included in
revenue in the consolidated statement of income.
g) Exploration and Evaluation (“E&E”)
Exploration expenditures are the costs incurred in the
initial search for mineral deposits with economic
potential or in the process of obtaining more information
about existing mineral deposits. Exploration expenditures
typically include costs associated with prospecting,
sampling, mapping, diamond drilling and other work
involved in searching for ore.
Evaluation expenditures are the costs incurred to
establish the technical and commercial viability of
developing mineral deposits identified through exploration
activities or by acquisition. Evaluation expenditures
include the cost of (i) establishing the volume and grade
of deposits through drilling of core samples, trenching
and sampling activities in an ore body that is classified
as either a mineral resource or a proven and probable
reserve; (ii) determining the optimal methods of
extraction and metallurgical and treatment processes;
(iii) studies related to surveying, transportation and
infrastructure requirements; (iv) permitting activities;
and (v) economic evaluations to determine whether
development of the mineralized material is commercially
justified, including scoping, prefeasibility and final
feasibility studies.
Exploration and evaluation expenditures are
expensed as incurred unless management determines
that probable future economic benefits will be generated
as a result of the expenditures. Once the technical
feasibility and commercial viability of a program or
project has been demonstrated with a prefeasibility
study, and we have recognized reserves in accordance
with National Instrument 43-101, we account for future
expenditures incurred in the development of that
program or project in accordance with our policy for
Property, Plant & Equipment, as described in note 2m.
h) Earnings per Share
Earnings per share is computed by dividing net income
available to common shareholders by the weighted
average number of common shares outstanding for the
period. Diluted earnings per share reflect the potential
dilution that could occur if additional common shares
are assumed to be issued under securities that entitle
their holders to obtain common shares in the future.
For stock options, the number of additional shares for
inclusion in diluted earnings per share calculations is
determined using the treasury stock method. Under this
method, stock options, whose exercise price is less than
the average market price of our common shares, are
assumed to be exercised and the proceeds are used to
repurchase common shares at the average market price
for the period. The incremental number of common
shares issued under stock options and repurchased
from proceeds is included in the calculation of diluted
earnings per share.
i) Taxation
Current tax for each taxable entity is based on the local
taxable income at the local statutory tax rate enacted or
substantively enacted at the balance sheet date and
includes adjustments to tax payable or recoverable in
respect of previous periods.
Deferred tax is recognized using the balance sheet
method in respect of all temporary differences between
the tax bases of assets and liabilities, and their carrying
amounts for financial reporting purposes, except as
indicated below.
Deferred income tax liabilities are recognized for all
taxable temporary differences, except:
Where the deferred income tax liability arises from
the initial recognition of goodwill, or the initial
recognition of an asset or liability in an acquisition that
is not a business combination and, at the time of the
acquisition, affects neither the accounting profit nor
taxable profit or loss; and
107
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 In respect of taxable temporary differences associated
with investments in subsidiaries and interests in joint
arrangements, where the timing of the reversal of
the temporary differences can be controlled and it
is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognized for all
deductible temporary differences and the carry forward
of unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences and
the carry forward of unused tax assets and unused tax
losses can be utilized, except:
Where the deferred income tax asset relating to the
deductible temporary difference arises from the initial
recognition of an asset or liability in an acquisition
that is not a business combination and, at the time of
the acquisition, affects neither the accounting profit
nor taxable profit or loss; and
In respect of deductible temporary differences
associated with investments in subsidiaries and
interests in joint arrangements, deferred tax assets
are recognized only to the extent that it is probable
that the temporary differences will reverse in the
foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is
reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred
income tax asset to be utilized. To the extent that an
asset not previously recognized fulfills the criteria for
recognition, a deferred income tax asset is recorded.
Deferred tax is measured on an undiscounted basis
at the tax rates that are expected to apply in the periods
in which the asset is realized or the liability is settled,
based on tax rates and tax laws enacted or substantively
enacted at the balance sheet date.
Current and deferred tax relating to items recognized
directly in equity are recognized in equity and not in the
income statement.
Royalties and Special Mining Taxes
Income tax expense includes the cost of royalty and
special mining taxes payable to governments that are
calculated based on a percentage of taxable profit
whereby taxable profit represents net income adjusted
for certain items defined in the applicable legislation.
108
Indirect Taxes
Indirect tax recoverable is recorded at its undiscounted
amount, and is disclosed as non-current if not expected
to be recovered within twelve months.
j) Other Investments
Investments in publicly quoted equity securities that are
neither subsidiaries nor associates are categorized as fair
value through other comprehensive income (“FVOCI”)
pursuant to the irrevocable election available in IFRS 9 for
these instruments. FVOCI equity investments (referred to
as “other investments”) are recorded at fair value with all
realized and unrealized gains and losses recorded
permanently in OCI.
k) Inventory
Material extracted from our mines is classified as either
ore or waste. Ore represents material that, at the time
of extraction, we expect to process into a saleable form
and sell at a profit. Raw materials are comprised of
both ore in stockpiles and ore on leach pads as
processing is required to extract benefit from the ore.
Ore is accumulated in stockpiles that are subsequently
processed into gold/copper in a saleable form. The
recovery of gold and copper from certain oxide ores is
achieved through the heap leaching process. Work in
process represents gold/copper in the processing circuit
that has not completed the production process, and is
not yet in a saleable form. Finished goods inventory
represents gold/copper in saleable form. Mine operating
supplies represent commodity consumables and other
raw materials used in the production process, as well as
spare parts and other maintenance supplies that are not
classified as capital items.
Inventories are valued at the lower of cost and net
realizable value. Cost is determined on a weighted
average basis and includes all costs incurred, based on
a normal production capacity, in bringing each product
to its present location and condition. Cost of inventories
comprises direct labor, materials and contractor expenses,
including non-capitalized stripping costs; depreciation
on PP&E including capitalized stripping costs; and an
allocation of general and administrative costs. As ore is
removed for processing, costs are removed based on the
average cost per ounce/pound in the stockpile.
We record provisions to reduce inventory to net
realizable value to reflect changes in economic factors
that impact inventory value and to reflect present
intentions for the use of slow moving and obsolete
supplies inventory. Net realizable value is determined
with reference to relevant market prices less applicable
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 variable selling expenses. Provisions recorded also reflect
an estimate of the remaining costs of completion to
bring the inventory into its saleable form. Provisions are
also recorded to reduce mine operating supplies to
net realizable value, which is generally calculated by
reference to its salvage or scrap value, when it is
determined that the supplies are obsolete. Provisions
are reversed to reflect subsequent recoveries in net
realizable value where the inventory is still on hand.
l) Production Stage
A mine that is under construction is determined to enter
the production stage when the project is in the location
and condition necessary for it to be capable of operating
in the manner intended by management. We use the
following factors to assess whether these criteria have
been met: (1) the level of capital expenditures compared
to construction cost estimates; (2) the completion of a
reasonable period of testing of mine plant and equipment;
(3) the ability to produce minerals in saleable form
(within specifications); and (4) the ability to sustain
ongoing production of minerals.
of: the purchase price; brokers’ commissions; and
installation costs including architectural, design and
engineering fees, legal fees, survey costs, site preparation
costs, freight charges, transportation insurance costs,
duties, testing and preparation charges.
We capitalize costs that meet the asset recognition
criteria. Costs incurred that do not extend the productive
capacity or useful economic life of an asset are considered
repairs and maintenance expense and are accounted for
as a cost of the inventory produced in the period.
Buildings, plant and equipment are depreciated on
a straight-line basis over their expected useful life, which
commences when the assets are considered available
for use. Once buildings, plant and equipment are
considered available for use they are measured at cost
less accumulated depreciation and applicable
impairment losses.
Depreciation on equipment utilized in the
development of assets, including open pit and
underground mine development, is recapitalized as
development costs attributable to the related asset.
When a mine construction project moves into the
Estimated Useful Lives of Major Asset Categories
production stage, the capitalization of certain mine
construction costs ceases and costs are either capitalized
to inventory or expensed, except for capitalizable costs
related to property, plant and equipment additions or
improvements, open pit stripping activities that provide
a future benefit, underground mine development or
expenditures that meet the criteria for capitalization in
accordance with IAS 16 Property Plant and Equipment.
Pre-production stripping costs (note 2m(iii)) are
capitalized until an “other than de minimis” level of
mineral is extracted, after which time such costs are
either capitalized to inventory or, if it qualifies as an open
pit stripping activity that provides a future benefit, to
PP&E. We consider various relevant criteria to assess
when an “other than de minimis” level of mineral is
produced. Some of the criteria considered would include,
but are not limited to, the following: (1) the amount of
minerals mined versus total ounces in life of mine
(“LOM”) ore; (2) the amount of ore tons mined versus
total LOM expected ore tons mined; (3) the current
stripping ratio versus the LOM strip ratio; and (4) the
ore grade versus the LOM grade.
m) Property, Plant and Equipment
Buildings, Plant and Equipment
At acquisition, we record buildings, plant and equipment
at cost, including all expenditures incurred to prepare
an asset for its intended use. These expenditures consist
Buildings, plant and equipment
Underground mobile equipment
Light vehicles and other mobile equipment
Furniture, computer and office equipment
7 – 38 years
5 – 7 years
2 – 3 years
2 – 3 years
Leasing Arrangements
The determination of whether an arrangement is, or
contains, a lease is based on the substance of the
arrangement at inception date, including whether the
fulfillment of the arrangement is dependent on the use
of a specific asset or assets or whether the arrangement
conveys a right to use the asset.
Leasing arrangements that transfer substantially all
the risks and rewards of ownership of the asset to
Barrick are classified as finance leases. Assets acquired
via a finance lease are recorded as an asset with a
corresponding liability at an amount equal to the lower
of the fair value of the leased property and the present
value of the minimum lease payments. Each lease
payment is allocated between the liability and finance
costs using the effective interest method, whereby a
constant rate of interest expense is recognized on the
balance of the liability outstanding. The interest element
of the lease is charged to the consolidated statement
of income as a finance cost.
PP&E assets acquired under finance leases are
depreciated over the shorter of the useful life of the
asset and the lease term.
109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 All other leases are classified as operating leases.
Operating lease payments are recognized as an operating
cost in the consolidated statements of income on a
straight-line basis over the lease term.
Mineral Properties
Mineral properties consist of: the fair value attributable
to mineral reserves and resources acquired in a business
combination or asset acquisition; underground mine
development costs; open pit mine development costs;
capitalized exploration and evaluation costs; and
capitalized interest. In addition, we incur project costs
which are generally capitalized when the expenditures
result in a future benefit.
i) Acquired Mining Properties
On acquisition of a mining property, we prepare an
estimate of the fair value attributable to the proven
and probable mineral reserves, mineral resources and
exploration potential attributable to the property. The
estimated fair value attributable to the mineral reserves
and the portion of mineral resources considered to be
probable of economic extraction at the time of the
acquisition is depreciated on a units of production
(“UOP”) basis whereby the denominator is the proven
and probable reserves and the portion of mineral
resources considered to be probable of economic
extraction. The estimated fair value attributable to
mineral resources that are not considered to be probable
of economic extraction at the time of the acquisition is
not subject to depreciation until the resources become
probable of economic extraction in the future. The
estimated fair value attributable to exploration licenses
is recorded as an intangible asset and is not subject to
depreciation until the property enters production.
ii) Underground Mine Development Costs
At our underground mines, we incur development costs
to build new shafts, drifts and ramps that will enable us
to physically access ore underground. The time over
which we will continue to incur these costs depends on
the mine life. These underground development costs are
capitalized as incurred.
Capitalized underground development costs incurred
to enable access to specific ore blocks or areas of the
underground mine, and which only provide an economic
benefit over the period of mining that ore block or
area, are depreciated on a UOP basis, whereby the
denominator is estimated ounces/pounds of gold/copper
in proven and probable reserves and the portion of
resources within that ore block or area that is considered
probable of economic extraction.
If capitalized underground development costs
provide an economic benefit over the entire mine life,
the costs are depreciated on a UOP basis, whereby the
denominator is the estimated ounces/pounds of gold/
copper in total accessible proven and probable reserves
and the portion of resources that is considered probable
of economic extraction.
iii) Open Pit Mining Costs
In open pit mining operations, it is necessary to remove
overburden and other waste materials to access ore
from which minerals can be extracted economically. The
process of mining overburden and waste materials is
referred to as stripping. Stripping costs incurred in order
to provide initial access to the ore body (referred to as
pre-production stripping) are capitalized as open pit mine
development costs.
Stripping costs incurred during the production stage
of a pit are accounted for as costs of the inventory
produced during the period that the stripping costs are
incurred, unless these costs are expected to provide a
future economic benefit to an identifiable component
of the ore body. Components of the ore body are based
on the distinct development phases identified by the
mine planning engineers when determining the optimal
development plan for the open pit. Production phase
stripping costs generate a future economic benefit when
the related stripping activity: (i) improves access to a
component of the ore body to be mined in the future;
(ii) increases the fair value of the mine (or pit) as access
to future mineral reserves becomes less costly; and
(iii) increases the productive capacity or extends the
productive life of the mine (or pit). Production phase
stripping costs that are expected to generate a future
economic benefit are capitalized as open pit mine
development costs.
Capitalized open pit mine development costs are
depreciated on a UOP basis whereby the denominator is
the estimated ounces/pounds of gold/copper in proven
and probable reserves and the portion of resources
considered probable of economic extraction based on
the current LOM plan in the current component of the
ore body that has been made more accessible through
the stripping activity and all future components in the
current plan that benefit from the particular stripping
activity. Capitalized open pit mine development costs are
depreciated once the open pit has entered production
and the future economic benefit is being derived.
110
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 Construction-in-Progress
Assets under construction at operating mines are
capitalized as construction-in-progress. The cost of
construction-in-progress comprises its purchase price
and any costs directly attributable to bringing it into
working condition for its intended use. Construction-in-
progress amounts related to development projects are
included in the carrying amount of the development
project. Construction-in-progress amounts incurred at
operating mines are presented as a separate asset within
PP&E. Construction-in-progress also includes deposits on
long lead items. Construction-in-progress is not
depreciated. Depreciation commences once the asset is
complete and available for use.
Capitalized Interest
We capitalize interest costs for qualifying assets. Qualifying
assets are assets that require a significant amount of time
to prepare for their intended use, including projects that
are in the exploration and evaluation, development or
construction stages. Qualifying assets also include
significant expansion projects at our operating mines.
Capitalized interest costs are considered an element of
the cost of the qualifying asset which is determined
based on gross expenditures incurred on an asset.
Capitalization ceases when the asset is substantially
complete or if active development is suspended or
ceases. Where the funds used to finance a qualifying
asset form part of general borrowings, the amount
capitalized is calculated using a weighted average of
rates applicable to the relevant borrowings during the
period. Where funds borrowed are directly attributable
to a qualifying asset, the amount capitalized represents
the borrowing costs specific to those borrowings.
Where surplus funds available out of money borrowed
specifically to finance a project are temporarily invested,
the total capitalized interest is reduced by income
generated from short-term investments of such funds.
Insurance
We record losses relating to insurable events as they
occur. Proceeds receivable from insurance coverage are
recorded at such time as receipt is receivable or virtually
certain and the amount receivable is fixed or determinable.
For business interruption the amount is only recognized
when it is virtually certain or receivable as supported by
receipt of notification of a minimum or proposed
settlement amount from the insurance adjuster.
n) Goodwill
Under the acquisition method of accounting, the costs of
business combinations are allocated to the assets
acquired and liabilities assumed based on the estimated
fair value at the date of acquisition. The excess of the fair
value of consideration paid over the fair value of the
identifiable net assets acquired is recorded as goodwill.
Goodwill is not amortized; instead it is tested annually
for impairment at the start of the fourth quarter for all of
our segments. In addition, at each reporting period we
assess whether there is an indication that goodwill is
impaired and, if there is such an indication, we would
test for goodwill impairment at that time. At the date of
acquisition, goodwill is assigned to the cash generating
unit (“CGU”) or group of CGUs that is expected to
benefit from the synergies of the business combination.
For the purposes of impairment testing, goodwill is
allocated to the Company’s operating segments, which
are our individual mine sites and corresponds to the level
at which goodwill is internally monitored by the Chief
Operating Decision Maker (“CODM”), the President.
The recoverable amount of an operating segment is
the higher of Value in Use (“VIU”) and Fair Value Less
Costs of Disposal (“FVLCD”). A goodwill impairment is
recognized for any excess of the carrying amount
of the operating segment over its recoverable amount.
Goodwill impairment charges are not reversible.
o) Intangible Assets
Intangible assets acquired by way of an asset acquisition
or business combination are recognized if the asset is
separable or arises from contractual or legal rights and
the fair value can be measured reliably on initial
recognition.
On acquisition of a mineral property in the
exploration stage, we prepare an estimate of the fair
value attributable to the exploration licenses acquired,
including the fair value attributable to mineral resources,
if any, of that property. The fair value of the exploration
license is recorded as an intangible asset (acquired
exploration potential) as at the date of acquisition. When
an exploration stage property moves into development,
the acquired exploration potential attributable to that
property is transferred to mining interests within PP&E.
p) Impairment of Non-Current Assets
We review and test the carrying amounts of PP&E
and intangible assets with finite lives when an indicator
of impairment is considered to exist. Impairment
assessments on PP&E and intangible assets are conducted
at the level of the CGU, which is the lowest level for
111
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 which identifiable cash flows are largely independent of
the cash flows of other assets and includes any liabilities
specific to the CGU. For operating mines and projects,
the individual mine/project represents a CGU for
impairment testing.
The recoverable amount of a CGU is the higher of
VIU and FVLCD. An impairment loss is recognized
for any excess of the carrying amount of a CGU over its
recoverable amount where both the recoverable amount
and carrying value include the associated other assets
and liabilities, including taxes where applicable, of the
CGU. Where it is not appropriate to allocate the loss to
a separate asset, an impairment loss related to a CGU is
allocated to the carrying amount of the assets of the
CGU on a pro rata basis based on the carrying amount
of its non-monetary assets.
Impairment Reversal
Impairment losses for PP&E and intangible assets are
reversed if there has been a change in the estimates used
to determine the asset’s recoverable amount since the
last impairment loss was recognized, and it has been
determined that the asset is no longer impaired or that
impairment has decreased. This reversal is recognized in
the consolidated statements of income and is limited to
the carrying value that would have been determined,
net of any depreciation where applicable, had no
impairment charge been recognized in prior years. When
an impairment reversal is undertaken, the recoverable
amount is assessed by reference to the higher of VIU
and FVLCD.
q) Debt
Debt is recognized initially at fair value, net of financing
costs incurred, and subsequently measured at amortized
cost. Any difference between the amounts originally
received and the redemption value of the debt is
recognized in the consolidated statements of income over
the period to maturity using the effective interest method.
r) Derivative Instruments and Hedge Accounting
Derivative Instruments
Derivative instruments are recorded at fair value on the
consolidated balance sheet, classified based on contractual
maturity. Derivative instruments are classified as either
hedges of the fair value of recognized assets or liabilities
or of firm commitments (“fair value hedges”), hedges
of highly probable forecasted transactions (“cash flow
hedges”) or non-hedge derivatives. Derivatives designated
as either a fair value or cash flow hedge that are expected
to be highly effective in achieving offsetting changes in
112
fair value or cash flows are assessed on an ongoing basis
to determine that they actually have been highly effective
throughout the financial reporting periods for which
they were designated. Derivative assets and derivative
liabilities are shown separately in the balance sheet
unless there is a legal right to offset and intent to settle
on a net basis.
Fair Value Hedges
Changes in the fair value of derivatives that are
designated and qualify as fair value hedges are recorded
in the consolidated statements of income, together with
any changes in the fair value of the hedged asset or
liability or firm commitment that is attributable to the
hedged risk.
Cash Flow Hedges
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognized in equity. The gain or loss relating
to the ineffective portion is recognized in the consolidated
statements of income. Amounts accumulated in equity
are transferred to the consolidated statements of income
in the period when the forecasted transaction impacts
earnings. When the forecasted transaction that is
hedged results in the recognition of a non-financial asset
or a non-financial liability, the gains and losses previously
deferred in equity are transferred from equity and
included in the measurement of the initial carrying
amount of the asset or liability.
When a derivative designated as a cash flow hedge
expires or is sold and the forecasted transaction is still
expected to occur, any cumulative gain or loss relating to
the derivative that is recorded in equity at that time
remains in equity and is recognized in the consolidated
statements of income when the forecasted transaction
occurs. When a forecasted transaction is no longer
expected to occur, the cumulative gain or loss that was
recorded in equity is immediately transferred to the
consolidated statements of income.
Non-Hedge Derivatives
Derivative instruments that do not qualify as either fair
value or cash flow hedges are recorded at their fair value
at the balance sheet date, with changes in fair value
recognized in the consolidated statements of income.
s) Embedded Derivatives
Derivatives embedded in other financial instruments or
executory contracts are accounted for as separate
derivatives when their risks and characteristics are not
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 closely related to their host financial instrument or
contract. In some cases, the embedded derivatives may
be designated as hedges and are accounted for as
described above.
t) Environmental Rehabilitation Provision
Mining, extraction and processing activities normally
give rise to obligations for environmental rehabilitation.
Rehabilitation work can include facility decommissioning
and dismantling; removal or treatment of waste materials;
site and land rehabilitation, including compliance with
and monitoring of environmental regulations; security
and other site-related costs required to perform the
rehabilitation work; and operation of equipment
designed to reduce or eliminate environmental effects.
The extent of work required and the associated costs are
dependent on the requirements of relevant authorities
and our environmental policies. Routine operating costs
that may impact the ultimate closure and rehabilitation
activities, such as waste material handling conducted
as an integral part of a mining or production process,
are not included in the provision. Costs arising from
unforeseen circumstances, such as the contamination
caused by unplanned discharges, are recognized as an
expense and liability when the event that gives rise to an
obligation occurs and reliable estimates of the required
rehabilitation costs can be made.
Provisions for the cost of each rehabilitation program
are normally recognized at the time that an environmental
disturbance occurs or a constructive obligation is
determined. When the extent of disturbance increases
over the life of an operation, the provision is increased
accordingly. The major parts of the carrying amount of
provisions relate to tailings pond closure/rehabilitation;
demolition of buildings/mine facilities; ongoing water
treatment; and ongoing care and maintenance and
security of closed mines. Costs included in the provision
encompass all closure and rehabilitation activity expected
to occur progressively over the life of the operation at
the time of closure and post-closure in connection with
disturbances as at the reporting date. Estimated costs
included in the determination of the provision reflect the
risks and probabilities of alternative estimates of cash
flows required to settle the obligation at each particular
operation. The expected rehabilitation costs are
estimated based on the cost of external contractors
performing the work or the cost of performing the work
internally depending on management’s intention.
The timing of the actual rehabilitation expenditure is
dependent upon a number of factors such as the life
and nature of the asset, the operating license conditions
and the environment in which the mine operates.
Expenditures may occur before and after closure and can
continue for an extended period of time depending on
rehabilitation requirements. Rehabilitation provisions are
measured at the expected value of future cash flows,
which exclude the effect of inflation, discounted to their
present value using a current US dollar real risk-free
pre-tax discount rate. The unwinding of the discount,
referred to as accretion expense, is included in finance
costs and results in an increase in the amount of the
provision. Provisions are updated each reporting period
for changes to expected cash flows and for the effect
of changes in the discount rate, and the change in
estimate is added or deducted from the related asset
and depreciated over the expected economic life of
the operation to which it relates.
Significant judgments and estimates are involved
in forming expectations of future activities and the
amount and timing of the associated cash flows.
Those expectations are formed based on existing
environmental and regulatory requirements or, if more
stringent, our environmental policies which give rise
to a constructive obligation.
When provisions for closure and rehabilitation are
initially recognized, the corresponding cost is capitalized
as an asset, representing part of the cost of acquiring
the future economic benefits of the operation. The
capitalized cost of closure and rehabilitation activities is
recognized in PP&E and depreciated over the expected
economic life of the operation to which it relates.
Adjustments to the estimated amount and timing of
future closure and rehabilitation cash flows are a normal
occurrence in light of the significant judgments and
estimates involved. The principal factors that can cause
expected cash flows to change are: the construction
of new processing facilities; changes in the quantities of
material in reserves and resources with a corresponding
change in the life of mine plan; changing ore
characteristics that impact required environmental
protection measures and related costs; changes in water
quality that impact the extent of water treatment
required; changes in discount rates; changes in foreign
exchange rates; and changes in laws and regulations
governing the protection of the environment.
Rehabilitation provisions are adjusted as a result of
changes in estimates and assumptions. Those adjustments
are accounted for as a change in the corresponding cost
of the related assets, including the related mineral
property, except where a reduction in the provision is
greater than the remaining net book value of the related
assets, in which case the value is reduced to nil and the
113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 Equity-settled awards are measured at fair value
using the Lattice model with market related inputs as
of the date of the grant. The cost is recorded over the
vesting period of the award to the same expense
category as the award recipient’s payroll costs (i.e., cost of
sales, general and administrative) and the corresponding
entry is recorded in equity. Equity-settled awards are not
remeasured subsequent to the initial grant date.
Cash-settled awards are measured at fair value
initially using the market value of the underlying shares
on the day preceding the date of the grant of the award
and are required to be remeasured to fair value at each
reporting date until settlement. The cost is then recorded
over the vesting period of the award. This expense, and
any changes in the fair value of the award, is recorded to
the same expense category as the award recipient’s
payroll costs. The cost of a cash-settled award is recorded
within liabilities until settled.
We use the accelerated method (also referred to as
‘graded’ vesting) for attributing stock option expense
over the vesting period. Stock option expense
incorporates an expected forfeiture rate. The expected
forfeiture rate is estimated based on historical forfeiture
rates and expectations of future forfeiture rates. We
make adjustments if the actual forfeiture rate differs
from the expected rate.
Employee Stock Option Plan (“ESOP”)
Under Barrick’s ESOP, certain officers and key employees
of the Corporation may purchase common shares at an
exercise price that is equal to the closing share price on
the day before the grant of the option. The grant date
is the date when the details of the award, including the
number of options granted to the individual and the
exercise price, are approved. Stock options vest equally
over four years, beginning in the year after granting.
The ESOP arrangement has graded vesting terms, and
therefore multiple vesting periods must be valued and
accounted for separately over their respective vesting
periods. The compensation expense of the instruments
issued for each grant under the ESOP is calculated using
the Lattice model. The compensation expense is adjusted
by the estimated forfeiture rate which is estimated based
on historical forfeiture rates and expectations of future
forfeiture rates. We make adjustments if the actual
forfeiture rate differs from the expected rate.
remaining adjustment is recognized in the consolidated
statements of income. In the case of closed sites, changes
in estimates and assumptions are recognized immediately
in the consolidated statements of income. For an
operating mine, the adjusted carrying amount of the
related asset is depreciated prospectively. Adjustments
also result in changes to future finance costs.
u) Litigation and Other Provisions
Provisions are recognized when a present obligation
exists (legal or constructive), as a result of a past event,
for which it is probable that an outflow of resources will
be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
Provisions are discounted to their present value using a
current US dollar real risk-free pre-tax discount rate and
the accretion expense is included in finance costs.
Certain conditions may exist as of the date the
financial statements are issued, which may result in a loss
to the Company, but which will only be resolved when
one or more future events occur or fail to occur. In
assessing loss contingencies related to legal proceedings
that are pending against us or unasserted claims that
may result in such proceedings, the Company with
assistance from its legal counsel evaluate the perceived
merits of any legal proceedings or unasserted claims as
well as the perceived merits of the amount of relief
sought or expected to be sought.
If the assessment of a contingency suggests that
a loss is probable, and the amount can be reliably
estimated, then a loss is recorded. When a contingent
loss is not probable but is reasonably possible, or is
probable but the amount of loss cannot be reliably
estimated, then details of the contingent loss are
disclosed. Loss contingencies considered remote are
generally not disclosed unless they involve guarantees, in
which case we disclose the nature of the guarantee.
Legal fees incurred in connection with pending legal
proceedings are expensed as incurred. Contingent gains
are only recognized when the inflow of economic
benefits is virtually certain.
v) Stock-Based Compensation
Barrick offers equity-settled (Employee Stock Option Plan
(“ESOP”), Employee Share Purchase Plan (“ESPP”)),
cash-settled (Restricted Share Units (“RSU”), Deferred
Share Units (“DSU”), Performance Restricted Share Units
(“PRSU”)) and Performance Granted Share Units
(“PGSU”) awards to certain employees, officers and
directors of the Company.
114
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 Restricted Share Units (“RSU”)
Under our RSU plan, selected employees are granted
RSUs where each RSU has a value equal to one Barrick
common share. RSUs generally vest within three years
and primarily settle in cash upon vesting. Additional RSUs
are credited to reflect dividends paid on Barrick common
shares over the vesting period.
A liability for RSUs is measured at fair value on the
grant date and is subsequently adjusted for changes in
fair value. The liability is recognized on a straight-line
basis over the vesting period, with a corresponding
charge to compensation expense, as a component of
corporate administration and operating segment
administration. Compensation expenses for RSUs
incorporate an estimate for expected forfeiture rates
based on which the fair value is adjusted.
Deferred Share Units (“DSU”)
Under our DSU plan, Directors must receive at least 75%
of their basic annual retainer in the form of DSUs or cash
to purchase common shares that cannot be sold,
transferred or otherwise disposed of until the Director
leaves the Board. Each DSU has the same value as one
Barrick common share. DSUs must be retained until the
Director leaves the Board, at which time the cash value
of the DSUs is paid out. Additional DSUs are credited to
reflect dividends paid on Barrick common shares. The
initial fair value of the liability is calculated as of the
grant date and is recognized immediately. Subsequently,
at each reporting date and on settlement, the liability is
remeasured, with any change in fair value recorded as
compensation expense in the period. Officers may also
elect to receive a portion or all of their incentive
compensation in the form of DSUs. The plan also allows
granting of DSUs to other officers and employees at the
discretion of the Board Compensation Committee.
Performance Restricted Share Units (“PRSU”)
Under our PRSU plan, selected employees are granted
PRSUs, where each PRSU has a value equal to one Barrick
common share. PRSUs vest at the end of a three-year
period and are settled in cash on the third anniversary of
the grant date. Additional PRSUs are credited to reflect
dividends paid on Barrick common shares over the
vesting period. Vesting, and therefore the liability, is
based on the achievement of performance goals and the
target settlement ranges from 0% to 200% of the
original grant of units.
The value of a PRSU reflects the value of a Barrick
common share and the number of shares issued is
adjusted for its relative performance against certain
competitors and other internal financial performance
measures. Therefore, the fair value of the PRSUs is
determined with reference to the closing stock price at
each remeasurement date.
The initial fair value of the liability is calculated as of
the grant date and is recognized within compensation
expense using the straight-line method over the vesting
period. Subsequently, at each reporting date and on
settlement, the liability is remeasured, with any changes
in fair value recorded as compensation expense. The fair
value is adjusted for the revised estimated forfeiture rate.
Performance Granted Share Units (“PGSU”)
Under our PGSU plan, selected employees are granted
PGSUs, where each PGSU has a value equal to one Barrick
common share. Annual PGSU awards are determined
based on a multiple ranging from one to six times base
salary (depending on position and level of responsibility)
multiplied by a performance factor. The number of PGSUs
granted to a plan participant is determined by dividing the
dollar value of the award by the closing price of Barrick
common shares on the day prior to the grant, or if the
grant date occurs during a blackout period, by the greater
of (i) the closing price of Barrick common shares on the
day prior to the grant date and (ii) the closing price of
Barrick common shares on the first day following the
expiration of the blackout. Upon vesting, the after-tax
value of the award is used to purchase common shares
and these shares cannot be sold until the employee retires
or leaves Barrick. PGSUs vest at the end of the third year
from the date of the grant.
The initial fair value of the liability is calculated as of
the grant date and is recognized within compensation
expense using the straight-line method over the vesting
period. Subsequently, at each reporting date and on
settlement, the liability is remeasured, with any changes
in fair value recorded as compensation expense.
Employee Share Purchase Plan (“ESPP”)
Under our ESPP plan, Barrick employees can purchase
Company shares through payroll deduction. Each year,
employees may contribute 1%–6% of their combined
base salary and annual short-term incentive, and Barrick
will match 50% of the contribution, up to a maximum
of C$5,000 per year.
Both Barrick and the employee make the
contributions on a semi-monthly basis with the funds
being transferred to a custodian who purchases Barrick
Common Shares in the open market. Shares purchased
with employee contributions have no vesting requirement;
however, shares purchased with Barrick’s contributions
115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 vest approximately one year from contribution date.
All dividend income is used to purchase additional
Barrick shares.
Barrick records an expense equal to its semi-monthly
cash contribution. No forfeiture rate is applied to the
amounts accrued. Where an employee leaves prior to
vesting, any accrual for contributions by Barrick during
the year related to that employee is reversed.
w) Post-Retirement Benefits
Defined Contribution Pension Plans
Certain employees take part in defined contribution
employee benefit plans whereby we contribute up
to 6% of the employee’s annual salary. We also have a
retirement plan for certain officers of Barrick under
which we contribute 15% of the officer’s annual salary
and annual short-term incentive. The contributions are
recognized as compensation expense as incurred. The
Company has no further payment obligations once the
contributions have been paid.
Defined Benefit Pension Plans
We have qualified defined benefit pension plans that
cover certain former United States and Canadian
employees and provide benefits based on employees’
years of service. Our policy is to fund the amounts
necessary on an actuarial basis to provide enough assets
to meet the benefits payable to plan members.
Independent trustees administer assets of the plans,
which are invested mainly in fixed-income and
equity securities.
As well as the qualified plans, we have non-qualified
defined benefit pension plans covering certain employees
and former directors of Barrick. No funding is done on
these plans and contributions for future years are
required to be equal to benefit payments.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are
charged or credited to equity in OCI in the period in
which they arise.
Our valuations are carried out using the projected
unit credit method. We record the difference between
the fair value of the plan assets and the present value of
the plan obligations as an asset or liability on the
consolidated balance sheets.
Pension Plan Assets and Liabilities
Pension plan assets, which consist primarily of fixed-
income and equity securities, are valued using current
market quotations. Plan obligations and the annual
pension expense are determined on an actuarial basis
and are affected by numerous assumptions and
116
estimates including the market value of plan assets,
estimates of the expected return on plan assets, discount
rates, future wage increases and other assumptions.
The discount rate and life expectancy are the
assumptions that generally have the most significant
impact on our pension cost and obligation.
Other Post-Retirement Benefits
We provide post-retirement medical, dental, and life
insurance benefits to certain employees. Actuarial gains
and losses resulting from variances between actual
results and economic estimates or actuarial assumptions
are recorded in OCI.
x) New Accounting Standards Adopted
during the Year
The Company has adopted IFRS 9 (2014) effective
January 1, 2015.
IFRS 9 (2014)
We have early adopted all of the requirements of IFRS 9
Financial Instruments 2014 (“IFRS 9”) as of January 1,
2015. IFRS 9 uses a single approach to determine
whether a financial asset is classified and measured at
amortized cost or fair value, replacing the multiple rules
in IAS 39. The approach in IFRS 9 is based on how an
entity manages its financial instruments and the
contractual cash flow characteristics of the financial
asset. Most of the requirements in IAS 39 for classification
and measurement of financial liabilities were carried
forward in IFRS 9. IFRS 9 introduced a single expected
credit loss impairment model, which is based on changes
in credit quality since initial recognition. The adoption
of the expected credit loss impairment model did
not have a significant impact on the Company’s
financial statements.
IFRS 9 changes the requirements for hedge
effectiveness and consequently for the application of
hedge accounting. The IAS 39 effectiveness test is
replaced with a requirement for an economic relationship
between the hedged item and hedging instrument, and
for the ‘hedged ratio’ to be the same as that used by the
entity for risk management purposes. Certain restrictions
that prevented some hedging strategies and hedging
instruments from qualifying for hedge accounting were
removed under IFRS 9. Generally, the mechanics of
hedge accounting remain unchanged.
As a result of the early adoption of IFRS 9, we have
changed our accounting policy for financial instruments
retrospectively, except as described below. The change
did not result in a change in carrying value of any of our
financial instruments on transition date. The two main
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 areas of change are the accounting for a) equity securities
previously classified as available for sale and b) derivative
instruments, which includes the accounting for hedging
relationships that now qualify for hedge accounting and
the exclusion of the time value component of options
from hedging instruments.
i) Impact of Adoption on the Accounting for Equity
Securities Previously Designated as Available for Sale
The revised policy on the accounting for Other Investments,
which represent equity securities previously designated as
available for sale, is described in note 2j. The adjustment
to opening retained earnings on January 1, 2015 was
$95 million with a corresponding adjustment to
accumulated other comprehensive income. There was
no impact on net loss for 2015.
ii) Impact of Adoption on Accounting for
Derivative Instruments
We have reassessed all of our existing hedging relation-
ships that qualified for hedge accounting under IAS 39
upon adoption of IFRS 9 and these have continued to
qualify for hedge accounting under IFRS 9. We have also
reassessed economic hedges that did not qualify for hedge
accounting under IAS 39. IFRS 9 has enabled us to apply
hedge accounting for most of our fuel positions, thus
reducing the volatility of reported net income. These
positions previously did not qualify for hedge accounting
since component hedging was not permitted under
IAS 39. We have applied these changes prospectively
from January 1, 2015.
Under IFRS 9, we also began separating the intrinsic
value and time value of option contracts and designating
only the change in intrinsic value as the hedging
instrument. IFRS 9 does not require restatement of
comparatives. However, we have reflected the
retrospective impact of the adoption of IFRS 9 relating
to the change in accounting for time value of option
contracts as an adjustment to opening retained earnings.
The adjustment to opening retained earnings on January 1,
2015 was $4 million with a corresponding adjustment to
accumulated other comprehensive income. There was no
impact on net loss for 2015.
We recognize a financial asset or a financial liability
when we become a party to the contractual provisions of
the instrument. Financial assets are initially measured at
fair value and are derecognized either when we have
transferred substantially all the risks and rewards of
ownership of the financial asset or when cash flows expire.
We classify and measure financial assets (excluding
derivatives) on initial recognition as described below:
Cash and equivalents and restricted cash include
cash, term deposits, treasury bills and money market
investments with original maturities of less than
90 days. All of these are classified as financial assets
at fair value through profit or loss and are measured
at fair value. Unrealized gains or losses related to
changes in fair value are reported in income;
Trade and other receivables are classified as and
measured at amortized cost using the effective interest
method, less impairment allowance, if any;
Equity instruments are designated as financial assets
at fair value through other comprehensive income and
are recorded at fair value on the settlement date, net
of transaction costs. Future changes in fair value are
recognized in other comprehensive income and are not
recycled into income.
Financial liabilities (excluding derivatives) are derecognized
when the obligation specified in the contract is discharged,
cancelled or expired. For financial liabilities, IFRS 9 retains
most of the IAS 39 requirements and since we do not have
any financial liabilities designated at fair value through
profit or loss, the adoption of IFRS 9 did not impact our
accounting policies for financial liabilities.
y) New Accounting Standards Issued but
not Yet Effective
IFRS 15 Revenue from Contracts with Customers
In May 2014, the IASB issued IFRS 15 Revenue from
Contracts with Customers, which covers principles that an
entity shall apply to report useful information to users of
financial statements about the nature, amount, timing,
and uncertainty of revenue and cash flows arising from a
contract with a customer. In September 2015, the IASB
deferred the effective date of the standard to annual
reporting periods beginning on or after January 1, 2018,
with earlier application permitted. We are currently
assessing the impact on our consolidated financial
statements along with timing of our adoption of IFRS 15.
IFRS 16 Leases
In January 2016, the IASB issued IFRS 16 Leases, which
requires lessees to recognize assets and liabilities for most
leases. Application of the standard is mandatory for annual
reporting periods beginning on or after January 1, 2019,
with earlier application permitted, provided the new
revenue standard, IFRS 15 Revenue from Contracts with
Customers, has been applied or is applied at the same
date as IFRS 16. We are currently assessing the impact on
our consolidated financial statements along with timing of
our adoption of IFRS 16.
117
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 3 Critical Judgments, Estimates, Assumptions and Risks
Many of the amounts included in the consolidated
balance sheet require management to make judgments
and/or estimates. These judgments and estimates are
continuously evaluated and are based on management’s
experience and knowledge of the relevant facts and
circumstances. Actual results may differ from the
estimates. Information about such judgments and
estimates is contained in the description of our accounting
policies and/or other notes to the financial statements.
The key areas where judgments, estimates and
assumptions have been made are summarized below.
Life of Mine (“LOM”) Plans and Reserves and Resources
Estimates of the quantities of proven and probable
mineral reserves and mineral resources form the basis
for our LOM plans, which are used for a number of
important business and accounting purposes, including:
the calculation of depreciation expense; the capitalization
of production phase stripping costs; and forecasting the
timing of the payments related to the environmental
rehabilitation provision. In addition, the underlying LOM
plans are used in the impairment tests for goodwill and
non-current assets. In certain cases, these LOM plans
have made assumptions about our ability to obtain the
necessary permits required to complete the planned
activities. We estimate our ore reserves and mineral
resources based on information compiled by qualified
persons as defined in accordance with the Canadian
Securities Administrators’ National Instrument 43-101
Standards of Disclosure for Mineral Projects requirements.
As at December 31, 2015, we have used a per ounce
gold price of $1,000 short-term and $1,200 long-term to
calculate our gold reserves, compared with $1,100 per
ounce short- and long-term used as at December 31,
2014. Refer to notes 18 and 20.
Inventory
The measurement of inventory including the
determination of its net realizable value, especially as it
relates to ore in stockpiles, involves the use of estimates.
Estimation is required in determining the tonnage,
recoverable gold and copper contained therein, and in
determining the remaining costs of completion to bring
inventory into its saleable form. Judgment also exists
in determining whether to recognize a provision for
obsolescence on mine operating supplies, and estimates
are required to determine salvage or scrap value
of supplies.
118
Impairment and Reversal of Impairment for
Non-Current Assets and Impairment of Goodwill
Goodwill and non-current assets are tested for
impairment if there is an indicator of impairment, and in
the case of goodwill, annually during the fourth quarter
for all of our operating segments. Calculating the
estimated fair values of CGUs for non-current asset
impairment tests and CGUs or groups of CGUs for
goodwill impairment tests requires management to make
estimates and assumptions with respect to future
production levels, operating and capital costs in our LOM
plans, future metal prices, foreign exchange rates, Net
Asset Value (“NAV”) multiples, value of reserves outside
LOM plans in relation to the assumptions related to
comparable entities and the market values per ounce
and per pound and discount rates. Changes in any of
the assumptions or estimates used in determining the
fair values could impact the impairment analysis. Refer
to notes 2n, 2p and 20 for further information.
Provisions for Environmental Rehabilitation
Management assesses its provision for environmental
rehabilitation on an annual basis or when new
information becomes available. This assessment includes
the estimation of the future rehabilitation costs, the
timing of these expenditures, and the impact of changes
in discount rates and foreign exchange rates. The actual
future expenditures may differ from the amounts
currently provided if the estimates made are significantly
different than actual results or if there are significant
changes in environmental and/or regulatory requirements
in the future. Refer to notes 2u and 26 for further
information.
Taxes
Management is required to make estimations regarding
the tax basis of assets and liabilities and related deferred
income tax assets and liabilities, amounts recorded for
uncertain tax positions, the measurement of income tax
expense and indirect taxes, and estimates of the timing
of repatriation of earnings, which would impact the
recognition of withholding taxes and taxes related to the
outside basis on subsidiaries/associates. A number of
these estimates require management to make estimates
of future taxable profit, as well as the recoverability
of indirect taxes, and if actual results are significantly
different than our estimates, the ability to realize
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 the deferred tax assets and indirect tax receivables
recorded on our balance sheet could be impacted.
Refer to notes 2i, 11 and 29 for further information.
Contingencies
Contingencies can be either possible assets or possible
liabilities arising from past events which, by their nature,
will only be resolved when one or more future events not
wholly within our control occur or fail to occur. The
assessment of such contingencies inherently involves the
exercise of significant judgment and estimates of the
outcome of future events. In assessing loss contingencies
related to legal proceedings that are pending against us
or unasserted claims that may result in such proceedings
or regulatory or government actions that may negatively
impact our business or operations, the Company with
assistance from its legal counsel evaluates the perceived
merits of any legal proceedings or unasserted claims or
actions as well as the perceived merits of the nature and
amount of relief sought or expected to be sought, when
determining the amount, if any, to recognize as a
contingent liability or assessing the impact on the
carrying value of assets. Contingent assets are not
recognized in the consolidated financial statements.
Refer to note 35 for more information.
Pascua-Lama
As a result of our decision to suspend the construction of
our Pascua-Lama project, significant judgment and
estimation has been used in determining our accrued
liabilities, including: demobilization, contract claims and
severance. For contractors, it is necessary to estimate
accruals for work completed but not yet invoiced based
on subjective assessments of the stage of completion of
their work in relation to invoices rendered; and for costs
arising from existing contracts for legal or constructive
obligations arising from our demobilization actions. In
addition, the Pascua-Lama project received $382 million
(2014: $403 million) in value added tax (“VAT”) refunds
in Chile relating to the development of the Chilean side
of the project. Under the current arrangement this
amount plus interest of $170 million (2014: $137 million)
must be repaid if the project does not evidence exports
for an amount of $3,538 million within a term that
expires on June 30, 2018. Barrick expects to apply for
an extension of the 2018 deadline sometime in the next
two years. We have also recorded $308 million in VAT
recoverable in Argentina as of December 31, 2015
($461 million, December 31, 2014) relating to the
development of the Argentine side of the project. These
amounts may not be recoverable if the project does not
enter into production and are subject to devaluation risk
as the amounts are recoverable in Argentinean pesos.
Streaming Transactions
The upfront cash deposit received from Royal Gold
on the gold and silver streaming transaction has been
accounted for as deferred revenue as we have determined
that it is not a derivative as it will be satisfied through the
delivery of non-financial items (i.e., gold and silver) rather
than cash or financial assets. It is our intention to settle
the obligations under the streaming arrangement
through our own production and if we were to fail to
settle the obligations with Royal Gold through our own
production, this would lead to the streaming arrangement
becoming a derivative. This would cause a change to
the accounting treatment, resulting in the revaluation
of the fair value of the agreement through profit
and loss on a recurring basis. Refer to note 24 for
further details.
Our silver sale agreement with Silver Wheaton Corp
(“Silver Wheaton”) requires us to deliver 25% of the life
of mine silver production from the Pascua-Lama project
once it is constructed and 100% of silver from Lagunas
Norte, Pierina and Veladero mines until March 31, 2018.
The completion date for Pascua-Lama was originally
December 31, 2015 but was subsequently extended
to June 30, 2020. Per the terms of the amended silver
purchase agreement, if the requirements of the
completion guarantee have not been satisfied by
June 30, 2020, the agreement may be terminated by
Silver Wheaton, in which case, they will be entitled to
the return of the upfront cash consideration paid less
credit for silver delivered up to the date of that event.
The cash liability at December 31, 2015 is $313 million.
Refer to note 27 for a summary of our key
financial risks.
119
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 Other Notes to the Financial Statements
Note
Page
Divestitures
Segment information
Revenue
Cost of sales
Exploration, evaluation and project expenses
Other expense (income)
General and administrative expenses
Income tax (recovery) expense
Loss per share
Finance costs
Cash flow – other items
Investments
Inventories
Accounts receivable and other current assets
Property, plant and equipment
Goodwill and other intangible assets
Impairment of goodwill and non-current assets
Other assets
Accounts payable
Other current liabilities
Financial instruments
Fair value measurements
Provisions
Financial risk management
Other non-current liabilities
Deferred income taxes
Capital stock
Non-controlling interests
Remuneration of key management personnel
Stock-based compensation
Post-retirement benefits
Contingencies
4 Divestitures
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
120
122
125
125
127
127
127
127
129
129
129
130
131
132
133
134
136
141
141
141
141
150
153
153
156
157
159
160
161
161
163
165
For the year ended December 31
2015
2014
Gross cash proceeds on divesture
Zaldívar
Cowal
Porgera
Spring Valley
Ruby Hill
Marigold
Kanowna
Plutonic
Other
Less: cash divested
120
$ 950
550
298
58
52
–
–
–
2
$ 1,910
(6)
$
–
–
–
–
–
86
67
22
–
$ 175
(9)
$ 1,904
$ 166
a) Disposition of 50 Percent Interest in Zaldívar Mine
On December 1, 2015, we completed the sale of 50%
of our Zaldívar copper mine in Chile to Antofagasta Plc
for total consideration of $1.005 billion. We received
$950 million upon closing of the transaction, net of
$10 million for working capital items, $20 million being
held in escrow pending finalization of working capital
adjustment and the remaining $25 million will be
received over the next five years. As the agreed selling
price is lower than the previously recorded book values
of the Zaldívar cash generating unit, we recorded a
goodwill impairment charge of $427 million for the
full year 2015. The transaction resulted in a loss of
$16 million for the year ended December 31, 2015
based on movements in working capital from the date
of announcement until the date of completing the
transaction. The transaction remains subject to a net
working capital adjustment period to complete the
review of the working capital. The net working capital
of Zaldívar (on a 100% basis) was $522 million as at
December 1, 2015. We have determined that Zaldívar
will be accounted for as a joint venture and upon closing
we began accounting for our investment under the
equity method. The purchase price allocation underlying
our equity method investment and the ultimate gain/loss
on disposition of our 50% of Zaldívar will be finalized
when the working capital adjustment is finalized.
b) Divestments of Ruby Hill and Spring Valley
On December 17, 2015, we closed the sale of our Ruby
Hill mine and Spring Valley, a development stage project,
for total cash consideration of $110 million. The
transaction resulted in a gain of $110 million for the
year ended December 31, 2015.
c) Assets Held-for-Sale
On November 11, 2015, we announced the sale of
Bald Mountain and our remaining 50% interest in
Round Mountain to Kinross for cash consideration of
$610 million. The transaction was subject to customary
closing conditions and closed on January 11, 2016.
As at December 31, 2015, all of the assets and liabilities
of Bald Mountain and our 50% interest in Round
Mountain (refer to table below) were classified as
held-for-sale. As the agreed selling price is lower than
previously recorded book values, we recorded an
impairment of $81 million in fourth quarter 2015.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
As at December 31
Assets
Current assets
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Other
Total assets
Liabilities
Current liabilities
Non-current liabilities
Provisions and other
Total liabilities
2015
$ 149
1
$ 150
605
3
$ 758
$ 40
109
$ 149
d) Disposition of Cowal and 50 Percent Interest
in Porgera Mines
On July 23, 2015, we completed the sale of our Cowal
mine in Australia for cash consideration of $550 million.
The transaction resulted in a gain of $34 million for the
year ended December 31, 2015.
On August 31, 2015, we completed the sale of 50%
of our interest in the Porgera mine in Papua New Guinea
to Zijin Mining Group Company (“Zijin”) for cash
consideration of $298 million. The transaction resulted in
a gain of $39 million for the year ended December 31,
2015. Subsequent to completion of the transaction, we
account for Porgera as a joint operation and include our
share of Porgera’s assets, liabilities, revenues and expenses
in our financial statements.
e) Disposition of 50 Percent Interest in Jabal Sayid
On July 13, 2014, Barrick entered into an agreement to
form a joint venture with Ma’aden to operate the Jabal
Sayid copper project. Ma’aden, which is 50% owned by
the Saudi Arabian government, acquired its 50% interest
in the new joint venture company for cash consideration
of $216 million. The transaction closed on December 3,
2014. The transaction resulted in a loss of control;
consequently the assets and liabilities were written down
to their fair value less costs of disposal, which resulted
in an impairment loss of $514 million, including
$316 million of goodwill recorded in 2014. Refer to
note 20 for further details of the impairment loss.
Jabal Sayid is a joint arrangement which is structured
through a separate entity of which Barrick is a 50%
shareholder. The terms of the contractual arrangement
provide that we have rights to 50% of the net earnings of
the entity, and therefore we concluded that it was a joint
venture and, as such, we account for our investment
under the equity method.
f) Disposition of Australian Assets
On January 31, 2014, we closed the sale of our Plutonic
mine for total cash consideration of $22 million. In
addition, on March 1, 2014, we completed the sale
of our Kanowna mine for total cash consideration of
$67 million. The transactions resulted in a loss of
$5 million for the year ended December 31, 2014.
g) Disposition of 10 Percent Interest in Acacia
On March 11, 2014, we completed the divestment of
41 million ordinary shares in Acacia, representing 10% of
the issued ordinary share capital of Acacia for net cash
proceeds of $186 million. Subsequent to the divestment,
we continue to retain a controlling interest in Acacia and
continue to consolidate Acacia. We have accounted for
the divestment as an equity transaction and, accordingly,
recorded the difference between the proceeds received
and the carrying value of $179 million as $7 million of
additional paid-in capital in shareholders’ equity.
h) Disposition of Marigold Mine
On April 4, 2014, we completed the divestiture of
our minority interest in the Marigold mine, for total
cash consideration of $86 million. The transaction
resulted in a gain of $21 million for the year ended
December 31, 2014.
121
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
5 Segment Information
Barrick’s business is organized into fifteen individual
minesites, one publicly traded company and one project.
Barrick’s Chief Operating Decision Maker (“CODM”), the
President, reviews the operating results, assesses
performance and makes capital allocation decisions at
the minesite, Company and/or project level. Therefore,
each individual minesite and Acacia are operating
segments for financial reporting purposes. For segment
reporting purposes, we present our reportable operating
segments as follows: eight individual gold mines, two
individual copper mines, Acacia and our Pascua-Lama
project. The remaining operating segments have been
grouped into an “other” category consisting of our
remaining gold mines. The prior periods have been
restated to reflect the change in presentation.
Segment performance is evaluated based on a
number of measures including operating income before
tax, production levels and unit production costs. Certain
costs are managed on a consolidated basis and are
therefore not reflected in segment income. Starting
January 1, 2015, we transferred most of the functional
services to minesites in order to hold the minesites
directly accountable for the cost of the functional
services they require to run their business, resulting in
the allocation of our general and administration costs
to individual minesites.
Cost of sales
Direct mining,
royalties and
community
relations Depreciation
Exploration,
evaluation and
project
expenses
$ 530
483
627
209
391
118
338
233
694
380
374
–
658
$ 192
343
277
169
108
23
37
74
143
60
50
22
247
$ 9
2
2
2
2
–
2
2
26
–
–
118
5
Revenue
$ 1,143
1,129
1,332
673
720
235
506
358
860
501
528
–
1,060
Other
expenses
(income)1
Segment
income
(loss)
$
4
14
1
8
3
2
4
4
(2)
8
–
(9)
(2)
$ 408
287
425
285
216
92
125
45
(1)
53
104
(131)
152
$ 9,045
$ 5,035
$ 1,745
$ 170
$ 35
$ 2,060
Consolidated Statements of Income Information
For the year ended December 31, 2015
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Porgera
Kalgoorlie
Acacia
Lumwana
Zaldívar2
Pascua-Lama
Other Mines3
122
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Consolidated Statements of Income Information
For the year ended December 31, 2014
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Porgera
Kalgoorlie
Acacia
Lumwana
Zaldívar
Pascua-Lama
Other Mines3
Cost of sales
Direct mining,
royalties and
community
relations Depreciation
Exploration,
evaluation and
project
expenses
$ 519
432
642
243
438
94
465
267
564
372
415
–
785
$ 132
255
243
92
116
17
80
42
129
98
73
14
304
$ 1
1
–
2
3
1
2
1
18
–
1
113
54
Revenue
$ 1,154
1,093
1,552
775
894
252
644
417
923
515
711
–
1,282
Other
expenses
(income)1
Segment
income
(loss)
$
6
12
(2)
(1)
7
1
13
1
21
5
(2)
(12)
(17)
$ 496
393
669
439
330
139
84
106
191
40
224
(115)
156
$ 10,212
$ 5,236
$ 1,595
$ 197
$ 32
$ 3,152
1. Other expenses include accretion expense, which is included with finance costs in the consolidated statements of income. For the year ended December 31, 2015,
accretion expense was $54 million (2014: $51 million). Refer to note 9a for details of other expenses (income).
2. Subsequent to its sale in December 2015, Zaldívar has been presented as pro rata for purposes of segment reporting. Total adjustments include $26 million to
Revenues, $23 million to direct mining, royalties and community relations and $6 million to Amortization which otherwise would be included as losses from
equity investees in the Other Mines segment.
3. Includes gold mines, exploration and evaluation expense and losses from equity investees that hold copper projects and mines.
Reconciliation of Segment Income to Loss from Continuing Operations Before Income Taxes
For the years ended December 31
2015
2014
Segment income
Other revenue1
Other cost of sales/amortization1,2
Exploration, evaluation and project expenses not attributable to segments
General and administrative expenses
Other (expense) income not attributable to segments
Impairment charges
Loss on currency translation
Closed mine rehabilitation
Finance income
Finance costs (includes non-segment accretion)
Loss on non-hedge derivatives
$ 2,060
10
(156)
(185)
(233)
90
(3,897)
(120)
(3)
13
(685)
(38)
$ 3,152
27
1
(195)
(385)
(5)
(4,106)
(132)
(83)
11
(745)
(193)
Loss before income taxes
$ (3,144)
$ (2,653)
1. Includes revenue and costs from Pierina until second quarter 2015, at which point it was presented as part of our operating segments.
2. Includes all realized hedge gains/losses, where hedge accounting is applied.
123
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Geographic Information
Non-current assets
Revenue1
United States
Dominican Republic
Argentina
Chile
Tanzania
Peru
Australia
Zambia
Papua New Guinea
Saudi Arabia
Canada
Unallocated
Total
As at Dec. 31, As at Dec. 31,
2014
2015
2015
2014
$ 7,375
3,576
2,177
2,020
1,648
627
518
422
342
344
470
1,321
$ 9,455
5,208
2,517
3,711
1,717
1,045
1,155
395
668
343
495
1,020
$ 3,076
1,332
720
502
860
734
552
501
506
–
246
–
$ 3,095
1,552
894
711
923
801
821
515
644
–
283
–
$ 20,840
$ 27,729
$ 9,029
$ 10,239
1. Presented based on the location from which the product originated.
Capital Expenditures Information
Segment capital expenditures1
For the year
For the year
ended Dec. 31, ended Dec. 31,
2014
2015
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Porgera
Kalgoorlie
Acacia
Lumwana
Zaldívar
Pascua-Lama
Other Mines
Segment total
Other items not allocated to segments
Total
$ 160
148
102
67
242
32
93
34
177
99
85
(81)
235
$ 1,393
116
$ 1,509
$ 558
189
134
82
173
30
33
66
254
181
111
195
189
$ 2,195
69
$ 2,264
1. Segment capital expenditures are presented for internal management reporting purposes on an accrual basis. Capital expenditures in the consolidated statements
of cash flow are presented on a cash basis. In 2015, cash expenditures were $1,713 million (2014: $2,432 million) and the decrease in accrued expenditures was
$204 million (2014: $168 million decrease).
124
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
$
214
$
271
As at December 31
2015
2014
2015
2014
6 Revenue
For the years ended December 31
2015
2014
Gold bullion sales1
Spot market sales
Concentrate sales
Copper sales1
Copper cathode sales
Concentrate sales
Other sales2
Total
$ 7,559
254
$ 8,471
273
$ 7,813
$ 8,744
$
501
501
$
710
514
$ 1,002
$ 1,224
$ 9,029
$ 10,239
1. Revenues include amounts transferred from OCI to earnings for commodity
cash flow hedges (see note 24d).
2. Revenues include the sale of by-products from our gold and copper mines
and energy sales to third parties from our Monte Rio power plant in the
Dominican Republic.
Principal Products
All of our gold mining operations produce gold in doré
form, except Acacia’s gold mines of Bulyanhulu and
Buzwagi, which produce both gold doré and gold
concentrate. Gold doré is unrefined gold bullion bars
usually consisting of 90% gold that is refined to pure
gold bullion prior to sale to our customers. Concentrate
is a processing product containing the valuable ore
mineral from which most of the waste mineral has been
eliminated. Our Lumwana mine produces a concentrate
that primarily contains copper. At our Zaldívar mine
we produce copper cathode, which consists of
99.9% copper.
Provisional Copper and Gold Sales
We have provisionally priced sales for which price
finalization, referenced to the relevant copper and gold
index, is outstanding at the balance sheet date. Our
exposure at December 31, 2015 to the impact of
movements in market commodity prices for provisionally
priced sales is set out in the following table:
Impact on net
income before
taxation of 10%
movement in
market price ($M)
Volumes subject to
final pricing
Copper pounds (millions)
Gold ounces (000s)
55
16
82
28
$ 11
2
$ 24
3
For the year ended December 31, 2015, our provisionally
priced copper sales included provisional pricing losses of
$67 million (2014: $38 million loss) and our provisionally
priced gold sales included provisional pricing losses of
$3 million (2014: $1 million loss).
At December 31, 2015, our provisionally priced
copper and gold sales subject to final settlement were
recorded at average prices of $2.10/lb (2014: $2.88/lb)
and $1,068/oz (2014: $1,201/oz), respectively. The
sensitivities in the above tables have been determined as
the impact of a 10% change in commodity prices at
each reporting date, while holding all other variables,
including foreign currency exchange rates, constant.
7 Cost of Sales
For the years ended December 31
2015
2014
Revenue
Revenue is presented net of direct sales taxes of
$34 million (2014: $48 million). Incidental revenues
from the sale of by-products, primarily copper, silver
and energy at our gold mines, are classified within
other sales.
Direct mining cost1,2,3
Depreciation
Royalty expense
Community relations
Total
$ 4,738
1,771
336
62
$ 4,803
1,648
303
76
$ 6,907
$ 6,830
1. Direct mining cost includes charges to reduce the cost of inventory to net
realizable value of $285 million (2014: $121 million).
2. Direct mining cost includes the costs of extracting by-products.
3. Includes employee costs of $1,302 million (2014: $1,381 million).
125
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Cost of Sales
Cost of sales consists of direct mining costs (which
include personnel costs, certain general and administrative
costs, energy costs (principally diesel fuel and electricity),
maintenance and repair costs, operating supplies,
external services, third-party smelting and transport fees),
depreciation related to sales, royalty expenses, and
community relations expense at our operating sites. Cost
of sales also includes costs associated with power sales
to third parties from our Monte Rio power plant in the
Dominican Republic. Cost of sales is based on the
weighted average cost of contained or recoverable
ounces sold and royalty expense for the period. Costs
also include any impairment to reduce inventory to its
net realizable value.
Beginning on January 1, 2015, we transferred most
of the functional services to mine sites in order to hold
the mine sites directly accountable for the cost of the
functional services they require to run the business,
resulting in the allocation of our general and administrative
costs to individual mine sites. These costs now form part
of mine site G&A costs, which are included within direct
mining costs.
Royalties
Certain of our properties are subject to royalty
arrangements based on mineral production at the
properties. The primary type of royalty is a net smelter
return (NSR) royalty. Under this type of royalty we
pay the holder an amount calculated as the royalty
percentage multiplied by the value of gold production at
market gold prices less third-party smelting, refining and
transportation costs. Other types of royalties include:
Net profits interest (NPI) royalty to other than a
government,
Modified net smelter return (NSR) royalty,
Net smelter return sliding scale (NSRSS) royalty,
Gross proceeds sliding scale (GPSS) royalty,
Gross smelter return (GSR) royalty,
Net value (NV) royalty,
Land tenement (LT) royalty, and a
Gold revenue royalty.
Royalty expense is recorded on completion of the
production or sales process.
Producing mines and projects
Type of royalty
Goldstrike
Cortez
Cortez – Pipeline/South
Pipeline deposit
Cortez – portion of Pipeline/
South Pipeline deposit
Pueblo Viejo
Lagunas Norte
Veladero
Porgera
Kalgoorlie
Acacia
Bulyanhulu
North Mara – Nyabirama and
Nyabigena pit
North Mara – Gokona pit
Buzwagi
Pascua-Lama Project –
Chile gold production
Pascua-Lama Project –
Chile copper production
Pascua-Lama Project –
Argentina production
Other Mines – Gold
Williams
Hemlo – Interlake property
Round Mountain
Bald Mountain
Other Mines – Copper
Lumwana
Kabanga
Other
Cerro Casale
Donlin Gold Project
0%–5% NSR, 0%–6% NPI
1.5% GSR
0.4%–9% GSR
5% NV
3.2% NSR (for gold & silver)
2.51% NSR
3.75% gross proceeds
2% NSR, 0.25% other
2.5% of gold revenue
4% NSR
4% NSR, 1% LT
4% NSR, 1.1% LT
4% NSR, 30% NPI1
1.43%–9.56% GPSS
1.92% NSR
3% modified NSR
1.5% NSR, 0.75%–1% NV
50% NPI, 3% NSR
3.53%–6.35% NSRSS2
3.5%–7% NSRSS,
2.9%–4% NSR, 10% NPI2
6% GSR Jan to Dec 2014
20% GSR Jan to June 2015
9% GSR July to Dec 2015
4% NSR
3% NSR (capped at $3 million
cumulative)
1.5% NSR (first 5 years or until
advance royalty is repaid),
4.5% NSR (thereafter),
8.0% NPI3
3% NPI, $0.4 cent mill
tonnage fee
1. The NPI is calculated as a percentage of profits realized from the Buzwagi
mine after all capital, exploration, and development costs and interest
incurred in relation to the Buzwagi mine have been recouped and all
operating costs relating to the Buzwagi mine have been paid. No amount
is currently payable.
2. These mines have been disposed of on January 11, 2016.
3. The NPI is calculated as a percentage of profits realized from the mine after
all funds invested to date with interest at an agreed upon rate are recovered.
No amount is currently payable.
126
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
8 Exploration, Evaluation and Project Expenses
b) Impairment Charges
For the years ended December 31
2015
2014
For the years ended December 31
2015
2014
Exploration:
Minesite exploration
Global programs
Evaluation costs
Exploration and evaluation expense1
Advanced project costs:
Pascua-Lama
Jabal Sayid
Other project related costs:
Cerro Casale
Kainantu
Reko Diq
Corporate development
Community relations related to projects
Exploration, evaluation and project expenses
$ 355
1. Approximates the impact on operating cash flow.
9 Other Expense (Income)
a) Other Expense (Income)
For the years ended December 31
Other Expense:
Consulting fees
Bank charges
Office closure costs
Toll milling
Mine site severance and non-operational costs
World Gold Council fees
Pension and other post-retirement benefits
Total other expense
Other Income:
Gain on sale of non-current
assets/investments1
Insurance recovery
Management fee income
Royalty income
Incidental income
Total other income
Net other expense (income)
2015
2014
$ 12
19
30
5
27
–
3
$ 96
$ (187)
(3)
(2)
(4)
(13)
$ (209)
$ (113)
$ 28
16
15
–
12
3
3
$ 77
$ (52)
(7)
(5)
(4)
(23)
$ (91)
$ (14)
1. 2015 includes gains of $110 million from the sale of Ruby Hill and Spring
Valley, $39 million from the sale of Porgera, and $34 million from the sale
of Cowal. 2014 includes gains of $21 million from the sale of Marigold and
$5 million losses from the sale of Plutonic and Kanowna (see note 4).
$ 34
109
$ 143
20
$ 32
131
$ 163
21
$ 163
$ 184
Impairment of non-current assets1
Impairment of other intangibles1
Impairment of goodwill1
Impairment of other investments
Total
1. Refer to note 20 for further details.
$ 1,726
–
$ 1,726
2,171
–
$ 2,672
7
$ 2,679
1,409
18
$ 3,897
$ 4,106
117
–
7
–
4
61
3
88
30
14
4
12
35
25
$ 392
10 General and Administrative Expenses
For the years ended December 31
Corporate administration2
Operating segment administration
Total1
2015
$ 191
42
$ 233
2014
$ 217
168
$ 385
1. Includes employee costs of $155 million (2014: $231 million).
2. Includes $29 million (2014: $24 million) related to one-time severance payments.
11 Income Tax (Recovery) Expense
For the years ended December 31
2015
2014
Tax on profit
Current tax
Charge for the year
Adjustment in respect of prior years
Deferred tax
Origination and reversal of temporary
differences in the current year
Adjustment in respect of prior years
$ 476
(71)
$ 750
(64)
$ 405
$ 686
$ (551)
115
$ (436)
56
$ (436)
$ (380)
Income tax (recovery) expense
$ (31)
$ 306
Tax expense related to continuing operations
Current
Canada
International
Deferred
Canada
International
$
3
402
$
–
686
$ 405
$ 686
$ (32)
(404)
$ (181)
(199)
$ (436)
$ (380)
Income tax (recovery) expense
$ (31)
$ 306
127
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
De-recognition of a Deferred Tax Asset
In second quarter 2015, we recorded a deferred tax
expense of $20 million related to de-recognition of a
deferred tax asset in Pueblo Viejo.
Non-Recognition of US Alternative Minimum Tax
(AMT) Credits
In fourth quarter 2015 and 2014, we recorded a
deferred tax expense of $19 million and $43 million,
respectively, related to US AMT credits which are not
probable to be realized based on our current life of
mine plans.
Tax Rate Changes
In third quarter 2014, a tax rate change was enacted in
Chile, resulting in current tax expense of $2 million.
In fourth quarter 2014, a tax rate change was
enacted in Peru, reducing corporate income tax rates.
This resulted in a deferred tax expense of $18 million
due to recording the deferred tax asset in Peru at the
lower rates.
Currency Translation
Deferred tax balances are subject to remeasurement
for changes in currency exchange rates each period.
The most significant balances are Argentinean deferred
tax liabilities. In 2015 and 2014, tax expense of
$62 million and $46 million, respectively, primarily arose
from translation losses due to the weakening of the
Argentinean peso against the US dollar. These losses are
included within deferred tax recovery/expense.
Internal Restructures
In fourth quarter 2015, a deferred tax recovery of
$116 million arose from a loss that was realized on
internal restructuring of subsidiary corporations. This
resulted in a net increase in deferred tax assets.
In second quarter 2014, a deferred tax recovery of
$112 million arose from a restructure of internal debt to
equity in subsidiary corporations, which resulted in the
release of a deferred tax liability and a net increase in
deferred tax assets.
Reconciliation to Canadian Statutory Rate
For the years ended December 31
2015
2014
At 26.5% statutory rate
Increase (decrease) due to:
Allowances and special tax deductions1
Impact of foreign tax rates2
Expenses not tax deductible
Goodwill impairment charges not tax deductible
Impairment charges not recognized in
deferred tax assets
Net currency translation losses on deferred
tax balances
Current year tax losses not recognized in
deferred tax assets
Internal restructures
De-recognition of a deferred tax asset
Non-recognition of US AMT credits
Adjustments in respect of prior years
Increase to income tax related
contingent liabilities
Impact of tax rate changes
Other withholding taxes
Mining taxes
Other items
$ (833)
$
(703)
(103)
(110)
55
736
246
62
56
(116)
20
19
44
13
–
12
(125)
(7)
(93)
18
96
373
334
46
20
(112)
–
43
(8)
–
20
40
227
5
Income tax (recovery) expense
$ (31)
$
306
1. We are able to claim certain allowances and tax deductions unique to
extractive industries that result in a lower effective tax rate.
2. We operate in multiple foreign tax jurisdictions that have tax rates different
than the Canadian statutory rate.
128
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
12 Loss per Share
For the years ended December 31
($ millions, except shares in millions and per share amounts in dollars)
Net loss
Net loss attributable to non-controlling interests
2015
2014
Basic
Diluted
Basic
Diluted
$ (3,113)
275
$ (3,113) $ (2,959)
52
275
$ (2,959)
52
Net loss attributable to equity holders of Barrick Gold Corporation
$ (2,838)
$ (2,838) $ (2,907)
$ (2,907)
Weighted average shares outstanding
1,165
1,165 1,165
1,165
Loss per share data attributable to the equity holders of Barrick Gold Corporation
Net loss
$
(2.44)
$
(2.44) $
(2.50)
$
(2.50)
13 Finance Costs
For the years ended December 31
2015
2014
Interest
Amortization of debt issue costs
Amortization of discount (premium)
Loss (Gain) on interest rate hedges
Interest capitalized1
Accretion
Gain on debt extinguishment2
$ 737
19
3
2
(17)
63
(68)
$ 733
21
(1)
(2)
(30)
75
–
Total
$ 739
$ 796
1. For the year ended December 31, 2015, the general capitalization rate was
5.80% (2014: 5.40%).
2. Gain arose from partial repayment of several notes during the year (2.50%
notes due 2018, 3.85% notes due 2022, 4.10% notes due 2023 and 6.95%
notes due 2019).
b) Investing Cash Flows – Other Items
For the years ended December 31
2015
2014
Value added tax recoverable on project
capital expenditures
Other
Other net investing activities
$ –
(17)
$ (66)
(26)
$ (17)
$ (92)
Investing cash flow includes payments for:
Capitalized interest (note 24)
$ 15
$ 29
c) Financing Cash Flows – Other Items
For the years ended December 31
Gain on debt extinguishment
Derivative settlements
Other net financing activities
2015
2014
$ 68
–
$ 68
$
$
–
9
9
14 Cash Flow – Other Items
a) Operating Cash Flows – Other Items
For the years ended December 31
2015
Adjustments for non-cash income statement items:
Loss on currency translation
RSU expense
Stock option expense (recovery)
Loss from investment in equity investees (note 15)
Change in estimate of rehabilitation costs
$ 120
16
2
7
at closed mines
Inventory impairment charges (note 16)
Cash flow arising from changes in:
Accounts receivable
Other current assets
Accounts payable
Other current liabilities
Other assets and liabilities
Settlement of rehabilitation obligations
3
285
81
10
(35)
(148)
(237)
(89)
2014
$ 132
8
(5)
–
83
121
(24)
(177)
(329)
141
(284)
(108)
Other net operating activities
$ 15
$ (442)
129
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
15 Investments
Equity Accounting Method Investment Continuity
At January 1, 2014
Funds invested
At December 31, 2014
Funds invested
Transfer to equity accounting method investment
Loss from equity investees
At December 31, 2015
Publicly traded
Kabanga
Jabal Sayid
Zaldívar
$ 27
1
$ 28
2
–
–
$ 30
No
$
–
178
$ 178
–
–
–
$ 178
No
$
–
–
$
–
–
993
(3)
$ 990
No
Total
$
27
179
$ 206
7
993
(7)
$ 1,199
GNX
$ –
–
$ –
5
–
(4)
$ 1
No
Summarized Equity Investee Financial Information
Summarized Balance Sheet
Zaldívar
Jabal Sayid
Zaldívar
For the year ended December 31
2015
For the years ended December 31
2015
2014
2015
Revenue
Cost of sales (excluding depreciation)
Depreciation
Loss from continuing operations before tax
Income tax recovery
Loss from continuing operations after tax
Other comprehensive loss
Total comprehensive loss
$ 51
46
12
$ (7)
Cash and equivalents
Other current assets1
$
6
66
$ 10
21
$
17
565
Total current asset
$ 72
$ 31
$
582
Non-current assets
452
429
1,640
1
Total assets
$ 524
$ 460
$ 2,222
$ (6)
–
$ (6)
Current financial liabilities
(excluding trade, other
payables & provisions)
Other current liabilities
Total current liabilities
Non-current financial liabilities
(excluding trade, other
payables & provisions)
Other non-current liabilities
$
–
12
$ 12
$
$
3
1
4
$
–
145
$
145
–
401
2
343
7
60
67
212
$
$
Total non-current liabilities
$ 401
$ 345
Total liabilities
Net assets
$ 413
$ 349
$ 111
$ 111
$ 2,010
The information above reflects the amounts presented in the financial information of the joint venture adjusted
for differences between IFRS and local GAAP.
1. Zaldívar other current assets include inventory of $471 million.
Reconciliation of Summarized Financial Information to Carrying Value
Opening net assets
Loss for the period
Closing net assets, December 31
Barrick’s share of net assets (50%)
Working capital adjustments
Goodwill recognition
Carrying value
130
Jabal Sayid
Zaldívar
$ 111
–
$ 111
55
–
123
$ 178
$ 2,010
(6)
$ 2,004
1,002
(12)
–
$ 990
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
16 Inventories
Raw materials
Ore in stockpiles
Ore on leach pads
Mine operating supplies
Work in process
Finished products
Gold doré
Copper cathode
Copper concentrate
Gold concentrate
Non-current ore in stockpiles1
Gold
Copper
As at
Dec. 31,
2015
As at
Dec. 31,
2014
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 1,912
292
633
210
32
–
–
10
$ 2,036
357
875
245
129
–
–
11
$ 3,089
(1,494)
$ 3,653
(1,584)
$ 1,595
$ 2,069
$ 48
–
74
–
–
–
8
–
$ 130
(8)
$ 122
2015
$ 285
$ 182
392
132
7
–
12
28
–
$ 753
(100)
$ 653
2014
$ 121
1. Ore that we do not expect to process in the next 12 months is classified within other long-term assets.
For the years ended December 31
Inventory impairment charges1
1. Impairment charges in 2015 primarily relate to production costs exceeding net realizable value at Cortez, stockpile and supplies impairments at Buzwagi as well
as mine operating supplies obsolescence across the sites.
Ore on Leach Pads
The recovery of gold and copper from certain oxide ores
is achieved through the heap leaching process. Our
Pierina, Lagunas Norte, Veladero, Cortez, Bald Mountain
and Round Mountain mines all use a heap leaching
process for gold and 50% owned Zaldívar mine uses a
heap leaching process for copper. Under this method,
ore is placed on leach pads where it is treated with a
chemical solution, which dissolves the gold or copper
contained in the ore. The resulting “pregnant” solution is
further processed in a plant where the gold or copper is
recovered. For accounting purposes, costs are added to
ore on leach pads based on current mining and leaching
costs, including applicable depreciation, depletion and
amortization relating to mining operations. Costs are
removed from ore on leach pads as ounces or pounds
are recovered based on the average cost per recoverable
ounce of gold or pound of copper on the leach pad.
Estimates of recoverable gold or copper on the leach
pads are calculated from the quantities of ore placed
on the leach pads (measured tons added to the leach
pads), the grade of ore placed on the leach pads (based
on assay data) and a recovery percentage (based on
ore type).
Although the quantities of recoverable gold or
copper placed on the leach pads are reconciled by
comparing the grades of ore placed on pads to the
quantities of gold or copper actually recovered
(metallurgical balancing), the nature of the leaching
process inherently limits the ability to precisely monitor
inventory levels. As a result, the metallurgical balancing
process is regularly monitored and estimates are refined
based on actual results over time. Historically, our
operating results have not been materially impacted by
variations between the estimated and actual recoverable
quantities of gold or copper on our leach pads.
131
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Ore on Leach Pads
Gold
Veladero
Cortez
Bald Mountain
Round Mountain
Lagunas Norte
Pierina
Copper
Zaldívar
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 136
71
–
–
81
4
$ 149
40
108
21
37
2
–
392
$ 292
$ 749
Purchase Commitments
At December 31, 2015, we had purchase obligations for
supplies and consumables of approximately $1,151 million
(2014: $1,154 million).
17 Accounts Receivable and Other Current Assets
Accounts receivable
Amounts due from concentrate sales
Amounts due from copper cathode sales
Receivable from Dominican
Republic government2
Working capital adjustments held in escrow
Other receivables
Other current assets
Derivative assets (note 24f)
Goods and services taxes recoverable1
Prepaid expenses
Other
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 76
–
47
20
132
$ 275
$
–
199
46
18
$ 263
$ 98
86
109
–
125
$ 418
$
7
208
62
34
$ 311
1. Primarily includes VAT and fuel tax recoverables of $56 million in Argentina,
$56 million in Tanzania, $18 million in the Dominican Republic, $44 million
in Chile, and $9 million in Peru (Dec. 31, 2014: $84 million, $44 million,
$33 million, $24 million and $8 million, respectively).
2. Amounts receivable from the Dominican Republic government primarily relate
to payments made by Pueblo Viejo on behalf of the government.
At December 31, 2015, the weighted average cost
per recoverable ounce of gold on leach pads was $596
per ounce (2014: $687 per ounce of gold and $1.24
per pound of copper). Variations between actual
and estimated quantities resulting from changes in
assumptions and estimates that do not result in write-
downs to net realizable value are accounted for on a
prospective basis.
The ultimate recovery of gold or copper from a leach
pad will not be known until the leaching process is
concluded. Based on current mine plans, we expect to
place the last ton of ore on our current leach pads at
dates for gold ranging from 2016 to 2028. Including the
estimated time required for residual leaching, rinsing and
reclamation activities, we expect that our leaching
operations will terminate within a period of up to 6 years
following the date that the last ton of ore is placed on
the leach pad.
The current portion of ore inventory on leach pads is
determined based on estimates of the quantities of gold
or copper at each balance sheet date that we expect to
recover during the next 12 months.
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 906
406
77
179
–
113
38
48
80
34
20
11
$ 760
340
257
159
176
103
69
43
54
32
18
25
–
48
108
74
$ 1,960
$ 2,218
Ore in Stockpiles
Gold
Goldstrike
Pueblo Viejo
Porgera
Cortez
Cowal
Kalgoorlie
Buzwagi
North Mara
Lagunas Norte
Veladero
Turquoise Ridge
Other
Copper
Zaldívar
Lumwana
132
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
18 Property, Plant and Equipment
At January 1, 2015
Net of accumulated depreciation
Additions4
Capitalized interest
Disposals
Depreciation
Impairment charges
Transfers5
Assets held-for-sale
At December 31, 2015
At December 31, 2015
Mining
property
costs
subject to
Mining
property
costs not
subject to
depreciation1,3 depreciation1,2
Total
Buildings, plant
and equipment
$ 6,683
$ 8,264
$ 4,246
$ 19,193
(20)
–
(904)
(1,030)
(1,041)
1,203
(207)
225
17
(734)
(954)
(236)
1,062
(344)
1,048
–
(55)
–
(470)
(2,265)
(54)
1,253
17
(1,693)
(1,984)
(1,747)
–
(605)
$ 4,684
$ 7,300
$ 2,450
$ 14,434
Cost
Accumulated depreciation and impairments
$ 13,782
(9,098)
$ 19,968
(12,668)
$ 14,734
(12,284)
$ 48,484
(34,050)
Net carrying amount – December 31, 2015
$ 4,684
$ 7,300
$ 2,450
$ 14,434
At January 1, 2014
Cost
Accumulated depreciation and impairments
Mining
property
costs
subject to
depreciation1,3
Mining
property
costs not
subject to
depreciation1,2
Total
Buildings, plant
and equipment
$ 13,817
(7,607)
$ 20,769
(12,218)
$ 16,602
(9,675)
$ 51,188
(29,500)
Net carrying amount – January 1, 2014
$ 6,210
$ 8,551
$ 6,927
$ 21,688
Additions4
Capitalized interest
Disposals
Depreciation
Impairment charges
Transfers5
At December 31, 2014
At December 31, 2014
190
–
(36)
(933)
(105)
1,357
301
2
(15)
(891)
(422)
738
2,048
28
(523)
–
(2,139)
(2,095)
2,539
30
(574)
(1,824)
(2,666)
–
$ 6,683
$ 8,264
$ 4,246
$ 19,193
Cost
Accumulated depreciation and impairments
$ 15,273
(8,590)
$ 21,803
(13,539)
$ 16,060
(11,814)
$ 53,136
(33,943)
Net carrying amount – December 31, 2014
$ 6,683
$ 8,264
$ 4,246
$ 19,193
1. Includes capitalized reserve acquisition costs, capitalized development costs and capitalized exploration and evaluation costs other than exploration license costs
included in intangible assets.
2. Assets not subject to depreciation includes construction-in-progress, projects and acquired mineral resources and exploration potential at operating mine sites and
development projects.
3. Assets subject to depreciation includes the following items for production stage properties: acquired mineral reserves and resources, capitalized mine development
costs, capitalized stripping and capitalized exploration and evaluation costs.
4. Additions include revisions to the capitalized cost of closure and rehabilitation activities.
5. Primarily relates to long-lived assets that are transferred to PP&E once they are placed into service.
133
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
a) Mineral Property Costs Not Subject to Depreciation
Construction-in-progress1
Acquired mineral resources and
exploration potential
Projects
Pascua-Lama
Cerro Casale2
Donlin Gold
Carrying
amount at
Dec. 31,
2015
Carrying
amount at
Dec. 31,
2014
$
529
$ 1,490
42
264
1,287
444
148
1,910
444
138
$ 2,450
$ 4,246
1. Represents assets under construction at our operating mine sites.
2. Amounts are presented on a 100% basis and include our partner’s
non-controlling interest.
b) Changes in Gold and Copper Mineral Life
of Mine Plan
As part of our annual business cycle, we prepare updated
estimates of proven and probable gold and copper
mineral reserves and the portion of resources considered
probable of economic extraction for each mineral
property. This forms the basis for our LOM plans. We
19 Goodwill and Other Intangible Assets
prospectively revise calculations of amortization expense
for property, plant and equipment amortized using
the UOP method, where the denominator is our LOM
ounces. The effect of changes in our LOM on amortization
expense for 2015 was a $94 million decrease (2014:
$201 million increase). The effect of changes in our LOM
on amortization expense for fourth quarter 2015 was
a $56 million decrease (2014: $57 million increase).
c) Capital Commitments and Operating Leases
In addition to entering into various operational
commitments in the normal course of business, we
had commitments of approximately $120 million at
December 31, 2015 (2014: $159 million) for
construction activities at our sites and projects.
Operating leases are recognized as an operating cost
in the consolidated statements of income on a straight-
line basis over the lease term. At December 31, 2015, we
have operating lease commitments totaling $161 million,
of which $36 million is expected to be paid within a
year, $95 million is expected to be paid within two to
five years and the remaining amount to be paid beyond
five years.
a) Goodwill
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
North America Portfolio
Turquoise Ridge
Hemlo
Bald Mountain
Round Mountain
Australia Pacific
Kalgoorlie
Cowal
Porgera
Copper2
Zaldívar
Lumwana
Total
Closing balance
December 31,
2013
Impairments
Reallocation1
Closing balance
December 31,
2014
Disposals
$
730
869
412
247
195
758
–
–
–
–
206
–
–
–
2,418
–
–
$
–
–
–
–
–
–
–
–
(131)
(36)
–
–
–
–
(316)
(712)
(214)
$
–
–
–
–
–
(758)
528
63
131
36
(206)
71
64
71
(2,102)
1,888
214
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
730
869
412
247
195
–
528
63
–
–
–
71
64
71
–
1,176
–
$ 5,835
$ (1,409)
$
–
$
–
$ 4,426
1. As a result of the reorganization of our operating segments in November 2014, we reallocated goodwill, which had previously been recorded in our North America
Portfolio, Australia Pacific and Copper Operating Units on a relative fair value basis. The reorganized operating segments were then tested for impairment (see note 20).
2. In second quarter 2014 we reclassified Jabal Sayid to held-for-sale pending the sale of 50% to our joint venture partner. As a result, we recorded an impairment of
goodwill of $316 million.
134
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Hemlo
Kalgoorlie
Cowal
Porgera
Zaldívar
Total
Opening balance
January 1,
2015
Impairments
Reallocation
Closing balance
December 31,
2015
Disposals
$
$
730
869
412
247
195
528
63
71
64
71
1,176
$
(730)
(355)
(412)
(247)
–
–
–
–
–
–
(427)
$ 4,426
$ (2,171)
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
(64)
(71)
(749)
$
–
514
–
–
195
528
63
71
–
–
–
$ (884)
$ 1,371
On a total basis, the gross amount and accumulated impairment losses are as follows:
Cost
Accumulated impairment losses January 1, 2014
Impairment losses 2014
Impairment losses 2015
Accumulated impairment losses December 31, 2015
Net carrying amount December 31, 2015
b) Intangible Assets
Opening balance January 1, 2014
Additions
Amortization and impairment losses
Closing balance December 31, 2014
Additions
Disposals
Amortization and impairment losses
Closing balance December 31, 2015
Cost
Accumulated amortization and impairment losses
Net carrying amount December 31, 2014
Cost
Disposals
Accumulated amortization and impairment losses
Net carrying amount December 31, 2015
$ 8,659
(3,708)
(1,409)
(2,171)
(7,288)
$ 1,371
Total
$ 320
–
(12)
Water
rights1
$ 116
–
–
Technology2
Supply
contracts3
Exploration
potential4
$ 16
$ 20
$ 168
–
(2)
–
(3)
–
(7)
$ 116
$ 14
$ 17
$ 161
$ 308
–
(29)
–
$ 87
$ 116
–
$ 116
$ 116
(29)
–
$ 87
–
–
(2)
–
–
(1)
–
(5)
–
–
(34)
(3)
$ 12
$ 16
$ 156
$ 271
$ 17
(3)
$ 39
(22)
$ 467
(306)
$ 639
(331)
$ 14
$ 17
$ 161
$ 308
$ 17
–
(5)
$ 39
–
(23)
$ 283
(5)
(122)
$ 455
(34)
(150)
$ 12
$ 16
$ 156
$ 271
1. Relates to water rights in South America, which are subject to annual impairment testing and will be amortized through cost of sales when we begin using
these in the future.
2. The amount is amortized through cost of sales using the UOP method over LOM ounces of the Pueblo Viejo mine, with no assumed residual value.
3. Relates to a supply agreement with Michelin North America Inc. to secure a supply of tires and is amortized over the effective term of the contract through
cost of sales.
4. Exploration potential consists of the estimated fair value attributable to exploration licenses acquired as a result of a business combination or asset acquisition.
The carrying value of the licenses will be transferred to PP&E when the development of attributable mineral resources commences (note 2m(i)). See note 20 for
details of impairment charges recorded against exploration assets.
135
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
20 Impairment of Goodwill and Non-Current Assets
In accordance with our accounting policy, goodwill is
tested for impairment in the fourth quarter and also
when there is an indicator of impairment. Non-current
assets are tested for impairment when events or changes
in circumstances suggest that the carrying amount may
not be recoverable.
When there is an indicator of impairment of non-
current assets within an operating segment consisting of
a CGU that does not contain goodwill, we test the
non-current assets for impairment and recognize any
impairment loss on the non-current assets. When there is
an indicator of impairment of non-current assets within
an operating segment that contains goodwill, we test
the non-current assets for impairment first and recognize
any impairment loss on goodwill first and then
any remaining impairment loss is applied against
the non-current assets.
An impairment loss is recognized when the carrying
amount exceeds the recoverable amount. The
recoverable amount of each operating segment for
goodwill testing purposes has been determined based on
its estimated FVLCD, which has been determined to be
greater than the VIU amounts. The recoverable amount
for non-current asset testing is calculated using the same
approach as for goodwill; however, the assessment is
done at the CGU level, which is the lowest level for
which identifiable cash flows are largely independent of
the cash flows of other assets. A CGU is generally an
individual operating mine or development project.
Summary of Impairments (Reversals)
For the year ended December 31, 2015, we recorded
impairment losses of $1.7 billion (2014: $2.7 billion) for
non-current assets and $2.2 billion (2014: $1.4 billion)
for goodwill, as summarized in the following table:
For the years ended December 31
2015
2014
Pueblo Viejo
Pascua-Lama
Bald Mountain/Round Mountain1
Buzwagi
Lagunas Norte
Oil Royalty
Cortez
Cerro Casale
Lumwana
Jabal Sayid
Other investments
Exploration (Tusker, Kainantu, Saudi Licenses)
Porgera
Other
$ 1,112
399
81
37
36
36
2
–
–
–
–
–
–
23
$
(9)
382
–
–
–
–
46
1,476
720
198
18
7
(160)
19
Total non-current asset impairment losses
$ 1,726
$ 2,697
Goldstrike
Zaldívar
Pueblo Viejo
Cortez
Lagunas Norte
Jabal Sayid
Lumwana
Bald Mountain
Round Mountain
$ 730
427
412
355
247
–
–
–
–
$
–
712
–
–
–
316
214
131
36
Total goodwill impairment losses
$ 2,171
$ 1,409
Total impairment losses
$ 3,897
$ 4,106
1. As discussed in note 4c, we have disposed of Bald Mountain
and Round Mountain in a single transaction. Accordingly, the
impairment loss has been calculated together.
2015 Indicators of Impairment
Fourth Quarter 2015
In fourth quarter 2015, as per our policy, we performed
our annual goodwill impairment test. Primarily as a result
of the lower gold price assumptions used in this year’s
test which are consistent with current market conditions,
we identified that the carrying values of our Pueblo
Viejo, Goldstrike, Cortez and Lagunas Norte mines
exceeded their FVLCD. At Pueblo Viejo, a goodwill
impairment loss of $412 million and a non-current asset
136
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
impairment loss of $1,101 million was recorded and the
recoverable amount after the impairment, based on
the mine’s FVLCD, was $3.2 billion (100% basis). At
Goldstrike, a goodwill impairment loss of $730 million
was recorded and the recoverable amount after the
impairment, based on the mine’s FVLCD, was $2.7 billion.
At Cortez, a goodwill impairment loss of $355 million
was recorded and the recoverable amount after the
impairment, based on the mine’s FVLCD, was $3.4 billion.
At Lagunas Norte, a goodwill impairment loss of
$247 million and a non-current asset impairment loss
of $36 million was recorded and the recoverable amount
after the impairment, based on the mine’s FVLCD, was
$480 million. Refer to note 19 for our remaining
goodwill balances.
As at December 31, 2015, all of the assets and
liabilities of Bald Mountain and Round Mountain were
classified as held-for-sale. As the agreed selling price is
lower than previously recognized carrying values, we
recorded a non-current asset impairment loss of
$81 million.
Throughout fourth quarter 2015, the trading price
of the Company’s shares declined such that the carrying
value of our net assets exceeded our market capitalization.
We have determined that this is an indicator of
impairment and tested the remaining assets that were
not included in the annual goodwill impairment test.
As a result, we determined two additional impairments.
At our Pascua-Lama project, we recorded an impairment
loss of $404 million (net of a $46 million reversal related
to a specific PP&E asset). The recoverable amount after
the impairment, based on the project’s FVLCD, was
$810 million. At our Buzwagi mine in Tanzania (part of
our Acacia subsidiary), we recorded a non-current asset
impairment loss of $37 million. The recoverable amount
after the impairment, based on the mine’s FVLCD, was
$81 million (100% basis).
We evaluated the FVLCD of an oil royalty that we
received as part of the consideration for one of the
Barrick Energy dispositions in 2013 and concluded that
due to the significant decline in current oil prices in
fourth quarter 2015 and the corresponding constraints
on capital investment in the oil industry, its carrying value
was not recoverable. We recorded an impairment of
$36 million and reduced its carrying value to nil.
Third Quarter 2015
In July 2015, the Zambian government passed legislation
that amended the country’s mining tax regime. This was
an indicator of potential reversal of previous impairments
recorded on our Lumwana mine in fourth quarter 2014.
In third quarter 2015, we evaluated the FVLCD and
concluded that, based on the current mine plan, lower
short-term copper prices and a higher observable
discount rate offset the lower royalty rate. Therefore no
reversal of impairment was required at that time.
As at September 30, 2015, all of the assets and
liabilities of Zaldívar were classified as held-for-sale as
the transaction will result in a loss of control. The agreed
selling price was lower than our previous assessment
of FVLCD due to lower short-term copper prices, the
impact of 10 months’ worth of production on the fair
value and an increase in observable discount rates. For
the year ended December 31, 2015 we recorded a
goodwill impairment loss of $427 million as a result
of this transaction.
In third quarter 2015, a net reversal of $16 million
was recognized relating to the termination of contracts
of certain leased assets at Pascua-Lama that had
previously been impaired. They are now carried at their
expected realizable value.
Second Quarter 2015
In second quarter 2015, we determined that we expect
to sell the Monte Rio power asset at our Pueblo Viejo
mine. Power supply to Pueblo Viejo is not impacted by
this disposition. In third quarter 2015, we entered into
an agreement to sell the asset and recorded a partial
reversal of this impairment based on the agreed upon
sales price. For the year ended December 31, 2015, we
recorded an impairment loss of $11 million to reduce
its carrying value down to its net realizable value.
2014 Indicators of Impairment
In second quarter 2014, our Jabal Sayid project in
Saudi Arabia met the criteria as an asset held-for-sale.
Accordingly, we were required to allocate goodwill
from the Copper Operating Unit to Jabal Sayid and test
the Jabal Sayid group of assets for impairment. We
determined that the carrying value exceeded the FVLCD,
and consequently recorded $514 million in impairment
charges, including the full amount of goodwill allocated
on a relative fair value basis, of $316 million. The
recoverable amount after the impairment, based on
FVLCD, was $560 million. In fourth quarter 2014, we
closed a transaction to sell a 50 percent interest of Jabal
Sayid for cash proceeds of $216 million.
We reached an agreement to sell a power-related
asset at our Pueblo Viejo mine for proceeds that
exceeded its carrying value. This asset had previously
137
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 been impaired in fourth quarter 2012, and therefore we
recognized an impairment reversal of $9 million. This
transaction closed on September 30, 2014.
In fourth quarter 2014, as described in note 19,
we reorganized our internal management reporting
structure. As a result, the goodwill attributable to our
former North America Portfolio, Australia Pacific and
Copper segments was allocated to the individual CGUs
within those operating segments on a relative fair value
basis. The allocation of goodwill to the carrying value of
our Bald Mountain and Round Mountain CGUs resulted
in their carrying values exceeding their FVLCD and, as
a result, we recorded goodwill impairment losses of
$131 million and $36 million, respectively. The
recoverable amounts after the impairment of Bald
Mountain and Round Mountain, based on FVLCD, were
$482 million and $131 million, respectively.
On December 18, 2014, the Zambian government
passed changes to the country’s mining tax regime that
would replace the current corporate income tax and
variable profit tax with a 20 percent royalty which took
effect on January 1, 2015. The application of a
20 percent royalty rate compared to the 6 percent royalty
rate the Company was paying has a significant negative
impact on the expected future cash flows of our
Lumwana mine and was considered an indicator of
impairment. As a result, we conducted an impairment
test and as a result of the new royalty rate along with
the decrease in our copper price assumptions, recorded
$930 million in impairment charges, including the full
amount of goodwill of $214 million allocated to
Lumwana as a result of the change in segments (see
note 19). The recoverable amount after the impairment,
based on FVLCD, was $300 million.
Our Zaldívar mine experienced a significant decrease
in the estimated FVLCD of the mine, primarily as a result
of the decrease in fourth quarter 2014 of our forecast of
the long-term copper price and, to a lesser extent, as a
result of the final assessment of the tax rate increase
in Chile. Accordingly, we recorded a goodwill impairment
loss of $712 million on this CGU. The recoverable
amount after the impairment, based on FVLCD, was
$2,411 million.
In November 2014, we completed a strategy
optimization study for our Cerro Casale project with the
goal of identifying a development model that would
improve the project economics and risk by reducing the
upfront capital requirements in order to generate a
higher return on our investment. The study was unable
to identify an alternative that provided an overall rate
138
of return above our hurdle rate for a project of this size
and complexity. As a result, the budget for 2015 for the
project was significantly reduced, with the 2015 budget
focused on preserving the optionality of the project.
We will continue activities to protect the asset and assess
alternative ways to develop the project in a more
economic manner; however, management’s expectation
of achieving a suitable rate of return in the metal
price environment has been diminished. The foregoing
developments were deemed to be indicators of
impairment, and as a result, we assessed the recoverable
amount of the project and have recorded an impairment
loss on the project of $1,467 million. The recoverable
amount after the impairment, based on the project’s
estimated FVLCD, was $500 million (100% basis).
In December 2014, the Chilean Supreme Court
declined to consider Barrick’s appeal of the Environmental
Court Decision on Pascua-Lama on procedural grounds
(see note 35). As a result, the Superintendencia del
Medio Ambiente (“SMA”) will now re-evaluate the
resolution. Although we cannot reasonably predict the
outcome of the resolution, this risk, in combination with
the decrease in our long-term silver price assumption in
fourth quarter 2014 due to declining market prices, and
the continued uncertainty about the timing, cost and
permitting of the project, were deemed to be indicators
of impairment. As a result, we assessed the recoverable
amount of the project and have recorded an impairment
loss on Pascua-Lama of $382 million. The recoverable
amount after the impairment, based on the project’s
estimated FVLCD, was $1,200 million, which is equal to
the project’s carrying value at the start of the year.
At our Porgera mine in Papua New Guinea, we have
revised our LOM plan to include a portion of the open pit
resources that were removed from the plan in the prior
year. In 2013, we did not have a feasible plan to access
the open pit reserves due to technical and financial issues
with respect to the west wall of the open pit. In 2014,
management resolved these technical issues and
developed an optimized mine plan to sequence the west
wall cutback in an economical manner. As a result,
management was able to bring a significant portion of
the ounces from the open pit back into the LOM plan.
The new plan resulted in an increase in the estimated
mine life from 8 to 12 years, and an increase in the
estimated FVLCD of the mine, which has resulted
in a partial reversal of a previous impairment loss of
$160 million. The recoverable amount after the impair-
ment reversal, based on FVLCD, was $600 million.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 The annual update to the LOM plan at Cortez
resulted in a cessation of mining in one of the open pits
at the mine. This was identified as an indicator of
impairment, resulting in the impairment of assets
specifically related to this pit of $46 million.
Key Assumptions
The key assumptions and estimates used in determining
the FVLCD are related to commodity prices, discount
rates, NAV multiples for gold assets, operating costs,
exchange rates, capital expenditures, the LOM
production profile, continued license to operate,
evidence of value from current year disposals and for our
projects the expected start of production. In addition,
assumptions are related to observable market evaluation
metrics, including identification of comparable entities,
and associated market values per ounce and per pound
of reserves and/or resources, as well as the valuation of
resources beyond what is included in LOM plans.
Gold
For the gold segments, excluding Pascua-Lama and Cerro
Casale, FVLCD for each of the CGUs was determined by
calculating the net present value (“NPV”) of the future
cash flows expected to be generated by the mines and
projects within the segments (level 3 of the fair value
hierarchy). The estimates of future cash flows were
derived from the most recent LOM plans and, where the
LOM plans excludes a material portion of total reserves
and resources, we assign value to reserves and resources
not considered in these models. Based on observable
market or publicly available data, including forward
prices and equity sell-side analyst forecasts, we make an
assumption of future gold and silver prices to estimate
future revenues. The future cash flows for each gold
mine are discounted using a real weighted average cost
of capital (“WACC”), which reflects specific market risk
factors for each mine. Some gold companies trade at a
market capitalization greater than the NPV of their
expected cash flows. Market participants describe this as
a “NAV multiple”, which represents the multiple applied
to the NPV to arrive at the trading price. The NAV
multiple is generally understood to take account of a
variety of additional value factors such as the exploration
potential of the mineral property, namely the ability to
find and produce more metal than what is currently
included in the LOM plan or reserve and resource
estimates, and the benefit of gold price optionality. As a
result, we applied a specific NAV multiple to the NPV of
each CGU within each gold segment based on the NAV
multiples observed in the market in recent periods and
that we judged to be appropriate to the CGU.
Pascua-Lama and Cerro Casale
The FVLCD for Pascua-Lama and Cerro Casale was
determined by considering observable market values for
comparable assets expressed as dollar per ounce and
dollar per pound of proven and probable reserves (level 3
of the fair value hierarchy). We used the market approach
as the LOMs for Pascua-Lama and Cerro Casale have
significant uncertainty with respect to the estimated
timeline for the project and the estimated remaining
construction costs. The observable market values were
adjusted, where appropriate, for country risk if the
comparable asset was in a different country and any
change in metal prices since the valuation date of the
comparable asset.
Copper
For our copper operating segments, the FVLCD for each
of the CGUs was determined based on the NPV of future
cash flows expected to be generated using the most
recent LOM plans (level 3 of the fair value hierarchy).
Based on observable market or publicly available data
including spot and forward prices and equity sell-side
analyst consensus, we make an assumption of future
copper prices to estimate future revenues. The future
cash flows for each copper mine were discounted using
a WACC depending on the location and market risk
factors for each mine.
Our gold price assumptions used in our 2015
impairment testing are 2016: $1,000, 2017: $1,100
and 2018+: $1,200. In fourth quarter 2015, market
consensus prices ranged from $1,000 to $1,250 in
the short term and $800 to $1,300 in the long term.
Consequently, our gold price assumptions are consistent
with the assumptions a market participant would use
to value a gold mining property. In 2014, impairment
test gold prices were $1,250 for 2015–2016 and
$1,300 for 2017 onwards.
139
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 The other key assumptions used in our impairment
testing are summarized in the table below:
The results of this analysis are as follows:
2015
2014
Operating
segment
Impairment
recorded
Impairment based on
Gold price
+$100
Gold price
-$100
Silver price per oz (long-term)
Copper price per lb (long-term)
WACC – gold (range)
WACC – gold (avg)
WACC – copper (range)
WACC – copper (avg)
NAV multiple – gold (avg)
LOM years – gold (avg)1
Value per ounce of gold2
Value per ounce of silver2
Value per pound of copper2
19
$
$ 3.00
3%–8%
4%
7%
7%
1.1
18
$45–$70
$
21
$ 3.00
3%–8%
5%
7%–9%
7%
1.1
12
$45–$80
$0.71–$1.11 $0.73–$1.29
$0.03–$0.04 $0.05–$0.06
1. The average LOM years is longer in 2015 as a result of the disposition
of some of our shorter life mines and extensions in mine life of some of our
remaining assets.
2. The value per ounce/pound used is dependent on the characteristics of the
property being valued.
Sensitivities
Should there be a significant decline in commodity
prices, we would take actions to assess the implications
on our life of mine plans, including the determination
of reserves and resources, and the appropriate cost
structure for the operating segments. The recoverable
amount of the CGUs would also be impacted by other
market factors such as changes in net asset value
multiples and the value per ounce/pound of comparable
market entities.
We performed a sensitivity analysis on the gold price,
which is the key assumption that impacts the impairment
calculations. We assumed a $100 per ounce change
in our gold price assumptions, while holding all other
assumptions constant, to determine the impact on
impairment losses recorded, and whether any additional
operating segments would be impacted. We note that
this sensitivity identifies the key assets where the
increase/decrease in the sales price, in isolation, could
cause the carrying value of our operating segments to
exceed its recoverable amount for the purposes of the
goodwill impairment test or the carrying value of any
of our CGUs to exceed its recoverable amount for the
purposes of the non-current asset impairment test.
Pueblo Viejo
Goodwill
Non-current assets
Lagunas Norte
Goodwill
Non-current assets
Goldstrike
Goodwill
Non-current assets
Cortez
Goodwill
Non-current assets
Buzwagi non-current assets
Veladero goodwill
Turquoise Ridge goodwill
$ 412
1,101
247
36
730
–
355
–
37
–
–
$ –
–
65
–
–
–
–
–
25
–
–
$ 412
2,519
247
321
730
1,088
869
735
42
112
316
We also performed a sensitivity analysis on our WACC,
which is another key input that impacts the impairment
calculations. We assumed a +/-10% change on the
WACC, while holding all other assumptions constant, to
determine the impact on impairment losses recorded,
and whether any additional operating segments would
be impacted. The results of this analysis are as follows:
Operating
segment
Impairment
recorded
Impairment based on
WACC
+10%
WACC
-10%
Pueblo Viejo
Goodwill
Non-current assets
Lagunas Norte
Goodwill
Non-current assets
Buzwagi non-current assets
Goldstrike goodwill
Cortez goodwill
$ 412
1,101
$ 412
1,333
247
36
37
730
355
247
51
37
730
447
$ 412
843
247
–
37
647
–
In addition, for our Cerro Casale and Pascua-Lama
projects, we have determined our valuation based on a
market approach. The key assumption that impacts the
impairment calculations, should there be an indication of
impairment for these CGUs, is the value per ounce of
gold and per pound of copper based on an analysis of
comparable companies. We assumed a negative 10%
change for the assumption of gold, silver and copper
value per unit, while holding all other assumptions
140
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
constant, and based on the results of the impairment
testing performed in fourth quarter 2015 for Cerro Casale
and Pascua-Lama, the fair value of the CGUs would have
been reduced from $500 million to $450 million and
$810 million to $730 million, respectively. We note that
this sensitivity identifies the decrease in the value that,
in isolation, would cause the carrying value of the CGU
to exceed its recoverable amount. For Cerro Casale
and Pascua-Lama, this value decrease is linear to the
decrease in value per ounce/pound.
Based on the results of the impairment test
performed in fourth quarter 2015, the carrying value of
the CGUs that are most sensitive to the change in sales
prices used in the annual test are:
As at December 31, 2015
Carrying value
Pueblo Viejo2
Cortez1,2
Goldstrike2
Turquoise Ridge1
Veladero1
Pascua-Lama2
Cerro Casale
Lagunas Norte2
Lumwana
Buzwagi2
$ 3,729
3,304
2,610
1,140
1,084
742
511
465
351
81
22 Accounts Payable
Accounts payable
Accruals
23 Other Current Liabilities
Provision for environmental
rehabilitation (note 26b)
Derivative liabilities (note 24f)
Deposit on gold and silver
streaming agreement
Restricted stock units (note 33b)
Deposit on silver sale agreements
Other
As at
Dec. 31,
2015
$ 736
422
As at
Dec. 31,
2014
$ 974
679
$ 1,158
$ 1,653
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 62
160
$ 109
158
36
21
22
36
–
15
40
95
$ 337
$ 417
1. Carrying value includes goodwill.
2. These CGUs have been impaired in 2015 and therefore their fair value
24 Financial Instruments
approximates carrying value.
21 Other Assets
Derivative assets (note 24f)
Goods and services taxes recoverable1
Notes receivable
Due from joint venture2
Restricted cash3
Prepayments
Other investments
Other
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$
1
397
105
186
91
60
8
175
$
2
565
112
164
59
64
35
237
$ 1,023
$ 1,238
Financial instruments include cash; evidence of
ownership in an entity; or a contract that imposes an
obligation on one party and conveys a right to a second
entity to deliver/receive cash or another financial
instrument. Information on certain types of financial
instruments is included elsewhere in these consolidated
financial statements as follows: accounts receivable
(note 17); investments (note 15); restricted share units
(note 33b).
a) Cash and Equivalents
Cash and equivalents include cash, term deposits,
treasury bills and money market investments with
original maturities of less than 90 days.
1. Includes VAT and fuel tax receivables of $308 million in Argentina, $52 million
in Tanzania and $37 million in Chile (Dec. 31, 2014: $461 million, $62 million
and $42 million, respectively). The VAT in Argentina is recoverable once
Pascua-Lama enters production.
2. Primarily represents the non-interest bearing shareholder loan due from
the Jabal Sayid JV as a result of the divestment of 50 percent interest in
Jabal Sayid.
3. Represents cash balance at Pueblo Viejo that is contractually restricted to the
disbursements for environmental rehabilitation that are expected to occur
near the end of Pueblo Viejo’s mine life.
Cash deposits
Term deposits
Money market investments
As at
Dec. 31,
2015
$ 1,370
313
772
As at
Dec. 31,
2014
$ 967
630
1,102
$ 2,455
$ 2,699
141
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Of total cash and cash equivalents as of December 31,
2015, $621 million (2014: $614 million) was held in
subsidiaries which have regulatory regulations,
contractual restrictions or operate in countries where
exchange controls and other legal restrictions apply and
are therefore not available for general use by the
Company. In addition, $62 million (2014: $242 million)
of cash and equivalents is held in subsidiaries where
we have determined the cash is reinvested for the
foreseeable future for the calculation of deferred income
tax. This cash can be repatriated; however, there would
be a tax cost of doing so, which has not yet been
recognized in these financial statements.
b) Long-Term Debt1
2015
2.9%/4.4%/5.7% notes3,9
3.85%/5.25% notes
5.80% notes4,9
5.75%/6.35% notes5,9
Other fixed rate notes6,9
Project financing
Capital leases7
Other debt obligations
2.5%/4.10%/5.75% notes8,9
Acacia Credit Facility10
Less: current portion11
2.9%/4.4%/5.7% notes3,9
3.85%/5.25% notes
5.80% notes4,9
5.75%/6.35% notes5,9
Other fixed rate notes6,9
Project financing
Capital leases7
Other debt obligations
2.5%/4.10%/5.75% notes8,9
Acacia Credit Facility10
Less: current portion11
At Dec. 31
Proceeds
Repayments
Amortization
and other2
$ 2,182
1,077
395
592
2,451
646
153
654
1,690
128
$ 9,968
(203)
$ 9,765
$
$
$
–
–
–
–
–
–
–
9
–
–
9
–
9
$
(229)
(913)
–
(264)
(275)
(211)
(189)
(149)
(898)
(14)
$ (3,142)
–
$ (3,142)
2014
$ 2
7
–
1
6
7
(12)
–
9
–
$ 20
–
$ 20
At Dec. 31
Proceeds
Repayments
Amortization
and other2
$ 2,409
1,983
395
855
2,720
850
354
794
2,579
142
$ 13,081
(333)
$ 12,748
$
–
–
–
–
–
–
133
8
–
–
$ 141
–
$ 141
$
$
–
–
–
–
–
(102)
(46)
(40)
–
–
(188)
–
$
(188)
$ 3
–
–
–
8
11
27
(3)
2
–
$ 48
–
$ 48
At Jan. 1
$ 2,409
1,983
395
855
2,720
850
354
794
2,579
142
$ 13,081
(333)
$ 12,748
At Jan. 1
$ 2,406
1,983
395
855
2,712
941
240
829
2,577
142
$ 13,080
(179)
$ 12,901
1. The agreements that govern our long-term debt each contain various provisions which are not summarized herein. These provisions allow Barrick to, at its option,
redeem indebtedness prior to maturity at specified prices and also may permit redemption of debt by Barrick upon the occurrence of certain specified changes
in tax legislation.
2. Amortization of debt premium/discount and increases (decreases) in capital leases.
3. Consists of $2.2 billion (2014: $2.4 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of
$1.35 billion of BNAF notes due 2021 and $850 million of BNAF notes due 2041.
4. Consists of $400 million (2014: $400 million) of 5.80% notes which mature in 2034.
5. Consists of $600 million (2014: $864 million) of 6.35% notes which mature in 2036.
6. Consists of $2.5 billion (2014: $2.8 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”) and our wholly-owned
subsidiary Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”). This consists of $500 million of BNAF notes due 2018, $475 million (2014: $750 million) of BGC notes
due 2019, $400 million of BPDAF notes due 2020, $250 million of BNAF notes due 2038 and $850 million of BPDAF notes due 2039.
7. Consists primarily of capital leases at Pascua-Lama, $57 million and Lagunas Norte, $88 million (2014: $199 million and $123 million, respectively).
8. Consists of $1.7 billion (2014: $2.6 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of
$123 million (2014: $252 million) of BGC notes due 2018, $731 million (2014: $1.5 billion) of BGC notes due 2023 and $850 million of BNAF notes due 2043.
9. We provide an unconditional and irrevocable guarantee on all Barrick North America Finance LLC (“BNAF”), Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”),
Barrick Gold Finance Company (“BGFC”), and Barrick (HMC) Mining (“BHMC”) notes and generally provide such guarantees on all BNAF, BPDAF, BGFC, and
BHMC notes issued, which will rank equally with our other unsecured and unsubordinated obligations.
10. Consists of an export credit backed term loan facility.
11. The current portion of long-term debt consists of project financing ($89 million; 2014: $98 million), other debt obligations ($45 million; 2014: $150 million),
capital leases ($41 million; 2014: $71 million) and Acacia credit facility ($28 million; 2014: $14 million).
142
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
1.75%/2.9%/4.4%/5.7% Notes
In June 2011, Barrick, and our wholly-owned subsidiary
Barrick North America Finance LLC (”BNAF”), issued an
aggregate of $4.0 billion in debt securities comprised of:
$700 million of 1.75% notes that had an original
maturity date in 2014 and $1.1 billion of 2.90% notes
that had an original maturity date in 2016 issued by
Barrick (collectively, the “Barrick Notes”) as well as
$1.35 billion of 4.40% notes that mature in 2021 and
$850 million of 5.70% notes that mature in 2041 issued
by BNAF (collectively, the “BNAF Notes”). Barrick
provides an unconditional and irrevocable guarantee of
the BNAF Notes. The Barrick Notes and the guarantee in
respect of the BNAF Notes will rank equally with Barrick’s
other unsecured and unsubordinated obligations.
During 2013, the entire balance ($700 million) of
the 1.75% notes was repaid along with $871 million of
the $1.1 billion of 2.9% notes. During 2015, the
remainder ($229 million) of the $1.1 billion of 2.9%
notes was repaid.
3.85% and 5.25% Notes
On April 3, 2012, we issued an aggregate of $2 billion
in debt securities comprised of $1.25 billion of
3.85% notes that mature in 2022 and $750 million of
5.25% notes that mature in 2042. During 2015,
$913 million of the 3.85% notes was repaid.
Other Fixed Rate Notes
On October 16, 2009, we issued two tranches of
debentures totaling $1.25 billion through our wholly-
owned indirect subsidiary Barrick (PD) Australia Finance
Pty Ltd. (“BPDAF”) consisting of $850 million of 30-year
notes with a coupon rate of 5.95%, and $400 million
of 10-year notes with a coupon rate of 4.95%. We also
provide an unconditional and irrevocable guarantee of
these payments, which rank equally with our other
unsecured and unsubordinated obligations.
On March 19, 2009, we issued an aggregate of
$750 million of 10-year notes with a coupon rate of
6.95% for general corporate purposes. The notes are
unsecured, unsubordinated obligations and rank equally
with our other unsecured, unsubordinated obligations.
During 2015, $275 million was repaid.
In September 2008, we issued an aggregate of
$1.25 billion of notes through our wholly-owned indirect
subsidiaries Barrick North America Finance LLC and
Barrick Gold Financeco LLC (collectively, the “LLCs”)
consisting of $500 million of 5-year notes with a coupon
rate of 6.125%, $500 million of 10-year notes with a
coupon rate of 6.8%, and $250 million of 30-year notes
with a coupon rate of 7.5%. We also provide an
unconditional and irrevocable guarantee of these
payments, which rank equally with our other unsecured
and unsubordinated obligations.
During 2013, the entire balance ($500 million) of
the 5-year notes with a coupon rate of 6.125% that was
due in September 2013 was repaid.
Pueblo Viejo Project Financing Agreement
In April 2010, Barrick and Goldcorp finalized terms for
$1.035 billion (100% basis) in project financing for
Pueblo Viejo. The project financing was non-recourse
subject to guarantees provided by Barrick and Goldcorp
for their proportionate share which will terminate upon
Pueblo Viejo meeting certain operating completion tests
and are subject to an exclusion for certain political risk
events. On February 17, 2015, we received notification
that the completion tests have been met, resulting in
termination of the guarantees. The lending syndicate is
comprised of international financial institutions including
export development agencies and commercial banks. The
amount was divided into three tranches of $400 million,
$375 million and $260 million with tenors of 15, 15 and
12 years, respectively. The $400 million tranche bears
a coupon of LIBOR+3.25% pre-completion and scales
gradually to LIBOR+5.10% (inclusive of political risk
insurance premium) for years 13–15. The $375 million
tranche bears a fixed coupon of 3.86% for the entire
15 years. The $260 million tranche bears a coupon of
LIBOR+3.25% pre-completion and scales gradually to
LIBOR+4.85% (inclusive of political risk insurance
premium) for years 11–12.
We have drawn the entire $1.035 billion to date.
During the year, $211 million of loans was repaid. The
remaining principal balance under the Pueblo Viejo
Financing Agreement is $677 million.
Refinancing of the Credit Facility
In January 2012, we finalized a credit and guarantee
agreement (the “Credit Facility”, previously referred to
as the ”2012 Credit Facility”) with certain Lenders, which
requires such Lenders to make available to us a credit
facility of $4.0 billion or the equivalent amount in
Canadian dollars. The Credit Facility, which is unsecured,
currently has an interest rate of LIBOR plus 2.00% on
143
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 drawn amounts, and a commitment rate of 0.35% on
undrawn amounts. In December 2015, $3.61 billion of
the $4 billion credit facility was extended from January
2020 to January 2021. The remaining $390 million
currently terminates in January 2020. The 2012 Credit
Facility is undrawn as at December 31, 2015.
2.50%/4.10%/5.75% Notes
On May 2, 2013, we issued an aggregate of $3 billion in
notes through Barrick and our wholly-owned indirect
subsidiary Barrick North America Finance LLC consisting
of $650 million of 2.50% notes that mature in 2018,
$1.5 billion of 4.10% notes that mature in 2023 and
$850 million of 5.75% notes issued by BNAF that mature
in 2043. $2.0 billion of the net proceeds from this
offering were used to repay existing indebtedness under
our $4 billion revolving credit facility. We provided an
unconditional and irrevocable guarantee on the
$850 million of 5.75% notes issued by BNAF, which
will rank equally with our other unsecured and
unsubordinated obligations.
During 2013, $398 million of the $650 million
2.50% notes were repaid. During 2015, $769 million of
4.1% notes and $129 million of 2.5% notes were repaid.
Acacia Credit Facility
In January 2013, Acacia concluded negotiations with a
group of commercial banks for the provision of an export
credit backed term loan facility (the “Facility”) for the
amount of US$142 million. The Facility was put in place
to fund a substantial portion of the construction costs of
the new CIL circuit at the process plant at the Bulyanhulu
Project (the “Project”). The Facility is collateralized by the
Project, has a term of seven years and, when drawn, the
spread over LIBOR will be 250 basis points. The Facility is
repayable in equal installments over the term of the
Facility, after a two-year repayment holiday period. The
interest rate has been fixed at an effective rate of
3.6% through the use of an interest rate swap. At
December 31, 2014, the full value of the Facility was
drawn and in 2015, $14 million was repaid.
Interest
2015
2014
For the years ended December 31
2.9%/4.4%/5.7% notes
3.85%/5.25% notes
5.80% notes
5.75%/6.35% notes
Other fixed rate notes
Project financing
Capital leases
Other debt obligations
2.5%/4.10%/5.75% notes
Acacia credit facility
Deposits on silver contracts (note 28)
Deposits on gold and silver streaming (note 28)
Accretion
Other interest
Gain on debt extinguishment
Less: interest capitalized
Interest
cost
Effective
rate1
5.12%
4.65%
5.87%
8.73%
6.59%
5.46%
4.45%
6.08%
4.73%
3.59%
8.40%
6.15%
$ 120
86
23
66
177
41
11
41
118
5
61
9
63
3
(68)
$ 756
(17)
$ 739
Effective
rate1
4.84%
4.44%
5.87%
6.25%
6.50%
5.09%
3.51%
5.97%
4.59%
2.80%
8.32%
n/a
Interest
cost
$ 118
89
23
54
179
47
13
46
120
4
57
–
75
1
–
$ 826
(30)
$ 796
1. The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest
rate contracts designated in a hedging relationship with debt.
144
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Scheduled Debt Repayments1
Maturity
Year
Issuer
2016
2017
2018
2019
2020
2021 and
thereafter
Total
2.50% notes
6.80% notes3
6.95% notes3
4.95% notes3
7.31% notes2
4.40% notes
3.85% notes
4.10% notes
7.73% notes2
7.70% notes2
7.37% notes2
8.05% notes2
6.38% notes2
5.80% notes
5.80% notes
6.45% notes2
6.35% notes
7.50% notes3
5.95% notes3
5.70% notes
5.25% notes
5.75% notes
Other debt obligations2
Project financing
Acacia credit facility
Minimum annual payments
under capital leases
BGC
BNAF
BGC
BPDAF
BGC
BNAF
BGC
BGC
BGC
BGC
BGC
BGC
BGC
BGC
BGFC
BGC
BHMC
BNAF
BPDAF
BNAF
BGC
BNAF
2018
2018
2019
2020
2021
2021
2022
2023
2025
2025
2026
2026
2033
2034
2034
2035
2036
2038
2039
2041
2042
2043
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
45
89
28
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5
89
29
$ 123
500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
89
28
$
–
–
475
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
89
29
$
–
–
–
400
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
89
14
$
– $ 123
500
–
475
–
400
–
7
7
1,350
1,350
337
337
731
731
7
7
5
5
32
32
15
15
200
200
200
200
200
200
300
300
600
600
250
250
850
850
850
850
750
750
850
850
55
–
677
232
128
–
$ 162
$ 123
$ 744
$ 594
$ 503
$ 7,766 $ 9,892
$ 41
$ 37
$ 30
$ 16
$
9
$
20 $ 153
1. This table illustrates the contractual undiscounted cash flows, and may not agree with the amounts disclosed in the consolidated balance sheet.
2. Included in Other debt obligations in the Long-Term Debt table.
3. Included in Other fixed rate notes in the Long-Term Debt table.
145
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
The time frame and manner in which we manage those
risks varies for each item based upon our assessment of
the risk and available alternatives for mitigating risk. For
these particular risks, we believe that derivatives are an
appropriate way of managing the risk.
We use derivatives as part of our risk management
program to mitigate variability associated with changing
market values related to the hedged item. Many of the
derivatives we use meet the hedge effectiveness criteria
and are designated in a hedge accounting relationship.
Certain derivatives are designated as either hedges
of the fair value of recognized assets or liabilities or of
firm commitments (“fair value hedges”) or hedges of
highly probable forecasted transactions (“cash flow
hedges”), collectively known as “accounting hedges”.
Hedges that are expected to be highly effective in
achieving offsetting changes in fair value or cash flows
are assessed on an ongoing basis to determine that
they actually have been highly effective throughout the
financial reporting periods for which they were
designated. Some of the derivative instruments we
use are effective in achieving our risk management
objectives, but they do not meet the strict hedge
accounting criteria. These derivatives are considered
to be “non-hedge derivatives”.
c) Derivative Instruments (“Derivatives”)
In the normal course of business, our assets, liabilities
and forecasted transactions, as reported in US dollars,
are impacted by various market risks including, but not
limited to:
Item
Sales
Impacted by
Prices of gold, silver
and copper
By-product credits
Prices of silver, copper
and gold
Cost of sales
Consumption of diesel fuel,
propane, natural gas, and
electricity
Prices of diesel fuel,
propane, natural gas,
and electricity
Non-US dollar expenditures
General and administration,
exploration and evaluation costs
Currency exchange rates –
US dollar versus A$, ARS,
C$, CLP, EUR, PGK, TZS,
ZAR, and ZMW
Currency exchange rates –
US dollar versus A$, ARS,
C$, CLP, GBP, PGK, TZS,
ZAR, and ZMW
Capital expenditures
Non-US dollar capital
Currency exchange
expenditures
rates – US dollar versus
A$, ARS, C$, CLP, EUR,
GBP, PGK, and ZAR
Consumption of steel
Price of steel
Interest earned on cash
US dollar interest rates
and equivalents
Interest paid on fixed-rate
US dollar interest rates
borrowings
146
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 d) Summary of Derivatives at December 31, 2015
Notional amount by term to maturity
Accounting
classification by
notional amount
Within
1 year
2 to 3
years
4 to 5
years
Total
Cash flow
hedge
Non-
hedge
Fair value
(USD)
US dollar interest rate contracts (US$ millions)
Total receive-float swap positions
Currency contracts
A$:US$ contracts (A$ millions)
Commodity contracts
Fuel contracts (thousands of barrels)1
$ 28
$ 57
$ 43
$ 128
$ 128
$ –
87
–
2,933
3,173
–
–
87
6,106
85
2
4,988
1,118
(228)
$ 1
(36)
1. Fuel contracts represent a combination of WTI swaps and BRENT options. These derivatives hedge physical supply contracts based on the price of fuel across our
operating mine sites plus a spread. WTI represents West Texas Intermediate and BRENT represents Brent Crude Oil.
Fair Values of Derivative Instruments
Asset derivatives
Liability derivatives
Balance
Fair value
as at
sheet Dec. 31,
2015
classification
Fair value
as at
Dec. 31,
2014
Balance
Fair value
as at
sheet Dec. 31,
2015
classification
Fair value
as at
Dec. 31,
2014
Derivatives designated as
hedging instruments
US dollar interest
rate contracts
Currency contracts
Commodity contracts1
Total derivatives classified
as hedging instruments
Derivatives not designated as
hedging instruments
US dollar interest rate contracts
Currency contracts
Commodity contracts
Total derivatives not designated
as hedging instruments
Total derivatives
Other assets
Other assets
Other assets
$ 1
–
–
$ 2
–
–
Other liabilities
Other liabilities
Other liabilities
$
–
16
190
$ 1
71
–
$ 1
$ 2
$ 206
$ 72
Other assets
Other assets
Other assets
$ –
–
–
$ –
$ 1
$ –
4
3
$ 7
$ 9
Other liabilities
Other liabilities
Other liabilities
$
–
20
38
$
–
30
185
$ 58
$ 215
$ 264
$ 287
1. The majority of our fuel contracts are now being designated as hedging instruments as a result of adoption of IFRS 9. These contracts did not qualify for hedge
accounting prior to January 1, 2015.
As of December 31, 2015, we had 19 counterparties to
our derivative positions. We proactively manage our
exposure to individual counterparties in order to mitigate
both credit and liquidity risks. We have one counterparty
with which we hold a net asset position of $0.2 million,
and 18 counterparties with which we are in a net liability
position, for a total net liability of $263 million. On an
ongoing basis, we monitor our exposures and ensure
that none of the counterparties with which we hold
outstanding contracts has declared insolvency.
US Dollar Interest Rate Contracts
Fair Value Hedges
During 2014, we closed out $400 million of pay-variable
receive-fixed swap positions which were used to hedge
the fair value of a portion of our long-term fixed-rate debt.
Cash Flow Hedges
At December 31, 2015, Acacia has $128 million of
pay-fixed receive-float interest rate swaps to hedge the
floating rate debt associated with the Bulyanhulu plant
147
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
expansion. These contracts, designated as cash flow
hedges, convert the floating rate debt as it is drawn
against the Financing agreement.
Currency Contracts
Cash Flow Hedges
During the year, no currency contracts have been
designated against forecasted non-US dollar denominated
expenditures. In total, we have A$85 million designated
as cash flow hedges of our anticipated operating,
administrative and sustaining capital spend. The
outstanding contracts hedge the variability of the
US dollar amount of those expenditures caused by
changes in currency exchange rates over the next year.
The effective portion of changes in fair value of the
currency contracts is recorded in OCI until the forecasted
expenditure impacts earnings. Gains and losses from
hedge ineffectiveness are recognized in current earnings
classified in the consolidated statement of income as
gains (losses) on non-hedge derivatives.
During 2014, we sold back and effectively closed
out approximately C$149 million of our Canadian dollar
option contracts as a loss mitigation strategy. We
crystallized losses of approximately $1 million, which
were recognized in the consolidated statement of
income based on the original hedge contract maturity
dates. At December 31, 2015, none of these losses
remain crystallized in OCI.
During 2013, we sold back and effectively closed out
approximately A$990 million of our Australian dollar
forward contracts as a loss mitigation strategy. No cash
settlement occurred and payments will net at maturity
(2014–2016). Including Australian dollar contracts closed
out in 2012, $14 million of losses remain crystallized in
OCI at December 31, 2015.
Non-Hedge Derivatives
The non-hedge currency contracts are used to mitigate
the variability of the US dollar amount of non-US dollar
denominated exposures that do not meet the strict
hedge effectiveness criteria. Changes in the fair value
of the non-hedge currency contracts are recorded in the
consolidated statement of income as gains (losses) on
non-hedge derivatives.
During the year, we did not write any currency
options. As a result, there are no outstanding notional
amounts to report at December 31, 2015.
Commodity Contracts
Diesel/Propane/Electricity/Natural Gas
Cash Flow Hedges
During the year, 8,040 thousand barrels of WTI were
designated against forecasted fuel consumption at our
mines, some of which are hedges which matured within
the year. These contracts are now being designated as
hedging instruments as a result of adopting IFRS 9 and
did not qualify for hedge accounting prior to January 1,
2015. In total, we have 4,988 thousand barrels of WTI
designated as cash flow hedges of our exposure to
forecasted fuel purchases at our mines.
Non-Hedge Derivatives
During the year, we entered into a contract to purchase
294 thousand barrels of Brent to economically hedge
our exposure to forecasted fuel purchases for expected
consumption at our mines. In total, on a combined basis
we have 466 thousand barrels of Brent swaps outstanding
that economically hedge our exposure to forecasted fuel
purchases at our mines.
During the year, we did not write any fuel options.
As a result, there are no outstanding notional amounts
to report at December 31, 2015.
Metals Contracts
Cash Flow Hedges
During 2013, we purchased 251 million pounds of
copper collars for 2014 which matured evenly
throughout 2014. These contracts contained purchased
put and sold call options with weighted average strike
prices of $3.00/lb and $3.75/lb, respectively. At
December 31, 2014, there are no remaining positions
classified as cash flow hedges or economic hedges of
our Zaldívar mine. Previously, these contracts were
designated as cash flow hedges, with the effective
portion of the hedge recognized in OCI and the
ineffective portion, together with the changes in time
value, recognized in non-hedge derivative gains (losses).
Provided that the spot copper price remained within the
collar band, any unrealized gain (loss) on the collar was
attributable to time value.
During 2014, we recorded unrealized losses on our
copper collars of $6 million to changes in time value. This
was included in current period earnings as losses on
non-hedge derivative activities. Gains and losses from
hedge ineffectiveness and time value of options, which
148
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 are generally excluded, are recognized in the
consolidated statement of income as gains on non-
hedge derivatives.
ineffective amounts or time value have been recognized
in the consolidated statements of income as gains on
non-hedge derivatives.
During 2013, we early terminated 65 million ounces
of silver hedges. We realized net cash proceeds of
approximately $190 million with $16 million remaining
crystallized in OCI at December 31, 2015, to be
recognized in revenue as the exposure occurs. Any
unrealized changes and realized gains/losses on
Non-Hedge Derivatives
We enter into purchased and written contracts with the
primary objective of increasing the realized price on some
of our gold sales. During the year, we did not write any
metal options. As a result, there are no outstanding
notional amounts to report at December 31, 2015.
Cash Flow Hedge Gains (Losses) in Accumulated Other Comprehensive Income (“AOCI”)
Commodity
price hedges
Gold/Silver1
Copper
Operating
costs
Fuel
Currency hedges
General and
administrative
costs
Interest rate
hedges
Capital
expenditures
Long-term
debt
Total
$ 18
$ –
$
(4)
$ 53
$ (2)
$ –
$ (26)
$ 39
At January 1, 2014
Effective portion of change in
value of hedging instruments
Transfers to earnings:
On recording hedged items in
earnings/PP&E1
Hedge ineffectiveness due to changes
in original forecasted transaction
At December 31, 2014
Impact of adopting IFRS 9 on
January 1, 2015
Effective portion of change in
fair value of hedging instruments
Transfers to earnings:
On recording hedged items in
earnings/PP&E1
Hedge ineffectiveness due to changes
in original forecasted transaction
$ 18
$ –
$
–
–
–
(2)
–
–
–
(4)
–
–
–
–
–
2
–
(44)
4
(93)
5
$ (79)
–
–
–
3
(4)
–
–
–
–
(2)
(41)
3
(92)
–
5
$ (3)
$ –
$ (25)
$ (89)
(5)
–
–
–
(5)
(135)
(27)
(14)
(2)
1
(177)
19
70
17
14
11
–
2
–
2
106
–
25
At December 31, 2015
$ 14
$ –
$ (102)
$ (30)
$ –
$ –
$ (22)
$ (140)
Hedge gains/losses classified within
Gold/Silver
sales
Copper
sales
Cost of
sales
Cost of
sales
General and
administrative
costs
Property,
plant and
equipment
Interest
expense
Total
Portion of hedge gain (loss)
expected to affect 2016 earnings2
$ 4
$ –
$ (43)
$ (30)
$ –
$ –
$
(3)
$ (72)
1. Realized gains (losses) on qualifying currency hedges of capital expenditures are transferred from OCI to PP&E on settlement.
2. Based on the fair value of hedge contracts at December 31, 2015.
149
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Cash Flow Hedge Gains (Losses) at December 31
Derivatives in cash flow
hedging relationships
Amount of gain
(loss) recognized
in OCI
2015
2014
Location of gain (loss)
transferred from OCI
into income/PP&E
(effective portion)
Amount of gain
(loss) transferred
from OCI into income
(effective portion)
2015
2014
Interest rate contracts $
1
$
(2) Finance income/finance costs
$
(2)
$
(3)
Foreign exchange
contracts
(43)
(41)
Cost of sales/general and
administrative costs/PP&E
(89)
97
Commodity contracts
(135)
2
Revenue/cost of sales
(15)
(2)
Total
$ (177)
$ (41)
$ (106)
$ 92
Location of gain (loss)
recognized in income
(ineffective portion and
amount excluded from
effectiveness testing)
Amount of gain (loss)
recognized in income
(ineffective portion and
amount excluded from
effectiveness testing)
Gain (loss) on non-
hedge derivatives
Gain (loss) on non-
hedge derivatives
Gain (loss) on non-
hedge derivatives
2015
2014
$
–
$
–
(11)
(14)
(4)
(6)
$ (25)
$ (10)
e) Gains (Losses) on Non-hedge Derivatives
2015
For the years ended December 31
Commodity contracts
Gold
Silver
Copper
Fuel
Currency contracts
Interest rate contracts
$
–
5
–
(10)
(8)
–
2014
$
1
–
3
(181)
(8)
2
$ (13)
$ (183)
f) Derivative Assets and Liabilities
At January 1
Derivatives cash (inflow) outflow
Operating activities
Financing activities
Change in fair value of:
Non-hedge derivatives
Cash flow hedges:
Effective portion
Ineffective portion
Excluded from effectiveness changes
Gains (losses) attributable to copper option
collar hedges1
Gains (losses) attributable to currency option
collar hedges1
Hedge ineffectiveness
$
–
$
(6)
At December 31
–
(25)
1
(5)
$ (25)
$
(10)
$ (38)
$ (193)
Classification:
Other current assets
Other long-term assets
Other current liabilities
Other long-term obligations
1. Represents unrealized gains (losses) attributable to changes in time value
of the collars, which were excluded from the hedge effectiveness assessment
in 2014.
25 Fair Value Measurements
2015
2014
$ (278)
$
(59)
211
–
14
(9)
(13)
(183)
(177)
25
(31)
(41)
5
(5)
$ (263)
$ (278)
$
–
1
(160)
(104)
$
7
2
(158)
(129)
$ (263)
$ (278)
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value hierarchy establishes three levels to classify
the inputs to valuation techniques used to measure fair
value. Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities. Level 2
inputs are quoted prices in markets that are not active,
quoted prices for similar assets or liabilities in active
markets, inputs other than quoted prices that are
observable for the asset or liability (for example, interest
rate and yield curves observable at commonly quoted
intervals, forward pricing curves used to value currency
and commodity contracts and volatility measurements
used to value option contracts), or inputs that are
derived principally from or corroborated by observable
market data or other means. Level 3 inputs are
unobservable (supported by little or no market activity).
The fair value hierarchy gives the highest priority to
Level 1 inputs and the lowest priority to Level 3 inputs.
150
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
a) Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair Value Measurements
At December 31, 2015
Cash and equivalents
Other investments
Derivatives
Receivables from provisional copper and gold sales
Fair Value Measurements
At December 31, 2014
Cash and equivalents
Other investments
Derivatives
Receivables from provisional copper and gold sales
b) Fair Values of Financial Assets and Liabilities
Financial assets
Other receivables
Other investments1
Derivative assets
Financial liabilities
Debt2
Derivative liabilities
Other liabilities
Quoted prices
in active
markets for
identical assets
(Level 1)
$ 2,455
8
–
–
$ 2,463
Quoted prices
in active
markets for
identical assets
(Level 1)
$ 2,699
35
–
–
$ 2,734
Significant
other
observable
inputs
(Level 2)
$
–
–
(263)
76
$ (187)
Significant
other
observable
inputs
(Level 2)
$
–
–
(278)
184
$ (94)
Significant
unobservable
inputs
(Level 3)
$ –
–
–
–
$ –
Significant
unobservable
inputs
(Level 3)
$ –
–
–
–
$ –
Aggregate
fair value
$ 2,455
8
(263)
76
$ 2,276
Aggregate
fair value
$ 2,699
35
(278)
184
$ 2,640
At Dec. 31, 2015
At Dec. 31, 2014
Carrying
amount
Estimated
fair value
Carrying
amount
Estimated
fair value
$
365
8
1
$
365
8
1
$
385
35
9
$
385
35
9
$
374
$
374
$
429
$
429
$ 9,968
264
223
$ 8,516
264
223
$ 13,081
287
360
$ 13,356
287
360
$ 10,455
$ 9,003
$ 13,728
$ 14,003
1. Recorded at fair value. Quoted market prices are used to determine fair value.
2. Debt is generally recorded at amortized cost except for obligations that are designated in a fair-value hedge relationship, in which case the carrying amount is
adjusted for changes in fair value of the hedging instrument in periods when a hedge relationship exists. The fair value of debt is primarily determined using quoted
market prices. Balance includes both current and long-term portions of debt.
We do not offset financial assets with financial liabilities.
151
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
c) Assets Measured at Fair Value on a Non-Recurring Basis
Other assets1
Property, plant and equipment2
Goodwill3
Quoted prices
in active
markets for
identical assets
(Level 1)
$ –
–
–
Significant
other
observable
inputs
(Level 2)
$ –
–
–
Significant
unobservable
inputs
(Level 3)
$
–
5,450
1,214
Aggregate
fair value
$
–
5,450
1,214
1. Other assets were written down by $49 million which was included in earnings in this period, to their fair value of $nil.
2. Property, plant and equipment were written down by $1,747 million which was included in earnings in this period, to their fair value less costs of disposal
of $5,450 million.
3. Goodwill was written down as a result of impairment of CGUs by $2,171 million which was included in earnings in this period.
Valuation Techniques
Cash Equivalents
The fair value of our cash equivalents is classified within
Level 1 of the fair value hierarchy because they are
valued using quoted market prices in active markets. Our
cash equivalents are comprised of U.S. Treasury bills and
money market securities that are invested primarily in
U.S. Treasury bills.
Other Investments
The fair value of other investments is determined based
on the closing price of each security at the balance sheet
date. The closing price is a quoted market price obtained
from the exchange that is the principal active market for
the particular security, and therefore other investments
are classified within Level 1 of the fair value hierarchy.
Derivative Instruments
The fair value of derivative instruments is determined
using either present value techniques or option pricing
models that utilize a variety of inputs that are a
combination of quoted prices and market-corroborated
inputs. The fair value of all our derivative contracts
includes an adjustment for credit risk. For counterparties
in a net asset position, credit risk is based upon the
observed credit default swap spread for each particular
counterparty, as appropriate. For counterparties in a net
liability position, credit risk is based upon Barrick’s
observed credit default swap spread. The fair value of
US dollar interest rate and currency swap contracts is
determined by discounting contracted cash flows using
a discount rate derived from observed LIBOR and swap
rate curves and CDS rates. In the case of currency
contracts, we convert non-US dollar cash flows into
US dollars using an exchange rate derived from currency
swap curves and CDS rates. The fair value of commodity
forward contracts is determined by discounting contractual
cash flows using a discount rate derived from observed
LIBOR and swap rate curves and CDS rates. Contractual
cash flows are calculated using a forward pricing
curve derived from observed forward prices for each
commodity. Derivative instruments are classified within
Level 2 of the fair value hierarchy.
Receivables from Provisional Copper and Gold Sales
The fair value of receivables arising from copper and gold
sales contracts that contain provisional pricing mechanisms
is determined using the appropriate quoted forward
price from the exchange that is the principal active
market for the particular metal. As such, these receivables,
which meet the definition of an embedded derivative,
are classified within Level 2 of the fair value hierarchy.
Other Long-Term Assets
The fair value of property, plant and equipment, goodwill,
intangibles and other assets is determined primarily using
an income approach based on unobservable cash flows
and a market multiples approach where applicable, and
as a result is classified within Level 3 of the fair value
hierarchy. Refer to note 20 for disclosure of inputs used
to develop these measures.
152
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
26 Provisions
a) Provisions
Environmental rehabilitation
(“PER”)
Post-retirement benefits
Share-based payments
Other employee benefits
Other
b) Environmental Rehabilitation
At January 1
PERs divested during the year
PERs arising (decreasing) in the year
Impact of revisions to expected cash flows
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 1,920
86
24
46
26
$ 2,375
103
21
33
29
$ 2,102
$ 2,561
2015
2014
$ 2,484
(170)
(229)
$ 2,359
(17)
125
recorded in earnings
38
58
27 Financial Risk Management
Our financial instruments are comprised of financial
liabilities and financial assets. Our principal financial
liabilities, other than derivatives, comprise accounts
payable and debt. The main purpose of these financial
instruments is to manage short-term cash flow and raise
funds for our capital expenditure program. Our principal
financial assets, other than derivative instruments, are
cash and equivalents and accounts receivable, which
arise directly from our operations. In the normal course
of business, we use derivative instruments to mitigate
exposure to various financial risks.
We manage our exposure to key financial risks in
accordance with our financial risk management policy.
The objective of the policy is to support the delivery
of our financial targets while protecting future financial
security. The main risks that could adversely affect
our financial assets, liabilities or future cash flows are
as follows:
a) Market risk, including commodity price risk, foreign
Settlements
Cash payments
Settlement gains
Accretion
Assets held-for-sale
At December 31
Current portion (note 23)
(89)
(6)
63
(109)
(108)
(8)
75
–
currency and interest rate risk;
b) Credit risk;
c) Liquidity risk; and
d) Capital risk management.
$ 1,982
$ 2,484
(62)
(109)
$ 1,920
$ 2,375
The eventual settlement of all PERs is expected to take
place between 2015 and 2054.
The PER has decreased in fourth quarter 2015 by
$162 million primarily due to changes in cost estimates,
partially offset by changes in discount rates. For the year
ended December 31, 2015, our PER balance decreased
by $502 million as a result of divestments as well
as various impacts at our mine sites including new
requirements related to water treatment, expanded
footprints of our operations and updated estimates
for reclamation activities. A 1% increase in the discount
rate would result in a decrease in PER by $286 million
and a 1% decrease in the discount rate would result in
an increase in PER by $374 million, while holding the
other assumptions constant.
Management designs strategies for managing each
of these risks, which are summarized below. Our senior
management oversees the management of financial
risks. Our senior management ensures that our financial
risk-taking activities are governed by policies and
procedures and that financial risks are identified,
measured and managed in accordance with our policies
and our risk appetite. All derivative activities for
risk management purposes are carried out by the
appropriate functions.
a) Market Risk
Market risk is the risk that changes in market factors,
such as commodity prices, foreign exchange rates or
interest rates, will affect the value of our financial
instruments. We manage market risk by either accepting
it or mitigating it through the use of derivatives and
other economic hedging strategies.
153
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Commodity Price Risk
Gold and Copper
We sell our gold and copper production in the world
market. The market prices of gold and copper are the
primary drivers of our profitability and ability to generate
both operating and free cash flow. All of our future gold
and copper production is unhedged in order to provide
our shareholders with full exposure to changes in the
market gold and copper prices.
Fuel
On average we consume approximately 4 million barrels
of diesel fuel annually across all our mines. Diesel fuel is
refined from crude oil and is therefore subject to the
same price volatility affecting crude oil prices. Therefore,
volatility in crude oil prices has a significant direct and
indirect impact on our production costs. To mitigate this
volatility, we employ a strategy of using financial
contracts to hedge our exposure to oil prices.
Foreign Currency Risk
The functional and reporting currency for all of our
operating segments is the US dollar and we report our
results using the US dollar. The majority of our operating
and capital expenditures are denominated and settled
in US dollars. We have exposure to the Australian dollar
and Canadian dollar through a combination of mine
operating costs and general and administrative costs;
and to the Papua New Guinea kina, Peruvian sol, Chilean
peso, Argentinean peso, Dominican Republic peso
and Zambian kwacha through mine operating costs.
Consequently, fluctuations in the US dollar exchange
rate against these currencies increase the volatility of
cost of sales, general and administrative costs and overall
net earnings, when translated into US dollars. To mitigate
these inherent risks and provide greater certainty over
certain costs, we had foreign currency hedges in place
for some of our Australian dollar, Canadian dollar and
Chilean peso exposures. We have had a significant
decrease in our hedging program over the last few
years and as a result, we now have greater exposure
to fluctuations in the value of the Chilean peso
and Australian and Canadian dollars compared to the
US dollar.
The following table shows gains (losses) associated with
a 10% change in exchange rate of the Australian dollar:
Impact of a 10% change in exchange rate of Australian dollar
Average
exchange rate
Effect on
net earnings
Effect on
equity
2015 2014
2015 2014
2015 2014
10% strengthening $ 0.75 $ 0.90
0.75 0.90
10% weakening
$ (11) $ (33)
33
11
$ (11) $ (33)
11
33
Interest Rate Risk
Interest rate risk refers to the risk that the value of a
financial instrument or cash flows associated with the
instruments will fluctuate due to changes in market
interest rates. Currently, our interest rate exposure mainly
relates to interest receipts on our cash balances
($2.5 billion at the end of the year); the mark-to-market
value of derivative instruments; the fair value and
ongoing payments under US dollar interest-rate swaps;
and to the interest payments on our variable-rate debt
($0.6 billion at December 31, 2015).
The following table shows the approximate interest
rate sensitivities of our financial assets and liabilities as
at December 31:
Impact of a 1% change in interest rate
Effect on
net earnings
Effect on
equity
2015
2014
2015
2014
$ 13
(13)
$ 12
(12)
$ 13
(13)
$ 12
(12)
1% increase
1% decrease
b) Credit Risk
Credit risk is the risk that a third party might fail to fulfill
its performance obligations under the terms of a financial
instrument. Credit risk arises from cash and equivalents,
trade and other receivables as well as derivative assets.
For cash and equivalents and trade and other receivables,
credit risk exposure equals the carrying amount on the
balance sheet, net of any overdraft positions. To mitigate
our inherent exposure to credit risk we maintain
policies to limit the concentration of credit risk, review
counterparty creditworthiness on a monthly basis, and
154
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
ensure liquidity of available funds. We also invest our
cash and equivalents in highly rated financial institutions,
primarily within the United States and other investment
grade countries1. Furthermore, we sell our gold and
copper production into the world market and to private
customers with strong credit ratings. Historically
customer defaults have not had a significant impact on
our operating results or financial position.
For derivatives with a positive fair value, we are
exposed to credit risk equal to the carrying value. When
the fair value of a derivative is negative, we assume no
credit risk. We mitigate credit risk on derivatives by:
Entering into derivatives with high credit-quality
counterparties;
Limiting the amount of net exposure with each
counterparty; and
Monitoring the financial condition of counterparties
on a regular basis.
The Company’s maximum exposure to credit risk at
the reporting date is the carrying value of each of the
financial assets disclosed as follows:
Cash and equivalents
Accounts receivable
Net derivative assets
by counterparty
As at
Dec. 31,
2015
$ 2,455
275
As at
Dec. 31,
2014
$ 2,699
418
–
1
$ 2,730
$ 3,118
1. Investment grade countries include Canada, Chile, Australia, and Peru.
Investment grade countries are defined as being rated BBB- or higher by S&P.
c) Liquidity Risk
Liquidity risk is the risk of loss from not having access to
sufficient funds to meet both expected and unexpected
cash demands. We manage our exposure to liquidity risk
by maintaining cash reserves, access to undrawn credit
facilities and access to public debt markets, by staggering
the maturities of outstanding debt instruments to
mitigate refinancing risk and by monitoring of forecasted
and actual cash flows. Details of the undrawn credit
facility are included in note 24.
Our capital structure comprises a mix of debt and
shareholders’ equity. As at December 31, 2015, our
total debt was $10.0 billion (debt net of cash and
equivalents was $7.5 billion) compared to total debt as
at December 31, 2014 of $13.1 billion (debt net of
cash and equivalents was $10.4 billion).
As part of our capital allocation strategy, we are
constantly evaluating our capital expenditures and
making reductions where the risk-adjusted returns do
not justify the investment. Our primary source of liquidity
is our operating cash flow. Other options to enhance
liquidity include drawing the $4.0 billion available under
our Credit Facility (subject to compliance with covenants
and the making of certain representations and
warranties, this facility is available for drawdown as a
source of financing), further asset sales and issuances of
debt or equity securities in the public markets or to
private investors, which could be undertaken for liquidity
enhancement and/or in connection with establishing a
strategic partnership. Many factors, including, but not
limited to, general market conditions and then prevailing
metals prices could impact our ability to issue securities
on acceptable terms, as could our credit ratings. Moody’s
and S&P rate our long-term debt Baa3 and BBB-,
respectively. Changes in our ratings could affect the
trading prices of our securities and our cost of capital.
If we were to borrow under our Credit Facility, the
applicable interest rate on the amounts borrowed would
be based, in part, on our credit ratings at the time. The
key financial covenant, which was amended in fourth
quarter 2015, in the Credit Facility (undrawn as at
December 31, 2015) requires Barrick to maintain a net
debt to total capitalization ratio, as defined in the
agreement, of 0.60:1 or lower (Barrick’s net debt to total
capitalization ratio was 0.44:1 as at December 31, 2015).
The following table outlines the expected maturity of
our significant financial assets and liabilities into relevant
maturity groupings based on the remaining period from
the balance sheet date to the contractual maturity date.
As the amounts disclosed in the table are the contractual
undiscounted cash flows, these balances may not agree
with the amounts disclosed in the balance sheet.
155
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
As at December 31, 2015
(in $ millions)
Cash and equivalents
Accounts receivable
Derivative assets
Trade and other payables
Debt
Derivative liabilities
Other liabilities
As at December 31, 2014
(in $ millions)
Cash and equivalents
Accounts receivable
Derivative assets
Trade and other payables
Debt
Derivative liabilities
Other liabilities
Less than 1 year
1 to 3 years
3 to 5 years Over 5 years
Total
$ 2,455
275
–
1,158
203
160
40
$
–
–
1
–
934
102
44
$
–
–
–
–
1,122
2
17
$
–
–
–
–
7,786
–
122
$ 2,455
275
1
1,158
10,045
264
223
Less than 1 year
1 to 3 years
3 to 5 years
Over 5 years
Total
$ 2,699
418
7
1,653
333
157
67
$
–
–
1
–
919
117
112
$
–
–
1
–
1,853
13
46
$
–
–
–
–
10,082
–
135
$ 2,699
418
9
1,653
13,187
287
360
d) Capital Risk Management
Our objective when managing capital is to provide value
for shareholders by maintaining an optimal short-term
and long-term capital structure in order to reduce the
overall cost of capital while preserving our ability to
continue as a going concern. Our capital management
objectives are to safeguard our ability to support our
operating requirements on an ongoing basis, continue
the development and exploration of our mineral
properties and support any expansion plans. Our
objectives are also to ensure that we maintain a strong
balance sheet and optimize the use of debt and equity to
support our business and provide financial flexibility in
order to maximize shareholder value. We define capital
as total debt less cash and equivalents and it is managed
by management subject to approved policies and limits
by the Board of Directors. We have no significant
financial covenants or capital requirements with our
lenders or other parties other than what is discussed
under liquidity risk in note 27.
28 Other Non-Current Liabilities
As at
Dec. 31,
2015
Deposit on silver sale agreement
Deposit on gold and silver streaming agreement
Derivative liabilities (note 24f)
Deferred revenue
Provision for supply contract restructuring costs
Provision for offsite remediation
Other
$ 716
565
104
2
–
55
144
As at
Dec. 31,
2014
$ 668
–
129
85
8
56
239
$ 1,586
$ 1,185
Silver Sale Agreement
Our silver sale agreement with Silver Wheaton Corp.
(“Silver Wheaton”) requires us to deliver 25 percent of
the life of mine silver production from the Pascua-Lama
project and 100 percent of silver production from the
Lagunas Norte, Pierina and Veladero mines (“South
American mines”) until the end of 2018. In return, we
156
were entitled to an upfront cash payment of $625 million
payable over three years from the date of the agreement,
as well as ongoing payments in cash of the lesser of
$3.90 (subject to an annual inflation adjustment of
1 percent starting three years after project completion at
Pascua-Lama) and the prevailing market price for each
ounce of silver delivered under the agreement.
An imputed interest expense is being recorded on
the liability at the rate implicit in the agreement. The
liability plus imputed interest will be amortized based on
the difference between the effective contract price for
silver and the amount of the ongoing cash payment per
ounce of silver delivered under the agreement.
Gold and Silver Streaming Agreement
On September 29, 2015, we closed a gold and silver
streaming transaction with Royal Gold, Inc. (“Royal
Gold”) for production linked to Barrick’s 60 percent
interest in the Pueblo Viejo mine. Royal Gold made an
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
upfront cash payment of $610 million and will continue
to make cash payments for gold and silver delivered
under the agreement. The $610 million upfront payment
is not repayable and Barrick is obligated to deliver gold
and silver based on Pueblo Viejo’s production. We have
accounted for the upfront payment as deferred revenue
and will recognize it in earnings, along with the ongoing
cash payments, as the gold and silver is delivered to
Royal Gold. We will also be recording accretion expense
on the deferred revenue balance as the time value of
the upfront deposit represents a significant component
of the transaction.
Under the terms of the agreement, Barrick will sell
gold and silver to Royal Gold equivalent to:
7.5 percent of Barrick’s interest in the gold produced
at Pueblo Viejo until 990,000 ounces of gold have
been delivered, and 3.75 percent thereafter.
75 percent of Barrick’s interest in the silver produced
at Pueblo Viejo until 50 million ounces have been
delivered, and 37.5 percent thereafter. Silver will be
delivered based on a fixed recovery rate of 70 percent.
Silver above this recovery rate is not subject to
the stream.
Barrick will receive ongoing cash payments from Royal
Gold equivalent to 30 percent of the prevailing spot
prices for the first 550,000 ounces of gold and
23.1 million ounces of silver delivered. Thereafter
payments will double to 60 percent of prevailing spot
prices for each subsequent ounce of gold and silver
delivered. Ongoing cash payments to Barrick are tied
to prevailing spot prices rather than fixed in advance,
maintaining exposure to higher gold and silver prices
in the future.
29 Deferred Income Taxes
Recognition and Measurement
We record deferred income tax assets and liabilities
where temporary differences exist between the carrying
amounts of assets and liabilities in our balance sheet and
their tax bases. The measurement and recognition of
deferred income tax assets and liabilities takes into
account: substantively enacted rates that will apply when
temporary differences reverse; interpretations of relevant
tax legislation; estimates of the tax bases of assets and
liabilities; and the deductibility of expenditures for
income tax purposes. In addition, the measurement and
recognition of deferred tax assets takes into account tax
planning strategies. We recognize the effect of changes
in our assessment of these estimates and factors when
they occur. Changes in deferred income tax assets and
liabilities are allocated between net income, other
comprehensive income, and goodwill based on the
source of the change.
Current income taxes of $89 million have been
provided on the undistributed earnings of certain foreign
subsidiaries. Deferred income taxes have not been
provided on the undistributed earnings of all other
foreign subsidiaries for which we are able to control the
timing of the remittance, and it is probable that there
will be no remittance in the foreseeable future. These
undistributed earnings amounted to $2,500 million as
at December 31, 2015.
Sources of Deferred Income Tax Assets and Liabilities
Deferred tax assets
Tax loss carry forwards
Alternative minimum tax (“AMT”) credits
Environmental rehabilitation
Property, plant and equipment
Post-retirement benefit obligations
and other employee benefits
Accrued interest payable
Derivative instruments
Other
Deferred tax liabilities
Property, plant and equipment
Inventory
Classification:
Non-current assets
Non-current liabilities
As at
Dec. 31,
2015
As at
Dec. 31,
2014
$ 475
22
560
320
$ 369
11
586
81
42
61
106
52
73
51
32
55
$ 1,638
$ 1,258
(1,713)
(438)
(2,216)
(404)
$
(513)
$ (1,362)
$ 1,040
(1,553)
$ 674
(2,036)
$
(513)
$ (1,362)
The deferred tax asset of $1,040 million includes
$925 million expected to be realized in more than one
year. The deferred tax liability of $1,553 million includes
$1,351 million expected to be realized in more than
one year.
157
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Expiry Dates of Tax Losses and AMT Credits
Non-capital tax losses1
Canada
Dominican Republic
Barbados
Chile
Tanzania
Zambia
Other
AMT credits2
2016
2017
2018
2019
2020+
$
–
–
627
–
–
–
9
$
–
–
148
–
–
–
5
$
–
–
4,751
–
–
186
7
$
–
–
926
–
–
–
–
$ 1,539
–
725
–
–
416
–
$
No
expiry
date
–
47
–
666
179
–
461
Total
$ 1,539
47
7,177
666
179
602
482
$ 636
$ 153
$ 4,944
$ 926
$ 2,680
$ 1,353
$ 10,692
$ 134
$
134
1. Represents the gross amount of tax loss carry forwards translated at closing exchange rates at December 31, 2015.
2. Represents the amounts deductible against future taxes payable in years when taxes payable exceed “minimum tax” as defined by United States tax legislation.
A deferred income tax asset totaling $558 million
(December 31, 2014: $505 million) has been recorded
in Canada. This deferred tax asset primarily arose from
derivative realized losses, finance costs, and general and
administrative expenses. A deferred tax asset totaling
$116 million (December 31, 2014: $nil) has been
recorded in a foreign subsidiary. This deferred tax asset
primarily arose from a realized loss on internal
restructuring of subsidiary corporations. Projections
of various sources of income support the conclusion that
the realizability of these deferred tax assets is probable
and consequently, we have fully recognized these
deferred tax assets.
Deferred Tax Assets Not Recognized
Australia and Papua New Guinea
Canada
US
Dominican Republic
Chile
Argentina
Barbados
Tanzania
Zambia
Saudi Arabia
As at
Dec. 31,
2015
$ 383
374
113
18
787
647
72
131
190
70
As at
Dec. 31,
2014
$ 367
371
93
–
776
823
68
92
–
67
$ 2,785
$ 2,657
The non-capital tax losses include $8,872 million of
losses which are not recognized in deferred tax assets. Of
these, $627 million expire in 2016, $148 million expire in
2017, $4,937 million expire in 2018, $926 million expire
in 2019, $1,365 million expire in 2020 or later, and
$869 million have no expiry date.
The AMT credits include $112 million which are not
recognized in deferred tax assets.
Recognition of Deferred Tax Assets
We recognize deferred tax assets taking into account
the effects of local tax law. Deferred tax assets are fully
recognized when we conclude that sufficient positive
evidence exists to demonstrate that it is probable that
a deferred tax asset will be realized. The main factors
considered are:
Historic and expected future levels of taxable income;
Tax plans that affect whether tax assets can be
realized; and
The nature, amount and expected timing of reversal
of taxable temporary differences.
Levels of future income are mainly affected by: market
gold, copper and silver prices; forecasted future costs
and expenses to produce gold and copper reserves;
quantities of proven and probable gold and copper
reserves; market interest rates; and foreign currency
exchange rates. If these factors or other circumstances
change, we record an adjustment to the recognition
of deferred assets to reflect our latest assessment of
the amount of deferred tax assets that is probable
will be realized.
158
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Deferred Tax Assets Not Recognized relate to: non-capital
loss carry forwards of $516 million (2014: $348 million),
capital loss carry forwards with no expiry date of
$602 million (2014: $518 million), US AMT credits of
$112 million (2014: $92 million) and other deductible
temporary differences with no expiry date of
$1,555 million (2014: $1,699 million).
Source of Changes in Deferred Tax Balances
For the years ended December 31
2015
2014
Temporary differences
Property, plant and equipment
Environmental rehabilitation
Tax loss carry forwards
AMT credits
Inventory
Derivatives
Other
Intraperiod allocation to:
Loss from continuing operations
before income taxes
Zaldívar disposition
Cowal disposition
OCI
Other
Income Tax Related Contingent Liabilities
At January 1
Additions based on tax positions related
to the current year
Reductions for tax positions of prior years
At December 311
$ 741
(25)
106
10
(34)
74
(23)
$ 228
(17)
118
2
4
22
38
$ 849
$ 395
$ 436
388
7
20
(2)
$ 380
–
–
15
–
$ 849
$ 395
2015
2014
$ 49
$ 51
13
(1)
1
(3)
$ 61
$ 49
1. If reversed, the total amount of $61 million would be recognized as a benefit
to income taxes on the income statement, and therefore would impact the
reported effective tax rate.
We anticipate the amount of income tax related
contingent liabilities to decrease within 12 months of the
reporting date by approximately $1 million to $2 million,
related primarily to the expected settlement of income
tax and mining tax assessments.
We further anticipate that it is reasonably possible
for the amount of income tax related contingent
liabilities to decrease within 12 months of the reporting
date by approximately $58 million through a potential
settlement with tax authorities that may result in a
reduction of available tax pools.
Tax Years Still Under Examination
Canada
United States
Dominican Republic
Peru
Chile
Argentina
Australia
Papua New Guinea
Saudi Arabia
Tanzania
Zambia
30 Capital Stock
2011–2015
2015
2012–2015
2009, 2011–2015
2012–2015
2008–2015
2011–2015
2004–2015
2007–2015
All years open
2010–2015
Authorized Capital Stock
Our authorized capital stock includes an unlimited number
of common shares (issued 1,165,081,379 common
shares); an unlimited number of first preferred shares
issuable in series (the first series is designated as the
“First Preferred Shares, Series A” and consists of
10,000,000 first preferred shares (issued nil); the second
series is designated as the “First Preference Shares,
Series B” and consists of 10,000,000 first preferred
shares (issued nil); and the third series is designated as
the “First Preferred Shares, Series C Special Voting
Share” and consists of 1 Special Voting Share (issued
nil)); and an unlimited number of second preferred
shares issuable in series (the first series is designated as
the “Second Preferred Shares, Series A” and consists
of 15,000,000 second preferred shares (issued nil)). Our
common shares have no par value.
Dividends
In 2015, we declared and paid dividends in US dollars
totaling $0.14 per share, $160 million (2014: $0.20 per
share, $232 million).
The Company implemented a dividend reinvestment
plan in 2015 resulting in $3 million reinvested into
the Company.
159
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
31 Non-Controlling Interests
a) Non-Controlling Interests Continuity
NCI in subsidiary at December 31, 2015
40%
36.1%
25%
Various
Pueblo Viejo
Acacia
Cerro Casale
Other
Total
At January 1, 2014
Share of income (loss)
Cash contributed
Increase (decrease) in non-controlling interest1
At December 31, 2014
Share of loss
Cash contributed
Decrease in non-controlling interest2
$ 1,432
89
–
–
$ 1,521
(199)
–
(90)
$ 522
62
–
174
$ 758
(69)
–
(12)
At December 31, 2015
$ 1,232
$ 677
$ 514
(199)
4
–
$ 319
(3)
2
–
$ 318
$ –
(4)
25
(4)
$ 17
(4)
39
(2)
$ 2,468
(52)
29
170
$ 2,615
(275)
41
(104)
$ 50
$ 2,277
1. Primarily represents the increase in non-controlling interests as a result of divestment of 10% of issued ordinary share capital of Acacia (see note 4g).
2. Primarily represents disbursements made to non-controlling interest at Pueblo Viejo.
b) Summarized Financial Information on Subsidiaries with Material Non-Controlling Interests
Summarized Balance Sheets
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Pueblo Viejo
Acacia
Cerro Casale
As at
Dec. 31,
2015
667
$
3,540
As at
Dec. 31,
2014
$
771
5,209
As at
Dec. 31,
2015
$ 528
1,699
As at
Dec. 31,
2014
$ 672
1,810
$ 4,207
$ 5,980
$ 2,227
$ 2,482
1,767
499
1,338
1,175
15
340
214
365
$ 2,266
$ 2,513
$ 355
$ 579
As at
Dec. 31,
2015
–
$
557
$ 557
313
42
$ 355
As at
Dec. 31,
2014
$
5
561
$ 566
40
42
$
82
Summarized Statements of Income
Pueblo Viejo
Acacia
Cerro Casale
For the years ended December 31
2015
2014
Revenue
Income (loss) from continuing operations after tax
Other comprehensive income (loss)
$ 1,332
(902)
–
$ 1,552
311
–
Total comprehensive income (loss)
$ (902)
$ 311
Dividends paid to NCI
$
–
$
–
2015
$ 860
(206)
–
$ (206)
$
6
2014
$ 923
79
(1)
$ 78
$
5
2015
2014
$ –
(6)
–
$ (6)
$ –
$
–
(1,018)
–
$ (1,018)
$
–
160
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Summarized Statements of Cash Flows
Pueblo Viejo
Acacia
Cerro Casale
For the years ended December 31
Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
2015
$ 471
(100)
(301)
2014
$ 533
(184)
(101)
2015
$ 165
(189)
(37)
2014
$ 286
(255)
(19)
2015
$ (5)
–
2
2014
$
(2)
(1)
4
Net increase (decrease) in cash and
cash equivalents
$ 70
$ 248
$
(61)
$ 12
$ (3)
$ 1
Under the terms of Pueblo Viejo’s project financing
agreement described in note 24b, Pueblo Viejo
Dominicana Corporation is prohibited from making cash
payments to Barrick and Goldcorp in the form of
dividends or certain shareholder loan interest and
principal payments until Pueblo Viejo achieves specified
requirements, including requirements relating to
operational, social, and environmental matters.
The project financing agreement contains covenants
which limit certain activities by Pueblo Viejo Dominicana,
including Pueblo Viejo’s ability to sell assets and incur
debt. Furthermore, Pueblo Viejo’s material tangible and
intangible assets, including the proceeds from metal
sales, are segregated and pledged for the benefit of the
project lenders, thus restricting our access to those assets
and our ability to use those assets to settle our liabilities
to third parties.
33 Stock-Based Compensation
a) Stock Options
Under Barrick’s stock option plan, certain officers and key
employees of the Corporation may purchase common
shares at an exercise price that is equal to the closing
share price on the day before the grant of the option.
The grant date is the date when the details of the award,
including the number of options granted by individual
and the exercise price, are approved. Stock options
vest evenly over four years, beginning in the year after
granting. Options are exercisable over seven years.
At December 31, 2015, 2.9 million (2014: 5.4 million)
common shares were available for granting options.
32 Remuneration of Key Management Personnel
Key management personnel include the members of the
Board of Directors and the Executive leadership team.
Compensation for key management personnel (including
Directors) was as follows:
For the years ended December 31
2015
2014
Salaries and short-term employee benefits1
Post-employment benefits2
Termination Benefits
Share-based payments and other3
$ 31
2
–
6
$ 39
$ 20
2
11
6
$ 39
1. Includes annual salary and annual short-term incentives/other bonuses earned
in the year.
2. Represents Company contributions to retirement savings plans.
3. Relates to stock option, RSU, PGSU and PRSU grants and other compensation.
Compensation expense for stock options was
$2 million in 2015 (2014: $5 million recovery), and is
presented as a component of corporate administration
and operating segment administration, consistent with
the classification of other elements of compensation
expense for those employees who had stock options. The
recognition of compensation expense for stock options
reduced earnings per share for 2015 by $nil (2014: $nil).
Total intrinsic value relating to options exercised in
2015 was $nil (2014: $nil).
161
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Employee Stock Option Activity (Number of Shares in Millions)
C$ options
At January 1
Granted
Exercised
Cancelled/expired
At December 31
US$ options
At January 1
Granted
Exercised
Forfeited
Cancelled/expired
At December 31
2015
2014
Shares Average price
Shares
Average price
0.2
0.2
–
(0.1)
0.3
5.2
–
–
(0.3)
(2.3)
2.6
$ 19
10
–
20
$ 13
$ 41
–
–
46
40
$ 42
0.1
0.1
–
–
0.2
6.4
–
–
(0.3)
(0.9)
5.2
$ 19
20
–
–
$ 19
$ 41
–
–
42
41
$ 41
Stock Options Outstanding (Number of Shares in Millions)
Range of exercise prices
C$ options
$ 9 – $ 17
$ 18 – $ 21
US$ options
$ 28 – $ 41
$ 42 – $ 55
Outstanding
Exercisable
Shares
Average
price
Average
life (years)
Intrinsic
value1
($ millions)
Shares
Average
price
Intrinsic
value1
($ millions)
0.2
0.1
0.3
1.2
1.4
2.6
$ 10
18
$ 13
$ 33
50
$ 42
6.6
4.6
5.9
3.9
2.2
3.0
$
–
(1)
$
(1)
$ (30)
(59)
$ (89)
–
0.1
0.1
0.7
1.3
2.0
$ –
18
$ 18
$ 33
50
$ 44
$
$
–
–
–
$ (18)
(55)
$ (73)
1. Based on the closing market share price on December 31, 2014 of C$12.52 and US$10.75.
As at December 31, 2015, there was $1 million (2014:
$3 million) of total unrecognized compensation cost
relating to unvested stock options. We expect to
recognize this cost over a weighted average period of
1 year (2014: 1 year).
b) Restricted Share Units (RSUs) and
Deferred Share Units (DSUs)
Under our RSU plan, selected employees are granted
RSUs where each RSU has a value equal to one Barrick
common share. RSUs generally vest from two-and-a-half
years to three years and are settled in cash upon vesting.
Additional RSUs are credited to reflect dividends paid on
Barrick common shares over the vesting period.
Compensation expense for RSUs incorporates an
expected forfeiture rate. The expected forfeiture rate
is estimated based on historical forfeiture rates and
expectations of future forfeiture rates. We make
adjustments if the actual forfeiture rate differs from the
expected rate. At December 31, 2015, the weighted
average remaining contractual life of RSUs was
1.37 years (2014: 1.46 years).
Compensation expense for RSUs was a $5 million
credit to earnings in 2015 (2014: $8 million) and is
presented as a component of corporate administration
and operating segment administration, consistent with
the classification of other elements of compensation
expense for those employees who had RSUs.
162
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
Under our DSU plan, Directors must receive a
specified portion of their basic annual retainer in the
form of DSUs, with the option to elect to receive 100%
of such retainer in DSUs. Officers may also elect to
receive a portion or all of their incentive compensation
in the form of DSUs. Each DSU has the same value as
one Barrick common share. DSUs must be retained until
the Director or officer leaves the Board or Barrick, at
which time the cash value of the DSUs will be paid out.
Additional DSUs are credited to reflect dividends paid on
Barrick common shares. DSUs are recorded at fair value
on the grant date and are adjusted for changes in fair
value. The fair value of amounts granted each period
together with changes in fair value are expensed.
DSU and RSU Activity
At January 1, 2014
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
At December 31, 2014
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
DSUs
(thousands)
Fair
value
RSUs
($ millions) (thousands)
Fair
value
($ millions)
201
(53)
–
113
–
–
261
(34)
–
238
–
–
$ 4.7 2,850 $ 29.8
(17.2)
(992)
(0.6)
(11.5)
(629)
–
42.9
1.6 2,327
0.7
49
(14.6)
–
–
(2.9)
$ 2.8 3,605 $ 30.1
(11.1)
(1,492)
(0.2)
(0.6)
(54)
–
48.9
2.0 4,458
1.0
110
(29.0)
–
–
(1.1)
At December 31, 2015
465
$ 3.5 6,627 $ 39.3
c) Performance Restricted Share Units (PRSUs)
In 2008, Barrick launched a PRSU plan. Under this plan,
selected employees are granted PRSUs, where each
PRSU has a value equal to one Barrick common share.
At December 31, 2015, 1,169 thousand units were
outstanding at a fair value of $6 million (2014:
1,675 thousand units, fair value $6 million).
d) Performance Granted Share Units (PGSUs)
In 2014, Barrick launched a PGSU plan. Under this plan,
selected employees are granted PGSUs, where each
PGSU has a value equal to one Barrick common share.
At December 31, 2015, 589 units had been granted
at a fair value of $1 million (2014: nil).
e) Employee Share Purchase Plan (ESPP)
In 2008, Barrick launched an Employee Share Purchase
Plan. This plan enables Barrick employees to purchase
Company shares through payroll deduction. During
2015, Barrick contributed and expensed $0.4 million
to this plan (2014: $0.6 million).
34 Post-Retirement Benefits
Barrick operates various post-employment plans,
including both defined benefit and defined contribution
pension plans and other post-retirement plans. The table
below outlines where the Company’s post-employment
amounts and activity are included in the financial
statements:
For the years ended December 31
2015
2014
Balance sheet obligations for:
Defined pension benefits
Other post-retirement benefits
Liability in the balance sheet
Income statement charge included
income statement for:
Defined pension benefits
Other post-retirement benefits
Measurements for:
Defined pension benefits
Other post-retirement benefits
$ 80
6
$ 86
$
$
$
$
3
–
3
7
1
8
$ 96
7
$ 103
$ 3
–
$ 3
$ (29)
(1)
$ (30)
163
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
The amounts recognized in the balance sheet are
determined as follows:
For the years ended December 31
2015
2014
Present value of funded obligations
Fair value of plan assets
Deficit of funded plans
Present value of unfunded obligations
Total deficit of defined benefit pension plans
Impact of minimum funding requirement/
asset ceiling
$ 219
(201)
$ 18
62
$ 80
$ 241
(218)
$ 23
73
$ 96
–
–
Liability in the balance sheet
$ 80
$ 96
a) Defined Benefit Pension Plans
We have qualified defined benefit pension plans that
cover certain of our former United States and Canadian
employees and provide benefits based on an employee’s
years of service. The plans operate under similar
regulatory frameworks and generally face similar risks.
The majority of benefit payments are from trustee-
administered funds; however, there are also a number of
unfunded plans where the Company meets the benefit
payment obligation as it falls due. Plan assets held in
trust are governed by local regulations and practice in
each country. Responsibility for governance of the plans
– overseeing all aspects of the plans including investment
decisions and contribution schedules – lies with the
Company. We have set up pension committees to assist
in the management of the plans and have also appointed
experienced independent professional experts such as
actuaries, custodians and trustees.
The significant actuarial assumptions were as follows:
As at December 31
Discount rate
Pension Plans 2015
Other Post-Retirement
Benefits 2015
Pension Plans 2014
Other Post-Retirement
Benefits 2014
2.10–4.25%
3.85%
1.95–4.05%
3.40–3.55%
Less Between Between
1–2
years
than a
year
years
2–5 Over 5
years
Total
Pension benefits
Other post-
$ 20
$ 20
$ 60
$ 421
$ 521
retirement benefits
1
1
2
5
9
At December 31,
2014
$ 21
$ 21
$ 62
$ 426
$ 530
Pension benefits
Other post-retirement
benefits
$ 19
$ 19
$ 56
$ 364 $ 458
1
1
2
6
10
At December 31,
2015
$ 20
$ 20
$ 58
$ 370
$ 468
c) Defined Contribution Pension Plans
Certain employees take part in defined contribution
employee benefit plans and we also have a retirement
plan for certain officers of the Company. Our share of
contributions to these plans, which is expensed in the
year it is earned by the employee, was $38 million in
2015 (2014: $42 million).
b) Other Post-Retirement Benefits
We provide post-retirement medical, dental, and life
insurance benefits to certain employees in the US.
All of these plans are unfunded.
The movement in the defined benefit liability over the
year is as follows:
At January 1, 2014
Remeasurements:
Loss from demographic
assumptions
At December 31, 2014
Remeasurements:
Gain from demographic
assumptions
At December 31, 2015
Present value
of obligation
Fair value of
plan assets
Total
$ 6
$ –
$ 6
1
$ 7
(1)
$ 6
–
$ –
–
$ –
1
$ 7
(1)
$ 6
The weighted average duration of the defined benefit
obligation is 11 years (2014: 11 years).
164
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015
35 Contingencies
Certain conditions may exist as of the date the financial
statements are issued that may result in a loss to the
Company, but which will only be resolved when one or
more future events occur or fail to occur. The impact of
any resulting loss from such matters affecting these
financial statements and noted below may be material.
Litigation and Claims
In assessing loss contingencies related to legal
proceedings that are pending against us or unasserted
claims that may result in such proceedings, the Company
with assistance from its legal counsel evaluate the
perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of
relief sought or expected to be sought.
U.S. Shareholder Class Action
On December 6, 2013, lead counsel and plaintiffs in the
securities class action filed a consolidated amended
complaint (the “Complaint”) in the U.S. District Court
for the Southern District of New York (the “Court”),
on behalf of anyone who purchased the common stock
of the Company between May 7, 2009, and November 1,
2013. The Complaint asserts claims against the Company
and individual defendants Jamie Sokalsky, Aaron Regent,
Ammar Al-Joundi, Igor Gonzales, Peter Kinver, George
Potter and Sybil Veenman (collectively, the “Defendants”).
The Complaint alleges that the Defendants made false
and misleading statements to the investing public
relating (among other things) to the cost of the Pascua-
Lama project (the “Project”), the amount of time it
would take before production commenced at the Project,
and the environmental risks of the Project, as well as
alleged internal control failures. The Complaint seeks an
unspecified amount of damages.
The Complaint largely tracks the legal theories
advanced in three prior complaints filed on June 5, 2013,
June 14, 2013 and August 2, 2013. The Court
consolidated those complaints and appointed lead
counsel and lead plaintiffs for the resulting consolidated
action in September 2013.
On April 1, 2015, the Court issued its ruling on the
Defendants’ motion to dismiss. The Court dismissed the
plaintiffs’ claims relating to the cost and scheduling of
the Project. However, the Court allowed the plaintiffs’
claims relating to the environmental risks of the Project
and alleged internal control failures to go forward. The
Court denied Barrick’s motion for reconsideration of
certain aspects of that ruling on June 2, 2015, and
discovery is continuing in the case. The Company intends
to vigorously defend this matter. No amounts have been
recorded for any potential liability arising from this
matter, as the Company cannot reasonably predict
the outcome.
Proposed Canadian Securities Class Actions
Between April and September 2014, eight proposed
class actions were commenced against the Company in
Canada in connection with the Pascua-Lama project.
Four of the proceedings were commenced in Ontario,
two were commenced in Alberta, one was commenced
in Saskatchewan, and one was commenced in Quebec.
The allegations in each of the eight Canadian proceedings
are substantially similar to those in the Complaint filed
by lead counsel and plaintiffs in the U.S. shareholder
class action (see “U.S. Shareholder Class Action” above).
Of the eight proposed class actions, three of the Ontario
claims, both of the Alberta claims, the Quebec claim
and the Saskatchewan claim have been formally served
on the Company.
The first Ontario and Alberta actions were commenced
by Statement of Claim on April 15, 2014 and April 17,
2014, respectively, and served on May 20, 2014 and
July 29, 2014, respectively. The same law firm acts
for the plaintiffs in these two proceedings, and the
Statements of Claim are largely identical. Aaron Regent,
Jamie Sokalsky and Ammar Al-Joundi are also named
as defendants in the two actions. Both actions purport
to be on behalf of anyone who, during the period
from May 7, 2009 to May 23, 2013, purchased Barrick
securities in Canada. Both actions seek $4.3 billion
in general damages and $350 million in special damages
for alleged misrepresentations in the Company’s public
disclosure. The first Alberta action was discontinued by
plaintiffs’ counsel on June 26, 2015.
165
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 The second Ontario action was commenced by
Notice of Action on April 24, 2014, and the Statement
of Claim was served on May 27, 2014. Aaron Regent,
Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver are
also named as defendants. Following a September 8,
2014 amendment to the Statement of Claim, this action
purports to be on behalf of anyone who acquired Barrick
securities during the period from October 29, 2010 to
October 30, 2013, and seeks $3 billion in damages for
alleged misrepresentations in the Company’s public
disclosure. The amended claim also reflects the addition
of a law firm that previously acted as counsel in a third
Ontario action, which was commenced by Notice of
Action on April 28, 2014 and included similar allegations
but was never served and is not expected to be pursued.
The Quebec action was commenced and served on
April 30, 2014. Aaron Regent, Jamie Sokalsky, Ammar
Al-Joundi and Peter Kinver are also named as defendants.
This action purports to be on behalf of any person who
resides in Quebec and acquired Barrick securities during
the period from May 7, 2009 to November 1, 2013.
The action seeks unspecified damages for alleged
misrepresentations in the Company’s public disclosure.
The second Alberta action was commenced by
Statement of Claim on May 23, 2014, and served
on June 6, 2014. Aaron Regent, Jamie Sokalsky,
Ammar Al-Joundi and Peter Kinver are also named as
defendants. This action purports to be on behalf of
any person who acquired Barrick securities during the
period from May 7, 2009 to November 1, 2013, and
seeks $6 billion in damages for alleged
misrepresentations in the Company’s public disclosure.
The Saskatchewan action was commenced by
Statement of Claim on May 26, 2014, and served on
May 28, 2014. Aaron Regent, Jamie Sokalsky, Ammar
Al-Joundi and Peter Kinver are also named as defendants.
This action purports to be on behalf of any person who
acquired Barrick securities during the period from May 7,
2009 to November 1, 2013, and seeks $6 billion in
damages for alleged misrepresentations in the Company’s
public disclosure.
The fourth Ontario action was commenced on
September 5, 2014. Aaron Regent, Jamie Sokalsky,
Ammar Al-Joundi and Peter Kinver are also named as
defendants. This action purports to be on behalf of any
person who acquired Barrick securities during the period
from May 7, 2009 to November 1, 2013 in Canada. The
action seeks $3 billion in damages plus an unspecified
amount for alleged misrepresentations in the Company’s
public disclosure. The Statement of Claim was amended
on October 20, 2014, to include two additional law
firms, one of which is acting as counsel in the first
Ontario action referred to above. The Amended
Statement of Claim was served on October 22, 2014.
In November 2014, an Ontario court heard a motion
to determine which of the competing counsel groups will
take the lead in the Ontario litigation. On December 10,
2014, the court issued a decision in favor of the counsel
group that commenced the first and fourth Ontario
actions, which will be consolidated in a single action.
On May 21, 2015, the Divisional Court affirmed the
lower court’s decision. The losing counsel group sought
and obtained leave to appeal to the Court of Appeal
for Ontario. The appeal is scheduled to be heard in
April 2016.
The Company intends to vigorously defend all of the
proposed Canadian securities class actions. No amounts
have been recorded for any potential liability arising from
any of the proposed class actions, as the Company
cannot reasonably predict the outcome.
Pascua-Lama – SMA Regulatory Sanctions
In May 2013, Compañía Minera Nevada (“CMN”),
Barrick’s Chilean subsidiary that holds the Chilean
portion of the Pascua-Lama project (the “Project”),
received a Resolution (the “Resolution”) from Chile’s
environmental regulator (the Superintendencia del Medio
Ambiente, or “SMA”) that requires the company to
complete the water management system for the Project
in accordance with the Project’s environmental permit
before resuming construction activities in Chile. The
Resolution also required CMN to pay an administrative
fine of approximately $16 million for deviations from
166
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 certain requirements of the Project’s Chilean environmental
approval, including a series of reporting requirements
and instances of non-compliance related to the Project’s
water management system. CMN paid the administrative
fine in May 2013.
In June 2013, CMN began engineering studies to
review the Project’s water management system in
accordance with the Resolution. These studies indicate
that an increase in the capacity of the final water
management system for the Project may be required
above the volume approved in the Project’s Chilean
environmental approval. The studies were suspended in
the second half of 2015 as a result of CMN’s decision to
file a temporary and partial closure plan for the Project
(for more information about this plan, see “Pascua-Lama
– Constitutional Protection Action” below) and the fact
that CMN is currently modifying certain aspects of the
existing water management system. An increase in the
capacity of the final water management system may
require a new environmental approval and the
construction of additional water management facilities,
which could impact the schedule and estimated budget
for completion of water management activities in Chile
to the satisfaction of the authorities.
In June 2013, a group of local farmers and
indigenous communities challenged the Resolution.
The challenge, which was brought in the Environmental
Court of Santiago, Chile (the “Environmental Court”),
claims that the fine was inadequate and requests more
severe sanctions against CMN including the revocation of
the Project’s environmental permit. The SMA presented
its defense of the Resolution in July 2013. On August 2,
2013, CMN joined as a party to this proceeding and
vigorously defended the Resolution. On March 3, 2014,
the Environmental Court annulled the Resolution and
remanded the matter back to the SMA for further
consideration in accordance with its decision (the
“Environmental Court Decision”). In particular, the
Environmental Court ordered the SMA to issue a new
administrative decision that recalculates the amount of
the fine to be paid by CMN using a different methodology
and addresses certain other errors it identified in the
Resolution. A new resolution from the SMA could
include more severe sanctions against CMN such as a
material increase in the amount of the fine above the
approximately $16 million imposed by the SMA in May
2013 and/or the revocation of the Project’s environmental
permit. The Environmental Court did not annul the
portion of the SMA Resolution that required the
Company to halt construction on the Chilean side of the
project until the water management system is completed
in accordance with the project’s environmental permit.
On December 30, 2014, the Chilean Supreme Court
declined to consider CMN’s appeal of the Environmental
Court Decision on procedural grounds. As a result of the
Supreme Court’s ruling, on April 22, 2015, the SMA
reopened the administrative proceeding against CMN in
accordance with the Environmental Court Decision.
On May 14, 2015, CMN filed a petition to limit the
scope of the new administrative proceeding to the
original allegations considered by the environmental
regulator at the time it issued the Resolution and to
assert additional defenses. CMN presented supporting
documents and witness testimony in January 2016 in
response to an order from the SMA. The SMA also
conducted a site visit in January 2016. A final resolution
from the SMA in this matter is pending.
Also on April 22, 2015, CMN was notified that the
SMA has initiated a new administrative proceeding for
alleged deviations from certain requirements of the
Project’s environmental approval, including with respect
to the Project’s environmental impact and a series of
monitoring requirements. In May 2015, CMN submitted
a compliance program to address certain of the
allegations and presented its defense to the remainder
of the alleged deviations. The SMA rejected CMN’s
proposed compliance program on June 24, 2015, and
denied CMN’s administrative appeal of that decision
on July 31, 2015. CMN appealed the SMA’s decision to
the Environmental Court, which held a hearing on
November 26, 2015. Decisions are pending from the
Environmental Court with respect to CMN’s appeal
and from the SMA with respect to CMN’s defense to
the remainder of the alleged deviations. The new
167
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 administrative proceeding against CMN is separate from
the original administrative proceeding described above,
and could result in additional sanctions including new
administrative fines and/or the revocation of the Project’s
environmental permit.
The Company has recorded an estimated amount
for the potential liability arising from administrative fines
in these matters. In the Company’s view, it would be
prejudicial to disclose the amount of that estimate as the
proceedings are ongoing and the SMA has not issued
any additional proposed administrative fines.
Pascua-Lama – Constitutional Protection Action
CMN filed a temporary and partial closure plan for the
Pascua-Lama project (the “Temporary Closure Plan”) with
the Chilean mining authority (Sernageomin) on August 31,
2015. Sernageomin approved the Temporary Closure
Plan on September 29, 2015, and issued a resolution
requiring CMN to comply with certain closure-related
maintenance and monitoring obligations for a period
of two years. The Temporary Closure Plan does not
address certain facilities, including the Project’s water
management system, which remain subject to the
requirements of the Project’s original environmental
approval and other regulations.
On December 4, 2015, a constitutional protection
action was filed in the Court of Appeals of Santiago,
Chile by a group of local farmers and other individuals
against CMN and Sernageomin in order to challenge the
Temporary Closure Plan and the resolution that approved
it. The plaintiffs assert that the Temporary Closure Plan
cannot be approved until the water management system
for the Project has been completed in accordance with
the Project’s environmental permit. The action has been
admitted for review by the court, which is expected to
schedule a hearing in this matter prior to issuing a
decision. The Company intends to vigorously defend
this matter. No amounts have been recorded for any
potential liability arising from this matter, as the
Company cannot reasonably predict the outcome.
Veladero
On September 13, 2015, a valve on a leach pad pipeline
at the Company’s Veladero mine in San Juan Province,
Argentina failed, resulting in a release of cyanide-bearing
process solution into a nearby waterway through a
diversion channel gate that was open at the time of the
incident. Minera Argentina Gold S.A. (“MAGSA”),
Barrick’s Argentine subsidiary that operates the Veladero
mine, notified regulatory authorities of the situation.
Environmental monitoring was conducted by MAGSA
and independent third parties following the incident. The
Company believes this monitoring demonstrates that the
incident posed no risk to human health at downstream
communities. A temporary restriction on the addition of
new cyanide to the mine’s processing circuit was lifted
on September 24, 2015, and mine operations have
returned to normal. Monitoring and inspection of the
mine site will continue in accordance with a court order.
On October 9, 2015, the San Juan mining authority
initiated an administrative sanction process against
MAGSA for alleged violations of the mining code relating
to the valve failure and release of cyanide-bearing
process solution. MAGSA submitted its response to these
allegations in October 2015 and provided additional
information in January 2016. This process is expected to
result in a fine. A decision from the San Juan mining
authority is pending. No amounts have been recorded
for any potential liability under this matter, as the
Company cannot reasonably predict the outcome.
Pueblo Viejo – Amparo Action
In October 2014, Pueblo Viejo Dominicana Corporation
(“PVDC”) received a copy of an action filed in an
administrative court (the “Administrative Court”) in
the Dominican Republic by Rafael Guillen Beltre (the
“Petitioner”), who claims to be affiliated with the
Dominican Christian Peace Organization. The action
alleges that environmental contamination in the vicinity
of the Pueblo Viejo mine has caused illness and affected
water quality in violation of the Petitioner’s fundamental
168
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 rights under the Dominican Constitution and other laws.
The primary relief sought in the action, which is styled
as an “Amparo” remedy, is the suspension of operations
at the Pueblo Viejo mine as well as other mining projects
in the area until an investigation into the alleged
environmental contamination has been completed by
the relevant governmental authorities. On November 21,
2014, the Administrative Court granted PVDC’s motion
to remand the matter to a trial court in the Municipality
of Cotuí (the “Trial Court”) on procedural grounds. On
June 25, 2015, the Trial Court rejected the Petitioner’s
amparo action, finding that the Petitioner failed to
produce evidence to support his allegations. The
Petitioner appealed the Trial Court’s decision to the
Constitutional Court on July 21, 2015. On July 28, 2015,
PVDC filed a motion to challenge the timeliness of this
appeal as it was submitted after the expiration of the
applicable filing deadline. The Company intends to
vigorously defend this matter. No amounts have been
recorded for any potential liability or asset impairment
arising from this matter, as the Company cannot
reasonably predict any potential losses.
Argentine Glacier Legislation and
Constitutional Litigation
On September 30, 2010, the National Law on Minimum
Requirements for the Protection of Glaciers was enacted
in Argentina, and came into force in early November 2010.
The federal law bans new mining exploration and
exploitation activities on glaciers and in the “peri-glacial”
environment, and subjects ongoing mining activities to
an environmental audit. If such audit identifies significant
impacts on glaciers and peri-glacial environment, the
relevant authority is empowered to take action, which
according to the legislation could include the suspension
or relocation of the activity. In the case of the Veladero
mine and the Pascua-Lama project, the competent
authority is the Province of San Juan. In late January 2013,
the Province announced that it had completed the
required environmental audit, which concluded that
Veladero and Pascua-Lama do not impact glaciers
or peri-glaciers.
The constitutionality of the federal glacier law is the
subject of a challenge before the National Supreme
Court of Argentina, which has not yet ruled on the issue.
On October 27, 2014, the Company submitted its
response to a motion by the federal government to
dismiss the constitutional challenge to the federal glacier
law on standing grounds. A decision on the motion is
pending. If the federal government’s arguments with
respect to standing are accepted then the case will be
dismissed. If they are not accepted then the National
Supreme Court of Argentina will proceed to hear
evidence on the merits. No amounts have been recorded
for any potential liability or asset impairment under this
matter, as the Company cannot reasonably predict the
outcome and in any event the provincial audit concluded
that the Company’s activities do not impact glaciers or
peri-glaciers.
Perilla Complaint
In 2009, Barrick Gold Inc. and Placer Dome Inc. were
purportedly served in Ontario with a complaint filed in
November 2008 in the Regional Trial Court of Boac (the
“Court”), on the Philippine island of Marinduque, on
behalf of two named individuals and purportedly on
behalf of the approximately 200,000 residents of
Marinduque. The complaint alleges injury to the
economy and the ecology of Marinduque as a result of
the discharge of mine tailings from the Marcopper mine
into Calancan Bay, the Boac River, and the Mogpog River.
The plaintiffs are claiming for abatement of a public
nuisance allegedly caused by the tailings discharge and
for nominal damages for an alleged violation of their
constitutional right to a balanced and healthful ecology.
In June 2010, Barrick Gold Inc. and Placer Dome Inc. filed
a motion to have the Court resolve their unresolved
motions to dismiss before considering the plaintiffs’
motion to admit an amended complaint and also filed an
opposition to the plaintiffs’ motion to admit on the same
basis. It is not known when these motions or the
outstanding motions to dismiss will be decided by the
Court. The Company intends to defend the action
vigorously. No amounts have been recorded for any
potential liability under this complaint, as the Company
cannot reasonably predict the outcome.
169
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 Cerro Casale
One of the environmental permits related to the open
pit and water management system at the Company’s
75 percent-owned Cerro Casale project in Chile is subject
to an environmental regulation (the “Regulation”) that,
if applied as written, would have required the Company
to begin construction of the project by January 26, 2015
or risk cancellation of the environmental permit. The
Company sought relief from the Regulation as construction
was not feasible and did not begin by that date. On
October 15, 2015, the Chilean environmental authority
issued a resolution confirming that initial project activities
were timely commenced as required by the environmental
permit and the matter is now closed. Permits required for
the majority of the project’s proposed operations were
obtained under a second environmental approval (the
“Cerro Casale environmental permit”) that is subject to
a January 2018 construction deadline. The Company
expects to obtain relief from this deadline through the
procedure outlined above.
The Cerro Casale environmental permit was
challenged in 2013 by local and indigenous community
members for alleged procedural deficiencies in the
community consultation process and other aspects of the
evaluation of the project by the Chilean environmental
authority. The challenge was brought before the Chilean
cabinet, which has jurisdiction over procedural claims of
this nature. On January 19, 2015, the cabinet ministers
rejected the majority of claims made against the Cerro
Casale environmental permit while also imposing new
limitations on the volume of groundwater that the
project may extract for mining operations. The Company
appealed this decision to the Environmental Court, which
held a hearing on August 27, 2015. A decision of the
Environmental Court is pending in this matter. The
Company intends to defend the action vigorously. No
amounts have been recorded for any potential liability or
asset impairment arising from this matter, as the
Company cannot reasonably predict the outcome.
Writ of Kalikasan
In February 2011, a Petition for the Issuance of a Writ of
Kalikasan with Prayer for Temporary Environmental
Protection Order was filed in the Supreme Court of the
Republic of the Philippines (the “Supreme Court”) in
Eliza M. Hernandez, Mamerto M. Lanete and Godofredo
L. Manoy versus Placer Dome Inc. and Barrick Gold
Corporation (the “Petition”). In March 2011, the
Supreme Court issued an En Banc Resolution and Writ
of Kalikasan, directed service of summons on Placer
Dome Inc. and the Company, ordered Placer Dome Inc.
and the Company to make a verified return of the Writ
with ten (10) days of service and referred the case to the
Court of Appeal for hearing. The Petition alleges that
Placer Dome Inc. violated the petitioners’ constitutional
right to a balanced and healthful ecology as a result of,
among other things, the discharge of tailings into
Calancan Bay, the 1993 Maguila-Guila dam break, the
1996 Boac river tailings spill and failure of Marcopper to
properly decommission the Marcopper mine. The
petitioners have pleaded that the Company is liable for
the alleged actions and omissions of Placer Dome Inc.,
which was a minority indirect shareholder of Marcopper
at all relevant times, and is seeking orders requiring the
Company to environmentally remediate the areas in and
around the mine site that are alleged to have sustained
environmental impacts. The petitioners purported to
serve the Company in March 2011, following which the
Company filed an Urgent Motion For Ruling on
Jurisdiction with the Supreme Court challenging the
constitutionality of the Rules of Procedure in
Environmental Cases (the “Environmental Rules”)
pursuant to which the Petition was filed, as well as the
jurisdiction of the Supreme Court over the Company.
In November 2011, two local governments, or
“baranguays” (Baranguay San Antonio and Baranguay
Lobo) filed a motion with the Supreme Court seeking
intervenor status with the intention of seeking a
dismissal of the proceedings. No decision has as yet been
issued with respect to the Urgent Motion for Ruling on
Jurisdiction, the motion for intervention, or certain other
matters before the Supreme Court. The Company
intends to continue to defend the action vigorously. No
amounts have been recorded for any potential liability
under this matter, as the Company cannot reasonably
predict the outcome.
170
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2015 SHAREHOLDER INFORMATION
Shareholder Information
Shares are traded on two stock exchanges
New York
Toronto
Ticker Symbol
ABX
Number of Registered Shareholders at
December 31, 2015
16,768
Index Listings
S&P/TSX Composite Index
S&P/TSX 60 Index
S&P Global 1200 Index
Philadelphia Gold/Silver Index
NYSE Arca Gold Miners Index
Dow Jones Sustainability Index (DJSI) – North America
Dow Jones Sustainability Index (DJSI) – World
Common Shares
(millions)
Outstanding at December 31, 2015
Weighted average 2015
Basic
Fully diluted
1,165
1,165
1,165
The Company’s shares were split on a two-for-one basis
in 1987, 1989 and 1993.
Volume of Shares Traded
(millions)
NYSE
TSX
Closing Price of Shares
December 31, 2015
NYSE
TSX
2015
2014
1,437
766
902
682
US$7.38
C$10.24
2015 Dividend per Share
US$0.14
Share Trading Information
New York Stock Exchange
Quarter
First
Second
Third
Fourth
Toronto Stock Exchange
Quarter
First
Second
Third
Fourth
Share Volume
(millions)
High
Low
2015
2014
2015
2014
2015
2014
353
243
468
373
1,437
223
176
166
337
902
Share Volume
(millions)
US$13.25
13.70
11.00
8.32
US$21.45
19.22
19.48
15.03
US$10.15
10.57
5.91
6.14
US$17.59
15.47
14.56
10.05
High
Low
2015
2014
2015
2014
2015
2014
184
133
229
220
766
199
157
131
195
682
C$16.54
16.40
13.92
10.97
C$23.78
20.97
21.14
16.80
C$12.15
13.15
7.89
8.15
C$19.00
16.81
16.32
11.67
Barrick Gold Corporation | Financial Report 2015 171
SHAREHOLDER INFORMATION
Dividend Policy
The Board of Directors reviews the dividend policy
quarterly based on the cash requirements of the
Company’s operating assets, exploration and
development activities, as well as potential acquisitions,
combined with the current and projected financial
position of the Company.
Dividend Payments
In 2015, the Company paid a cash dividend of $0.14
per share – $0.05 on March 16, $0.05 on June 15,
$0.02 on September 15, and $0.02 on December 15.
A cash dividend of $0.20 per share was paid in 2014 –
$0.05 on March 17, $0.05 on June 16, $0.05
on September 15, and $0.05 on December 15.
Form 40-F
The Company’s Annual Report on Form 40-F is filed
with the United States Securities and Exchange
Commission. This report is available on Barrick’s website
www.barrick.com and will be made available to
shareholders, without charge, upon written request
to the Secretary of the Company at the Head Office at
corporatesecretary@barrick.com or at 416-861-9911.
Shareholder Contacts
Shareholders are welcome to contact the Investor
Relations Department for general information on
the Company at investor@barrick.com or at
416-861-9911.
For information on such matters as share transfers,
dividend cheques and change of address, inquiries
should be directed to the Company’s Transfer Agents.
Transfer Agents and Registrars
CST Trust Company
P.O. Box 700, Postal Station B
Montreal, Quebec, Canada H3B 3K3
or
American Stock Transfer & Trust Company, LLC
6201 – 15th Avenue
Brooklyn, NY 11219, USA
Tel: 1-800-387-0825
Toll-free throughout North America
Fax: 1-888-249-6189
Email: inquiries@canstockta.com
Website: www.canstockta.com
Auditors
PricewaterhouseCoopers LLP
Toronto, Canada
Annual Meeting
The Annual Meeting of Shareholders will be held on
Tuesday, April 26, 2016 at 10:00 a.m. (Toronto time)
in the Metro Toronto Convention Centre,
John Bassett Theatre, 255 Front Street West,
Toronto, Ontario.
172
Barrick Gold Corporation | Financial Report 2015
Our Vision
Scorecard
Our vision is the generation of wealth through responsible
mining—wealth for our owners, our people, and the
countries and communities with which we partner. We aim
to be the leading mining company focused on gold,
growing our cash flow per share by developing and operating
high-quality assets through disciplined allocation of human
and financial capital and operational excellence.
2015 was a watershed
“
year for Barrick in which we
delivered on our promises
and fulfilled our four strategic
priorities. We did what we
said we would do—we streamlined the business,
strengthened the balance sheet, generated free
cash flow, and further focused our portfolio
around our core mines in the Americas. In 2016,
we will continue to build on our achievements
as we focus our efforts on growing free cash
flow through further debt and cost reduction.”
Kelvin Dushnisky, President
Message from the Chairman 4 | Message from the President 8 | Board of Directors 14 | Corporate Governance and Committees
of the Board 15 | Executive Officers and Advisory Boards 16 | Partners 17 | Management’s Discussion and Analysis 18 |
Mineral Reserves and Resources 87 | Financial Statements 99 | Notes to Financial Statements 104 | Shareholder Information 171
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this
Annual Report 2015, 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”, “objective”
“aspiration”, “aim”, “intend”, “project”, “continue”, “budget”,
“estimate”, “potential”, “may”, “will”, “can”, “could”, and similar
expressions identify forward-looking statements. In particular, this
Annual Report 2015 contains forward-looking statements including,
without limitation, with respect to: (i) Barrick’s forward-looking
production guidance; (ii) estimates of future all-in sustaining costs
per ounce/pound, cash costs per ounce and C1 cash costs per pound;
(iii) cash flow forecasts; (iv) projected capital, operating and exploration
expenditures; (v) targeted debt and cost reductions; (vi) mine life and
production rates; (vii) potential mineralization and metal or mineral
recoveries; (viii) Barrick’s Best in Class program (including potential
improvements to financial and operating performance and mine life
that may result from certain Best in Class initiatives); (ix) expectations
regarding future price assumptions, financial performance and other
outlook or guidance; and (x) the estimated timing and conclusions of
technical reports and other studies. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by the company as at the date of this
news release in light of management’s experience and perception of
current conditions and expected developments, are inherently subject
to significant business, economic and competitive uncertainties
and contingencies. Known and unknown factors could cause
actual results to differ materially from those projected in the forward-
looking statements and undue reliance should not be placed on
such statements and information. Such factors include, but are not
limited to: fluctuations in the spot and forward price of gold, copper
or certain other commodities (such as silver, diesel fuel, natural gas
and electricity); the speculative nature of mineral exploration and
development; changes in mineral production performance, exploitation
and exploration successes; risks associated with the fact that certain
Best in Class initiatives are still in the early stages of evaluation and
additional engineering and other analysis is required to fully assess
their impact; diminishing quantities or grades of reserves; increased
costs, delays, suspensions and technical challenges associated with the
construction of capital projects; operating or technical difficulties in
connection with mining or development activities, including disruptions
in the maintenance or provision of required infrastructure and
information technology systems; failure to comply with environmental
and health and safety laws and regulations; timing of receipt of, or
failure to comply with, necessary permits and approvals; uncertainty
whether some or all of the Best in Class initiatives will meet the
company’s capital allocation objectives; 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
n
a
m
x
e
l
P
w
e
h
t
t
a
M
y
h
p
a
r
g
o
t
o
h
P
e
v
i
t
u
c
e
x
E
/
r
e
h
p
o
t
s
i
r
h
C
r
e
t
e
P
y
h
p
a
r
g
o
t
o
h
P
n
o
i
t
a
c
o
L
/
a
d
a
n
a
C
n
o
i
t
a
r
o
p
r
o
C
l
l
i
r
r
e
M
/
.
c
n
I
e
l
b
a
e
v
o
M
/
n
g
i
s
e
D
l
d
n
a
r
B
e
v
O
changes in our credit ratings; the impact of inflation; fluctuations in
the currency markets; changes in U.S. dollar interest rates; risks
arising from holding derivative instruments; changes in national and
local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and practices,
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;
damage to the company’s reputation due to the actual or perceived
occurrence of any number of events, including negative publicity with
respect to the company’s handling of environmental matters or dealings
with community groups, whether true or not; the possibility that
future exploration results will not be consistent with the company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socio-economic studies and investment; risk of loss due to acts of war,
terrorism, sabotage and civil disturbances; litigation; contests over
title to properties, particularly title to undeveloped properties, or over
access to water, power and other required infrastructure; business
opportunities that may be presented to, or pursued by, the company;
our ability to successfully integrate acquisitions or complete divestitures;
employee relations; increased costs and risks related to the potential
impact of climate change; 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 Annual Report 2015 are
qualified by these cautionary statements. Specific reference is made to
the most recent Form 40-F/Annual Information Form on file with the
SEC and Canadian provincial securities regulatory authorities for a more
detailed discussion of some of the factors underlying forward-looking
statements and the risks that may affect Barrick’s ability to achieve the
expectations set forth in the forward-looking statements contained in
this Annual Report 2015.
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.
1234
Barrick Gold Corporation
Annual Report 2015
Partnership.
Performance.
Value.
www.barrick.com
Barrick Gold Corporation
Head Office:
Brookfield Place
TD Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Canada M5J 2S1
Tel: 416 861-9911
Toll-free throughout North America:
1 800 720-7415
Fax: 416 861-2492
Email: investor@barrick.com
barrick.com
B
a
r
r
i
c
k
G
o
l
d
C
o
r
p
o
r
a
t
i
o
n
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
5
@barrickgold
/barrick.gold.corporation