Barrick Gold Corporation
Annual Report 2016
A Company
of Owners
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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.
In 2016, we further strengthened our
“
balance sheet and generated record free cash flow
through a disciplined and rigorous approach to capital
allocation. Going forward, digital technology and
innovation will play an increasingly important role across
our business as we seek to grow the long-term value
of our portfolio with a focus on growing margins and
returns over production volume.”Kelvin Dushnisky, President
Our Assets are located in
geopolitically stable regions with an increasing
focus on our five core mines in the Americas.
Proven and Probable
Mineral Reserves6
As at
December 31, 2016
Production
(000s ozs)
Cost of Sales
($/oz)
AISC 1†
($/oz)
Tonnes
(000s ozs)
Grade
(gm/t)
Contained
(000s ozs)
Goldstrike
1,096
852
714
70,685
3.55
8,077
Cortez
1,059
901
518
151,002
2.11
10,220
Pueblo Viejo (60%)
700
564
490
85,821
2.93
8,087
Lagunas Norte
435
651
529
70,670
1.86
4,218
Veladero
544
872
769
252,125
0.83
6,749
Core mines sub-total
3,834
793
606
631,283
1.85
37,473
Total Barrick
5,517
798
730
2,006,898
1.33
85,950
†Please see page 84 of the 2016 Financial Report for corresponding endnotes.
Golden Sunlight
Hemlo
Turquoise Ridge JV
Goldstrike
Cortez
20%
19%
13%
8%
Pueblo Viejo
Lagunas Norte
Zaldívar Copper JV
Veladero
10%
~70%
of 2016 production
from core mines at
Cost of Sales(cid:31)$793/oz
and AISC $606/oz1
Other Gold Mines:
Porgera JV, Papua New Guinea
Kalgoorlie JV, Australia
Acacia, Tanzania
Other Copper Mines:
Jabal Sayid JV, Saudi Arabia
Lumwana, Zambia
Our Priorities executed in 2016
Focus on
Free Cash Flow
Strengthen the
Balance Sheet
Operational
Excellence
Disciplined
Capital Allocation
As at
December 31, 2016
Production
(000s ozs)
Cost of Sales
($/oz)
AISC 1†
($/oz)
Tonnes
(000s ozs)
Grade
(gm/t)
Contained
(000s ozs)
Goldstrike
1,096
852
714
70,685
3.55
8,077
Golden Sunlight
Hemlo
Turquoise Ridge JV
Goldstrike
Cortez
Proven and Probable
Mineral Reserves6
Pueblo Viejo
Lagunas Norte
20%
19%
13%
8%
Zaldívar Copper JV
Veladero
10%
Cortez
1,059
901
518
151,002
2.11
10,220
Pueblo Viejo (60%)
700
564
490
85,821
2.93
8,087
Lagunas Norte
435
651
529
70,670
1.86
4,218
Veladero
544
872
769
252,125
0.83
6,749
Core mines sub-total
3,834
793
606
631,283
1.85
37,473
Total Barrick
5,517
798
730
2,006,898
1.33
85,950
~70%
of 2016 production
from core mines at
Cost of Sales(cid:31)$793/oz
and AISC $606/oz1
Other Gold Mines:
Porgera JV, Papua New Guinea
Kalgoorlie JV, Australia
Acacia, Tanzania
Other Copper Mines:
Jabal Sayid JV, Saudi Arabia
Lumwana, Zambia
Barrick Gold Corporation | Annual Report 2016
1
See more on page 7See more on page 4See more on page 8See more on page 7 Financial Highlights
Gold Production
(million ounces)
Cost of Sales
($/oz)
AISC1
($/oz)
7.2
6.2
6.1
5.5
843
842
859
798
915
864
831
730
2013
2014
2015
2016
2013
2014
2015
2016
2013
2014
2015
2016
Total Debt
($ billions)
13.1
13.1
Net Earnings
($ billions)
Adjusted EBITDA1
($ billions)
0.7
5.0
10.0
7.9
-2.9
-2.8
3.8
3.8
3.2
2013
2014
2015
2016
2013
2014
2015
2016
2013
2014
2015
2016
-10.4
Attributed Capital
Expenditures ($ billions)
Operating Cash Flow
($ billions)
Free Cash Flow1
($ billions)
5.0
4.2
2.2
1.5
1.1
2.82
2.6
2.3
1.5
1.12
-0.1
-1.1
2013
2014
2015
2016
2013
2014
2015
2016
2013
2014
2015
2016
2
Barrick Gold Corporation | Annual Report 2016
(In millions of US dollars, except per share data)
2016
2015
2014
(Based on IFRS)
Revenues
Net earnings (loss)
per share
Adjusted net earnings1
per share1
Operating cash flow
Free cash flow1
EBITDA1
Adjusted EBITDA1
Cash and equivalents3
Dividends paid per share
Annualized dividend per share4
Gold production (000s oz)
Average spot gold price per ounce
Average realized gold price per ounce1
Cost of sales per ounce
All-in sustaining costs per ounce1
Copper production (Mlbs)
Average spot copper price per pound
Average realized copper price per pound1
Cost of sales per pound
All-in sustaining costs per pound1
$
$
$
$
$
$
$
$
$
8,558
655
0.56
818
0.70
2,640
1,514
4,077
3,827
2,389
0.08
0.08
5,517
1,251
1,248
798
730
415
2.21
2.29
1.43
2.05
$
$
$
$
$
$
$
$
$
2
9,029
(2,838)
(2.44)
344
0.30
2,794
1,081
(710)
3,187
2,455
0.14
0.08
2
6,117
1,160
1,157
859
831
511
2.49
2.37
1.65
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
1,266
1,265
842
864
436
3.11
3.03
2.19
2.79
$
$
$
$
$
$
$
$
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS. For further information please see pages 69–83
of the 2016 Financial Report.
2. 2015 Operating Cash Flow and Free Cash Flow includes $610 million in proceeds related to the Pueblo Viejo streaming transaction.
3. Includes $943 million cash primarily held at Acacia and Pueblo Viejo, which may not be readily deployed outside of Acacia and/or Pueblo Viejo.
4. Calculation based on annualizing the last dividend paid in the respective year.
Contents
Message from the Executive Chairman 4 | Message from the President 7 | 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 86 | Financial Statements 98 |
Notes to Financial Statements 103 | Shareholder Information 168
Barrick Gold Corporation | Annual Report 2016
3
MESSAGE FROM THE EXECUTIVE CHAIRMAN
In the months since last year’s Annual Meeting,
events around the world have only reinforced our
assertion that “gold is here to stay.”
While the future of the global economy is
always uncertain, it is clear that economic and
geopolitical instability are currently on the rise,
with growing risks of protectionism, trade
wars, and international conflict. Deeper secular
trends, particularly changes in the structure of
labor markets and slowing economic growth,
have gone unattended. There are even economic
historians such as Robert Gordon, who believe
that the high growth rates seen from 1870 to 1970
were anomalous and cannot be reproduced,
which, if correct, would likely inflame populist
anger, as expectations of ever-increasing
prosperity are disappointed. Meanwhile, we
are seeing the return of the East Asian savings
glut that created some of the conditions for
the financial crisis.
Regardless of whether these trends persist
over time or evolve in unforeseen ways, global
volatility and uncertainty remind us of gold’s
essential function as a store and unit of value—
but they also add greater complexity and risk
to our business. In the face of these challenges,
we believe we will succeed by being true to
ourselves. It is the things that make Barrick
distinctive that will allow us to create long-term
value per share for you, our fellow owners,
no matter the global environment.
First, our partnership culture gives us an
authentic, distinctive, and sustainable competitive
advantage. The decentralized operating model
that goes along with it ensures continual
improvements in efficiency and productivity.
We trust our mine leaders to run their businesses
safely and efficiently to maximize free cash
flow and long-term value; problems are solved
locally and quickly. Meanwhile, our head office
leaders focus on allocating capital, both human
and financial, and on setting strategy. Externally,
our dedication to partnership should make us
the partner of choice for host governments and
communities, NGOs and indigenous groups, as
well as other mining companies.
Partnership also means being a company
of owners. Last year, we created a program to
make all our people owners, with shares in the
Company. As far as we know, the program is the
first of its kind, and it is producing a true culture
of owners. Owners take responsibility, hold each
other accountable, work with a sense of urgency,
and always seek to improve. They are all in.
Second, we have instituted an approach to
capital allocation that is robust, transparent, and
reliable. Our overarching goal is to grow free
cash flow per share no matter the price of gold.
All prospective investments—whether external
acquisitions or internal allocations for exploration,
expansion, or other projects—compete for
capital. They must meet our stated target of a
10–15 percent return on invested capital through
the metal price cycle, align with our strategic
goals, undergo rigorous risk assessments, and be
able to grow our free cash flow per share, now
and over the long term.
4
Barrick Gold Corporation | Annual Report 2016
John L. Thornton
Executive Chairman
Our leaders at our head office devote the
greater part of their time to the allocation of
capital and people. We created a new role that is
a first in our industry: a Chief Investment Officer,
who ensures that the same standards, scrutiny,
and rigor are applied consistently to every
potential investment. We appointed Mark Hill to
the position. Mark previously led the Evaluations
group at Waterton Global Resource Management,
a private investment firm with an outstanding
track record of capital allocation—expertise he
combines with earlier experience at Barrick.
Third, we are becoming a talent-obsessed
firm, as all high-performance organizations are.
When I became Executive Chairman, the first
appointment we made was to elevate Darian
Rich to the position of Executive Vice President,
Talent Management. Talent is the first topic
at our weekly Executive Committee meetings.
Over the past year and a half, nearly every one
of our mine general managers has rotated into
a new role. We are tapping into all sources of
talent—we recruit highly skilled military veterans,
frequently with a special forces background,
young minds with a Silicon Valley background,
top talent from across the mining industry,
and the best students from leading universities
around the world.
Finally, we mean to be a leading twenty-first-
century company, in any industry or region. We
are embracing innovation across our business.
We created the position of Chief Innovation
Officer—another novel position for the mining
business—and filled it with Michelle Ash.
Michelle has a passion for challenging the status
quo, with more than 20 years of international
experience at leading companies in the mining
and manufacturing sectors. She and her team are
exploring approaches that will be fundamentally
disruptive to the mining industry.
A current example is our digital transformation
in partnership with Cisco. The initiative is being
led by Ed Humphries, whose background in
military special forces ensures a focus on rapid
implementation and high-level execution. The
world has been changing much faster than the
world of mining, and we intend not merely to
catch up but to lead it. We will embed digital
technology into every fiber of our business, which
will allow us to be even more transparent with,
and accountable to, our host government and
community partners. We will be able to identify
and mitigate problems the moment they arise.
We will use data and artificial intelligence to
make better predictions, on everything from
weather conditions to the timing of equipment
maintenance. We will continuously lower
costs through greater speed, efficiency, and
productivity. We will improve worker safety and
comfort, which among other things will mean
we will continue to attract the best miners and
Barrick Gold Corporation | Annual Report 2016
5
MESSAGE FROM THE EXECUTIVE CHAIRMAN
managers in the world. And we will unlock value
in places and ways that no other mining company
will be capable of doing.
While we remain vigilant in the face of risks
and disciplined in our digital investments, we
are also optimistic about digital technology’s
potential to transform every dimension of our
business and to enable us to redefine the nature
of mining. In the twenty-first-century mining we
envision, almost no one ventures below ground,
a host of performance metrics are available in
real time to everyone at the Company and to
all our external partners, and we use artificial
intelligence for the continual improvement of
our operations and management. Just as
importantly, our people will have opportunities
for ongoing learning and growth, as they adapt
to the latest technologies and devise ever more
ingenious ways of using them productively.
Digital technology will not replace our workers—
it will empower them.
As we evolve and embrace the new, we will
always hold fast to the core principles that make
us who we are: operational excellence; a robust
balance sheet; disciplined financial management
in accordance with strict hurdle rates; an
obsession with talent; deep emotional and
financial ownership on the part of all our people;
and a relentless commitment to execution at
the highest level.
The world is changing faster than ever. We
will change with it—adapting to it, mitigating its
risks, and seizing its opportunities. Throughout it
all, we will remain true to who we are, and we will
always work tirelessly to create long-term value
per share for you, our fellow owners.
John L. Thornton
Executive Chairman
The world is changing faster than ever. We will
change with it–adapting to it, mitigating its risks,
and seizing its opportunities.
6
Barrick Gold Corporation | Annual Report 2016
MESSAGE FROM THE PRESIDENT
More than two years ago, we began laying the foundation
to return Barrick to a high-performance, partnership
culture, characterized by disciplined capital allocation,
operational excellence, and continual self-improvement.
We are driving to become a leading twenty-first-
century company, continuously infusing Best-in-
Class practices across the business, using data to
drive innovation, and scouring the globe for the
best and brightest talent.
While the journey is ongoing, we are
beginning to see positive results. In 2016, our
total shareholder return was 117 percent. We
outperformed key gold benchmarks, including the
Philadelphia Stock Exchange Gold and Silver Index,
and the NYSE Arca Exchange Gold BUGS Index.
Our overriding objective is to grow free
cash flow per share—and that is exactly what
we did in 2016. Our goal last year was to
generate free cash flow at a gold price of $1,000
per ounce. Not only did we achieve this objective,
we reported the highest annual free cash flow1
in our history. In 2016, our mines generated
operating cash flow of $2.64 billion and free
cash flow1 of $1.51 billion. To put that in
perspective, in a year that saw an eight percent
increase in the gold price, we grew our free
cash flow by 221 percent.
Our focus on operational excellence
helped drive this performance. We continued
to implement our Best-in-Class approach across
the portfolio, reducing our cost of sales to
$798 per ounce and our all-in sustaining costs1
by 12 percent to $730 per ounce in 2016. We will
continue our push to reduce costs even further as
we incorporate new technology and innovation.
Since the start of 2015, we have reduced
our total debt by 39 percent. This includes
$2.04 billion in 2016, in line with our target for
Kelvin Dushnisky
President
the year. We ended the year with approximately
$2.4 billion in cash3, and an additional $4.0 billion
available on our fully undrawn credit facility. At
the end of 2016, our total debt was $7.9 billion,
with a modest repayment schedule of less than
$200 million2 due before 2019, and about
$5 billion maturing after 2032.
Strengthening our balance sheet will remain
a priority. We intend to reduce our debt by an
additional $2.9 billion, to $5 billion, by the end
of 2018—half of which we are targeting in 2017.
We will achieve this by using cash flow from
operations, potential asset sales, and creating
new joint ventures and partnerships.
As our balance sheet improves, so too does
our capacity to take advantage of opportunities
to grow our free cash flow per share. As always,
we will adhere to our strict capital allocation
requirements by pursuing new investments that
meet our 15 percent hurdle rate at a gold price
of $1,200 per ounce.
Barrick Gold Corporation | Annual Report 2016
7
MESSAGE FROM THE PRESIDENT
Our portfolio is comprised primarily of
long-life, high-quality assets in the Americas,
underpinned by our five core mines—Cortez,
Goldstrike, Lagunas Norte, Pueblo Viejo, and
Veladero. We have begun a process to unify
Goldstrike and Cortez into a single operating
business known as Barrick Nevada. The integration
will be conducted in phases, and will eventually
include the Turquoise Ridge mine. This will
allow us to fast-track efficiency improvements,
accelerate our digital transformation, and
optimize capital spending.
We produced 5.52 million ounces of gold
last year, and anticipate production will increase
to 5.60–5.90 million ounces* in 2017. Our five
core mines, which are expected to account for
approximately 70 percent of 2017 production*,
have an average reserve grade of 1.84 grams per
tonne6—more than double our peer group average.
In addition to our gold portfolio, we produced
415 million pounds of copper in 2016. In 2017,
we are forecasting copper production of 400–450
million pounds*.
At the end of 2016, we had proven and
probable gold reserves of 85.9 million ounces6
compared to 91.9 million ounces6 at the end
of 2015. This is the largest reserve base in the
gold mining industry, comprising a deep project
pipeline that offers significant development
optionality, gold price leverage and value.
Our exploration work continues to unearth
high-grade ounces at our existing operations.
At Turquoise Ridge, for example, recent drilling
revealed mineralization that exceeds the already
exceptionally high-grade mineralization in the site’s
existing reserves. We also believe there is strong
potential to further expand resources at Goldstrike,
and at our Hemlo operation in northern Ontario.
In the medium term, we have a series of
projects with the potential to contribute free
cash flow through new, high-quality production.
These include the expansion of the Cortez
underground, a project known as Deep South,
the expansion of Turquoise Ridge, the Lagunas
Norte Mine Life Extension project in Peru, and
our Goldrush project in Nevada.
Using road header technology at the new
Cortez Range Front twin decline reduces
blasting overbreak. The resulting tunnels are
more geotechnically stable and will provide
access to the deeper extensions of the
Cortez Hills deposit.
*Please see “Outlook Assumptions and Economic Sensitivity Analysis” on page 34 of the 2016 Financial Report for 2017 guidance assumptions.
8
Barrick Gold Corporation | Annual Report 2016
Operational
Excellence
Disciplined
Capital Allocation
■ 5.52 million ounces of gold produced
at a Cost of Sales of $798/oz and AISC1
of $730/oz
■ Initiated digital transformation
■ Total Capex of $1.1B–below
initial guidance
Pamela Moyo
Senior Metallurgist
Cortez, Nevada
Innovation has been a part of Barrick’s DNA
since the earliest days of pioneering pressure
oxidation in the gold sector. The new TCM circuit
at Goldstrike is now operating in line with
expectations. This process does not require the
use of cyanide, and is the only commercial use
of this technology in the world.
Goldrush continues to advance according to
schedule. Located just four miles from Cortez,
it contains 9.6 million ounces of measured and
indicated gold resources, and 1.9 million ounces
of inferred resources6. The deposit, which has
the potential to begin first production as early as
2021, is not yet fully defined, and we believe it
will continue to grow.
At Lagunas Norte, we are evaluating a
sequenced approach to extend the life of the
mine by about 10 years by first optimizing the
recovery of carbonaceous oxide ore from existing
stockpiles, followed by extraction and processing
of refractory ores.
We have initiated a prefeasibility study to
evaluate an underground mine at Lama on the
Argentinean side of the bi-national Pascua-Lama
project. The evaluation is being led by George
Bee, Senior Vice President, Frontera District.
George has more than 30 years of mining
experience, including eight years with Barrick in
Latin America. He also played a lead role on the
team that oversaw the phased development of
the Goldstrike mine. We believe that a phased
approach, which over time would incorporate ore
from the Chilean side of the project, may be the
best option to realize the potential of this world-
class deposit. Efforts in Chile this year will focus
on advancing project concepts in parallel with the
Lama study, with the intention of moving to a
prefeasibility study in 2018.
10
Barrick Gold Corporation | Annual Report 2016
Barrick Gold Corporation | Annual Report 2016
Beyond Pascua-Lama, we are evaluating an
integrated development strategy for the highly
prospective Frontera District, which includes
our most recent discovery, Alturas. We added
1.1 million ounces of inferred gold resources6
to the Alturas project last year, bringing the
total inferred resource to 6.8 million ounces6.
We expect to complete a scoping study for the
project in 2017.
Our portfolio also includes 50 percent
of the Donlin Gold project in Alaska, one
of the largest undeveloped gold deposits in
the world. Donlin is now advancing through
the permitting process, and we are working
with our joint venture partner on strategies
The recent greenfields discovery of Alturas
on the prolific El Indio belt is now in the
scoping stage. Digitization opportunities
such as autonomous vehicles, controlled
from a remote operations center, are being
considered, with the aim of developing an
optimal plan for development.
MESSAGE FROM THE PRESIDENT
Digital transformation is underway at Veladero
in Argentina, where UAV drones are deployed
for improved environmental monitoring.
to further optimize the project. This includes
evaluating alternative development scenarios
with the potential to lower capital intensity, as
well as incorporating innovation, automation,
and other Best-in-Class initiatives to improve
overall economics.
At the heart of Barrick’s ongoing evolution
is the renewal of the partnership culture
that drove our early success. The values of
partnership—trust, transparency, shared
responsibility and accountability, and mutual
respect—are taking deep root. This cultural
shift has allowed us to restore our decentralized
operating model, which is functioning just as we
hoped it would. It has improved collaboration
and communication between head office and
our mines, and between the mines themselves,
helping us to identify and resolve problems
faster, and make better decisions.
We also continue to strengthen our
relationships with external partners such as Zijin
Mining, Antofagasta Plc, and Ma’aden—our joint
venture partners at the Porgera, Zaldívar and Jabal
Sayid mines. And we are working to develop new
partnerships with the potential to unlock value
across the Company.
Last year, we announced a seminal partnership
with Cisco to drive the digital transformation of
our business. Through this collaboration, we are
harnessing digital technology to unlock value,
reduce costs, and identify new ways to grow
free cash flow per share. This multi-year initiative
is being rolled out initially at our Cortez mine in
Nevada, and will ultimately encompass all of our
operations, as well as our head office.
The first wave of digital projects is well
underway. At the Cortez processing plant, for
example, we have implemented an advanced
process control system to optimize crushing,
grinding, and carbon leaching, which will increase
gold recoveries and lower operating costs. We are
also implementing short-interval control systems
in the mine’s underground, deploying sensors and
software and improving Internet connectivity to
obtain real-time feedback.
Integrating digital technology will also
improve our environmental performance. At our
Pascua-Lama project, we now publicly share
real-time water monitoring data from Chile’s
Estrecho River, making us even more transparent
and accountable to our host community and
Barrick Gold Corporation | Annual Report 2016
11
Focus on
Free Cash Flow
■ Operating cash flow of $2,640M
■ Record free cash flow1 of $1,514M
■ Free cash flow break-even of less than
$1,000/oz in 2016
Strengthen the
Balance Sheet
■ Repaid $2.1B of debt in 2016
■ Liquidity improved–less than $200M2 of
debt due before 2019
■ Reduce total debt to $5B by end of 2018
Cristiana Moraes
Chief Financial Officer
Barrick Argentina
An environmental technician gathers data
from a water monitoring station near the
Las Taguas River, close to Barrick’s Veladero
mine in Argentina.
government partners. We also recently installed a
series of high-definition cameras at our Veladero
mine in Argentina to monitor the mine’s heap
leach pad and other areas of the operation.
These cameras provide a live feed for the general
public on a continual basis.
The next step in this process is to integrate
additional digital environmental monitoring and
sensing technology at Veladero. These steps
come following a challenging period at the
mine, including a 2015 release of processing
solution from the leach pad, and a two-week
suspension in 2016 during which the Company
carried out additional remedial work at the leach
pad. While we believe we are again beginning
to show leadership in this important area, we
also recognize that we can and must continue
to improve. Everyone at the Company, from
the Board and the Executive Committee to
our operations, is committed to responsible
environmental stewardship. In this regard, we
are making progress. Over the past three years,
we have reduced reportable environmental
incidents by more than 75 percent.
In 2017, our operations will be focused on
adapting the International Council on Mining and
Metals Critical Control Management guidance
to our environmental operations. By doing so,
we expect to further reduce the environmental
impact of our operations.
Nothing is more important than the safety,
health and well-being of our employees and their
families. In 2016, we met our target for a total
recordable injury frequency rate (TRIFR)5 of 0.4
at our mines—the lowest TRIFR in our history.
However, this was overshadowed by the death
of Meckson Kakompe, a haul truck driver at our
Lumwana mine in Zambia. Meckson was killed in
a truck fire. He was just 32 and is survived by a
wife and five children. Our goal is to send all of
our people home safe and healthy every day. That
is an expectation, not a target. That we did not
meet this goal in 2016 is unacceptable.
Our people are our greatest and most
valued asset. They work tirelessly to execute our
strategy and realize our vision to generate wealth
through responsible mining for the countries and
communities where we operate, and for you,
our fellow owners. Indeed, last year we created
a program to make every Barrick employee—
from the millwright to the mine clerk—a Barrick
shareholder, with an initial allocation of
25 common shares per person. We expect this
to grow over time, in line with the Company’s
performance. Hence, our interests are not
only aligned with your interests, they are one
and the same.
On behalf of the Executive Committee, we
would like to express our sincere thanks to our
people around the globe for their unflagging
commitment and dedication. Finally, we would
like to thank you, our investors and fellow
owners, for your support, confidence, and
invaluable feedback.
Kelvin Dushnisky
President
Barrick Gold Corporation | Annual Report 2016
13
BOARD OF DIRECTORS
Board of Directors
Gustavo A. Cisneros
Independent
Santo Domingo, Dominican Republic
Chairman, Cisneros Group of Companies
Graham G. Clow
Independent
Toronto, Ontario
Chairman, Roscoe Postle Associates Inc.
Gary A. Doer
Independent
Winnipeg, Manitoba
Corporate Director and
former Canadian Ambassador
to the United States
Kelvin P.M. Dushnisky
Non-Independent
Toronto, Ontario
President, Barrick Gold Corporation
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
J. Brett Harvey
Independent
Canonsburg, Pennsylvania
Chairman Emeritus,
CONSOL Energy Inc.
Nancy H.O. Lockhart
Independent
Toronto, Ontario
Corporate Director and Retired
Chief Administrative Officer,
Frum Development Group
Pablo Marcet
Independent
Buenos Aires, Argentina
Corporate Director
Dambisa Moyo
Independent
New York, New York
International Economist
and Author
Anthony Munk
Non-Independent*
Toronto, Ontario
Senior Managing Director,
Onex Corporation
J. Robert S. Prichard
Independent
Toronto, Ontario
Chairman, Torys LLP,
BMO Financial Group
and Metrolinx
Steven J. Shapiro
Independent
Silverthorne, Colorado
Corporate Director and
Retired Executive Vice President,
Finance and Corporate
Development, Burlington
Resources Inc.
John L. Thornton
Non-Independent
Palm Beach, Florida
Executive Chairman,
Barrick Gold Corporation
Ernie L. Thrasher
Independent
Latrobe, Pennsylvania
Founder, Chief Executive Officer
and Chief Marketing Officer,
Xcoal Energy & Resources
Pablo Marcet (left), Nancy Lockhart
and Michael Evans
John L. Thornton (left),
Graham Clow
Board of
Directors Meeting
Toronto
February 15, 2017
Robert Prichard
Kelvin Dushnisky
Brett Harvey (left), Steven Shapiro
and Ernie Thrasher
* Consistent with the Canadian Securities Administrators’ National Instrument 58–101 – Disclosure of Corporate Governance Practices and the New York Stock
Exchange Standards, Anthony Munk is deemed not to be independent for a period of three years from the date that his father, Peter Munk, ceased to be
Chairman of Barrick (i.e. April 30, 2017).
14
Barrick Gold Corporation | Annual Report 2016
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
regarding accounting, internal accounting controls,
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 the financial statements and 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 monitoring, reviewing, and
approving 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.
or other auditing matters. The Board of Directors has
adopted a formal Shareholder Engagement Policy
designed to facilitate an open dialogue and exchange
of ideas between our Board and our shareholders. A copy
of the Corporate Governance Guidelines, the Code of
Business Conduct and Ethics, the Shareholder Engagement
Policy, 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, B.L. Greenspun, N.H.O. Lockhart, 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, G.A. Doer, 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, G.G. Clow, D. Moyo, A. Munk, J.R.S. Prichard)
Supports the Board in overseeing the Company’s
management of enterprise risks, implementing policies
and standards for mitigating such risks, monitoring and
reviewing the Company’s financial structure, and investment
and financial risk management programs.
Barrick Gold Corporation | Annual Report 2016 15
15
EXECUTIVE OFFICERS AND ADVISORY BOARDS
Executive Officers
John L. Thornton
Executive Chairman
of the Board
Kelvin P.M. Dushnisky
President
Kevin J. Thomson
Senior Executive
Vice President,
Strategic Matters
Catherine Raw
Executive Vice President
and Chief Financial Officer
Darian K. Rich
Executive Vice President,
Talent Management
Rob L. Krcmarov
Executive Vice President,
Exploration and Growth
Richard J.E. Williams
Chief Operating Officer
Mark F. Hill
Chief Investment 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
Executive 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,
BSR
Gare A. Smith
Washington, DC
Partner, Foley Hoag, LLP
Chair, Corporate Social
Responsibility and
Federal Affairs Practice
Robert Fowler
Ottawa, Ontario
Former 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 2016
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 Barrick partnership
comprised of the most committed and passionate leaders across the Company:
Miguel Amable
Mejico Angeles
Michelle Ash
Sam Ash
Nigel Bain
Juana Barcelo
Andrew Baumen
Michael Brown
Curtis Cadwell
Nathan Chishimba
Gordon Chiu
Andy Cole
Kevin Creel
Jonathan Drimmer
Kelvin Dushnisky
Mike Estes
Dave Forestell
Sergio Fuentes
Manuel Fumagalli
John Giakoumakis
Matt Gili
Henri Gonin
Brian Grebenc
Rich Haddock
Andrew Hastings
Mark Hill
George Joannou
Naomi Johnson
Rob Krcmarov
Woo Lee
Andy Lloyd
Bill MacNevin
Faby Manzano
Basie Maree
Melanie Miller
Marian Moroney
Giovanna Moscoso
Deni Nicoski
Calvin Pon
Catherine Raw
Darian Rich
François Robert
Julie Robertson
Manuel Rocha
Rick Sims
Peter Sinclair
Kathy Sipos
Ettiene Smuts
Kevin Thomson
Andy Thompson
Greg Walker
Mark Wall
Cody Whipperman
James Whittaker
Richard Williams
Alex Wilson
Financial
Report
Management’s Discussion and Analysis 18 | Mineral Reserves and Resources 86 |
Financial Statements 98 | Notes to Financial Statements 103 | Shareholder Information 168
Barrick Gold Corporation | Financial Report 2016 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 15, 2017, should be read
in conjunction with our audited consolidated financial
statements for the year ended December 31, 2016.
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 85.
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”, “aim”, “intend”, “project”,
“goal”, “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: (i) Barrick’s forward-
looking production guidance; (ii) estimates of future cost
of sales per ounce for gold and per pound for copper,
all-in-sustaining costs per ounce/pound, cash costs per
ounce and C1 cash costs per pound; (iii) cash flow
forecasts; (iv) projected capital, operating and exploration
expenditures; (v) targeted debt and cost reductions; (vi)
targeted investments by the Company; (vii) mine life and
production rates; (viii) potential mineralization and metal
or mineral recoveries; (ix) Barrick’s Best-in-Class program
(including potential improvements to financial and
operating performance that may result from certain
Best-in-Class initiatives); (x) the Lama starter project and
the potential for phased in development of the Pascua
Lama project; (xi) timing and completion of acquisitions;
(xii) asset sales or joint ventures; and (xiii) expectations
regarding future price assumptions, financial performance
and other outlook or guidance.
18
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Forward-looking statements are necessarily based
upon a number of estimates and assumptions including
material estimates and assumptions related to the factors
set forth below that, while considered reasonable by
the Company as at the date of this MD&A 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 geotechnical challenges and
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 and investments targeted by the Company
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
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;
lack of certainty with respect to foreign legal systems,
corruption and other factors that are inconsistent with
the rule of law; 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;
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 including loss of
key employees; increased costs and physical risks,
including extreme weather events and resource
shortages, related to 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
19
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 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.
Changes in Presentation of Non-GAAP Financial Performance Measures
We use the following non-GAAP financial performance
measures in our MD&A:
n “adjusted net earnings”
n “free cash flow”
n “EBITDA”
n “adjusted EBITDA”
n “cash costs per ounce”
n “C1 cash costs per pound”
n “all-in sustaining costs per ounce/pound”
n “all-in costs per ounce” and
n “realized price”
For a detailed description of each of the non-GAAP
measures used in this MD&A and a detailed reconciliation,
please refer to the Non-GAAP Financial Performance
Measures section of this MD&A on pages 69 to 83.
Each non-GAAP financial performance measure has been
annotated with a reference to an endnote on page 84.
The non-GAAP financial performance measures set
out in this MD&A are intended to provide additional
information to investors and do not have any
standardized meaning under International Financial
Reporting Standards (“IFRS”), and therefore may not
be comparable to other issuers, and should not be
considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS. In
2016, we made changes to the following non-GAAP
performance measures:
EBITDA
Starting with the third quarter 2016 MD&A, we are
presenting a reconciliation of net earnings to EBITDA and
adjusted EBITDA for each of our reportable operating
segments. We believe this additional information will
assist analysts, investors and other stakeholders of
Barrick in understanding the details of this non-GAAP
metric on a segment-by-segment basis.
Adjusted Net Earnings
In the third quarter 2016 MD&A, we amended the
reconciliation of net earnings to adjusted net earnings
to present the adjusting items on a pre-tax and fully
consolidated basis, and including the tax effect and
non-controlling interest as a separate line. We believe
that this change will assist analysts, investors and other
stakeholders of Barrick to better understand how we
calculate this non-GAAP performance measure and
simplify how it reconciles to our financial statements.
This change to the presentation of our reconciliation
does not result in any change to the final calculation
of adjusted net earnings.
Cash Costs per ounce, All-in Sustaining Cash Costs per
ounce and All-in Costs per ounce
Starting with the third quarter 2016 MD&A, we have
presented this reconciliation for each of our reportable
operating segments. We believe this additional information
will assist analysts, investors and other stakeholders of
Barrick in understanding the details of these non-GAAP
metrics on a segment-by-segment basis.
Starting with the second quarter 2016 MD&A, we
condensed and simplified the reconciliation from cost of
sales to “cash costs”, “all-in sustaining costs” and “all-in
costs”, including on a per ounce basis for gold and per
pound basis for copper, to present items on a fully
consolidated basis and include non-controlling interest as
a separate line. As part of this simplification, we have
grouped several minor items into one line labeled
“Other”, with further detail in the footnote to the
reconciliation. We believe that these changes will assist
analysts, investors and other stakeholders of Barrick to
better understand how we calculate these non-GAAP
performance measures and simplify how they reconcile
to our financial statements. This change to the
20
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS presentation of our reconciliation does not result in any
change to the figures calculated, except as noted below
for “all-in costs”.
Also starting with the second quarter 2016 MD&A,
we adjusted the amount included as “project exploration
and evaluation costs and project costs” as part of
our “all-in costs” measure to include all exploration
and evaluation costs related to our advanced mining
and business improvement projects and corporate
development activities, where previously it did not.
The impact of this adjustment for the three and twelve
month periods ended December 31, 2016 was $22/oz
and $17/oz, respectively (2015: $27/oz and $30/oz,
respectively; 2014: $25/oz). We believe this change will
assist analysts, investors and other stakeholders of
Barrick in understanding all of the expenditures related
to growing our business.
The tables on pages 69 to 83 reconcile these non-
GAAP measures to the most directly comparable IFRS
measures and previous period reconciliations have been
modified to be presented in a manner consistent with
our current format.
Index
22 Overview
22 Our Business
22 Our Vision
22 Our Strategy
23
30 Outlook for 2017
34 Risks and Risk Management
36 Market Overview
Full Year Financial and Operating Highlights
41 Review of Annual Financial Results
41 Revenue
41
Production Costs
42 Capital Expenditures
43 General and Administrative Expenses
43
44
Exploration, Evaluation and Project Costs
Finance Costs, Net
44 Additional Significant Statement of Income Items
45
Income Tax Expense
46 Financial Condition Review
47 Balance Sheet Review
47
Shareholders’ Equity
Financial Position and Liquidity
Summary of Cash Inflow (Outflow)
Summary of Financial Instruments
47
48
49
49
Operating Segments Performance
50 Cortez
52 Goldstrike
54
Pueblo Viejo
Lagunas Norte
56
58 Veladero
61
63 Acacia Mining plc
Pascua-Lama
65
Turquoise Ridge
66 Commitments and Contingencies
67
Review of Quarterly Results
68 Internal Control over Financial Reporting and
Disclosure Controls and Procedures
69 IFRS Critical Accounting Policies and Accounting Estimates
69 Non-GAAP Financial Performance Measures
84 Technical Information
84 Endnotes
85 Glossary of Technical Terms
21
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Our Vision
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. In support of this vision, our overarching
objective is to grow our free cash flow per share.
Our Strategy
Our strategy is to grow our free cash flow per share over
the long term. We expect to achieve this through three
areas of focus:
Growing Free Cash Flow per Share through Industry-
leading Margins
Through our Best-in-Class approach, we pursue
industry-leading margins by continuously improving
the productivity and efficiency of existing systems
and operations. Equally, we pursue step changes in
performance by re-designing those systems and
introducing new technologies; and we innovate to
redefine what is possible. Our digital transformation
partnership with Cisco will be another Best-in-Class
priority for 2017.
Growing Free Cash Flow per Share through Superior
Portfolio Management
As part of our revamped capital allocation system, all
proposals go through a rigorous, independent peer
review process led by our Evaluations team, before they
go to the Investment Committee. They are then ranked,
prioritized and sequenced to optimize capital spending
over time on a strategic basis, allowing us to anticipate
and plan for funding requirements. Over time, assets
that are unable to meet our return expectations will
be divested. We are continuously evaluating external
opportunities to increase the long-term value of our
portfolio through acquisitions, joint ventures, and
other partnerships.
Overview
Our Business
Barrick is one of the world’s leading gold mining
companies with annual gold production and gold
reserves that are the largest in the industry. We are
principally engaged in the production and sale of
gold and copper, as well as related activities such as
exploration and mine development. We have 9
producing gold mines, which are located in Canada,
the United States, Peru, Argentina, Australia, the
Dominican Republic and a 47.5% interest in a producing
mine in Papua New Guinea. We also hold a 63.9%
equity interest in Acacia Mining plc (“Acacia”), a
company listed on the London Stock Exchange (“LSE”)
that owns gold mines and exploration properties in
Africa. More than 75% of our gold production comes
from the Americas region. Our copper business contains
a wholly-owned copper mine in Zambia and 50%
interests in copper mines in Chile and Saudi Arabia.
We also have projects located throughout the Americas.
We sell our production in the world market through the
following distribution channels: gold bullion is sold in
the gold spot market; and gold and copper concentrate
is sold to independent smelting companies. Barrick’s
shares trade on the New York Stock Exchange (“NYSE”)
and the Toronto Stock Exchange under the symbol ABX.
2016 REVENUE ($ millions)
Gold $7,908
Copper $466
Other
2016 GOLD PRODUCTION (thousands of ounces)
Americas 4,377
Other 1,140
22
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Growing Free Cash Flow per Share through Partnerships
We believe an authentic partnership culture is our most
distinctive and sustainable competitive advantage. For
Barrick, partnership means a trust-based culture, and the
currency of trust is transparency. It is a culture of peers.
Those who are part of Barrick recognize that in general,
the collective is stronger than the aggregation of
individuals. By embracing these values, we aim to be the
preferred partner of host governments and communities,
the most sought-after employer among the world’s
best talent, and the natural choice for long-term
investors. We also created a new partnership with Cisco
to drive Barrick’s digital transformation and have also
continued to strengthen our relationships with other
external partners, including Zijin Mining, Ma’aden, and
Antofagasta Plc – our joint venture partners at the
Porgera mine, the Jabal Sayid mine, and the Zaldívar
mine. And we are working to develop new partnerships
with the potential to unlock value across our business,
and grow free cash flow per share over the long term.
Last year, we created the Global Employee Share
Plan, a program to make every Barrick employee – from
the rock face to the head office – an owner of the
Company, with an initial allocation of 25 common shares
per person. We expect this to grow over time, in line
with Barrick’s performance. Our goal is not simply to be
aligned with our owners, we want our people to be
owners. Implementation of the program began in late
2016 and we expect to complete the initial roll out in the
first half of 2017.
Full Year Financial and Operating Highlights
OPERATING CASH FLOW AND FREE CASH FLOW1
GOLD PRODUCTION (000s ounces)
$1,266
2,296
$1,160
2,794
$1,251
2,640
720
to
770
1,514
1,081
546
6,249
6,117
5,517
5,600
to
5,900
(136)
2014
2015
2016
2014
2015
2016
2017 (est)
Operating Cash Flow ($ millions)
Divested Sites
Free Cash Flow ($ millions)
Gold Market Price ($/oz)
COST OF SALES, CASH COSTS1 AND
ALL-IN SUSTAINING COSTS1 ($ per ounce)
DEBT ($ millions)
13,081
842
864
859
831
798
730
598
596
546
780
to
820
720
to
770
510
to
535
9,968
3,113
7,931
2,037
5,000
2014
2015
2016
2017 (est)
December
2014
2015
Repayments
December
2015
2016
Repayments
December
2016
December
2018 (target)
Cash costs
AISC
Cost of sales
5000
4000
3000
2000
1000
0
5000
4000
3000
2000
1000
0
23
5000
4000
3000
2000
1000
0
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS For the years ended
December 31
For the three months
ended December 31
($ millions, except per share amounts in dollars)
2016
2015
2014
2016
2015
Net earnings (loss) attributable to equity holders
of the Company
Per share (dollars)1
Adjusted net earnings2
Per share (dollars)1,2
Operating cash flow
Free cash flow2
$ 655
0.56
818
0.70
2,640
$ 1,514
$ (2,838)
(2.44)
344
0.30
2,794
$ 1,081
$ (2,907)
(2.50)
793
0.68
2,296
(136)
$
$ 425
0.36
255
0.22
711
$ 385
$ (2,622)
(2.25)
91
0.08
698
387
$
1. Calculated using weighted average number of shares outstanding under the basic method of earnings per share of 1,165 million shares in 2016 (2015: 1,165 million
shares; 2014: 1,165 million shares).
2. Adjusted net earnings and free cash flow are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be
comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used
in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A.
In 2016, we exceeded all of our key targets for the year.
Our mines generated net cash flow provided by
operating activities (“operating cash flow”) of $2.6 billion
in 2016 and free cash flow1 of $1.5 billion for the year,
a record level of annual free cash flow for Barrick. We
reduced our cost of sales applicable to gold by seven
percent to $798 per ounce, and our all-in sustaining
costs1 fell by 12% to $730 per ounce, driven by Best-in-
Class improvements in efficiency and productivity
across our portfolio. At the same time, we continued
to strengthen our balance sheet, and we further
strengthened our capital allocation process with the
appointment of the Company’s first ever Chief
Investment Officer.
Balance Sheet and Liquidity
In 2016, we reduced our total debt by $2.04 billion,
or 20%, from $9.97 billion to $7.93 billion, exceeding
our original target of $2 billion. Approximately $5 billion
of our $7.9 billion in outstanding debt matures after
2032. In 2015 and 2016 we have reduced our debt by
a total of $5.15 billion, which will reduce pre-tax interest
payments by approximately $235 million on an annualized
basis. Over the same period, the average tenor on our
outstanding public debt has increased from approximately
14 years to approximately 17 years. 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 and a
consolidated cash balance of approximately $2.4 billion3.
We intend to reduce our total debt by $2.9 billion to
$5 billion by the end of 2018, half of which we are
targeting in 2017. We will achieve this by using cash
flow from operations, selling additional non-core assets,
and creating new joint ventures and partnerships.
Cost Performance
In 2016, we continued our focus on capital discipline,
identifying productivity and efficiency savings
opportunities through our Best-in-Class program and
maintaining reductions in corporate overhead. Cost of
sales per ounce4 in 2016 decreased 7% to $798 per
ounce and minesite sustaining capital expenditures
decreased 31% compared to the prior year. Combined
with an overall decrease in direct mining costs, a positive
change in our sales mix with higher production at our
lower cost mines and as a result of the divestment of
some of our higher cost mine sites, reduced our all-in
sustaining costs1 for 2016 by 12% to $730 per ounce,
compared to the prior year.
24
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Net Earnings (Loss), Adjusted Net Earnings, Operating Cash Flow and Free Cash Flow
FACTORS AFFECTING NET EARNINGS (LOSS) AND ADJUSTED NET EARNINGS1 ($ millions)
Controllable
Costs
Uncontrollable
Costs
Gold and
copper
cash costs4
Gold and
copper
sales volume
Exploration
and
evaluation
costs
Depreciation
Other1
Gold and
copper
prices
Foreign
exchange2
123
459
Income
tax
expense
Impact of
divested
sites3
2016
Adjusted
net
earnings4
2016
Adjusting
items
100
128
(69)
(25)
(259)
818
(189)
2016
Net
earnings
655
(163)
206
Gold
531
Copper
11
2015
Adjusted
net
earnings4
2015
Adjusting
items
3,182
344
2015
Net
earnings
(2,838)
1. Primarily consists of finance costs, closure costs and general & administrative costs.
2. Estimated impact of foreign exchange.
3. Includes Bald Mountain, Round Mountain, Cowal, Ruby Hill, 47.5% of Porgera and 50% of Zaldívar.
4. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures
presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure,
please see pages 69 to 83 of this MD&A.
Net earnings attributable to equity holders of Barrick
(“net earnings”) for 2016 was $655 million compared
with a net loss of $2,838 in the prior year. This significant
improvement in earnings was largely due to $3,897 million
of impairment charges recorded in 2015 compared to
net impairment reversals of $250 million recorded in
2016, partially offset by an income tax expense in 2016
compared to an income tax recovery in the prior year.
The higher earnings were also caused by higher gold and
copper prices combined with higher sales volumes
(excluding the impact of divested sites), decreased
operating costs and lower exploration, evaluation and
project expenses. These were partially offset by an
increase in costs relating to closed mine rehabilitation
combined with losses on currency translation primarily
related to the realization of deferred currency translation
losses in Australia of $91 million during the first quarter
of 2016. After adjusting for items that are not indicative
3000
5000
4000
2000
1000
0
of future operating earnings, adjusted net earnings1 of
$818 million in 2016 were 138% higher than the prior
year primarily due to the impact of higher gold and
copper prices combined with higher gold and copper
sales volumes (excluding the impact of divested sites) and
lower operating costs. These were partially offset by
higher income tax expense and the impact of divested
sites. For a breakdown of asset impairment charges/
reversals recognized in 2016, see page 44 of this MD&A.
Significant adjusting items to net earnings (pre-tax
and non-controlling interest effects) in 2016 include:
n $199 million in foreign currency translation losses,
including deferred currency translation losses released
as a result of the disposal and reorganization of
certain Australian entities in the first quarter of 2016
and unrealized foreign currency translation losses
related to the devaluation of the Argentinean peso on
VAT receivables;
25
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS FACTORS AFFECTING OPERATING CASH FLOW AND FREE CASH FLOW1 ($ millions)
Controllable
Costs
Uncontrollable
Costs
2015
Operating
cash flow
2,794
2015
Capex
Change
in
Capex
2015
Free cash
flow1
Gold and
copper sales
volume
Interest
paid
Gold and
copper
cash costs1
Deposit on
streaming
agreement
164
206
Change in
working
capital2
Other3
Impact of
divested
sites4
2016
Capex
2016
Operating
cash flow
2,640
Gold and
copper
price
2016
Free cash
flow1
1,081
1,713
251
327
Gold
531
Copper
11
(610)
(223)
214
459
1,514
1,126
(355)
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures
presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure,
please see pages 69 to 83 of this MD&A.
2. Change in working capital excludes amounts related to divested sites.
3. Consists of cash flows related primarily to global exploration and project costs and non-minesite general & administrative costs.
4. Includes Bald Mountain, 50% of Round Mountain, Cowal, Ruby Hill, 47.5% of Porgera and 50% of Zaldívar.
n $114 million in other expense adjustments primarily
relating to losses on debt extinguishment, partly offset
by insurance proceeds relating to the 2015 oxygen
plant motor failure at Pueblo Viejo;
n $43 million in significant tax adjustments primarily
relating to a tax provision in Acacia in the first quarter
of 2016;
n $42 million in disposition losses primarily relating to
the divestment of 50% of Zaldívar;
n The above are partially offset by $250 million in net
impairment reversals at Veladero and Lagunas Norte
in the fourth quarter of 2016, net of an impairment
5000
charge relating to the write-down of our retained
equity method investment in Zaldívar.
4000
1000
3000
2000
In 2016, we generated $2,640 million in operating cash
flow, compared to $2,794 million of operating cash
flow in the prior year. 2015 operating cash flow included
a $610 million deposit relating to the gold and silver
streaming arrangement with Royal Gold. Excluding this
transaction, operating cash flow for 2016 was
$456 million higher than the prior year despite the
$355 million reduction in operating cash flow associated
with the divestment of some non-core assets. We
benefited from higher market gold prices and lower
0
direct mining costs as a result of lower energy and fuel
costs (despite being hedged on a significant portion of
our fuel consumption) combined with the continued
realization of lower labor and consumable costs and
improved operating efficiencies resulting from our
Best-in-Class initiatives and also lower cash interest paid.
These improvements were largely offset by the impact
of lower gold and copper volumes sold, primarily as a
result of the aforementioned divestitures, combined with
the impact of unfavorable working capital movements
compared to the prior year, mainly as a result of
inventory balances, and higher income taxes paid.
Free cash flow1 for 2016 was $1,514 million,
compared to $1,081 million in the prior year. Excluding
the $610 million streaming deposit transaction recorded
in 2015, we generated $1,043 million additional free
cash flow in the current year. The increase primarily
reflects the higher operating cash flows combined with
lower capital expenditures. In 2016, capital expenditures
on a cash basis were $1,126 million compared to
$1,713 million in 2015. The decrease of $327 million,
excluding the impact of $260 million in capital
expenditures associated with divested sites, is primarily
due to lower capitalized stripping costs at our Veladero
mine, a decrease in leach pad expansion costs at our
26
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Veladero mine and our Lagunas Norte mine and our
continued focus on capital discipline across the
Company. This was combined with a decrease in project
costs mainly relating to the completion of the thiosulfate
circuit at Goldstrike in the prior year and decreased
capital expenditures on a cash basis at Pascua-Lama.
Safety
Nothing is more important to Barrick than the safety,
health and well-being of workers and their families. In
2016, we continued our trend of improving our total
reportable injury frequency rate5 (“TRIFR”) and since
2009, there has been a 67% improvement in the TRIFR
(from 1.20 to 0.40). 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 with elements of
the Barrick “Safety and Health Management System”.
Although we are pleased with these trends, this
performance was overshadowed by the tragic occurrence
of an incident in 2016 when a truck operator at
Lumwana suffered fatal injuries resulting from a fire on
the truck he was operating. Unfortunately, another tragic
event occurred early in 2017 as a contract employee was
involved in a fatal accident while performing scheduled
maintenance work at Pascua-Lama. Barrick’s goal is zero
fatalities with the implementation of Critical Control
Management based upon the guidance published by
the International Council on Mining and Metals (“ICMM”)
in 2015. In addition, following a successful trial of mobile
equipment collision avoidance technology in 2015, a
full-scale deployment of the technology was implemented
at the Cortez mine in 2016.
Environment
The unfortunate 2015 cyanide release at our Veladero
site in Argentina and the consequent loss of confidence
from regulators and investors was, in many ways, a
wake-up call for the Company. Since that time, the
Board and Executive leadership of Barrick have been
absolutely clear that our obligation to be a responsible
steward of the environment is second only to our
commitment to protecting the health and safety of our
workers and their families. Over the past three years, we
have reduced the number of reportable environmental
incidents by more than 75%. This reduction has been
accomplished by relentlessly scrutinizing our operations
for sources of environmental risk. In 2016, we had a
TOTAL REPORTABLE INJURY FREQUENCY5 AND
REPORTABLE ENVIRONMENTAL INCIDENTS
53
29
546
720
to
770
13
0.58
0.46
0.40
2014
2015
2016
Total Reportable Injury Frequency
Reportable Environmental Incidents
second incident at Veladero although no solution
reached surface water or escaped the site, and extensive
sampling confirmed that the incident did not result in
any environmental impact. Nonetheless, due to heightened
regulatory sensitivity surrounding the site, production
was temporarily suspended while the site completed
upgrades to the berms surrounding the leach pad. In
2017, our operations will be focused on adapting the
ICMM Critical Control Management guidance to
our environmental operations. By doing so, we expect to
be able to further reduce the number of environmental
incidents and continue to rebuild Barrick’s reputation for
environmental excellence and become the preferred
partner of host governments and communities.
Climate Change
Climate change, including temperature and precipitation
shifts as well as more frequent and severe extreme
5000
weather events, will have complex impacts on the mining
industry. Volatile climatic conditions can affect the
4000
stability and effectiveness of infrastructure and equipment;
potentially impact environmental protection and site
3000
closure practices; lead to changes in the regulatory
environment, including increased financial exposure to
2000
carbon tax regimes; and potentially impact the stability
and cost of water and energy supplies. Mining is an
1000
energy-intensive business and we understand the
important link between energy use and climate change.
Barrick considers climate change to be a company,
community, and global concern. By effectively managing
our energy use, we are able to reduce our greenhouse
gas (“GHG”) emissions, achieve more efficient production,
reduce our draw from local energy grids, and save a
significant proportion of our direct mining costs.
0
27
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Through 2017, we will continue to align with the
ICMM Position Statement on Climate Change and
support placing a market price on GHG emissions. We
will also be participating in multi-stakeholder forums,
such as the Carbon Pricing Leadership Coalition, to
advance our understanding and share knowledge on
climate change solutions. In addition we have established
an internal Climate Change Committee to build on
our existing energy management plan and develop
a comprehensive climate change strategy. By the
end of 2017 we plan to conduct a climate change risk
assessment and establish targets to reduce our
GHG emissions.
Reserves and Resources
To calculate our 2016 reserves, we have applied a
short-term gold price assumption of $1,000 per ounce
for the next four years, and a long-term gold price of
$1,200 per ounce from 2021 onwards, consistent with
our approach in 2015.
As of December 31, 2016, Barrick’s proven and
probable gold reserves were 85.9 million ounces6,
compared to 91.9 million ounces at the end of 2015.
Approximately 1.9 million ounces were divested last year,
and 6.8 million ounces were depleted through mining
and processing. We replaced approximately 60 percent
of the ounces we depleted through drilling and cost
improvements at our operating mines. Significant
additions included 1.1 million ounces at Lagunas Norte,
920,000 ounces at Hemlo, and 640,000 ounces at the
Goldstrike underground mine. Reserves at Pascua-Lama
declined by 1.3 million ounces as a result of design
modifications to enhance safety and environmental
mitigation at the project. Reserves at Acacia’s Bulyanhulu
mine also declined by 430,000 ounces.
In 2016, measured, indicated, and inferred resources
were calculated using a gold price assumption of $1,500
per ounce. This compares to $1,300 per ounce in 2015.
Measured and indicated gold resources decreased
to 75.2 million ounces6 at the end of 2016, compared to
79.1 million ounces at the end of 2015. Approximately
4.3 million ounces of measured and indicated gold
resources were divested in 2016, and 2.7 million ounces
were upgraded to proven and probable gold reserves.
Approximately 5.3 million ounces were added to measured
and indicated resources as a result of using a $1,500 per
ounce gold price assumption.
Inferred gold resources increased to 30.7 million
ounces at the end of 2016, compared to 27.4 million
ounces6 at the end of 2015. Approximately 3.2 million
ounces were upgraded to measured and indicated
resources. Approximately 5.3 million ounces were added
through drilling, including 2.0 million ounces at Veladero,
1.3 million ounces at Hemlo, and 1.1 million ounces at
RESERVES AND RESOURCES (millions of ounces)
29.3
94.3
93.0
2014
27.4
79.1
91.9
2015
596
30.7
75.2
85.9
2016
P&P Reserves
M&I Resources
Inferred Resources
Alturas. Approximately 1.7 million ounces were added
to inferred resources as a result of using a $1,500 per
ounce gold price assumption. The addition of 5.3 million
ounces of inferred gold resources through drilling
underscores the value of our investments in near-mine
exploration and sets the stage for replenishing and
upgrading our reserve and resource portfolio in
future years.
Proven and probable copper reserves were calculated
using a short-term copper price of $2.25 per pound and
a long-term price of $2.75 per pound. This compares to
a short-term copper price of $2.75 and a long-term price
of $3.00 per pound in 2015.
Copper reserves, including copper within gold
reserves, were 11.1 billion pounds6 at the end of 2016,
compared to 11.7 billion pounds, at the end of 2015.
Measured and indicated copper resources, including
copper within measured and indicated gold resources,
increased slightly to 9.7 billion pounds4, compared to
9.6 billion pounds, at the end of 2016.
5000
Exploration and Projects
4000
After several years of exploration focused primarily on
existing core districts and projects, we are increasing
3000
our budget and broadening our focus to include new
greenfield opportunities. In the short term, every one of
2000
28
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS our operating mines has the potential to identify new
reserves and resources through near-mine exploration. In
many cases, these ounces can be quickly incorporated
into mine plans, driving improvements in production,
cash flow, and earnings. Over the medium term, we are
advancing a pipeline of high-confidence projects at or
near our existing operations. These projects remain on
track and are expected to begin contributing new
production to our portfolio beginning in 2021. This
includes three significant projects in Nevada: the Cortez
Deep South underground expansion; the potential
development of an underground mine at Goldrush; and
a significant expansion of throughput at the Turquoise
Ridge mine. At the Lagunas Norte mine in Peru, we are
advancing a project to extend the life of the mine by
approximately nine years by mining the refractory
material below the oxide ore body in the current open
pit. At the Alturas project in Chile, we have added an
additional 1.1 million ounces of inferred gold resources,
bringing the total inferred resource to 6.8 million ounces6.
We expect to complete a scoping study for Alturas
in 2017. We have also initiated a prefeasibility study to
evaluate the construction of an underground mine at
Lama, on the Argentinean side of the Pascua-Lama project.
Highlights of our greenfield exploration program for
2017 include the Fourmile target, adjacent to our
Goldrush discovery in Nevada, and the Frontera District
on the border of Argentina and Chile. We have also
formed new partnerships with Alicanto Minerals in
Guyana and Osisko Mining in the Labrador Trough of
Northern Quebec, where we see the potential to develop
new core mineral districts for Barrick. Our portfolio also
contains a number of the world’s largest undeveloped
gold deposits, including Donlin Gold, Cerro Casale, and
Pascua-Lama. These projects contain 31.5 million ounces
of gold in proven and probable reserves (Barrick’s share),
and 29.3 million ounces in measured and indicated
resources (Barrick’s share).
Management Structure Refinements
In December 2016, Michelle Ash, formerly Senior Vice
President, Business Transformation & Innovation, was
elevated to the position of Chief Innovation Officer
and Matt Gili, formerly Executive General Manager for
the Cortez District in Nevada, was elevated to Chief
Technical Officer.
In August 2016, we announced the appointment of
Mark Hill as Chief Investment Officer and a member of
Barrick’s Executive Committee, a group of the Company’s
most senior partners. In this newly-created position,
Mr. Hill will chair Barrick’s Investment Committee and
apply a high degree of consistency and rigor to all capital
allocation decisions at the company – whether at existing
operations, development projects, exploration (both
near-mine and greenfields), or potential acquisitions
and divestments.
In March 2016, Shaun Usmar, then Barrick’s Senior
Executive Vice President and Chief Financial Officer,
announced his resignation from Barrick. Catherine Raw,
formerly Executive Vice President, Business Performance,
succeeded Mr. Usmar as Chief Financial Officer on
April 27, 2016, subsequent to the Company’s 2016
Annual General Meeting. In March 2016, we also
announced that Rob Krcmarov, formerly Senior Vice
President, Global Exploration, had been elevated to the
position of Executive Vice President, Exploration and
Growth, and had become a member of Barrick’s
Executive Committee.
Board Renewal & Appointments
In 2016, the Board of Directors appointed Kelvin
Dushnisky, President of Barrick, as a director. Graham G.
Clow, Chairman of Roscoe Postle Associates Inc.,
and Gary Doer, former Canadian Ambassador to the
United States, were elected as new directors at Barrick’s
Annual General Meeting on April 26, 2016. William
Birchall retired from the Board at the conclusion of
the Company’s 2016 Annual General Meeting. On
December 6, 2016, the Company appointed Pablo
Marcet to its Board of Directors. Mr. Marcet is a seasoned
mining professional with nearly 30 years of experience
in the exploration, development, and operation of
mines across Latin America and East Africa. He has held
senior management positions in geology, mining
operations, and business development, including
15 years at BHP Billiton. Barrick continues to renew the
talent on its Board, with nine of the 14 directors
(excluding the Executive Chairman) being new to the
Company since April 2014.
29
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Outlook for 2017
Operating Unit Guidance
Our 2016 gold and copper production, cost of sales, cash costs, all-in sustaining costs and 2017 forecast gold and
copper production, cost of sales, cash costs and all-in sustaining costs ranges by operating unit are as follows:
2016
production
(000s ozs)
2016
cost of
sales
($/oz)
2016
2016
cash
all-in
costs1
sustaining
($/oz) costs1 ($/oz)
2017
forecast
production
(000s ozs)
2017
forecast cost
of sales
($/oz)
2017
forecast cash
costs1
($/oz)
2017
forecast
all-in
sustaining
costs1 ($/oz)
1,059
1,096
700
435
544
$ 901
852
564
651
872
$ 430
572
395
383
582
$ 518 1,250 – 1,290
910 – 950
625 – 650
380 – 420
770 – 830
714
490
529
769
$ 730 – $ 760
950 – 990
650 – 680
710 – 780
750 – 800
$ 360 – $ 380
650 – 680
400 – 420
430 – 470
500 – 540
$ 430 – $ 470
910 – 980
530 – 560
560 – 620
840 – 940
Operating unit
Gold
Cortez
Goldstrike
Pueblo Viejo (60%)
Lagunas Norte
Veladero
Total Core Mines
3,834
$ 793
$ 480
$ 606 3,900 – 4,100
$ 770 – $ 810
$ 470 – $ 500
$ 650 – $ 710
Turquoise Ridge (75%)
Porgera (47.5%)
Kalgoorlie (50%)
Acacia (63.9%)
Hemlo
Golden Sunlight
266
234
376
530
235
34
603
836
762
880
795
1,512
498
689
627
640
679
1,376
625
858
706
958
839
1,493
260 – 280
250 – 270
390 – 410
545 – 575
205 – 220
35 – 50
575 – 625
780 – 840
750 – 790
860 – 910
800 – 860
900 – 1,200
460 – 500
650 – 700
600 – 630
580 – 620
640 – 690
900 – 950
650 – 730
900 – 970
670 – 710
880 – 920
880 – 980
950 – 1,040
Total Continuing Operations 5,509
$ 844
$ 523
$ 659 5,600 – 5,900
$ 780 – $ 820
$ 510 – $ 535
$ 700 – $ 750
Round Mountain (50%)2
Bald Mountain2
Pierina
5
3
92
701
1,112
911
608
723
662
601
1,692
1,301
Total Divested/Closed Sites
100
$ 897
$ 658
$ 1,250
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total Gold3
5,609
$ 798
$ 518
$ 668 5,600 – 5,900
$ 780 – $ 820
$ 510 – $ 535
$ 700 – $ 750
Total Consolidated Barrick4,5
5,609
$ 798
$ 546
$ 730 5,600 – 5,900
$ 780 – $ 820
$ 510 – $ 535
$ 720 – $ 770
2016
production
(millions lbs)
2016
2016
2016
all-in
cost of C1 cash
costs1
sustaining
($/lb) costs1 ($/lb)
sales
($/lb)
2017
forecast
production
(millions lbs)
2017
forecast cost
of sales
($/lb)
2017
forecast
C1 cash costs1
($/lb)
2017
forecast
all-in
sustaining
costs1 ($/lb)
Copper
Zaldívar (50%)
Lumwana
Jabal Sayid (50%)
114
271
30
$ 1.93
1.16
2.33
$ 1.55
1.44
1.97
$ 2.05
1.97
2.98
120 – 135
250 – 275
30 – 40
$ 2.00 – $2.20
1.20 – 1.40
2.10 – 2.80
~$ 1.50
1.40 – 1.60
1.50 – 1.90
$ 1.90 – $ 2.10
2.10 – 2.30
2.30 – 2.80
Total Copper
415
$ 1.43
$ 1.49
$ 2.05
400 – 450
$ 1.50 – $1.70
$ 1.40 – $1.60
$ 2.10 – $ 2.40
1. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may
not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures
used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A.
2. Includes results from Bald Mountain and Round Mountain up to January 11, 2016, the effective date of sale of these assets.
3. Total gold cash costs and all-in sustaining costs per ounce exclude the impact of hedges and/or costs allocated to non-operating sites.
4. Operating unit guidance ranges reflect expectations at each individual operating unit, and may not add up to the company-wide guidance range total. The
company-wide guidance ranges exclude Pierina which is mining incidental ounces as it enters closure and Bald Mountain and Round Mountain which were disposed
of in January 2016.
5. Total Consolidated Barrick all-in sustaining costs include corporate administration costs and expected savings from an improved capital management program that
have not been reflected in the individual site guidance ranges at this time.
30
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Operating Unit, Consolidated Expense and Capital Guidance
Our 2016 gold and copper production, cost of sales, cash costs1, all-in sustaining costs1, consolidated expenses and
capital expenditures and forecast gold and copper production, cost of sales, cash costs1, all-in sustaining costs1,
consolidated expenses and capital expenditures for 2017 are as follows:
($ millions, except per ounce/pound data)
Gold production and costs
Production (millions of ounces)
Gold unit production costs
Cost of sales – gold ($ per oz)
All-in sustaining costs ($ per oz)1
Cash costs ($ per oz)1
Depreciation ($ per oz)
Copper production and costs
Production (millions of pounds)
Copper unit production costs
Cost of sales – copper ($ per lb)
C1 cash costs ($ per lb)1
Depreciation ($ per lb)
Copper all-in sustaining costs ($ per lb)1
Exploration and project expenses
Exploration and evaluation
Project expenses
General and administrative expenses
Corporate administration
Stock-based compensation2
Acacia3
Other expense4
Finance costs
Attributable capital expenditures:
Attributable minesite sustaining
Attributable project
Total attributable capital expenditures5
2016 Original
guidance
Q3 2016
Guidance
2016 Actual
2017 Guidance
5.00 – 5.50
5.25 – 5.55
5.52
5.60 – 5.90
–
775 – 825
550 – 590
240 – 260
800 – 850
740 – 775
540 – 565
240 – 260
370 – 410
380 – 430
–
1.45 – 1.75
0.20 – 0.30
2.05 – 2.35
1.35 – 1.55
1.40 – 1.60
0.20 – 0.30
2.00 – 2.20
225 – 275
125 – 155
100 – 120
~215
~145
~45
~25
20 – 40
690 – 730
195 – 245
115 – 145
80 – 100
~260
~160
~40
~60
20 – 40
710 – 750
798
730
546
249
415
1.43
1.49
0.23
2.05
237
132
105
256
163
38
55
60
788
780 – 820
720 – 770
510 – 535
245 – 265
400 – 450
1.50 – 1.70
1.40 – 1.60
0.30 – 0.40
2.10 – 2.40
415 – 495
185 – 225
230 – 270
~285
~200
~40
~45
25 – 45
600 – 650
1,200 – 1,400 1,050 – 1,100
150 – 200
1,200 –1,300
150 – 250
1,350 – 1,650
977
145
1,122
1,050 – 1,200
250 – 300
1,300 – 1,500
1. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may
not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures
used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A.
2. 2016 actual based on US$15.98 and 2017 guidance based on a three month trailing average ending December 31, 2016 of US$16.92 per share and excludes Acacia.
3. 2016 actual includes $32 million in stock-based compensation. 2017 guidance includes ~$20 million in stock-based compensation.
4. 2016 actual includes a net loss on debt extinguishment of $129 million.
5. 2016 actual attributable capital expenditures are presented on the same basis as 2016 guidance, which include our 60% share of Pueblo Viejo and Arturo and our
50% share of Zaldívar and Jabal Sayid. 2017 guidance includes our 60% share of Pueblo Viejo and Arturo, our 63.9% share of Acacia and our 50% share of
Zaldívar and Jabal Sayid.
2017 Guidance Analysis
Estimates of future production, cost of sales, and cash
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).
In 2017 we expect improvements to our mine site AISC
and capital expenditures guidance as we identify further
savings from our continued focus on capital discipline,
currently reflected in the overall company guidance.
Production
We expect 2017 gold production to be in the range of
5.6 to 5.9 million ounces. 2017 gold production is
expected to be higher than 2016, primarily as a result of
increases at Cortez and Veladero, partially offset by
Goldstrike and Pueblo Viejo.
Production at Cortez in 2017 is expected to be
18% to 22% higher than the prior year due to an
increase in open pit production, primarily from higher
grade oxide ore as well as increased throughput at the
mill processed on site and larger volumes of refractory
ore being processed at Goldstrike. This is partially offset
by an expected decline in underground ore grade as
the mine transitions to lower grade ore zones deeper in
the deposit.
31
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Significantly higher production is expected at Veladero
We expect significantly lower cash costs at Cortez
in 2017 compared to the prior year. The expected
increase in production at Veladero is due to higher grade
ore being processed and faster recovery from the leach
pad, as a result of better operational management. In
addition, our 2017 production guidance for Veladero
anticipates higher ore tonnes mined and processed in
2017, given the suspension, environmental and bad
weather incidents experienced in 2016.
At Goldstrike, we expect 2017 production to be in
the range of 910 to 950 thousand ounces, 13% to
17% lower than the prior year. Our emphasis at the
underground in 2017 will be on development deeper in
the mine and ore mined will also be impacted by a
slightly higher percentage of cut and fill tonnage.
Production from the open pit is expected to be lower as
we transition from ore mining at the Arturo pit to
stripping the 3rd and 4th northwest laybacks at the
Betze Post pit.
Production at Pueblo Viejo is expected to be lower
than the prior year due to reduced gold grades, partially
offset by increased gold recovery from ore blending and
Best-in-Class initiatives improving availability and
utilization of autoclaves.
Cost of Sales
On a per ounce basis, cost of sales attributable to gold,
after removing the portion related to non-controlling
interests, is expected to be in the range of $780 to
$820 per ounce, in line with the prior year. In our 2017
guidance, we do not anticipate inventory impairment
charges (2016: $68 million) or hedge losses from
our currency and fuel hedging programs (2016:
$89 million loss).
We are currently projecting higher energy and
consumables costs in 2017, increasing direct mining
costs from the prior year. We plan to offset those rising
costs with a continued focus on lowering our other
direct mining costs through Best-in-Class initiatives,
which should improve operating efficiencies and lower
labor and contractor costs.
Cash Costs per ounce
Cash costs1 are expected to be in the range of $510 to
$535 per ounce, in line with the prior year, after
excluding hedge losses of $13 per ounce from 2016.
Expected improvements in cash costs at Cortez and
Veladero are partially offset by increases at Goldstrike
and Lagunas Norte.
in 2017 compared to the prior year, as productivity
improvements generated by digitization and Best-in-
Class start contributing to additional mining and
processing volumes which more than offset increases
in energy and consumable cost assumptions.
Lower expected cash costs at Veladero in 2017
compared to the prior year, are the result of higher
production on unit costs which more than offsets our
higher energy and consumable cost assumptions.
These cash cost decreases are expected to be
partially offset by increases in cash costs at Goldstrike
and Lagunas Norte due to lower expected production
and higher expected energy and consumables costs,
partially offset by improvements to direct mining costs
as a result of Best-in-Class initiatives.
All-In Sustaining Costs per ounce
All-in sustaining costs1 are expected to be in the range
of $720 to $770 per ounce for gold, which is comparable
to the $730 per ounce in 2016. In 2017, we will
continue to focus on Best-in-Class initiatives to reduce
mining and labor costs, partially offsetting higher
expected energy and consumable costs, digitization costs
at our mine sites ($14 per ounce) and an increase in
corporate administration expense ($7 per ounce), as we
seek to optimize our process and systems through
business improvement initiatives, including digitization.
The expected increase in minesite sustaining capital
in 2017 compared to the prior year is expected to be
offset by the impact of higher expected production on
unit costs and targeted capital savings from our continued
focus on capital discipline process.
Exploration and Project Expenses
We expect to incur approximately $185 to $225 million
of exploration and evaluation (“E&E”) expenditures in
2017 with approximately 80 percent of that spend
allocated to the Americas. The majority of the remaining
budget is allocated to Acacia. Our exploration programs
balance high-quality brownfield projects, greenfield
exploration, and emerging discoveries that have the
potential to become profitable mines. We continue to
take advantage of existing infrastructure and advance
key growth projects, including three significant projects
in Nevada: the Cortez Deep South underground
expansion, the potential development of an underground
mine at Goldrush and a significant expansion of
throughput at the Turquoise Ridge mine. At the Lagunas
32
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Norte mine in Peru, we are advancing a project to extend
the life of the mine by approximately nine years by
mining the refractory material below the oxide ore body
in the current open pit.
Highlights of our greenfield exploration program for
2017 include the Fourmile target, adjacent to our
Goldrush discovery in Nevada, and the Frontera District
on the border of Argentina and Chile.
We expect to incur approximately $230 to
$270 million of project expenses in 2017, compared
to $105 million in 2016. The increase in project expenses
primarily reflects the cost to complete a prefeasibility
study we have initiated to evaluate the construction of
an underground mine at Lama, the Argentinean side of
the Pascua-Lama project. If successful, it could support
a staged development of the Pascua-Lama deposit.
Project expenses also includes the cost of Pascua-Lama
water management and monitoring activities and other
holding costs as part of the temporary closure plan; and
the costs associated with our Alturas, Donlin Gold and
Cerro Casale projects.
General and Administrative Expenses
In 2017 we expect corporate administration costs to
be in the range of $175 to $200 million, an increase
from the prior year, as we seek to optimize our process
and systems through business improvement initiatives,
including digitization.
Finance Costs
Finance costs of $600 to $650 million primarily represent
interest expense on long-term debt. We expect finance
costs in 2017 to be lower than 2016 levels primarily due
to lower interest expense in 2017 following $2.04 billion
of debt repayments in 2016. The impact of any further
debt reductions accomplished in 2017 has not been
reflected in our guidance on interest expense. 2016
finance costs included a $129 million net loss on the
extinguishment of debt and further debt repurchases
could lead to additional losses on extinguishment that
could cause an increase to forecasted finance costs.
Capital Expenditures
Total attributable capital expenditures for 2017 are
expected to be in the range of $1.3 to $1.5 billion,
compared to $1.1 billion in 2016, which reflects an
increase in both sustaining and project capital.
Minesite sustaining capital expenditures reflect the
capital spending required to support current planned
production levels and those which do not meet our
definition of project capital. This includes capitalized
production phase stripping costs at our open pit mines,
underground mine development and minesite E&E
expenditures that meet our criteria for capitalization.
Attributable minesite sustaining capital expenditures
are expected to increase from 2016 expenditure levels of
$977 million to a range of $1,050 to $1,200 million,
mainly due to our digitization project, planned tailings
expansions and increased stripping at Goldstrike and
Veladero, equipment rebuilds and other process facility
upgrades at Hemlo, Lumwana and Pueblo Viejo. These
increases in sustaining capital are partially offset by
expected savings from our continued focus on capital
discipline process. These savings are not reflected in the
minesite guidance ranges at this time and are expected
to be included in updates through the year.
At Goldstrike in 2017, sustaining capital expenditures
are expected to increase primarily due to planned tailings
expansions, process improvements, and underground
sustaining projects to enable mining at greater depth.
Capitalized waste stripping is expected to increase
compared to the prior year as we shift from mining ore
at Arturo to stripping the 3rd and 4th northwest laybacks
in the Betze Post pit, partially offset by reduced operating
spend driven by savings initiatives to optimize planned
production at the lowest cost.
At Veladero, a significant increase in capital is
expected in 2017, mainly related to expansion of the
leach pad, digitization, equipment purchases and
increased capitalized waste stripping due to phases 5
and 6 of the Federico pit.
At Pueblo Viejo, the increase in sustaining capital in
2017 is related to initiatives to improve the plant and
mine operational efficiency, process facility upgrades and
construction of a substation.
At Lumwana, the 2017 increases in sustaining capital
are related to Chimi South 2 Embankment for water
diversion and equipment rebuilds.
At Hemlo, sustaining capital increases are primarily
related to a tailings dam expansion and replacement of
the semi-autogenous grinding mill shell in 2017.
Project capital expenditures reflect capital
expenditures at new projects and existing operations that
are related to discrete projects intended to increase
production and will not benefit production for at least
12 months. Project capital expenditures also include
capital expenditures related to the initial construction of
a project and include all of the expenditures required to
bring the project into operation and achieve commercial
production levels.
33
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Attributable project capital expenditures are expected
to increase to a range of $250 to $300 million in 2017.
The increase in project capital expenditures in 2017
compared to the prior year is primarily due to the Cortez
Lower Zone expansion project, and an increase in
pre-production waste stripping at Crossroads phase 1
at Cortez compared to 2016, the finalization of the
Robertson acquisition and a slight increase in spend
at Pascua-Lama. This is partially offset by the completion
of pre-production waste stripping at Arturo in 2016.
Effective Income Tax Rate
At current spot gold prices, our expected effective tax
rate for 2017 is approximately 45%.
Outlook Assumptions and Economic Sensitivity Analysis
Gold revenue, net of royalties3
Copper revenue, net of royalties2
Copper revenue, net of royalties2
Gold all-in sustaining costs
WTI crude oil price3
Australian dollar exchange rate
Canadian dollar exchange rate
Copper all-in sustaining costs
WTI crude oil price3
Chilean peso exchange rate
2017 Guidance
Hypothetical
assumption
change
$ 1,050/oz
$ 2.25/lb
$ 2.25/lb
+/- $ 100/oz
+ $ 0.50/lb
- $ 0.50/lb
$
55/bbl
0.75 : 1
1.32 : 1
+/- $ 10/bbl
+/- 10%
+/- 10%
$
55/bbl
675 : 1
+/- $ 10/bbl
+/- 10%
Impact on
revenue
(millions)
+/- $ 571
+ $ 213
- $ 171
n/a
n/a
n/a
n/a
n/a
Impact on cost
of sales
(millions)
n/a
n/a
n/a
+/- $ 17
+/- $ 29
+/- $ 32
Impact on
AISC1
+/- $ 3/oz
+ $ 0.03/lb
- $ 0.03/lb
+/- $ 3/oz
+/- $ 5/oz
+/- $ 6/oz
+/- $ 5
+/- $ 6
+/- $ 0.01/lb
+/- $ 0.01/lb
1. All-in sustaining costs is a non-GAAP financial performance measure with no standardized definition under IFRS. For further information and a detailed
reconciliation, please see pages 69 to 83 of this MD&A.
2. Utilizing option collar strategies, the company has protected the downside of a portion of its expected 2017 copper production at an average floor price of
$2.20 per pound and can participate on the same amount up to an average price of $2.82 per pound. Our remaining copper production is subject to market prices.
3. Due to our hedging activities, which are reflected in these sensitivities, we are partially protected against changes in these factors.
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
Responsibility Committee also provide oversight
focusing on financial and operational (e.g. Safety &
Health, Environmental, Community, Security, etc.) risk
exposures, respectively.
34
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Management Oversight
On a weekly basis, the global leadership team, including
the Executive Committee and representatives from each
of Barrick’s country offices, mine sites 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 most important 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 comprehensive 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 through scheduled interest and
principal repayments and the results of leverage ratio
calculations, which could influence our investment grade
credit ratings and ability to access capital markets. In
addition, the Company’s ability to draw on our 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, 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.
Key Risk Modification Activities:
n Reduced notional and lengthened average tenor
of our outstanding debt through liability
management activities;
n Continued focus on generating positive free cash flow
by improving the underlying cost structures of our
operations in a sustainable manner;
n Disciplined capital allocation criteria for all
investments;
n Preparation of budgets and forecasts to understand
the impact of different price scenarios on liquidity, and
formulate appropriate strategies; and
n Other options to enhance liquidity include drawing
on our $4.0 billion undrawn credit facility, asset sales,
joint ventures, or issuance of debt or equity securities.
Improving free cash flow and AISC
Our ability to improve productivity, drive down operating
costs and reduce working capital remains a focus in
2017 and is subject to several sources of uncertainty. This
includes our ability to achieve and maintain industry-
leading margins by improving the productivity and
efficiency of our operations through our Best-in-Class
program which includes the digital transformation
of Barrick.
Key Risk Modification Activities:
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 Ongoing implementation of a Best-in-Class program
to unleash the full potential of our mines and
encompassing:
n A standardized, performance-oriented,
measurement scorecard linking top operational and
economic measures;
n Monthly optimization forums as a way to
communicate and review the Best-in-Class projects
and performance to targets; and
n Innovation and digitization program focused on
driving value across the business.
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
35
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS while working to minimize the social and environmental
impacts of our activities. Incidents of corruption in the
extractive industry are indicative of the risks related to
interaction with government officials and the potential
consequences to our partnerships in the locations where
we operate. 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. Our ability to maintain compliance
with environmental, regulatory and community
obligations remains one of our top priorities.
Key Risk Modification Activities:
n Our external Corporate Social Responsibility Advisory
Board was formed in 2012 and provides expert advice
to the Company on a range of corporate responsibility
matters, including community relations, sustainable
development, water, energy, climate change, security
and human rights;
n Our obligations, expectations and intentions are
Resources and Reserves 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 2017 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 as discussed
on page 28. Uncertainty related to these and other
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.
Key Risk Modification Activities:
n Focus on responsible Mineral Resource Management
and continuously improved orebody knowledge,
adding to and upgrading reserves and resources
(organically and inorganically);
codified in our Vision and Values and the Code of
Business Conduct and Ethics, and they are reinforced
regularly at all levels of the Company;
n Develop and advance a balanced pipeline of high-
return projects and seek to exit those that do not
meet expectations;
n Barrick’s community relations, environment, safety and
health, security and compliance management systems
set expectations, define performance standards and
provide the necessary tools to modify the related risks;
n We take a partnership approach 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;
n We participate in the annual CDP Climate Change
and Water Disclosure process, providing investors and
other interested partners with detailed information on
our water and energy use and emissions data; and
n We open our social and environmental performance
to third-party scrutiny, including through the ISO
14001 re-certification process, International Cyanide
Management Code audits, annual human rights
impact assessments, and an annual assurance against
the International Council on Mining and Metal’s
Sustainable Development Framework.
n Pursue high-return growth options with a mindset of
innovation, cost control, and risk mitigation;
n Enhance project design to stagger capital outlay and
optimize timing of cash flows; and
n Exploration activities including minesite exploration
and global programs.
Market Overview
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.
Gold
The price of gold is subject to volatile price movements
over short periods of time and is affected by numerous
industry and macroeconomic factors. During the year,
the gold price ranged from $1,061 per ounce to
$1,375 per ounce. The average market price for the year
of $1,251 per ounce represented an increase of 8%
versus 2015.
36
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS USD
90
85
80
75
70
65
60
55
50
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
2009
2010
2011
Average Spot Price
USD Index
AVERAGE MONTHLY SPOT GOLD PRICES
(dollars per ounce)
2,000
1,750
1,500
1,250
1,000
750
The price of copper traded in a subdued range in
2016, before achieving significant price upside in the
fourth quarter due to positive economic and copper
usage data from China, expectations of increased
infrastructure spending in the U.S., an increase in the
price of other non-precious mined commodities, and an
increase in investor sentiment. Challenging near-term
fundamentals currently limit the potential copper price
upside, but a dearth of new projects scheduled to enter
production later in the decade could begin to positively
impact prices in the coming years should physical
demand continue to grow.
2012
2013
2014
2015
2016
AVERAGE MONTHLY SPOT
COPPER PRICES (dollars per pound)
The price of gold in 2016 generally rose over the first
half of the year, reaching its high for the year in early
July, and generally declined over the second half of the
year. In the first half of 2016, the gold price was
positively influenced by declining expectations regarding
increases in the benchmark U.S. interest rate, low and
negative interest rates on sovereign debt issued by many
of the world’s largest economies, global economic and
political uncertainty highlighted by the British referendum
in favor of leaving the European Union, and investor
interest in gold as a safe haven asset. In the second half
80
of 2016, the gold price was negatively influenced by a
stronger U.S. dollar, rising U.S. and global interest rates,
75
expectations of fiscal stimulus measures in the U.S.
70
to be put in place by the newly elected administration,
65
subdued physical demand in key consuming countries
60
of China and India due to government measures
to maintain currency valuations, and a decline in
investor sentiment.
90
55
85
50
90
85
80
75
70
65
60
55
50
Copper
During 2016, London Metal Exchange (“LME”) copper
prices traded in a range of $1.96 to $2.74 per pound,
averaged $2.21 per pound, and closed the year at
$2.50 per pound. Copper prices are significantly
influenced by physical demand from emerging markets,
especially China.
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
2012
2013
2014
2015
2016
Utilizing option collar strategies, and excluding co-product
copper hedges put in place by Acacia, we have protected
the downside on approximately 65 million pounds of
expected 2017 copper production at an average floor
price of $2.20 per pound and can participate up to an
average price of $2.82 per pound. These positions expire
evenly over the first six months of the year. In addition,
Acacia has co-product copper collar hedges in place on
approximately 13 million pounds of expected 2017
AVERAGE MONTHLY SPOT
copper production at an average floor price of $2.30 per
COPPER PRICES (dollars per pound)
pound and can participate up to an average price of
$2.78 per pound. Our remaining copper production is
2,000
subject to market prices.
1,750
1,500
1,250
1,000
750
500
2007
2008
2009
2010
2011
37
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 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, 2016, we recorded 44 million pounds of
copper sales subject to final settlement at an average
provisional price of $2.51 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.
Silver
Silver traded in a range of $13.75 to $21.14 per ounce in
2016, averaged $17.14 per ounce and closed the year at
$16.24 per ounce. The silver price is driven by factors
similar to those influencing investment demand for gold.
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)
40
35
30
25
20
15
10
5
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.
Fluctuations in the US dollar increase the volatility of
our costs reported in US dollars, subject to positions put
in place through our currency hedging program. In 2016,
the Australian dollar traded in a range of $0.68 to
$0.78 against the US dollar, while the US dollar against
the Canadian dollar, Chilean peso and Argentinean peso
ranged from $1.25 to $1.47, CLP642 to CLP733 and
ARS 12.90 to ARS 16.17, 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, at the end of 2016, we
did not have any foreign currency hedge positions.
During the year, we recorded losses in earnings of
approximately $28 million from our foreign currency
derivatives, primarily impacting our operating and
corporate administration costs (2015: $87 million loss;
2014: $97 million gain).
A strengthening US dollar versus our key currency
exposures is beneficial to our cost structure in 2017,
as we are unhedged against such exposures as at
December 31, 2016.
2012
2013
2014
2015
2016
AVERAGE MONTHLY ARS SPOT RATES
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
16
14
12
10
8
6
4
AVERAGE MONTHLY SPOT
SILVER PRICES (dollars per ounces)
2012
2013
2014
2015
2016
38
675
625
575
525
475
425
2009
2010
2011
AVERAGE MONTHLY SPOT
SILVER PRICES (dollars per ounces)
675
625
575
525
475
425
2009
2010
2011
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS AVERAGE MONTHLY AUD SPOT AND HEDGE RATES
AVERAGE MONTHLY AUD SPOT AND HEDGE RATES
AVERAGE MONTHLY CLP SPOT AND HEDGE RATES1
1.2
1.2
1.10
1.10
1.00
1.00
0.90
0.90
0.80
0.80
0.70
0.70
0.60
0.60
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
Average Spot Rate
Average Spot Rate
Average Hedge Rate
Average Hedge Rate
1.1
1.1
750
1.0
1.0
700
0.9
0.9
650
0.8
0.8
600
0.7
0.7
550
0.6
0.6
500
450
2012
2013
2014
2015
2016
Average Spot Rate
Average Hedge Rate
AVERAGE MONTHLY CAD SPOT AND HEDGE RATES1
AVERAGE MONTHLY CAD SPOT AND HEDGE RATES1
1. There were no CLP hedge positions in 2016.
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
750
700
650
600
550
500
450
750
700
650
600
550
500
450
1.50
1.50
1.40
1.40
1.30
1.30
1.20
1.20
1.10
1.10
1.00
1.00
0.90
0.90
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
Average Spot Rate
Average Spot Rate
Average Hedge Rate
Average Hedge Rate
1. There were no CAD hedge positions in 2016.
Fuel
For 2016, the price of West Texas Intermediate (“WTI”)
crude oil traded in a wide range between $26 and
1.4
1.4
$55 per barrel, averaged $43 per barrel and closed the
year at $54 per barrel. During 2016, the price of crude
1.3
1.3
oil generally rose after reaching multi-year lows in
the middle of the first quarter. Reduced supply and
1.2
1.2
increasing demand have helped towards balancing the
physical market, and a recent agreement by major
1.1
1.1
producing nations to cap production has improved
overall market sentiment towards crude oil.
1.0
1.0
0.9
0.9
AVERAGE MONTHLY SPOT CRUDE OIL PRICE (WTI)
(dollars per barrel)
1.4
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
2012
2013
2014
2015
2016
39
$120
$100
$80
$60
$40
$20
120
100
80
60
40
20
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2016, we recorded hedge losses in earnings of
$47 million on our fuel hedge positions (2015: $19 million
loss and 2014: $4 million loss). Assuming December 31,
2016 market forward curves and year-end spot prices,
we expect to realize fuel hedge losses of approximately
$47 million in 2017. A significant portion of these losses
has already been recorded in the consolidated statements
of income as an unrealized loss on non-hedge derivatives.
Beginning in January 2015, upon early adoption of IFRS 9,
Barrick’s fuel hedges qualified for hedge accounting and
unrealized gains and losses began being recorded in
Other Comprehensive Income.
Financial Fuel Hedge Summary
Barrels
(thousands)
% of total
expected
exposure
Average
price
Impact of $10
change on pre-
tax earnings
(USD millions)1
2017
2018
2,214
1,207
80
78
50%
28%
22
31
1. Includes the impact of hedges currently in place.
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. The range was raised by
an additional 25 basis points in December 2016. As
economic conditions in the US continue to normalize,
we expect incremental increases to short-term rates
to continue in 2017.
At present, our interest rate exposure mainly relates
to interest receipts on our cash balances ($2.4 billion
at December 31, 2016); 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
($0.4 billion at December 31, 2016). Currently, the
amount of interest expense recorded in our consolidated
statement of income is not materially impacted by changes
in interest rates, because the majority of debt was issued
at fixed interest rates. The relative amounts of variable-
rate financial assets and liabilities may change in the
future, depending on the amount of operating cash flow
we generate, as well as the level of capital expenditures
and our ability to borrow on favorable terms using
fixed rate debt instruments. Changes in interest rates
affect the accretion expense recorded on our provision
for environmental rehabilitation and therefore would
affect our net earnings.
40
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Review of Annual Financial Results
Revenue
($ millions, except per ounce/pound
data in dollars)
For the years ended December 31
Gold
000s oz sold1
000s oz produced1
Revenue
Market price2
Realized price2,3
Copper
millions lbs sold1
millions lbs produced1
Revenue
Market price2
Realized price2,3
Other sales
Total revenue
2016
2015
2014
6,284
5,503 6,083
5,517
6,249
6,117
$ 7,908 $ 7,813 $ 8,744
1,251 1,160
1,266
$ 1,248 $ 1,157 $ 1,265
510
511
405
415
435
436
$ 466 $ 1,002 $ 1,224
3.11
3.03
$ 184 $ 214 $
271
$ 8,558 $ 9,029 $ 10,239
2.21
2.29
2.49
2.37
1. Includes our equity share of gold ounces from Acacia and Pueblo Viejo and
copper pounds from Zaldívar and Jabal Sayid.
2. Per ounce/pound weighted average.
3. Realized price is a non-GAAP financial performance measure with no
standardized meaning under IFRS and therefore may not be comparable
to similar measures of performance presented by other issuers. For further
information and a detailed reconciliation of each non-GAAP measure used
in this section of the MD&A to the most directly comparable IFRS measure,
please see pages 69 to 83 of this MD&A.
In 2016, gold revenues were up 1% compared to the
prior year primarily due to a higher realized gold price1,
partially offset by a decrease in gold sales volume.
Excluding the impact of divested sites, gold revenues
were up 14% compared to the prior year due to an
increase in gold sales volume combined with higher
realized gold prices. Realized gold prices1 for 2016 were
up $91 per ounce compared to the prior year reflecting
the higher market gold prices in 2016, which were up
8% compared to 2015.
In 2016, gold production was 600 thousand ounces
or 10% lower than the prior year primarily as a result of
the divestment of non-core assets. Excluding the impact
of these divested sites, production increased by 2%
or 114 thousand ounces due to higher grade and
throughput at Pueblo Viejo, Cortez, Turquoise Ridge,
Goldstrike and Acacia, partially offset by lower
production at Lagunas Norte and Veladero.
Copper revenues for 2016 were down 53% compared
to the prior year primarily due to the divestment of 50%
of our ownership in Zaldívar which was completed on
December 1, 2015, combined with a lower realized
copper price1. In 2016, the realized copper price1 was
down $0.08 per pound compared to 2015, due to the
11% decline in market copper prices over the prior year
and the negative provisional pricing adjustments
recognized in 2016.
Copper production for 2016 decreased by 96 million
pounds or 19% compared to the prior year due to lower
production contribution from Zaldívar following the
divestment of 50% of our ownership. Excluding the
impact of the divestiture, copper production increased by
7 million pounds primarily related to the achievement of
commercial production at Jabal Sayid in July 2016,
partially offset by lower production at Lumwana due to
lower tonnes mined due to equipment availability and
lower grades.
Production Costs
($ millions, except per ounce/pound
data in dollars)
For the years ended December 31
Gold
Direct mining costs
Depreciation
Royalty expense
Community relations
Cost of sales – gold
Cost of sales – gold (per oz)1
Cash costs2,3
All-in sustaining costs – gold2,3
Copper
Cost of sales – copper
Cost of sales – copper (per lb)1
C1 cash costs2,3
All-in sustaining costs – copper2,3
2016
2015
2014
$ 3,215 $ 4,006 $ 4,155
1,414
1,613
1,503
263
235
224
61
50
37
$ 4,979 $ 5,904 $ 5,893
842
598
864
798
546
730
859
596
831
319
1.43
1.49
954
2.19
1.92
$ 2.05 $ 2.33 $ 2.79
814
1.65
1.73
1. Cost of sales related to gold per ounce is calculated using cost of sales related
to gold on an attributable basis (removing the non-controlling interest of 40%
Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable
gold ounces. Cost of sales related to copper per pound is calculated using cost
of sales related to copper including our proportionate share of cost of sales
attributable to equity method investments (Zaldívar and Jabal Sayid), divided
by consolidated copper pounds (including our proportionate share of copper
pounds from our equity method investments).
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 standardized meaning under IFRS and therefore
may not be comparable to similar measures of performance presented by
other issuers. For further information and a detailed reconciliation of each
non-GAAP measure used in this section of the MD&A to the most directly
comparable IFRS measure, please see pages 69 to 83 of this MD&A.
41
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
efficiencies combined with lower royalty expense at
Lumwana resulting from a decreased royalty rate (as
noted below) combined with lower depreciation
expense. These were partially offset by the cost of sales
associated with Jabal Sayid; our 50% owned copper
mine in Saudi Arabia, which entered commercial
production on July 1, 2016 combined with lower sales
volumes at Lumwana and Zaldívar.
In June 2016, the Zambian government passed
legislation to amend the royalty tax for mining operations
to a variable rate based on the prevailing copper price
effective June 1, 2016. These rates are 4% at copper
prices below $2.04 per pound; 5% at copper prices
between $2.04 per pound and $2.72 per pound; and
6% at copper prices of $2.72 per pound and above.
Legislation was also passed to remove the 15% variable
profit tax on income from mining companies.
Copper all-in sustaining costs1, which have been
adjusted to include our proportionate share of equity
method investments, were 12% lower than the prior
year primarily reflecting lower direct mining costs as a
result of improved cost controls at Lumwana and lower
fuel and acid costs at Zaldívar, combined with lower
royalty expense at Lumwana. These were partly offset by
lower sales volumes.
Capital Expenditures1
($ millions)
For the years ended December 31
Minesite sustaining2
Project capital expenditures3,4
Capitalized interest
Total consolidated
capital expenditures
Attributable consolidated
capital expenditures5
2016
2015
2014
$ 944 $ 1,359 $ 1,638
596
30
133
17
175
–
$ 1,119 $ 1,509 $ 2,264
$ 1,122 $ 1,477 $ 2,204
1. These amounts are presented on a 100% accrued basis, except for attributable
consolidated capital expenditures.
2. Includes both minesite sustaining and mine development.
3. Project capital expenditures are included in our calculation of all-in costs, but
not included in our calculation of all-in sustaining costs.
4. Includes both minesite expansion and projects.
5. These amounts are presented on the same basis as our guidance. For 2016,
these amounts include our 60% share of Pueblo Viejo and Arturo and our
50% share of Zaldívar and Jabal Sayid. For 2015, these amounts include our
60% share of Pueblo Viejo and Arturo and our 50% share of Jabal Sayid.
In 2016, cost of sales applicable to gold was 16% lower
than the prior year primarily due to lower ounces sold,
as discussed above. On a per ounce basis, cost of sales
applicable to gold4 after removing the portion related to
non-controlling interests, was 7% lower than the prior
year primarily due to a decrease in direct mining costs
combined with a positive change in our sales mix as a
result of the divestment of some of our higher cost mine
sites. Direct mining costs have decreased as a result of
lower fuel and energy prices, despite a significant
proportion of our oil exposure being hedged, as well as
the impact of Best-in-Class initiatives, including lower
labor and consumable costs and improved operating
efficiencies. Lower cost of sales was also attributable to
lower inventory impairment charges combined with
lower depreciation expense as a result of divested sites,
lower depreciation at Pueblo Viejo as a result of the
impairment recorded in the fourth quarter of 2015
and a life of mine extension at Lagunas Norte; partially
offset by higher depreciation expense at Cortez due to
increased sales volume attributed to the Cortez Hills
open pit and Arturo as it entered commercial production
on August 1, 2016.
In 2016, gold all-in sustaining costs1 were down
$101 per ounce or 12% compared to the prior year
primarily due to a reduction in minesite sustaining capital
expenditures, as a result of lower capitalized stripping
costs and our continued capital discipline, combined with
lower direct mining costs as described above. In addition,
2016 all-in sustaining costs were favorably impacted by a
higher proportion of our sales coming from lower cost
operations such as Pueblo Viejo and Cortez.
In 2016, cost of sales applicable to copper was 61%
lower than the prior year following the divestment of
50% of our ownership in the Zaldívar mine. Our
remaining 50% interest in Zaldívar is equity accounted
for and therefore we do not include Zaldívar’s cost of
sales in our consolidated copper cost of sales. On a per
pound basis, cost of sales applicable to copper4, after
including our proportionate share of cost of sales at our
equity method investees, decreased 13% compared to
the prior year primarily due to lower direct mining costs
as part of initiatives to reduce costs and increase
42
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2016, total consolidated capital expenditures decreased
26% compared to the prior year or 10% excluding the
impact of divested sites. The decrease is primarily due to
a decrease in minesite sustaining capital expenditures
combined with lower capitalized interest, partially offset
by increased project capital expenditures. The 31%
decrease in minesite sustaining capital expenditures is
primarily due to the impact of divested sites. Excluding
this impact, minesite sustaining capital expenditures
decreased 14% primarily due to lower capitalized
stripping costs, primarily at Veladero, and our continued
focus on capital discipline across the Company and in
particular at Veladero and at Lagunas Norte. Capitalized
interest decreased by $17 million compared to the prior
year as a result of the completion of the thiosulfate
circuit at Goldstrike, which entered commercial
production in the third quarter of 2015. Project capital
expenditures increased by $42 million as a result of
$81 million in reversals of accruals for contract claims
and other project costs at Pascua-Lama in the prior year,
partially offset by a $33 million decrease in project
expenditures on the thiosulfate circuit at Goldstrike.
Significant project capital expenditures in 2016 were
Arturo, progressing with feasibility studies at Cortez
Lower Zone and Lagunas Norte Refractory Ore Project.
General and Administrative Expenses
($ millions)
For the years ended December 31
Corporate administration1
Stock-based compensation2
Acacia
2016
2015
2014
$ 163 $ 176 $ 332
9
44
15
42
38
55
General & administrative expenses
$ 256 $ 233 $ 385
1. For the year ended December 31, 2016, corporate administration costs
include approximately $9 million of severance costs (2015: $29 million).
Starting in 2015, operating segment administration costs have been allocated
to our operating sites and are now included in cost of sales. In 2014, this
amount was $120 million.
2. Based on US$15.98 share price as at December 31, 2016 (2015: US$7.38;
2014: US$10.75) and excludes Acacia.
General and administrative expenses were $23 million
higher than the prior year, primarily related to higher
stock-based compensation expense combined with
higher expenses at Acacia (also primarily relating to their
stock-based compensation), partially offset by a
reduction in overhead costs and severance costs as a
result of actions taken to restructure our business in the
prior year. Higher stock-based compensation expense
resulted from the 117% year-to-date increase in Barrick’s
NYSE share price and the 108% year-to-date increase in
Acacia’s LSE share price as at December 31, 2016.
We exceeded our targeted reduction of $90 million
in annualized minesite and corporate overhead costs
(excluding severance, stock-based compensation and
Acacia corporate administration), which is recorded within
general and administrative expense and cost of sales.
Exploration, Evaluation and Project Costs
($ millions)
For the years ended December 31
Minesite exploration and evaluation
Global exploration and evaluation
Advanced project costs:
Pascua-Lama
Cerro Casale
Jabal Sayid
Other
Corporate development
Business improvement
2016
2015
2014
$
44 $
88
59
6
–
11
14
15
47 $
116
119
8
–
4
42
19
38
146
113
14
30
16
35
–
Global exploration and evaluation and
project expense
$ 193 $ 308 $ 354
Total exploration, evaluation and
project expenses
$ 237 $ 355 $ 392
Exploration, evaluation and project costs for 2016
decreased $118 million compared to the prior year. The
decrease is primarily due to a reduction in project costs at
Pascua-Lama ($60 million) combined with a decrease in
corporate development costs ($28 million). In addition,
the decrease in global exploration costs primarily related
to Goldrush as the project has progressed to the study
phase, and is now being capitalized.
43
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
2016
2015
2014
Impairment Charges (Reversals)
For the years ended December 31
2016
2015
2014
Finance Costs, Net
($ millions)
For the years ended December 31
Interest expense1
Accretion
Loss (gain) on debt extinguishment
Other finance costs
Finance income
$ 591 $ 737 $ 733
75
–
(12)
(11)
50
129
18
(13)
63
(68)
7
(13)
Finance costs, net
$ 775 $ 726 $ 785
1. For the year ended December 31, 2016, interest expense includes approximately
$100 million of non-cash interest expense relating to the gold and silver
streaming agreements with Silver Wheaton Corp. and Royal Gold, Inc.
(2015: $61 million).
In 2016, net finance costs were $49 million higher than
the prior year primarily due to the recognition of
$129 million of extinguishment costs arising from the
debt repurchases made through the year compared to
the recognition of a $68 million net gain in the prior
year. This was combined with an increase of $39 million
of non-cash interest expense on our gold and silver
streaming agreements. These increases more than offset
a $185 million reduction in interest expense as a result
of debt reductions made over the past two years. These
debt reductions will reduce interest payments by
approximately $235 million on an annualized basis.
Additional Significant Statement of Income Items
($ millions)
For the years ended December 31
2016
2015
2014
Impairment charges (reversals)
Loss (income) on currency translation
Other expense/(income)
$ (250) $ 3,897 $ 4,106
132
$ 199 $ 120 $
(14)
(113) $
$
60 $
44
($ millions)
Asset impairments (reversals)
Veladero
Equity method investments
Lagunas Norte
Pascua-Lama
Pueblo Viejo
Buzwagi
Round Mountain/Bald Mountain
Lumwana
Cerro Casale
Jabal Sayid
Porgera
Cortez
Kalgoorlie
Exploration sites
AFS investments
Other
Post-tax Post-tax Post-tax
(our
share)
(our
share)
(our
share)
$ (179) $
49
(20)
1
–
–
–
–
–
–
–
–
–
–
–
3
– $
–
26
399
386
30
53
–
–
–
–
–
–
–
–
53
–
–
–
382
–
–
–
720
778
198
(160)
29
9
7
18
4
Total asset impairment charges (reversals) $ (146) $ 947 $ 1,985
Goodwill
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 charges
$
– $ 2,171 $ 1,409
Tax effects and NCI
(104)
779
712
Total impairment charges
(reversals) (100%)
$ (250) $ 3,897 $ 4,106
In 2016, primarily as a result of improvements in the cost
structure at Veladero and Lagunas Norte, we recognized
$146 million (net of tax and non-controlling interests) of
net impairment reversals for non-current assets. This
compares to goodwill and non-current asset impairment
losses of $2.2 billion and $947 million (net of tax and
non-controlling interests), respectively, in the prior year.
Refer to note 21 to the Financial Statements for a full
description of impairment charges, including pre-tax
amounts and sensitivity analysis.
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Loss (Income) on Currency Translation
Loss on currency translation for 2016 increased
$79 million compared to the prior year. The increased
loss is primarily due to the release of $91 million of
currency translation losses as a result of the disposal
and reorganization of certain Australian entities during
the first quarter of 2016. This was combined with
increased unrealized foreign currency translation losses
relating to the Zambian kwacha, partly offset by lower
unrealized foreign currency translation losses relating
to the Argentinean peso, Australian dollar and
Tanzanian shilling.
Other Expense (Income)
Other expense was $60 million in 2016 compared to
income of $113 million in the prior year. The expense
in the current year was primarily due to a $39 million
additional loss on disposition relating to Zaldívar as a
result of the final purchase price adjustments recorded in
the third quarter of 2016. The income in the prior year
was primarily a result of the realization of gains on the
sale of our Cowal mine and 50% of our interest in the
Porgera mine, which closed in the third quarter of 2015;
and partly offset by $30 million in office closure costs
primarily relating to the exiting of leases at our Toronto
and Salt Lake City offices. For a further breakdown
of other expense (income), refer to note 9 to the
Financial Statements.
Income Tax Expense
Income tax expense was $917 million in 2016. The
underlying effective tax rate for ordinary income in 2016
was 44% after adjusting for the net impact of currency
translation losses on deferred tax balances; the impact
of the increase in income tax related contingent liabilities
in Tanzania; the impact of tax rate changes; the impact
of impairment (reversals) charges; the impact of asset
sales and non-hedge derivatives; and the impact of
non-deductible foreign exchange losses. The unadjusted
tax rate for income in 2016 was 52% of the income
before income taxes.
We record deferred tax charges or credits if changes
in facts or circumstances affect the estimated tax basis of
assets and therefore the amount of deferred tax assets or
liabilities to reflect changing expectations in our ability to
realize deferred tax assets. The interpretation of tax
regulations and legislation and their application to our
business is complex and subject to change. We have
significant amounts of deferred tax assets, including tax
loss carry forwards, and also deferred tax liabilities.
Potential changes of any of these amounts, as well as
our ability to realize deferred tax assets, could significantly
affect net income or cash flow in future periods.
Reconciliation to Canadian Statutory Rate
($ 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
Tax impact of profits from equity
accounted investments
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
2016
2015
$ 471
$ (833)
(134)
113
54
–
(103)
(110)
55
736
–
246
23
(5)
35
–
–
13
(4)
70
(13)
11
267
16
62
–
56
(116)
20
19
44
13
–
12
(125)
(7)
Income tax expense (recovery)
$ 917
$ (31)
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 2016 and 2015 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 2016 and 2015, tax expense of
$23 million and $62 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 expense/recovery.
45
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Non-Recognition of US Alternative Minimum Tax
(AMT) Credits
In the fourth quarter of 2016 and 2015, we recorded
a deferred tax expense of $13 million and $19 million,
respectively, related to US AMT credits which are not
probable to be realized based on our current life of
mine plans.
Increase in Income Tax Related Contingent Liabilities
in Tanzania
In the first quarter of 2016, Acacia received a judgement
from the Tanzania Court of Appeal regarding a long-
standing dispute over tax calculations at Bulyanhulu from
2000–2006. The Court of Appeal was reviewing seven
issues initially raised by the Tanzania Revenue Authority
(TRA) in 2012 regarding certain historic tax loss carry
forwards and ruled in favor of Bulyanhulu by the Tax
Appeals Board in 2013. The TRA appealed against this
ruling and in 2014 the Tax Tribunal reversed the decision
for all seven issues. The legal route in Tanzania has now
been exhausted; however Acacia is considering its options
for the next steps. Acacia is yet to receive a revised tax
assessment following the judgement, but has raised
further tax provisions of US$70 million in Q1 2016 in order
to address the direct impact of the ruling on Bulyanhulu’s
tax loss carry forwards and the potential impact this may
have on the applicability of certain capital deductions for
other years and our other mines in Tanzania.
Tax Rate Changes
In the fourth quarter of 2016, a tax rate change was
enacted in Peru, increasing corporate income tax rates.
This resulted in a deferred tax recovery of $13 million
due to recording the deferred tax asset in Peru at the
higher rates.
Internal Restructures
In the fourth quarter of 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.
De-recognition of a Deferred Tax Asset
In the second quarter of 2015, we recorded a deferred
tax expense of $20 million related to de-recognition of
a deferred tax asset in Pueblo Viejo.
Financial Condition Review
Summary Balance Sheet and Key Financial Ratios
($ 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 debt1
Debt (current and long-term)
Total Liabilities
Total shareholders’ equity
Non-controlling interests
Total Equity
2016
2015
2014
$ 2,389
2,485
20,390
$ 2,455
3,013
20,840
$ 2,699
3,451
27,729
$ 25,264
$ 26,308
$ 33,879
$ 1,676
5,344
7,931
$ 1,644
5,241
9,968
$ 2,154
5,782
13,081
$ 14,951
$ 16,853
$ 21,017
7,935
2,378
7,178
2,277
10,247
2,615
$ 10,313
$ 9,455
$ 12,862
Total common shares outstanding (millions of shares)2
1,166
1,165
1,165
Key Financial Ratios:
Current ratio3
Debt-to-equity4
2.68:1
0.77:1
2.77:1
1.05:1
2.47:1
1.02:1
1. Non-current financial liabilities as at December 31, 2016 were $8,002 million (2015: $10,068 million; 2014: $13,108 million).
2. Total common shares outstanding do not include 2.1 million stock options.
3. 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, 2016 and December 31, 2015.
4. Represents debt divided by total shareholders’ equity (including minority interest) as at December 31, 2016 and December 31, 2015.
46
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Balance Sheet Review
Total assets were $25.3 billion at December 31, 2016,
approximately $1.0 billion lower than at December 31,
2015, primarily reflecting the sale of Bald Mountain and
our 50% interest in Round Mountain, which were
presented as held-for-sale and included in current assets
at December 31, 2015 and of which the cash proceeds
were used to reduce our debt balance. 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 recoverable and receivable, concentrate sales
receivable and other government transaction and joint
venture related receivables, and cash and equivalents.
Total liabilities at December 31, 2016 totaled $15.0 billion;
approximately $1.9 billion lower than at December 31,
2015, reflecting $2.0 billion of debt repayments made
during the year.
Shareholders’ Equity
As at February 7, 2017
Common shares
Stock options
Number of shares
1,165,574,071
2,074,210
Financial Position and Liquidity
Total cash and cash equivalents as at December 31, 2016
was $2.4 billion3. Our capital structure comprises a mix
of debt and shareholders’ equity. As at December 31,
2016, our total debt was $7.9 billion (debt net of cash
and equivalents was $5.5 billion) and our debt-to-equity
ratio was 0.77:1. This compares to debt as at
December 31, 2015 of $10.0 billion (debt net of cash
and equivalents was $7.5 billion), and a debt-to-equity
ratio of 1.05:1.
At the beginning of 2016, we set a debt reduction
target of $2 billion. We have exceeded this target by
reducing debt by $2.04 billion in 2016. We currently
have less than $200 million2 in debt due before 2019,
and approximately $5 billion of our outstanding debt
matures after 2032.
In 2017, we have capital commitments of
$52 million and expect to incur attributable sustaining
and project capital expenditures of approximately
$1,300 to $1,500 million in 2017 based on our guidance
range on page 30. In 2017, we have contractual
obligations and commitments of $402 million in
purchase obligations for supplies and consumables and
$51 million in derivative liabilities which will form part of
operating costs. In addition, we have $434 million in
interest payments and other amounts as detailed in the
table on page 66. We expect to fund these commitments
through operating cash flow, which is our primary source
of liquidity, as well as existing cash balances.
Our operating cash flow is dependent on the ability
of our operations to deliver projected future cash flows.
The market prices of gold, and to a lesser extent copper,
are the primary drivers of our operating cash flow. Other
options to enhance liquidity include further non-core
asset sales or joint venture opportunities; 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; and drawing the $4.0 billion
available under our fully undrawn credit facility (subject
to compliance with covenants and the making of certain
representations and warranties, this facility is available
for drawdown as a source of financing).
Many factors, including but not limited to general
market conditions and then prevailing metals prices,
could impact our ability to issue securities on acceptable
terms, as could our credit ratings. Moody’s and S&P
currently rate our long-term debt as investment grade,
with ratings of Baa3 and BBB-, respectively. In August
2016, Moody’s affirmed the Company’s Baa3 rating and
revised its outlook to stable from negative. Also in
August 2016, S&P affirmed the Company’s BBB- rating
and raised its outlook to positive from stable. Further
changes in our ratings could affect the trading prices of
our securities and our cost of capital. If we were to
borrow under our credit facility, the applicable interest
rate on the amounts borrowed would be based, in part,
on our credit ratings at the time. The key financial
covenant in our fully undrawn credit facility requires
Barrick to maintain a net debt to total capitalization ratio
of less than 0.60:1. Barrick’s net debt to total capitalization
ratio was 0.35:1 as at December 31, 2016 (0.44:1 as at
December 31, 2015).
47
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Summary of Cash Inflow (Outflow)
($ millions)
For the years ended December 31
2016
2015
Net cash provided by operating activities $ 2,640
$ 2,794
Investing activities
Capital expenditures1
Divestitures
Other
$ (1,126)
588
126
$ (1,713)
1,904
59
Total investing inflows/(outflows)
$
(412)
$
250
Financing activities
Net change in debt
Dividends2
Other
$ (2,057)
(86)
(154)
$ (3,133)
(160)
18
Total financing inflows/(outflows)
$ (2,297)
$ (3,275)
Effect of exchange rate
3
(13)
Increase/(decrease) in cash
and equivalents
$
(66)
$
(244)
1. The amounts include capitalized interest of $nil for the year ended December 31,
2016 (2015: $17 million).
2. In 2016, we declared and paid dividends in US dollars totaling $0.08 per share
(2015: $0.14 per share; 2014: $0.20 per share).
In 2016, we generated $2,640 million in operating cash
flow, compared to $2,794 million of operating cash
flow in the prior year. 2015 operating cash flow included
a $610 million deposit relating to the gold and silver
streaming arrangement with Royal Gold. Excluding
this transaction, operating cash flow for 2016 was
$456 million higher than the prior year despite the
reduction in operating cash flow associated with
the divestment of some non-core assets. We benefited
from higher market gold prices and lower operating
costs, as a result of lower energy and fuel costs (despite
being hedged on a significant portion of our fuel
consumption) combined with the continued realization
of lower labor and consumable costs and improved
operating efficiencies resulting from our Best-in-Class
initiatives and also lower cash interest paid. These were
largely offset by lower gold and copper volumes sold,
primarily as a result of the aforementioned divestitures,
combined with the impact of unfavorable working
capital movements, mainly as a result of higher inventory
balances and income taxes paid compared to the prior
year. 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.
Cash outflows from investing activities in 2016
amounted to $412 million compared to $250 million
of cash inflows in the prior year. The decrease of
$662 million compared to 2015 is primarily due to
$1,316 million of additional proceeds from the
divestitures in the prior year. In 2016, we received
proceeds from the sale of Bald Mountain and our 50%
interest in Round Mountain. In 2015, we received
proceeds from the divestitures of Cowal, Spring Valley,
Ruby Hill and partial divestitures of Zaldívar and Porgera.
This was partially offset by a decrease in capital
expenditures as 2016 capital expenditures on a cash
basis were $1,126 million compared to $1,713 million
in 2015. The decrease of $587 million is primarily due
to the impact of divested sites combined with lower
capitalized stripping costs at Veladero and a decrease in
leach pad expansion costs at Veladero and Lagunas
Norte. This was combined with a decrease in project
costs mainly relating to the completion of the thiosulfate
circuit at Goldstrike in the prior year and decreased
spending at Pascua-Lama.
Net financing cash outflows for 2016 amounted to
$2,297 million, compared to $3,275 million of cash
outflows in the prior year. The net financing cash outflows
in 2016 and 2015 primarily consist of net debt repayments
of $2,057 million and $3,133 million, respectively, as we
achieved our debt reduction goals. This was combined
with debt extinguishment costs of $129 million (2015:
$68 million gains) and $86 million (2015: $160 million)
of dividend payments.
48
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Summary of Financial Instruments
As at December 31, 2016
Financial
Instrument
Cash and equivalents
Accounts receivable
Other investments
Accounts payable
Debt
Restricted share units
Deferred share units
Derivative instruments – currency contracts
Derivative instruments – gold contracts
Derivative instruments – copper contracts
Principal/
Notional Amount
Associated
Risks1
n Interest rate
$ 2,389 million
n Credit
n Credit
$ 249 million
n Market
n Market
$ 18 million
n Liquidity
$ 1,084 million
n Liquidity
$ 7,989 million
n Interest rate
$ 62 million
n Market
$ 9 million
n Market
AUD
PGK
23 million
21 million
43 million oz
78 million lbs
n Market/liquidity
n Market/liquidity
n Credit
n Interest rate
Derivative instruments – energy contracts
Diesel
3 million bbls
n Market/liquidity
n Credit
n Interest rate
Derivative instruments – interest rate contracts
Receive float interest rate swaps $ 99 million
n Market/liquidity
1. Refer to note 28 to the Financial Statements for more information regarding risks associated with financial instruments.
Operating Segments Performance
Review of Operating Segments Performance
Barrick’s business is organized into thirteen individual
mine sites, 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, Acacia and the Pascua-Lama
project are operating segments for financial reporting
purposes. Following the divestitures that were completed
in 2015 and early 2016, we re-evaluated our reportable
operating segments and no longer report on our
interests in the following non-core properties: Porgera,
Kalgoorlie, Zaldívar and Lumwana. Our updated
presentation of our reportable operating segments will
now be limited to six individual gold mines, Acacia and
our Pascua-Lama project. The remaining operating
segments, including the non-core properties referred to
above and our remaining gold and copper mines, have
been grouped into an “other” category and will not be
reported on individually. 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.
49
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Cortez, Nevada USA
Summary of Operating and Financial 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)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)2
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
2016
2015
% Change
2014
124,919
25,112
1.73
1,059
1,059
$ 1,314
955
340
839
142
75
67
901
430
518
581
$
151,357
22,406
1.73
999
982
$ 1,129
826
287
630
148
101
47
841
486
603
650
$
(17%)
12%
–
6%
8%
16%
16%
18%
33%
(4%)
(26%)
43%
7%
(12%)
(14%)
(11%)
152,146
25,957
1.34
902
865
$ 1,093
687
393
648
189
170
19
794
498
706
$ 728
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
2. Amounts presented exclude capitalized interest.
Financial Results
Cortez’s segment income for 2016 was 18% higher than
the prior year primarily due to a higher gold sales volume
combined with a higher gold price, partly offset by
higher depreciation due to an increase in ounces mined
at the Cortez Hills pit, which have a higher depreciation
charge per ounce than other areas at Cortez.
SEGMENT INCOME AND SEGMENT EBITDA1
1,266
1,160
1,251
839
648
630
393
287
546
340
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
In 2016, gold production was 6% higher than the prior
year primarily due to higher grades mined in the Cortez
Hills open pit (“CHOP”) for both mill feed and leach
placement. While less total open pit tonnes were mined
in the current year, ore tonnes were higher due to a
focus on mining higher grade ore from CHOP compared
to more waste mining in the prior year. This was
combined with Best-in-Class underground initiatives
increasing mining time per shift and process improvements
resulting in increased tonnes mined and throughput,
respectively, and partly offset by lower grades than the
prior year in the underground as mining is advancing
from the high grade Breccia zone to the lower grade
Middle zone.
PRODUCTION
(000s ounces)
1,500
750
0
999
1,059
1,250
to
1,290
2015
2016
2017 (est)
Cost of sales per ounce4 for 2016 was $60 per ounce
higher than the prior year primarily due to the impact of
higher depreciation from an increase in ounces mined at
the CHOP combined with lower waste stripping activity
associated with lower stripping at the Cortez Hills open
pit in 2016 compared to 2015. The increases in cost of
50
5000
4000
3000
2000
1000
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600
400
200
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Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
sales were partially offset by lower open pit consumable
costs, including lower fuel prices in 2016, and lower
inventory write-downs compared to the prior year.
Further offsetting higher depreciation in 2016, royalty
payments were lower compared to the prior year, as
more ore was produced from the Cortez Hills open pit,
which has lower associated royalties. For 2016, cost of
sales per ounce4 was also positively impacted by higher
sales volume. All-in sustaining costs1 decreased by
$85 per ounce from the prior year primarily due to the
impact of higher sales volume combined with lower
sustaining capital spend and lower inventory
write-downs.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
841
901
603
486
518
430
546
730
to
760
430
to
470
360
to
380
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
In 2016, capital expenditures decreased by 4% from the
prior year as lower minesite sustaining capital expenditures
were almost offset by higher project expenditures. Lower
sustaining capital is attributed to the completion of leach
and tailings expansions in 2015, as well as continued
efforts to reduce costs and optimize capital allocation in
2016. This was combined with higher capitalized stripping
at the Cortez Hills pit in the prior year compared to
the current year. Project capital expenditures in 2016 are
higher as a result of increased expenditures for the
underground development at Cortez Hills Lower Zone
and stripping at Crossroads during the fourth quarter
of 2016.
5000
4000
3000
2000
1000
0
Outlook
At Cortez we expect 2017 gold production to be in the
range of 1,250 to 1,290 thousand ounces, an increase
from 2016 production levels. This is due to a significant
increase in open pit production, primarily from higher
grade oxide ore and increased throughput at the mill
processed on site and larger volumes of refractory ore,
at grades similar to 2016, being processed at Goldstrike.
This is somewhat offset by an expected decline in
underground ore grade as the mine transitions to lower
grade ore zones deeper in the deposit.
In 2017, we expect cost of sales per ounce4 to be
in the range of $730 to $760 per ounce, which is a
material decrease from 2016 due to increased sales
volume. Cost of sales show only a slight increase from
2016 to 2017. We expect cash costs1 to be in the
range of $360 to $380 per ounce, a decrease from 2016.
Operating costs are in line with 2016, while productivity
improvements generated by digitization and Best-in-Class
initiatives are expected to start contributing to additional
mining and processing volumes. All-in sustaining costs1
are expected to be in the range of $430 to $470 per
ounce, again a decrease from 2016, primarily due to
higher sold ounces mentioned above.
51
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Goldstrike, Nevada USA
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)1
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)2
Capital expenditures ($ millions)3
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)2
All-in sustaining costs (per oz)2
All-in costs (per oz)2
2016
2015
% Change
2014
67,834
7,361
5.65
1,096
1,103
$ 1,389
940
442
749
186
142
44
852
572
714
754
$
72,304
6,752
6.01
1,053
999
$ 1,143
722
408
600
191
110
81
723
522
658
738
$
(6%)
9%
(6%)
4%
10%
22%
30%
8%
25%
(3%)
29%
(46%)
18%
10%
9%
2%
81,410
5,307
6.28
902
908
$ 1,154
651
496
628
540
245
295
718
571
854
$ 1,179
1. Includes tonnes mined relating to Arturo.
2. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
3. Includes our share of capital expenditures related to Arturo.
Financial Results
Segment income for 2016 was 8% higher than the
prior year primarily due to an increase in sales volume
and higher gold prices, partially offset by increased
processing and depreciation expense associated with
full year operation of the autoclave combined with
higher depreciation from the Arturo pit, which entered
commercial production August 1, 2016 and has a high
depreciation charge per ounce due to the short mine life.
In 2016, gold production was 4% higher than the prior
year primarily as a result of higher autoclave production,
slightly offset by processing ore from the 60% owned
Arturo pit in the second half of 2016, compared to full
ownership production in the prior year. The increase in
production at similar grades and recoveries was further
helped by an increase in roaster throughput due to blend
optimization and Arturo’s ore chemistry, as well as
further improvements at the autoclave facility.
SEGMENT INCOME AND SEGMENT EBITDA1
PRODUCTION
(000s ounces)
1,266
628
496
1,160
600
408
1,251
749
442
546
1,500
750
0
1,053
1,096
910
to
950
2015
2016
2017 (est)
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
Cost of sales per ounce4 in 2016 was $129 per ounce
higher than the prior year primarily due to higher
operating costs and depreciation expense from the
operation of the autoclave combined with higher
depreciation from the Arturo pit, which has a high
depreciation charge per ounce. The autoclave thiosulfate
circuit was commissioned in the third quarter of 2015
and operates at a higher cost than the roaster. The
600
400
200
0
-200
-400
-600
52
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Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
higher operating costs are also due in part to increases in
stock-based compensation as a result of movements in
Barrick’s share price and consulting costs related to our
Best-in-Class program. These increases are partially offset
by favorable fuel prices, energy prices, and Best-in-Class
initiatives aimed at better utilizing open pit equipment,
improving underground mining efficiency, and lowering
contractor costs, which are reflected in lower direct
mining costs. In 2016, this was partially offset by the
impact of an increase in sales volume. All-in sustaining
costs1 increased by $56 per ounce compared to the prior
year primarily due to higher operating costs combined
with higher sustaining capital, partly offset by an increase
in sales volume.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
723
658
522
852
714
572
950
to
990
910
to
980
650
to
680
546
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
In 2016, capital expenditures decreased by 3%, compared
to the prior year which was mainly due to lower project
expenditures associated with the autoclave thiosulfate
circuit, which entered commercial production in the third
quarter of 2015. This was partly offset by higher minesite
sustaining capital expenditures in 2016 due to major
projects such as the roaster CIL tank expansion,
dewatering well projects and stage 3 of the tailings
storage facility compared to process equipment
replacements and phase 2 construction of the tailings
storage facility which were completed in the prior year.
Lower sustaining capital in the current year is also
attributed to efforts to reduce costs and optimize
capital allocation.
Outlook
At Goldstrike we expect 2017 production to be in the
range of 910 to 950 thousand ounces, which is lower
than 2016 production levels. Lower ounce production
is expected from both the underground and open pit
operations. At the underground, emphasis in 2017 will
be on development deeper in the mine and ore mined
will also be impacted by a slightly higher percentage
of cut and fill tonnage. Contribution from open pit
production is expected to be lower as we transition from
ore mining at the Arturo pit to stripping the 3rd and
4th NW laybacks in the Betze Post pit.
For 2017, we expect cost of sales per ounce4 to be in
the range of $950 to $990 per ounce for 2017, higher
than 2016 due to sold ounces decreasing over 2016
primarily, offset slightly by lower operating spend driven
by Best-in-Class initiatives. We expect cash costs1 to be
in the range of $650 to $680 per ounce, higher than
2016 due to lower ounce production, primarily offset
by slightly lower operating spend driven by operational
excellence. All-in sustaining costs1 are expected to be
$910 to $980 per ounce, an increase from 2016 due
to lower ounce production and higher sustaining
capital expenditures for tailings expansions, process
improvements, and underground sustaining projects
to enable mining deeper in the mine.
5000
4000
3000
2000
1000
0
53
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Pueblo Viejo (60% basis)1, Dominican Republic
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)2
Capital expenditures ($ millions)
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)2
All-in sustaining costs (per oz)2
All-in costs (per oz)2
2016
2015
% Change
2014
23,278
4,527
5.29
700
700
$ 925
395
528
621
61
61
–
564
395
490
$ 490
22,736
4,150
4.94
572
597
$ 757
525
230
390
61
61
–
881
467
597
$ 597
2%
9%
7%
22%
17%
22%
(25%)
130%
59%
–
–
–
(36%)
(15%)
(18%)
(18%)
21,055
4,027
5.53
665
667
$ 940
524
417
555
80
80
–
786
446
588
$ 588
1. Pueblo Viejo is accounted for as a subsidiary with a 40% non-controlling interest. The results in the table and the discussion that follows are based on our
60% share only.
2. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
Financial Results
Pueblo Viejo’s segment income for 2016 was 130%
higher than the prior year primarily due to an increase in
sales volumes combined with higher gold prices and
lower cost of sales.
SEGMENT INCOME AND SEGMENT EBITDA1
1,266
555
417
1,251
621
528
1,160
390
230
546
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
In 2016, gold production was 22% higher than the prior
year primarily due to higher ore grades and recoveries
compared to the prior year due to a lower amount of
carbonaceous ore processed in 2016. This was combined
with lower throughput in 2015, as a result of the
mechanical failure at the oxygen plant in the fourth
quarter of 2015.
PRODUCTION
(000s ounces)
800
400
0
572
700
625
to
650
2015
2016
2017 (est)
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
881
597
467
852
564
490
395
650
to
680
530
to
560
400
to
420
600
2015
400
Cash Costs
2016
2017 (est)
AISC
Cost of Sales
54
5000
4000
3000
2000
1000
0
200
0
-200
-400
-600
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Cost of sales per ounce4 in 2016 was $317 per ounce
lower than the prior year primarily due to lower
depreciation as a result of the impairment recorded
in the fourth quarter of 2015 and an increase in the life
of mine, combined with insurance proceeds recorded
in the third quarter of 2016 relating to the 2015 oxygen
plant motor failure. Cost of sales per ounce4 was further
impacted by lower maintenance costs due to the timing
of maintenance activities and lower costs attributed to
shutdowns as a result of Best-in-Class initiatives combined
with lower energy and fuel prices and the impact of
higher sales volume on unit production costs. In 2016,
all-in sustaining costs1 decreased by $107 per ounce
compared to the prior year due to lower direct mining
costs combined with the impact of higher sales volume
on unit production costs. All-in sustaining costs1 did
not benefit from the aforementioned insurance proceeds
as they were excluded from our calculation.
In 2016, capital expenditures were in line with the
prior year as an increase in capitalized stripping costs was
offset by the deferral and cancellation of non-critical
sustaining capital expenditures.
Outlook
At Pueblo Viejo, we expect our equity share of 2017
gold production to be in the range of 625 to 650
thousand ounces, below 2016 production levels, driven
by reduced gold head grade offset by increased gold
recovery related to improved availability and utilization
achieved through the optimization of maintenance
strategies and ore blending.
In 2017, we expect cost of sales per ounce4 to be
in the range of $650 to $680 per ounce, cash costs1 to
be $400 to $420 per ounce and all-in-sustaining costs1
to be $530 to $560 per ounce. All three indicators will
be higher than 2016 primarily due to a reduction in total
ounces sold affected by head grades, cost increases
related to corporate allocations, higher maintenance
costs, and higher sustaining costs owing to the deferral
of projects from 2016 into 2017 which also affects
depreciation. By-product credits are expected to be
higher than 2016, impacted both by prices and recoveries
for silver and copper, while power sales will benefit from
the proceeds from frequency and capacity fees that
Quisqueya I Power Plant will start to receive in 2017.
55
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Lagunas Norte, Peru
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
2016
2015
% Change
2014
40,847
17,253
1.12
435
425
$ 548
276
260
356
56
51
5
651
383
529
$ 540
49,126
21,880
1.02
560
565
$ 673
378
285
454
67
67
–
669
329
509
$ 509
(17%)
(21%)
10%
(22%)
(25%)
(19%)
(27%)
(9%)
(22%)
(16%)
(24%)
100%
(3%)
16%
4%
6%
50,030
22,110
0.99
582
604
$ 775
335
439
531
81
81
–
555
379
543
$ 543
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
Financial Results
Lagunas Norte’s segment income for 2016 was 9%
lower than the prior year primarily due to lower sales
volumes, partially offset by lower depreciation expense,
higher gold prices and lower operating costs mostly
driven by lower tonnage mined due to ore depletion of
the oxide deposit and lower fuel prices.
In 2016, gold production was 22% lower than the prior
year primarily due to fewer ounces placed on the leach
pad as a result of lower equipment availability, combined
with processing harder material and a higher percentage
of older stock material, in line with expectations as
the mine matures. The decrease in gold production was
partially offset by higher ore grades.
SEGMENT INCOME AND SEGMENT EBITDA1
PRODUCTION
(000s ounces)
1,266
531
439
1,160
1,251
454
285
528
260
356
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
600
300
0
560
435
380
to
420
2015
2016
2017 (est)
Cost of sales per ounce4 for 2016 was $18 per ounce
lower than the prior year mainly due to a decrease in
depreciation expense and lower direct mining costs
resulting from lower tonnage mined and processed,
lower fuel prices and lower royalties derived from lower
sales. These were combined with realized cost savings
600
400
200
0
-200
-400
-600
56
5000
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3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Outlook
At Lagunas Norte we expect 2017 production to be in
the range of 380 to 420 thousand ounces, lower than
2016 production levels, as a result of the progressive
depletion of oxide ores, which are being replaced with
sulfide ores with lower kinetics and recoveries.
We expect cost of sales per ounce4 to be in the
range of $710 to $780 per ounce. This increase, in
comparison with 2016, is mainly driven by higher cost of
sales attributed to an expected increase in depreciation
expense, higher direct operating costs and CSR expenses,
partially offset by Best-in-Class initiatives. We expect
cash costs1 to be in the range of $430 to $470 per ounce
and all-in sustaining costs1 to be in the range of $560 to
$620 per ounce. The increase in all-in sustaining costs1
in comparison with 2016 is driven mainly by the decrease
in production; sustaining capital expenditures are
decreasing in 2017. Operational cost increases are
expected to be partially offset by Best-in-Class operational
initiatives including service and material contract
renegotiation, increased component life, improvements
in preventative maintenance, and energy optimization
programs. Structural cost reduction in mine stripping and
employee profit sharing are expected to occur due to
the reduced mine production plan.
from the Best-in-Class program such as the initiatives to
improve efficiencies in the carbon in column circuit,
implementation of short interval control, improvements
in planned maintenance and renegotiation of certain
service contracts. In 2016, all-in sustaining costs1
increased by $20 per ounce compared to the prior year
primarily due to lower sales volume, partially offset
by the lower direct mining costs and royalty costs
combined with a decrease in minesite sustaining
capital expenditures.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
669
651
509
329
529
383
546
710
to
780
560
to
620
430
to
470
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
In 2016, capital expenditures decreased by 16% compared
to the prior year due to lower minesite sustaining capital
relating to the end of construction of phase 6 of the
leach pad in 2015, partially offset by higher capitalized
stripping in 2016. Project expenditures in 2016 relate to
the Refractory Ore Project.
57
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Veladero, Argentina
Summary of Operating and Financial 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)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
2016
2015
% Change
2014
62,227
28,028
0.82
544
532
$ 685
464
220
338
95
95
–
872
582
769
$ 769
83,409
28,385
0.82
602
629
$ 720
499
216
324
242
242
–
792
552
946
$ 946
(25%)
(1%)
–
(10%)
(15%)
(5%)
(7%)
2%
4%
(61%)
(61%)
–
10%
5%
(19%)
(19%)
67,686
29,500
1.00
722
724
$ 894
554
330
446
173
173
–
764
566
815
$ 815
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
Financial Results
Veladero’s segment income for 2016 was 2% higher
than the prior year primarily due to lower operating costs
combined with higher gold prices, partially offset by a
decrease in sales volume.
SEGMENT INCOME AND SEGMENT EBITDA1
In 2016, gold production was 10% lower compared to
the prior year mainly reflecting lower grade tonnes placed
on the leach pad in efforts to manage water balances in
the leach pad. This was further impacted by the temporary
suspension of operations late in the third quarter of
2016 combined with unexpected severe winter weather
conditions in the second quarter of 2016.
1,266
1,160
1,251
PRODUCTION
(000s ounces)
446
330
324
216
528
220
338
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
602
544
770
to
830
900
450
0
2015
2016
2017 (est)
Cost of sales per ounce4 in 2016 was $80 per ounce
higher than the prior year primarily due to the impact
of lower sales volume on unit production costs relating
to the severe weather conditions and temporary
suspension of operations during 2016 combined with
lower waste stripping activity and higher depreciation
600
400
200
0
-200
-400
-600
58
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
expense. This was partially offset by lower direct mining
costs as a result of lower tonnes mined due to severe
weather conditions and the temporary suspension
of operations, combined with Best-in-Class savings
initiatives such as optimizing consumables usage,
improving efficiencies in mine operations and the impact
of lower contractor costs. In 2016, all-in sustaining
costs1 decreased by $177 per ounce compared to the
prior year primarily due to a decrease in minesite
sustaining capital expenditures combined with lower
direct mining costs, partly offset by the impact of
lower sales volume on unit production costs.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
792
946
552
872
769
582
750
to
800
840
to
940
500
to
540
546
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
In 2016, capital expenditures decreased by 61% compared
to the prior year primarily due to a decrease in minesite
sustaining expenditures mainly related to lower capitalized
stripping costs and the construction of the phase 4B leach
pad combined with higher capitalized infrastructure
improvement costs in the prior year as a result of
the cyanide incident that occurred in the third quarter
of 2015.
On October 9, 2015, the San Juan mining authority
initiated an administrative sanction process against
Minera Argentina Gold SRL (“MAG”), Barrick’s Argentine
subsidiary that operates the Veladero mine, for alleged
violations of the mining code relating to a valve failure
and release of cyanide-bearing process solution in
September 2015. On March 11, 2016, the San Juan
Provincial mining authority announced its intention to
impose an administrative fine against MAG in connection
with the solution release. MAG was formally notified
of this decision on March 15, 2016. On April 6, 2016,
MAG sought reconsideration of certain aspects of the
decision but did not challenge the amount of the
administrative fine. On April 14, 2016, in accordance
with local requirements, MAG paid the administrative
fine of approximately $10 million (at the then-applicable
Argentine peso/$ exchange rate) while the request for
reconsideration is pending. MAG is implementing a
remedial action plan at Veladero in response to the
incident as required by the San Juan mining authority.
Certain construction-related activities in the Valley Fill
Leach Facility (“VLF”) are still pending. Refer to note 36
to the Financial Statements for more information
regarding this matter.
On September 8, 2016, ice rolling down the slope of
the leach pad at the Veladero mine damaged a pipe
carrying process solution, causing some material to leave
the leach pad. This material, primarily crushed ore
saturated with process solution, was contained on the
mine site and returned to the leach pad. Extensive water
monitoring in the area conducted by MAG has confirmed
that the incident did not result in any environmental
impact. A temporary suspension of operations at the
Veladero mine was ordered by the San Juan Provincial
mining authority and a San Juan Provincial court on
September 15, 2016 and September 22, 2016,
respectively, as a result of this incident. On October 4,
2016, following, among other matters, the completion
of certain urgent works required by the San Juan
Provincial mining authority and a judicial inspection of
the mine, the San Juan Provincial court lifted the
suspension of operations and ordered that mining
activities be resumed.
On September 14, 2016, the San Juan Provincial
mining authority commenced an administrative proceeding
in connection with this incident that included, in addition
to the issue of the suspension order, an infringement
proceeding against MAG. On December 2, 2016, the
San Juan Provincial mining authority notified MAG of
two charges under the infringement proceeding for
alleged violations of the Mining Code. Refer to note 36
to the Financial Statements for more information
regarding this matter.
On December 15, 2016, MAG was served notice of
a lawsuit by certain persons who claim to be living in
Jachal, Argentina and to be affected by the Veladero
mine and, in particular, the VLF. In the lawsuit, which was
filed in the San Juan Provincial court, the plaintiffs have
requested a court order that MAG cease leaching metals
with cyanide solutions, mercury and other similar
substances at the Veladero mine and replace that process
with one that is free of hazardous substances, that MAG
59
5000
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3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
implement a closure and remediation plan for the VLF and
surrounding areas, and create a committee to monitor this
process. The lawsuit is proceeding as an ordinary civil
action. The Company expects to reply to the lawsuit in
mid-February 2017, and the case will then proceed to the
evidentiary stage. Refer to note 36 to the Financial
Statements for more information regarding this matter.
On December 30, 2016, the San Juan Mining
Authority approved the fifth update to the Veladero
mine’s environmental impact study (“EIS”), which as
submitted by the Company had included a request for
approval of the leach pad expansion for Phases 6 to 9.
The fifth EIA update did not include an approval of
Phases 6 to 9. Rather, the San Juan Mining Authority
required additional technical information. Veladero
submitted an initial response to the San Juan Mining
Authority on January 12, 2017, and expects to provide
additional information in late February 2017 as requested
by the San Juan Mining Authority. Future production at
Veladero after 2017 could be impacted if the leach pad
expansion is not timely approved.
Outlook
At Veladero we expect 2017 production to be in the
range of 770 to 830 thousand ounces, higher than
2016 production levels. The increase is mainly a result
of a higher head grade in ore processed due to mine
sequence phases at Federico pit. This is combined with
higher ore tonnes mined and processed given the
suspension, environmental and bad weather incidents
in 2016 all leading to improved mining productivity,
higher operating hours, and fewer days lost. In addition,
a higher inventory draw-down, due to better operational
management of the leach pad, will contribute to
higher production.
Cost of sales per ounce4 is expected to be decreasing
from $872 to an expected range of $750 to $800,
mainly due to the impact of higher sales compared to
2016 and higher mining costs capitalized as stripping.
These positive variances are expected to be partly offset
by higher direct operating costs and the impact of higher
charges from the production inventory movements
stemming from the expected drawdown of leach pad
inventories. Higher gross direct operating costs are
expected in 2017 as a consequence of higher operating
hours and higher tonnage to be moved combined with
higher costs in process area in order to improve the
management of leach facilities.
We expect cash costs1 in 2017 to be in the range of
$500 to $540 per ounce, lower than 2016 levels mainly
due to the increase in gold production driving higher
sales combined with higher credits from capitalized
stripping. All-in sustaining costs1 are expected to be
between $840 and $940 per ounce, higher than 2016
levels mainly due to the increase in capital expenditures
requirements combined with higher direct 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. Higher
gross direct operating costs are expected in 2017 as a
consequence of higher operating hours and higher
tonnage to be moved combined with higher costs in
process area in order to improve the management of
leach facilities. Operating costs at Veladero are also
highly sensitive to local inflation and fluctuations in
foreign exchange rates. We have assumed an average
ARS:USD exchange rate of $16.5 and a local inflation
rate of 20% for the purposes of preparing our cash cost
and all-in sustaining cost guidance for 2017.
60
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Turquoise Ridge (75% basis), Nevada USA
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)
Ore tonnes processed (000s)
Average grade (grams/tonne)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
2016
598
523
17.04
266
257
$ 322
155
166
193
32
32
–
603
498
625
$ 625
2015
% Change
349
390
18.82
217
202
$ 235
141
92
115
32
32
–
697
581
742
$ 742
71%
34%
(9%)
23%
27%
37%
10%
80%
68%
–
–
–
(13%)
(14%)
(16%)
(16%)
2014
312
335
19.62
195
200
$ 252
111
139
156
30
30
–
559
473
628
$ 628
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
Financial Results
Turquoise Ridge’s segment income for 2016 was 80%
higher than the prior year primarily due to an increase in
sales volume due to increased mining productivity
combined with higher gold prices.
SEGMENT INCOME AND SEGMENT EBITDA1
1,266
156
139
1,160
115
92
1,251
193
166
In 2016, gold production was 23% higher than the prior
year primarily due to an increase in tonnes mined and
processed resulting from increasing labor to support
production growth combined with improved equipment
availability and improved mine engineering to take
advantage of the larger ore geometry. In the first quarter
of 2015, the mine transitioned to fully mechanized
topcuts, larger excavations and other Best-in-Class
activities, which resulted in increased productivity and
the processing of more ore tonnes in subsequent
quarters. The aim of the productivity improvements is to
have a more consistent ore flow from the mine from
month to month.
PRODUCTION
(000s ounces)
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
5000
4000
3000
2000
1000
0
217
266
260
to
280
2015
2016
2017 (est)
61
300
150
0
600
400
200
0
-200
-400
-600
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2016, capital expenditures were in line with the
prior year as higher capitalized development costs were
offset by lower minesite sustaining capital.
Outlook
At Turquoise Ridge we expect 2017 production to be in
the range of 260 to 280 thousand ounces (Barrick’s
share), in line with 2016 production levels, as mine
productivity improves slightly, offset by slightly lower
grades. Turquoise Ridge has completely transitioned to
standardized equipment allowing for greater mining
flexibility with higher reliability and less equipment.
Capital and waste development requirements are in line
with 2016 mining rates.
The cost of sales per ounce4 is expected to be in the
range of $575 to $625 per ounce which is in line with
2016. We expect cash costs1 in 2016 to be in the range
of $460 to $500 per ounce, consistent with 2016, and
all-in sustaining costs1 to be in the range of $650 to
$730 per ounce. All-in sustaining costs1 in 2017 are
expected to be higher than 2016 due to increased spend
on sustaining capital for the initial construction and final
engineering of a third shaft.
Cost of sales per ounce4 in 2016 was $94 per ounce
lower than the prior year mainly reflecting the impact of
higher sales volume on unit production costs combined
with an increase in capitalized underground development
costs. Although operating costs have increased due
to the increased productivity rates in 2016, they have
decreased on a per unit basis compared to the prior year.
The increased productivity and unit cost reductions are
due to the investment in equipment and facilities made
in 2015 as well as a focus on equipment utilization,
equipment maintenance and consumables consumption
as part of our Best-in-Class program. In 2016, all-in
sustaining costs1 decreased by $117 per ounce compared
to the prior year primarily reflecting the impact of lower
cost of sales per ounce4.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
697
742
581
603
625
498
575
to
625
650
to
730
460
to
500
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
62
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Acacia Mining plc (100% basis), Africa
Summary of Operating and Financial 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)
Segment revenue ($ millions)
Cost of sales ($ millions)
Segment income ($ millions)
Segment EBITDA ($ millions)1
Capital expenditures ($ millions)
Minesite sustaining
Project
Cost of sales (per oz)
Cash costs (per oz)1
All-in sustaining costs (per oz)1
All-in costs (per oz)1
2016
2015
% Change
2014
38,491
9,818
3.00
830
817
$ 1,045
719
299
465
191
190
1
880
640
958
960
$
$
41,390
9,268
2.80
732
721
860
837
(1)
142
177
178
(1)
1,161
772
1,112
$ 1,111
(7%)
6%
7%
13%
13%
22%
(14%)
30,000%
227%
8%
7%
200%
(24%)
(17%)
(14%)
(14%)
41,684
8,413
$
3.00
719
704
923
693
191
320
251
195
56
985
732
1,105
$ 1,190
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented
by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable
IFRS measure, please see pages 69 to 83 of this MD&A.
Financial Results
Acacia’s segment income for 2016 was $300 million
higher than the prior year primarily due to lower cost
of sales combined with a higher gold price and an
increase in sales volume.
In 2016, gold production was 13% higher than the prior
year primarily due to an increase in production at North
Mara as a result of higher grade ore from the underground
Gokona mine combined with higher recovery rates.
SEGMENT INCOME AND SEGMENT EBITDA1
PRODUCTION
(000s ounces)
1,251
465
299
1,000
500
0
732
830
850
to
900
2015
2016
2017 (est)
Cost of sales per ounce4 in 2016 was 24% lower than the
prior year primarily reflecting the impact of $109 million
of impairments at Buzwagi relating to supplies inventory
and the long-term stockpile in 2015 combined with
higher sales volume on unit production costs. This was
partly offset by higher capitalized operating costs at
North Mara relating to capitalized stripping combined
with lower labor costs as a result of headcount reductions.
All-in sustaining costs1 were 14% lower than the
prior year as the lower cost of sales per ounce4 was
partially offset by an increase in minesite sustaining
capital expenditures.
600
400
200
0
-200
-400
-600
63
1,266
1,160
320
191
142
92
(1)
2014
2015
2016
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
5000
4000
3000
2000
1000
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
1,112
1,161
772
880
958
640
860
to
910
880
to
920
580
to
620
2015
2016
2017 (est)
Cash Costs
AISC
Cost of Sales
In 2016, capital expenditures increased by 8% compared
to the prior year primarily due to an increase in capitalized
stripping costs at North Mara primarily related to higher
waste stripping at Nyabirama Stage 4, partially offset by
a reduction in minesite sustaining capital expenditures
primarily relating to capitalized development, equipment
and infrastructure expenditures.
Outlook
We expect Acacia’s 2017 gold production to be in the
range of 545 to 575 thousand ounces (Barrick’s share),
which is higher than 2016 production levels. Acacia’s
production is expected to be higher than 2016 mainly
due to a revision to the mine plan at Buzwagi, where
mining has been extended by approximately six months.
Production at Bulyanhulu is expected to be in line with
2016 and North Mara is expected to be lower in 2017
as an increased proportion of underground ore is sourced
from the lower grade West Zone which will offset the
impact of the increase in underground tonnes mined.
We expect cost of sales per ounce4 to be in the range
of $860 to $910 per ounce. We expect cash costs1 to
be in the range of $580 to $620 per ounce and all-in
sustaining costs1 to be in the range of $880 to $920
per ounce. The decrease in all-in sustaining costs in
comparison with 2016 is driven mainly by the increased
production at Buzwagi.
5000
4000
3000
2000
1000
64
0
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Pascua-Lama, Argentina/Chile
The Pascua-Lama project, located on the border between
Chile and Argentina, is one of the world’s largest
undeveloped gold and silver deposits, with the potential to
generate significant free cash flow over a long mine life. In
the third quarter of 2016, we announced the appointment
of George Bee as Senior Vice President for Lama and
Frontera District Development. Mr. Bee and his team have
initiated a prefeasibility study for an underground mine at
Lama in Argentina, which represents an opportunity to
unlock the value of this deposit, and the wider district,
through a phased approach that reduces execution risks
and upfront capital requirements. Concurrently, the team
in Chile remains focused on optimizing the Chilean
components of the project, while addressing outstanding
legal, regulatory, and permitting matters.
Our Investment Committee will continue to scrutinize
the project as it advances, applying a high degree of
consistency and rigor – as we do for all capital allocation
decisions at the company – before further review by the
Executive Committee and the Board at each stage
of advancement.
U.S. Shareholder Class Action
On May 31, 2016, the Company confirmed that it had
reached a $140 million settlement in this matter. The
settlement was approved by the Court on December 2,
2016. The amount of the settlement is insured. The
Company continues to believe that the allegations by the
lead plaintiffs in this matter are unfounded, and under
the terms of the settlement agreement, the Company
has not accepted any allegations of wrongdoing or
liability. Refer to note 36 to the Financial Statements
for more information regarding this matter.
SMA Regulatory Sanctions
On June 8, 2016, Chile’s environmental regulator (the
Superintendencia del Medio Ambiente, or “SMA”)
consolidated the two administrative proceedings against
Compañía Minera Nevada (“CMN”), Barrick’s Chilean
subsidiary that holds the Chilean portion of the Pascua-
Lama project, into a single proceeding encompassing both
the reconsideration of the 2013 Resolution in accordance
with the decision of the Environmental Court and the
alleged deviations from the Project’s environmental approval
notified by the SMA in April 2015. A final resolution from
the SMA with respect to these matters is pending and
could result in additional sanctions including new
administrative fines and/or the revocation of the Project’s
environmental permit. Refer to note 36 to the Financial
Statements for more information regarding this matter.
Constitutional Protection Action
On August 12, 2016, the court ruled in favor of CMN
and the Chilean mining authority (Sernageomin),
rejecting the plaintiffs’ challenges to the Temporary and
Partial Closure Plan for the Pascua-Lama project. On
August 19, 2016, the plaintiffs appealed the court’s
decision to the Chilean Supreme Court. A decision from
the Supreme Court on this matter is pending. Refer to
note 36 to the Financial Statements for more information
regarding this matter.
Water Quality Review
CMN initiated a review of the baseline water quality of the
Rio Estrecho in August 2013 as required by a July 15,
2013 decision of the Court of Appeals of Copiapo, Chile.
The purpose of the review was to establish whether the
water quality baseline has changed since the Pascua-Lama
project received its environmental approval in February
2006 and, if so, to require CMN to adopt the appropriate
corrective measures. As a result of that study, CMN
requested certain modifications to its environmental
permit water quality requirements. On June 6, 2016, the
responsible agency approved a partial amendment of
the environmental permit to better reflect the water
quality baseline from 2009. That approval was appealed by
certain water users and indigenous residents of the Huasco
Valley. On October 19, 2016, the Chilean Committee of
Ministers for the Environment, which has jurisdiction over
claims of this nature, voted to uphold the permit
amendments. On January 27, 2017, the Environmental
Court agreed to consider an appeal of the Committee’s
decision brought by CMN and the water users and
indigenous residents. Refer to note 36 to the Financial
Statements for more information regarding this matter.
Water Treatment Plant
The water treatment plant on the Chilean side of the
Pascua-Lama project was damaged during the second
quarter of 2016 as a result of heavy snowfall. The water
treatment plant consists of two main components, the
high density sludge unit followed by the reverse osmosis
unit. The damage to the reverse osmosis plant is still
under repair. On August 10, operation of the high
density sludge unit and discharges were reestablished.
Exceptional snowfall during the winter and an early melt
has increased inflows to the plant to an extent that it is
difficult to keep discharges within permit limits. CMN
has reviewed its contingency plan with Chilean
regulatory authorities.
65
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Commitments and Contingencies
Litigation and Claims
We are currently subject to various litigation proceedings
as disclosed in note 36 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
In the normal course of business, we enter into contracts that give rise to commitments for future minimum payments.
The following table summarizes the remaining contractual maturities of our financial liabilities and operating and
capital commitments shown on an undiscounted basis:
Payments due
as at December 31, 2016
($ millions)
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
2017
2018
2019
2020
2021
2022 and
thereafter
Total
$ 105
38
434
75
17
46
20
51
402
52
13
$ 105
31
430
78
18
14
20
25
254
16
3
$
381
16
415
84
12
2
20
2
144
4
4
$
304
9
398
110
11
–
20
–
100
4
2
$ 678
6
371
102
7
–
20
–
68
4
1
$ 6,302
14
5,410
1,804
8
–
408
–
2
23
146
$ 7,875
114
7,458
2,253
73
62
508
78
970
103
169
Total
$ 1,253
$ 994
$ 1,084
$
958
$ 1,257
$ 14,117
$ 19,663
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% 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,
2016. 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 25C 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 of $146 million related to the potential funding of a power transmission line in Argentina,
which is not expected to be paid prior to 2022.
66
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Review of Quarterly Results
Quarterly Information1
($ millions, except where indicated)
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
2016
2015
Revenues
Realized price per ounce – gold2
Realized price per pound – copper2
Cost of sales
Net earnings (loss)
Per share (dollars)3
Adjusted net earnings2
Per share (dollars)2,3
Operating cash flow4
Cash capital expenditures
Free cash flow2,4
1,333
2.18
1,291
1,259
2.14
1,336
$ 2,319 $ 2,297 $ 2,012 $ 1,930
1,181
1,217
2.18
2.62
1,324
1,454
(83)
(0.07)
127
0.11
451
270
$ 385 $ 674 $ 274 $ 181
425
0.36
255
0.22
711
326
138
0.12
158
0.14
527
253
175
0.15
278
0.24
951
277
$ 2,238 $ 2,315 $ 2,231 $ 2,245
1,219
1,105
2.55
2.16
1,708
1,768
57
(2,622)
0.05
(2.25)
62
91
0.05
0.08
316
698
514
311
(198)
1,190
2.66
1,689
(9)
(0.01)
60
0.05
525
499
1,125
2.18
1,742
(264)
(0.23)
131
0.11
1,255
389
$ 387 $ 866 $
26 $
1. Sum of all the quarters may not add up to the annual total due to rounding.
2. Realized price, adjusted net earnings, adjusted net earnings per share and free cash flow are non-GAAP financial performance measures with no standardized
meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed
reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A.
3. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
4. Q3 2015 includes $610 million of proceeds from the gold and silver streaming transaction with Royal Gold, Inc.
Our recent financial results reflect our emphasis on cost
control and growing operating cash flow and free
cash flow. While gold prices have fluctuated around
$1,200 per ounce, we have been able to record positive
free cash flow1 in seven consecutive quarters. In the
fourth quarter of 2016, we recorded a net asset
impairment reversal of $146 million (net of tax effects
and non-controlling interests) primarily relating to
impairment reversals at Veladero and Lagunas Norte.
In the fourth quarter of 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 the third quarter of 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.
Fourth Quarter Results
In the fourth quarter of 2016, we reported net earnings of
$425 million and adjusted net earnings1 of $255 million,
compared to a net loss of $2.6 billion and adjusted net
earnings1 of $91 million in the fourth quarter of 2015.
The net earnings in the fourth quarter of 2016 reflect the
recording of $146 million (net of tax effects and non-
controlling interests) in net impairment reversals compared
to impairment charges of $2.6 billion (net of tax effects
and non-controlling interests) recorded in the fourth
quarter of 2015.
The higher net earnings in the fourth quarter of
2016 reflect an increase in realized gold and copper prices
and lower cost of sales combined with the recognition
of impairment reversals rather than impairment charges,
partly offset by lower sales volumes due to divested sites
compared to the same prior year period. The increase in
adjusted net earnings primarily reflects the higher realized
gold and copper prices, partly offset by a decrease in
gold and copper sales volumes compared to the fourth
quarter of 2015.
In the fourth quarter of 2016, gold and copper sales
were 1.52 million ounces and 107 million pounds,
respectively, compared to 1.64 million ounces (1.48 million
ounces excluding the impact of divested sites) and
132 million pounds (114 million pounds excluding the
impact of divested sites), respectively, in the fourth
quarter of 2015. Revenues in the fourth quarter of 2016
were higher than the same prior year period, reflecting
higher market prices for gold and copper, partially offset
by lower gold and copper sales volumes. In the fourth
quarter of 2016, cost of sales was $1.5 billion, a decrease
of $314 million compared to the same prior year period,
reflecting lower direct mining costs and depreciation
expense attributed mainly to divested sites, combined
with lower consumable prices and Best-in-Class initiatives.
Cost of sales per ounce4 was $784 per ounce, a decrease
of $64 per ounce, primarily due to a positive change in
our sales mix as a result of the divestment of some of our
higher cost mine sites combined with lower consumable
67
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
costs, inventory impairment charges and lower
depreciation expense. Cost of sales per pound4 was
$1.45 per pound, an increase of $0.36 per pound
from the same prior year period due to lower sales
volume at Lumwana and Zaldívar, partially offset by
higher cost of sales at Jabal Sayid combined with
lower royalty expense at Lumwana.
In the fourth quarter of 2016, operating cash flow
was $711 million, up 2% from the same prior year
period. The increase in operating cash flow primarily
reflects higher realized gold and copper prices,
partially offset by lower gold and copper sales volume
combined with an increase in income tax payments.
In the fourth quarter of 2016, free cash flow1 was
$385 million, in line with the $387 million in the same
prior year period. The higher operating cash flow
generated in the fourth quarter of 2016 compared to
the same prior year period was offset by higher cash
capital expenditures of $326 million, compared to
$311 million in the fourth quarter of 2015. The higher
cash capital expenditures were a result of greater
spending at Cortez, Veladero and Goldstrike, partially
offset by the impact of divested sites.
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 for external purposes 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 provide reasonable assurance
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 of the Treadway Commission
(COSO). Based on that evaluation, Management
concluded that the Company’s internal control over
financial reporting was effective as at December 31, 2016.
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, 2016 are included in Barrick’s 2016
Annual Report and its 2016 Form 40-F/Annual
Information Form on file with the US Securities and
Exchange Commission and Canadian provincial
securities regulatory authorities.
68
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’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
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
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.
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 Acquisition/disposition gains/losses;
n Foreign currency translation gains/losses;
n Significant tax adjustments;
n Unrealized gains/losses on non-hedge derivative
instruments; and
n Tax effect and non-controlling interest of the
above items.
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 impairment charges,
acquisition/disposition gains/losses and significant
tax adjustments do not reflect the underlying operating
performance of our core mining business and are not
necessarily indicative of future operating 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. The tax
effect and non-controlling interest of the adjusting items
are also excluded to reconcile the amounts to Barrick’s
share on a post-tax basis, consistent with net earnings.
As noted, we use this measure for internal purposes.
Management’s internal budgets and forecasts and public
guidance do not reflect the types of items we adjust for.
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.
69
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Starting with the second quarter 2016 MD&A, we
have amended the reconciliation from net earnings to
adjusted net earnings to present the adjusting items
on a pre-tax and fully consolidated basis and including
the tax effect and non-controlling interest as a separate
line. We believe that this change will assist analysts,
investors and other stakeholders of Barrick to better
understand how we calculate this non-GAAP performance
measure and simplify how it reconciles to our financial
statements. This change to the presentation of our
reconciliation does not result in any change to the final
calculation of adjusted net earnings.
Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share
For the years
ended Dec. 31
For the three months
ended Dec. 31
($ millions, except per share amounts in dollars)
2016
2015
2014
2016
2015
Net earnings (loss) attributable to equity holders of the Company
Impairment charges related to intangibles, goodwill, property,
plant and equipment, and investments
Acquisition/disposition (gains)/losses
Foreign currency translation (gains)/losses
Significant tax adjustments1
Other expense adjustments2
Unrealized gains on non-hedge derivative instruments
Tax effect and non-controlling interest
$ 655
$ (2,838)
$ (2,907)
$ 425
$ (2,622)
(250)
42
199
43
114
(32)
47
3,897
(187)
120
134
135
11
(928)
4,106
(50)
132
(3)
119
181
(785)
(304)
7
18
(16)
39
(9)
95
3,405
(107)
132
95
40
4
(856)
Adjusted net earnings
$ 818
$
344
$
793
$ 255
$
91
Net earnings (loss) per share3
Adjusted net earnings per share3
0.56
0.70
(2.44)
0.30
(2.50)
0.68
0.36
0.22
(2.25)
0.08
1. Significant tax adjustments for the current year primarily relate to a tax provision booked by Acacia in Q1 2016.
2. Other expense adjustments for the current year relate to losses on debt extinguishment, the impact of the decrease in the discount rate used to calculate the
provision for environmental remediation at our closed mines and a reduction in cost of sales attributed to insurance proceeds recorded in the third quarter of 2016
relating to the 2015 oxygen plant motor failure at Pueblo Viejo.
3. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
Free Cash Flow
Free cash flow is a measure that excludes capital
expenditures from net cash provided by operating
activities. 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
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.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
($ millions)
Net cash provided by operating activities
Capital expenditures
Free cash flow
For the years
ended Dec. 31
2016
2015
2014
$ 2,640
(1,126)
$ 2,794
(1,713)
$ 2,296
(2,432)
$ 1,514
$ 1,081
$
(136)
For the three months
ended Dec. 31
2016
$ 711
(326)
$ 385
2015
$ 698
(311)
$ 387
70
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
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
Cash costs per ounce, all-in sustaining costs per ounce
and all-in costs per ounce are non-GAAP financial
measures which are calculated based on the definition
published by the World Gold Council (“WGC”) (a market
development organization for the gold industry
comprised of and funded by 18 gold mining companies
from around the world, including Barrick). The WGC is
not a regulatory organization. Management uses these
measures to monitor the performance of our gold
mining operations and its ability to generate positive
cash flow, both on an individual site basis and an overall
company basis.
Cash costs start with our cost of sales related to
gold production and removes depreciation, the non-
controlling interest of cost of sales and includes
by-product credits. All-in sustaining costs start with cash
costs and include sustaining capital expenditures, general
& administrative costs, minesite exploration and
evaluation costs and reclamation cost accretion and
amortization. These additional costs reflect the
expenditures made to maintain current production levels.
All-in costs start with all-in sustaining costs and adds
additional costs that 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 discrete projects at existing
operations intended to increase production capacity and
will not benefit production for at least 12 months) and
other non-sustaining costs (primarily exploration and
evaluation costs, community relations costs and general
and administrative costs that are not associated with
current operations). These definitions recognize 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 cash costs, 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 operations and to
generate free cash flow on an overall company basis.
Due to the capital-intensive nature of the industry and
the long useful lives over which these items are
depreciated, there can be a significant timing difference
between net earnings calculated in accordance with IFRS
and the amount of free cash flow that is being generated
by a mine and therefore we believe these measures are
useful non-GAAP operating metrics and supplement our
IFRS disclosures. These measures are not representative
of all of our cash expenditures as they do not include
income tax payments, interest costs or dividend
payments. These measures do not include depreciation
or amortization.
Cash costs per ounce, 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.
C1 cash costs per pound and All-in sustaining costs
per pound are non-GAAP financial measures related to
our copper mine operations. We believe that C1 cash
costs per pound enables investors to better understand
the performance of our copper operations in comparison
to other copper producers who present results on a
similar basis. C1 cash costs per pound excludes royalties
and non-routine charges as they are not direct
production costs. All-in sustaining costs per pound is
similar to the gold all-in sustaining costs metric and
Management uses this to better evaluate the costs of
copper production. We believe this 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
71
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS administrative costs, minesite exploration and evaluation
costs, royalties, environmental rehabilitation costs and
write-downs taken on inventory to net realizable value.
Starting with the third quarter 2016 MD&A, we have
presented this reconciliation for each of our reportable
operating segments. We believe this additional information
will assist analysts, investors and other stakeholders of
Barrick in understanding the details of these non-GAAP
metrics on a segment-by-segment basis.
Starting with the second quarter 2016 MD&A, we
have condensed and simplified the reconciliation from
cost of sales to “cash costs”, “all-in sustaining costs” and
“all-in costs”, including on a per ounce basis for gold
and per pound basis for copper, to present items on a
fully consolidated basis and include non-controlling
interest as a separate line. As part of this simplification,
we have grouped several minor items into one line
labeled “Other”, with further detail in the footnote to
the reconciliation. We believe that these changes will
assist analysts, investors and other stakeholders of
Barrick to better understand how we calculate these
non-GAAP performance measures and simplify how they
reconcile to our financial statements. This change to
the presentation of our reconciliation does not result in
any change to the figures calculated, except as noted
below for “all-in costs”.
Also starting with the second quarter 2016 MD&A,
we have adjusted the amount included as “project
exploration and evaluation costs and project costs” as
part of our “all-in costs” measure to include all exploration
and evaluation costs related to our advanced mining and
business improvement projects and corporate development
activities, where previously it did not. The impact of this
adjustment for the three and twelve month periods
ended December 31, 2016, was $22/oz and $17/oz,
respectively (2015: $27/oz and $30/oz, respectively;
2014: $25/oz). We believe this change will assist
analysts, investors and other stakeholders of Barrick
in understanding all of the expenditures related to
growing our business.
72
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Reconciliation of Gold Cost of Sales to Cash costs, All-in Sustaining Costs and All-in Costs, including on a per ounce basis
For the years
ended Dec. 31
For the three months
ended Dec. 31
($ millions, except per ounce information in dollars)
Footnote
2016
2015
2014
2016
2015
Cost of sales related to gold production
Depreciation
By-product credits
Realized (gains)/losses on hedge and non-hedge derivatives
Non-recurring items
Other
Non-controlling interests (Pueblo Viejo and Acacia)
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization (operating sites)
Non-controlling interest, copper operations and other
All-in sustaining costs
Project exploration and evaluation and project costs
Community relations costs not related to current operations
Project capital expenditures
Rehabilitation – accretion and amortization (non-operating sites)
Non-controlling interest and copper operations
1
2
3
4
5
6
7
8
9
6
7
8
9
$ 4,979
(1,503)
(184)
89
24
(44)
(358)
$ 5,904
(1,613)
(214)
128
(210)
25
(394)
$ 5,893
(1,414)
(271)
(94)
–
26
(379)
$ 1,347
(396)
(41)
18
–
(20)
(91)
$ 1,575
(462)
(48)
50
(149)
7
(78)
$ 3,003
$ 3,626
$ 3,761
$ 817
$ 895
256
44
944
59
(287)
233
47
1,359
145
(362)
385
38
1,638
135
(532)
39
18
298
18
(78)
52
11
303
26
(86)
$ 4,019
$ 5,048
$ 5,425
$ 1,112
$ 1,201
193
8
175
11
(42)
308
12
133
12
(43)
354
29
596
11
(74)
64
2
51
4
(4)
75
–
(48)
3
(20)
All-in costs
$ 4,364
$ 5,470
$ 6,341
$ 1,229
$ 1,211
Ounces sold – equity basis (000s ounces)
10
5,503
6,083
6,284
1,519
1,636
Cost of sales per ounce
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
All-in sustaining costs per ounce
All-in sustaining costs per ounce (on a co-product basis)
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
1 By-product credits
11,12
12
12,13
12
12,13
12
12,13
$
$
$
$
$
$
$
798
546
569
730
753
792
815
$
$
$
$
$
$
$
859
596
619
831
854
900
923
$
$
$
$
$
842
598
618
864
884
$ 1,010
$ 1,030
$ 784
$ 848
$ 540
$ 557
$ 732
$ 749
$ 809
$ 826
$ 547
$ 566
$ 733
$ 752
$ 741
$ 760
Revenues include the sale of by-products for our gold and copper mines for the three months ended December 31, 2016 of $41 million
(2015: $34 million) and the year ended December 31, 2016 of $151 million (2015: $140 million; 2014: $183 million) and energy sales from
the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2016 of $nil (2015: $14 million) and the
year ended December 31, 2016, of $33 million (2015: $74 million; 2014: $88 million) up until its disposition on August 18, 2016.
2 Realized (gains)/losses on hedge and non-hedge derivatives
Includes realized hedge losses of $14 million and $73 million for the three months and year ended December 31, 2016, respectively (2015:
$40 million and $106 million, respectively; 2014: $86 million gains), and realized non-hedge losses of $4 million and $16 million for the three
months and year ended December 31, 2016, respectively (2015: $10 million and $22 million, respectively; 2014: $8 million gains). Refer to
Note 5 of the Financial Statements for further information.
3 Non-recurring items
Non-recurring items in 2016 consist of $34 million in a reduction in cost of sales attributed to insurance proceeds recorded in the third
quarter of 2016 relating to the 2015 oxygen plant motor failure at Pueblo Viejo and $10 million in abnormal costs at Veladero relating to
the administrative fine in connection with the cyanide incident that occurred in 2015. These gains/costs are not indicative of our cost of
production and have been excluded from the calculation of cash costs.
73
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
4 Other
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $5 million, respectively (2015: $2 million
and $12 million, respectively; 2014: $16 million) and adding the cost of treatment and refining charges of $4 million and $16 million,
respectively (2015: $4 million and $14 million, respectively; 2014: $11 million). 2016 includes the removal of cash costs associated with our
Pierina mine, which is mining incidental ounces as it enters closure, of $24 million and $66 million, respectively.
5 Non-controlling interests (Pueblo Viejo and Acacia)
Non-controlling interests include non-controlling interests related to gold production of $127 million and $508 million, respectively, for the
three months and year ended December 31, 2016 (2015: $188 million and $681 million, respectively; 2014: $602 million). Refer to Note 5
of the Financial Statements for further information.
6 Exploration and evaluation costs
Exploration, evaluation and project expenses are presented as minesite sustaining if it supports current mine operations and project if it relates
to future projects. Refer to page 43 of this MD&A.
7 Capital expenditures
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and
are not related to current production. Significant projects in the current year are Arturo, Cortez Lower Zone and Lagunas Norte Refractory Ore
Project. Refer to page 42 of this MD&A.
8 Rehabilitation – accretion and amortization
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provision
of our gold operations, split between operating and non-operating sites.
9 Non-controlling interest and copper operations
Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue. Also
removes exploration, evaluation and project costs, rehabilitation costs and capital expenditures incurred by our copper sites and the non-
controlling interest of our Acacia and Pueblo Viejo operating segment and Arturo. In 2016, figures remove the impact of Pierina. The impact
is summarized as the following:
($ millions)
For the years
ended Dec. 31
For the three months
ended Dec. 31
Non-controlling interest, copper operations and other
2016
2015
2014
2016
2015
General & administrative costs
Minesite exploration and evaluation costs
Rehabilitation – accretion and amortization (operating sites)
Minesite sustaining capital expenditures
$
(36)
(9)
(9)
(233)
$
(53)
(8)
(13)
(288)
$
(86)
(18)
(12)
(416)
$
(5)
(3)
(4)
(66)
$
(5)
(3)
(4)
(74)
All-in sustaining costs total
$
(287)
$
(362)
$
(532)
$
(78)
$
(86)
Project exploration and evaluation and project costs
Project capital expenditures
(12)
(30)
(11)
(32)
(43)
(31)
All-in costs total
10 Ounces sold – equity basis
$
(42)
$
(43)
$
(74)
$
(4)
–
(4)
(9)
(11)
$
(20)
In 2016, figures remove the impact of Pierina as the mine is currently going through closure.
11 Cost of sales per ounce
In 2016, figures remove the cost of sales impact of Pierina of $30 million and $82 million, respectively, for the three months and year ended
December 31, 2016, as the mine is currently going through closure. Cost of sales per ounce excludes non-controlling interest related to gold
production. Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling
interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces.
12 Per ounce figures
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
74
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
13 Co-product costs per ounce
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of
by-product credits of our gold production (net of non-controlling interest) calculated as:
($ millions)
By-product credits
Non-controlling interest
For the years
ended Dec. 31
For the three months
ended Dec. 31
2016
2015
2014
2016
2015
$
184
(53)
$
214
(62)
$
271
(80)
$
41
(13)
$
48
(14)
By-product credits (net of non-controlling interest)
$
131
$
152
$
191
$
28
$
34
Reconciliation of Gold Cost of Sales to Cash Costs, All-in Sustaining Costs and All-in Costs, including on a per ounce basis,
by operating segment
($ millions, except per ounce
information in dollars)
Footnote
Cortez Goldstrike
Pueblo
Viejo
Lagunas
Turquoise
Norte Veladero
Ridge Acacia
For the three months ended Dec. 31, 2016
Cost of sales related to gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization
(operating sites)
Non-controlling interests
All-in sustaining costs
Project capital expenditures
Non-controlling interests
All-in costs
1
2
3
4
5
6
5
$ 235
(119)
–
–
–
–
$ 269 $ 144
(21)
(17)
–
1
(39)
(105)
–
–
–
–
$
60
(19)
(4)
–
–
–
$ 173
(42)
(7)
–
–
–
$
41
(8)
–
–
–
–
$ 195
(44)
(10)
–
1
(52)
$ 116
$ 164 $
68
$
37
$ 124
$
33
$ 90
–
6
19
3
–
–
1
55
6
(4)
–
–
32
2
(13)
–
–
3
2
–
–
1
49
1
–
–
–
9
–
–
(1)
1
56
2
(21)
$ 144
$ 222 $
89
$
42
$ 175
$
42
$ 127
33
–
–
–
–
–
1
–
–
–
–
–
–
–
$ 177
$ 222 $
89
$
43
$ 175
$
42
$ 127
Ounces sold – equity basis (000s ounces)
277
305
198
98
194
69
134
Cost of sales per ounce
7, 8
$ 846
$ 880 $ 450
$ 612
$ 892
$ 595 $ 935
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
8
8, 9
$ 418
$ 418
$ 534 $ 341
$ 536 $ 471
$ 379
$ 418
$ 642
$ 716
$ 484
$ 484
$ 679
$ 713
All-in sustaining costs per ounce
All-in sustaining costs per ounce
(on a co-product basis)
8
$ 517
$ 734 $ 443
$ 436
$ 905
$ 610
$ 952
8, 9
$ 517
$ 736 $ 573
$ 475
$ 979
$ 610
$ 986
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
8
8, 9
$ 637
$ 637
$ 734 $ 443
$ 736 $ 573
$ 447
$ 486
$ 905
$ 979
$ 610
$ 610
$ 953
$ 987
75
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
For the three months ended Dec. 31, 2015
Cost of sales related to gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization
(operating sites)
Non-controlling interests
All-in sustaining costs
Project capital expenditures
Non-controlling interests
All-in costs
1
2
3
4
5
6
5
$ 242
(122)
(1)
–
–
–
$ 251 $ 197
(55)
(26)
(38)
3
(27)
(73)
–
–
–
–
$
81
(37)
(4)
–
–
–
$ 123
(29)
(4)
(2)
–
–
$
35 $
(6)
–
–
–
–
303
(44)
(9)
(109)
4
(51)
$ 119
$ 178 $
54
$
40
$
88
$
29 $
94
–
1
15
4
–
–
2
16
3
–
–
1
19
7
(11)
–
1
17
2
–
–
–
55
1
–
–
–
9
–
–
9
–
43
2
(20)
$ 139
$ 199 $
70
$
60
$ 144
$
38 $
128
5
–
24
(9)
–
–
–
–
–
–
–
–
–
–
$ 144
$ 214 $
70
$
60
$ 144
$
38 $
128
Ounces sold – equity basis (000s ounces)
344
345
141
118
156
51
127
Cost of sales per ounce
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
7, 8
8
8, 9
$ 703
$ 727 $ 849
$ 690
$ 785
$ 685 $ 1,526
$ 348
$ 348
$ 514 $ 383
$ 516 $ 505
$ 337
$ 370
$ 556
$ 594
$ 571 $
$ 571 $
728
756
All-in sustaining costs per ounce
All-in sustaining costs per ounce
(on a co-product basis)
8
$ 406
$ 581 $ 496
$ 506
$ 915
$ 735 $ 1,004
8, 9
$ 406
$ 583 $ 618
$ 539
$ 953
$ 735 $ 1,032
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
8
8, 9
$ 419
$ 419
$ 623 $ 496
$ 625 $ 618
$ 506
$ 539
$ 915
$ 953
$ 735 $ 1,005
$ 735 $ 1,033
76
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Cortez Goldstrike
Pueblo
Viejo
Lagunas
Turquoise
Norte Veladero
Ridge Acacia
For the year ended Dec. 31, 2016
Cost of sales related to gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization
(operating sites)
Non-controlling interests
All-in sustaining costs
Project capital expenditures
Non-controlling interests
All-in costs
1
2
3
4
5
6
5
$ 955
(499)
–
–
–
–
$ 940 $ 644
(147)
(90)
34
5
(170)
(307)
(1)
–
–
–
$ 276
(96)
(17)
–
–
–
$ 464
(118)
(27)
(10)
–
–
$ 155
(27)
–
–
–
–
$ 719
(166)
(39)
–
8
(188)
$ 456
$ 632 $ 276
$ 163
$ 309
$ 128
$ 334
–
6
75
12
–
–
4
142
14
(4)
–
–
101
10
(44)
–
2
51
8
–
–
1
95
4
–
–
–
32
1
–
55
3
190
6
(88)
$ 549
$ 788 $ 343
$ 224
$ 409
$ 161
$ 500
67
–
74
(30)
–
–
5
–
–
–
–
–
1
–
$ 616
$ 832 $ 343
$ 229
$ 409
$ 161
$ 501
Ounces sold – equity basis (000s ounces)
1,059
1,103
700
425
532
257
522
Cost of sales per ounce
7, 8
$ 901
$ 852 $ 564
$ 651
$ 872
$ 603 $ 880
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
8
8, 9
$ 430
$ 430
$ 572 $ 395
473
$ 573
$ 383
$ 423
$ 582
$ 632
$ 498
$ 498
$ 640
$ 677
All-in sustaining costs per ounce
All-in sustaining costs per ounce
(on a co-product basis)
8
$ 518
$ 714 $ 490
$ 529
$ 769
$ 625
$ 958
8, 9
$ 518
$ 715 $ 568
$ 569
$ 819
$ 625
$ 995
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
8
8, 9
$ 581
$ 581
$ 754 $ 490
$ 755 $ 568
$ 540
$ 580
$ 769
$ 819
$ 625
$ 625
$ 960
$ 997
77
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
For the year ended Dec. 31, 2015
Cost of sales related to gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization
(operating sites)
Non-controlling interests
All-in sustaining costs
Project capital expenditures
Non-controlling interests
All-in costs
1
2
3
4
5
6
5
$ 826
(343)
(1)
(5)
–
–
$ 722 $ 904
(277)
(120)
(47)
13
(194)
(192)
(1)
(7)
–
–
$ 378
(169)
(18)
(5)
–
–
$ 499
(108)
(22)
(21)
–
–
$ 141 $
(23)
–
(1)
–
–
837
(143)
(36)
(109)
8
(200)
$ 477
$ 522 $ 279
$ 186
$ 348
$ 117 $
357
–
2
101
12
–
–
10
110
15
–
–
1
102
25
(51)
–
3
67
32
–
–
2
242
4
–
–
–
32
1
–
42
2
178
9
(75)
$ 592
$ 657 $ 356
$ 288
$ 596
$ 150 $
513
47
–
112
(31)
–
–
–
–
–
–
–
–
(1)
–
$ 639
$ 738 $ 356
$ 288
$ 596
$ 150 $
512
Ounces sold – equity basis (000s ounces)
982
999
597
565
629
202
461
Cost of sales per ounce
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
7, 8
8
8, 9
$ 841
$ 723 $ 881
$ 669
$ 792
$ 697 $ 1,161
$ 486
$ 487
$ 522 $ 467
$ 523 $ 595
$ 329
$ 361
$ 552
$ 587
$ 581 $
$ 581 $
772
810
All-in sustaining costs per ounce
All-in sustaining costs per ounce
(on a co-product basis)
8
$ 603
$ 658 $ 597
$ 509
$ 946
$ 742 $ 1,112
8, 9
$ 604
$ 659 $ 725
$ 541
$ 981
$ 742 $ 1,150
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
8
8, 9
$ 650
$ 651
$ 738 $ 597
$ 739 $ 725
$ 509
$ 541
$ 946
$ 981
$ 742 $ 1,111
$ 742 $ 1,149
78
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
For the year ended Dec. 31, 2014
Cost of sales related to gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
General & administrative costs
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Rehabilitation – accretion and amortization
(operating sites)
Non-controlling interests
All-in sustaining costs
Project capital expenditures
Non-controlling interests
All-in costs
1
2
3
4
5
6
5
$ 687
(255)
(1)
–
–
–
$
651 $ 885
(243)
(132)
(163)
(1)
–
–
16
–
(197)
–
$ 335
(92)
(14)
–
–
–
$ 554
(116)
(28)
–
–
–
$ 111 $
(17)
–
–
–
–
693
(129)
(45)
–
(8)
(182)
$ 431
$
518 $ 298
$ 229
$ 410
$
94 $
329
–
1
170
9
–
–
2
245
10
–
–
–
134
23
(62)
–
1
81
17
–
–
3
173
4
–
–
–
30
1
–
44
1
195
8
(80)
$ 611
$
775 $ 393
$ 328
$ 590
$ 125 $
497
19
–
300
(5)
–
–
–
–
–
–
–
–
56
(17)
$ 630
$ 1,070 $ 393
$ 328
$ 590
$ 125 $
536
Ounces sold – equity basis (000s ounces)
865
908
667
604
724
200
450
Cost of sales per ounce
Cash costs per ounce
Cash costs per ounce (on a co-product basis)
All-in sustaining costs per ounce
All-in sustaining costs per ounce
(on a co-product basis)
7, 8
8
8, 9
$ 794
$ 498
$ 499
8
$ 706
$
$
$
$
718 $ 786
$ 555
$ 764
$ 559 $
985
571 $ 446
572 $ 521
$ 379
$ 403
$ 566
$ 604
$ 473 $
$ 473 $
732
786
854 $ 588
$ 543
$ 815
$ 628 $ 1,105
8, 9
$ 707
$
855 $ 663
$ 567
$ 853
$ 628 $ 1,159
All-in costs per ounce
All-in costs per ounce (on a co-product basis)
8
8, 9
$ 728
$ 729
$ 1,179 $ 588
$ 1,180 $ 663
$ 543
$ 567
$ 815
$ 853
$ 628 $ 1,190
$ 628 $ 1,244
1 By-product credits
Revenues include the sale of by-products for our gold mines and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for
the three months and year ended December 31, 2016, of $nil and $33 million, respectively (2015: $14 million and $74 million, respectively;
2014: $88 million).
2 Non-recurring items
Non-recurring items in 2016 consist of $34 million in a reduction in cost of sales attributed to insurance proceeds recorded in the third quarter
of 2016 relating to the 2015 oxygen plant motor failure at Pueblo Viejo and $10 million in abnormal costs at Veladero relating to the admin-
istrative fine in connection with the cyanide incident that occurred in 2015. These gains/costs are not indicative of our cost of production and
have been excluded from the calculation of cash costs.
3 Other
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $5 million, respectively (2015: $2 million
and $12 million, respectively; 2014: $16 million) and adding the cost of treatment and refining charges of $2 million and $9 million, respectively
(2015: $3 million and $8 million, respectively; 2014: $7 million).
4 Exploration and evaluation costs
Exploration, evaluation and project expenses are presented as minesite sustaining if it supports current mine operations and project if it relates
to future projects. Refer to page 43 of this MD&A.
5 Capital expenditures
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and
are not related to current production. Significant projects in the current year are Arturo, Cortez Lower Zone and Lagunas Norte Refractory Ore
Project. Refer to page 42 of this MD&A.
79
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
6 Rehabilitation – accretion and amortization
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provision
of our gold operations, split between operating and non-operating sites.
7 Cost of sales per ounce
Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of
40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces.
8 Per ounce figures
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
9 Co-product costs per ounce
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of
by-product credits of our gold production (net of non-controlling interest) calculated as:
For the three months ended Dec. 31, 2016
Cortez Goldstrike
Pueblo
Viejo
Lagunas
Turquoise
Norte Veladero
Ridge Acacia
$
$
–
–
–
$
– $
–
17
(9)
$
$
– $
8
$
4
–
4
$
$
7
–
7
$
$
–
–
–
$ 10
(4)
$
6
For the three months ended Dec. 31, 2015
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
$
$
1
–
1
$
– $
–
26
(10)
$
$
– $
16
$
4
–
4
$
$
4
–
4
$
$
–
–
–
Acacia
$
9
(3)
$
6
For the year ended Dec. 31, 2016
Cortez Goldstrike
Pueblo
Viejo
Lagunas
Turquoise
Norte Veladero
Ridge Acacia
$
$
–
–
–
$
1 $
–
90
(39)
$
17
–
$
27
–
$
1 $
51
$
17
$
27
$
$
–
–
–
$ 39
(14)
$ 25
For the year ended Dec. 31, 2015
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
$
$
1
–
1
$
1 $ 120
(49)
–
$
18
–
$
22
–
$
1 $
71
$
18
$
22
$
$
–
–
–
Acacia
$ 36
(13)
$ 23
For the year ended Dec. 31, 2014
Cortez
Goldstrike
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
$
$
1
–
1
$
1 $ 163
(64)
–
$
14
–
$
28
–
$
1 $
99
$
14
$
28
$
$
–
–
–
Acacia
$ 45
(16)
$ 29
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
80
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Reconciliation of Copper Cost of Sales to C1 Cash Costs and All-in Sustaining Costs, including on a per pound basis
($ millions, except per pound information in dollars)
2016
2015
2014
2016
2015
For the years
ended Dec. 31
For the three months
ended Dec. 31
Cost of sales
Depreciation/amortization1
Treatment and refinement charges
Cash cost of sales applicable to equity method investments2
Less: royalties
Non-routine charges
Other metal sales
Other
C1 cash cost of sales
General & administrative costs
Rehabilitation – accretion and amortization
Royalties
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
Inventory write-downs
All-in sustaining costs
$ 319
(45)
161
209
(41)
–
–
–
$ 814
(104)
178
23
(101)
–
(1)
72
$ 954
(171)
120
–
(39)
(1)
(1)
(27)
$ 84
(15)
41
55
(9)
–
–
–
$ 116
(23)
49
23
(16)
–
–
72
$ 603
$ 881
$ 835
$ 156
$ 221
14
7
41
–
169
–
21
6
101
–
177
–
40
8
39
1
294
1
3
2
9
–
48
–
4
–
16
–
44
–
$ 834
$ 1,186
$ 1,218
$ 218
$ 285
Pounds sold – consolidated basis (millions pounds)
405
510
435
107
132
Cost of sales per pound3,4
C1 cash cost per pound3
$ 1.43
$ 1.65
$ 2.19
$ 1.45
$ 1.09
$ 1.49
$ 1.73
$ 1.92
$ 1.47
$ 1.66
All-in sustaining costs per pound3
$ 2.05
$ 2.33
$ 2.79
$ 2.04
$ 2.15
1. For the year ended December 31, 2016, depreciation excludes $50 million (2015: $6 million; 2014: $nil) of depreciation applicable to equity method investments.
2. For the year ended December 31, 2016, figures include $177 million (2015: $23 million; 2014: $nil) of cash costs related to our 50% share of Zaldívar due to the
divestment of 50% of our interest in the mine on December 1, 2015, as well as $32 million (2015: $nil; 2014: $nil) of cash costs related to our 50% share of Jabal
Sayid due to the divestment of 50% of our interest in the mine on December 4, 2014 and subsequent accounting as equity method investments.
3. Cost of sales per pound, 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.
4. Cost of sales related to copper per pound is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method
investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments).
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.
81
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Starting with the third quarter 2016 MD&A, we have presented this reconciliation for each of our reportable operating
segments. We believe this additional information will assist analysts, investors and other stakeholders of Barrick in
understanding the details of these non-GAAP metrics on a segment-by-segment basis.
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
($ millions)
Net earnings (loss)
Income tax expense
Finance costs, net1
Depreciation
EBITDA
Impairment charges
Adjusted EBITDA
1. Finance costs exclude accretion.
Reconciliation of Segment Income to Segment EBITDA
($ millions)
Segment Income
Depreciation
Segment EBITDA
($ millions)
Segment Income
Depreciation
Segment EBITDA
($ millions)
Segment Income
Depreciation
Segment EBITDA
For the years
ended Dec. 31
For the three months
ended Dec. 31
2016
2015
2014
2016
2015
$
861
917
725
1,574
$ (3,113)
(31)
663
1,771
$
(2,959)
306
710
1,648
$
512
223
200
418
$ (2,941)
(361)
120
499
$ 4,077
(250)
$
(710)
3,897
$
(295)
4,106
$ 1,353
(304)
$ (2,683)
3,405
$ 3,827
$ 3,187
$ 3,811
$ 1,049
$
722
For the year ended Dec. 31, 2016
Cortez Goldstrike
Pueblo
Viejo
(60%)
Lagunas
Turquoise
Norte Veladero
Ridge Acacia
$ 340
499
$ 442 $ 528
93
307
$ 260
96
$ 220
118
$ 166
27
$ 299
166
$ 839
$ 749 $ 621
$ 356
$ 338
$ 193
$ 465
For the year ended Dec. 31, 2015
Cortez
Goldstrike
Pueblo
Viejo
(60%)
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
$ 287
343
$ 408 $ 230
160
192
$ 285
169
$ 216
108
$
92
23
(1)
$
143
$ 630
$ 600 $ 390
$ 454
$ 324
$ 115
$ 142
For the year ended Dec. 31, 2014
Cortez
Goldstrike
Pueblo
Viejo
(60%)
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
$ 393
255
$ 496 $ 417
138
132
$ 439
92
$ 330
116
$ 139
17
$ 191
129
$ 648
$ 628 $ 555
$ 531
$ 446
$ 156
$ 320
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
82
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
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
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
Reconciliation of Sales to Realized Price per ounce/pound
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.
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 applicable to equity method investments1
Realized non-hedge gold/copper derivative (losses) gains
Sales applicable to Pierina2
Treatment and refinement charges
Export duties
Other3
Gold
Copper
2016
2015
2014
2016
2015
2014
$ 7,908
(948)
–
(2)
(112)
16
2
–
$ 7,813
(826)
–
–
–
14
34
–
$ 8,744
(851)
–
1
–
11
48
–
$ 466
–
299
–
–
161
–
–
$ 1,002
–
26
–
–
178
–
–
$ 1,224
–
–
(11)
–
120
–
(17)
Revenues – as adjusted
$ 6,864
$ 7,035
$ 7,953
$ 926
$ 1,206
$ 1,316
Ounces/pounds sold (000s ounces/millions pounds)2
5,503
6,083
6,284
405
510
435
Realized gold/copper price per ounce/pound4
$ 1,248
$ 1,157
$ 1,265
$ 2.29
$ 2.37
$ 3.03
1. Represents sales of $259 million for the year ended December 31, 2016 (2015: $26 million; 2014: $nil) applicable to our 50% equity method investment in Zaldívar
effective December 1, 2015 as well as $40 million (2015: $nil; 2014: $nil) applicable to our 50% equity method investment in Jabal Sayid effective December 3,
2014 and subsequent accounting as equity method investments.
2. 2016 figures exclude Pierina from the calculation of realized price per ounce as the mine is currently going through closure.
3. Revenue related to copper cathode purchases made in the second quarter of 2014.
4. Realized price per ounce/pound may not calculate based on amounts presented in this table due to rounding.
83
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS
Technical Information
The scientific and technical information contained in this
MD&A has been reviewed and approved by Steven
Haggarty, P. Eng., Senior Director, Metallurgy of Barrick;
Rick Sims, Registered Member SME, Senior Director,
Resources and Reserves of Barrick; and Patrick Garretson,
Registered Member SME, Senior Director, Life of Mine
Planning of Barrick who are each a “Qualified Person” as
defined in National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
Endnotes
1 These are non-GAAP financial performance measures
6 Estimated in accordance with National Instrument
with no standardized meaning under IFRS and
therefore may not be comparable to similar measures
presented by other issuers. For further information
and a detailed reconciliation of each non-GAAP
measure to the most directly comparable IFRS
measure, please see pages 69 to 83 of this MD&A.
2 Amount excludes capital leases and includes project
financing payments at Pueblo Viejo (60% basis) and
Acacia (100% basis).
3 Includes $943 million cash primarily held at Acacia
and Pueblo Viejo, which may not be readily deployed
outside of Acacia and/or Pueblo Viejo.
4 Cost of sales related to gold per ounce is calculated
using cost of sales related to gold on an attributable
basis (removing the non-controlling interest of 40%
Pueblo Viejo and 36.1% Acacia from cost of sales),
divided by attributable gold ounces. Cost of sales
related to copper per pound is calculated using cost
of sales related to copper including our proportionate
share of cost of sales attributable to equity method
investments (Zaldívar and Jabal Sayid), divided
by consolidated copper pounds (including our
proportionate share of copper pounds from our
equity method investments).
5 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.
43-101 as required by Canadian securities regulatory
authorities. Estimates are as of December 31, 2016,
unless otherwise noted. Proven reserves of 480.3 million
tonnes grading 1.68 g/t, representing 25.9 million
ounces of gold, and 173.3 million tonnes grading
0.533%, representing 2.035 billion pounds of copper.
Probable reserves of 1.5 billion tonnes grading
1.22 g/t, representing 60.1 million ounces of gold,
and 276 million tonnes grading 0.638%, representing
3.886 billion pounds of copper. Measured resources
of 82.9 million tonnes grading 2.52 g/t, representing
6.7 million ounces of gold, and 83.2 million tonnes
grading 0.410%, representing 753.4 million pounds
of copper. Indicated resources of 1.2 billion tonnes
grading 1.74 g/t, representing 68.5 million ounces
of gold, and 650.3 million tonnes grading 0.526%,
representing 7.545 billion pounds of copper. Inferred
resources of 781 million tonnes grading 1.22 g/t,
representing 30.7 million ounces of gold, and
114.1 million tonnes grading 0.501%, representing
1.259 billion pounds of copper. Complete mineral
reserve and mineral resource data for all mines and
projects referenced in this MD&A, including tonnes,
grades, and ounces, can be found on pages 86 to 93
of Barrick’s Annual Report 2016.
84
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’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 73 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 81 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 73 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 70 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.
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 86 to 93 – Summary Gold/
Copper Mineral Reserves and Mineral Resources.
MINERAL RESOURCE: See pages 86 to 93 – 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.
85
Barrick Gold Corporation | Financial Report 2016MANAGEMENT’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 87 to 93.
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
86
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.
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Gold Mineral Reserves1,2
As at December 31, 2016
Based on attributable ounces
North America
Goldstrike Open Pit
Goldstrike Underground
Goldstrike Property Total
Pueblo Viejo (60.00%)
Cortez
Turquoise Ridge (75.00%)
South Arturo (60.00%)
Hemlo
Golden Sunlight
South America
Cerro Casale (75.00%)
Pascua-Lama
Veladero
Lagunas Norte
Australia Pacific
Porgera (47.50%)
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Jabal Sayid (50.00%)
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)
54,473
2,996
57,469
60,668
16,196
4,288
851
1,018
288
2.86
11.11
3.29
2.82
1.52
15.54
3.95
3.64
1.30
5,012
1,070
6,082
5,505
793
2,143
108
119
12
10,527
2,689
13,216
25,153
134,806
4,003
129
24,764
539
3.72
8.51
4.70
3.19
2.18
14.65
3.38
1.85
3.40
1,259
736
1,995
2,582
9,427
1,886
14
1,469
59
65,000
5,685
70,685
85,821
151,002
8,291
980
25,782
827
6,271
3.00
1,806
9.88
8,077
3.55
2.93
8,087
2.11 10,220
4,029
122
1,588
71
15.11
3.87
1.92
2.67
172,276
29,247
23,986
26,322
0.65
1.94
0.78
1.83
3,586
1,828
602
1,548
725,926
248,623
228,139
44,348
0.59 13,848
1.53 12,222
6,147
0.84
2,670
1.87
898,202
277,870
252,125
70,670
0.60 17,434
1.57 14,050
6,749
0.83
4,218
1.86
444
72,472
12.26
0.94
175
2,193
14,011
27,601
4.51
2.19
2,032
1,947
14,455
100,073
4.75
1.29
2,207
4,140
1,464
4,683
5,798
2,855
10.52
3.25
0.95
0.26
495
489
178
24
12,494
10,519
3,826
8,476
6.91
2.13
1.74
0.23
2,776
720
214
62
13,958
15,202
9,624
11,331
7.29
2.47
1.27
0.24
3,271
1,209
392
86
Total
480,325
1.68 25,880
1,526,573
1.22 60,070
2,006,898
1.33 85,950
Copper Mineral Reserves1,2
As at December 31, 2016
Proven
Probable
Total
Based on attributable pounds
Zaldívar (50.00%)
Lumwana
Jabal Sayid (50.00%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
142,666
27,786
2,855
0.501 1,575.1
315.8
0.516
144.1
2.289
87,736
179,860
8,476
0.535 1,035.0
0.597 2,367.9
483.0
2.585
230,402
207,646
11,331
0.514 2,610.1
0.586 2,683.7
627.1
2.510
Total
173,307
0.533 2,035.0
276,072
0.638 3,885.9
449,379
0.598 5,920.9
1. See accompanying endnote #1.
2. See accompanying endnote #2.
87
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Gold Mineral Resources1,2
As at December 31, 2016
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
Turquoise Ridge (75.00%)
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%)
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Nyanzaga (57.51%)
Golden Ridge (63.90%)
Tankoro (31.95%)
Jabal Sayid (50.00%)
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)
1,329
984
2,313
10,183
2,199
161
13,426
7
126
825
3,865
17,217
13,562
7,637
3,253
–
2.74
11.73
6.56
2.33
2.04
10.43
6.97
1.33
2.72
1.51
2.52
0.30
1.69
0.48
0.65
–
117
371
488
764
144
54
3,009
0.3
11
40
3,896
2,022
5,918
95,459
29,137
30,837
37,364
22
58,771
14,320
313 266,803
2.63
330
9.81
638
5.09
968
2.33
7,146
2.13
1,999
9.60
9,522
5.39
6,476
1.41
1
0.90
1,709
631
1.37
2.24 19,190
447
1,009
1,456
7,910
2,143
9,576
9,485
1.3
1,720
671
19,503
81
1.92
1,064 10.06
9.48
1,145
2.04
2,845
1.64
14,506
8.18
7,343
6.34
15,979
5.18
6
1.94
7,765
1.32
5,123
2.02
46,108
5
344
349
187
763
1,931
3,257
1
484
218
2,997
167 205,268
736 143,111
118 204,698
54,192
–
68
–
0.36
1.43
0.48
0.63
–
2,362
6,561
3,185
1,100
–
2,529
7,297
3,303
1,168
–
371,580
15,400
21,389
3,946
210,965
0.38
1.74
0.33
0.71
1.00
4,493
863
229
90
6,793
168
3,123
5.92
0.67
32
67
13,607
10,991
4.05
0.95
1,770
335
1,802
402
13,528
553
3.39
2.47
1,476
44
874
2,174
83
1,685
–
–
57
11.53
2.66
1.50
3.78
–
–
–
324
186
4
205
–
–
–
8,011
10,714
16,449
12,520
5,076
–
3,125
8.62
2.30
1.23
3.45
2.78
–
0.60
2,220
793
650
1,389
454
–
60
2,544
979
654
1,594
454
–
60
15,469
6,703
1,315
2,933
904
13,739
1,765
9.75
2.51
1.37
3.49
2.27
1.52
0.42
4,848
540
58
329
66
671
24
Total
82,938
2.52
6,730 1,226,393
1.74 68,521
75,251
781,009
1.22 30,711
Copper Mineral Resources1,2
As at December 31, 2016
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable pounds
Zaldívar (50.00%)
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)
58,039
25,154
57
0.410
0.409
1.353
524.9
22,354
226.8 624,826
3,125
1.7
0.399
196.7
0.522 7,191.8
156.9
2.277
721.6
7,418.6
158.6
4,062 0.529
47.4
108,266 0.468 1,116.3
95.5
1,765 2.454
Total
83,250
0.410
753.4 650,305
0.526 7,545.4
8,299
114,093 0.501 1,259.2
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying endnote #1.
88
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3,4
For the years ended December 31
2016
2015
Based on attributable ounces
North America
Goldstrike Open Pit
Goldstrike Underground
Goldstrike Property Total
Pueblo Viejo (60.00%)
Cortez
Goldrush
Bald Mountain (0.00%)5
Turquoise Ridge (75.00%)
Round Mountain (0.00%)5
South Arturo (60.00%)
Hemlo
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)
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying endnote #1.
3. Measured plus indicated resources.
4. See accompanying endnote #2.
5. See accompanying endnote #3.
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
65,000
5,225
5,685
3,006
70,685
8,231
85,821
105,642
151,002
31,336
–
30,998
–
–
8,291
50,790
–
–
980
29
25,782
58,897
827
15,145
–
270,668
898,202
222,485
277,870
156,673
252,125
212,335
70,670
57,445
6,271
3.00
447
2.66
1,806
9.88
1,009
10.44
8,077
3.55
1,456
5.50
8,087
2.93
2.33
7,910
2.11 10,220
2,143
2.13
–
–
9,576
9.61
–
–
–
–
4,029
15.11
9,485
5.81
–
–
–
–
122
3.87
1
1.07
1,588
1.92
1,720
0.91
71
2.67
671
1.38
–
–
2.24 19,503
0.60 17,434
0.35
2,529
1.57 14,050
7,297
1.45
6,749
0.83
3,303
0.48
4,218
1.86
1,168
0.63
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
2.46
7,731
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
89
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3,4
For the years ended December 31
2016
2015
Based on attributable ounces
Australia Pacific
Porgera (47.50%)5
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Nyanzaga (57.51%)
Golden Ridge (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 endnote #1.
3. Measured plus indicated resources.
4. See accompanying endnote #2.
5. See accompanying endnote #4.
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
14,455
13,775
100,073
14,114
4.75
4.07
1.29
0.89
2,207
1,802
4,140
402
14,471
9,444
100,838
15,450
4.24
5.47
1.28
0.88
1,971
1,660
4,154
439
13,958
8,885
15,202
12,888
9,624
16,532
–
14,205
–
5,076
11,331
3,182
7.29
8.91
2.47
2.36
1.27
1.23
–
3.49
–
2.78
0.24
0.59
3,271
2,544
1,209
979
392
654
–
1,594
–
454
86
60
17,488
14,159
14,685
8,099
9,382
28,213
–
62,208
–
–
12,496
19
6.99
7.03
2.67
2.66
1.32
1.35
–
1.31
–
–
0.27
–
3,930
3,201
1,262
692
399
1,221
–
2,621
–
–
107
–
2,006,898
1,309,331
1.33 85,950
1.79 75,251
2,160,149
1,403,220
1.32 91,858
1.75 79,095
90
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Reserves1
For the year ended
December 31, 2016
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%)2
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)
60,668 18.678
36,432
25,153 14.07
11,377
85,821 17.33
47,809 80.0%
172,276 1.907
29,247 70.342
26,322 3.686
23,986 7.714
10,565
66,143
3,119
5,949
725,926
33,451
1.43
248,623 67.64 540,657
8,180
5.74
228,139 14.81 108,602
44,348
1.52
898,202
44,016 69.0%
277,870 67.92 606,800 82.0%
11,299 31.5%
252,125 14.13 114,551 9.8%
70,670
4.97
1,464
6.05
285
8,544
8.46
2,325
10,008
8.11
2,610 65.0%
Total
313,963 12.14 122,493
1,280,733 17.11
704,592
1,594,696 16.13
827,085 70.4%
1. Silver is accounted for as a by-product credit against reported or projected gold production costs.
2. See accompanying endnote #5.
Contained Copper Within Reported Gold Reserves1
For the year ended
December 31, 2016
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%)2
Buzwagi (63.90%)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained Process
lbs recovery
%
(millions)
60,668 0.093
124.9
25,153 0.100
55.3
85,821 0.095
180.2 47.6%
172,276 0.190
29,247 0.101
721.3
65.0
725,926 0.226
248,623 0.080
3,613.3
440.3
898,202 0.219
277,870 0.082
4,334.6 87.4%
505.3 29.9%
1,464 0.431
5,798 0.070
13.9
9.0
8,544 0.565
3,826 0.140
106.4
11.8
10,008 0.545
9,624 0.098
120.3 90.0%
20.8 64.9%
Total
269,453 0.157
934.1
1,012,072 0.189
4,227.1
1,281,525 0.183
5,161.2 80.4%
1. Copper is accounted for as a by-product credit against reported or projected gold production costs.
2. See accompanying endnote #5.
91
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Resources1
For the year ended December 31, 2016
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)
10,183
14.53
4,758
95,459
11.22 34,449
39,207
2,845
9.76
893
17,217
13,562
3,253
7,637
1.19
661 205,268
28.91 12,604 143,111
54,192
304
2,304 204,698
2.91
9.38
1.06
6,985
25.44 117,060
5,250
12.38 81,459
3.01
7,646 371,580
129,664 15,400
3,946
83,763 21,389
5,554
1.04 12,379
8,830
529
6,966
17.83
4.17
10.13
874
7.15
201
8,011
6.58
1,696
1,897 15,469
6.96
3,461
Total
52,726
12.29 20,832 710,739
10.80 246,899
267,731 430,629
2.39 33,058
1. Resources which are not reserves do not have demonstrated economic viability.
Contained Copper Within Reported Gold Resources1
For the year ended December 31, 2016
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
Bulyanhulu (63.90%)
Buzwagi (63.90%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
10,183
0.090
20.2
95,459
0.085
179.7
199.9
2,845
0.022
1.4
17,217
13,562
0.132
0.103
50.1
30.7
205,268
143,111
0.164
0.084
743.8
264.3
793.9 371,580
15,400
295.0
0.192 1,570.2
16.5
0.049
874
83
0.405
0.109
7.8
0.2
8,011
16,449
0.449
0.116
79.3
42.1
87.1
42.3
15,469
1,315
0.632
0.128
215.5
3.7
Total
41,919
0.118
109.0
468,298
0.127 1,309.2
1,418.2 406,609
0.202 1,807.3
1. Resources which are not reserves do not have demonstrated economic viability.
Nickel Mineral Resources1
For the year ended December 31, 2016
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
(%)
–
0.0
–
0.0
0.0
–
0.0
1. Resources which are not reserves do not have demonstrated economic viability.
92
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES
Mineral Reserves and Resources Endnotes
1. Mineral reserves (“reserves”) and mineral resources (“resources”) have been estimated as at December 31, 2016 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 1.9 million ounces of proven and probable gold reserves at Cortez 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, Senior 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 2017 through 2020 and US$1,200 per ounce from 2021 onwards, an assumed
silver price of US$13.75 per ounce for 2017 through 2020 and US$16.50 from 2021 onwards, and an assumed copper price of US$2.25 per pound for 2017
through 2020 and US$2.75 per pound from 2021 onwards (for more information about Barrick’s two-tiered approach to estimating reserves, see page 28
of the Annual Report 2016) and long-term average exchange rates of 1.30 CAD/US$ and 0.75 US$/AUD. Reserves at Kalgoorlie assumed a gold price of
AUD$1,600 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, 2016 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. In confirming our annual reserves for each of our mineral properties, projects, and operations we conduct a reserve test on December 31 of each year to verify
that the future undiscounted cash flow from reserves is positive. The cash flow ignores all sunk costs and only considers future operating and closure expenses
as well as any future capital costs.
3. 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 120 of Barrick’s Annual Report 2016.
4. On August 31, 2015, the Company divested 50% of its interest in the Porgera mine. For additional information regarding this matter, see page 120
of Barrick’s Annual Report 2016.
5. Silver and copper probable reserve tonnage at the Bulyanhulu mine is less than the gold probable reserve tonnage because the gold reserve includes
3.95 million tonnes of tailings material which are being separately re-processed for recovery of gold only.
93
Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES MANAGEMENT’S RESPONSIBILITY
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 Professional
Accountants. Their report outlines the scope of their examination and opinion on the consolidated financial statements.
Catherine Raw
Executive Vice President
and Chief Financial Officer
Toronto, Canada
February 15, 2017
94
Barrick Gold Corporation | Financial Report 2016
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, 2016. Barrick’s Management used the Internal Control – Integrated Framework (2013) as issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 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, 2016.
The effectiveness of the Company’s internal control over financial reporting as at December 31, 2016 has been
audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants, as stated in their report which is located
on pages 96 – 97 of Barrick’s 2016 Annual Financial Statements.
Barrick Gold Corporation | Financial Report 2016
95
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
Independent Auditor’s Report
February 15, 2017
To the Shareholders of
Barrick Gold Corporation
We have completed integrated audits of Barrick Gold Corporation’s (the company) 2016 and 2015 consolidated
financial statements and its internal control over financial reporting as at December 31, 2016. 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, 2016 and December 31, 2015 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 judgment,
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, 2016 and December 31, 2015 and its financial performance and its cash
flows for the years then ended in accordance with IFRS as issued by the IASB.
96
Barrick Gold Corporation | Financial Report 2016
Report on internal control over financial reporting
We have also audited Barrick Gold Corporation’s internal control over financial reporting as at December 31, 2016,
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, 2016, based on criteria established in Internal Control – Integrated Framework (2013)
issued by COSO.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
97
INDEPENDENT AUDITOR’S REPORTBarrick Gold Corporation | Financial Report 2016 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 11)
Exploration, evaluation and project expenses (notes 5 and 8)
Impairment (reversals) charges (note 10)
Loss on currency translation (note 9b)
Closed mine rehabilitation (note 27b)
(Income) loss from equity investees (note 16)
(Gain) loss on non-hedge derivatives (note 25e)
Other expense (income) (note 9a)
Income (loss) before finance items and income taxes
Finance costs, net (note 14)
Income (loss) before income taxes
Income tax (expense) recovery (note 12)
Net income (loss)
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests (note 32)
2016
2015
$ 8,558
$ 9,029
5,405
256
237
(250)
199
130
(20)
(12)
60
2,553
(775)
1,778
(917)
6,907
233
355
3,897
120
3
7
38
(113)
(2,418)
(726)
(3,144)
31
$
861
$
(3,113)
$
$
655
206
$
$
(2,838)
(275)
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 13)
Net income (loss)
Basic
Diluted
$ 0.56
$ 0.56
$
$
(2.44)
(2.44)
The accompanying notes are an integral part of these consolidated financial statements.
98
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Consolidated Statements
of Comprehensive Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Net income (loss)
Other comprehensive income (loss), net of taxes
Items that may be reclassified subsequently to profit or loss:
Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax ($9) and $43
Realized (gains) losses on derivatives designated as cash flow hedges, net of tax ($8) and ($20)
Currency translation adjustments, net of tax $nil and $nil
Items that will not be reclassified to profit or loss:
Actuarial gain (loss) on post-employment benefit obligations, net of tax ($4) and ($3)
Net unrealized change on equity investments, net of tax $nil and $nil
Net realized change on equity investments, net of tax $nil and $nil
Total other comprehensive income (loss)
Total comprehensive income (loss)
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests
The accompanying notes are an integral part of these consolidated financial statements.
2016
2015
$
861
$
(3,113)
16
64
95
7
6
–
188
(134)
111
(56)
5
(11)
18
(67)
$ 1,049
$ (3,180)
$
$
843
206
$ (2,905)
(275)
$
99
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Consolidated Statements of Cash Flow
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Operating Activities
Net income (loss)
Adjustments for the following items:
Depreciation
Finance costs (note 14)
Impairment (reversals) charges (note 10)
Income tax expense (recovery) (note 12)
Net currency translation losses (note 9b)
Loss (gain) on sale of non-current assets/investments
Deposit on gold and silver streaming agreement (note 29)
Change in working capital (note 15a)
Other operating activities (note 15a)
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
Divestitures (note 4)
Investment sales
Other investing activities (note 15b)
2016
2015
$ 861
$ (3,113)
1,574
788
(250)
917
199
42
–
(315)
(176)
3,640
(513)
(487)
2,640
(1,126)
135
588
–
(9)
1,771
739
3,897
(31)
120
(187)
610
(39)
(4)
3,763
(677)
(292)
2,794
(1,713)
43
1,904
33
(17)
Net cash provided by (used in) investing activities
(412)
250
Financing Activities
Debt (note 25b)
Proceeds
Repayments
Dividends (note 31)
Funding from non-controlling interests (note 32)
Disbursements to non-controlling interests (note 32)
Debt extinguishment costs
Net cash used in financing activities
Effect of exchange rate changes on cash and equivalents
Net decrease in cash and equivalents
Cash and equivalents at beginning of year (note 25a)
Cash and equivalents at the end of year
The accompanying notes are an integral part of these consolidated financial statements.
100
5
(2,062)
(86)
70
(95)
(129)
9
(3,142)
(160)
40
(90)
68
(2,297)
(3,275)
3
(66)
2,455
(13)
(244)
2,699
$ 2,389
$ 2,455
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Consolidated Balance Sheets
Barrick Gold Corporation
(in millions of United States dollars)
Assets
Current assets
Cash and equivalents (note 25a)
Accounts receivable (note 18)
Inventories (note 17)
Other current assets (note 18)
Total current assets (excluding assets classified as held-for-sale)
Assets classified as held-for-sale (note 4)
Total current assets
Non-current assets
Non-current portion of inventory (note 17)
Equity in investees (note 16)
Property, plant and equipment (note 19)
Intangible assets (note 20a)
Goodwill (note 20b)
Deferred income tax assets (note 30)
Other assets (note 22)
Total assets
Liabilities and Equity
Current liabilities
Accounts payable (note 23)
Debt (note 25b)
Current income tax liabilities
Other current liabilities (note 24)
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 25b)
Provisions (note 27)
Deferred income tax liabilities (note 30)
Other liabilities (note 29)
Total liabilities
Equity
Capital stock (note 31)
Deficit
Accumulated other comprehensive loss
Other
Total equity attributable to Barrick Gold Corporation shareholders
Non-controlling interests (note 32)
Total equity
Contingencies and commitments (notes 2, 17, 19 and 36)
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
As at
As at
December 31, December 31,
2015
2016
$ 2,389
249
1,930
306
4,874
–
4,874
1,536
1,185
14,103
272
1,371
977
946
$ 2,455
275
1,717
263
4,710
758
5,468
1,502
1,199
14,434
271
1,371
1,040
1,023
$ 25,264
$ 26,308
$ 1,084
143
283
309
1,819
–
1,819
7,788
2,363
1,520
1,461
$ 1,158
203
–
337
1,698
149
1,847
9,765
2,102
1,553
1,586
14,951
16,853
20,877
(13,074)
(189)
321
7,935
2,378
10,313
20,869
(13,642)
(370)
321
7,178
2,277
9,455
$ 25,264
$ 26,308
101
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Consolidated Statements
of Changes in Equity
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, 2016
1,165,081
$ 20,869 $ (13,642)
$ (370) $ 321
$ 7,178 $ 2,277 $ 9,455
Attributable to equity holders of the Company
Net income
Total other comprehensive income
Total comprehensive income
Transactions with owners
–
–
–
–
–
655
7
–
181
–
–
655
188
206
–
861
188
$
– $
662
$ 181 $
–
$
843
$ 206 $ 1,049
Dividends
Dividend reinvestment plan
Funding from non-controlling interests
Other decrease in non-controlling interests
–
493
–
–
–
8
–
–
(86)
(8)
–
–
–
–
–
–
–
–
–
–
(86)
–
–
–
–
–
70
(175)
(86)
–
70
(175)
Total transactions with owners
493
$
8 $
(94)
$
– $
–
$
(86) $ (105) $
(191)
At December 31, 2016
1,165,574
$ 20,877 $ (13,074)
$ (189) $ 321
$ 7,935 $ 2,378 $ 10,313
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 25)
–
–
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)
–
–
–
–
–
–
Total transactions with owners
411
$
5 $
(169)
$
– $
–
–
–
–
–
–
–
(160)
–
2
–
–
(6)
–
–
–
41
(104)
–
(160)
–
2
41
(104)
(6)
$
(164) $
(63) $
(227)
At December 31, 2015
1,165,081
$ 20,869 $ (13,642)
$ (370) $ 321
$ 7,178 $ 2,277 $ 9,455
1. Includes cumulative translation adjustments as at December 31, 2016: $95 million loss (2015: $178 million).
2. Includes additional paid-in capital as at December 31, 2016: $283 million (December 31, 2015: $283 million) and convertible borrowings – equity component as
at December 31, 2016: $38 million (December 31, 2015: $38 million).
The accompanying notes are an integral part of these consolidated financial statements.
102
FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Notes to Consolidated Financial Statements
Barrick Gold Corporation. Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to A$, 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 and the Dominican Republic and our producing
copper mine is in Zambia. We hold a 50% interest in
KCGM, a gold mine located in Australia and 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”), a company
listed on the London Stock Exchange that owns gold
mines and exploration properties in Africa. We have a
50% interest in Zaldívar, a copper mine located in Chile
and a 50% interest in Jabal Sayid, a copper mine located
in Saudi Arabia. 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. These
consolidated financial statements were approved for
issuance by the Board of Directors on February 15, 2017.
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.
103
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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”).
Outlined below is information related to our joint arrangements and entities other than 100% owned Barrick
subsidiaries at December 31, 2016:
Place of business
Entity type
Economic interest1
Method2
Acacia Mining plc3
Cerro Casale Project3
Pueblo Viejo3
South Arturo3
Donlin Gold Project
Kalgoorlie Mine
Porgera Mine4
Turquoise Ridge Mine5
GNX6,7
Jabal Sayid6
Kabanga Project6,7
Zaldívar6,8
Tanzania
Chile
Dominican Republic
United States
United States
Australia
Papua New Guinea
United States
Chile
Saudi Arabia
Tanzania
Chile
Subsidiary, publicly traded
Subsidiary
Subsidiary
Subsidiary
JO
JO
JO
JO
JV
JV
JV
JV
63.9%
75%
60%
60%
50%
50%
47.5%
75%
50%
50%
50%
50%
Consolidation
Consolidation
Consolidation
Consolidation
Our share
Our share
Our share
Our share
Equity Method
Equity Method
Equity Method
Equity Method
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 consolidate our interests in Acacia, Cerro Casale, Pueblo Viejo and South Arturo and record a non-controlling interest for the 36.1%, 25%, 40% and 40%,
respectively, that we do not own.
4. We divested 50% of our 95% interest in Porgera in 2015, bringing our interest down to 47.5%.
5. We have joint control given that decisions about relevant activities require unanimous consent of the parties to the joint operation.
6. Barrick has commitments of $188 million relating to its interest in the joint ventures.
7. These JVs are early stage exploration projects and, as such, do not have any significant assets, liabilities, income, contractual commitments or contingencies.
Expenses are recognized through our equity pick-up (loss). Refer to note 16 for further details.
8. We divested 50% of our interest in 2015.
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.
104
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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 HFS, property, plant and equipment
are no longer amortized. The assets and liabilities are
presented as HFS 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;
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 on the date of sale 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
105
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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
106
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 the Canadian Securities Administrators’ 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 and
Equipment, as described in note 2n.
h) 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.
When a mine construction project moves into the
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.
i) 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 j) 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
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.
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.
k) 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.
l) 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.
Metal 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
107
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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. Net
realizable value is determined with reference to relevant
market prices less applicable variable selling expenses.
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. Provisions are 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.
m) 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. Royalty expense is recorded
on completion of the production or sales process in
cost of sales. 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.
n) Property, Plant and Equipment
Estimated Useful Lives of Major Asset Categories
Buildings, plant and equipment
Underground mobile equipment
Light vehicles and other mobile equipment
Furniture, computer and office equipment
7 – 32 years
5 – 7 years
2 – 3 years
2 – 3 years
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 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.
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
108
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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 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 that benefit from the development
and are considered probable of economic extraction.
iii) Open Pit Stripping 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.
Pre-production stripping costs 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.
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.
Construction-in-Progress
Assets under construction are capitalized as construction-
in-progress until the asset is available for use. 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.
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
109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
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.
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 insurance the
amount recoverable is only recognized when receipt is
virtually certain, as supported by notification of a
minimum or proposed settlement amount from the
insurance adjuster.
o) Impairment (and Reversals of 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
110
on PP&E and intangible assets are conducted at the
level of the cash generating unit (“CGU”), which is the
lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets and
includes most 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 Value in Use (“VIU”) and Fair Value Less Costs of
Disposal (“FVLCD”). We have determined that the
FVLCD is greater than the VIU amounts and therefore
used as the recoverable amount for impairment testing
purposes. 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
An assessment is made at each reporting date to
determine whether there is an indication that previously
recognized impairment losses may no longer exist or
may have decreased. A previously recognized impairment
loss is reversed only if there has been a change in the
assumptions used to determine the CGU’s recoverable
amount since the last impairment loss was recognized.
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. We have
determined that the FVLCD is greater than the VIU
amounts and therefore used as recoverable amount for
impairment testing purposes.
p) 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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
We also have water rights associated with our
mineral properties. Upon acquisition, they are measured
at initial cost and are depreciated when they are being
used. They are also subject to impairment testing when
an indicator of impairment is considered to exist.
q) 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 for
impairment in the fourth quarter and also when there is
an indicator of impairment. At the date of acquisition,
goodwill is assigned to the 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 VIU and 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.
r) 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.
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 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.
s) 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
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.
111
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 t) Embedded Derivatives
Derivatives embedded in other financial instruments or
executory contracts are accounted for as separate
derivatives when their risks and characteristics are not
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.
u) 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
112
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; changes in Barrick’s closure
policies; and changes in laws and regulations governing
the protection of the environment.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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
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.
v) 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.
w) Stock-Based Compensation
We recognize the expense related to these plans over
the vesting period, beginning once the grant has been
approved and announced to the beneficiaries.
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. Barrick offers cash-settled
(Restricted Share Units (“RSU”), Deferred Share Units
(“DSU”), Performance Restricted Share Units (“PRSU”))
awards to certain employees, officers and directors of
the Company.
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. Barrick offers equity-settled (Employee Stock
Option Plan (“ESOP”), Employee Share Purchase Plan
(“ESPP”) Performance Granted Share Units (“PGSU”) and
Global Employee Share Plan (“GESP”)), awards to certain
employees, officers and directors of the Company.
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
113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
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
114
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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 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.
Global Employee Share Plan (“GESP”)
Under our GESP plan, Barrick employees are awarded
Company Common Shares. These shares vest immediately,
but must be held until the employee ceases to be
employed by the Company. Barrick recognizes the
expense when the award is announced and has no
ongoing liability.
x) 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
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.
y) New Accounting Standards Adopted
during the Year
The Company has adopted IFRS 9 (2014) effective
January 1, 2015.
IFRS 9 (2014)
We 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
115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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 changed the requirements for hedge
effectiveness and consequently for the application of
hedge accounting. The IAS 39 effectiveness test was
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
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 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 2k. The adjustment
to opening retained earnings on January 1, 2015 for
historical gains and losses on existing investments 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
relationships 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
116
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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 z) 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 will not be early
adopting IFRS 15. We are currently assessing the impact
on our consolidated financial statements. We have
identified two potential areas of impact:
Bullion (gold and silver) sales – we do not anticipate
these sales to be significantly affected by IFRS 15;
Concentrate (gold and copper) and cathode (copper)
sales – we do not anticipate these sales or the
associated provisional pricing adjustments to be
significantly affected by IFRS 15.
We will continue to assess and implement the new
revenue recognition policy and any related impact on our
internal controls throughout 2017.
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.
We expect that IFRS 16 will result in an increase in assets
and liabilities as fewer leases will be expensed as payments
are made. We expect an increase in depreciation and
accretion expenses and also an increase in cash flow
from operating activities as these lease payments will be
recorded as financing outflows in our cash flow statement.
In 2017, we plan to develop a full implementation plan
and will provide updates to our assessment in our
quarterly interim financial statements.
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, 2016, we have used a per ounce
gold price of $1,000 short-term and $1,200 long-term
to calculate our gold reserves, consistent with what was
used as at December 31, 2015. Refer to notes 19 and 21.
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
117
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 mine operating supplies, and estimates are required to
determine salvage or scrap value of supplies.
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).
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 or reversal of
impairment, and in the case of goodwill, annually during
the fourth quarter for all of our operating segments. We
consider both external and internal sources of information
for indications that non-current assets and/or goodwill
are impaired. External sources of information we
consider include changes in the market, economic and
legal environment in which the CGU operates that are
not within its control and affect the recoverable amount
of mining interests and goodwill. Internal sources of
information we consider include the manner in which
mining properties and plant and equipment are being
used or are expected to be used and indications of
economic performance of the assets. Calculating the
FVLCD of CGUs for non-current asset and 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 2o, 2q
and 21 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 27 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 the
deferred tax assets and indirect tax receivables recorded
on our balance sheet could be impacted. Refer to
notes 2j, 12 and 30 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 36 for more information.
Pascua-Lama
The Pascua-Lama project received $429 million as at
December 31, 2016 ($382 million as at December 31,
2015) 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 $236 million (2015: $170 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. On January 25, 2017, Barrick applied for
an extension of the 2018 deadline. No amounts have
118
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Other Notes to the Financial Statements
Note
Page
Acquisitions and Divestitures
Segment information
Revenue
Cost of sales
Exploration, evaluation and project expenses
Other expense (income)
Impairment (reversals) charges
General and administrative expenses
Income tax expense (recovery)
Earnings (loss) per share
Finance costs, net
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 impairment
and reversal of 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
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
36
120
121
124
124
125
125
125
125
125
127
127
127
128
129
130
130
132
133
137
137
137
137
146
149
149
152
153
155
155
157
157
159
160
been recorded for any potential liability related to VAT
refunds in Chile. We have recorded $255 million in VAT
recoverable in Argentina as of December 31, 2016
($308 million, December 31, 2015) 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 25
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, 2016 is $288 million.
Refer to note 28 for a summary of our key
financial risks.
119
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
4 Acquisitions and Divestitures
For the years ended December 31
2016
2015
Gross cash proceeds on divestiture
Bald Mountain
Round Mountain
Zaldívar
Cowal
Porgera
Spring Valley
Ruby Hill
Other
Less: cash divested
$ 423
165
–
–
–
–
–
–
$ 588
–
$
–
–
950
550
298
58
52
2
$ 1,910
(6)
$ 588
$ 1,904
a) Acquisition of Robertson Property in Nevada
On June 21, 2016, we entered into an agreement to
purchase the Robertson Property in Nevada from Coral
Gold Resources (“Coral”). The transaction consists of
a payment of $16 million of cash along with the return
of 4.15 million shares (approximate value of $1 million)
of Coral currently held by Barrick and a royalty on
production. The transaction has been approved by Coral
shareholders and, subject to satisfaction of the remaining
closing conditions, is expected to close in 2017.
b) Disposition of Bald Mountain and Round
Mountain Mines
On January 11, 2016, we closed the sale of our Bald
Mountain mine and our 50% interest in the Round
Mountain mine. We received net cash consideration of
$588 million, which reflected working capital adjustments
of $22 million in the second quarter of 2016. The
transactions resulted in a loss of $17 million for the year
ended December 31, 2016. As at December 31, 2015,
all of the assets and liabilities of Bald Mountain and
our 50% interest in Round Mountain were classified as
held-for-sale.
c) 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 was to be
received over the next five years. As the agreed selling
price was 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 remained subject to a net
working capital adjustment period to complete the
review of the working capital which was finalized in
August 2016. The finalization of consideration resulted
in an additional loss on disposition of $39 million as we
agreed to forfeit the amount remaining in escrow and
the right to receive $25 million over five years. It also
changed the fair value of the 50% of Zaldívar we
retained, resulting in a write-down of our equity method
investment of $49 million. We have determined that
Zaldívar will be accounted for as a joint venture and
upon completion we began accounting for our
investment under the equity method.
d) 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.
e) 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.
120
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
5 Segment Information
Barrick’s business is organized into thirteen 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, Acacia and the Pascua-Lama
project are operating segments for financial reporting
purposes. Following the divestitures that were completed
in 2015 and early 2016, we re-evaluated our reportable
operating segments and no longer report on our
interests in the following non-core properties: Porgera,
Kalgoorlie, Zaldívar and Lumwana. Our updated
presentation of our reportable operating segments is
now limited to six individual gold mines, Acacia and
our Pascua-Lama project. The remaining operating
segments, including the non-core properties referred
to above and our remaining gold and copper mines,
have been grouped into an “other” category and will
not be reported on individually. 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.
Consolidated Statements of Income Information
Cost of sales
Direct mining,
royalties and
community
For the year ended December 31, 2016
Goldstrike
Cortez
Pueblo Viejo3
Lagunas Norte
Veladero
Turquoise Ridge
Acacia3
Pascua-Lama
Other Mines4
Revenue
$ 1,389
1,314
1,548
548
685
322
1,045
–
1,707
Exploration,
evaluation and
project
expenses
relations Depreciation
$ 633
456
497
180
346
128
553
–
958
$ 307
499
147
96
118
27
166
7
188
$ 4
6
–
3
1
–
27
59
6
Other
expenses
(income)1
Segment
income
(loss)
$
3
13
3
9
–
1
–
1
52
$ 442
340
901
260
220
166
299
(67)
503
$ 8,558
$ 3,751
$ 1,555
$ 106
$ 82
$ 3,064
121
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Consolidated Statements of Income Information
Cost of sales
Direct mining,
royalties and
community
For the year ended December 31, 2015
Goldstrike
Cortez
Pueblo Viejo3
Lagunas Norte
Veladero
Turquoise Ridge
Acacia3
Pascua-Lama
Other Mines2,4
Revenue
$ 1,143
1,129
1,332
673
720
235
860
–
2,937
relations Depreciation
$
530
483
627
209
391
118
694
–
1,969
$ 192
343
277
169
108
23
143
22
463
$ 9,029
$ 5,021
$ 1,740
Exploration,
evaluation and
project
expenses
Other
expenses
(income)1
Segment
income
(loss)
$ 4
14
1
8
3
2
(2)
(9)
12
$
408
287
425
285
216
92
(1)
(131)
484
$ 33
$ 2,065
$
9
2
2
2
2
–
26
118
9
$ 170
1. Includes accretion expense, which is included with finance costs in the consolidated statements of income. For the year ended December 31, 2016, accretion
expense was $41 million (2015: $54 million). Refer to note 9a for details of other expenses (income).
2. Includes revenues and segment income (loss) for the year ended December 31, 2015, for Porgera ($506 million, $125 million), Kalgoorlie ($358 million, $45 million),
Lumwana ($501 million, $53 million) and Zaldívar ($528 million, $104 million). These mines were individually disclosed as operating segments in the prior year.
3. Includes non-controlling interest portion of revenues, cost of sales and segment income for the year ended December 31, 2016, for Pueblo Viejo $623 million,
$249 million, $373 million (2015: $575 million, $379 million, $195 million) and Acacia $377 million, $259 million, $108 million (2015: $310 million, $302 million,
$nil million).
4. Includes cost of sales of Pierina for the year ended December 31, 2016 of $82 million (2015: $62 million).
Reconciliation of Segment Income to Loss from Continuing Operations Before Income Taxes
For the years ended December 31
2016
2015
Segment income
Other cost of sales/amortization1
Exploration, evaluation and project expenses not attributable to segments
General and administrative expenses
Other (expense) income not attributable to segments
Impairment reversals (charges)
Loss on currency translation
Closed mine rehabilitation
Income (loss) from equity investees
Finance costs, net (includes non-segment accretion)2
Gain (loss) on non-hedge derivatives3
$ 3,064
(99)
(131)
(256)
(19)
250
(199)
(130)
20
(734)
12
$ 2,065
(146)
(185)
(233)
92
(3,897)
(120)
(3)
(7)
(672)
(38)
Income (loss) before income taxes
$ 1,778
$ (3,144)
1. Includes all realized hedge losses of $73 million (2015: $106 million).
2. Includes debt extinguishment losses of $129 million (2015: $68 million gains).
3. Includes unrealized non-hedge gains and losses of $32 million gains (2015: $5 million losses).
122
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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,
2015
2016
2016
2015
$ 6,768
3,540
2,366
1,945
1,673
678
478
473
353
346
503
1,267
$ 7,375
3,576
2,177
2,020
1,648
627
518
422
342
344
470
1,321
$ 3,081
1,548
685
–
1,045
663
472
466
304
–
294
–
$ 3,076
1,332
720
502
860
734
552
501
506
–
246
–
$ 20,390
$ 20,840
$ 8,558
$ 9,029
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,
2015
2016
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Acacia
Pascua-Lama
Other Mines2
Segment total
Other items not allocated to segments
Total
$ 216
142
101
56
95
32
191
20
230
$ 1,083
36
$ 240
148
102
67
242
32
177
(81)
546
$ 1,473
36
$ 1,119
$ 1,509
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 2016, cash expenditures were $1,126 million (2015: $1,713 million) and the decrease in accrued expenditures was
$7 million (2015: $204 million decrease).
2. For the year ended December 31, 2015, includes capital expenditures for Porgera ($93 million), Kalgoorlie ($34 million), Lumwana ($99 million) and Zaldívar
($85 million). These mines were individually disclosed as operating segments in the prior year.
123
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
6 Revenue
For the years ended December 31
2016
2015
Gold bullion sales1
Spot market sales
Concentrate sales
Copper sales1
Copper cathode sales
Concentrate sales
Other sales2
Total
$ 7,650
258
$ 7,559
254
$ 7,908
$ 7,813
$
$
$
–
466
$
501
501
466
$ 1,002
184
$
214
$ 8,558
$ 9,029
1. Revenues include amounts transferred from OCI to earnings for commodity
cash flow hedges (see note 25d). Revenue is presented net of direct sales
taxes of $2 million (2015: $34 million).
accounting for it. Incidental revenues from the sale of
by-products, primarily copper, silver and energy at our
gold mines, are classified within other sales.
Provisional Copper and Gold Sales
We have provisionally priced sales for which price
finalization, referenced to the relevant copper and gold
index, is outstanding at the balance sheet date. Our
exposure at December 31, 2016 to the impact of
movements in market commodity prices for provisionally
priced sales is set out in the following table:
Volumes subject to
final pricing
Copper (millions)
Gold (000s)
Impact on net
income before
taxation of 10%
movement in
market price US$
As at December 31
2016
2015
2016
2015
2. Revenues include the sale of by-products from our gold and copper mines and
energy sales to third parties from the Monte Rio power plant at our Pueblo
Viejo mine up until its disposition on August 18, 2016.
Copper pounds
Gold ounces
44
13
55
16
$ 11
2
$ 11
2
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 and Jabal Sayid mines produce
a concentrate that primarily contains copper. At our
Zaldívar mine we produce copper cathode, which
consists of 99.9% copper. In December 2015 we
disposed of 50% of our Zaldívar mine and began equity
For the year ended December 31, 2016, our provisionally
priced copper sales included provisional pricing gains of
$22 million (2015: $67 million loss) and our provisionally
priced gold sales included provisional pricing adjustments
of $nil million (2015: $3 million loss).
At December 31, 2016, our provisionally priced
copper and gold sales subject to final settlement were
recorded at average prices of $2.51/lb (2015: $2.10/lb)
and $1,152/oz (2015: $1,068/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
Gold
Copper
Other5
Total
For the years ended December 31
2016
2015
2016
2015
2016
2015
2016
2015
Direct mining cost1,2,3,4
Depreciation
Royalty expense
Community relations
$ 3,215
1,503
224
37
$ 4,006
1,613
235
50
$ 228
45
41
5
$ 603
104
101
6
$
77
26
–
4
$ 129
54
–
6
$ 3,520
$ 1,574
$ 265
46
$
$ 4,738
$ 1,771
$ 336
62
$
Total
$ 4,979
$ 5,904
$ 319
$ 814
$ 107
$ 189
$ 5,405
$ 6,907
1. Direct mining cost includes charges to reduce the cost of inventory to net realizable value of $68 million (2015: $285 million).
2. Direct mining cost includes the costs of extracting by-products.
3. Includes employee costs of $1,048 million (2015: $1,302 million).
4. Cost of sales also includes costs associated with power sales to third parties from our Monte Rio power plant in the Dominican Republic up until its disposition
on August 18, 2016.
5. Other includes all realized hedge gains and losses and corporate amortization.
124
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
8 Exploration, Evaluation and Project Expenses
10 Impairment (Reversals) Charges
For the years ended December 31
2016
2015
For the years ended December 31
2016
2015
Minesite exploration and evaluation
Global exploration and evaluation
Advanced project costs:
Pascua-Lama
Cerro Casale
Other
Corporate development
Business improvement
Total exploration, evaluation and
project expenses1
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
Loss (gain) on sale of non-current assets1
Office closure
Other
$ 44
88
59
6
11
14
15
119
8
4
42
19
$ 237
$ 355
$ 47
116
Impairment of non-current assets1
Impairment of goodwill1
Total
1. Refer to note 21 for further details.
$ (250)
–
$ 1,726
2,171
$ (250)
$ 3,897
11 General and Administrative Expenses
For the years ended December 31
2016
2015
Corporate administration2
Operating segment administration
Total1
$ 201
55
$ 191
42
$ 256
$ 233
1. Includes employee costs of $153 million (2015: $155 million).
2. Includes $9 million (2015: $29 million) related to one-time severance payments.
2016
2015
12 Income Tax Expense (Recovery)
For the years ended December 31
2016
2015
$ 12
20
42
(4)
6
$ 12
19
(187)
30
27
Tax on profit
Current tax
Charge for the year
Adjustment in respect of prior years
Total other expense
$ 76
$ (99)
Other Income:
Other
Total other income
Total
(16)
$ (16)
$ 60
(14)
$ (14)
$ (113)
Deferred tax
Origination and reversal of temporary
differences in the current year
Adjustment in respect of prior years
$ 911
(2)
$ 476
(71)
$ 909
$ 405
$ 10
(2)
$ (551)
115
$
8
$ (436)
1. 2016 includes losses of $17 million from the sale of Bald Mountain and Round
Mountain and $39 million from the sale of Zaldívar. 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.
Income tax expense (recovery)
$ 917
$
(31)
Tax expense related to continuing operations
b) Loss on Currency Translation
For the years ended December 31
2016
2015
Currency translation losses released as
a result of the disposal and reorganization
of entities
Foreign currency translation losses
Total
$ 91
108
$ 199
$
–
120
$ 120
Current
Canada
International
Deferred
Canada
International
7
$
902
3
$
402
$ 909
$ 405
$ (30)
38
$
(32)
(404)
$
8
$ (436)
Income tax expense (recovery)
$ 917
$
(31)
125
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Increase in Income Tax Related Contingent Liabilities
in Tanzania
In the first quarter 2016, Acacia received a judgement
from the Tanzania Court of Appeal regarding a long-
standing dispute over tax calculations at Bulyanhulu from
2000–2006. The Court of Appeal was reviewing seven
issues initially raised by the Tanzania Revenue Authority
(TRA) in 2012 regarding certain historic tax loss carry
forwards and ruled in favor of Bulyanhulu by the Tax
Appeals Board in 2013. The TRA appealed against this
ruling and in 2014 the Tax Tribunal reversed the decision
for all seven issues. The legal route in Tanzania has
now been exhausted; however Acacia is considering its
options for the next steps. Acacia is yet to receive a
revised tax assessment following the judgement, but has
raised further tax provisions of US$70 million in Q1 2016
in order to address the direct impact of the ruling on
Bulyanhulu’s tax loss carry forwards and the potential
impact this may have on the applicability of certain
capital deductions for other years and our other mines
in Tanzania.
Tax Rate Changes
In the fourth quarter 2016, a tax rate change was
enacted in Peru, increasing corporate income tax rates.
This resulted in a deferred tax recovery of $13 million
due to recording the deferred tax asset in Peru at the
higher rates.
Internal Restructures
In the 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.
De-recognition of a Deferred Tax Asset
In the second quarter 2015, we recorded a deferred tax
expense of $20 million related to de-recognition of
a deferred tax asset in Pueblo Viejo.
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 2016 and 2015, tax expense of
$23 million and $62 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 expense/recovery.
Non-Recognition of US Alternative Minimum Tax
(AMT) Credits
In the fourth quarter 2016 and 2015, we recorded a
deferred tax expense of $13 million and $19 million,
respectively, related to US AMT credits which are not
probable to be realized based on our current life of
mine plans.
Reconciliation to Canadian Statutory Rate
For the years ended December 31
2016
2015
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
$ 471
$ (833)
(134)
113
54
–
(103)
(110)
55
736
–
246
tax balances
Tax impact of profits from equity
accounted investments
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
23
(5)
35
–
–
13
(4)
70
(13)
11
267
16
62
–
56
(116)
20
19
44
13
–
12
(125)
(7)
Income tax expense (recovery)
$ 917
$
(31)
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.
126
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
13 Earnings (Loss) per Share
For the years ended December 31
($ millions, except shares in millions and per share amounts in dollars)
Net income (loss)
Net (income) loss attributable to non-controlling interests
2016
2015
Basic
Diluted
Basic
Diluted
$
861
(206)
$
861 $ (3,113)
275
(206)
$ (3,113)
275
Net income (loss) attributable to equity holders of Barrick Gold Corporation
$
655
$
655 $ (2,838)
$ (2,838)
Weighted average shares outstanding
1,165
1,165
1,165
1,165
Basic and diluted earnings (loss) per share data attributable to the equity holders of
Barrick Gold Corporation
$
0.56
$
0.56 $
(2.44)
$
(2.44)
14 Finance Costs, Net
15 Cash Flow – Other Items
For the years ended December 31
2016
2015
Interest1
Amortization of debt issue costs
Amortization of discount
Loss (gain) on interest rate hedges
Interest capitalized2
Accretion
Loss (gain) on debt extinguishment3
Finance income
$ 591
17
2
(1)
–
50
129
(13)
$ 737
19
3
2
(17)
63
(68)
(13)
Total
$ 775
$ 726
1. Interest in the consolidated statements of cash flow are presented on a cash
basis. In 2016, cash interest paid was $513 million (2015: $677 million).
2. For the year ended December 31, 2016, the general capitalization rate was
5.90% (2015: 5.80%).
3. 2016 loss arose from partial repayment of several notes during the year
(2.5% notes due 2018, 4.4% notes due 2021, 4.95% notes due 2020,
6.8% notes due 2018 and 6.95% notes due 2019). 2015 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).
a) Operating Cash Flows – Other Items
For the years ended December 31
2016
2015
Adjustments for non-cash income statement items:
(Gain) loss on non-hedge
derivatives (note 25e)
Stock-based compensation expense
(Income) loss from investment in
equity investees (note 16)
Change in estimate of rehabilitation costs at
closed mines
Net inventory impairment charges (note 17)
Change in other assets and liabilities
Settlement of rehabilitation obligations
Other operating activities
Cash flow arising from changes in:
Accounts receivable
Inventory
Other current assets
Accounts payable
Other current liabilities
$ (12)
82
$ 38
18
(20)
7
130
68
(362)
(62)
(176)
(5)
(190)
41
(190)
29
3
285
(266)
(89)
(4)
81
24
39
(35)
(148)
Change in working capital
$ (315)
$
(39)
b) Investing Cash Flows – Other Items
For the years ended December 31
2016
2015
Funding of investments in equity
investees (note 16)
Other
Other investing activities
$ (9)
–
$
(7)
(10)
$ (9)
$ (17)
127
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
16 Investments
Equity Accounting Method Investment Continuity
At January 1, 2015
Funds invested
Transfer to equity accounting method investment
Loss from equity investees
At December 31, 2015
Funds invested
Working capital adjustments
Equity pick-up (loss) from equity investees
Impairment charges
At December 31, 2016
Publicly traded
Summarized Equity Investee Financial Information
For the years ended December 31
Revenue
Cost of sales (excluding depreciation)
Depreciation
Finance expense
Other expense
Income (loss) from continuing operations before tax
Income tax (expense) recovery
Income (loss) from continuing operations after tax
Total comprehensive income (loss)
Summarized Balance Sheet
For the years ended December 31
Cash and equivalents
Other current assets1
Total current assets
Non-current assets
Total assets
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
Total non-current liabilities
Total liabilities
Net assets
Kabanga
Jabal Sayid
Zaldívar
GNX
Total
$ 28
2
–
–
$ 30
1
–
(1)
–
$ 30
No
$ 178
–
–
–
$ 178
–
–
2
–
$ 180
No
$
–
–
993
(3)
$ 990
–
6
27
(49)
$ 974
No
$ 206
7
993
(7)
$ 1,199
9
6
20
(49)
$ 1,185
$ –
5
–
(4)
$ 1
8
–
(8)
–
$ 1
No
Jabal Sayid
Zaldívar
2016
$ 80
65
12
–
–
3
–
3
3
$
$
$
2015
$
$
$
$
–
–
–
–
–
–
–
–
2016
$ 518
354
87
2
(5)
$ 80
(25)
$ 55
$ 55
2015
$ 51
46
12
–
–
(7)
1
(6)
(6)
$
$
$
Jabal Sayid
Zaldívar
2016
$ 14
56
$ 70
473
$ 543
$
–
27
$ 27
–
402
$ 402
$ 429
$ 114
2015
$
6
66
2016
102
482
$
2015
$
17
565
$ 72
$
584
$
582
452
1,603
1,640
$ 524
$ 2,187
$ 2,222
$
–
12
$
–
107
$
–
145
$ 12
$
107
$
145
–
401
$ 401
$ 413
26
87
113
220
$
$
7
60
67
212
$
$
$ 111
$ 1,967
$ 2,010
1. Zaldívar other current assets include inventory of $429 million (2015: $471 million).
The information above reflects the amounts presented in the financial information of the joint venture adjusted for
differences between IFRS and local GAAP.
128
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Reconciliation of Summarized Financial Information to Carrying Value
Opening net assets
Income for the period
Impairment
Closing net assets, December 31
Barrick’s share of net assets (50%)
Equity earnings adjustment
Goodwill recognition
Carrying value
Jabal Sayid1
Zaldívar
$ 111
3
–
$ 114
57
–
123
$ 180
$ 2,010
55
(98)
$ 1,967
984
(10)
–
$ 974
1. A $165 million non-interest bearing shareholder loan due from the Jabal Sayid JV is presented as part of Other Assets (see note 22).
Gold
Copper
As at
Dec. 31,
2015
As at
Dec. 31,
2016
As at
Dec. 31,
2015
17 Inventories
Raw materials
Ore in stockpiles
Ore on leach pads
Mine operating supplies
Work in process
Finished products
Non-current ore in stockpiles1
As at
Dec. 31,
2016
$ 2,067
406
585
219
50
$ 3,327
(1,536)
$ 1,912
292
633
210
42
$ 3,089
(1,494)
1. Ore that we do not expect to process in the next 12 months is classified within other long-term assets.
Inventory Impairment Charges
Ore in Stockpiles
For the years ended December 31
2016
2015
$ 1,791
$ 1,595
Cortez
Golden Sunlight
Porgera
Pierina
Buzwagi
Goldstrike
Pueblo Viejo
Veladero
Lagunas Norte
Turquoise Ridge
Other
$
57
7
3
1
–
–
–
–
–
–
–
$
84
25
2
3
109
7
16
16
5
1
17
Inventory impairment charges1
$
68
$ 285
1. Impairment charges in 2016 primarily relate to stockpiles at Cortez.
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.
Gold
Goldstrike
Pueblo Viejo
Cortez
Porgera
Kalgoorlie
Lagunas Norte
Buzwagi
North Mara
Veladero
Turquoise Ridge
Other
Copper
Lumwana
$ 72
–
62
–
5
$ 139
–
$ 139
$ 48
–
74
–
8
$ 130
(8)
$ 122
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 932
475
196
77
127
91
64
41
38
22
4
$ 906
406
179
77
113
80
38
48
34
20
11
72
48
$ 2,139
$ 1,960
129
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Ore on Leach Pads
18 Accounts Receivable and Other Current Assets
Gold
Veladero
Cortez
Lagunas Norte
Pierina
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 172
109
97
28
$ 136
71
81
4
$ 406
$ 292
Accounts receivable
Amounts due from concentrate sales
Receivable from Dominican
Republic government1
Working capital adjustments held in escrow
Other receivables
Purchase Commitments
At December 31, 2016, we had purchase obligations for
supplies and consumables of approximately $970 million
(2015: $1,151 million).
Other current assets
Derivative assets (note 25f)
Goods and services taxes recoverable2
Prepaid expenses
Other
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 110
$
77
30
–
109
47
20
131
$ 249
$ 275
$
1
239
48
18
$
–
199
46
18
$ 306
$ 263
1. Amounts receivable from the Dominican Republic government primarily
relate to payments made by Pueblo Viejo on behalf of the government.
2. Primarily includes VAT and fuel tax recoverables of $124 million in Tanzania,
$52 million in Argentina, $32 million in Chile, $10 million in the Dominican
Republic, and $6 million in Peru (Dec. 31, 2015: $56 million, $56 million,
$44 million, $18 million and $9 million, respectively).
Mining
property
costs
subject to
Mining
property
costs not
subject to
depreciation1,3 depreciation1,2
Total
Buildings, plant
and equipment
$ 4,684
$ 7,300
$ 2,450
$ 14,434
71
(80)
(794)
217
458
272
–
(995)
79
538
933
(37)
–
3
(996)
1,276
(117)
(1,789)
299
–
$ 4,556
$ 7,194
$ 2,353
$ 14,103
19 Property, Plant and Equipment
At January 1, 2016
Net of accumulated depreciation
Additions4
Disposals
Depreciation
Impairment reversals
Transfers5
At December 31, 2016
At December 31, 2016
Cost
Accumulated depreciation and impairments
$ 14,111
(9,555)
$ 20,778
(13,584)
$ 14,634
(12,281)
$ 49,523
(35,420)
Net carrying amount – December 31, 2016
$ 4,556
$ 7,194
$ 2,353
$ 14,103
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.
130
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
At January 1, 2015
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
$ 15,273
(8,590)
$ 21,803
(13,539)
$ 16,060
(11,814)
$ 53,136
(33,943)
Net carrying amount – January 1, 2015
$ 6,683
$ 8,264
$ 4,246
$ 19,193
Additions4
Capitalized interest
Disposals
Depreciation
Impairment charges
Transfers5
Assets held for sale
At December 31, 2015
At December 31, 2015
(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
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.
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,
2016
Carrying
amount at
Dec. 31,
2015
$
466
$ 529
24
42
1,263
444
156
1,287
444
148
$ 2,353
$ 2,450
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
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 2016 was a $67 million decrease (2015:
$94 million decrease).
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 $103 million
at December 31, 2016 (2015: $120 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,
2016, we have operating lease commitments totaling
$73 million, of which $17 million is expected to be paid
within a year, $48 million is expected to be paid within
two to five years and the remaining amount to be paid
beyond five years.
131
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
20 Goodwill and Other Intangible Assets
a) Intangible Assets
Water
rights1
Technology2
Supply
contracts3
Exploration
potential4
Total
Opening balance January 1, 2015
$ 116
$ 14
$ 17
$ 161
$ 308
Disposals
Amortization
(29)
–
–
(2)
–
(1)
(5)
–
(34)
(3)
Closing balance December 31, 2015
$ 87
$ 12
$ 16
$ 156
$ 271
Additions
Amortization
Closing balance December 31, 2016
Cost
Accumulated amortization and impairment losses
Net carrying amount December 31, 2016
–
–
$ 87
$ 87
–
$ 87
–
(1)
$ 11
$ 17
(6)
$ 11
–
(2)
$ 14
$ 39
(25)
$ 14
4
–
4
(3)
$ 160
$ 272
$ 282
(122)
$ 425
(153)
$ 160
$ 272
1. Relates to water rights in South America, 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 2n(i)). See note 21
for details of impairment charges recorded against exploration assets.
b) Goodwill
Goldstrike
Cortez
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Hemlo
Kalgoorlie
Cowal
Porgera
Zaldívar
Total
Opening balance
January 1,
2015
Impairments
Closing balance Closing balance
December 31,
December 31,
2016
2015
Disposals
$
730
869
412
247
195
528
63
71
64
71
1,176
$
(730)
(355)
(412)
(247)
–
–
–
–
–
–
(427)
$
–
–
–
–
–
–
–
–
(64)
(71)
(749)
$
–
514
–
–
195
528
63
71
–
–
–
$
–
514
–
–
195
528
63
71
–
–
–
$ 4,426
$ (2,171)
$
(884)
$ 1,371
$ 1,371
On a total basis, the gross amount and accumulated impairment losses are as follows:
Cost
Accumulated impairment losses January 1, 2015
Impairment losses 2015
Accumulated impairment losses December 31, 2016
Net carrying amount December 31, 2016
$ 8,659
(5,117)
(2,171)
(7,288)
$ 1,371
132
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
21 Impairment of Goodwill and Impairment and Reversal of Non-Current Assets
Summary of impairments (reversals)
For the year ended December 31, 2016, we recorded net
impairment reversals of $250 million (2015: impairment
of $1.7 billion) for non-current assets and $nil (2015:
impairment of $2.2 billion) for goodwill, as summarized
in the following table:
For the years ended December 31
2016
2015
Veladero
Lagunas Norte
Zaldívar
Pueblo Viejo
Pascua-Lama
Bald Mountain/Round Mountain1
Buzwagi
Oil Royalty
Cortez
Other
$
(275)
(28)
49
–
–
–
–
–
–
4
$
–
36
–
1,112
399
81
37
36
2
23
Total non-current asset impairment
losses (reversals)
$
(250)
$ 1,726
Goldstrike
Zaldívar
Pueblo Viejo
Cortez
Lagunas Norte
Total goodwill impairment losses
$
$
–
–
–
–
–
–
$ 730
427
412
355
247
$ 2,171
Total impairment losses (reversals)
$
(250)
$ 3,897
1. As discussed in note 4b, we have disposed of Bald Mountain
and Round Mountain in a single transaction. Accordingly, the
impairment loss was calculated together.
2016 Indicators of Impairment/Reversal
Fourth Quarter 2016
In the fourth quarter 2016, as per our policy, we
performed our annual goodwill impairment test. No
impairments were identified. Also in the fourth quarter,
we reviewed the updated LOM plans for our other
operating mine sites for indicators of impairment or
reversal. We noted no indicators of impairment, but did
note three indicators of potential impairment reversal.
As a result of improvements in the cost structure at
our Veladero mine in Argentina, we have expanded the
open pit in our Life of Mine (“LOM”) plan, increasing
our expected production and the number of years in our
plan. These changes increased Veladero’s Fair Value Less
Costs of Disposal (“FVLCD”) which has resulted in a
full reversal of the non-current asset impairment loss
recorded in 2013. After reflecting the amount of
depreciation that would have been taken on the
impaired assets, an amount of $275 million was recorded
as an impairment reversal in the fourth quarter of 2016.
The recoverable amount, based on the mine’s FVLCD,
was $1.6 billion.
Also as a result of cost improvements, we have
observed an increase in the FVLCD of our Lagunas Norte
mine in Peru that has resulted in a full reversal of the
non-current asset impairment loss recorded in the fourth
quarter of 2015. After reflecting the amount of
depreciation that would have been taken on the
impaired assets, an amount of $28 million was recorded
as an impairment reversal in the fourth quarter of 2016.
The recoverable amount, based on the mine’s FVLCD,
was $630 million.
In the fourth quarter of 2016, our Lumwana copper
mine in Zambia completed a new LOM plan incorporating
a lower cost structure. We determined this was an
indicator of potential reversal of the 2014 impairments
recorded on our Lumwana mine. Based on the level
of uncertainty surrounding some of the assumptions in
our FVLCD calculation, we determined there existed
significant uncertainty as to whether or not a change in
FVLCD existed that warranted a reversal in the previously
recorded impairment.
133
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Third Quarter 2016
As noted in note 4c, in the third quarter 2016 we
agreed to an adjustment of the purchase price for the
50% interest in our Zaldívar mine. This adjustment
resulted in a non-current asset impairment loss
of $49 million. This is in addition to the goodwill
impairment loss of $427 million we recognized in
third quarter 2015, as detailed below. The recoverable
amount after the impairment, based on the FVLCD of
our 50% equity interest, was $950 million.
Second Quarter 2016
In June 2016, the Zambian government passed
legislation to amend the royalty tax for mining operations
to a variable rate based on the prevailing copper price
effective June 1, 2016. These rates are 4% at copper
prices below $2.04 per pound; 5% at copper prices
between $2.04 per pound and $2.72 per pound; and
6% at copper prices of $2.72 per pound and above.
Legislation was also passed to remove the 15% variable
profit tax on income from mining companies. We
determined this was an indicator of potential reversal of
the 2014 impairments recorded on our Lumwana
copper mine and we determined the FVLCD was not
in excess of the carrying value and therefore no reversal
was recorded.
2015 Indicators of Impairment/Reversal
Fourth Quarter 2015
In the 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 the test, which were consistent with 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
impairment loss of $1,101 million were 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 20 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
was lower than previously recognized carrying values,
we recorded a non-current asset impairment loss of
$81 million.
Throughout the 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 determined that this was 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
134
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 due to the significant decline in current oil prices in the
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.
In the second quarter 2015, we determined that we
expected to sell the Monte Rio power asset at our Pueblo
Viejo mine. Power supply to Pueblo Viejo was not
impacted by this disposition. In the 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.
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 the fourth quarter
2014. In the 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. The recoverable amount after this
impairment, based on the FVLCD of our 50% equity
interest, was $1,010 million.
Also, in the third quarter 2015, a net reversal of
non-current asset impairment 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.
Key assumptions
The recoverable amount has been determined based on
its estimated FVLCD, which has been determined to be
greater than the VIU amounts. 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 where a recoverable amount was
required to be determined, FVLCD 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
135
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
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
are discounted using a WACC depending on the location
and market risk factors for each mine.
Assumptions
Our gold price assumptions used in our 2016 impairment
testing are 2017: $1,050 and 2018+: $1,200. Our gold
price assumptions used in our 2015 impairment testing
are 2016: $1,000, 2017: $1,100 and 2018+: $1,200.
The other key assumptions used in our impairment
testing are summarized in the table below:
Copper price per lb (long-term)
WACC – gold (range)
WACC – gold (avg)
WACC – copper
NAV multiple – gold (avg)
LOM years – gold (avg)
2016
2015
$ 2.75
3%–6%
4%
9%
1.2
15
$ 3.00
3%–8%
4%
7%
1.1
18
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 be affected by these
changes and 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 and
copper prices and the WACC, which are the most
significant assumptions that impact the impairment
calculations. We first assumed a +/- $100 per ounce
change in our gold price assumptions or a +/- $0.25
per pound change in copper price assumptions, while
holding all other assumptions constant. We then
assumed a +/- 1% change in our WACC, independent
from the change in gold or copper prices, while holding
all other assumptions constant. These sensitivities help
to determine the theoretical impairment losses or
impairment reversals that would be recorded with these
changes in gold or copper prices and WACC. As the
non-current asset impairment reversal recorded for
Veladero represents a full reversal, none of the sensitivity
analysis performed impacted the amount of the reversal.
The full reversal of the non-current asset impairment
reversal recorded for Lagunas Norte would not be
recognized if the gold price per ounce was decreased by
$100 and was otherwise not affected by the sensitivity
analysis. Other results of the sensitivity analysis are
as follows:
A $0.25 per pound increase in the copper price
would cause a partial reversal of $443 million of the
non-current asset impairment recorded in 2013 at
Lumwana. A $0.25 per pound decrease in the copper
price would result in a non-current asset impairment
at Lumwana of $253 million.
136
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
The carrying value of the CGUs that are most sensitive
24 Other Current Liabilities
to changes in the key assumptions used in the FVLCD
calculation are:
As at December 31, 2016
Carrying value
Pueblo Viejo1
Pascua-Lama2
Cerro Casale2
Lagunas Norte
Lumwana
$ 3,081
581
516
453
452
Provision for environmental
rehabilitation (note 27b)
Derivative liabilities (note 25f)
Deposit on Pueblo Viejo gold and silver
streaming agreement
1. This CGU had an impairment loss in 2015. As there have been no indicators
of impairment or impairment reversal in 2016, the carrying value would
remain sensitive to the key assumptions in the FVLCD model from 2015.
2. These CGUs are most sensitive to changes to the value per ounce/pound of
comparable market entities.
Share-based payments (note 34b)
Deposit on Pascua-Lama silver sale agreement
Other
22 Other Assets
25 Financial Instruments
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 67
50
$ 62
160
77
53
26
36
36
21
22
36
$ 309
$ 337
Derivative assets (note 25f)
Goods and services taxes recoverable1
Notes receivable2
Restricted cash3
Prepayments
Other investments
Other
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$
1
303
274
118
51
18
181
$
1
397
291
91
60
8
175
$ 946
$ 1,023
1. Includes VAT and fuel tax receivables of $255 million in Argentina, $8 million
in Tanzania and $40 million in Chile (Dec. 31, 2015: $308 million, $52 million
and $37 million, respectively). The VAT in Argentina is recoverable once
Pascua-Lama enters production.
2. Primarily represents the interest bearing promissory note due from NovaGold
and 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.
23 Accounts Payable
Accounts payable
Accruals
As at
Dec. 31,
2016
$ 749
335
As at
Dec. 31,
2015
$ 736
422
$ 1,084
$ 1,158
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 18);
investments (note 16); restricted share units (note 34b).
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.
Cash deposits
Term deposits
Money market investments
As at
Dec. 31,
2016
$ 1,009
654
726
As at
Dec. 31,
2015
$ 1,370
313
772
$ 2,389
$ 2,455
137
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Of total cash and cash equivalents as of December 31,
2016, $943 million (2015: $621 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, $nil million (2015: $62 million) of cash and
b) Debt and Interest1
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.
4.4%/5.7% notes3,9
3.85%/5.25% notes
5.80% notes4,9
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
Closing
balance
Dec. 31, 2015
$ 2,182
1,077
395
592
2,451
646
153
654
1,690
128
$ 9,968
(203)
$ 9,765
Proceeds
Repayments
$
–
–
–
–
–
–
2
3
–
–
$
(721)
–
–
–
(848)
(254)
(41)
(46)
(123)
(29)
$ 5
–
$ 5
$ (2,062)
–
$ (2,062)
Amortization
Closing
balance
and other2 Dec. 31, 2016
$ 6
1
–
1
4
8
–
(2)
2
–
$ 20
–
$ 20
$ 1,467
1,078
395
593
1,607
400
114
609
1,569
99
$ 7,931
(143)
$ 7,788
Closing
balance
Dec. 31, 2014
Proceeds
Repayments
Amortization
Closing
balance
and other2 Dec. 31, 2015
$ 2,409
1,983
395
855
2,720
850
354
794
2,579
142
$ 13,081
(333)
$ 12,748
$
–
–
–
–
–
–
–
9
–
–
$
(229)
(913)
–
(264)
(275)
(211)
(189)
(149)
(898)
(14)
$ 9
–
$ 9
$ (3,142)
–
$ (3,142)
$ 2
7
–
1
6
7
(12)
–
9
–
$ 20
–
$ 20
$ 2,182
1,077
395
592
2,451
646
153
654
1,690
128
$ 9,968
(203)
$ 9,765
1. The agreements that govern our long-term debt each contain various provisions which are not summarized herein. These provisions allow Barrick, at its option, to
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 $1.5 billion (2015: $2.2 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of
$629 million (2015: $1.35 billion) of BNAF notes due 2021 and $850 million of BNAF notes due 2041.
4. Consists of $400 million of 5.80% notes which mature in 2034.
5. Consists of $600 million of 6.35% notes which mature in 2036.
6. Consists of $1.6 billion (2015: $2.5 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 $279 million (2015: $475 million) of BGC notes due 2019, $248 million (2015:
$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, $50 million and Lagunas Norte, $56 million (2015: $57 million and $88 million, respectively).
8. Consists of $1.6 billion (2015: $1.7 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of
$731 million 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 ($72 million; 2015: $89 million), other debt obligations ($5 million; 2015: $45 million),
capital leases ($38 million; 2015: $41 million) and Acacia credit facility ($28 million; 2015: $28 million).
138
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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. During 2016, $721 million of the $1.35 billion
of 4.4% 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. During
2016, $152 million of the $400 million of 4.95% notes
was repaid.
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. During 2016, an
additional $196 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. During 2016, the
entire balance ($500 million) of the 10-year notes with
a coupon rate of 6.8% 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 would 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 had 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, $254 million of the financing was repaid.
The remaining principal balance under the Pueblo Viejo
Financing Agreement is $423 million.
139
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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
drawn amounts, and a commitment rate of 0.35% on
undrawn amounts. In November 2016, $3.66 billion of
the $4 billion credit facility was agreed to be extended
from January 2021 to January 2022. The remaining
$340 million currently terminates in January 2020. The
Credit Facility is undrawn as at December 31, 2016.
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 was repaid. During 2015, $769 million of
4.1% notes and $129 million of 2.5% notes were
repaid. During 2016, the remainder ($123 million) of
the $650 million of 2.5% notes was 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 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. During 2015, $14 million was repaid. During
2016, $29 million was repaid.
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 Pascua-Lama silver sale agreement (note 29)
Deposits on Pueblo Viejo gold and silver streaming agreement (note 29)
Less: interest capitalized
2016
2015
Interest
cost
Effective
rate1
5.09%
4.87%
5.85%
6.41%
6.75%
6.23%
4.02%
6.09%
4.98%
3.59%
8.37%
6.34%
$ 104
53
23
38
128
33
5
36
82
7
63
37
$ 609
–
$ 609
Interest
cost
$ 120
86
23
66
177
41
11
44
118
5
61
9
$ 761
(17)
$ 744
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%
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.
140
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Scheduled Debt Repayments1
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
Issuer
BGC
BPDAF
BGC
BNAF
BGC
BGC
BGC
BGC
BGC
BGC
BGC
BGC
BGFC
BGC
BHMC
BNAF
BPDAF
BNAF
BGC
BNAF
Maturity
Year
2017
2018
2019
2020
2021
2022 and
thereafter
Total
2019
2020
2021
2021
2022
2023
2025
2025
2026
2026
2033
2034
2034
2035
2036
2038
2039
2041
2042
2043
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
72
29
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5
72
28
$ 279
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
70
28
$
–
248
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
42
14
$
–
–
7
629
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
42
–
$
– $ 279
248
–
7
–
629
–
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
13
–
423
125
99
–
$ 105
$ 105
$ 381
$ 304
$ 678
$ 6,302 $ 7,875
$ 38
$ 31
$ 16
$
9
$
6
$
14 $ 114
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.
141
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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, DOP, EUR, PGK,
TZS, ZAR, and ZMW
Currency exchange rates –
US dollar versus A$, ARS,
C$, CLP, DOP, GBP, PGK,
TZS, ZAR, and ZMW
Capital expenditures
Non-US dollar capital
Currency exchange
expenditures
rates – US dollar versus
A$, ARS, C$, CLP, DOP,
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
142
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 d) Summary of Derivatives at December 31, 2016
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)
PGK:US$ contracts (PGK millions)
Commodity contracts
Gold collar sell contracts (thousands of ounces)
Copper bought floor contracts (millions of pounds)
Fuel contracts (thousands of barrels)1
$ 28
$ 57
$ 14
$ 99
$ 99
$ –
$ 1
23
21
–
–
43
78
2,214
–
–
1,207
–
–
–
–
–
23
21
43
78
3,421
–
–
–
65
2,790
23
21
43
13
631
–
–
1
–
(78)
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,
2016
classification
Fair value
as at
Dec. 31,
2015
Balance
Fair value
as at
sheet Dec. 31,
2016
classification
Fair value
as at
Dec. 31,
2015
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
Currency contracts
Commodity contracts
Total derivatives not designated
as hedging instruments
Total derivatives
Other assets
Other assets
Other assets
$ 1
–
–
$ 1
–
–
Other liabilities
Other liabilities
Other liabilities
$
–
–
71
$
–
16
190
$ 1
$ 1
$ 71
$ 206
Other assets
Other assets
$ –
1
$ 1
$ 2
–
–
$ –
$ 1
Other liabilities
Other liabilities
$
–
7
$ 20
38
$ 7
$ 58
$ 78
$ 264
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.
143
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
As of December 31, 2016, we had 17 counterparties to
our derivative positions. We proactively manage our
exposure to individual counterparties in order to mitigate
both credit and liquidity risks. We have four counterparties
with which we hold a net asset position of $1 million,
and 13 counterparties with which we are in a net liability
position, for a total net liability of $77 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
Cash Flow Hedges
At December 31, 2016, Acacia has $99 million of
pay-fixed receive-float interest rate swaps to hedge the
floating rate debt associated with the Bulyanhulu plant
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. As at December 31, 2016, there are no
outstanding currency contracts designated as cash flow
hedges of our anticipated operating, administrative and
sustaining capital spend.
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). During the year, losses of $14 million were
recognized in the consolidated statement of income
based on the original hedge contract maturity dates. No
losses remain crystallized in OCI at December 31, 2016.
Commodity Contracts
Diesel/Propane/Electricity/Natural Gas
Cash Flow Hedges
During 2015, 8,040 thousand barrels of WTI contracts
designated against forecasted fuel consumption at our
mines were designated as hedging instruments as a
result of adopting IFRS 9 and did not qualify for hedge
accounting prior to January 1, 2015. As at December 31,
2016, we have 2,790 thousand barrels of WTI designated
as cash flow hedges at an average rate of $80 per
barrel of our exposure to forecasted fuel purchases at
our mines.
Non-hedge Derivatives
During the year, we entered into a contract to purchase
248 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 421 thousand barrels of Brent swaps outstanding
that economically hedge our exposure to forecasted fuel
purchases at our mines.
Metals Contracts
Cash Flow Hedges
During 2016, we purchased 65 million pounds of copper
collars that will mature evenly throughout the first half
of 2017. These contracts contained purchased put and
sold call options with weighted average strike prices
of $2.20/lb and $2.82/lb, respectively. These contracts
are designated as cash flow hedges, with the effective
portion and the changes in time value of the hedge
recognized in OCI and the ineffective portion recognized
in non-hedge derivative gains (losses).
During 2013, we early terminated 65 million ounces
of silver hedges. We realized net cash proceeds of
approximately $190 million with $9 million remaining
crystallized in OCI at December 31, 2016, to be recognized
in revenue as the exposure occurs. Any unrealized changes
and realized gains/losses on ineffective amounts or time
value have been recognized in the consolidated statements
of income as gains on non-hedge derivatives.
Non-Hedge Derivatives
We enter into purchased and written contracts with the
primary objective of increasing the realized price on
some of our gold and copper sales. During the year, we
purchased gold put and sold call options of 199 thousand
ounces and purchased copper put and sold call options
of 13 million pounds. As a result of these activities, we
recorded approximately $2 million in the consolidated
statement of income as gains on non-hedge derivatives.
There are 43 thousand ounces of gold positions and
13 million pounds of copper positions outstanding at
December 31, 2016.
144
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Cash Flow Hedge Gains (Losses) in Accumulated Other Comprehensive Income (“AOCI”)
Commodity
price hedges
Gold/Silver
Copper
Operating
costs
Fuel
Currency hedges
General and
administrative
costs
Interest rate
hedges
Capital
expenditures
Long-term
debt
Total
$ 18
$ –
$
–
$ (79)
$ (3)
$ –
$ (25)
$ (89)
–
(5)
–
–
–
(5)
(135)
(27)
(14)
(2)
1
(177)
At January 1, 2015
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
At December 31, 2015
Effective portion of change in
–
–
(4)
–
–
–
–
–
19
70
17
14
11
$ 14
$ –
$ (102)
$ (30)
fair value of hedging instruments
–
Transfers to earnings:
On recording hedged items in
earnings/PP&E1
(5)
–
–
23
2
47
28
2
–
2
106
–
25
$ –
$ (22)
$ (140)
–
–
25
–
2
72
–
$ –
–
–
At December 31, 2016
$ 9
$ –
$ (32)
$ –
$ –
$ –
$ (20)
$ (43)
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 2017 earnings2
$ 7
$ –
$ (19)
$ –
$ –
$ –
$
(3)
$ (15)
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, 2016.
Cash Flow Hedge Gains (Losses) at December 31
Derivatives in cash flow
hedging relationships
Amount of gain
(loss) recognized
in OCI
2016
2015
Location of gain (loss)
transferred from OCI
into income/PP&E
(effective portion)
Amount of gain
(loss) transferred
from OCI into income
(effective portion)
2016
2015
Interest rate contracts
$
–
$
1 Finance income/finance costs
$
(2) $
(2)
Foreign exchange
contracts
2
(43)
Cost of sales/general and
administrative costs/PP&E
(28)
(89)
Commodity contracts
23
(135)
Revenue/cost of sales
(42)
(15)
Total
$ 25
$ (177)
$
(72) $ (106)
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
2016
2015
$
–
$
–
–
–
–
(11)
(14)
$ (25)
$
145
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
e) Gains (Losses) on Non-hedge Derivatives
2016
For the years ended December 31
Commodity contracts
Gold
Silver1
Fuel
Currency contracts
Hedge ineffectiveness
1. Relates to the amortization of crystallized OCI.
2015
$
–
5
(10)
(8)
$
2
6
5
(1)
$ 12
$
(13)
–
–
$
(25)
$
(25)
$ 12
$
(38)
f) Derivative Assets and Liabilities
At January 1
Derivatives cash (inflow) outflow
Operating activities
Change in fair value of:
Non-hedge derivatives
Cash flow hedges:
Effective portion
Ineffective portion
Excluded from effectiveness changes
2016
2015
$ (263)
$ (278)
156
211
6
25
–
–
(13)
(177)
25
(31)
At December 31
$ (76)
$ (263)
Classification:
Other current assets
Other long-term assets
Other current liabilities
Other long-term obligations
$
1
1
(50)
(28)
$
–
1
(160)
(104)
$ (76)
$ (263)
26 Fair Value Measurements
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.
146
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
a) Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair Value Measurements
At December 31, 2016
Cash and equivalents
Other investments
Derivatives
Receivables from provisional copper and gold sales
Fair Value Measurements
At December 31, 2015
Cash and equivalents
Other investments
Derivatives
Receivables from provisional copper and gold sales
b) Fair Values of Financial Assets and Liabilities
Financial assets
Other assets1
Other investments2
Derivative assets
Financial liabilities
Debt3
Derivative liabilities
Other liabilities
Quoted prices
in active
markets for
identical assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
$ 2,389
18
–
–
$ 2,407
Quoted prices
in active
markets for
identical assets
(Level 1)
$ 2,455
8
–
–
$ 2,463
$
–
–
(76)
110
$ 34
Significant
other
observable
inputs
(Level 2)
$
–
–
(263)
76
$ (187)
$ –
–
–
–
$ –
Significant
unobservable
inputs
(Level 3)
$ –
–
–
–
$ –
Aggregate
fair value
$ 2,389
18
(76)
110
$ 2,441
Aggregate
fair value
$ 2,455
8
(263)
76
$ 2,276
At Dec. 31, 2016
At Dec. 31, 2015
Carrying
amount
Estimated
fair value
Carrying
amount
Estimated
fair value
$
399
18
2
$
399
18
2
$
365
8
1
$
365
8
1
$
419
$
419
$
374
$
374
$ 7,931
78
216
$ 8,279
78
216
$ 9,968
264
223
$ 8,516
264
223
$ 8,225
$ 8,573
$ 10,455
$ 9,003
1. Includes restricted cash and amounts due from our partners.
2. Recorded at fair value. Quoted market prices are used to determine fair value.
3. 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.
147
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
c) Assets Measured at Fair Value on a Non-Recurring Basis
Other assets1
Property, plant and equipment2
Quoted prices
in active
markets for
identical assets
(Level 1)
$ –
–
Significant
other
observable
inputs
(Level 2)
$ –
–
Significant
unobservable
inputs
(Level 3)
$ 974
1,470
Aggregate
fair value
$ 974
1,470
1. Other assets were written down by $49 million in the third quarter 2016, which was included in earnings in this period. Refer to note 4c.
2. Property, plant and equipment were written up by $299 million, which was included in earnings in this period, reflecting the historical impairment loss taken
on these assets.
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 21 for disclosure of inputs used
to develop these measures.
148
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
27 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
Closed Sites
Impact of revisions to expected
cash flows recorded in earnings
Settlements
Cash payments
Settlement gains
Accretion
Operating Sites
PERs arising (decreasing) in the year
Settlements
Cash payments
Settlement gains
Accretion
Assets held for sale
At December 31
Current portion (note 24)
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 2,179
72
34
45
33
$ 1,920
86
25
46
25
$ 2,363
$ 2,102
2016
2015
$ 1,982
–
$ 2,484
(170)
146
(28)
(1)
10
38
(78)
(5)
19
134
(229)
(34)
(3)
40
–
(11)
(1)
44
(109)
$ 2,246
(67)
$ 1,982
(62)
$ 2,179
$ 1,920
The eventual settlement of all PERs is expected to take
place between 2017 and 2057.
The PER has increased in the fourth quarter 2016 by
$32 million primarily due to changes in cost estimates
at our Grants, Pierina and McLaughlin properties,
partially offset by changes in discount rates. For the year
ended December 31, 2016, our PER balance increased by
$264 million as a result of 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
$300 million and a 1% decrease in the discount rate
would result in an increase in PER by $264 million,
while holding the other assumptions constant.
28 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
currency and interest rate risk;
b) Credit risk;
c) Liquidity risk; and
d) Capital risk management.
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.
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. Our corporate
149
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
treasury function implements hedging strategies on
an opportunistic basis to protect us from downside price
risk on our gold and copper production. We have
43 thousand ounces of gold and 78 million pounds of
copper positions outstanding at December 31, 2016.
Our remaining gold and copper production is subject
to market 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.
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
($2.4 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
($0.4 billion at December 31, 2016).
The effect on net earnings and equity of a 1% change
in interest rate of our financial assets and liabilities as
at December 31 is approximately $13 million (2015:
$13 million).
150
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
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,
2016
$ 2,389
249
As at
Dec. 31,
2015
$ 2,455
275
1
–
$ 2,639
$ 2,730
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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 25.
Our capital structure comprises a mix of debt
and shareholders’ equity. As at December 31, 2016, our
total debt was $7.9 billion (debt net of cash and
equivalents was $5.5 billion) compared to total debt as
at December 31, 2015 of $10 billion (debt net of cash
and equivalents was $7.5 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 the
fourth quarter 2015, in the Credit Facility (undrawn as
at December 31, 2016) 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 0.35:1 as at December 31, 2016).
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.
As at December 31, 2016
(in $ millions)
Cash and equivalents
Accounts receivable
Derivative assets
Trade and other payables
Debt
Derivative liabilities
Other liabilities
As at December 31, 2015
(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
$ 2,389
249
1
1,084
143
51
42
$
–
–
1
–
533
27
51
$
–
–
–
–
997
–
3
$
–
–
–
–
6,316
–
120
$ 2,389
249
2
1,084
7,989
78
216
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
151
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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 28.
29 Other Non-Current Liabilities
Deposit on Pascua-Lama silver
sale agreement
Deposit on Pueblo Viejo gold and
silver streaming agreement
Derivative liabilities (note 25f)
Provision for offsite remediation
Other
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 749
$ 716
499
28
48
137
565
104
55
146
$ 1,461
$ 1,586
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 March 31, 2018. In return, we
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
152
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
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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
30 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 $4,507 million as
at December 31, 2016.
Expiry Dates of Tax Losses and AMT
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
Other working capital
Derivative instruments
Other
Deferred tax liabilities
Property, plant and equipment
Inventory
Classification:
Non-current assets
Non-current liabilities
As at
Dec. 31,
2016
As at
Dec. 31,
2015
$ 503
–
639
273
$ 475
22
560
320
47
75
54
89
41
42
61
52
106
–
$ 1,721
$ 1,638
(1,731)
(533)
(1,713)
(438)
$
(543)
$
(513)
$ 977
(1,520)
$ 1,040
(1,553)
$
(543)
$
(513)
The deferred tax asset of $977 million includes
$832 million expected to be realized in more than one
year. The deferred tax liability of $1,520 million includes
$1,470 million expected to be realized in more than
one year.
Non-capital tax losses1
Canada
Argentina
Barbados
Chile
Tanzania
Zambia
Other
AMT credits2
2017
2018
2019
2020
2021+
$
–
–
148
–
–
–
5
$
–
–
4,751
–
–
176
7
$
–
–
926
–
–
–
–
$
–
–
218
–
–
–
–
$ 1,650
301
566
–
–
416
–
$
No
expiry
date
–
–
–
914
177
–
524
Total
$ 1,650
301
6,609
914
177
592
536
$ 153
$ 4,934
$ 926
$ 218
$ 2,933
$ 1,615
$ 10,779
$ 113
$
113
1. Represents the gross amount of tax loss carry forwards translated at closing exchange rates at December 31, 2016.
2. Represents the amounts deductible against future taxes payable in years when taxes payable exceed “minimum tax” as defined by United States tax legislation.
153
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
The non-capital tax losses include $8,880 million of
losses which are not recognized in deferred tax assets.
Of these, $148 million expire in 2017, $4,927 million
expire in 2018, $926 million expire in 2019, $218 million
expire in 2020, $1,512 million expire in 2021 or later,
and $1,149 million have no expiry date.
The AMT credits include $113 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.
A deferred income tax asset totaling $569 million
(December 31, 2015: $558 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
$126 million (December 31, 2015: $116 million) 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,
2016
$ 162
377
115
–
890
599
66
183
151
70
As at
Dec. 31,
2015
$ 383
374
113
18
787
647
72
131
190
70
$ 2,613
$ 2,785
Deferred Tax Assets Not Recognized relate to: non-capital
loss carry forwards of $638 million (2015: $516 million),
capital loss carry forwards with no expiry date of
$440 million (2015: $602 million), US AMT credits
of $113 million (2015: $112 million) and other
deductible temporary differences with no expiry date
of $1,422 million (2015: $1,555 million).
Source of Changes in Deferred Tax Balances
For the years ended December 31
2016
2015
Temporary differences
Property, plant and equipment
Environmental rehabilitation
Tax loss carry forwards
Inventory
Derivatives
Other
Intraperiod allocation to:
(Income)/loss from continuing operations
before income taxes
Zaldívar disposition
Cowal disposition
OCI
Other
$ (65)
79
27
(94)
(16)
39
$ 741
(25)
106
(34)
74
(13)
$ (30)
$ 849
$
(8)
–
–
(22)
–
$ 436
388
7
20
(2)
$ (30)
$ 849
154
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Income Tax Related Contingent Liabilities
31 Capital Stock
Authorized Capital Stock
Our authorized capital stock includes an unlimited number
of common shares (issued 1,165,574,071 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 2016, we declared and paid dividends in US dollars
totaling $86 million (2015: $160 million).
The Company’s dividend reinvestment plan
resulted in $8 million (2015: $3 million) reinvested
into the Company.
At January 1
Net additions based on uncertain tax positions
related to prior years
Additions based on tax positions related
to the current year
Reductions for tax positions of prior years
2016
2015
$ 61
$ 49
70
–
(3)
–
13
(1)
At December 311
$ 128
$ 61
1. If reversed, the total amount of $128 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 that it is reasonably possible for the
amount of income tax related contingent liabilities to
decrease within 12 months of the reporting date by
the full amount of $128 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
2013–2016
2016
2013–2016
2009, 2011–2016
2013–2016
2009–2016
2012–2016
2006–2016
2007–2016
All years open
2010–2016
32 Non-Controlling Interests
a) Non-Controlling Interests Continuity
NCI in subsidiary at December 31, 2016
40%
36.1%
25%
Various
Pueblo Viejo
Acacia
Cerro Casale
Other
Total
At January 1, 2015
Share of loss
Cash contributed
Disbursements
At December 31, 2015
Share of income (loss)
Cash contributed
Disbursements
At December 31, 2016
$ 1,521
(199)
–
(90)
$ 1,232
174
–
(95)
$ 758
(69)
–
(12)
$ 677
34
–
(7)
$ 1,311
$ 704
$ 319
(3)
2
–
$ 318
(1)
2
–
$ 319
$ 17
(4)
39
(2)
$ 50
(1)
68
(73)
$ 2,615
(275)
41
(104)
$ 2,277
206
70
(175)
$ 44
$ 2,378
155
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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,
2016
833
$
3,703
As at
Dec. 31,
2015
$
667
3,540
As at
Dec. 31,
2016
$ 673
1,725
As at
Dec. 31,
2015
$ 528
1,699
$ 4,536
$ 4,207
$ 2,398
$ 2,227
1,357
603
1,767
499
71
381
15
340
$ 1,960
$ 2,266
$ 452
$ 355
As at
Dec. 31,
2016
1
$
560
$ 561
318
42
$ 360
As at
Dec. 31,
2015
$
–
557
$ 557
313
42
$ 355
Summarized Statements of Income
Pueblo Viejo
Acacia
Cerro Casale
For the years ended December 31
2016
2015
2016
2015
$ 1,548
$ 1,332
$ 1,045
$ 860
Revenue
Income (loss) from continuing operations
after tax
Other comprehensive income (loss)
810
–
(902)
–
Total comprehensive income (loss)
$ 810
$
(902)
Dividends paid to NCI
$
–
$
–
81
–
81
7
$
$
(206)
–
$ (206)
$
6
2016
$ –
(3)
–
$ (3)
$ –
2015
$
–
(6)
–
$
(6)
$
–
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
2016
$ 602
(54)
(350)
2015
2016
$ 471
(100)
(301)
$ 324
(190)
(49)
2015
$ 165
(189)
(37)
2016
$ (1)
–
2
2015
$
(5)
–
2
Net increase (decrease) in cash and
cash equivalents
$ 198
$
70
$ 85
$
(61)
$ 1
$
(3)
156
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Under the terms of Pueblo Viejo’s project financing
agreement described in note 25b, Pueblo Viejo
Dominicana Corporation is restricted from making cash
payments to Barrick and Goldcorp in the form of
dividends, distributions or certain shareholder loan
interest and principal payments. Pueblo Viejo Dominicana
Corporation is permitted to make such restricted
payments twice per year upon satisfaction of
certain conditions.
The project financing agreement contains covenants
which limit certain activities by Pueblo Viejo Dominicana
Corporation, 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.
34 Stock-Based Compensation
a) Global Employee Share Plan (GESP)
In 2016, Barrick launched a Global Employee Share Plan.
This plan is awarded to all eligible employees. During
2016, Barrick contributed and expensed $3 million to
this plan.
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, 2016, the weighted
average remaining contractual life of RSUs was
1.09 years (2015: 1.37 years).
33 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
2016
2015
Salaries and short-term employee benefits1
Post-employment benefits2
Share-based payments and other3
$ 19
2
17
$ 38
$ 31
2
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 RSUs was a $60 million
charge to earnings in 2016 (2015: $16 million) and is
presented as a component of corporate administration
and operating segment administration, consistent with
the classification of other elements of compensation
expense for those employees who had RSUs.
Under our DSU plan, Directors must receive a
specified portion of their basic annual retainer in the
form of DSUs, with the option to elect to receive 100%
of such retainer in DSUs. Officers may also elect to
receive a portion or all of their incentive compensation
in the form of DSUs. Each DSU has the same value as
one Barrick common share. DSUs must be retained until
the Director or officer leaves the Board or Barrick, at
which time the cash value of the DSUs will be paid out.
Additional DSUs are credited to reflect dividends paid on
Barrick common shares. DSUs are recorded at fair value
on the grant date and are adjusted for changes in fair
value. The fair value of amounts granted each period
together with changes in fair value are expensed.
157
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
DSU and RSU Activity
DSUs
(thousands)
Fair
value
RSUs
($ millions) (thousands)
Fair
value
($ millions)
At December 31, 2016, 1,536 thousand units had been
granted at a fair value of $11 million (2015: 589 thousand
units at a value of $1 million).
At January 1, 2015
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
At December 31, 2015
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
261
(34)
–
238
–
–
465
(26)
–
134
–
–
$ 2.8 3,605
(1,492)
(0.2)
(54)
–
2.0 4,458
110
–
–
(1.1)
$ 3.5 6,627
(1,102)
(0.4)
(2,952)
–
2.2 3,836
43
–
–
3.8
$ 19.8
(11.1)
(0.6)
48.9
1.0
(33.4)
$ 24.6
(22.7)
(46.3)
55.0
0.7
47.3
At December 31, 2016
573
$ 9.2 6,452
$ 58.6
At December 31, 2016, Acacia Mining plc had $1 million
of DSUs outstanding (2015: $1 million) and $3 million of
RSUs outstanding (2015: $2 million).
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, 2016, 489 thousand units were
outstanding at a fair value of $6 million (2015:
1,169 thousand units, fair value $5 million).
At December 31, 2016, Acacia Mining plc had
$8 million of PRSUs outstanding (2015: $12 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.
Employee Stock Option Activity (Number of Shares in Millions)
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
2016, Barrick contributed and expensed $0.3 million
to this plan (2015: $0.4 million).
f) 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, 2016, 2.1 million (2015: 2.9 million)
common shares were available for granting options.
Compensation expense for stock options was
$nil million in 2016 (2015: $2 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
had no impact on earnings per share for 2016 and 2015.
Total intrinsic value relating to options exercised in
2016 was $nil (2015: $nil).
C$ options
At January 1
Granted
Cancelled/expired
At December 31
US$ options
At January 1
Forfeited
Cancelled/expired
At December 31
158
2016
2015
Shares Average price
Shares
Average price
0.3
–
–
0.3
2.6
(0.4)
(0.4)
1.8
$ 13
–
–
$ 13
$ 42
45
39
$ 42
0.2
0.2
(0.1)
0.3
5.2
(0.3)
(2.3)
2.6
$ 19
10
20
$ 13
$ 41
46
40
$ 42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
Stock Options Outstanding (Number of Shares in Millions)
Range of exercise prices
C$ options
$ 9 – $ 17
$ 18 – $ 21
US$ options
$ 32 – $ 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
0.9
0.9
1.8
$ 10
18
$ 13
$ 33
51
$ 42
5.6
3.6
4.9
2.9
1.6
2.3
$ 2
1
$ 3
$ (16)
(31)
$ (47)
0.1
0.1
0.2
0.9
0.8
1.7
$ 10
18
$ 14
$ 33
51
$ 42
$ 1
–
$ 1
$ (15)
(30)
$ (45)
1. Based on the closing market share price on December 31, 2016 of C$21.49 and US$15.98.
As at December 31, 2016, there was $0.1 million
(2015: $1 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 (2015: 1 year).
35 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
2016
2015
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
$ 66
6
$ 72
$
$
4
–
4
$ 11
–
$ 11
$ 80
6
$ 86
$ 3
–
$ 3
$ 7
1
$ 8
The amounts recognized in the balance sheet are
determined as follows:
For the years ended December 31
2016
2015
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
$ 198
(191)
$
7
59
$ 66
$ 219
(201)
$ 18
62
$ 80
–
–
Liability in the balance sheet
$ 66
$ 80
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.
159
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
The significant actuarial assumptions were as follows:
As at December 31
Discount rate
Pension Plans 2016
Other Post-Retirement
Benefits 2016
Pension Plans 2015
Other Post-Retirement
Benefits 2015
2.10–3.90%
3.70%
2.10–4.25%
3.85%
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 weighted average duration of the defined
benefit obligation is 10 years (2015: 11 years).
Pension benefits
Other post-retirement benefits
At December 31, 2015
Pension benefits
Other post-retirement benefits
At December 31, 2016
Less than
a year
Between
1–2 years
Between
2–5 years
Over 5 years
$ 19
1
$ 20
18
1
$ 19
$ 19
1
$ 20
19
1
$ 20
$ 56
2
$ 58
54
2
$ 56
$ 364
6
$ 370
313
6
$ 319
Total
$ 458
10
$ 468
404
10
$ 414
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 $32 million
in 2016 (2015: $38 million).
36 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 asserted 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 alleged 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
160
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016
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
sought an unspecified amount of damages.
The Complaint largely tracked 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.
On May 31, 2016, the Company confirmed that it
had reached a $140 million settlement in this matter. The
settlement was approved by the Court on December 2,
2016. The amount of the settlement is insured. The
Company continues to believe that the allegations by
the lead plaintiffs in this matter are unfounded,
and under the terms of the settlement agreement, the
Company has not accepted any allegations of
wrongdoing or liability.
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).
The first Ontario and Alberta actions were
commenced by Statement of Claim on April 15 and 17,
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 were also named as
defendants in the two actions. Both actions purported
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 sought $4.3 billion in
general damages and $350 million in special damages
for alleged misrepresentations in the Company’s public
disclosure. The first Ontario action was subsequently
consolidated with the fourth Ontario action, as discussed
below. The first Alberta action was discontinued by
plaintiffs’ counsel on June 26, 2015.
The second Ontario action was commenced on
April 24, 2014. Aaron Regent, Jamie Sokalsky, Ammar
Al-Joundi and Peter Kinver were also named as
defendants. Following a September 8, 2014 amendment
to the Statement of Claim, this action purported to be
on behalf of anyone who acquired Barrick securities
during the period from October 29, 2010 to October 30,
2013, and sought $3 billion in damages for alleged
misrepresentations in the Company’s public disclosure.
As a result of the outcome of the carriage motion and
appeals described below, the second Ontario action has
now been stayed. 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 or pursued.
The Quebec action was commenced 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 on
May 23, 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. Aaron Regent,
Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver were
also named as defendants. This action purported to be
on behalf of any person who acquired Barrick securities
during the period from May 7, 2009 to November 1, 2013,
161
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 and sought $6 billion in damages for alleged
misrepresentations in the Company’s public disclosure.
The action was discontinued by plaintiffs’ counsel
on December 19, 2016.
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, and
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.
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. The court issued a
decision in December 2014 in favor of the counsel group
that commenced the first and fourth Ontario actions,
which have been consolidated in a single action. The
lower court’s decision was subsequently affirmed by the
Divisional Court in May 2015 and the Court of Appeal
for Ontario in July 2016 following appeals by the losing
counsel group. The losing counsel group sought leave to
appeal to the Supreme Court of Canada but later
discontinued the application after reaching an agreement
with the counsel group that commenced the first and
fourth Ontario actions.
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
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. 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). The review of the Project’s water
management system may require a new environmental
approval and the construction of additional water
management facilities.
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
162
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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 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.
On December 30, 2016, the Environmental Court
rejected CMN’s appeal and CMN declined to challenge
this decision. The decision of the SMA with respect to
CMN’s defense to the remainder of the alleged
deviations is still pending.
On June 8, 2016, the SMA consolidated the two
administrative proceedings against CMN into a single
proceeding encompassing both the reconsideration of
the 2013 Resolution in accordance with the decision
of the Environmental Court and the alleged deviations
from the Project’s environmental approval notified
by the SMA in April 2015. A final resolution from the
SMA with respect to these matters is pending 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. On August 12,
2016, the court ruled in favor of CMN and Sernageomin,
rejecting the plaintiffs’ challenges to the Temporary
and Partial Closure Plan for the Pascua-Lama project.
On August 19, 2016, the plaintiffs appealed the court’s
decision to the Chilean Supreme Court. A decision of
the Supreme Court is pending. No amounts have been
recorded for any potential liability arising from this
matter, as the Company cannot reasonably predict
the outcome.
Pascua-Lama – Water Quality Review
CMN initiated a review of the baseline water quality of
the Rio Estrecho in August 2013 as required by a July 15,
2013 decision of the Court of Appeals of Copiapo, Chile.
The purpose of the review was to establish whether the
water quality baseline has changed since the Pascua-Lama
project received its environmental approval in February
2006 and, if so, to require CMN to adopt the appropriate
corrective measures. As a result of that study, CMN
requested certain modifications to its environmental
permit water quality requirements. On June 6, 2016,
the responsible agency approved a partial amendment of
the environmental permit to better reflect the water
quality baseline from 2009. That approval was appealed
by certain water users and indigenous residents of the
Huasco Valley. On October 19, 2016, the Chilean
Committee of Ministers for the Environment, which has
jurisdiction over claims of this nature, voted to uphold
the permit amendments. On January 27, 2017, the
163
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Environmental Court agreed to consider an appeal of the
Chilean Committee’s decision brought by CMN and the
water users and indigenous residents. No amounts have
been recorded for any potential liability arising from
this matter, as the Company cannot reasonably predict
any potential losses.
Veladero – Release of Cyanide-Bearing Process Solution
San Juan Provincial Regulatory Sanction Proceeding
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 SRL (“MAG”) (formerly,
Minera Argentina Gold S.A. or MAGSA), Barrick’s
Argentine subsidiary that operates the Veladero mine,
notified regulatory authorities of the situation.
Environmental monitoring was conducted by MAG 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 MAG
for alleged violations of the mining code relating to
the valve failure and release of cyanide-bearing process
solution. MAG submitted its response to these
allegations in October 2015 and provided additional
information in January 2016.
On March 11, 2016, the San Juan Provincial mining
authority announced its intention to impose an
administrative fine against MAG in connection with
the solution release. MAG was formally notified of
this decision on March 15, 2016. On April 6, 2016,
MAG sought reconsideration of certain aspects of the
decision but did not challenge the amount of the
administrative fine. On April 14, 2016, in accordance
with local requirements, MAG paid the administrative
fine of approximately $10 million (at the then-applicable
Argentine peso/$ exchange rate) while the request for
reconsideration is pending. On December 29, 2016,
the request for reconsideration was rejected by the
Provincial mining authority. MAG is considering whether
to continue challenging certain aspects of the decision.
MAG is implementing a remedial action plan at Veladero
in response to the incident as required by the San Juan
mining authority. Certain construction-related activities
in the Valley Fill Leach Facility (the “VLF”) are still pending.
Criminal Matters
On March 11, 2016, a San Juan Provincial court laid
criminal charges based on alleged negligence against
nine current and former MAG employees in connection
with the solution release (the “Provincial Action”). The
individual defendants have appealed the indictment.
In addition, a federal criminal investigation was
initiated by a Buenos Aires federal court based on the
alleged failure of certain current and former federal and
provincial government officials and individual directors
of MAG to prevent the solution release (the “Federal
Investigation”). The federal judge overseeing the Federal
Investigation admitted a local group in San Juan Province
as a party. In March 2016, this group requested an
injunction against the operations of the Veladero mine.
The federal judge ordered technical studies to assess
the solution release and its impact and appointed a
committee to conduct a site visit, which occurred in late
April 2016.
On May 5, 2016, the National Supreme Court of
Argentina limited the scope of the Federal Investigation
to the potential criminal liability of the federal government
officials, ruling that the Buenos Aires federal court does
not have jurisdiction to investigate the solution release.
As a result of this decision, the investigation into the
incident will continue to be conducted by the San Juan
Provincial judge in the Provincial Action. To date, no
charges have been laid against any specific individuals
in connection with the Federal Investigation, consistent
with its more limited scope.
MAG is not a party to either the Provincial Action
or the Federal Investigation. No amounts have been
recorded for any potential liability arising from these
matters, as the Company cannot reasonably predict
any potential losses.
164
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Veladero – Release of Crushed Ore Saturated with
Process Solution
Temporary Suspension of Operations and Regulatory
Infringement Proceeding
On September 8, 2016, ice rolling down the slope of the
leach pad at the Veladero mine damaged a pipe carrying
process solution, causing some material to leave the
leach pad. This material, primarily crushed ore saturated
with process solution, was contained on the mine site
and returned to the leach pad. Extensive water monitoring
in the area conducted by MAG has confirmed that the
incident did not result in any environmental impacts. A
temporary suspension of operations at the Veladero mine
was ordered by the San Juan Provincial mining authority
and a San Juan Provincial court on September 15, 2016
and September 22, 2016, respectively, as a result of this
incident. On October 4, 2016, following, among other
matters, the completion of certain urgent works required
by the San Juan Provincial mining authority and a judicial
inspection of the mine, the San Juan Provincial court
lifted the suspension of operations and ordered that
mining activities be resumed.
On September 14, 2016, the San Juan Provincial
mining authority commenced an administrative proceeding
in connection with this incident that included, in addition
to the issue of the suspension order, an infringement
proceeding against MAG. On December 2, 2016, the
San Juan Provincial mining authority notified MAG of
two charges under the infringement proceeding for
alleged violations of the Mining Code. A new criminal
judicial investigation has also been commenced by
the Provincial prosecutor’s office in the same San Juan
Provincial court that is hearing the Provincial Action.
The court in this proceeding issued the orders suspending
and resuming the operations at the Veladero mine
described above. No amounts have been recorded for
any potential liability arising from these matters, as the
Company cannot reasonably predict the outcome.
Veladero Cyanide Leaching Process – Civil Action
On December 15, 2016, MAG was served notice of a
lawsuit by certain persons who claim to be living in
Jachal, Argentina and to be affected by the Veladero
mine and, in particular, the VLF. In the lawsuit, which
was filed in the San Juan Provincial court, the plaintiffs
have requested a court order that MAG cease leaching
metals with cyanide solutions, mercury and other similar
substances at the Veladero mine and replace that process
with one that is free of hazardous substances, that
MAG implement a closure and remediation plan for the
VLF and surrounding areas, and create a committee to
monitor this process. The lawsuit is proceeding as an
ordinary civil action. The company expects to reply to the
lawsuit in mid-February 2017, and the case will then
proceed to the evidentiary stage. The Company intends
to defend this matter vigorously. No amounts have been
recorded for any potential liability or asset impairment
under this matter, as the Company cannot reasonably
predict the outcome.
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. On October 3, 2016, federal authorities
published a partial national inventory of glaciers, which
includes the area where the Veladero mine and Pascua-
Lama Project are located. The Company has analyzed the
national inventory in the area where Veladero and
Pascua-Lama are located and has concluded that this
inventory is consistent with the provincial inventory that
the Province of San Juan used in connection with its
January 2013 environmental audit.
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
165
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
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
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.
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.
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
166
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 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.
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. On August 10, 2016, the Company filed
documentation and supporting materials related to initial
activities at the Cerro Casale project and 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
Committee of Ministers for the Environment, which has
jurisdiction over procedural claims of this nature. On
January 19, 2015, the Committee of Ministers for the
Environment 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.
Acacia Mining plc – Tanzanian Revenue
Authority Assessments
In January 2016, The Tanzanian Revenue Authority (“TRA”)
issued an assessment to Acacia Mining plc (“Acacia”)
in the amount of $41.3 million for withholding tax on
certain historic offshore dividend payments paid
by Acacia to its shareholders. Acacia is appealing this
assessment on the substantive grounds that, as an
English incorporated company, it is not resident in
Tanzania for taxation purposes. The appeal is currently
pending at the Court of Appeal and the substantive
grounds of appeal will be filed on receipt of the record
of appeal required from the lower tribunals.
Further TRA assessments were issued to Acacia in
January 2016 in the amount of $500.7 million, based on
an allegation that Acacia is resident in Tanzania for
corporate and dividend withholding tax purposes. The
corporate tax assessments have been levied on certain
of Acacia’s net profits before tax. Acacia is in the process
of appealing these assessments at the TRA Board level.
Acacia’s substantive grounds of appeal are based on
the correct interpretation of Tanzanian permanent
establishment principles and law, relevant to a non-
resident English incorporated company. Accordingly
no amounts have been recorded for any potential
liability and Acacia intends to continue to defend these
actions vigorously.
167
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 SHAREHOLDER INFORMATION
Shareholder Information
Shares are traded on two stock exchanges
New York
Toronto
Ticker Symbol
ABX
Number of Registered Shareholders at
December 31, 2016
16,463
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, 2016
Weighted average 2016
Basic
Fully diluted
1,166
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, 2016
NYSE
TSX
2016
2015
4,980
1,218
1,437
766
US$15.98
C$21.49
2016 Dividend per Share
US$0.08
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
2016
1,491
1,246
1,082
1,161
4,980
2015
2016
2015
2016
2015
US$15.52
21.43
23.47
18.95
US$13.25
13.70
11.00
8.32
US$7.39
13.04
16.75
13.81
US$10.15
10.57
5.91
6.14
353
243
468
373
1,437
Share Volume
(millions)
High
Low
2016
2015
2016
2015
2016
2015
389
321
246
262
1,218
184
133
229
220
766
C$20.17
27.86
30.44
25.36
C$16.54
16.40
13.92
10.97
C$10.62
17.09
22.02
18.52
C$12.15
13.15
7.89
8.15
168
Barrick Gold Corporation | Financial Report 2016
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.
In 2016, the Company paid a cash dividend of $0.08 per
share – $0.02 on March 15, $0.02 on June 15, $0.02 on
September 15, and $0.02 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 25, 2017 at 10:00 a.m. (Toronto time)
in the Metro Toronto Convention Centre,
John Bassett Theatre, 255 Front Street West,
Toronto, Ontario.
Barrick Gold Corporation | Financial Report 2016 169
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this Annual
Report 2016, 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”, “goal”, “continue”, “budget”, “estimate”, “potential”, “may”,
“will”, “can”, “should”, “could”, “would”, and similar expressions identify
forward-looking statements. In particular, this Annual Report 2016
contains forward-looking statements including, without limitation, with
respect to: (i) Barrick’s forward-looking production guidance; (ii) estimates
of future cost of sales per ounce for gold and per pound for copper,
all-in-sustaining costs per ounce/pound, cash costs per ounce, and
C1 cash costs per pound; (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
that may result from certain Best-in-Class initiatives); (ix) the Lama starter
project and the potential for phased-in development of the Pascua-Lama
project; (x) the potential to identify new reserves and resources; (xi) our
pipeline of high confidence projects at or near existing operations; (xii)
the extension of mine life at Lagunas Norte; (xiii) the benefits of integrating
the Cortez and Goldstrike operations; (xiv) the potential impact and
benefits of Barrick’s digital transformation; (xv) asset sales, joint ventures,
and partnerships; and (xvi) 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 as at the date of this press 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; risks associated with
the implementation of Barrick’s digital transformation initiative, and
the ability of the projects under this initiative to meet the Company’s
capital allocation objectives; 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 geotechnical
challenges, and 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 and
targeted investments 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 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; lack of certainty with respect to foreign legal systems, corruption,
and other factors that are inconsistent with the rule of law; 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; 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
including loss of key employees; increased costs and physical risks,
including extreme weather events and resource shortages, related to
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 2016 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 press release.
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.
170
Barrick Gold Corporation | Financial Report 2016
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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
On our cover:
Majed Badra (left),
RIL/Elution Supervisor
Holly Saucier
TCM Operations General Supervisor
TCM Circuit, Goldstrike, Nevada
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