Barrick Gold Corporation
Annual Report 2017
A Company
of Owners
The photos in this Annual
Report were taken by our
people as part of Barrick’s
annual Employee Photo
Competition. We initiated
the contest in 2005 and our
archive now boasts tens of
thousands of photos created
by our employees who,
like you, are fellow Barrick
owners. They are proud of
their achievements and the
Company’s contributions to
the communities in which
they work and live.
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 90
Financial Statements 102
Notes to Financial Statements 107
Shareholder Information 176
On the cover, from left to right:
The Analytics and Unified Operations (AuOps) Center
in Elko, Nevada processes vast quantities of data
from sensors, equipment, and digital tools, enabling
data-driven decisions in real or near-real time.
Mariah McCormick, a geological engineer at Cortez,
does her best imitation of iconic World War II poster,
Rosie the Riveter. Photographer Nicholas Vetz won the
grand prize in 2017 for this photo.
Roadheaders at Cortez are cutting more precise
declines compared to drilling and blasting, and
represent a shift towards continuous mining.
As at
December 31, 2017
Production
(000s ozs)
Cost of Sales
($/oz)
AISC †,1
($/oz)
Grade
(gm/t)
Contained
(000s ozs)
Proven and Probable Mineral Reserves †,6
Barrick Nevada††
2,312
Our Portfolio is now
primarily focused on high-margin, long-life
gold operations and projects clustered
in core districts throughout the Americas,
supporting a sustainable long-term production
profile with significant optionality and upside.
We continue to advance a pipeline of high-
confidence brownfield projects at or near
our existing operations with the potential
to contribute more than one million ounces
of annual production to Barrick, with initial
contributions beginning in 2021. Our portfolio
also contains a number of the world’s largest
undeveloped greenfield gold deposits, providing
further optionality and leverage to gold prices.
1
2
3
4
5
6
7
8
9
Pueblo Viejo (60%)
Lagunas Norte
Veladero (50%)
Turquoise Ridge (75%)
Porgera (47.5%)
Kalgoorlie (50%)
Acacia (63.9%)
Hemlo
10
Golden Sunlight
Other
Total Barrick
792
699
617
897
715
944
806
791
986
1,334
624
525
483
987
733
993
729
875
1,092
1,329
650
387
432
211
235
368
491
196
41
11,771
15.53
Tonnes
(000s)
245,207
81,359
55,430
113,914
13,255
99,060
38,614
24,928
452
610,639
2.58
2.76
2.25
0.77
4.78
1.21
3.83
2.21
2.06
0.60
1.55
20,351
7,224
4,005
2,816
5,878
2,038
3,858
4,758
1,774
30
11,712
64,444
Copper Mines:
Jabal Sayid JV, Saudi Arabia
Lumwana, Zambia
Zaldívar JV, Chile
5,323
794
750
1,294,629
† Please see page 88 of the 2017 Financial Report for corresponding endnotes.
†† Reserves include Cortez, Goldstrike, Goldrush and our 60% share of South Arturo.
6
7
8
9
10
5
1
2
4
3
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.
Our People are constantly
striving to achieve sustained excellence –
working together as partners with a vested
interest in our success. It is, by definition,
an elusive goal, because we are never satisfied.
We are constantly evolving and challenging
assumptions. Kelvin Dushnisky, President
Our Priorities executed in 2017
Focus on Free Cash flow
Disciplined Investment
See more
on page
8
See more
on page
9
Strengthen the Balance Sheet
See more
on page
11
Operational Excellence
Talent Development
See more
on page
12
See more
on page
13
Barrick Gold Corporation | Annual Report 2017
1
Financial Highlights
Gold Production
(million ounces)
Cost of Sales
($/oz)
AISC1
($/oz)
6.2
6.1
5.5
5.3
842
859
798
794
864
831
730
750
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
Total Debt
($ billions)
13.1
10.0
Net Earnings
($ billions)
Adjusted EBITDA1
($ billions)
1.4
0.7
3.8
3.8
4.0
3.2
7.9
6.4
-2.9
-2.8
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
Attributed Capital
Expenditures ($ billions)
Operating Cash Flow
($ billions)
Free Cash Flow1
($ billions)
2.2
1.5
1.4
1.1
2.82
2.6
2.3
2.1
1.5
1.12
0.67
2014
2015
2016
2017
2014
2015
2016
2017
Copper Production
(million pounds)
511
436
415
413
Cost of Sales
($/lb)
2.19
2015
2016
2017
-0.1
2014
AISC1
($/lb)
2.79
1.65
1.41
1.77
2.33
2.05
2.34
2014
2015
2016
2017
2014
2015
2016
2017
2014
2015
2016
2017
2
Barrick Gold Corporation | Annual Report 2017
(In millions of US dollars, except per share data)
(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 equivalents
Dividends paid per share
Annualized dividend per share3
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 pound
Cost of sales per pound
All-in sustaining costs per pound1
2017
8,374
1,438
1.23
876
0.75
2,065
669
5,018
4,017
2,234
0.12
0.12
5,323
1,257
1,258
794
750
413
2.80
2.95
1.77
2.34
$
$
$
$
$
$
$
$
$
2016
2015
$
$
$
$
$
$
$
$
$
8,558
655
0.56
818
0.70
2,640
1,514
4,077
4,021
2,389
0.08
0.08
5,517
1,251
1,248
798
730
415
2.21
2.29
1.41
2.05
$
$
$
$
$
$
$
$
$
9,029
(2,838)
(2.44)
344
0.30
2,794
1,081
2
2
(710)
3,334
2,455
0.14
0.08
6,117
1,160
1,157
859
831
511
2.49
2.37
1.65
2.33
1. These are non-GAAP financial performance measures with no standardized meaning under IFRS. For further information please see pages 73–87
of the 2017 Financial Report.
2. 2015 Operating Cash Flow and Free Cash Flow included $610 million in proceeds related to the Pueblo Viejo streaming transaction.
3. Calculation based on annualizing the last dividend paid in the respective year.
Barrick Gold Corporation | Annual Report 2017
3
MESSAGE FROM THE EXECUTIVE CHAIRMAN
The currents of the twenty-
first century are shaped by
certain distinctive features:
profound interdependence,
increasing complexity,
and an ever-accelerating
rate of change.
In such a world, seeing every situation as zero-
sum is a failed strategy. Businesses and business
leaders who pursue self-interest to the exclusion
of all else may fool markets in the short term,
but in the long run they will have built nothing
because their efforts will be unsustainable.
Mining is a case study: it requires decades-long
collaboration among businesses, governments,
non-profits, and local communities to succeed.
Without genuine concern for one another’s
interests and points of view, the activity is
unsustainable. That is why trust and partnership
are at the core of our business. By partnering
with host governments, communities, indigenous
peoples, NGOs, regulators, and other distinctive
companies who share our values, we can create
sustainable prosperity for all. We work tirelessly
to build and maintain trust with our partners, and
the currency of that trust is transparency: we tell
you what we are going to do, and then we tell
you whether or not we did it.
Last year, by and large we did what we told
you we would: we generated free cash flow,
reduced debt, maintained strict capital discipline,
remained obsessed with talent, advanced our
digital transformation, and created distinctive
new partnerships.
4
Barrick Gold Corporation | Annual Report 2017
John L. Thornton
Executive Chairman
Of course, like you, we are not satisfied. In
the end execution is everything. There are three
fundamental elements of execution for our
business that are non-negotiable at all times and
under all circumstances: reliability, operational
excellence, and disciplined investment.
As a gold company we must be, first and
foremost, reliable and safe. We must have world-
class people executing on the ground so that, at a
bare minimum, there are no bad mistakes. It must
be like breathing.
Second, operational excellence. The difference
between being very good and excellent is small—
but it is also the whole thing. Each leader must
know what true excellence is and must pursue
it relentlessly, every single day. Leading us in this
area will be Greg Walker, whom we have elevated
to the role of Senior Vice President, Operational
and Technical Excellence. Since joining Barrick in
2003, Greg has led some of our most complex
operations, including Porgera and Pueblo Viejo.
He has a track record of delivering tangible results
when it comes to business improvement, and his
appointment reflects our increased emphasis on
operational excellence.
He will take over responsibility for Barrick’s
operations from Richard Williams, who has
ably led the reinvigoration of our decentralized
operating model, among other achievements. We
have asked Richard to take on a new role focused
exclusively on resolving outstanding issues in
Tanzania. This is a matter of strategic importance
to us, requiring Richard’s attention full time.
Third, disciplined investment. In 1989, Warren
Buffett looked back on his first twenty-five years
of investing in many different businesses, and he
asked himself what he had found most surprising.
He described what he called the “institutional
imperative”—by which he meant two things.
One: “The behavior of peer companies, whether
they are expanding, acquiring, setting executive
compensation or whatever, will be mindlessly
imitated.” And two: “Just as work expands to fill
available time, corporate projects or acquisitions
will materialize to soak up available funds.” In
mining, we know empirically from history, when
times are good, companies overpay for mediocre
assets or invest in projects with low returns.
At Barrick, this will not happen. We are
putting in place the discipline to make certain of
it. We have set clear capital allocation criteria and
overhauled our entire capital allocation process.
Most important, we have appointed Mark Hill as
our Chief Investment Officer. Mark is unique in
the industry: after growing up at Barrick, he left
to become a private equity investor investing in
mining. He knows mining, and he knows true
investing. The decision to create a CIO and to
appoint Mark is significant. It tells you that we are
going to allocate capital the way a true CIO does.
Mark is going down to an unprecedented level of
granularity in examining both our growth capital
and our sustaining capital. He is applying extreme
rigor to all requests for capital—often to the loud
disappointment of our General Managers who are
asking for it. And he is also, in effect, educating
those General Managers on how to conceive of
projects that are economically interesting.
We apply that same level of discipline to
acquisitions. Anything we buy must add material
value for our shareholders. As we have said many
times now, our goal is to grow free cash flow
per share, not ounces for their own sake. We
examined a number of external opportunities over
the last year, and we passed on all of them. We
simply will not yield to the pressure to “just find
something” in order to “grow.”
In addition to those three core elements of
execution, there are two more priorities that are
of particular importance in this century: one is the
requirement to have a distinctive relationship with
China, and the other is the need to be state-of-
the-art technologically.
Nothing will be more important to this
century’s economics and geopolitics than China,
where success depends on deep engagement
with governments and other partners. In a capital-
intensive industry, having a preferred relationship
with China and its best companies brings new
sources of investment, technical expertise, and
geopolitical standing that has unique value in
mitigating sovereign and financial risks in our
business. On the heels of the partnership we
created with Zijin Mining Group in 2015, the
strategic partnership we created this past year
with Shandong Gold Group moves us even
further down that path, and we will deepen this
distinctive dimension to our business in the future.
Technology, in particular digital
transformation, holds enormous promise for our
industry: it can improve the safety of our workers,
lower costs, increase productivity and enhance
transparency with partners. Mining is well behind
Barrick Gold Corporation | Annual Report 2017
5
MESSAGE FROM THE EXECUTIVE CHAIRMAN
other industries in this area, and it will take
time to catch up. At our Cortez mine, our pilot
projects have already increased productivity and
reduced costs. As we scale up these successful
efforts, the economic benefits should continue
to improve. There will be fits and starts. As we
know, innovation is not a straight line—just as we
also know that those who venture nothing, gain
nothing. We believe in the benefits; that does
not, however, reduce the scrutiny under which
these investments are made. If we do not see the
results, we will not continue spending.
Over the past three years, we have made
progress on all five of these fronts. We have much
more to do. In every one of these areas there are
examples where we either failed to deliver to the
standard required or have yet to do so. Acacia and
Veladero are the glaring instances of the former;
the conundrum of growth is the best example of
the latter. It is tempting to look back and see 2016
as a year in which we seemed to be executing
on all of the above and 2017 as almost the
reverse. The truth is we were neither that good
nor that bad. We made good progress in both
years, but we are nowhere near where we want
to be and where we know we can and will be.
If we were an athlete, we would say we were in
better shape but not yet headed to the Olympics,
much less winning any medals. On behalf of you,
our fellow owners, we are working tirelessly to
build a distinctive, leading twenty-first century
company. We know we will get there.
John L. Thornton
Executive Chairman
There are three fundamental elements of execution for
our business that are non-negotiable at all times and
under all circumstances: reliability, operational excellence,
and disciplined investment.
6
Barrick Gold Corporation | Annual Report 2017
MESSAGE FROM THE PRESIDENT
Kelvin Dushnisky
President
In 2017, we continued to
strengthen our balance
sheet while advancing key
organic projects.
We partnered with peer companies, most
notably Shandong Gold Group, and invested in a
number of exploration companies with promising
projects. We advanced our digital transformation,
introducing applications that are helping to
improve the speed, safety, and efficiency with
which we mine. We also refined our approach
to sustainability in ways that we believe will help
strengthen our social license to operate.
While we made progress on our strategic
priorities last year, we also faced challenges, most
notably at our Veladero mine in Argentina and at
Acacia Mining plc in Tanzania.
In March, a pipe carrying process solution
on the heap leach pad at Veladero ruptured.
Although the solution was contained within the
operating site, this was the third environmental
incident at the mine in eighteen months. The
Government of San Juan province temporarily
restricted the addition of new cyanide to the
leach pad until corrective actions were completed.
These works—including the construction of
an additional containment barrier in the heap
leach area and the relocation and upgrading of
piping systems—were completed and the mining
authority lifted the suspension in June following
inspection of all corrective actions.
Still, the incident damaged our credibility
in Argentina. We fully understand that to
fulfill our vision of generating wealth through
responsible mining for our stakeholders, we
must do everything possible to reduce the risk
of such an incident happening again. Together
with Shandong, our new joint venture partner
at Veladero, we are committed to improving
our operational performance and regaining the
trust and confidence of our host community and
government partners. We are already seeing
progress in this important context.
In Tanzania, the national government banned
concentrate exports, including those by Acacia,
and levied a multi-billion-dollar tax claim against
Acacia, a publicly traded company operated
independently of Barrick but in which Barrick
holds a 63.9 percent interest. Barrick subsequently
entered into discussions with the Government
of Tanzania to develop a proposal for a mutually
beneficial resolution. In October, Barrick announced
an agreement on a proposed framework for a
new partnership between Acacia and the Tanzanian
government, whereby economic benefits generated
by Acacia’s Bulyanhulu, Buzwagi and North Mara
mines would be shared with Tanzania on a 50-
50 basis. Barrick is engaging with the Tanzanian
government on the proposed framework, which
will be subject to review and approval by Acacia.
Barrick Gold Corporation | Annual Report 2017
7
Focus on
Free Cash Flow
(cid:81)(cid:3) Earnings Per Share of $1.23
and Adjusted EPS1 of $0.75
(cid:81)(cid:3) Operating Cash Flow
of $2,065M and
Free Cash Flow1 of $669M
Despite these challenges, we remained
focused on executing against five key priorities
last year:
(cid:81) Focus on Free Cash Flow
(cid:81) Disciplined Investment
(cid:81) Strengthen the Balance Sheet
(cid:81) Operational Excellence
(cid:81) Talent Development
We produced 5.32 million ounces of gold
at cost of sales applicable to gold of $794 per
ounce and all-in sustaining costs1 of $750 per
ounce in 2017. We also generated $2.07 billion
in operating cash flow and $669 million of free
cash flow1.
Strong operating cash flow allowed us to
increase reinvestment back into the business.
We did so in a disciplined way, focusing on our
pipeline of low-risk, high-quality organic projects.
These projects are located at or near our core
operations in the Americas, areas where we have
extensive expertise, experience, relationships, and
infrastructure. The projects include: the Turquoise
Ridge underground expansion in Nevada;
the Cortez Deep South project in Nevada;
the Goldrush project in Nevada; and the Lagunas
Norte mine life extension in Peru. These projects
are advancing on schedule and on budget and
they have the potential to contribute more than
one million low-cost ounces of production with
initial contributions beginning in 2021.
At Turquoise Ridge, permits for the
construction of a third shaft are in hand.
Surface works and shaft sinking are expected
to take place in 2018 and 2019, followed by
equipping of the shaft in 2020 and 2021, with
initial production from the new shaft expected
to begin in 2022, and sustained production
expected to begin in 2023.
Permitting for the Cortez Deep South project
was initiated in 2016 with the submission of
an amendment to the current Mine Plan of
Operations to the Bureau of Land Management,
and is expected to take approximately three
to four years, including the preparation of an
Environmental Impact Statement. A record of
decision is expected in the second half of 2019,
followed by two years of construction, with initial
production from Deep South in 2022.
8
Barrick Gold Corporation | Annual Report 2017
MESSAGE FROM THE PRESIDENT
Disciplined
Investment
(cid:81)(cid:3)
(cid:81)(cid:3)
(cid:3)Four organic low-risk brownfield
projects continued to advance
(cid:3)Added 7.9 million ounces of
gold reserves through successful
exploration
Goldrush is one of the largest and most
exciting new discoveries in the past decade.
Located just a few kilometers from Cortez,
decline construction, detailed engineering, and
permitting (Environmental Impact Statement)
are expected to take place between 2018 and
2020, with construction and initial production
expected between 2021 and 2022, and sustained
production expected from 2023. The first phase
of the project involves the construction of an
exploration twin decline to provide access to
the orebody at depth, which will enable further
exploration drilling, as well as the conversion of
existing resources to reserves. The exploration
declines are permitted and can be converted into
production declines in the future.
At Lagunas Norte, we are advancing a phased
approach to extending the life of the mine. The
first component of the project would involve the
construction of a grinding and carbon-in-leach
processing circuit that would treat remaining
carbonaceous oxide material at Lagunas Norte.
Environmental permits for these facilities are
already in hand while construction permits
are pending. We expect to complete detailed
engineering in 2018 and 2019. If approved,
construction and commissioning are anticipated
to take place in 2019 and 2020, with initial
production expected in 2021.
In addition to these projects, we continue
to evaluate a block cave underground operation
at Pascua-Lama. The project would utilize the
existing process plant and tailings facility on the
Argentinean side of the border, construction
of which is already well advanced. A switch to
underground mining would address a number of
Barrick Gold Corporation | Annual Report 2017
9
MESSAGE FROM THE PRESIDENT
community concerns by significantly reducing the
overall environmental footprint of the project, as
compared to an open pit operation. That said, we
would only proceed if we have a high degree of
confidence that the project meets our investment
criteria, which it presently does not.
Our portfolio also includes 50 percent of
the Donlin Gold project in Alaska—one of the
largest undeveloped gold deposits in the world.
Drilling results for 2017 were encouraging with
high-grade mineralization in multiple areas.
Permitting activities continue to advance on
schedule with a Record of Decision from the
U.S. Army Corps of Engineers expected in the
second half of 2018. We will continue to work
with NOVAGOLD, our joint venture partner,
on strategies to further optimize the project.
In recent years, we have entered into several
joint ventures with our peers, including our
strategic partnership with Shandong. While the
market understandably focused on the sale of a
50 percent interest in Veladero to Shandong, that
was just one of three elements of the Strategic
Cooperation Agreement. Under the Agreement,
Barrick and Shandong also formed a working
group to study a potential partnership for the
development of Pascua-Lama, and we will work
together to evaluate additional investment
opportunities on the highly prospective El Indio
Belt on the Argentinean-Chilean border.
Shandong has great mining and technical
expertise, as well as access to capital and a very
progressive approach to operations. Both of our
companies had high expectations from the outset
and I’m pleased to report that our relationship is
developing even better than we had anticipated.
We have also created a joint venture with
Goldcorp at the Norte Abierto project in Chile
(consisting of the Cerro Casale, Caspiche and
Luciano deposits). The agreement will bring a
fresh perspective to this project and potentially
expedite its development.
Partnering with our peers brings several
important advantages. It allows us to unlock
value that might otherwise go unrealized. It
drives fresh thinking and innovation that will help
advance projects in cost-effective ways. And it
allows us to strengthen our balance sheet while
retaining optionality in important projects such as
Norte Abierto.
10
Barrick Gold Corporation | Annual Report 2017
Strengthen
the Balance Sheet
(cid:81)(cid:3) Repaid $1.5B of debt in 2017
(cid:81)(cid:3) Liquidity improved – less than $100M2 of debt
due before 2020
(cid:81)(cid:3) Reduce total debt to around $5B by end of 2018
We have also recently partnered with a
number of exploration companies with promising
greenfield opportunities in the Americas. These
include Osisko Mining on the Kan project in
Quebec, Reunion Gold, which has three projects
in French Guiana and another in Guyana,
Premier Gold on the McCoy-Cove project in
Nevada, and ATAC Resources on the Orion
project in the Yukon.
ATAC, to highlight one of these opportunities,
holds a 100 percent interest in the only known
Carlin-type gold district in Canada. Barrick has
had great experience in Nevada with Carlin-
type deposits, including at Goldstrike, Cortez,
Turquoise Ridge, and more recently at Goldrush.
Our expertise in these systems coupled with
ATAC’s expertise and experience in the Yukon
made this opportunity very attractive. We’re
excited about the potential for this project, and
for all our exploration partnerships.
We continued to make solid progress on
strengthening our balance sheet, lowering our
total debt by $1.51 billion in 2017. That exceeded
our target of $1.45 billion and brought our total
debt down to $6.4 billion. Since the end of 2014,
we’ve reduced total debt by $6.7 billion, or
51 percent. Our goal remains to reduce our total
debt to about $5 billion by the end of 2018.
Our liquidity position has improved markedly,
with less than $100 million2 of debt due before
2020 and the majority due after 2032. We ended
the year with $2.2 billion in cash3 and a fully
undrawn $4 billion credit facility.
At the end of 2017, we had proven and
probable gold reserves of 64.4 million ounces6 at
a strong average grade of 1.55 grams per tonne.
That compares to 86.0 million and 1.33 grams per
tonne, respectively, at the end of 2016. The decline
in ounces primarily reflects the reclassification
of Pascua-Lama reserves to resources. Largely
through increased investment in mine exploration
drilling, we added 7.9 million ounces of gold
reserves last year, more than replacing the
6.2 million ounces depleted through production.
While we have outstanding core assets and
reserves, our most valuable asset is our people.
Like you, our employees are our owners, from
the head office to the rock face. This year, we
issued our third grant of common shares since
the launch of our Global Employee Share Plan in
Barrick Gold Corporation | Annual Report 2017
11
MESSAGE FROM THE PRESIDENT
Operational
Excellence
(cid:81)(cid:3) 5.32 million ounces of gold
produced at a Cost of Sales of $794/oz
and AISC1 of $750/oz
(cid:81)(cid:3) Pilot phase of digital transformation
in Nevada
late 2016. All told, our employees now own more
than 1.5 million shares of the Company as a result
of our Employee Share Plan.
Working together as partners with a vested
interest in our success, our people are constantly
striving to achieve sustained excellence. It is,
by definition, an elusive goal, because we are
never satisfied. We are constantly evolving and
challenging our assumptions.
One way we are working to raise the bar
is through our digital transformation. Using a
combination of existing technologies such as
autonomous underground equipment, together
with custom-tailored solutions developed at
our Code Mine hub in Elko, Nevada, we are
infusing digital technology across our Barrick
Nevada operation. Our goal for these digital
applications—improved short interval control,
better predictive maintenance planning and
execution programs, as well as the creation of
an advanced data analytics center, to name a
few—is to enable our people to unlock their full
potential through real-time, data-driven decisions.
We are pleased with the progress so far and look
forward to deploying digital solutions across
the business.
Our efforts to continuously improve extend
to every area of the business. Last year, we
introduced a new sustainability vision that calls
on us to partner with our host communities
to transform their natural resources into long-
term mutual prosperity. The vision deliberately
challenges preconceived ideas about mining,
namely, that we only extract value. We
feel differently and believe that by working
collaboratively and transparently with our
partners, we can add value and create prosperity.
In so doing, we put ourselves in a much better
position to earn the trust and good will of our
partners and strengthen our license to operate.
We achieved the lowest safety incident record
in our history last year with a total reportable
injury frequency rate5 of 0.35. However, that
was slightly above our target of 0.32 and marred
by the tragic deaths of Eulogio Gutierrez and
Williams Garrido. Eulogio died after being
struck by a piece of mobile equipment in the
underground mine at Hemlo, and Williams was
fatally injured while making improvements at
12
Barrick Gold Corporation | Annual Report 2017
Talent
Development
(cid:81)(cid:3) Global Hackathon brings
together innovators
(cid:81)(cid:3) Barrick Leadership Academy
development program
(cid:81)(cid:3) Cisco Networking Academy
in Nevada and Argentina
Pascua-Lama. Our goal is to send all of our
people home safe and healthy every day. We did
not meet this target last year. We must do better.
It is not only imperative that we protect our
people, we must also hone and develop their
talent, and ensure Barrick is the destination
of choice for top talent across all functions—
from conventional disciplines like geology and
engineering to emerging areas for a twenty-
first century mining company, such as machine
learning and artificial intelligence. The Barrick
Learning Academy, which delivers a streamlined
learning experience to emerging leaders via
on-site and online learning, has been a successful
recruitment and retention tool in this regard.
We have also partnered with Cisco’s
Networking Academy to advance the digital
knowledge of our people, as well as various
groups in our host communities, including
indigenous peoples. The Networking Academy
offers free digital courses and is now available
to employees and community members near our
mines in Nevada, Peru, and Argentina. We are
working to expand the program to every country
where we operate.
In closing, on behalf of our Executive
Committee I would like to thank our people
around the world for their hard work, dedication
and commitment. I would also like to thank our
Executive Chairman, John Thornton, and our
Board for their continued counsel and support.
And, finally, I would like to thank you, our
investors, for your ownership, confidence, and
invaluable feedback.
Kelvin Dushnisky
President
Barrick Gold Corporation | Annual Report 2017
13
BOARD OF DIRECTORS
Board of Directors
Gustavo A. Cisneros
Independent
Santo Domingo, Dominican Republic
Chairman, the 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
Mesquite, Nevada
Corporate Director
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 F. Moyo
Independent
New York, New York
International Economist
and Author
Anthony Munk
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
G.G. Clow
E.L. Thrasher
G.A. Doer
J.M. Evans
B.L. Greenspun
D.F. Moyo
K.P.M. Dushnisky
14
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, P. Marcet, D.F. 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.F. 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, P. Marcet,
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.F. 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.
S.J. Shapiro
P. Marcet
N.H.O. Lockhart
J.B. Harvey
G.A. Cisneros
A. Munk
J.L. Thornton
J.R.S. Prichard
1515
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 P. 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
Mark F. Hill
Chief Investment Officer
Kathy J. Sipos
Chief of Staff
Greg A.P. Walker
Senior Vice President,
Operational and
Technical Excellence
International Advisory Board
The International Advisory Board was established to provide advice to Barrick’s Board of Directors and management on
geopolitical 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, the 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 2017
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. As of March 23, 2018 our partners are:
Miguel Amable
Michelle Ash
Sam Ash
Nigel Bain
Juana Barcelo
Dave Baumgartel
Michael Brown
Curtis Cadwell
Nathan Chishimba
Sham Chotai
Andy Cole
James Connolly
Kevin Creel
Jaimie Donovan
Jonathan Drimmer
Ettienne Du Plessis
Kelvin Dushnisky
Mike Estes
Dave Forestell
Jac Fourie
Sergio Fuentes
Manuel Fumagalli
John Giakoumakis
Fernando Giannoni
Matt Gili
Henri Gonin
Brian Grebenc
Raul Guerra
Rich Haddock
Andrew Hastings
Mark Hill
George Joannou
Rob Krcmarov
Aaron Lamb
Woo Lee
Andy Lloyd
Bill MacNevin
Faby Manzano
Basie Maree
Melanie Miller
Cristiana Moraes
Marian Moroney
Giovanna Moscoso
Deni Nicoski
Zoe Nutten
Catherine Raw
Darian Rich
Francois Robert
Julie Robertson
Manuel Rocha
Rick Sims
Peter Sinclair
Kathy Sipos
Ettiene Smuts
Andy Thompson
Kevin Thomson
Greg Walker
Mark Wall
James Whittaker
Richard Williams
Financial Report
Management’s Discussion and Analysis 18
Mineral Reserves and Resources 90
Financial Statements 102
Notes to Financial Statements 107
Shareholder Information 176
Barrick Gold Corporation | Financial Report 2016 17
MANAGEMENT’S DISCUSSION AND ANALYSIS
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 14, 2018, should be read
in conjunction with our audited consolidated financial
statements (“Financial Statements”) for the year ended
December 31, 2017. 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;
(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 89.
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”, “target”, “plan”,
“objective”, “assume”, “intend”, “intention”, “project”,
“goal”, “continue”, “budget”, “estimate”, “potential”,
“may”, “will”, “can”, “could”, “would” 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, cash costs per ounce and
C1 cash costs per pound, and all-in-sustaining costs
per ounce/pound; (iii) cash flow forecasts; (iv) projected
capital, operating and exploration expenditures;
(v) Barrick’s expectations regarding the potential
benefits resulting from a new partnership between
Acacia Mining plc (“Acacia”) and the Government of
Tanzania; (vi) targeted debt and cost reductions; (vii) mine
life and production rates; (viii) potential mineralization
and metal or mineral recoveries; (ix) savings from our
improved capital management program; (x) Barrick’s
Best-in-Class program (including potential improvements
to financial and operating performance that may result
from certain Best-in-Class initiatives); (xi) the timing and
results of the prefeasibility study at Pascua-Lama; (xii) our
pipeline of high confidence projects at or near existing
operations; (xiii) the benefits of unifying the Cortez and
Goldstrike operations; (xiv) the potential impact and
benefits of Barrick’s ongoing digital transformation; (xv)
our ability to convert resources into reserves; (xvi) asset
sales, joint ventures and partnerships; and (xvii)
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 including
material estimates and assumptions related to the factors
set forth below that, while considered reasonable by
18
Barrick Gold Corporation | Financial Report 2017
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; the
duration of the Tanzanian ban on mineral concentrate
exports; the ultimate terms of any definitive agreement
between Acacia and the Government of Tanzania
to resolve a dispute relating to the imposition of
the concentrate export ban and allegations by the
Government of Tanzania that Acacia under-declared
the metal content of concentrate exports from Tanzania;
the status of certain tax reassessments by the Tanzanian
government; the manner in which amendments to
the 2010 Mining Act (Tanzania) increasing the royalty
rate applicable to metallic minerals such as gold, copper
and silver to 6% (from 4%), the new Finance Act
(Tanzania) imposing a 1% clearing fee on the value of
all minerals exported from Tanzania from July 1, 2017
and the new Mining Regulations announced by the
Government of Tanzania in January 2018 will be
implemented and the impact of these and other
legislative changes on Acacia; whether Acacia will
approve the terms of any final agreement reached
between Barrick and the Government of Tanzania
with respect to the dispute between Acacia and the
Government of Tanzania; the benefits expected
from recent transactions being realized; 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
MANAGEMENT’S DISCUSSION AND ANALYSIS
failure to comply with, necessary permits and approvals;
uncertainty whether some or all of the Best-in-Class
initiatives, targeted investments and projects will meet
the Company’s capital allocation objectives and internal
hurdle rate; 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 or its affiliates do 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; the outcome
of the appeal of the decision of Chile’s Superintendencia
del Medio Ambiente; damage to the Company’s
reputation due to the actual or perceived occurrence of
any number of events, including negative publicity with
respect to the Company’s handling of environmental
matters or dealings with community groups, whether
true or not; the possibility that future exploration results
will not be consistent with the Company’s expectations;
risks that exploration data may be incomplete and
considerable additional work may be required to
complete further evaluation, including but not limited
to drilling, engineering and socioeconomic studies and
investment; risk of loss due to acts of war, terrorism,
sabotage and civil disturbances; litigation; contests
over title to properties, particularly title to undeveloped
properties, or over access to water, power and other
required infrastructure; business opportunities that may
be presented to, or pursued by, the Company; risks
associated with the fact that certain of the initiatives
described in this MD&A are still in the early stages and
may not materialize; 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
Barrick Gold Corporation | Financial Report 2017
19
MANAGEMENT’S DISCUSSION AND ANALYSIS
risks and hazards associated with the business of mineral
exploration, development and mining, including
environmental hazards, industrial accidents, unusual
or unexpected formations, pressures, cave-ins, flooding
and gold bullion, copper cathode or gold or copper
concentrate losses (and the risk of inadequate insurance,
or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can
affect our actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, us.
Readers are cautioned that forward-looking statements
are not guarantees of future performance. All of the
forward-looking statements made in this MD&A are
qualified by these cautionary statements. Specific
reference is made to the most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian
provincial securities regulatory authorities for a more
detailed discussion of some of the factors underlying
forward-looking statements and the risks that may affect
Barrick’s ability to achieve the expectations set forth in
the forward-looking statements contained in this MD&A.
We disclaim any intention or obligation to update or
revise any forward-looking statements whether as a
result of new information, future events or otherwise,
except as required by applicable law.
Changes in Presentation of Non-GAAP Financial
Performance Measures
Adjusted EBITDA
Starting in the second quarter 2017 MD&A, we began
including additional adjusting items in the Adjusted
EBITDA reconciliation to provide a greater level of
consistency with the adjusting items included in our
Adjusted Net Earnings reconciliation. These new items
include: acquisition/disposition gains/losses; foreign
currency translation gains/losses; other expense
adjustments; and unrealized gains on non-hedge
derivative instruments. These amounts are adjusted
to remove any impact on finance costs/income,
income tax expense and/or depreciation as they do
not affect EBITDA. The prior periods have been restated
to reflect the change in presentation. We believe this
additional information will assist analysts, investors and
other stakeholders of Barrick in better understanding
our ability to generate liquidity from operating cash flow,
by excluding these amounts from the calculation as
they are not indicative of the performance of our core
mining business and not necessarily reflective of the
underlying operating results for the periods presented.
Use of Non-Gaap Financial Performance Measures
We use the following non-GAAP financial performance
measures in our MD&A:
(cid:132) “adjusted net earnings”
(cid:132) “free cash flow”
(cid:132) “EBITDA”
(cid:132) “adjusted EBITDA”
(cid:132) “cash costs per ounce”
(cid:132) “C1 cash costs per pound”
(cid:132) “all-in sustaining costs per ounce/pound”
(cid:132) “all-in costs per ounce” and
(cid:132) “realized price”
For a detailed description of each of the non-GAAP
measures used in this MD&A and a detailed reconciliation
to the most directly comparable measure under
International Financial Reporting Standards (“IFRS”),
please refer to the Non-GAAP Financial Performance
Measures section of this MD&A on pages 73 to 87. Each
non-GAAP financial performance measure has been
annotated with a reference to an endnote on page 88.
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 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.
20
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
Index
22 Overview
49 Operating Segments Performance
22 Our Vision
22 Our Business
22 Our Strategy
23
31 Outlook for 2018
35 Risks and Risk Management
38 Market Overview
Full Year Financial and Operating Highlights
Lagunas Norte
50 Barrick Nevada
53 Pueblo Viejo
55
57 Veladero
62 Turquoise Ridge
64 Acacia Mining plc
68 Pascua-Lama
41 Review of Annual Financial Results
69 Commitments and Contingencies
41 Revenue
41 Production Costs
42 Capital Expenditures
43 General and Administrative Expenses
43 Exploration, Evaluation and Project Costs
43
43 Additional Significant Statement of Income Items
44
Income Tax Expense
Finance Costs, Net
46 Financial Condition Review
47 Balance Sheet Review
47 Shareholders’ Equity
Financial Position and Liquidity
47
48 Summary of Cash Inflow (Outflow)
49 Summary of Financial Instruments
70 Review of Quarterly Results
71 Internal Control over Financial Reporting and
Disclosure Controls and Procedures
72 IFRS Critical Accounting Policies and
Accounting Estimates
73 Non-GAAP Financial Performance Measures
88 Technical Information
88 Endnotes
89 Glossary of Technical Terms
Barrick Gold Corporation | Financial Report 2017
21
MANAGEMENT’S DISCUSSION AND ANALYSIS
Overview
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.
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.
Our Business
Barrick is one of the world’s leading gold mining
companies with annual gold production and gold
reserves that are among 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 hold interests
in nine producing gold mines, which are located in
Argentina, Australia, Canada, the Dominican Republic,
Papua New Guinea, Peru and the United States. 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
2017 REVENUE ($ millions)
Gold $7,631
Copper $608
Other $135
22
Barrick Gold Corporation | Financial Report 2017
2017 GOLD PRODUCTION (thousands of ounces)
Americas 4,229
Tanzania 491
Australia 368
Papua New Guinea 235
companies. Barrick’s shares trade on the New York Stock
Exchange (“NYSE”) and the Toronto Stock Exchange
under the symbol ABX.
Our Strategy
Our strategy remains consistent. We are focused on
growing free cash flow per share over the long term by:
maintaining and growing industry-leading margins,
driven by operational excellence, investments in digital
technology and innovation; managing our portfolio and
allocating capital with discipline and rigor; and leveraging
our talent and distinctive partnership culture as a
competitive advantage.
Operational Excellence and Innovation
We seek to maximize revenue and expand margins by
continuously optimizing existing operations, pushing
technical limits to achieve best-in-class performance,
improving the returns of existing assets and strengthening
the feasibility and economics of undeveloped assets.
We will make targeted investments in innovation and
accelerate our digital transformation in an effort to drive
step changes in current performance and redefine what
is possible over the long term. We will continue to refine
our decentralized operating model, in which our head
office is focused on doing a small number of tasks
exceptionally well: setting strategy, allocating capital and
managing talent. Our leaders in the field will operate as
business owners, focused on optimizing free cash flow,
alongside managing risk and creating long-term value.
MANAGEMENT’S DISCUSSION AND ANALYSIS
Exploration and Project Development
Growing free cash flow per share means continually
replenishing and improving the quality of our reserves
and resources. The quality of our asset base means we
have significant opportunities to replace and grow
reserves through low-risk brownfield and minex drilling,
balanced with greenfield exploration, and emerging
discoveries that have the potential to become profitable
mines. In addition to organic projects, we are continuously
evaluating external opportunities. We take a highly
disciplined approach to all investments, including
acquisitions, and will only pursue those that have the
potential to generate clear value for our shareholders,
while aligning with our strategic focus.
Full Year Financial and Operating Highlights
Partnerships
We believe a core part of our business is that of
partnering with host governments and communities
to transform their natural resources into sustainable
benefits and mutual prosperity. These partnerships
must be built on a foundation of transparency and
mutual respect that moves beyond an emphasis
on maximizing short-term financial returns and
transactional relationships. By doing so, our intent
is to strengthen our social license to operate, reduce
operational disruptions and develop stronger and
more durable partnerships with our host governments
and communities.
OPERATING CASH FLOW AND FREE CASH FLOW1
GOLD PRODUCTION (000s ounces)
$1,160
2,794
1,081
$1,251
$1,257
2,640
1,514
2,065
720
to
770
546
669
6,117
5,517
5,323
4,500
to
5,000
2015
2016
2017
2015
2016
2017
2018 (est)
Operating Cash Flow ($ millions)
Divested Sites
Free Cash Flow ($ millions)
Gold Market Price ($/oz)
COST OF SALES, CASH COSTS1 AND
ALL-IN SUSTAINING COSTS1 ($ per ounce)
859
831
596
798
794
730
546
750
526
810
to
850
765
to
815
540
to
575
DEBT ($ millions)
9,968
7,931
2,037
6,423
1,508
˜ 5000
2015
2016
2017
2018 (est)
December
2015
2016
Repayments
December
2016
2017
Repayments
December
2017
December
2018 (target)
Cost of sales
Cash costs
AISC
Barrick Gold Corporation | Financial Report 2017
23
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the years ended
December 31
For the three months
ended December 31
($ millions, except per share amounts in dollars)
2017
2016
2015
2017
2016
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
$ 1,438
1.23
876
0.75
2,065
$ 669
$ 655
0.56
818
0.70
2,640
$ 1,514
$ (2,838)
(2.44)
344
0.30
2,794
$ 1,081
$ (314)
(0.27)
253
0.22
590
$ 240
$ 425
0.36
255
0.22
711
$ 385
1. Calculated using weighted average number of shares outstanding under the basic method of earnings per share of 1,166 million shares in 2017 (2016: 1,165 million
shares; 2015: 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 73 to 87 of this MD&A.
In 2017, we generated net cash flow provided by
operating activities (“operating cash flow”) of $2.1 billion
and free cash flow1 of $669 million for the year. We
reduced our cost of sales applicable to gold by $4 per
ounce to $794 per ounce, while our all-in sustaining
costs1 (“AISC”) increased by 3% to $750 per ounce,
reflecting higher capital expenditures as we increased
investments in the future of our business. At the same
time, we continued to strengthen our balance sheet
by exceeding our debt reduction target.
In 2017, we divested 50% and 25% interests in our
Veladero mine and Cerro Casale project, respectively. The
successful formation of these new partnerships helped
us strengthen our balance sheet, de-risk our portfolio
and provide a renewed impetus to how we approach
these assets. These two transactions resulted in proceeds
of $990 million and combined impairment reversals
and gains on disposition of $2,031 million. In addition,
we recognized $259 million of impairment reversals at
Lumwana due to an increase in reserves. This was offset
by an impairment of $740 million (pre-tax, 100%) taken
at Acacia’s Bulyanhulu mine related to the continued
challenges experienced in the operating environment in
Tanzania; and an impairment of $429 million at Pascua-
Lama, mainly attributable to the reclassification of
open-pit reserves to resources after receiving a closure
order from the Chilean regulators.
Balance Sheet and Liquidity
In 2017, we reduced our total debt by $1.51 billion,
or 19%, from $7.93 billion to $6.42 billion, exceeding
our original target of $1.45 billion. Since the beginning
of 2015, we have reduced our debt by a total of
$6.66 billion, which will reduce pre-tax interest payments
by approximately $300 million on an annualized
basis. Approximately $5 billion of our $6.4 billion in
outstanding debt matures after 2032. Since the
beginning of December 2015, 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 $2.2 billion3.
Our goal remains to reduce our total debt to around
$5 billion by the end of 2018. We plan to achieve this
primarily by using cash flow from operations and cash
on hand, and potentially through further portfolio
optimization. Barrick will continue to pursue debt
reduction with discipline, taking only those actions that
make sense for the business, on terms we consider
favorable to our shareholders.
Cost Performance
In 2017, we continued our focus on driving Best-in-Class
productivity and efficiency improvements across our
portfolio. Cost of sales per ounce4 in 2017 decreased by
$4 per ounce to $794 per ounce, reflecting a decrease in
direct mining costs combined with a positive sales mix,
partially offset by higher depreciation expense. Our all-in
sustaining costs1 for 2017 increased by 3% to $750 per
ounce, compared to the prior year primarily reflecting the
17% increase in minesite sustaining capital expenditures
attributed to the future investment in our business.
24
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
Net Earnings (Loss), Adjusted Net Earnings1, Operating Cash Flow and Free Cash Flow1
FACTORS AFFECTING NET EARNINGS AND ADJUSTED NET EARNINGS1 ($ millions)
Controllable
Costs
Uncontrollable
Costs
2016
Net
earnings
2016
Adjusting
items
2016
Adjusted
net
earnings1
2017
Adjusted
net
earnings1
2017
Adjusting
items
2017
Net
earnings
562
1,438
Gold and
copper
cash costs1
Gold and
copper
sales volume
Depreciation
163
818
43
655
(133)
(77)
Exploration
&
evaluation
(117)
Income
tax
(102)
Gold and
Copper
prices
Closed
mine
rehabilitation
Other2
237
876
136
71
1. These 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 73 to 87 of this MD&A.
2. Primarily consists of higher earnings from equity investees (~$56 million) and a reduction in finance costs (~$34 million).
Net earnings attributable to equity holders of Barrick
(“net earnings”) for 2017 was $1,438 million compared
with $655 million in the prior year. This significant
improvement in net earnings was primarily due to
$2,031 million ($1,425 million net of tax and non-
controlling interest) in impairment reversals and gains
on sale in 2017 related to our successful formation of
joint operations at the Veladero mine and Cerro Casale
project. This was partially offset by net impairment
charges of $908 million ($511 million net of tax and
non-controlling interest) mainly relating to impairment
charges at Acacia’s Bulyanhulu mine and the Pascua-
Lama project, coupled with an impairment reversal at
Lumwana. After adjusting for items that are not
indicative of future operating earnings, adjusted net
earnings1 of $876 million in 2017 were 7% higher than
the prior year primarily as a result of an increase in gold
and copper prices, as well as lower direct mining costs
driven by higher capitalized waste stripping costs at
Barrick Nevada and Veladero, a positive change in
our sales mix with lower relative sales volume from
our higher cost Acacia mines and lower inventory
write-downs than the prior year. This was offset by an
increase in exploration and evaluation costs primarily due
to an increased investment in the Pascua-Lama project,
global exploration and innovation initiatives combined
with lower sales volume. The increase in adjusted net
earnings1 was further offset by higher income tax
expense associated with our higher net earnings and
higher depreciation expense as a result of a depreciation
adjustment at Pueblo Viejo, partially offset by lower
depreciation at Barrick Nevada associated with the
South Arturo pit.
Significant adjusting items to net earnings (pre-tax
and non-controlling interest effects) in 2017 include:
(cid:132) $718 million ($714 million net of tax) gain relating
to the sale of a 50% interest in the Veladero mine
(for further details, refer to note 4 to the Financial
Statements);
(cid:132) $193 million ($192 million net of tax) gain related
to the sale of a 25% interest in the Cerro Casale
project (for further details, refer to note 4 to the
Financial Statements);
Barrick Gold Corporation | Financial Report 2017
25
MANAGEMENT’S DISCUSSION AND ANALYSIS
FACTORS AFFECTING OPERATING CASH FLOW AND FREE CASH FLOW1 ($ millions)
Controllable
Costs
Uncontrollable
Costs
2016
Operating
cash flow
2,640
2016
Capex
2016
Free Cash
Flow1
1,514
1,126
Change
in
working
capital
Change
in
capex
Cash taxes
paid
Gold &
copper
sales
volume
E & E
and
project
costs
Gold &
copper
cash costs1
Other2
Gold &
copper
price
2017
Free Cash
Flow1
2017
Capex
2017
Operating
cash flow
2,065
(300)
(270)
(162)
(133)
(95)
43
237
669
1,396
(165)
1. These 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 73 to 87 of this MD&A.
2. Other primarily includes the negative impact on free cash flow attributable to non-controlling interests (~$100 million) combined with an increase
in legal costs (~$20 million) and in reclamation payments (~$10 million).
(cid:132) $212 million ($7 million net of tax and non-controlling
interest) net impairment charges, primarily on Acacia’s
Bulyanhulu mine of $740 million ($350 million net of
tax and non-controlling interest) and on the Pascua-
Lama project of $407 million ($407 million net of tax),
partially offset by impairment reversals as a result of
the indicative fair value of the Cerro Casale project
related to our divestment of 25% of $1,120 million
($518 million net of tax and non-controlling interest)
and on Lumwana of $259 million ($259 million net
of tax); partially offset by
(cid:132) $244 million significant tax adjustments primarily
relating to dividend withholding tax expense and
a tax provision relating to the impact of the proposed
framework for Acacia operations in Tanzania, partially
offset by the anticipated impact of the U.S tax reform;
(cid:132) $178 million other expense adjustments, mainly
relating to losses on debt extinguishment and
reduced operations program costs at Acacia’s
Bulyanhulu mine; and
(cid:132) $72 million foreign currency translation losses,
primarily related to the devaluation of the Argentinean
peso on VAT receivables.
Refer to page 74 for a full list of reconciling items
between net earnings and adjusted net earnings for the
current and prior year.
In 2017, we generated $2,065 million in operating
cash flow, compared to $2,640 million of operating cash
flow in the prior year. The decrease of $575 million was
due to lower gold sales as a result of the divestment of
50% of the Veladero mine on June 30, 2017, lower gold
sales volume at Pueblo Viejo, Hemlo, Turquoise Ridge,
Lagunas Norte and Acacia, partially offset by higher sales
at Barrick Nevada attributed to higher grades and
Best-in-Class initiatives positively impacting throughput.
This was further impacted by working capital outflows
reflecting the buildup of metals inventory at Pueblo
Viejo, Lagunas Norte and Acacia combined with an
increase in exploration, evaluation and project expenses.
Operating cash flow was also affected by lower cash
flows attributed to non-controlling interest, combined
with higher cash taxes paid. These outflows were
partially offset by higher gold and copper prices as well
as lower direct mining costs.
26
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
team-based culture. In addition, we continue to focus on
compliance with Barrick’s “Safety and Health
Management System”.
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 provides us with the
opportunity to stress the importance of safety, recall the
lessons learned from past fatal incidents, review our
current safety performance against targets and share
best practices across our business.
Although we are pleased with these trends, this
performance was overshadowed by two fatalities in
2017. As previously reported, in February of 2017 a
contract worker at Pascua-Lama was involved in a fatal
incident while performing scheduled maintenance work.
In November of 2017 a surveyor at Hemlo was fatally
struck underground by a piece of heavy machinery.
Barrick is fully committed to zero fatalities and is
implementing Critical Control Management across all
sites and exploration activities. Critical Control
Management is specifically focused on fatality prevention
and is based upon guidance published by the
International Council on Mining and Metals (“ICMM”) in
2015. Significant progress has been made in the
development of digital technologies that significantly
reduce risks of fatalities at our mines, including the
development of autonomous vehicles.
TOTAL REPORTABLE INJURY FREQUENCY
0.64
0.58
0.46
0.40
720
to
770
0.35
2013
2014
2015
2016
2017
Free cash flow1 for 2017 was $669 million, compared
to $1,514 million in the prior year, reflecting lower
operating cash flows combined with higher capital
expenditures. In 2017, capital expenditures on a cash
basis were $1,396 million compared to $1,126 million
in 2016 as we reinvested more into our business. The
increase of $270 million is due to a $109 million increase
in project capital expenditures, primarily at Barrick
Nevada relating to the development of Crossroads and
Cortez Hills Lower Zone, and Goldrush project drilling,
partially offset by a decrease in pre-production stripping
at the South Arturo pit, which entered commercial
production in August 2016. In addition, minesite
sustaining capital expenditures increased by $161 million
primarily reflecting an increase in sustaining capital at
Barrick Nevada relating to higher capitalized stripping
costs at Goldstrike and the timing of a greater number
of minesite sustaining projects in the current year,
combined with increased spending relating to phases
4B and 5B of the leach pad expansion and additional
equipment purchases at Veladero. These increases were
partially offset by a decrease in sustaining capital at
Acacia as a result of reduced operations at Bulyanhulu
combined with lower capitalized stripping at North Mara
relating to Nyabirama Stage 3 and 4.
The free cash flow1 generated in 2017 was combined
with the $990 million in proceeds from the sale of
a 50% interest in Veladero in the second quarter of 2017
and existing cash balances to repay $1.51 billion in
debt in the current year, which allowed us to exceed
our 2017 debt reduction target of $1.45 billion.
Safety
Nothing is more important to Barrick than the safety,
health and well-being of our workers and their families.
Our safety vision is “Every person going home safe and
healthy every day.” In 2017, we continued our trend of
improving our total reportable injury frequency rate5
(“TRIFR”) and since 2009, there has been a 71%
improvement in the TRIFR from 1.20 to 0.35.
The foundation underpinning Barrick’s safety
improvement continues to be our Courage to Care
program, designed to help Barrick make the next step
in safety performance through building a strong
Barrick Gold Corporation | Financial Report 2017
27
MANAGEMENT’S DISCUSSION AND ANALYSIS
Environment
Barrick is focused on rebuilding our reputation for
environmental excellence and being the preferred
partner of host governments and communities. In 2017,
our operations worked on adapting the ICMM Critical
Control Management guidance to our environmental
operations. In addition, each site developed an in-depth
improvement plan with a focus on water management.
The results of this are demonstrated in a 72% reduction
in reportable environmental incidents between
2015 and 2017.
Despite these achievements, in March 2017 the
monitoring system at the Veladero mine detected a
rupture of a pipe carrying gold-bearing process solution
on the leach pad. Although the solution was contained
within the operating site and no solution reached any
diversion channels or watercourses, it was the third
cyanide-related incident in the past three years at this
site. Barrick along with Shandong Gold, our new joint
venture partner at Veladero, made modifications to the
leach pad as agreed with San Juan provincial authorities
to reduce the risk of this happening again.
REPORTABLE ENVIRONMENTAL INCIDENTS
53
36
29
13
720
to
770
8
2013
2014
2015
2016
2017
Climate Change
Climate change, including shifts in temperature and
precipitation and more frequent severe weather events,
will affect the mining industry in a range of possible
ways. Volatile climatic conditions can affect the stability
and effectiveness of infrastructure and equipment;
potentially impact environmental protection and site
closure practices; lead to changes in the regulatory
environment, including increased carbon tax regimes;
and potentially impact the stability and cost of water and
energy supplies. We therefore view climate change as
a company, community, and global concern. In 2017, we
developed a climate change strategy aligned with our
overall business strategy to grow free cash flow per share
through safe and responsible mining.
Barrick’s climate change strategy has three pillars:
understand and mitigate the risks associated with climate
change; reduce our impacts on climate change; and
improve our disclosure on climate change. Action taken
on each pillar in 2017 is described below.
Understand and mitigate the risks associated with
climate change: In 2017, we performed a climate change
risk assessment, using our standard risk management
framework. We assessed risks and opportunities across
both potential transition (e.g., regulatory, policy,
reputational) and physical (e.g., extreme climate events)
aspects of climate change. We have identified the top
three climate-related risks and opportunities for our
business: an increase in extended duration extreme
precipitation events; an increase in climate change
regulations to limit greenhouse gas (“GHG”) emissions;
and increased global investment in innovation and low
carbon technologies. The assessment also included a
review of the current mitigation and controls associated
with each risk and identified areas which may need
further strengthening to reduce risk.
Reduce the Company’s impact on climate change:
Over the course of 2017, we analyzed our current and
forecasted GHG emissions to develop an ambitious but
realistic goal to reduce Barrick’s GHG emissions. Mining
is an energy-intensive business, and we understand the
important link between energy use and GHG emissions.
By effectively managing our energy use, we can reduce
our draw from local energy grids, reduce our GHG
emissions, achieve more efficient production, and save
direct mining costs. Barrick has set a goal to keep its
current GHG emissions flat in the short term and is
targeting a 30 percent reduction in GHG emissions by
2030, from a 2016 baseline of 3.5 MT CO2e emitted.
This target is also closely aligned with the national
targets set by many of our host governments.
28
Barrick Gold Corporation | Financial Report 2017
Improve our disclosure on climate change: In
2017, we committed to supporting the voluntary
recommendations of the industry-led Financial Stability
Board Task Force on Climate-related Financial Disclosures
(“TCFD”). The TCFD recommendations are considered
the new benchmark for disclosure of climate-related risks
and opportunities, and Barrick was the only Canadian
mining company to make this public commitment.
We will implement the full recommendations over the
next two years.
Governance over climate-related risks and
opportunities is provided at both the Board and
management level. The Board’s Corporate Responsibility
Committee meets at least quarterly and is responsible for
overseeing Barrick’s policies, programs, and performance
relating to the environment, including climate change.
The Risk Committee assists the Board in overseeing
the Company’s management of enterprise risks as well
as the implementation of policies and standards for
monitoring and mitigating such risks. Climate change is
built into our formal risk management process, outputs
of which are reviewed by the Risk Committee. The Audit
Committee reviews the Company’s approach to climate
change in the context of Barrick’s disclosures.
At the management level, our Climate Change
Committee, comprised of senior members of our
management team, provides strategic oversight and
governance over key decisions related to Barrick’s
Climate Change Strategy, such as overseeing climate
change risk and opportunity assessments, monitoring
progress against GHG emissions targets, and providing
guidance on external disclosures.
Further to the specific focus of the Climate Change
Committee, the weekly BPR allows for the discussion
of opportunities and risks that may help or hinder the
Company from achieving its objectives, including climate-
related risks (e.g., spring snow melts, hurricanes,
flooding, and mud slides).
MANAGEMENT’S DISCUSSION AND ANALYSIS
Climate change activities initiated in 2017 will
continue into 2018 and beyond. Site-level climate-
related risks and mitigation plans will be reviewed in the
context of the company-wide risk assessment, and
site-level plans to reduce energy and GHG emissions
will be strengthened. We will continue to enhance our
climate-related disclosure according to the TCFD
recommendations. Overall, based on the groundwork
completed in 2017, Barrick is building resilience to
withstand the potential impacts of climate change and
leverage potential opportunities as the global economy
transitions to a low-carbon future.
Reserves and Resources
Our 2017 reserves were calculated using a gold price
assumption of $1,200 per ounce. As of December 31,
2017, Barrick’s proven and probable gold reserves were
64.4 million ounces6, compared to 86.0 million ounces at
the end of 2016. This decline primarily reflects the
divestment of approximately 9.2 million ounces
associated with Veladero and Cerro Casale, and the
reclassification of approximately 14.0 million ounces
of Pascua-Lama proven and probable gold reserves as
measured and indicated resources.
Barrick added 8.0 million ounces of proven and
probable gold reserves at existing operations (as well
as the Goldrush project) through drilling, more than
replacing the 6.2 million ounces depleted through
processing last year. This success reflects increased
investment in mine exploration drilling in 2017. Significant
additions included 2.1 million ounces at Turquoise
Ridge, 1.4 million ounces at Cortez, 1.3 million ounces
at Goldstrike, 397,000 ounces at Hemlo, and
392,000 ounces at Lagunas Norte. We also declared
an initial reserve of 1.5 million ounces at the Goldrush
project. In addition, Barrick’s 63.9 percent share
of reserves at Acacia’s North Mara mine increased by
504,000 ounces. The average grade of Barrick’s reserves
also increased by 17 percent, from 1.33 grams per
tonne, to 1.55 grams per tonne.
Barrick Gold Corporation | Financial Report 2017
29
MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2017, measured, indicated, and inferred gold
resources were calculated using a gold price assumption
of $1,500 per ounce, consistent with 2016. Measured
and indicated gold resources increased to 88.6 million
ounces6 at the end of 2017, compared to 75.2 million
ounces at the end of 2016. Roughly 9.1 million ounces
of measured and indicated gold resources were added
as a result of the formation of the Norte Abierto joint
venture (which includes the Cerro Casale and Caspiche
deposits), net of resources divested at Cerro Casale and
Veladero. Roughly 14.0 million ounces of measured
and indicated resources were added as a result of the
reclassification of Pascua-Lama reserves to resources, and
5.8 million ounces were added through drilling, including
1.5 million ounces at Goldstrike, 1.2 million ounces at
Cortez, and 535,000 ounces at Hemlo.
Inferred gold resources decreased to 30.8 million
ounces6 at the end of 2017, compared to 30.7 million
ounces at the end of 2016.
GOLD RESERVES AND RESOURCES (millions of ounces)
27.4
79.1
91.9
2015
596
30.7
75.2
86.0
2016
30.8
88.6
64.4
2017
P&P Reserves
M&I Resources
Inferred Resources
Proven and probable copper reserves were calculated
using a copper price of $2.75 per pound, consistent with
the long-price assumption we used in 2016. Copper
reserves, including copper within gold reserves, increased
to 11.2 billion pounds6 at the end of 2017, compared to
11.1 billion pounds at the end of 2016. The Lumwana
mine added approximately 2.6 billion pounds to its
reserves as a result of successful cost reduction efforts.
Approximately 1.4 billion pounds of copper reserves
were divested with the sale of 25% of Cerro Casale,
554 million pounds were processed, and 505 million
pounds of copper contained within gold reserves were
reclassified as copper contained within gold resources.
In 2017, measured, indicated, and inferred copper
resources were calculated using a copper price assumption
of $3.50 per pound, consistent with 2016. Measured
and indicated copper resources, including copper within
measured and indicated gold resources, increased to
11.7 billion pounds6, compared to 9.7 billion pounds at
the end of 2016. Approximately 2.6 billion pounds of
measured and indicated copper resources were upgraded
to copper reserves, 2.6 billion pounds were added
through the inclusion of the Caspiche deposit, and
1.6 billion pounds were added through drilling. Inferred
copper resources were 3.0 billion pounds6, compared to
3.1 billion pounds at the end of 2016.
COPPER RESERVES AND RESOURCES (millions of pounds)
58
8,346
6,524
2015
1,259
8,299
5,921
2016
596
1,331
7,287
8,051
2017
P&P Reserves
M&I Resources
Inferred Resources
30
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
Outlook for 2018
Operating Unit Guidance
Our 2017 gold and copper production, cost of sales, cash costs1, all-in sustaining costs1 and 2018 forecast gold and
copper production, cost of sales, cash costs1 and all-in sustaining costs1 ranges by operating unit are as follows:
Operating unit
Gold
Barrick Nevada
Pueblo Viejo (60%)
Lagunas Norte
Veladero (50%)2
Turquoise Ridge (75%)
Porgera (47.5%)
Kalgoorlie (50%)
Acacia (63.9%)
Hemlo
Golden Sunlight
2017
production
(000s ozs)
2017
cost of
sales
($/oz)
2017
2017
cash
all-in
costs1
sustaining
($/oz) costs1 ($/oz)
2018
forecast
production
(000s ozs)
2018
forecast cost
of sales
($/oz)
2018
forecast cash
costs1
($/oz)
2,312
650
387
432
211
235
368
491
196
41
$ 792
699
617
897
715
944
806
791
986
1,334
$ 455
405
405
598
589
781
642
587
841
1,265
$ 624 2,000 – 2,255
585 – 615
230 – 270
275 – 330
240 – 270
230 – 255
390 – 440
275 – 305
200 – 220
35 – 50
525
483
987
733
993
729
875
1,092
1,329
$ 760 – $ 810
720 – 750
780 – 910
970 – 1,110
670 – 720
950 – 1,000
720 – 820
970 – 1,020
860 – 920
1,100 – 1,200
$ 470 – $ 530
425 – 450
420 – 490
560 – 620
580 – 620
780 – 830
580 – 630
690 – 720
740 – 790
1,130 – 1,230
2018
forecast
all-in
sustaining
costs1 ($/oz)
$ 610 – $ 660
590 – 620
670 – 780
960 – 1,100
650 – 730
950 – 1,000
695 – 745
935 – 985
975 – 1,075
1,290 – 1,460
Total Continuing Operations
5,323
$ 793
$ 522
$ 703 4,500 – 5,000
$ 810 – $ 850
$ 540 – $ 575
$ 765 – $ 815
Total Consolidated Barrick3,4,5
5,323
$ 794
$ 526
$ 750 4,500 – 5,000
$ 810 – $ 850
$ 540 – $ 575
$ 765 – $ 815
2017
production
(millions lbs)
2017
cost of
sales
($/lb)
2017
2017
all-in
cash
costs1
sustaining
($/lb) costs1 ($/lb)
2018
forecast
production
(millions lbs)
2018
forecast cost
of sales
($/lb)
2018
forecast
C1 cash costs1
($/lb)
2018
forecast
all-in
sustaining
costs1 ($/lb)
Copper
Zaldívar (50%)
Lumwana
Jabal Sayid (50%)
$
114
256
43
2.15 $
1.57
1.90
1.66 $ 2.21
2.35
1.66
2.30
1.70
115 – 130 $ 2.30 – $ 2.50
1.65 – 1.90
230 – 265
1.85 – 2.50
40 – 55
~ $ 1.70
1.65 – 1.90
1.40 – 1.80
$ 2.05 – $ 2.25
2.50 – 2.80
1.70 – 2.30
Total Copper
413
$
1.77 $
1.66 $ 2.34
385 – 450 $ 1.80 – $ 2.10
$ 1.55 – $ 1.75
$ 2.30 – $ 2.60
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 73 to 87 of this MD&A.
2. We sold 50% of Veladero on June 30, 2017; therefore these measures represent results on a 100% basis from January 1 to June 30, 2017 and on a 50% basis
from July 1, 2017 onwards.
3. Total gold cash costs and all-in sustaining costs per ounce include 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 2017 results and guidance ranges exclude Pierina which is mining incidental ounces as it enters closure.
5. Total Consolidated Barrick all-in sustaining costs include corporate administration costs.
Barrick Gold Corporation | Financial Report 2017
31
MANAGEMENT’S DISCUSSION AND ANALYSIS
Operating Unit, Consolidated Expense and Capital Guidance
Our 2017 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 2018 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)
Cash costs ($ per oz)1
Depreciation ($ per oz)
All-in sustaining costs ($ per oz)1
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 expense (income)4
Finance costs5
Attributable capital expenditures:
Attributable minesite sustaining
Attributable project
Total attributable capital expenditures6
2017 Original
guidance
Q3 2017
Guidance
2017 Actual
2018 Guidance
5.60 – 5.90
5.30 – 5.50
5.32
4.50 – 5.00
780 – 820
510 – 535
245 – 265
720 – 770
790 – 810
520 – 535
245 – 265
740 – 770
400 – 450
420 – 440
1.50 – 1.70
1.40 – 1.60
0.30 – 0.40
2.10 – 2.40
1.70 – 1.85
1.60 – 1.75
0.30 – 0.40
2.20 – 2.40
415 – 495
185 – 225
230 – 270
~285
~200
~40
~45
25 – 45
600 – 650
415 – 495
185 – 225
230 – 270
~260
~200
~40
~20
25 – 45
600 – 650
794
526
254
750
413
1.77
1.66
0.38
2.34
354
173
181
248
201
26
21
(799)
705
810 – 850
540 – 575
240 – 260
765 – 815
385 – 450
1.80 – 2.10
1.55 – 1.75
0.40 – 0.50
2.30 – 2.60
325 – 405
185 – 225
140 – 180
~340
~275
~30
~35
80 – 100
500 – 550
1,050 – 1,200 1,100 – 1,200
250 – 300
1,300 – 1,500 1,350 – 1,500
250 – 300
1,095
269
1,364
950 – 1,100
450 – 550
1,400 – 1,600
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 73 to 87 of this MD&A
2. 2017 actual based on US$14.47 and 2018 guidance based on a three month trailing average ending December 31, 2017 of US$14.50 per share and excludes Acacia.
3. 2017 actual includes $8 million in stock-based compensation recovery. 2018 guidance is substantially comprised of stock-based compensation.
4. 2017 actual includes gain on sale of non-current assets of $911 million.
5. 2017 actual includes a net loss on debt extinguishment of $127 million.
6. Attributable capital expenditures are presented on the same basis as guidance, which includes our 60% share of Pueblo Viejo and South Arturo, our 63.9% share
of Acacia and our 50% share of Zaldívar and Jabal Sayid.
2018 Guidance Analysis
Estimates of future production, cost of sales, and cash
costs1 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).
Production
We expect 2018 gold production to be in the range of
4.5 to 5.0 million ounces. 2018 gold production is
expected to be lower than 2017, primarily as a result of
decreases at Barrick Nevada, Pueblo Viejo and Veladero.
We expect first quarter production of around one million
ounces at costs that will be proportionately higher than
those anticipated for the remainder of the year, largely
due to lower grades at Barrick Nevada, and the timing
of planned maintenance at Pueblo Viejo.
32
Barrick Gold Corporation | Financial Report 2017
Lower production is expected at Barrick Nevada as
its Cortez Hills open pit and Cortez Hills underground
moves from purely oxide ore to a mix of oxide, refractory,
and transitional ores. Grade is expected to be lower as
production progresses deeper in the mine. This is partially
offset by increased throughput at the oxide mill, increased
grades at Goldstrike open pit from processing the third
northwest layback, and higher grades at Goldstrike
underground. Throughput initiatives at the autoclave
are expected to more than offset lower autoclave
recovery as we transition from an all acid blend to an
alkaline/acid blend.
Production at Pueblo Viejo in 2018 is expected
to be lower than 2017 production levels, driven by
reduced gold grade, partially offset by increased
autoclave throughput resulting from improved
maintenance strategies.
Lower production for Veladero is expected as a
result of the divestment of 50% of the Veladero mine as
at June 30, 2017. This, combined with an increased
proportion of ore tonnage mined at lower grade, will be
offset by a higher inventory drawdown due to improved
management of the leach pad.
Cost of Sales
On a per ounce basis, cost of sales attributable to gold4,
after removing the portion related to non-controlling
interests, is expected to be in the range of $810
to $850 per ounce, higher than the prior year. The
projected increase is mainly due to higher assumed
energy and consumables costs. We are planning 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 $540 to
$575 per ounce, slightly higher than the prior year due
to increases at Barrick Nevada, Pueblo Viejo and Lagunas
Norte, partially offset by a decrease at Veladero.
We expect Barrick Nevada to have higher cash costs1
than 2017 due to lower sold ounces. At Pueblo Viejo and
Lagunas Norte we expect higher cash costs1 than 2017
primarily due to a reduction in total ounces produced
and sold and higher fuel prices.
We expect lower cash costs1 at Veladero in 2018
compared to the prior year due to lower direct operating
costs partly offset by the impact of higher charges from
the production inventory movements.
MANAGEMENT’S DISCUSSION AND ANALYSIS
All-In Sustaining Costs per ounce
All-in sustaining costs1 are expected to be in the range
of $765 to $815 per ounce for gold, higher than the
$750 per ounce in 2017 driven primarily by the higher
expected cash costs as well as an increase in minesite
sustaining capital expenditures on a per ounce basis.
In 2018, we expect to incur increased corporate
administration expense. We will also continue to focus
on Best-in-Class initiatives to reduce mining costs.
Exploration and Project Expenses
We expect to incur approximately $185 to $225 million
of exploration and evaluation (“E&E”) expenditures in
2018 with approximately 80 percent allocated to the
Americas. Our exploration programs balance high-quality
brownfield projects, greenfield exploration, and
emerging discoveries that we believe have the potential
to become profitable mines. We continue to take
advantage of existing infrastructure and advance key
growth projects in Barrick Nevada. At our Hemlo mine
we are building on the expansion potential of our
underground, and at the Lagunas Norte mine in Peru we
continue to advance a project to extend the life of the
mine by potentially exploiting existing oxide stockpiles
and then transitioning to mining the refractory material
below the oxide ore body in the current open pit.
Highlights of our greenfield exploration program for
2018 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 $140 to
$180 million of project expenses in 2018, compared
to $181 million in 2017. In 2018, project expenses
include the Pascua-Lama study and ongoing site costs,
the re-scoping study of our Donlin Gold Project, costs
associated with regional digital projects and Norte
Abierto (our joint venture with Goldcorp containing
Cerro Casale and Caspiche) projects. The Pascua-Lama
study spend relates to the cost of ongoing work to
evaluate and permit the development of an underground
mine at Pascua-Lama, accessed from the Argentinean
side of the project. Pascua-Lama’s ongoing site expenses
include the cost of care and maintenance and does not
anticipate the impact of the Superintendencia del Medio
Ambiente (“SMA”) sanction received on January 17,
2018. The Company has appealed the SMA sanction
on Pascua in Chile and the full impacts are still
being evaluated.
Barrick Gold Corporation | Financial Report 2017
33
MANAGEMENT’S DISCUSSION AND ANALYSIS
General and Administrative Expenses
In 2018, we expect corporate administration costs to be
approximately $275 million, an increase of $74 million
compared to 2017. This reflects additional investments
including improving our enterprise-wide processes and
systems – the Barrick Data Fabric; accelerating the
implementation of digital technology; and driving
step-change innovations.
Finance Costs
Finance costs of $500 to $550 million primarily represent
interest expense on long-term debt, non-cash interest
expense relating to gold and silver streaming agreements,
and accretion, net of finance income. We expect finance
costs in 2018 to be lower than 2017 finance costs of
$705 million primarily due to lower interest expense in
2017 following $1.5 billion of debt repayments in 2017.
The impact of any further debt reductions accomplished
in 2018 has not been reflected in our guidance on
interest expense or extinguishment losses. 2017
finance costs included a $127 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 2018 are
expected to be in the range of $1.40 to $1.60 billion.
Investing in project capital is a priority in 2018 for Barrick,
and we expect attributable project capital expenditures
to increase to a range of $450 to $550 million, an
increase over our 2017 project capital expenditure of
$269 million. In contrast, attributable minesite sustaining
capital expenditures are expected to be in the range of
$950 to $1,100 million, compared to our 2017 minesite
sustaining capital expenditure of $1,095 million.
Project capital expenditures reflect capital expenditures
at new projects and existing operations that are related
to discrete expansion 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.
The budgeted increase in project capital expenditures
in 2018 is primarily due to increased spending on the
Lower Zone underground expansion and Crossroads
project at Cortez, associated with the underground
declines at Cortez Hills underground and Goldrush, an
34
Barrick Gold Corporation | Financial Report 2017
increase at Zaldívar associated with a planned plant
expansion, and increases at Norte Abierto and
Pascua-Lama.
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,
minesite E&E expenditures, and routine plant,
equipment and maintenance spend that meet our
criteria for capitalization.
Attributable minesite sustaining capital expenditures
are expected to be in the range of $950 to $1,100 million
compared to $1,095 in 2017. We expect reduced
capitalized stripping at Barrick Nevada, Porgera and
Acacia, in addition to a reduction in processing and
minesite sustaining capital at Barrick Nevada and
Veladero. These are partially offset by an increase in
capitalized stripping and equipment rebuilds at
Lumwana, an increase in tailings and process facility
upgrades at Pueblo Viejo and an increase in capital
associated with environmental obligations at Lagunas
Norte. These decreases in sustaining capital are the result
of our continued focus on our asset optimization and
capital discipline processes.
At Barrick Nevada in 2018, sustaining capital
expenditures are expected to decrease primarily due to
a reduction in capitalized stripping as the Goldstrike
open pit transitions from stripping both the 3rd and 4th
northwest laybacks to only stripping the 4th northwest
layback until the fourth quarter of 2018. In addition,
Goldstrike’s cooling and ventilation and dewatering
projects to allow mining below a 3,600-foot elevation
will near completion mid-2018. The autoclave thiosulfate
water treatment plant conversion was completed in
2017, which significantly improved water balances and
the consumption of fresh reagent.
At Porgera, sustaining capital expenditures are
expected to decrease in 2018 primarily due to a planned
reduction in capitalized stripping as the site focuses on
an underground expansion plan.
At Veladero, a reduction in sustaining capital is
expected in 2018, mainly associated with the completion
of the Phase 6 VFLF leach pad expansion and process
facility upgrades along with a reduction in overall
attributable capital spend due to 2018 being our first full
year at our 50/50 equity ownership with our joint
venture partner, Shandong Gold.
MANAGEMENT’S DISCUSSION AND ANALYSIS
At Lumwana, the 2018 increase in sustaining capital
is related to increased stripping of the Chimi deposit and
purchase of major maintenance components and the
electric conversion of the PC8000 shovel.
At Pueblo Viejo, the increase in sustaining capital in
2018 is related to initiatives to improve the plant’s
operational efficiency, process facility upgrades and
continued tailings expansion capital.
Effective Income Tax Rate
At current spot gold prices, our expected effective tax
rate range for 2018 is 41% to 43%.
Outlook Assumptions and Economic Sensitivity Analysis
Gold revenue, net of royalties2
Copper revenue, net of royalties3
Copper revenue, net of royalties3
Gold all-in sustaining costs
WTI crude oil price2
Australian dollar exchange rate
Argentinean peso exchange rate
Canadian dollar exchange rate
Copper all-in sustaining costs
WTI crude oil price2
Chilean peso exchange rate
2018 Guidance
Hypothetical
assumption
change
$ 1,200/oz
$ 2.75/lb
$ 2.75/lb
+/- $ 100/oz
+ $ 0.50/lb
- $ 0.50/lb
Impact on
revenue
(millions)
+/- $ 468
+ $ 205
- $ 180
55/bbl
$
0.75 : 1
18.35 : 1
1.25 : 1
+/- $ 10/bbl
+/- 10%
+/- 10%
+/- 10%
$
55/bbl
650 : 1
+/- $ 10/bbl
+/- 10%
n/a
n/a
n/a
n/a
n/a
n/a
Impact on cost
Impact on
of sales
(millions)
all-in
sustaining costs1
+/- $ 14
+ $ 13
- $ 12
+/- $ 26
+/- $ 31
+/- $7
+/- $ 35
+/- $ 3/oz
+ $ 0.03/lb
- $ 0.03/lb
+/- $ 5/oz
+/- $ 7/oz
+/- $2/oz
+/- $ 7/oz
+/- $ 5
+/- $ 10
+/- $ 0.06/lb
+/- $ 0.02/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 73 to 87 of this MD&A.
2. Due to our hedging activities, which are reflected in these sensitivities, we are partially protected against changes in these factors.
3. Utilizing option collar strategies, the Company has protected the downside of a portion of its expected 2018 copper production at an average floor price of
$2.83 per pound and can participate on the same amount up to an average price of $3.25 per pound. Our remaining copper production is subject to market prices.
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:
(cid:132) Maintain a framework that ensures we manage risk
effectively and in a manner that creates the
greatest value;
(cid:132) 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;
(cid:132) 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
(cid:132) 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 its 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., environmental, health
and safety, corporate social responsibility, security and
human rights) risk exposures, respectively.
Barrick Gold Corporation | Financial Report 2017
35
MANAGEMENT’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 the 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. At regularly scheduled meetings, the Board
and the Risk Committee are provided with updates on
issues identified by management at these weekly sessions.
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 of this MD&A.
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:
(cid:132) Reduced notional and lengthened average tenor
of our outstanding debt through liability
management activities;
(cid:132) Continued focus on generating positive free cash
flow by improving the underlying cost structures of
our operations in a sustainable manner;
(cid:132) Disciplined capital allocation criteria for all
investments, and regular Investment Committee
meetings to ensure a high degree of consistency and
rigor is applied to all capital allocation decisions based
on a comprehensive understanding of risk and reward;
(cid:132) Preparation of budgets and forecasts to understand
the impact of different price scenarios on liquidity,
and formulate appropriate strategies; and
(cid:132) Other options available to the Company 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 1 and costs
Our ability to improve productivity, drive down operating
costs and reduce working capital remains a focus in
2018 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,
Asset Integrity and digital transformation programs.
Key Risk Modification Activities:
(cid:132)(cid:3)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;
(cid:132)(cid:3)Ongoing implementation of a digitization program
including a Cisco partnership to unlock the potential
of digital mining; and
(cid:132)(cid:3)Ongoing implementation of a Best-in-Class program
to unleash the full potential of our mines and
encompassing:
36
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
(cid:132) A standardized, performance-oriented measurement
scorecard linking top operational and economic
measures;
(cid:132) Monthly optimization forums as a way to
communicate and review the Best-in-Class projects
and performance to targets;
(cid:132) Innovation and digitization program focused on
driving value across the business; and
(cid:132) Asset Integrity program to improve availability of
critical infrastructure.
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 seek to develop long-term and mutually-
beneficial relationships with host governments and
communities while working to minimize the social and
environmental impacts of our activities. Geopolitical risks
such as resource nationalism and incidents of corruption
are inherent for a company operating globally. Past
environmental incidents in the extractive industry
highlight the hazards (e.g., water management, tailings
storage facilities, etc.) and the potential consequences
to both the environment and community health and
safety. Barrick also recognizes climate change as an area
of risk requiring specific focus. Our ability to maintain
compliance with regulatory and community obligations
in order to protect the environment and our host
communities alike remains one of our top priorities.
Key Risk Modification Activities:
(cid:132)(cid:3)Our external Corporate Social Responsibility Advisory
Board was formed in 2012 and provides expert
advice to the Company on a range of corporate social
responsibility matters, including community relations,
sustainable development, water, energy, climate
change, security and human rights;
(cid:132)(cid:3)Our obligations, expectations and intentions are
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;
(cid:132)(cid:3)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;
(cid:132)(cid:3)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;
(cid:132)(cid:3)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;
(cid:132)(cid:3)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;
(cid:132)(cid:3)Under the direction of the Climate Change committee,
we performed a climate change risk assessment.
Refer to page 28 for details; and
(cid:132)(cid:3)We continually review and update our closure plans
and cost estimates to plan for environmentally
responsible closure and monitoring of operations.
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 2018 and beyond, our overriding objective of
growing free cash flow per share is underpinned by a
strong pipeline of organic projects and minesite expansion
opportunities in our core regions. Uncertainty related to
these 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.
Barrick Gold Corporation | Financial Report 2017
37
MANAGEMENT’S DISCUSSION AND ANALYSIS
Key Risk Modification Activities:
(cid:132)(cid:3)Focus on responsible Mineral Resource Management
and continuously improved orebody knowledge,
adding to and upgrading reserves and resources
(organically and inorganically);
(cid:132)(cid:3)Develop and advance a balanced pipeline of high-
return projects and seek to exit those that do not
meet expectations;
(cid:132)(cid:3)Pursue high-return growth options with a mindset
of innovation, cost control, and risk mitigation;
(cid:132)(cid:3)Enhance project design to stagger capital outlay and
optimize timing of cash flows; and
(cid:132)(cid:3)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 $1,146 per ounce to
$1,358 per ounce. The average market price for the
year of $1,257 per ounce represented an increase
of 0.5% versus 2016.
AVERAGE MONTHLY SPOT GOLD PRICES
(dollars per ounce)
The price of gold generally rose over the course of 2017,
experiencing its low in early January and ending the
year near $1,300/oz. Over the year, the gold price was
positively influenced by a weakening of the trade-
weighted US dollar to lows not seen since early 2015. In
addition, geopolitical tensions, highlighted by concerns
regarding North Korea, fluctuations in long-term US
interest rates, and investor interest in gold as a safe
haven asset and hedge against record high levels in U.S.
equity indices were all supportive factors for gold.
Copper
During 2017, London Metal Exchange (“LME”) copper
prices traded in a range of $2.47 to $3.32 per pound,
averaged $2.80 per pound, and closed the year at
$3.25 per pound. Copper prices are significantly
influenced by physical demand from emerging markets,
especially China.
The price of copper traded higher over the course
of 2017, reaching a 3-year high near the end of the year
and averaging 27% above the previous year. Copper
prices benefited from a weakening of the trade-weighted
U.S. dollar, positive economic and copper usage data
from China, an increase in the price of other non-precious
metal mined commodities, and positive investor
sentiment. A dearth of new projects scheduled to enter
production later in the decade could positively impact
prices in the coming years should physical demand
continue to grow.
AVERAGE MONTHLY SPOT COPPER PRICES
(dollars per pound)
4.0
3.5
3.0
2.5
2.0
1.5
1,800
1,600
1,400
1,200
1,000
2013
2014
2015
2016
2017
38
Barrick Gold Corporation | Financial Report 2017
2013
2014
2015
2016
2017
Utilizing option collar strategies, we have protected the
downside on approximately 60 million pounds (~15%)
of expected copper production for the first half of 2018
at an average floor price of $2.83 per pound and can
participate up to an average price of $3.25 per pound.
These positions expire evenly over the first six months of
the year. Our remaining copper production is subject to
market prices.
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, 2017, we recorded 40 million pounds of
copper sales subject to final settlement at an average
provisional price of $3.29 per pound. The impact to
net income before taxation of a 10% movement in
the market price of copper would be approximately
$13 million, holding all other variables constant.
Silver
Silver traded in a range of $15.19 to $18.65 per ounce in
2017, with an average market price of $17.05 per ounce
and closed the year at $16.87 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)
35
30
25
20
15
10
5
2013
2014
2015
2016
2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
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 30% of our operating and capital cost
exposures. Although we have made dispositions,
we continue to have exposure to the Australian and
Canadian dollars through a combination of mine
operating and corporate administration costs, as well as
exposure to the Chilean peso through expected future
capital and operating costs at our Pascua-Lama project
and mine operating costs at Zaldívar. We also have
exposure to the Argentinean peso through operating
costs at our Veladero mine, peso denominated VAT
receivable balances and expected future capital and
operating costs at our Pascua-Lama project. In addition,
we have exposure to the Papua New Guinea kina,
Peruvian sol, Zambian kwacha, Tanzanian shilling and
Dominican peso through mine operating and
capital costs.
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. During
2017, we did not have any currency hedge positions. In
2017, the Australian dollar traded in a range of $0.72 to
$0.81 against the US dollar, while the US dollar against
the Canadian dollar, Chilean peso and Argentinean peso
ranged from $1.21 to $1.38, CLP613 to CLP682 and
ARS 15.01 to ARS 19.20, respectively.
We are unhedged against foreign exchange
exposures as at December 31, 2017.
Fuel
For 2017, the price of West Texas Intermediate (“WTI”)
crude oil traded in a wide range between $42 and
$61 per barrel, with an average market price of $51 per
barrel and closed the year at $60 per barrel. During
2017, the price of crude oil rose significantly over the
second half of the year, reaching the highest levels since
mid-2015 toward the end of the year. Reduced supply
and increasing demand have helped towards balancing
the physical market, and an agreement reportedly being
adhered to by major producing nations to cap
production has improved overall market sentiment
towards crude oil.
Barrick Gold Corporation | Financial Report 2017
39
MANAGEMENT’S DISCUSSION AND ANALYSIS
AVERAGE MONTHLY SPOT CRUDE OIL PRICE (WTI)
(dollars per barrel)
$120
$100
$80
$60
$40
$20
2013
2014
2015
2016
2017
In 2017, we recorded hedge losses in earnings of
$32 million on our fuel hedge positions (2016:
$47 million loss and 2015: $19 million loss). Assuming
December 31, 2017 market forward curves and year-end
spot prices, we expect to realize fuel hedge losses of
approximately $21 million in 2018. 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
2018
1,244
78
28%
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 and an
additional 75 basis points over the course of 2017. As
economic conditions in the US continue to normalize,
we expect incremental increases to short-term rates
to continue in 2018.
At present, our interest rate exposure mainly relates
to interest receipts on our cash balances ($2.2 billion
at December 31, 2017); 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
($0.1 billion at December 31, 2017). Currently, the
amount of interest expense recorded in our consolidated
statement of income is not materially impacted by
changes in interest rates, because the majority of debt
was issued at fixed interest rates. The relative amounts
of variable-rate financial assets and liabilities may change
in the future, depending on the amount of operating
cash flow we generate, as well as the level of capital
expenditures and our ability to borrow on favorable
terms using fixed rate debt instruments. Changes in
interest rates affect the accretion expense recorded on
our provision for environmental rehabilitation and
therefore would affect our net earnings.
40
Barrick Gold Corporation | Financial Report 2017
Review of Annual Financial Results
Revenue
($ 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
2017
2016
2015
5,302
6,083
5,503
5,323
6,117
5,517
$ 7,631 $ 7,908 $ 7,813
1,257
1,160
1,251
$ 1,258 $ 1,248 $ 1,157
405
413
405
415
510
511
$ 608 $ 466 $ 1,002
2.49
2.37
$ 135 $ 184 $ 214
$ 8,374 $ 8,558 $ 9,029
2.80
2.95
2.21
2.29
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 73 to 87 of this MD&A.
In 2017, gold revenues were down 4% compared to
the prior year primarily due to a decrease in gold sales
volume, partially offset by higher realized gold prices1.
The average realized gold price1 for 2017 was up $10 per
ounce compared to the prior year reflecting the higher
market gold prices in 2017, which averaged $6 per
ounce higher than 2016.
In 2017, gold production was 194 thousand ounces
or 4% lower than the prior year, primarily as a result of
the divestment of 50% of the Veladero mine on June 30,
2017. Excluding the impact of the Veladero divestment,
gold production decreased by 1% or 48 thousand
ounces due to lower grade and recovery at Turquoise
Ridge, lower grade at Pueblo Viejo and Hemlo, lower
recovery at Lagunas Norte and lower throughput at
Acacia as a result of reduced operations at Bulyanhulu.
These decreases were partially offset by higher production
at Barrick Nevada and Veladero attributed to higher
throughput and grade.
MANAGEMENT’S DISCUSSION AND ANALYSIS
Copper revenues for 2017 were up 30% compared
to the prior year due to a higher realized copper price1. In
2017, the realized copper price was up $0.66 per pound
compared to 2016, due to the 27% increase in market
copper prices over the prior year.
Copper production for 2017 was 2 million pounds
lower than the prior year as lower production at
Lumwana by 15 million pounds due to lower grades and
recoveries was partially offset by increased production
at Jabal Sayid of 13 million pounds, related to a full year
of production in 2017 after it achieved commercial
production in July 2016.
Production Costs
($ 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
Cost of sales (per oz)1
Cash costs2,3
All-in sustaining costs2,3
Copper
Cost of sales
Cost of sales (per lb)1
C1 cash costs2,3
All-in sustaining costs2,3
2017
2016
2015
$ 3,063 $ 3,215 $ 4,006
1,529
1,615
1,504
206
235
224
38
50
37
$ 4,836 $ 4,980 $ 5,906
859
596
831
794
526
750
798
546
730
$ 399 $ 319 $ 814
1.65
1.73
$ 2.34 $ 2.05 $ 2.33
1.77
1.66
1.41
1.49
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 73 to 87 of this MD&A.
Barrick Gold Corporation | Financial Report 2017
41
MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2017, cost of sales applicable to gold was 3%
lower than the prior year primarily due to lower sales
volume, which has contributed to a decrease in direct
mining costs and royalty expense. This was partially
offset by an increase in depreciation expense, as
discussed below. On a per ounce basis, cost of sales
applicable to gold4 after removing the portion related to
non-controlling interests, was 1% lower than the prior
year primarily due to a decrease in direct mining costs
combined with a positive change in our sales mix with
lower relative sales volume from our higher cost Acacia
mines. Direct mining costs expense also decreased
as a result of higher capitalized waste stripping activity
at Barrick Nevada and Veladero combined with lower
inventory write-downs than the prior year and higher
equipment rental costs in the prior year as a result of the
oxygen plant motor failure at Pueblo Viejo in the fourth
quarter of 2015. These decreases were partially offset by
higher fuel prices and consulting costs associated with
Best-in-Class initiatives. Direct mining costs in 2016 had
also benefited from the receipt of insurance proceeds
relating to the 2015 oxygen plant motor failure at Pueblo
Viejo. Higher depreciation expense is mainly a result of
higher depreciation at Pueblo Viejo relating to a tailings
storage facility depreciation adjustment, partially offset
by lower depreciation at Barrick Nevada associated with
the South Arturo pit.
In 2017, gold all-in sustaining costs1 were up $20 per
ounce or 3% compared to the prior year primarily due to
a planned increase in minesite sustaining capital
expenditures, partially offset by lower cost of
sales per ounce4.
In 2017, cost of sales applicable to copper was 25%
higher than the prior year as a result of higher power,
fuel, consumables and contractor costs combined with
higher depreciation expense at Lumwana. On a per
pound basis, cost of sales applicable to copper4, after
including our proportionate share of cost of sales at our
equity method investees, increased 26% compared to
the prior year primarily due to higher direct mining
costs combined with higher depreciation expense at
Lumwana as discussed above, partially offset by the
positive sales mix impact of lower sales volume at
42
Barrick Gold Corporation | Financial Report 2017
Lumwana compared to the prior year. This was further
impacted by higher direct mining costs at Zaldívar
primarily related to higher fuel and labor costs combined
with higher depreciation expense.
Copper all-in sustaining costs1, which have been
adjusted to include our proportionate share of equity
method investments, were 14% higher than the prior
year primarily reflecting the higher cost of sales applicable
to copper combined with higher minesite sustaining
capital expenditures at Lumwana and Jabal Sayid.
Capital Expenditures1
($ millions)
For the years ended December 31
Minesite sustaining2
Project capital expenditures3,4
Capitalized interest
Total consolidated
capital expenditures
Attributable consolidated
capital expenditures5
2017
2016
2015
$ 1,109 $ 944 $ 1,359
133
17
273
–
175
–
$ 1,382 $ 1,119 $ 1,509
$ 1,364 $ 1,053 $ 1,414
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, which
include our 60% share of Pueblo Viejo and South Arturo, our 63.9% share
of Acacia and our 50% share of Zaldívar and Jabal Sayid.
In 2017, total consolidated capital expenditures
increased 24% compared to the prior year primarily
due to an increase in minesite sustaining capital
expenditures combined with an increase in project
capital expenditures.
The 17% increase in minesite sustaining capital
expenditures reflects a $143 million increase in sustaining
capital at Barrick Nevada relating to higher capitalized
stripping costs at Goldstrike open pit and a greater
number of minesite sustaining projects compared to
2016, combined with increased spending of $78 million
relating to phases 4B and 5B of the leach pad expansion
and additional equipment purchases at Veladero.
These increases were partially offset by a $53 million
decrease in sustaining capital at Acacia as a result of
MANAGEMENT’S DISCUSSION AND ANALYSIS
reduced operations at Bulyanhulu combined with
lower capitalized stripping at North Mara relating to
Nyabirama Stage 3 and 4.
Project capital expenditures increased by $98 million
primarily as a result of greater spending incurred at
Barrick Nevada relating to development of Crossroads
and Cortez Hills Lower Zone, and Goldrush project
drilling, partially offset by lower spending at South Arturo,
which entered commercial production in August 2016.
Exploration, evaluation and project costs for 2017
increased $117 million compared to the prior year. The
increase is primarily due to a $63 million increase in
project costs at Pascua-Lama including study costs. The
increase was further impacted by a $38 million increase
in global exploration expenses, including Alturas, and
various earn-in projects combined with a $17 million
increase in business improvement and innovation,
primarily related to innovation projects.
General and Administrative Expenses
($ millions)
For the years ended December 31
Corporate administration1
Stock-based compensation2
Acacia
2017
2016
2015
$ 201 $ 159 $ 183
8
42
26
21
42
55
General & administrative expenses
$ 248 $ 256 $ 233
1. For the year ended December 31, 2017, corporate administration costs
include approximately $3 million of severance costs (2016: $9 million;
2015: $29 million).
2. Based on US$14.47 share price as at December 31, 2017 (2016: US$15.98;
2015: US$7.38) and excludes Acacia.
General and administrative expenses were $8 million
lower than the prior year primarily related to lower
stock-based compensation expense due to decreases in
Barrick’s and Acacia’s share prices. These were partially
offset by higher corporate administration expenses,
in line with expectation, mainly relating to increased
spending on digital initiatives and upgrading IT systems.
Exploration, Evaluation and Project Costs
($ millions)
For the years ended December 31
Minesite exploration and evaluation
Global exploration and evaluation
Advanced project costs:
Pascua-Lama
Other
Corporate development
Business improvement and innovation
2017
2016
2015
$
47 $
126
44 $
88
47
116
122
14
13
32
59
17
14
15
119
12
42
19
Global exploration and evaluation
and project expense
$ 307 $ 193 $ 308
Total exploration, evaluation and
project expenses
$ 354 $ 237 $ 355
Finance Costs, Net
($ millions)
For the years ended December 31
Interest expense1
Accretion
Loss (gain) on debt extinguishment
Other finance costs
Finance income
2017
2016
2015
$ 511 $ 591 $ 737
63
(68)
7
(13)
67
127
–
(14)
50
129
18
(13)
Finance costs, net
$ 691 $ 775 $ 726
1. For the year ended December 31, 2017, interest expense includes approximately
$101 million of non-cash interest expense relating to the gold and
silver streaming agreements with Wheaton Precious Metals Corp. and
Royal Gold, Inc. (2016: $100 million; 2015: $61 million).
In 2017, net finance costs were $84 million lower than
the prior year primarily due to an $80 million reduction
in interest expense attributed to debt reductions
combined with a decrease in other finance costs relating
to amortization of debt issue costs and higher gains
on interest rate hedges. These were partially offset
by an increase in accretion expense. We also recorded
$127 million and $129 million in losses on debt
extinguishment in 2017 and 2016, respectively, as we
have been actively reducing our outstanding debt
balances in recent years.
Additional Significant Statement of Income Items
($ millions)
For the years ended December 31
Impairment charges (reversals)
Loss (income) on currency translation
Other expense/(income)
2017
2016
2015
$ (212) $
$
$ (799) $
72 $ 199 $
60 $
(250) $ 3,897
120
(113)
Barrick Gold Corporation | Financial Report 2017
43
MANAGEMENT’S DISCUSSION AND ANALYSIS
Impairment Charges (Reversals)
For the years ended December 31
2017
2016
2015
($ millions)
Asset impairments (reversals)
Cerro Casale
Bulyanhulu
Lumwana
Pascua-Lama
Lagunas Norte
Golden Sunlight
Veladero
Equity method investments
Pueblo Viejo
Buzwagi
Round Mountain/Bald Mountain
Exploration sites
Other
Post-tax Post-tax Post-tax
(our
share)
(our
share)
(our
share)
$ (518) $
350
(259)
407
2
2
–
–
–
–
–
8
1
– $
–
–
1
(20)
–
(179)
49
–
–
–
–
3
–
–
–
399
26
–
–
–
386
30
53
–
53
Total asset impairment charges (reversals) $
(7) $
(146) $ 947
Goodwill
Goldstrike
Zaldívar
Pueblo Viejo
Cortez
Lagunas Norte
Total goodwill impairment charges
Tax effects and NCI
Total impairment charges
(reversals) (100%)
$
$
– $
–
–
–
–
– $
– $ 730
427
–
412
–
355
–
247
–
– $ 2,171
(205)
(104)
779
$ (212) $
(250) $ 3,897
In 2017, we recognized $7 million (net of tax and
non-controlling interests) of net impairment reversals for
non-current assets. This was primarily as a result of
impairment reversals at the Cerro Casale project upon
reclassification of the project’s net assets as held-for-sale
as at March 31, 2017, combined with impairment
reversals at Lumwana due to an increase in reserves.
These were partially offset by an impairment taken at
Acacia’s Bulyanhulu mine related to the continued
challenges experienced in the operating environment in
Tanzania and net impairments taken at Pascua-Lama,
mainly attributable to the reclassification of open-pit
reserves to resources after receiving a closure order from
the Chilean regulators. This compares to non-current
asset impairment reversals of $146 million (net of tax
and non-controlling interests) in the prior year primarily
44
Barrick Gold Corporation | Financial Report 2017
relating to net impairment reversals at Veladero and
Lagunas Norte as a result of improvements in the cost
structure, partially offset by a $49 million write-down of
our equity method investment in Zaldívar due to the final
purchase price adjustments. Refer to note 21 to the
Financial Statements for a full description of impairment
charges, including pre-tax amounts and sensitivity analysis.
Loss (Income) on Currency Translation
Loss on currency translation for 2017 decreased
$127 million compared to the prior year primarily due to
$81 million of currency translation losses recognized
during the first quarter of 2016 as a result of the disposal
and reorganization of certain Australian entities. This was
further impacted by lower unrealized foreign currency
translation losses relating to the Argentinean peso,
which did not depreciate as quickly in the current year.
Other Expense (Income)
Other income was $799 million in 2017 compared to an
expense of $60 million in the prior year. The increase
primarily relates to 2017 gains of $718 million connected
to the sale of a 50% interest in the Veladero mine and
$193 million on the gain related to the sale of a 25%
interest in the Cerro Casale project. This was partially
offset by an increase at Acacia relating to Bulyanhulu
reduced operations program costs combined with higher
litigation expense. This compares to a $42 million loss,
primarily relating to Zaldívar, as a result of the final
purchase price adjustments recorded in 2016. For a
further breakdown of other expense (income), refer to
note 9 to the Financial Statements.
Income Tax Expense
Income tax expense was $1,231 million in 2017. The
underlying effective tax rate for ordinary income in 2017
was 44% after adjusting for the net impact of foreign
currency translation losses on deferred tax balances; the
impact of impairment (reversals) charges; the impact of
debt extinguishment costs; the impact of asset sales and
non-hedge derivatives; the impact of non-deductible
foreign exchange losses; the impact of United States tax
reform; the impact of the proposed framework for
Acacia operations; and the impact of US withholding
taxes. The unadjusted tax rate for income in 2017 was
45% of the income before income taxes.
MANAGEMENT’S DISCUSSION AND ANALYSIS
We record deferred tax charges or credits if changes
in facts or circumstances affect the estimated tax basis of
assets and therefore the amount of deferred tax assets
or liabilities to reflect changing expectations in our ability
to realize deferred tax assets. The interpretation of tax
regulations and legislation and their application to our
business is complex and subject to change. We have
significant amounts of deferred tax assets, including tax
loss carry forwards, and also deferred tax liabilities.
Potential changes of any of these amounts, as well as
our ability to realize deferred tax assets, could significantly
affect net income or cash flow in future periods.
Reconciliation to Canadian Statutory Rate
($ 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
Non-taxable gains on sales of long-lived assets
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
United States tax reform
Non-recognition of US AMT credits
Adjustments in respect of prior years
Increase to income tax related
contingent liabilities
Impact of tax rate changes
United States withholding taxes
Other withholding taxes
Mining taxes
Other items
2017
2016
$ 728
$ 471
(96)
215
24
(241)
(134)
113
54
–
66
10
(7)
21
(203)
–
(6)
172
–
252
18
266
12
–
23
(5)
35
–
13
(4)
70
(13)
–
11
267
16
Income tax expense
$ 1,231
$ 917
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 2017 and 2016 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 2017 and 2016, tax expense of
$10 million and $23 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.
United States Tax Reform
On December 22, 2017 Tax Reform was enacted in
the United States. The significant changes include:
(i) a reduction from 35% to 21% in the corporate
income tax rate effective January 1, 2018, which resulted
in a deferred tax recovery of $343 million on our net
deferred tax liability in the US, (ii) a repeal of the
corporate Alternative Minimum Tax (AMT) effective
January 1, 2018, (iii) the mandatory repatriation of
earnings and profits of specified foreign corporations
effective December 31, 2017, which resulted in an
estimated one-time 2017 toll charge of $228 million,
offset by (iv) the recognition of our previously
unrecognized deferred tax asset on AMT credits in the
amount of $88 million, which can be used to offset the
one-time toll charge. The net one-time 2017 toll charge
payable amount of $140 million is payable over 8 years.
$129 million of this amount has been recorded in other
non-current liabilities (refer to note 29 to the Financial
Statements). The impact of the United States Tax Reform
may differ from this estimate due to changes in
interpretations and assumptions we have made and
guidance that may be issued.
Proposed Framework for Acacia Operations in
Tanzania and the Increase to Income Tax Related
Contingent Liabilities in Tanzania
The terms of the Proposed Framework for Acacia Mining
Operations in Tanzania were announced on October 19,
2017. The Proposed Framework indicates that in support
Barrick Gold Corporation | Financial Report 2017
45
MANAGEMENT’S DISCUSSION AND ANALYSIS
of ongoing efforts to resolve outstanding tax claims,
Acacia would make a payment of $300 million to the
Government of Tanzania, on terms to be settled by a
working group. A tax provision of $128 million had been
recorded prior to December 31, 2016 in respect of tax
disputes related to Acacia. Of this amount, $70 million
was recorded in 2016. In the third quarter of 2017, an
additional amount of $172 million was recorded as
current tax expense. Refer to note 36 to the Financial
Statements for further information with respect to
these matters.
United States Withholding Taxes
Prior to fourth quarter 2017, we had not previously
recorded withholding tax related to the undistributed
earnings of our United States subsidiaries because
our intention was to reinvest our current and future
undistributed earnings of our United States subsidiaries
indefinitely. During fourth quarter 2017, we reassessed
our intentions regarding those undistributed earnings.
As a result of our reassessment, we concluded that it was
no longer our intent to indefinitely reinvest our current
and future undistributed earnings of our United States
subsidiaries, and therefore in fourth quarter 2017,
we recognized an increase in our income tax provision
in the amount of $252 million, representing withholding
tax on the undistributed United States earnings.
$150 million was recorded in the tax charge for the
year, and $102 million was recorded as deferred
tax expense. Of the $150 million, $130 million has
been recorded in other non-current liabilities (refer to
note 29 to the Financial Statements).
Financial Condition Review
Summary Balance Sheet and Key Financial Ratios
($ 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
Total common shares outstanding (millions of shares)2
Key Financial Ratios:
Current ratio3
Debt-to-equity4
2017
2016
2015
$ 2,234
2,450
20,624
$ 25,308
$ 1,688
6,130
6,423
$ 14,241
9,286
1,781
$ 2,389
2,485
20,390
$ 2,455
3,013
20,840
$ 25,264
$ 26,308
$ 1,676
5,344
7,931
$ 1,644
5,241
9,968
$ 14,951
$ 16,853
7,935
2,378
7,178
2,277
$ 11,067
$ 10,313
$ 9,455
1,167
1,166
1,165
2.68:1
0.58:1
2.68:1
0.77:1
2.77:1
1.05:1
1. Non-current financial liabilities as at December 31, 2017 were $6,844 million (2016: $8,002 million; 2015: $10,068 million).
2. Total common shares outstanding do not include 1.0 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, 2017, December 31, 2016 and December 31, 2015.
4. Represents debt divided by total shareholders’ equity (including minority interest) as at December 31, 2017 and December 31, 2016.
46
Barrick Gold Corporation | Financial Report 2017
Balance Sheet Review
Total assets were $25.3 billion at December 31, 2017, in
line with the balance at December 31, 2016, as the sale
of 50% percent of our Veladero mine in Argentina and
25% of the Cerro Casale project in Chile, combined with
impairment charges at Acacia’s Bulyanhulu mine and our
Pascua-Lama project, were offset by the remeasurement
of our remaining interest in the Veladero mine and the
Cerro Casale project, combined with asset impairment
reversals, mainly at Lumwana. The proceeds from the
Veladero transaction were a primary source of funding
for debt repayments, and were combined with a portion
of our existing cash balance, which further reduced total
assets. 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 growth through
acquisitions. Other significant assets include production
inventories, indirect taxes recoverable and receivable,
concentrate sales receivables, other government
transaction and joint venture related receivables, and
cash and equivalents. Total liabilities at December 31,
2017 totaled $14.2 billion, approximately $0.7 billion
lower than at December 31, 2016, reflecting $1.5 billion
of debt repayments made during the year, partially
offset by increases in our provisions for environmental
rehabilitation of $0.8 billion.
Shareholders’ Equity
As at February 6, 2018
Common shares
Stock options
Number of shares
1,166,577,478
999,467
Financial Position and Liquidity
Total cash and cash equivalents as at December 31, 2017
was $2.2 billion3. Our capital structure comprises a mix
of debt and shareholders’ equity. As at December 31,
2017, our total debt was $6.4 billion (debt net of cash
and equivalents was $4.2 billion) and our debt-to-
equity ratio was 0.58:1. This compares to debt as at
December 31, 2016 of $7.9 billion (debt net of cash
and equivalents was $5.5 billion), and a debt-to-equity
ratio of 0.77:1.
At the beginning of 2017, we set a target to reduce
our total debt by $2.9 billion, to around $5 billion, by
the end of 2018 – half of which was targeted in 2017.
We exceeded our 2017 target, reducing total debt by
$1.5 billion in 2017. We currently have less than
$100 million2 in debt due before 2020, and approximately
$5 billion of our outstanding debt matures after 2032.
MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2018, we have capital commitments of
$79 million and expect to incur attributable sustaining
and project capital expenditures of approximately
$1,400 to $1,600 million in 2018 based on our guidance
range on page 31. In 2018, we have contractual
obligations and commitments of $548 million in
purchase obligations for supplies and consumables and
$30 million in derivative liabilities which will form part
of operating costs. In addition, we have $362 million in
interest payments and other amounts as detailed in the
table on page 69. 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 portfolio
optimization and the creation of new joint ventures and
partnerships; 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 $4.0 billion available under our undrawn credit
facility (subject to compliance with covenants and the
making of certain representations and warranties, this
facility is available for drawdown as a source of financing).
Many factors, including but not limited to general
market conditions and then prevailing metals prices,
could impact our ability to issue securities on acceptable
terms, as could our credit ratings. Moody’s and S&P
currently rate our long-term debt as investment grade,
with ratings of Baa3 and BBB-, respectively. In August
2016, S&P affirmed the Company’s BBB- rating and
raised its outlook to positive from stable. Also in
August 2016, Moody’s affirmed the Company’s Baa3
rating and revised its outlook to stable from negative.
In September 2017, Moody’s and S&P each released
reports affirming their existing ratings and outlooks.
Further changes in our ratings could affect the trading
prices of our securities and our cost of capital. If we were
to borrow under our credit facility, the applicable interest
rate on the amounts borrowed would be based, in
part, on our credit ratings at the time. The key financial
covenant in our undrawn credit facility requires Barrick
to maintain a net debt to total capitalization ratio of
less than 0.60:1. Barrick’s net debt to total capitalization
ratio was 0.27:1 as at December 31, 2017 (0.35:1 as
at December 31, 2016).
Barrick Gold Corporation | Financial Report 2017
47
MANAGEMENT’S DISCUSSION AND ANALYSIS
Summary of Cash Inflow (Outflow)
($ millions)
For the years ended December 31
2017
2016
Net cash provided by operating activities $ 2,065
$ 2,640
Investing activities
Capital expenditures
Divestitures
Other
$ (1,396)
990
69
$ (1,126)
588
126
Total investing inflows/(outflows)
$
(337)
$
(412)
Financing activities
Net change in debt1
Dividends2
Other
$ (1,533)
(125)
(228)
$ (2,057)
(86)
(154)
Total financing inflows/(outflows)
$ (1,886)
$ (2,297)
Effect of exchange rate
Increase/(decrease) in cash
and equivalents
3
3
$
(155)
$
(66)
1. The difference between the net change in debt on a cash basis and the
net change on the balance sheet is due to changes in non-cash charges,
specifically the unwinding of discounts and amortization of debt issue costs.
2. In 2017 we declared and paid dividends in US dollars totaling $0.12 per share
(2016: $0.08 per share; 2015: $0.14 per share).
In 2017, we generated $2,065 million in operating cash
flow, compared to $2,640 million of operating cash flow
in the prior year. The decrease of $575 million was due
to lower gold sales as a result of the divestment of 50%
of the Veladero mine on June 30, 2017, lower gold
sales volume at Pueblo Viejo, Hemlo, Turquoise Ridge,
Lagunas Norte and Acacia, partially offset by higher sales
at Barrick Nevada attributed to higher grades and
Best-in-Class initiatives positively impacting throughput.
This was further impacted by working capital outflows
reflecting the buildup of metals inventory at Pueblo
Viejo, Lagunas Norte and Acacia combined with an
increase in exploration, evaluation and project expenses.
Operating cash flow was also affected by lower cash
flows attributed to non-controlling interest, combined
with higher cash taxes paid. These outflows were
partially offset by higher gold and copper prices as well
as lower direct mining costs.
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 2017
amounted to $337 million compared to $412 million
of cash inflows in the prior year. The decrease of
$75 million compared to 2016 is primarily due to
$402 million of additional proceeds from the divestitures
in the current year relating to $990 million from the
divestiture of a 50% interest in Veladero in 2017
compared to $588 million of proceeds from the sale
of Bald Mountain and our 50% interest in Round
Mountain in 2016. This was partially offset by a planned
increase in capital expenditures on a cash basis of
$270 million in the current period.
Net financing cash outflows for 2017 amounted to
$1,886 million, compared to $2,297 million in the prior
year. The net financing cash outflows in 2017 and 2016
primarily consist of net debt repayments including
non-cash items of $1,533 million and $2,057 million,
respectively, as we achieved our debt reduction goals.
This was combined with higher outflows associated with
non-controlling interests and dividends, partially offset
by a reduction in debt extinguishment costs.
48
Barrick Gold Corporation | Financial Report 2017
Summary of Financial Instruments1
As at December 31, 2017
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
MANAGEMENT’S DISCUSSION AND ANALYSIS
Principal/
Notional Amount
Associated
Risks
(cid:132) Interest rate
$ 2,234 million
(cid:132) Credit
(cid:132) Credit
$ 239 million
(cid:132) Market
(cid:132) Market
$ 33 million
(cid:132) Liquidity
$ 1,059 million
(cid:132) Liquidity
$ 6,456 million
(cid:132) Interest rate
$ 41 million
(cid:132) Market
$ 12 million
(cid:132) Market
AUD
CAD
PGK
21 million
8 million
32 million
105 thousand oz
60 million lbs
(cid:132) Market/liquidity
(cid:132) Market/liquidity
(cid:132) Credit
(cid:132) Interest rate
Derivative instruments – energy contracts
Diesel 1 million bbls
(cid:132) Market/liquidity
(cid:132) Credit
(cid:132) Interest rate
Derivative instruments – interest rate contracts
Receive float interest rate swaps $ 71 million
(cid:132) Market/liquidity
1. Refer to note 25 to the Financial Statements for more information regarding financial instruments.
Operating Segments Performance
Review of Operating Segments Performance
In the first quarter of 2017, we unified the management
and the operation of our Cortez and Goldstrike minesites,
now referred to as Barrick Nevada. Barrick’s business
is now organized into eleven individual minesites, one
grouping of two minesites, one publicly traded company
and one project. Barrick’s Chief Operating Decision
Maker, the President, reviews the operating results,
assesses performance and makes capital allocation
decisions at the minesite, grouping, Company and/or
project level. Therefore, each individual minesite, with
the exception of Barrick Nevada, Acacia and the Pascua-
Lama project, is an operating segment for financial
reporting purposes. Our updated presentation of our
reportable operating segments is now four individual
gold mines (Pueblo Viejo, Lagunas Norte, Veladero
and Turquoise Ridge), Barrick Nevada, Acacia and our
Pascua-Lama project. The remaining operating segments,
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.
Barrick Gold Corporation | Financial Report 2017
49
MANAGEMENT’S DISCUSSION AND ANALYSIS
Barrick Nevada1, Nevada USA
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)
Open pit
Underground
Average grade (grams/tonne)
Open pit mined
Underground mined
Processed
Ore tonnes processed (000s)
Oxide mill
Roaster
Autoclave
Heap leach
Gold produced (000s/oz)
Oxide mill
Roaster
Autoclave
Heap leach
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
2017
211,090
208,240
2,850
2.73
10.58
3.50
23,894
4,562
4,902
4,258
10,172
2,312
957
929
248
178
2,357
$ 2,961
1,869
1,052
1,845
584
360
224
792
455
624
722
$
2016
% Change
2015
192,753
189,941
2,812
1.74
11.39
2.62
32,473
4,197
4,789
3,503
19,984
2,155
569
1,115
242
229
2,162
$ 2,703
1,896
771
1,578
328
217
111
876
502
618
678
$
10%
10%
1%
57%
(7%)
34%
(26%)
9%
2%
22%
(49%)
7%
68%
(17%)
2%
(22%)
9%
10%
(1%)
36%
17%
78%
66%
102%
(10%)
(9%)
1%
6%
223,661
221,501
2,160
1.87
13.40
2.72
29,158
3,476
5,050
2,605
18,027
2,052
530
1,177
204
141
1,981
$ 2,272
1,551
678
1,215
339
211
128
782
504
631
$ 715
1. Includes our 60% share of South 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 73 to 87 of this MD&A.
3. 2015 figures exclude capitalized interest.
Financial Results
Barrick Nevada’s segment income for 2017 was 36%
higher than the prior year primarily due to an increase in
sales volume combined with higher realized gold prices1
and a decrease in cost of sales.
SEGMENT INCOME AND SEGMENT EBITDA1
1,160
1,215
678
1,251
1,257
1,845
1,578
1,052
771
546
2015
2016
2017
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
50
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2017, gold production was 7% higher than the prior
year primarily due to higher grades mined and processed
from Cortez Hills open pit (“CHOP”) coupled with higher
throughput at the oxide mill as a result of Best-in-Class
process improvements and an increased permit limit.
These improvements resulted in the highest annual
throughput level ever achieved at the oxide mill. This was
partially offset by lower Goldstrike open pit stockpile
grades available for processing at the roaster compared
to higher stockpile grades in the prior year, fewer
Goldstrike underground ounces processed due to a
decrease in long-hole stoping and available stopes to
mine, and fewer leach tonnes mined and placed in the
current year at Cortez. Lower grades at Cortez Hills
underground (“CHUG”) as it advances deeper into the
mine were partially offset by higher mining rates as a
result of digitization initiatives such as short interval
control and automation. For 2017, gold sales were
higher than production due to a drawdown of work in
process inventory in the current year as a result of
Best-in-Class process improvements.
PRODUCTION
(000s ounces)
2,500
1,250
0
2,155
2,312
2,000
to
2,255
2016
2017
2018 (est)
Cost of sales per ounce4 for 2017 was $84 per ounce
lower than the prior year primarily due to the impact of
higher sales volume on unit production costs combined
with higher capitalized waste stripping activity at
Crossroads and lower depreciation associated with South
Arturo as mining ended in July 2017 and which had a
high depreciation per ounce impact due to the short
mine life. These decreases in cost of sales per ounce4
were partially offset by lower grades mined and
processed from CHUG, Goldstrike underground and
Goldstrike open pit, as well as higher autoclave production
in the current year, which is the highest cost per tonne
processing facility for Barrick Nevada. This was further
impacted by inventory write-downs in the prior year
which were not experienced in the current year.
All-in sustaining costs1 increased by $6 per ounce
from the prior year primarily due to higher minesite
sustaining capital expenditures, partially offset by lower
direct mining costs combined with a higher sales volume.
Lower direct mining costs were mainly due to higher
capitalized waste stripping at Crossroads, which is
classified as project capital expenditures.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
876
792
618
502
760
to
810
610
to
660
470
to
530
624
455
546
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
In 2017, capital expenditures increased by 78% from
the prior year due to higher minesite sustaining capital
combined with higher project expenditures. Higher
minesite sustaining capital is attributed to higher
capitalized stripping relating to the 3rd and 4th northwest
laybacks at the Goldstrike open pit; underground cooling
and ventilation project to allow mining below 3,600 feet
at the Goldstrike underground; tailings expansions;
the autoclave thiosulfate water treatment plant
conversion which significantly improved water balances
and the consumption of fresh reagent; the roaster
oxygen plant upgrade to increase plant availability; and
digitization initiatives to enhance productivity and
Barrick Gold Corporation | Financial Report 2017
51
MANAGEMENT’S DISCUSSION AND ANALYSIS
efficiency. Investment in digitization initiatives resulted
in a significant increase in mining rates at CHUG and
increased oxide mill performance. Project capital
expenditures in 2017 increased compared to the prior
year as a result of capitalized stripping and dewatering
at Crossroads combined with underground development
at Cortez Hills Lower Zone, the range front declines,
and Goldrush project drilling. These were partially offset
by a decrease in pre-production stripping at the South
Arturo pit, which entered commercial production in
August 2016.
Outlook
At Barrick Nevada we expect gold production to be in
the range of 2,000 to 2,255 thousand ounces, which
is lower than 2017 production levels. Lower production
is expected at CHOP and CHUG. At Cortez Hills open
pit, mining will transition from purely oxide ore to a mix
of oxide, refractory, and transitional ores. Grade mined
from Cortez Hills underground is expected to be lower
as we progress deeper in the mine. This is partially offset
by increased throughput at the oxide mill, increased
grades at Goldstrike open pit from processing the 3rd
northwest layback compared to stockpile processing
in the prior year, and higher grades at Goldstrike
underground. Throughput initiatives at the autoclave
are expected to more than offset lower autoclave
recovery as we transition primarily from an all acid blend
to an alkaline/acid blend.
In 2018, we expect cost of sales per ounce4 to
remain in the range of $760 to $810 per ounce as lower
production is offset by lower CHOP depreciation. We
expect cash costs1 to be in the range of $470 to $530,
which is higher than 2017 due to lower ounces sold.
CHUG is expected to exceed its increased mining rates
achieved in the fourth quarter of 2017 driven by digital
initiatives such as short interval control and automation,
and continued transition to bulk mining, which is
significantly lowering its overall expected cost per tonne
in 2018. This is offset by an increase in Goldstrike
open pit’s expected cost per tonne as we mine ore at
the bottom of the pit and continue to strip the 4th
northwest layback, increased CHOP dewatering costs,
and major roaster maintenance planned mid-2018.
All-in sustaining costs1 are expected to remain in the
range of $610 to $660 per ounce as lower production
is offset by lower sustaining capital expenditures for
tailings expansions, process improvements, and
Goldstrike underground projects to enable mining
deeper in the mine.
52
Barrick Gold Corporation | Financial Report 2017
Pueblo Viejo (60% basis)1, Dominican Republic
Summary of Operating and Financial Data
For the years ended December 31
Open pit tonnes mined (000s)
Average grade (grams/tonne)
Open pit mined
Processed
Autoclave ore tonnes processed (000s)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ 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
MANAGEMENT’S DISCUSSION AND ANALYSIS
2017
23,430
3.07
4.57
4,791
650
637
$ 850
445
395
538
69
69
–
699
405
525
$ 525
2016
% Change
2015
23,278
1%
22,736
3.13
5.29
4,527
700
700
$ 925
395
528
621
61
61
–
564
395
490
$ 490
(2%)
(14%)
6%
(7%)
(9%)
(8%)
13%
(25%)
(13%)
13%
13%
–
24%
3%
7%
7%
3.35
4.94
4,150
572
597
$ 757
525
230
390
61
61
–
881
467
597
$ 597
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 73 to 87 of this MD&A.
Financial Results
Pueblo Viejo’s segment income for 2017 was 25% lower
than the prior year primarily due to a decrease in sales
volumes attributed to lower ore grades combined with
higher cost of sales, partially offset by higher gold prices.
SEGMENT INCOME AND SEGMENT EBITDA1
1,160
390
230
1,251
1,257
621
528
538
395
546
2015
2016
2017
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
In 2017, gold production was 7% lower than the prior
year primarily due to lower ore grades processed in
the current year as compared to higher grades processed
from the Moore pit in the prior year, partially offset
by higher recovery rates. Improvements in carbon
management and reagent cyanide addition have
improved recoveries compared to the prior year. Higher
throughput for 2017 was due to optimization of
autoclave operations and fewer descaling shutdowns
as a result of Best-in-Class initiatives.
PRODUCTION
(000s ounces)
800
400
0
700
650
585
to
615
2016
2017
2018 (est)
Barrick Gold Corporation | Financial Report 2017
53
MANAGEMENT’S DISCUSSION AND ANALYSIS
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
564
490
395
699
525
405
720
to
750
590
to
620
425
to
450
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
Cost of sales per ounce4 in 2017 was $135 per ounce
higher than the prior year primarily due to the impact of
lower sales volume on unit production costs combined
with higher depreciation expense relating to a tailings
storage facility depreciation adjustment and higher fuel
prices. 2016 cost of sales per ounce4 was also lower due
to one-time insurance proceeds recorded in the third
quarter of 2016 relating to the 2015 oxygen plant motor
failure. This was partially offset by higher equipment
rental costs in the prior year as a result of the oxygen
plant motor failure.
In 2017, all-in sustaining costs1 increased by $35 per
ounce compared to the prior year due to higher minesite
sustaining capital expenditures combined with the higher
cost of sales per ounce4. All-in sustaining costs1 were not
impacted by the aforementioned insurance proceeds and
depreciation adjustment as the insurance benefit was
excluded from our calculation and depreciation does not
form part of all-in sustaining costs1.
In 2017, capital expenditures increased by 13%
compared to the prior year primarily attributed to the
timing of mining equipment replacements, increased
capitalization of costs related to the process plant and
construction of the Bonao III power substation. This was
partially offset by a decrease in capitalized stripping costs
as a result of planned mine plan sequencing.
Outlook
At Pueblo Viejo, we expect our equity share of 2018 gold
production to be in the range of 585 to 615 thousand
ounces, below 2017 production levels, driven by reduced
gold head grade, partially offset by increased autoclave
throughput resulting from improved maintenance
strategies and small-scale pre-oxidation and flotation
concentrate pre-processing expansions.
In 2018, we expect cost of sales per ounce4 to be in
the range of $720 to $750 per ounce, cash costs1 to
be $425 to $450 per ounce and all-in-sustaining costs1
to be $590 to $620 per ounce. All three measures are
expected to be higher than 2017 primarily due to a
reduction in total ounces produced and sold, higher fuel
prices and higher sustaining capital expenditures related
mainly to increased capitalized waste stripping, tailings
dam construction, Quisqueya power station gas conversion
and Bonao sub-station construction capital projects.
By-product credits are expected to be higher than 2017,
reflecting increased metal prices, ore grades and
recoveries for both silver and copper.
54
Barrick Gold Corporation | Financial Report 2017
Lagunas Norte, Peru
Summary of Operating and Financial Data
For the years ended December 31
Open pit tonnes mined (000s)
Average grade (grams/tonne)
Open pit mined
Processed
Heap leach ore tonnes processed (000s)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ 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
MANAGEMENT’S DISCUSSION AND ANALYSIS
2017
2016
% Change
2015
32,859
40,847
(20%)
49,126
1.41
1.05
17,874
387
397
$
$
514
245
259
327
25
20
5
617
405
483
497
1.18
1.12
17,253
435
425
$
$
548
276
260
356
56
51
5
651
383
529
540
19%
(6%)
4%
(11%)
(7%)
(6%)
(11%)
–
(8%)
(55%)
(61%)
–
(5%)
6%
(9%)
(8%)
1.10
1.02
21,880
560
565
$
$
673
378
285
454
67
67
–
669
329
509
509
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 73 to 87 of this MD&A.
Financial Results
Lagunas Norte’s segment income for 2017 was in line
with the prior year primarily due to lower sales volumes,
offset by higher realized gold prices1 combined with
lower depreciation expense.
SEGMENT INCOME AND SEGMENT EBITDA1
1,160
454
285
1,251
1,257
356
260
528
259
327
2015
2016
2017
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
In 2017, gold production was 11% lower than the
prior year as a result of processing harder material with
lower grades and slower recovery rates combined with
a higher percentage of older stock material, in line
with expectations as the mine matures. Productivity for
2017 was further impacted by heavy rains causing
road closures and power outages early in the year
combined with lower efficiency with the loading and
hauling equipment.
PRODUCTION
(000s ounces)
600
300
0
435
387
2016
2017
2018 (est)
230
to
270
Barrick Gold Corporation | Financial Report 2017
55
MANAGEMENT’S DISCUSSION AND ANALYSIS
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
651
529
383
617
483
405
546
780
to
910
670
to
780
420
to
490
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
Cost of sales per ounce4 for 2017 was $34 per ounce
lower than the prior year mainly due to lower depreciation
expense and realized cost savings from the Best-in-Class
program, such as initiatives to improve efficiencies in the
carbon in column circuit, implementation of short interval
control and improvements in planned maintenance. These
were partially offset by the impact of lower sales volume
and higher direct mining costs, resulting from lower
capitalized waste stripping and higher processing costs
driven by higher tonnage processed and increased
supplies consumption given the treatment of different
ore types in the mine plan. In 2017, all-in sustaining
costs1 decreased by $46 per ounce compared to the prior
year primarily due to the decrease in minesite sustaining
capital expenditures, partially offset by higher direct
mining costs.
In 2017, capital expenditures decreased by 55%
compared to the prior year due to lower minesite
sustaining capital relating to the construction of phase 6
of the leach pad, which was completed in the prior year
period, combined with lower capitalized stripping.
Project expenditures relate to ongoing studies for the
sequenced life-of-mine extension which involves the
potential construction of a grinding and carbon-in-leach
processing circuit to treat carbonaceous oxides ore
which may be expanded later with flotation and pressure
oxidation circuits to treat refractory material.
Outlook
At Lagunas Norte we expect 2018 production to be in
the range of 230 to 270 thousand ounces, lower than
2017 production levels, as a result of the progressive
depletion of oxide ores, which are being replaced with
harder ore material with lower kinetics and recoveries.
We expect cost of sales per ounce4 to be in the
range of $780 to $910 per ounce. This increase, in
comparison with 2017, is mainly driven by the impact
of lower gold sales combined with an increase in
depreciation expense and higher corporate social
responsibility expenses. We expect cash costs1 to be
in the range of $420 to $490 per ounce and all-in
sustaining costs1 to be in the range of $670 to $780 per
ounce. The increase in all-in sustaining costs1 in
comparison with 2017 is driven mainly by the decrease
in production and increase in sustaining capital
expenditures in 2018. Operational costs are expected
to decrease aligned to the reduced mine production
plan compared to 2017. Best-in-Class operational
initiatives for 2018 will be focused on getting gold
ounces from injection wells and slag processing.
56
Barrick Gold Corporation | Financial Report 2017
Veladero, Argentina1
Summary of Operating and Financial Data
For the years ended December 31
Open pit tonnes mined (000s)
Average grade (grams/tonne)
Open pit mined
Processed
Heap leach ore tonnes processed (000s)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ 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
MANAGEMENT’S DISCUSSION AND ANALYSIS
2017
2016
% Change
2015
48,376
1.00
1.02
21,190
432
458
$
$
591
410
173
292
173
173
–
897
598
987
987
62,227
(22%)
83,409
0.82
0.82
28,028
544
532
$ 685
464
220
338
95
95
–
872
582
769
$ 769
22%
24%
(24%)
(21%)
(14%)
(14%)
(12%)
(21%)
(14%)
82%
82%
–
3%
3%
28%
28%
0.81
0.82
28,385
602
629
$ 720
499
216
324
242
242
–
792
552
946
$ 946
1. We sold 50% of Veladero on June 30, 2017; therefore these represent results on a 100% basis from January 1 to June 30, 2017 and on a 50% basis from
July 1, 2017 onwards.
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 73 to 87 of this MD&A.
Financial Results
Veladero’s segment income for 2017 was 21% lower
than the prior year primarily due to the impact of the
divestment of 50% of the Veladero mine as at June 30,
2017, partly offset by higher realized gold prices1. This
was further impacted by an increase in depreciation
expense as a result of the fair value increments applied
to our remaining 50% interest, which was required to
be fair valued because of the change in control.
SEGMENT INCOME AND SEGMENT EBITDA1
In 2017, gold production was 21% lower compared to
the prior year due to the divestment of 50% of the
mine as at June 30, 2017. Excluding the impact of the
divestment, gold production increased 18% in the
current year primarily as a result of higher grades
processed combined with higher tonnes placed on the
leach pad, partially offset by lower recovery reflecting
the impact of the temporary restriction due to the
March 28, 2017 incident with the leach pumping system.
The prior year was negatively impacted by the temporary
suspension of operations late in the third quarter of
2016 combined with severe weather conditions.
1,160
1,251
1,257
PRODUCTION
(000s ounces)
324
338
216
220
528
173
292
600
300
0
544
432
275
to
330
2015
2016
2017
2016
2017
2018 (est)
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
Barrick Gold Corporation | Financial Report 2017
57
MANAGEMENT’S DISCUSSION AND ANALYSIS
Cost of sales per ounce4 in 2017 was $25 per ounce
On April 6, 2017, we announced the sale to
higher than the prior year primarily due to the impact
of higher direct mining costs combined with higher
depreciation expense as a result of the impact of the
fair value increments relating to the revaluation of
our remaining 50% of the Veladero mine, partially offset
by a lack of depreciation in the second quarter of 2017
as Veladero was classified as held-for-sale pending the
close of the sale on June 30, 2017. The increase in direct
mining costs primarily related to consulting services,
camp costs, mining costs due to additional fleet,
maintenance and labor and contractors due to the
impact of inflation in Argentina. These increases were
partially offset by higher capitalized waste stripping costs
in the current year as there was no capitalized waste
stripping in the third quarter of 2016 as a result of severe
weather conditions. In 2017, all-in sustaining costs1
increased by $218 per ounce compared to the prior year
primarily due to an increase in minesite sustaining capital
expenditures combined with an increase in cost of sales
per ounce4.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
872
769
582
987
897
598
970
to
1,110
960
to
1,100
560
to
620
546
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
In 2017, capital expenditures increased by 82%
compared to the prior year primarily due to higher
minesite sustaining capital expenditures relating
to the construction of phases 4B and 5B of
the leach pad expansion, leach pad improvements
and equipment purchases combined with higher
capitalized stripping costs.
Shandong Gold of a 50% interest in the Veladero mine,
which reflects the first step in our strategic partnership
with Shandong. The transaction closed on June 30,
2017 and we received total cash consideration of
$990 million, which reflected working capital adjustments
of $30 million in the fourth quarter of 2017. Refer to
note 4 to the Financial Statements for more information.
On December 30, 2016, the San Juan provincial
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. Environmental approval for Phases 6
to 9 of the leach pad expansion was confirmed on
May 19, 2017 by the San Juan Mining Minister.
March 2017 Release of Gold-bearing Process Solution
On March 28, 2017, the monitoring system at the
Company’s Veladero mine detected a rupture of a pipe
carrying gold-bearing process solution on the leach pad.
This solution was contained within the operating site; no
solution reached any diversion channels or watercourses.
All affected soil was promptly excavated and placed on
the leach pad. The Company notified regulatory
authorities of the situation, and San Juan provincial
authorities inspected the site on March 29, 2017.
On March 29, 2017, the San Juan provincial mining
authority issued a violation notice against Minera
Argentina Gold SRL (“MAG”) (formerly, Minera
Argentina Gold S.A. or MAGSA) in connection with the
incident and ordered a temporary restriction on the
addition of new cyanide to the leach pad until corrective
actions on the system were completed. The mining
authority lifted the suspension on June 15, 2017,
following inspection of corrective actions.
On March 30, 2017, the San Juan Mining Minister
ordered the commencement of a regulatory infringement
proceeding against MAG as well as a comprehensive
evaluation of the mine’s operations to be conducted by
representatives of the Company and the San Juan
provincial authorities. The Company filed its defense to
the regulatory infringement proceeding on April 5, 2017.
On September 14, 2017, the San Juan Provincial mining
58
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
authority consolidated this administrative proceeding
into a single proceeding against MAG encompassing
both the September 2016 incident and the March 2017
incident. On October 10, 2017, the San Juan Provincial
mining authority notified MAG of two charges under
the infringement proceeding for alleged violations of the
Mining Code in connection with the March 2017 incident.
On December 27, 2017, MAG received notice
of a resolution from the San Juan Provincial mining
authority requiring payment of an administrative fine of
approximately $5.6 million (calculated at the prevailing
exchange rate on December 31, 2017) encompassing
both the September 2016 incident and the March 2017
incident. On January 23, 2018, in accordance with local
requirements, MAG paid the administrative fine and filed
a request for reconsideration with the San Juan Provincial
mining authority, which remains pending. Refer to note 36
to the Financial Statements for more information
regarding this matter.
Provincial Amparo Action
On March 30, 2017, MAG was served notice of a lawsuit,
called an “amparo” protection action, filed in the Jachal
First Instance Court (the “Jachal Court”) by individuals
who claimed to be living in Jachal, Argentina, seeking
the cessation of all activities at the Veladero mine.
The plaintiffs sought an injunction as part of the lawsuit,
requesting, among other things, the cessation of
all activities at the Veladero mine or, alternatively, a
suspension of the leaching process at the mine. On
March 30, 2017, the Jachal Court rejected the request
for an injunction to cease all activities at the Veladero
mine, but ordered, among other things, the suspension
of the leaching process at the Veladero mine and for
MAG and the San Juan Provincial mining authority to
provide additional information to the Jachal Court in
connection with the incident.
The Company filed a defense to the provincial
amparo action on April 7, 2017. The Jachal Court lifted
the suspension on June 15, 2017, after the San Juan
Provincial mining authority provided the required
information and a hydraulic assessment of the leach pad
and process plant was implemented. Further developments
in this case are pending a decision by the Argentine
Supreme Court as to whether the Federal Court or
Provincial Court has jurisdiction to assess the merits of
the amparo remedy. Refer to note 36 to the Financial
Statements for more information regarding this matter.
Federal Amparo Action
On April 4, 2017, the National Minister of Environment
of Argentina filed a lawsuit in the Buenos Aires federal
court (the “Federal Court”) in connection with the
March 2017 incident. The amparo protection action
sought a court order requiring the cessation and/or
suspension of activities at the Veladero mine. MAG
submitted extensive information to the Federal Court
about the incident, the then-existing administrative and
provincial judicial suspensions, the remedial actions
taken by the Company and the lifting of the suspensions
as described above. MAG also challenged the jurisdiction
of the Federal Court and the standing of the National
Minister of Environment of Argentina and requested
that the matter be remanded to the Jachal Court. The
Province of San Juan also challenged the jurisdiction
of the Federal Court in this matter. On June 23, 2017,
the Federal Court decided that it was competent to hear
the case, and referred the case to the Court of Appeals
to determine whether the Federal Court or Provincial
Court in the case described above has the authority to
assess the merits of the amparo remedy. On July 5, 2017,
the Provincial Court issued a request for the Supreme
Court of Argentina to resolve the jurisdictional dispute.
On July 30, 2017, the Court of Appeals referred the
jurisdictional dispute to the Supreme Court and a
decision on the matter is pending. Refer to note 36 to
the Financial Statements for more information regarding
this matter.
Veladero experienced operational incidents in 2015
and 2016 which also resulted in regulatory and legal
proceedings as summarized below.
Barrick Gold Corporation | Financial Report 2017
59
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 2015 Release of Cyanide-bearing Process Solution
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 $10 million (at the then-applicable
Argentinean peso/$ exchange rate) while the request for
reconsideration was pending. On December 29, 2016,
the request for reconsideration was rejected by the
Provincial mining authority. On July 11, 2017, the San
Juan government rejected MAG’s final administrative
appeal of this decision. On September 5, 2017, the
Company commenced a legal action to continue
challenging certain aspects of the decision before the
San Juan courts. MAG has implemented a remedial
action plan at Veladero in response to the incident
as required by the San Juan mining authority. Refer
to note 36 to the Financial Statements for more
information regarding this matter.
September 2016 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.
On September 14, 2017, the San Juan Provincial
mining authority consolidated the administrative
proceeding into a single proceeding against MAG
encompassing both the September 2016 incident and
the March 2017 incident.
On December 27, 2017, MAG received notice of
a resolution from the San Juan Provincial mining
authority requiring payment of an administrative fine of
approximately $5.6 million (calculated at the prevailing
exchange rate on December 31, 2017) encompassing
both the September 2016 incident and the March 2017
incident. On January 23, 2018, in accordance with local
requirements, MAG paid the administrative fine and
filed a request for reconsideration with the San Juan
Provincial mining authority, which remains pending.
Refer to note 36 to the Financial Statements for more
information regarding this matter.
60
Barrick Gold Corporation | Financial Report 2017
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 valley leach facility (“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.
MAG replied to the lawsuit on February 20, 2017.
On March 31, 2017, the plaintiffs supplemented their
original complaint to allege that the risk of environmental
damage had increased as a result of the March 28,
2017 release of gold-bearing process solution incident
described above. The Company responded to the new
allegations and intends to continue defending this
matter vigorously. Refer to note 36 to the Financial
Statements for more information regarding this matter.
MANAGEMENT’S DISCUSSION AND ANALYSIS
Outlook
At Veladero we expect 2018 production to be in the
range of 275 to 330 thousand ounces (Barrick’s share),
lower than 2017 production levels. The decrease is
a result of the divestment of 50% of the Veladero
mine as at June 30, 2017. This is combined with slightly
lower ore grade to the leach pad in 2018, offset by
ongoing soluble inventory drawdown with improved
solution management.
Cost of sales per ounce4 is expected to be in the
range of $970 to $1,110 per ounce which is higher than
2017, mainly due to higher depreciation expense
reflecting the effect of the fair value increments applied
to our remaining 50% interest. We expect cash costs1
in 2018 to be in the range of $560 to $620 per ounce,
lower than 2017 levels mainly due to lower direct
operating costs, partly offset by the impact of higher
charges from the production inventory movements.
All-in sustaining costs1 are expected to be between
$960 and $1,100 per ounce, aligned with 2017 as
lower cash costs1 are offset by higher capitalized waste
stripping. 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 ARS18.3:$1.00 and a local inflation
rate of 15% for the purposes of preparing our cash
costs1 and all-in sustaining costs1 guidance for 2018.
Barrick Gold Corporation | Financial Report 2017
61
MANAGEMENT’S DISCUSSION AND ANALYSIS
Turquoise Ridge (75% basis), Nevada USA
Summary of Operating and Financial Data
For the years ended December 31
Underground tonnes mined (000s)
Average grade (grams/tonne)
Underground mined
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ 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
2017
643
15.45
211
222
$ 280
159
119
147
36
32
4
715
589
733
$ 753
2016
% Change
598
16.85
266
257
$ 322
155
166
193
32
32
–
603
498
625
$ 625
8%
(8%)
(21%)
(14%)
(13%)
3%
(28%)
(24%)
13%
–
100%
19%
18%
17%
20%
2015
349
18.34
217
202
$ 235
141
92
115
32
32
–
697
581
742
$ 742
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 73 to 87 of this MD&A.
Financial Results
Turquoise Ridge’s segment income for 2017 was 28%
lower than the prior year primarily due to a decrease in
sales volume combined with higher cost of sales, partially
offset by higher realized gold prices1.
SEGMENT INCOME AND SEGMENT EBITDA1
1,160
115
92
1,251
1,257
193
166
147
119
2015
2016
2017
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
In 2017, gold production was 21% lower than the
prior year primarily due to lower grades combined with
issues related to higher organic carbon content and
the subsequent decision to process 17 thousand ounces
at Barrick Nevada, which was recognized as Barrick
Nevada production. Lower grades in the current year
were due to the planned mining of the south zone to
control organic carbon content in the ore. This was
partially offset by higher tonnes mined resulting from
Best-in-Class initiatives driving increased equipment
availability combined with improved mine engineering
to take advantage of the larger ore geometry. These
activities resulted in a 22% increase in tonnes mined
per employee from the prior year.
PRODUCTION
(000s ounces)
300
150
0
266
211
240
to
270
2016
2017
2018 (est)
62
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
Cost of sales per ounce4 in 2017 was $112 per ounce
higher than the prior year mainly reflecting the impact
of lower sales volume on unit production costs combined
with higher processing costs associated with processing
lower grade ore and higher organic carbon content ore.
In 2017, all-in sustaining costs1 increased by $108 per
ounce compared to the prior year primarily reflecting the
impact of higher cost of sales per ounce4.
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
603
625
498
715
733
589
650
to
730
580
to
620
670
to
720
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
In 2017, capital expenditures increased by 13% compared
to the prior year as a result of higher project capital
expenditures relating to the construction of the third
shaft. Minesite sustaining capital expenditures were
in line with the prior year as higher expenditures relating
to the timing of spending combined with the construction
of the water treatment plant, were offset by lower
capitalized underground development costs.
Outlook
At Turquoise Ridge we expect 2018 production to be
in the range of 240 to 270 thousand ounces (Barrick’s
share), exceeding 2017 production levels, as mine
productivity continues to improve. Turquoise Ridge has
completely transitioned to standardized equipment
allowing for greater mining flexibility, increased reliability,
and a reduced truck fleet and we continue to incorporate
mechanical cutting as a mining method and short interval
control. Capital and waste development requirements
are in line with 2017 mining rates.
The cost of sales per ounce4 is expected to be in the
range of $670 to $720 per ounce which is in line with
2017. We expect cash costs1 in 2018 to be in the range
of $580 to $620 per ounce, consistent with 2017, and
all-in sustaining costs1 to be in the range of $650 to
$730 per ounce. All-in sustaining costs1 in 2018 are
expected to be lower than 2017 due to a reduction in
sustaining capital as the construction of the third shaft
is included in project capital.
In February 2018, Barrick and Newmont Mining
Corporation (“Newmont”) reached a new, seven-year
toll milling agreement for the processing of Turquoise
Ridge ore at Newmont’s Twin Creeks facility. The
agreement supports plans to expand production and
unlock the full potential of Turquoise Ridge by increasing
processing capacity. It provides for throughput of
850,000 tons per year in 2018 and 2019, rising to
1.2 million tons per year between 2020 and 2024.
Processing costs are in line with market rates, and are
reflected in our guidance for Turquoise Ridge.
Barrick Gold Corporation | Financial Report 2017
63
MANAGEMENT’S DISCUSSION AND ANALYSIS
Acacia Mining plc (100% basis), Africa
Summary of Operating and Financial Data
For the years ended December 31
Total tonnes mined (000s)
Open pit
Underground
Average grade (grams/tonne)
Open pit mined
Underground mined
Processed1
Ore tonnes processed (000s)
Gold produced (000s/oz)
Gold sold (000s/oz)
Segment revenue ($ 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
2017
31,917
30,666
1,251
1.45
8.32
3.00
8,719
768
593
$
$
751
469
191
298
148
137
11
791
587
875
894
2016
% Change
2015
38,491
37,141
1,350
1.48
9.62
3.00
9,818
830
817
$ 1,045
719
299
465
191
190
1
880
640
958
960
$
(17%)
(17%)
(7%)
(2%)
(14%)
–
(11%)
(7%)
(27%)
(28%)
(35%)
(36%)
(36%)
(23%)
(28%)
(1,000%)
(10%)
(8%)
(9%)
(7%)
41,390
40,099
1,291
1.65
9.02
2.80
9,268
732
721
$
860
837
(1)
142
177
178
(1)
1,161
772
1,112
$ 1,111
1. Includes processing of tailings retreatment.
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 73 to 87 of this MD&A.
Barrick holds a 63.9 percent equity interest in Acacia
Mining plc, a publicly traded company listed on the
London Stock Exchange that is operated independently
of Barrick.
Financial Results
Acacia’s segment income for 2017 was 36% lower than
the prior year primarily due to lower sales volume as
a result of the concentrate export ban, affecting sales
from Bulyanhulu and Buzwagi combined with higher
costs related to the Bulyanhulu reduced operations,
partially offset by higher realized gold prices1 and lower
cost of sales.
SEGMENT INCOME AND SEGMENT EBITDA1
1,160
1,251
1,257
465
299
298
191
2016
2017
142
(1)
2015
Segment Income ($ millions)
Segment EBITDA ($ millions)
Market Price ($/oz)
64
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
In 2017, gold production was 7% lower than the prior
year primarily caused by a decrease at Bulyanhulu due to
the decision to transition to reduced operations in the
third quarter of 2017 and droughts experienced in the
Kahama district combined with lower production from
North Mara as a result of lower grades at the Gokona
underground mine and Nyabirama pit. These were
partially offset by an increase at Buzwagi as a result of
higher grade ore from the main ore zone at the bottom
of the open pit and higher ore tonnes mined. Gold
ounces sold were lower than ounces produced primarily
as a result of the ban on concentrate exports, as
described below.
PRODUCTION
(000s ounces)
1000
500
0
830
768
2016
2017
2018 (est)
435
to
475
COST OF SALES, CASH COSTS1
AND AISC1 ($ per ounce)
880
958
640
791
875
587
970
to
1,020
935
to
985
690
to
720
2016
2017
2018 (est)
Cash Costs
AISC
Cost of Sales
In 2017, capital expenditures decreased by 23% compared
to the prior year due mostly to a reduction in minesite
sustaining capital expenditures primarily at Bulyanhulu
attributed to reduced operations combined with lower
capitalized waste stripping at North Mara relating to
Nyabirama Stage 4. This was partially offset by an
increase in project capital expenditures mainly relating to
capitalized drilling at North Mara’s Gokona underground.
Cost of sales per ounce4 in 2017 was 10% lower than
the prior year primarily reflecting the impact of the
buildup in inventory due to the ban on concentrate
exports combined with lower depreciation expense.
These decreases were partially offset by lower capitalized
underground development costs at Bulyanhulu and
lower waste stripping at North Mara’s Nyabirama pit
combined with the impact of lower sales volume on
unit production costs. All-in sustaining costs1 were
9% lower than the prior year due to lower cost of sales
per ounce4 combined with lower stock-based
compensation expense and a decrease in minesite
sustaining capital expenditures.
Concentrate Export Ban and Related Disputes with the
Government of Tanzania
On March 3, 2017, the Tanzanian Government
announced a general ban on the export of metallic
mineral concentrates (“Ban”) following a directive made
by the President to promote the creation of a domestic
smelting industry. Following the directive, Acacia ceased
all exports of its gold/copper concentrate (“concentrate”)
including containers previously approved for export prior
to the ban which are located in Dar es Salaam.
The prevention of exports impacts Bulyanhulu
and Buzwagi which produce gold in both doré and in
concentrate form due to the mineralogy of the ore.
Barrick Gold Corporation | Financial Report 2017
65
MANAGEMENT’S DISCUSSION AND ANALYSIS
North Mara is unaffected due to 100% of its production
being doré. Since the export ban was imposed, impacting
approximately 25% of 2017 production, Acacia has seen
a buildup of approximately $264 million of concentrate
inventory in Tanzania, based on current prices, with
approximately 186 thousand ounces of gold, 12.1 million
pounds of copper and 159 thousand ounces of silver
contained in the unsold concentrate. As a result of the
transition to a reduced operations program at Bulyanhulu,
and the changes to the process flowsheet at Buzwagi, all
of Acacia’s mines are now solely producing doré and, as
such, will no longer see a further buildup of concentrate.
During the second quarter of 2017, investigations
were conducted on behalf of the Tanzanian Government
by two Tanzanian Government Presidential Committees,
which have resulted in allegations of historical undeclared
revenue and unpaid taxes being made against Acacia
and its predecessor companies. Acacia considers these
findings to be implausible and has fully refuted the
findings of both Presidential Committees. Acacia has
requested copies of the reports issued by the two
Presidential Committees and called for independent
verification of the findings, but has not yet received a
response to these requests.
On July 4, 2017, Acacia’s subsidiaries, Bulyanhulu
Gold Mine Limited (“BGML”), the owner of the
Bulyanhulu mine, and Pangea Minerals Limited (“PML”),
the owner of the Buzwagi mine, each commenced
international arbitrations against the Government of
Tanzania in accordance with the dispute resolution
processes agreed by the Government of Tanzania in the
Mineral Development Agreements (“MDAs”) with BGML
and PML. These arbitrations remain ongoing.
In July 2017, Acacia received adjusted assessments
for the tax years 2000–2017 from the Tanzania
Revenue Authority (the “TRA”) for a total amount of
approximately $190 billion for alleged unpaid taxes,
interest and penalties, apparently issued in respect of
alleged and disputed under-declared export revenues,
and appearing to follow on from the announced
findings of the First and Second Presidential Committees.
These assessments are being disputed and the underlying
allegations are included in the matters that have been
referred to international arbitration.
In addition, following the end of the third quarter,
Acacia was served with notices of conflicting adjusted
corporate income tax and withholding tax assessments
for tax years 2005 to 2011 with respect to Acacia’s
former Tulawaka joint venture, and demands for
payment, for a total amount of approximately $3 billion.
Interest and penalties represent the vast majority of the
new assessments. The TRA has not provided Acacia with
any explanations or reasons for the adjusted assessments,
or with the TRA’s position on how the assessments have
been calculated or why they have been issued. Acacia
disputes these assessments and has requested supporting
calculations, which have not yet been received. Acacia is
objecting to these assessments and defending this
matter through the Tanzanian tax appeals process.
In addition to the Ban, new and amended legislation
was passed in Tanzania in early July 2017, including
various amendments to the 2010 Mining Act and a new
Finance Act. The amendments to the 2010 Mining Act
increased the royalty rate applicable to metallic minerals
such as gold, copper and silver to 6% (from 4%), and
the new Finance Act imposes a 1% clearing fee on the
value of all minerals exported from Tanzania from July 1,
2017. In January 2018, new Mining Regulations were
announced by the Tanzanian Government introducing,
among other things, local content requirements, export
regulations and mineral rights regulations, the scope and
effect of which remain under review by Acacia. Acacia
continues to monitor the impact of all new legislation in
light of its MDAs with the Government of Tanzania.
However, to minimize further disruptions to its
operations Acacia will, in the interim, satisfy the
requirements imposed as regards the increased royalty
rate in addition to the recently imposed 1% clearing fee
on exports. Acacia is making these payments under
protest, without prejudice to its legal rights under
its MDAs.
66
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
Acacia has been looking to address all issues in
respect of the Ban along with other ongoing disputes
through dialogue with the Tanzanian Government.
Acacia remains of the view that a negotiated resolution
is the preferable outcome to the current disputes and
Acacia will continue to work to achieve this. During the
third quarter of 2017, Barrick and the Government of
Tanzania engaged in discussions for the potential
resolution of the disputes. Acacia did not participate
directly in these discussions as the Government of
Tanzania had informed Barrick that it wished to continue
dialogue solely with Barrick.
On October 19, 2017, Barrick announced that it
had agreed with the Government of Tanzania on a
proposed framework for a new partnership between
Acacia and the Government of Tanzania. Barrick and
the Government of Tanzania also agreed to form a
working group that will focus on the resolution of
outstanding tax claims against Acacia. Key terms of the
proposed framework announced by Barrick and the
Government of Tanzania include (i) the creation of a new
Tanzanian company to manage Acacia’s Bulyanhulu,
Buzwagi and North Mara mines and all future operations
in the country with key officers located in Tanzania and
Tanzanian representation on the board of directors;
(ii) maximization of local employment of Tanzanians
and procurement of goods and services within Tanzania;
(iii) economic benefits from Bulyanhulu, Buzwagi and
North Mara to be shared on a 50/50 basis, with the
Government’s share delivered in the form of royalties,
taxes and a 16% free carry interest in Acacia’s Tanzanian
operations; and (iv) in support of the working group’s
ongoing efforts to resolve outstanding tax claims,
Acacia would make a payment of $300 million to the
Government of Tanzania, staged over time, on terms
to be settled by the working group. Barrick and the
Government of Tanzania are also reviewing the
conditions for the lifting of the Ban. Negotiations
concerning the proposed framework remain ongoing
and the definitive terms of any final proposal for the
implementation of the framework remain outstanding.
Barrick is targeting completion of discussions aimed
at agreeing to and documenting the details of the
announced framework by the first half of 2018.
Such terms would be subject to review and approval
by Acacia.
Outlook
Acacia successfully managed through a challenging
environment to deliver a year of resilient performance in
2017. As a result of Bulyanhulu’s transition to reduced
operations and the planned transition of Buzwagi to a
stockpile processing operation in 2018, we expect to see
a decrease in production from 2017 levels to 275 to
305 thousand ounces (Barrick’s share).
We expect cost of sales per ounce4 to be in the
range of $970 to $1,020 per ounce, cash costs1 of
$690 to $720 per ounce and all-in sustaining costs1 of
$935 to $985 per ounce. The increase in all three
measures from 2017 is mainly due to the negative
impact of approximately $50 per ounce due to increased
inventory costs at Buzwagi as Acacia processes ore
stockpiles previously classified as ore inventory. We
expect production to be broadly stable through the year,
although due to the roll-over of cost from the movement
to reduced operations in the first quarter of 2018, we
expect increased cash flow in the second half of the year.
All gold produced in 2018 is expected to be in doré form.
Barrick Gold Corporation | Financial Report 2017
67
MANAGEMENT’S DISCUSSION AND ANALYSIS
Pascua-Lama, Argentina/Chile
The Pascua-Lama project, located on the border between
Chile and Argentina, contains 21.3 million ounces of
measured and indicated gold resources.
As described below, in January 2018 we received
a resolution of closure of existing infrastructure on the
Chilean side of the Pascua-Lama project from Chile’s
environmental regulator (the Superintendencia del Medio
Ambiente, or “SMA”). The resolution does not affect
the Company’s ongoing evaluation of an underground,
block-caving operation at Pascua-Lama, which would
require additional permitting and regulatory approvals in
both Argentina and Chile, unconnected to the recent
SMA decision. In any underground scenario, Barrick
would also close site facilities and surface disturbance in
Chile not necessary for an underground mine. As a
result, we have increased our provision for environmental
remediation at Pascua-Lama by $644 million in the
fourth quarter of 2017.
In light of the order to close surface facilities in
Chile, and current plans to evaluate an underground
mine, Barrick is reclassifying Pascua-Lama’s proven and
probable gold reserves of approximately 14 million
ounces6, which are based on an open pit mine plan, as
measured and indicated resources. As a result, we have
recorded an impairment of $429 million at Pascua-Lama
in the fourth quarter of 2017.
We have formed a working group with Shandong
Gold to study a potential partnership at Pascua-Lama,
building on our existing joint venture at the nearby
Veladero mine. 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.
SMA Regulatory Sanctions
On June 8, 2016, the SMA consolidated the two
administrative proceedings against Compañía Minera
Nevada (“CMN”) into a single proceeding encompassing
both the reconsideration of the original resolution issued
by the SMA in May 2013 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.
On January 17, 2018, CMN received the revised
resolution (the “Revised Resolution”) from the SMA, in
which the environmental regulator reduced the original
administrative fine from approximately $16 million to
$11.5 million and ordered the closure of existing surface
facilities on the Chilean side of the Project in addition to
certain monitoring activities. The Revised Resolution does
not revoke the Project’s environmental approval. CMN
filed an appeal of the Revised Resolution on February 3,
2018. 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 Sernageomin, rejecting the plaintiffs’ challenges to
the Temporary Closure Plan for the Pascua-Lama project.
The plaintiffs appealed the court’s decision to the Chilean
Supreme Court and on March 13, 2017, the Supreme
Court vacated the Temporary Closure Plan, ruling that
additional information regarding the SMA regulatory
sanction process was required from the environmental
regulator, and ordering Sernageomin to issue a new
resolution on the Temporary Closure Plan after receiving
such information. On August 29, 2017, Sernageomin
issued a new resolution in which it reapproved the
Temporary Closure Plan as originally issued. This approval
is valid through September 2019. 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
68
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
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 Chilean Committee’s decision brought by CMN and
the water users and indigenous residents. A hearing took
place on July 25, 2017. On December 12, 2017, the
water users withdrew their appeal. The Environmental
Court dismissed that appeal on January 5, 2018. A
decision of the Environmental Court on the remaining
appeals is still pending. 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. In June 2017, repairs were completed and the
water treatment plant resumed normal operations.
CMN has reviewed its contingency plan with Chilean
regulatory authorities.
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, 2017
($ 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
2018
2019
2020
2021
2022
2023 and
thereafter
Total
$
32
27
362
141
21
9
15
30
548
79
7
$
33
11
360
145
19
27
15
2
305
5
11
$
263
4
356
212
11
5
14
–
181
4
3
$
636
1
331
262
8
–
14
–
109
4
1
$ 337
1
311
228
8
–
13
–
4
4
1
$ 5,109
2
5,042
2,812
1
–
205
–
–
22
204
$ 6,410
46
6,762
3,800
68
41
276
32
1,147
118
227
Total
$ 1,271
$ 933
$ 1,053
$ 1,366
$ 907
$ 13,397
$ 18,927
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. 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, 2017. 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 a commitment of $157 million related to the potential funding of a power transmission line in Argentina, the majority
of which is not expected to be paid prior to 2023.
Barrick Gold Corporation | Financial Report 2017
69
MANAGEMENT’S DISCUSSION AND ANALYSIS
Review of Quarterly Results
Quarterly Information1
($ millions, except where indicated)
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
2017
2016
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 flow
Cash capital expenditures
Free cash flow2
1,274
3.05
1,270
$ 2,228 $ 1,993 $ 2,160 $ 1,993
1,258
1,220
1,280
2.60
3.34
2.76
1,277
1,342
1,411
(11) 1,084
679
0.93
0.58
261
162
0.22
0.14
448
495
405
334
43 $ 161
(314)
(0.27)
253
0.22
590
350
(0.01)
200
0.17
532
307
$ 240 $ 225 $
$ 2,319 $ 2,297 $ 2,012 $ 1,930
1,181
1,217
2.18
2.62
1,324
1,454
(83)
425
(0.07)
0.36
127
255
0.11
0.22
451
711
270
326
$ 385 $ 674 $ 274 $ 181
1,259
2.14
1,336
138
0.12
158
0.14
527
253
1,333
2.18
1,291
175
0.15
278
0.24
951
277
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 73 to 87 of this MD&A.
3. Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
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 are consistently generating
positive free cash flow1. This free cash flow, combined
with the proceeds from various divestitures, have allowed
us to strengthen our balance sheet over the past two
years. In the fourth quarter of 2017, we recorded
$521 million (net of tax effects and non-controlling
interest) of net asset impairments primarily relating to
impairments at the Pascua-Lama project and Acacia’s
Bulyanhulu mine, partially offset by an impairment
reversal at Lumwana. In the third quarter of 2017, we
recognized a $172 million tax provision relating to the
impact of the proposed framework for Acacia operations
in Tanzania. In the second quarter of 2017, we recorded
$858 million (net of tax effects) of gains on the disposition
of 50% of the Veladero mine and a 25% interest in the
Cerro Casale project. In the first quarter of 2017, we
recorded a net asset impairment reversal of $522 million
(net of tax effects and non-controlling interest) primarily
relating to impairment reversals at the Cerro Casale
project. In the fourth quarter of 2016, we recorded a net
asset impairment reversal of $199 million (net of tax
effects) primarily relating to impairment reversals at
Veladero and Lagunas Norte.
Fourth Quarter Results
In the fourth quarter of 2017, we reported a net loss of
$314 million and adjusted net earnings1 of $253 million,
compared to net earnings of $425 million and adjusted
net earnings1 of $255 million in the fourth quarter of
2016. The net loss in the fourth quarter of 2017 reflects
the recording of $521 million (net of tax effects and
non-controlling interests) in net impairment charges
compared to net impairment reversals of $199 million
(net of tax effects) recorded in the fourth quarter of 2016.
The lower net earnings in the fourth quarter of 2017
primarily reflects the recognition of impairment charges
rather than impairment reversals in the prior year period
combined with lower gold sales volumes, partially offset
by an increase in realized gold and copper prices1. The
decrease in adjusted net earnings1 primarily reflects
higher income tax expense combined with a decrease
in gold sales volume, partially offset by higher realized
gold and copper prices1 compared to the fourth quarter
of 2016.
In the fourth quarter of 2017, gold and copper
sales were 1.37 million ounces and 107 million pounds,
respectively, compared to 1.52 million ounces
(1.42 million ounces excluding the impact of divestments)
and 107 million pounds, respectively, in the fourth
quarter of 2016. The decrease in gold sales was primarily
due to lower grades at Barrick Nevada combined with
70
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
lower sales at Acacia due to reduced operations at
Acacia’s Bulyanhulu mine, partially offset by higher sales
at Porgera and Lagunas Norte. Revenues in the fourth
quarter of 2017 were lower than the same prior year
period, reflecting lower gold sales volumes, partially
offset by higher market prices for gold and copper.
In the fourth quarter of 2017, cost of sales was
$1.4 billion, a decrease of $43 million compared to the
same prior year period, primarily due to lower sales
volume, which have contributed to a decrease in direct
mining costs and royalty expense. This was partially
offset by an increase in depreciation expense, as
discussed below. Cost of sales per ounce4 was $801 per
ounce, an increase of $17 per ounce, primarily due
to higher direct mining costs mainly due to higher
consumables and power at Pueblo Viejo, partially offset
by higher capitalized waste stripping activity at Barrick
Nevada and higher depreciation expense mainly as a
result of higher depreciation at Pueblo Viejo relating to
a tailings storage facility depreciation adjustment,
partially offset by lower depreciation at Barrick Nevada
associated with the South Arturo pit. The increase was
further partially offset by a positive change in our sales
mix with lower relative sales volume from the higher cost
Bulyanhulu mine at Acacia. Cost of sales per pound4 was
$1.79, an increase of $0.36 per pound from the same
prior year period due to higher direct mining costs
combined with higher depreciation expense at Lumwana,
partially offset by a positive sales mix impact of lower
sales volume at Lumwana compared to the same prior
year period. This was further impacted by higher direct
mining costs at Zaldívar primarily related to higher fuel
and labor costs.
In the fourth quarter of 2017, operating cash flow
was $590 million, compared to $711 million in the same
prior year period. The decrease in operating cash flow
primarily reflects lower gold sales volume combined with
unfavorable working capital movements mainly related
to the timing of accounts receivable balances, partially
offset by higher realized gold and copper prices, a
decrease in income tax payments and a decrease in
interest paid.
In the fourth quarter of 2017, free cash flow1
was $240 million, lower than the $385 million in the
same prior year period. The decrease was caused by
lower operating cash flow generated in the fourth
quarter of 2017 compared to the same prior year period
combined with slightly higher cash capital expenditures
of $350 million, compared to $326 million in the
fourth quarter of 2016. The higher cash capital
expenditures were primarily a result of higher project
capital expenditures, partially offset by a reduction
in capitalized development primarily at Acacia’s
Bulyanhulu and North Mara mines.
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
Barrick Gold Corporation | Financial Report 2017
71
MANAGEMENT’S DISCUSSION AND ANALYSIS
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, 2017.
There were no changes in the Company’s internal
control over financial reporting during the fourth quarter
of 2017 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
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, 2017 will be included in Barrick’s 2017
Annual Report and its 2017 Form 40-F/Annual
Information Form on file with the US Securities and
Exchange Commission and Canadian provincial
securities regulatory authorities.
IFRS Critical Accounting Policies and Accounting Estimates
Critical Accounting Estimates and Judgments
Certain accounting estimates have been identified as being
“critical” to the presentation of our financial condition
and results of operations because they require us to make
subjective and/or complex judgments about matters
that are inherently uncertain; or there is a reasonable
likelihood that materially different amounts could be
reported under different conditions or using different
assumptions and estimates. Our significant accounting
judgments, estimates and assumptions are disclosed
in note 3 of the accompanying Financial Statements.
Management 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 Financial Statements, including a summary of current
and future changes in accounting policies.
72
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
As noted, we use this measure for internal purposes.
Management’s internal budgets and forecasts and public
guidance do not reflect 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.
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:
(cid:132)(cid:3)Impairment charges (reversals) related to intangibles,
goodwill, property, plant and equipment,
and investments;
(cid:132)(cid:3)Acquisition/disposition gains/losses;
(cid:132)(cid:3)Foreign currency translation gains/losses;
(cid:132)(cid:3)Significant tax adjustments;
(cid:132)(cid:3)Unrealized gains/losses on non-hedge derivative
instruments; and
(cid:132)(cid:3)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.
Barrick Gold Corporation | Financial Report 2017
73
MANAGEMENT’S DISCUSSION AND ANALYSIS
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)
2017
2016
2015
Net earnings (loss) attributable to equity holders of the Company
Impairment charges (reversals) related to long-lived assets1
Acquisition/disposition (gains)/losses2
Foreign currency translation (gains)/losses
Significant tax adjustments3
Other expense adjustments4
Unrealized gains on non-hedge derivative instruments
Tax effect and non-controlling interest5
Adjusted net earnings
Net earnings (loss) per share6
Adjusted net earnings per share6
$ 1,438
(212)
(911)
72
244
178
(1)
68
$ 876
1.23
0.75
$ 655
(250)
42
199
43
114
(32)
47
$ (2,838)
3,897
(187)
120
134
135
11
(928)
$ 818
$
344
0.56
0.70
(2.44)
0.30
2017
$ (314)
916
(29)
12
61
17
5
(415)
$ 253
(0.27)
0.22
2016
$ 425
(304)
7
18
(16)
39
(9)
95
$ 255
0.36
0.22
1. Net impairment reversals for the current year primarily relate to impairment reversals at the Cerro Casale project upon reclassification of the project’s net assets
as held-for-sale as at March 31, 2017 and impairment reversals at Lumwana during the fourth quarter of 2017, partially offset by net impairments at Acacia’s
Bulyanhulu mine and the Pascua-Lama project during the fourth quarter of 2017.
2. Disposition gains for the current year primarily relate to the sale of a 50% interest in the Veladero mine and the gain related to the sale of a 25% interest in the
Cerro Casale project.
3. Significant tax adjustments for the current year primarily relate to dividend withholding tax expense and a tax provision relating to the impact of the proposed
framework for Acacia operations in Tanzania, partially offset by the anticipated impact of the U.S tax reform.
4. Other expense adjustments for the current year primarily relate to losses on debt extinguishment and reduced operations program costs at Acacia’s Bulyanhulu mine.
5. Tax effect and non-controlling interest for the current year primarily relates to the impairment reversals at the Cerro Casale project, tax provision at Acacia and
Pueblo Viejo depreciation adjustment discussed above.
6. 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
2017
2016
2015
$ 2,065
(1,396)
$ 669
$ 2,640
(1,126)
$ 2,794
(1,713)
$ 1,514
$ 1,081
For the three months
ended Dec. 31
2017
$ 590
(350)
$ 240
2016
$ 711
(326)
$ 385
74
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’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 23 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 and 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 starts 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:
project 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 measure enables
investors to better understand the operating performance
of our copper mines as this measure reflects all of the
sustaining expenditures incurred in order to produce
copper. All-in sustaining costs per pound includes
C1 cash costs, corporate general and administrative
costs, minesite exploration and evaluation costs,
royalties, environmental rehabilitation costs and write-
downs taken on inventory to net realizable value.
Barrick Gold Corporation | Financial Report 2017
75
MANAGEMENT’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
2017
2016
2015
2017
2016
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
$ 4,836
(1,529)
(135)
23
–
(106)
(299)
$ 4,980
(1,504)
(184)
89
24
(44)
(358)
$ 5,906
(1,615)
(214)
128
(210)
25
(394)
$ 1,292
(404)
(30)
4
–
(35)
(81)
$ 1,347
(396)
(41)
18
–
(20)
(91)
$ 2,790
$ 3,003
$ 3,626
$ 746
$ 817
248
47
1,109
64
(273)
256
44
944
59
(287)
233
47
1,359
145
(362)
62
8
279
13
(74)
39
18
298
18
(78)
$ 3,985
$ 4,019
$ 5,048
$ 1,034
$ 1,112
307
4
273
20
(21)
193
8
175
11
(42)
308
12
133
12
(43)
90
1
81
4
(9)
64
2
51
4
(4)
All-in costs
$ 4,568
$ 4,364
$ 5,470
$ 1,201
$ 1,229
Ounces sold – equity basis (000s ounces)
10
5,302
5,503
6,083
1,372
1,519
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
$
$
$
$
$
$
$
794
526
544
750
768
860
878
$
$
$
$
$
$
$
798
546
569
730
753
792
815
$
$
$
$
$
$
$
859
596
619
831
854
900
923
$ 801
$ 784
$ 545
$ 561
$ 756
$ 772
$ 882
$ 898
$ 540
$ 557
$ 732
$ 749
$ 809
$ 826
Revenues include the sale of by-products for our gold and copper mines for the three months ended December 31, 2017 of $30 million
(2016: $41 million) and the year ended December 31, 2017 of $135 million (2016: $151 million; 2015: $140 million) and energy sales from
the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2017 of $nil (2016: $nil) and the year
ended December 31, 2017 of $nil (2016: $33 million; 2015: $74 million) up until its disposition on August 18, 2016.
2 Realized (gains)/losses on hedge and non-hedge derivatives
Includes realized hedge losses of $5 million and $27 million for the three months and year ended December 31, 2017, respectively
(2016: $14 million and $73 million, respectively; 2015: $106 million), and realized non-hedge gains of $1 million and $4 million for the
three months and year ended December 31, 2017, respectively (2016: $4 million and $16 million losses, respectively; 2015: $22 million losses).
Refer to Note 5 of the Financial Statements for further information.
3 Non-recurring items
These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs.
76
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
4 Other
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $nil, respectively, for the three
months and year ended December 31, 2017 (2016: $nil and $5 million, respectively; 2015: $12 million) and adding the cost of treatment
and refining charges of $nil and $1 million, respectively, for the three months and year ended December 31, 2017 (2016: $4 million and
$16 million, respectively; 2015: $14 million). 2016 and 2017 includes the removal of cash costs associated with our Pierina mine, which is
mining incidental ounces as it enters closure, of $35 million and $108 million for the three months and year ended December 31, 2017,
respectively (2016: $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 $137 million and $454 million, respectively, for the
three months and year ended December 31, 2017 (2016: $127 million and $508 million, respectively; 2015: $681 million). Refer to Note 5
of the Financial Statements for further information.
6 Exploration and evaluation costs
Exploration, evaluation and project expenses are presented as minesite if it supports current mine operations and project if it relates to future
projects. Refer to page 43 of this MD&A.
7 Capital expenditures
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine
and are not related to current production. Significant projects in the current year are Crossroads, Cortez Hills Lower Zone, Range Front Declines
and Goldrush. Refer to page 42 of this MD&A.
8 Rehabilitation – accretion and amortization
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provisions
of our gold operations, split between operating and non-operating sites.
9 Non-controlling interest and copper operations
Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue.
Also removes exploration, evaluation and project costs, rehabilitation costs and capital expenditures incurred by our copper sites and the
non-controlling interest of our Acacia and Pueblo Viejo operating segment and South Arturo. In 2016 and 2017, figures remove the
impact of Pierina, which is mining incidental ounces as it enters closure. The impact is summarized as the following:
($ millions)
For the years
ended Dec. 31
For the three months
ended Dec. 31
Non-controlling interest, copper operations and other
2017
2016
2015
2017
2016
General & administrative costs
Minesite exploration and evaluation costs
Rehabilitation – accretion and amortization (operating sites)
Minesite sustaining capital expenditures
All-in sustaining costs total
Project exploration and evaluation and project costs
Project capital expenditures
All-in costs total
10 Ounces sold – equity basis
$
(21)
(12)
(10)
(230)
$
(36)
(9)
(9)
(233)
$
(53)
(8)
(13)
(288)
$
(8)
1
(2)
(65)
$
(5)
(3)
(4)
(66)
$
(273)
$
(287)
$
(362)
$
(74)
$
(78)
(17)
(4)
(12)
(30)
(11)
(32)
$
(21)
$
(42)
$
(43)
$
(8)
(1)
(9)
(4)
–
(4)
$
In 2016 and 2017, figures remove the impact of Pierina, which is mining incidental ounces as it enters closure.
11 Cost of sales per ounce
In 2016 and 2017, figures remove the cost of sales impact of Pierina of $55 million and $174 million, respectively, for the three months and
year ended December 31, 2017 (2016: $30 million and $82 million, respectively), which is mining incidental ounces as it enters closure. Cost
of sales per ounce excludes non-controlling interest related to gold production. Cost of sales related to gold per ounce is calculated using cost
of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by
attributable gold ounces.
12 Per ounce figures
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
Barrick Gold Corporation | Financial Report 2017
77
MANAGEMENT’S DISCUSSION AND ANALYSIS
13 Co-product costs per ounce
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of
by-product credits of our gold production (net of non-controlling interest) calculated as:
($ millions)
By-product credits
Non-controlling interest
By-product credits (net of non-controlling interest)
For the years
ended Dec. 31
For the three months
ended Dec. 31
2017
2016
2015
2017
2016
$
135
(30)
$
184
(53)
$
214
(62)
$
105
$
131
$
152
$
$
30
(6)
24
$
41
(13)
$
28
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)
Barrick
Footnote Nevada
Pueblo Lagunas
Norte Veladero
Turquoise
Ridge
For the three months ended Dec. 31, 2017
Acacia
Golden
Hemlo Sunlight
Porgera Kalgoorlie
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 exploration and
evaluation and project costs
Project capital expenditures
Non-controlling interests
All-in costs
Ounces sold – equity
basis (000s ounces)
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
2
3
4
5
6
4
5
7,8
8
8,9
8
8,9
8
8,9
Viejo
$ 241
(107)
(14)
–
–
(49)
$ 428
(155)
(1)
–
–
(1)
$ 75
(18)
(4)
–
–
–
$ 108
(33)
(5)
–
–
–
$ 55
(10)
–
–
–
–
$ 114
(25)
–
–
1
(31)
$ 53 $
(8)
–
–
–
–
14
–
–
–
–
–
$ 69
(12)
(1)
–
–
–
$ 79
(16)
–
–
–
–
$ 271
$ 71
$ 53
$ 70
$ 45
$ 59
$ 45 $
14
$ 56
$ 63
–
4
–
–
94
30
4
–
3
(13)
–
–
8
1
–
–
–
39
–
–
–
–
8
–
–
9
–
–
–
18
10
1
(12)
1
–
–
–
–
–
–
–
1
16
(1)
–
–
3
8
–
–
$ 373
$ 91
$ 62
$ 109
$ 53
$ 75
$ 56 $
14
$ 72
$ 74
4
63
–
–
–
–
–
–
–
–
–
–
–
4
–
–
3
(1)
–
–
–
–
–
–
–
–
–
–
–
–
$ 440
$ 91
$ 62
$ 109
$ 57
$ 77
$ 56 $
14
$ 72
$ 74
539
182
114
114
81
94
64
11
80
93
$ 794
$ 795
$ 659
$ 953
$ 672
$ 774
$ 831
1,221
864
850
$ 506
$ 388
$ 461
$ 609
$ 550
$ 581
$ 690 $ 1,218
$ 705
$ 675
$ 507
$ 490
$ 508
$ 618
$ 550
$ 587
$ 695 $ 1,228
$ 715
$ 680
$ 696
$ 498
$ 547
$ 950
$ 638
$ 779
$ 864 $ 1,262
$ 897
$ 796
$ 697
$ 600
$ 594
$ 959
$ 638
$ 785
$ 869 $ 1,272
$ 907
$ 801
$ 818
$ 498
$ 553
$ 950
$ 692
$ 803
$ 878 $ 1,267
$ 897
$ 796
$ 819
$ 600
$ 600
$ 959
$ 692
$ 809
$ 883 $ 1,277
$ 907
$ 801
78
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Barrick
Nevada
Pueblo
Viejo
Lagunas
Norte
Turquoise
Ridge
Veladero
Acacia
Hemlo
Golden
Sunlight
Porgera Kalgoorlie
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 exploration
and evaluation and
project costs
Project capital expenditures
Non-controlling interests
All-in costs
Ounces sold – equity
basis (000s ounces)
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
2
3
4
5
6
4
5
7,8
8
8,9
8
8,9
8
8,9
$ 504
(224)
(1)
–
–
–
$ 144
(21)
(17)
–
1
(39)
$ 60
(19)
(4)
–
–
–
$ 173
(42)
(7)
–
–
–
$ 41
(8)
–
–
–
–
$ 195
(44)
(10)
–
1
(52)
$ 53 $
(7)
–
–
–
–
17
(2)
–
–
–
–
$ 54
(9)
–
–
–
–
$ 76
(15)
–
–
2
–
$ 279
$ 68
$ 37
$ 124
$ 33
$ 90
$ 46 $
15
$ 45
$ 63
–
8
–
–
74
32
9
(4)
2
(13)
–
–
3
2
–
–
1
49
1
–
–
–
9
–
–
(1)
1
56
2
(21)
–
–
14
–
–
–
–
1
–
–
–
1
13
–
–
–
2
6
1
–
$ 366
$ 89
$ 42
$ 175
$ 42
$ 127
$ 60 $
16
$ 59
$ 72
6
34
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$ 406
$ 89
$ 43
$ 175
$ 42
$ 127
$ 60 $
16
$ 59
$ 72
582
198
98
194
69
134
74
13
59
99
$ 864
$ 450
$ 612
$ 892
$ 595
$ 935
$ 728 $ 1,264
$ 912
$ 772
$ 478
$ 341
$ 379
$ 642
$ 484
$ 679
$ 625 $ 1,162
$ 765
$ 638
$ 479
$ 471
$ 418
$ 716
$ 484
$ 713
$ 630 $ 1,173
$ 775
$ 631
$ 630
$ 443
$ 436
$ 905
$ 610
$ 952
$ 822 $ 1,245
$ 981
$ 731
$ 631
$ 573
$ 475
$ 979
$ 610
$ 986
$ 827 $ 1,256
$ 991
$ 724
$ 696
$ 443
$ 447
$ 905
$ 610
$ 953
$ 822 $ 1,245
$ 981
$ 731
$ 697
$ 573
$ 486
$ 979
$ 610
$ 987
$ 827 $ 1,256
$ 991
$ 724
Barrick Gold Corporation | Financial Report 2017
79
MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Barrick
Footnote Nevada
Cost of sales related to
gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
Cash costs
$ 1,869
(793)
(3)
–
–
(1)
1
2
3
$ 1,072
Viejo
$ 730
(229)
(72)
–
–
(171)
Pueblo Lagunas
Norte Veladero
Turquoise
Ridge
For the year ended Dec. 31, 2017
Acacia
Golden
Hemlo Sunlight
Porgera Kalgoorlie
$ 245 $ 410
(119)
(17)
–
–
–
(68)
(16)
–
–
–
$ 159
(28)
–
–
–
–
$ 469 $ 193 $
(107)
(7)
–
1
(27)
(1)
–
–
–
(127)
55 $ 239
(39)
(3)
(3)
–
–
–
–
–
–
–
$ 292
(58)
(2)
–
–
–
$ 258
$ 161 $ 274
$ 131
$ 229 $ 165 $
52 $ 197
$ 232
General & administrative costs
Minesite exploration and
evaluation costs
Minesite sustaining
capital expenditures
Rehabilitation – accretion and
amortization (operating sites)
Non-controlling interests
4
5
6
–
16
–
–
–
4
–
3
–
–
21
–
–
–
360
114
20
173
32
137
44
25
(3)
13
(51)
7
–
2
–
1
–
6
(61)
5
–
–
–
–
2
–
–
1
55
(2)
–
–
9
20
3
–
All-in sustaining costs
$ 1,470
$ 334
$ 192 $ 452
$ 164
$ 332 $ 214 $
54 $ 251
$ 264
Project exploration and evaluation
and project costs
Project capital expenditures
4
5
Non-controlling interests
8
224
–
–
–
–
–
5
–
–
–
–
–
4
–
–
11
(4)
–
5
–
–
1
–
–
–
–
–
–
–
All-in costs
Ounces sold – equity
basis (000s ounces)
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
$ 1,702
$ 334
$ 197 $ 452
$ 168
$ 339 $ 219 $
55 $ 251
$ 264
2,357
7,8 $ 792
8 $ 455
8,9 $ 456
8 $ 624
8,9 $ 625
8 $ 722
637
397
458
222
379
196
41
253
362
$ 699
$ 617 $ 897
$ 715
$ 791 $ 986 $ 1,334 $ 944
$ 806
$ 405
$ 405 $ 598
$ 589
$ 587 $ 841 $ 1,265 $ 781
$ 642
$ 475
$ 446 $ 636
$ 589
$ 598 $ 846 $ 1,270 $ 791
$ 647
$ 525
$ 483 $ 987
$ 733
$ 875 $ 1,092 $ 1,329 $ 993
$ 729
$ 595
$ 524 $ 1,025
$ 733
$ 886 $ 1,097 $ 1,334 $ 1,003
$ 734
$ 525
$ 497 $ 987
$ 753
$ 894 $ 1,119 $ 1,349 $ 993
$ 729
(on a co-product basis)
8,9 $ 723
$ 595
$ 538 $ 1,025
$ 753
$ 905 $ 1,124 $ 1,354 $ 1,003
$ 734
80
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended Dec. 31, 2016
($ millions, except per ounce
information in dollars)
Footnote
Barrick
Nevada
Pueblo
Viejo
Lagunas
Norte
Turquoise
Ridge
Veladero
Acacia
Hemlo
Golden
Sunlight
Porgera Kalgoorlie
Cost of sales related to
gold production
Depreciation
By-product credits
Non-recurring items
Other
Non-controlling interests
$ 1,896
(807)
(2)
–
–
–
1
2
3
$ 644
(147)
(90)
34
5
(170)
$ 276
(96)
(17)
–
–
–
$ 464
(118)
(27)
(10)
–
–
$ 155
(27)
–
–
–
–
$ 719
(166)
(39)
–
8
(188)
$ 188 $
(26)
(1)
–
–
–
54
(5)
–
–
–
–
$ 203
(34)
(2)
–
–
–
$ 289
(56)
(2)
–
7
–
Cash costs
$ 1,087
$ 276
$ 163
$ 309
$ 128
$ 334
$ 161 $
49
$ 167
$ 238
General & administrative costs
Minesite exploration and
evaluation costs
Minesite sustaining
capital expenditures
Rehabilitation – accretion and
amortization (operating sites)
Non-controlling interests
4
5
6
–
10
–
–
–
2
–
1
–
–
55
3
–
–
217
101
51
95
32
190
37
26
(4)
10
(44)
8
–
4
–
1
–
6
(88)
1
–
–
–
2
2
–
–
1
–
5
43
21
(2)
–
4
–
All-in sustaining costs
$ 1,336
$ 343
$ 224
$ 409
$ 161
$ 500
$ 199 $
53
$ 209
$ 268
Project exploration and
evaluation and project costs
Project capital expenditures
Non-controlling interests
4
5
19
141
(30)
–
–
–
–
5
–
–
–
–
–
–
–
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
All-in costs
$ 1,466
$ 343
$229
$ 409
$ 161
$ 501
$ 199 $
53
$ 209
$ 268
Ounces sold – equity
basis (000s ounces)
2,162
700
425
532
257
522
237
36
243
380
Cost of sales per ounce
7,8 $ 876
$ 564
$ 651
$ 872
$ 603
$ 880
$ 795 $ 1,512
$ 836
$ 762
Cash costs per ounce
Cash costs per ounce
8 $ 502
$ 395
$ 383
$ 582
$ 498
$ 640
$ 679 $ 1,376
$ 689
$ 627
(on a co-product basis)
8,9 $ 503
$ 473
$ 423
$632
$498
$677
$683 $ 1,385
$ 697
$ 615
All-in sustaining costs per ounce
All-in sustaining costs per ounce
8 $ 618
$ 490
$ 529
$ 769
$ 625
$ 958
$ 839 $ 1,493
$ 858
$706
(on a co-product basis)
8,9 $ 619
$ 568
$ 569
$ 819
$ 625
$ 995
$ 843 $ 1,502
$ 866
$ 694
All-in costs per ounce
All-in costs per ounce
8 $ 678
$ 490
$ 540
$ 769
$ 625
$ 960
$ 839 $ 1,493
$ 858
$ 706
(on a co-product basis)
8,9 $ 679
$ 568
$ 580
$ 819
$ 625
$ 997
$ 843 $ 1,502
$ 866
$ 694
Barrick Gold Corporation | Financial Report 2017
81
MANAGEMENT’S DISCUSSION AND ANALYSIS
($ millions, except per ounce
information in dollars)
Footnote
Barrick
Nevada
Pueblo
Viejo
Lagunas
Norte
Turquoise
Ridge
Veladero
Acacia
Hemlo
Golden
Sunlight
Porgera Kalgoorlie
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
$ 1,551
(537)
(2)
(12)
–
–
1
2
3
$ 904
(277)
(120)
(47)
13
(194)
$ 378
(169)
(18)
(5)
–
–
$ 499
(108)
(22)
(21)
–
–
$ 141 $ 837 $ 192 $ 134 $ 375
(37)
(1)
–
–
–
(143)
(36)
(109)
8
(200)
(38)
(2)
(11)
–
–
(23)
–
(1)
–
–
(38)
(1)
–
–
–
$ 306
(74)
(1)
–
6
–
Cash costs
$ 1,000
$ 279
$ 186
$ 348
$ 117 $ 357 $ 153 $
83 $ 337
$ 237
General & administrative costs
Minesite exploration and
evaluation costs
Minesite sustaining
capital expenditures
Rehabilitation – accretion and
amortization (operating sites)
Non-controlling interests
4
5
6
–
12
–
1
–
3
–
2
–
–
42
2
–
1
211
102
67
242
32
178
38
27
–
25
(51)
32
–
4
–
1
–
9
(75)
1
–
–
2
7
13
–
–
2
–
2
93
34
2
–
7
–
All-in sustaining costs
$ 1,250
$ 356
$ 288
$ 596
$ 150 $ 513 $ 193 $ 105 $ 434
$ 280
Project exploration and
evaluation and project costs
Project capital expenditures
Non-controlling interests
4
5
40
159
(31)
–
–
–
–
–
–
–
–
–
–
–
–
–
(1)
–
–
39
–
–
–
–
–
–
–
–
–
–
All-in costs
$ 1,418
$ 356
$ 288
$ 596
$ 150 $ 512 $ 232 $ 105 $ 434
$ 280
Ounces sold – equity
basis (000s ounces)
1,981
597
565
629
202
461
216
76
426
315
Cost of sales per ounce
7,8 $ 782
$ 881
$ 669
$ 792
$ 697 $ 1,161 $ 887 $ 1,768 $ 881
$ 973
Cash costs per ounce
Cash costs per ounce
8 $ 504
$ 467
$ 329
$ 552
$ 581 $ 772 $ 708 $ 1,098 $ 791
$ 752
(on a co-product basis)
8,9 $ 505
$ 595
$ 361
$ 587
$ 581 $ 810 $ 711 $ 1,121 $ 794
$ 738
All-in sustaining costs per ounce
All-in sustaining costs per ounce
8 $ 631
$ 597
$ 509
$ 946
$ 742 $ 1,112 $ 895 $ 1,379 $ 1,018
$ 886
(on a co-product basis)
8,9 $ 632
$ 725
$ 541
$ 981
$ 742 $ 1,150 $ 898 $ 1,402 $ 1,021
$ 872
All-in costs per ounce
All-in costs per ounce
8 $ 715
$ 597
$ 509
$ 946
$ 742 $ 1,111 $ 1,075 $ 1,379 $ 1,018
$ 886
(on a co-product basis)
8,9 $ 716
$ 725
$ 541
$ 981
$ 742 $ 1,149 $ 1,078 $ 1,402 $ 1,021
$ 872
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 ended December 31, 2017 of $nil (2016: $nil) and the year ended December 31, 2017 of $nil (2016: $33 million;
2015: $74 million) up until its disposition on August 18, 2016.
2 Non-recurring items
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 $nil, respectively, for the three months
and year ended December 31, 2017 (2016: $nil and $5 million, respectively; 2015: $12 million) and adding the cost of treatment and refining
charges of $1 million and $1 million, respectively, for the three months and year ended December 31, 2017 (2016: $2 million and $9 million,
respectively; 2015: $8 million).
4 Exploration and evaluation costs
Exploration, evaluation and project expenses are presented as minesite if it supports current mine operations and project if it relates to future
projects. Refer to page 43 of this MD&A.
82
Barrick Gold Corporation | Financial Report 2017
MANAGEMENT’S DISCUSSION AND ANALYSIS
5 Capital expenditures
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and
are not related to current production. Significant projects in the current year are Crossroads, Cortez Hills Lower Zone, Range Front Declines and
Goldrush. Refer to page 42 of this MD&A.
6 Rehabilitation – accretion and amortization
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provisions
of our gold operations, split between operating and non-operating sites.
7 Cost of sales per ounce
Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40%
Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces.
8 Per ounce figures
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
9 Co-product costs per ounce
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of
by-product credits of our gold production (net of non-controlling interest) calculated as:
For the three months ended Dec. 31, 2017
($ 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)
Barrick
Nevada
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
Hemlo
Golden
Sunlight
Porgera Kalgoorlie
$ 1
–
$ 14
(6)
$ 4
–
$ 5
–
$ –
–
$ –
–
$ –
–
$ –
–
$ 1
–
$ –
–
$ 1
$
8
$ 4
$ 5
$ –
$ –
$ –
$ –
$ 1
$ –
Barrick
Nevada
$ 1
–
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
Hemlo
$ 17
(9)
$ 4
–
$ 7
–
$ –
–
$ 10
(4)
$ –
–
Golden
Sunlight
$ –
–
Porgera
Kalgoorlie
$ –
–
$ –
–
For the three months ended Dec. 31, 2016
$ 1
$
8
$ 4
$ 7
$ –
$ 6
$ –
$ –
$ –
$ –
Barrick
Nevada
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
Hemlo
Golden
Sunlight
Porgera Kalgoorlie
$ 3
–
$ 72
(28)
$ 16
–
$ 17
–
$ –
–
$ 7
(3)
$ 1
–
$ –
–
$ 3
–
$ 2
–
For the year ended Dec. 31, 2017
$ 3
$ 44
$ 16
$ 17
$ –
$ 4
$ 1
$ –
$ 3
$ 2
Barrick
Nevada
$ 2
–
Pueblo
Viejo
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
Hemlo
$ 90
(39)
$ 17
–
$ 27
–
$ –
–
$ 39
(14)
$ 1
–
For the year ended Dec. 31, 2016
Golden
Sunlight
$ –
–
Porgera
Kalgoorlie
$ 2
–
$ 2
–
$ 2
$ 51
$ 17
$ 27
$ –
$ 25
$ 1
$ –
$ 2
$ 2
Barrick
Nevada
$ 2
–
Pueblo
Viejo
Lagunas
Norte
$ 120
(49)
$ 18
–
Veladero
$ 22
–
Turquoise
Ridge
Acacia
Hemlo
$ –
–
$ 36
(13)
$ 1
–
Golden
Sunlight
$ 2
–
Porgera
Kalgoorlie
$ 1
–
$ 1
–
For the year ended Dec. 31, 2015
$ 2
$ 71
$ 18
$ 22
$ –
$ 23
$ 1
$ 2
$ 1
$ 1
Barrick Gold Corporation | Financial Report 2017
83
MANAGEMENT’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)
2017
2016
2015
2017
2016
For the years
ended Dec. 31
For the three months
ended Dec. 31
Cost of sales
Depreciation/amortization
Treatment and refinement charges
Cash cost of sales applicable to equity method investments
Less: royalties
By-product credits
Other
C1 cash cost of sales
General & administrative costs
Rehabilitation – accretion and amortization
Royalties
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
All-in sustaining costs
Pounds sold – consolidated basis (millions pounds)
Cost of sales per pound1,2
C1 cash cost per pound1
$ 399
(83)
157
245
(38)
(5)
–
$ 675
12
12
38
6
204
$ 319
(45)
167
203
(41)
–
–
$ 814
(104)
178
23
(101)
(1)
72
$ 603
$ 881
14
7
41
–
169
21
6
101
–
177
$ 947
$ 834
$ 1,186
405
$ 1.77
$ 1.66
405
510
$ 1.41
$ 1.65
$ 1.49
$ 1.73
$ 107
(24)
41
75
(11)
(1)
–
$ 187
3
3
11
1
67
$ 272
107
$ 1.79
$ 1.72
$ 84
(15)
43
53
(9)
–
–
$ 156
3
2
9
–
48
$ 218
107
$ 1.43
$ 1.47
All-in sustaining costs per pound1
$ 2.34
$ 2.05
$ 2.33
$ 2.51
$ 2.04
1. 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.
2. Cost of sales per pound related to copper 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).
Reconciliation of Copper Cost of Sales to C1 Cash Costs and All-in Sustaining Costs, including on a per pound basis, by operating site
($ millions, except per pound information in dollars)
Zaldívar
Lumwana Jabal Sayid
Zaldívar
Lumwana
Jabal Sayid
For the three months ended December 31
2017
2016
Cost of sales
Depreciation/amortization
Treatment and refinement charges
Less: royalties
By-product credits
C1 cash cost of sales
Rehabilitation – accretion and amortization
Royalties
Minesite exploration and evaluation costs
Minesite sustaining capital expenditures
All-in sustaining costs
Pounds sold – consolidated basis (millions pounds)
Cost of sales per pound1,2
C1 cash cost per pound1
All-in sustaining costs per pound1
84
Barrick Gold Corporation | Financial Report 2017
73
(16)
–
–
–
57
–
–
1
21
79
32
2.29
1.78
2.45
104
(24)
37
(11)
–
106
3
11
–
43
163
65
1.60
1.63
2.52
23
(5)
4
–
–
22
–
–
–
3
25
10
59
(13)
–
–
–
46
–
–
–
16
62
31
84
(15)
41
(9)
–
101
3
9
–
27
140
70
11
(3)
2
–
–
10
–
–
–
6
16
6
2.15
2.05
2.41
1.87
1.20
1.46
1.45
1.97
1.99
1.89
1.79
2.73
MANAGEMENT’S DISCUSSION AND ANALYSIS
2017
2016
2015
For the years ended December 31
($ millions, except per pound
information in dollars)
Zaldívar
Lumwana
Jabal
Sayid
Zaldívar
Lumwana
Jabal
Sayid
Zaldívar
Lumwana
Cost of sales
Depreciation/amortization
$ 243
(55)
$ 396
(83)
$ 75
(17)
$ 221
(44)
$ 319
(45)
$ 33
(6)
$ 424
(50)
Treatment and
refinement charges
Less: royalties
By-product credits
Other
–
–
–
–
144
(38)
–
–
14
–
(5)
–
–
–
–
–
161
(41)
–
–
6
–
–
–
–
–
(1)
–
$ 418
(59)
178
(101)
–
72
Jabal
Sayid
$ –
–
–
–
–
–
C1 cash cost of sales
$ 188
$ 419
$ 67
$ 177
$ 394
$ 33
$ 373
$ 508
$ –
Rehabilitation - accretion
and amortization
Royalties
Minesite exploration and
evaluation costs
Minesite sustaining
capital expenditures
–
–
4
12
38
2
58
123
–
–
–
23
–
–
–
56
7
41
–
96
–
–
–
1
–
–
17
78
5
101
–
99
–
–
–
–
All-in sustaining costs
$ 250
$ 594
$ 90
$ 233
$ 538
$ 50
$ 452
$ 713
$ –
Pounds sold – consolidated
basis (millions pounds)
Cost of sales per pound1,2
C1 cash cost per pound1
All-in sustaining costs
per pound1
113
$ 2.15
$ 1.66
253
39
$ 1.57
$ 1.90
$ 1.66
$ 1.70
114
274
17
215
295
$ 1.93
$ 1.16
$ 1.98
$ 1.97
$ 1.42
$ 1.55
$ 1.44
$ 1.97
$ 1.74
$ 1.72
–
$ –
$ –
$ 2.21
$ 2.35
$ 2.30
$ 2.05
$ 1.97
$ 2.98
$ 2.11
$ 2.42
$ –
1. 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.
2. Cost of sales per pound applicable to copper 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:
(cid:132)(cid:3)Income tax expense;
(cid:132)(cid:3)Finance costs;
(cid:132)(cid:3)Finance income; and
(cid:132)(cid:3)Depreciation.
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.
Adjusted EBITDA removes the effect of “impairment
charges” and starting in the second quarter 2017 MD&A,
we began including additional adjusting items in the
Adjusted EBITDA reconciliation to provide a greater level
of consistency with the adjusting items included in our
Adjusted Net Earnings reconciliation. These new items
include: acquisition/disposition gains/losses; foreign
currency translation gains/losses; other expense
adjustments; and unrealized gains on non-hedge
derivative instruments. These amounts are adjusted to
remove any impact on finance costs/income, income
tax expense and/or depreciation as they do not affect
EBITDA. The prior periods have been restated to reflect
the change in presentation. We believe this additional
information will assist analysts, investors and other
stakeholders of Barrick in better understanding our
ability to generate liquidity from operating cash flow, by
excluding these amounts from the calculation as they are
not indicative of the performance of our core mining
business and not necessarily reflective of the underlying
operating results for the periods presented.
Barrick Gold Corporation | Financial Report 2017
85
MANAGEMENT’S DISCUSSION AND ANALYSIS
EBITDA and adjusted EBITDA are intended to provide
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.
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
($ millions)
Net earnings (loss)
Income tax expense
Finance costs, net1
Depreciation
EBITDA
Impairment charges (reversals) of long-lived assets2
Acquisition/disposition (gains)/losses3
Foreign currency translation (gains)/losses
Other expense adjustments4
Unrealized gains on non-hedge derivative instruments
For the years
ended Dec. 31
For the three months
ended Dec. 31
2017
2016
2015
2017
2016
$ 1,516
1,231
624
1,647
$ 5,018
(212)
(911)
72
51
(1)
$
861
917
725
1,574
$ 4,077
(250)
42
199
(15)
(32)
$ (3,113)
(31)
663
1,771
(710)
$
3,897
(187)
120
203
11
$ (467)
51
115
434
$ 133
916
(29)
12
17
5
$ 512
223
200
418
$ 1,353
(304)
7
18
(20)
(9)
Adjusted EBITDA
$ 4,017
$ 4,021
$ 3,334
$ 1,054
$ 1,045
1. Finance costs exclude accretion.
2. Net impairment reversals for the current year primarily relate to impairment reversals at the Cerro Casale project upon reclassification of the project’s net assets
as held-for-sale as at March 31, 2017 and impairment reversals at Lumwana during the fourth quarter of 2017, partially offset by net impairments at Acacia’s
Bulyanhulu mine and the Pascua-Lama project during the fourth quarter of 2017.
3. Disposition gains for the current year primarily relate to the sale of a 50% interest in the Veladero mine and the gain related to the sale of a 25% interest in the
Cerro Casale project.
4. Other expense adjustments primarily consist of reduced operations program costs at Acacia’s Bulyanhulu mine.
Reconciliation of Segment Income to Segment EBITDA
For the year ended Dec. 31, 2017
($ millions)
Segment Income
Depreciation
Segment EBITDA
($ millions)
Segment Income
Depreciation
Segment EBITDA
($ millions)
Segment Income
Depreciation
Segment EBITDA
86
Barrick Gold Corporation | Financial Report 2017
Pueblo
Viejo
(60%)
Barrick
Nevada
Lagunas
Norte Veladero
Turquoise Acacia
(100%)
Ridge
$ 1,052
793
$ 395
143
$ 259
68
$ 173
119
$ 119
28
$ 191
107
$ 1,845
$ 538
$ 327
$ 292
$ 147
$ 298
For the year ended Dec. 31, 2016
Barrick
Nevada
Pueblo
Viejo
(60%)
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
(100%)
$ 771
807
$ 528
93
$ 260
96
$ 220
118
$ 166
27
$ 299
166
$ 1,578
$ 621
$ 356
$ 338
$ 193
$ 465
For the year ended Dec. 31, 2015
Barrick
Nevada
Pueblo
Viejo
(60%)
Lagunas
Norte
Veladero
Turquoise
Ridge
Acacia
(100%)
$ 678
537
$ 230
160
$ 285
169
$ 216
108
$ 92
23
(1)
$
143
$ 1,215
$ 390
$ 454
$ 324
$ 115
$ 142
MANAGEMENT’S DISCUSSION AND ANALYSIS
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 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 Company’s 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.
Realized Price
Realized price is a non-GAAP financial measure which
excludes from sales:
(cid:132)(cid:3)Unrealized gains and losses on non-hedge derivative
contracts;
(cid:132)(cid:3)Unrealized mark-to-market gains and losses
on provisional pricing from copper and gold
sales contracts;
(cid:132)(cid:3)Sales attributable to ore purchase arrangements;
(cid:132)(cid:3)Treatment and refining charges; and
(cid:132)(cid:3)Export duties.
This measure is intended to enable Management to
better understand the price realized in each reporting
period for gold and copper sales because unrealized
mark-to-market values of non-hedge gold and copper
derivatives are subject to change each period due to
changes in market factors such as market and forward
gold and copper prices, so that prices ultimately realized
may differ from those recorded. The exclusion of such
unrealized mark-to-market gains and losses from the
presentation of this performance measure enables
investors to understand performance based on the
realized proceeds of selling gold and copper production.
The gains and losses on non-hedge derivatives and
receivable balances relate to instruments/balances
that mature in future periods, at which time the gains
Reconciliation of Sales to Realized Price per ounce/pound
Gold
Copper
For the years ended Dec. 31
($ millions, except per ounce/pound information in dollars)
2017
2016
2015
2017
2016
2015
Sales
Sales applicable to non-controlling interests
Sales applicable to equity method investments1,2
Realized non-hedge gold/copper derivative (losses) gains
Sales applicable to Pierina3
Treatment and refinement charges
Export duties
Revenues – as adjusted
Ounces/pounds sold (000s ounces/millions pounds)3
Realized gold/copper price per ounce/pound4
$ 7,631
(810)
–
3
(153)
1
–
$ 6,672
5,302
$ 1,258
$ 7,908
(948)
–
(2)
(112)
16
2
$ 7,813
(826)
–
–
–
14
34
$ 6,864
$ 7,035
5,503
6,083
$ 608
–
427
–
–
157
–
$ 1,192
405
$ 466
–
293
–
–
167
–
$1,002
–
26
–
–
178
–
$ 926
$ 1,206
405
510
$ 1,248
$ 1,157
$ 2.95
$ 2.29
$ 2.37
1 Represents sales of $325 million for the year ended December 31, 2017 (2016: $259 million; 2015: $26 million) applicable to our 50% equity method investment
in Zaldívar and $116 million (2016: $40 million; 2015: $nil) applicable to our 50% equity method investment in Jabal Sayid.
2. Sales applicable to equity method investments are net of treatment and refinement charges.
3. Figures exclude Pierina from the calculation of realized price per ounce, which is mining incidental ounces as it enters closure.
4. Realized price per ounce/pound may not calculate based on amounts presented in this table due to rounding.
Barrick Gold Corporation | Financial Report 2017
87
MANAGEMENT’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, Vice President,
Reserves and Resources 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
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 73 to 87 of this MD&A.
2 Amount excludes capital leases and includes Acacia
(100% basis).
3 Includes $87 million cash primarily held at Acacia,
which may not be readily deployed.
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.
6 Estimated in accordance with National Instrument 43-101
as required by Canadian securities regulatory
authorities. Estimates are as of December 31, 2017,
unless otherwise noted. Proven reserves of
398.2 million tonnes grading 1.91 g/t, representing
24.4 million ounces of gold, and 170.7 million tonnes
grading 0.556%, representing 2.095 billion pounds
of copper. Probable reserves of 0.9 billion tonnes
grading 1.39 g/t, representing 40.0 million ounces of
gold, and 456.7 million tonnes grading 0.592%,
88
Barrick Gold Corporation | Financial Report 2017
representing 5.956 billion pounds of copper.
Measured resources of 400.0 million tonnes grading
0.92 g/t, representing 11.8 million ounces of gold,
and 90.9 million tonnes grading 0.401%, representing
803.1 million pounds of copper. Indicated resources
of 1.6 billion tonnes grading 1.54 g/t, representing
76.8 million ounces of gold, and 581.2 million tonnes
grading 0.506%, representing 6.484 billion pounds
of copper. Inferred resources of 795.4 million tonnes
grading 1.21 g/t, representing 30.8 million ounces
of gold, and 125.4 million tonnes grading 0.482%,
representing 1.331 billion pounds of copper. Pascua-
Lama measured resources of 42.8 million tonnes
grading 1.86 g/t representing 2.6 ounces of gold, and
indicated resources of 391.7 tonnes grading 1.49 g/t,
representing 18.8 ounces of gold. Goldrush probable
reserves of 5.7 tonnes grading 8.12 g/t, representing
1.5 ounces of gold. Norte Abierto (formerly known
as the Cerro Casale project, comprised of the Cerro
Casale, Caspiche and Luciano deposits) proven
reserves of 114.9 million tonnes grading 0.65 g/t
(50 percent basis) representing 2.4 million ounces
of gold (50 percent basis), and probable reserves of
484.0 million tonnes grading 0.59 g/t (50 percent
basis), representing 9.2 million ounces of gold
(50 percent basis). Norte Abierto measured resources
of 310.1 million tonnes grading 0.57 g/t (50 percent
basis) representing 5.7 million ounces of gold
(50 percent basis, indicated resources of 391.8 million
tonnes grading 0.47 g/t (50 percent basis) representing
6.0 million ounces of gold (50 percent basis), and
inferred resources of 99.1 million tonnes grading
0.29 g/t (50 percent basis) representing 0.9 million
ounces of gold (50 percent basis). 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 90 to 97
of Barrick’s Annual Report 2017.
Glossary of Technical Terms
ALL-IN SUSTAINING COSTS: A measure of cost per ounce/pound
for gold/copper. Refer to page 76 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 84 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 76 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 74 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS
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 90 to 97 – Summary Gold/Copper
Mineral Reserves and Mineral Resources.
MINERAL RESOURCE: See pages 90 to 97 – Summary Gold/
Copper Mineral Reserves and Mineral Resources.
MINING RATE: Tonnes of ore mined per day or even specified
time period.
OPEN PIT: A mine where the minerals are mined entirely from
the surface.
ORE: Rock, generally containing metallic or non-metallic
minerals, which can be mined and processed at a profit.
ORE BODY: A sufficiently large amount of ore that can be
mined economically.
OUNCES: Troy ounces of a fineness of 999.9 parts per
1,000 parts.
RECLAMATION: The process by which lands disturbed as a result
of mining activity are modified to support beneficial land use.
Reclamation activity may include the removal of buildings,
equipment, machinery and other physical remnants of mining,
closure of tailings storage facilities, leach pads and other mine
features, and contouring, covering and re-vegetation of waste
rock and other disturbed areas.
RECOVERY RATE: A term used in process metallurgy to indicate
the proportion of valuable material physically recovered in
the processing of ore. It is generally stated as a percentage
of the material recovered compared to the total material
originally present.
REFINING: The final stage of metal production in which
impurities are removed from the molten metal.
STRIPPING: Removal of overburden or waste rock overlying
an ore body in preparation for mining by open pit methods.
Expressed as the total number of tonnes mined or to be mined
for each ounce of gold or pound of copper.
TAILINGS: The material that remains after all economically and
technically recoverable precious metals have been removed
from the ore during processing.
Barrick Gold Corporation | Financial Report 2017
89
MINERAL RESERVES AND MINERAL RESOURCES
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 91 to 97.
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
90
Barrick Gold Corporation | Financial Report 2017
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.
MINERAL RESERVES AND MINERAL RESOURCES
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)
50,013
3,982
53,995
62,137
19,145
–
7,082
2,267
935
270
114,851
14,198
25,719
2.82
11.49
3.46
2.67
1.46
–
15.56
3.28
3.66
1.15
0.65
0.72
2.23
4,537
1,471
6,008
5,335
898
–
3,544
239
110
10
2,391
330
1,840
9,198
4,599
13,797
19,222
148,775
5,671
4,689
1,557
23,993
182
483,950
99,716
29,711
3.78
8.75
5.44
3.06
1.92
8.12
15.48
2.52
2.16
3.42
0.59
0.78
2.27
1,117
1,294
2,411
1,889
9,188
1,481
2,334
126
1,664
20
9,232
2,486
2,165
59,211
8,581
67,792
81,359
167,920
5,671
11,771
3,824
24,928
452
598,801
113,914
55,430
5,654
2.97
2,765
10.02
8,419
3.86
2.76
7,224
1.87 10,086
1,481
8.12
5,878
15.53
365
2.97
1,774
2.21
30
2.06
0.60 11,623
2,816
0.77
4,005
2.25
635
75,145
9.21
0.89
188
2,161
12,620
23,915
4.56
2.21
1,850
1,697
13,255
99,060
4.78
1.21
2,038
3,858
1,864
5,298
9,108
5,556
10.66
2.40
0.92
0.21
639
408
269
38
10,716
11,628
–
6,282
6.86
2.89
–
0.25
2,362
1,080
–
51
12,580
16,926
9,108
11,838
7.42
2.73
0.92
0.23
3,001
1,488
269
89
398,205
1.91 24,408
896,424
1.39 40,036
1,294,629
1.55 64,444
Gold Mineral Reserves1,2
As at December 31, 2017
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
South America
Cerro Casale (50.00%)3
Veladero (50.00%)4
Lagunas Norte
Australia Pacific
Porgera (47.50%)
Kalgoorlie (50.00%)
Africa
Bulyanhulu (63.90%)
North Mara (63.90%)
Buzwagi (63.90%)
Other
Total
Copper Mineral Reserves1
As at December 31, 2017
Proven
Probable
Total
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
132,477
32,711
5,556
0.493 1,440.3
362.9
0.503
291.5
2.380
81,757
368,685
6,282
970.4
0.538
0.572 4,651.1
334.9
2.418
214,234
401,396
11,838
0.510 2,410.7
0.567 5,014.0
626.4
2.400
170,744
0.556 2,094.7
456,724
0.592 5,956.4
627,468
0.582 8,051.1
Based on attributable pounds
Zaldívar (50.00%)
Lumwana
Jabal Sayid (50.00%)
Total
1. See accompanying endnote #1.
2. See accompanying endnote #2.
3. See accompanying endnote #3.
4. See accompanying endnote #4.
Barrick Gold Corporation | Financial Report 2017
91
MINERAL RESERVES AND MINERAL RESOURCES
Gold Mineral Resources1,2
As at December 31, 2017
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 (50.00%)3
Caspiche (50.00%)3
Pascua-Lama4
Veladero (50.00%)5
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%)
Tankoro (31.95%)
Other
Total
Tonnes
(000s)
1,764
1,519
3,283
7,773
2,586
140
2,944
2,927
1,107
121
3,865
11,478
310,050
42,809
3,324
1,925
–
149
3,166
874
1,291
13
–
–
216
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)
2.61
9.91
5.99
2.39
1.88
10.44
9.03
1.19
2.67
1.54
2.52
0.30
0.57
1.86
0.48
0.87
–
5.22
0.96
11.53
2.63
2.39
–
–
0.29
148
484
632
598
156
47
855
111.6
95
6
3,840
2,379
6,219
93,913
28,837
31,379
2,162
8,365
40,232
3,013
313 266,803
112 136,846
5,655 391,750
2,564 391,734
66,771
29,017
–
51
54
–
2.89
357
7.75
593
4.75
950
2.47
7,456
1.85
1,712
9.27
9,351
9.37
651
1.12
301
1.36
1,763
173
1.79
2.24 19,190
1,574
0.36
5,965
0.47
1.49 18,783
1,225
0.57
896
0.96
–
–
505
1,077
1,582
8,054
1,868
9,398
1,506
412.6
1,858
179
19,503
1,686
11,620
21,347
1,276
950
–
267
2.80
1,192
9.37
1,459
8.16
27,637
2.43
9,874
2.01
8.24
8,817
1,697 13.03
0.46
2.78
2.17
2.02
749
4,949
2,442
46,108
247,720
99,050
15,400
33,486
1,857
210,965
0.38
0.29
1.74
0.43
0.92
1.00
24
359
383
2,155
638
2,335
711
11
442
170
2,997
2,995
921
863
464
55
6,793
25
98
12,316
12,120
4.62
1.21
1,828
473
1,853
571
11,879
1,252
4.15
2.48
1,584
100
324
109
1
–
–
2
8,334
6,522
2,878
12,520
–
2,404
8.78
2.77
1.04
3.45
–
0.61
2,352
581
96
1,389
–
47
2,676
690
97
1,389
–
49
15,469
4,112
31,898
2,933
13,739
1,860
9.75
4.15
0.77
3.49
1.52
0.25
4,848
548
790
329
671
15
400,041
0.92 11,809 1,554,135
1.54 76,756
88,565
795,352
1.21 30,818
Copper Mineral Resources1,2
As at December 31, 2017
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable pounds
Zaldívar (50.00%)
Lumwana
Jabal Sayid (50.00%)
Total
Tonnes
(000s)
62,629
28,041
216
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
0.402
0.388
1.617
555.5
25,248
239.9 553,524
2,404
7.7
0.389
216.4
0.505 6,161.3
106.2
2.004
771.9
6,401.2
113.9
4,408 0.511
49.7
119,094 0.452 1,187.4
94.3
1,860 2.300
90,886
0.401
803.1 581,176
0.506 6,483.9
7,287.0
125,362 0.482 1,331.4
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying endnote #1.
3. See accompanying endnote #3.
4. See accompanying endnote #5.
5. See accompanying endnote #4.
92
Barrick Gold Corporation | Financial Report 2017
MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3,4
For the years ended December 31
2017
2016
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 (50.00%)5
Caspiche (50.00%)5
Pascua-Lama6
Veladero (50.00%)7
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)
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.
6. See accompanying endnote #5.
7. See accompanying endnote #4.
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
59,211
5,604
8,581
3,898
67,792
9,502
81,359
101,686
167,920
31,423
5,671
31,519
11,771
5,106
3,824
11,292
24,928
41,339
452
3,134
–
270,668
598,801
148,324
–
701,800
–
434,543
113,914
70,095
55,430
30,942
5,654
2.97
505
2.80
2,765
10.02
1,077
8.59
8,419
3.86
1,582
5.18
7,224
2.76
2.46
8,054
1.87 10,086
1,868
1.85
1,481
8.12
9,398
9.27
5,878
15.53
1,506
9.17
365
2.97
413
1.14
1,774
2.21
1,858
1.40
30
2.06
179
1.78
–
–
2.24 19,503
–
0.60 11,623
1,686
0.35
–
–
0.51 11,620
–
1.53 21,347
2,816
0.77
0.57
1,276
4,005
2.25
950
0.95
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
2,529
0.35
–
–
–
–
1.57 14,050
7,297
1.45
6,749
0.83
3,303
0.48
4,218
1.86
1,168
0.63
Barrick Gold Corporation | Financial Report 2017
93
MINERAL RESERVES AND MINERAL RESOURCES
Summary Gold Mineral Reserves and Mineral Resources1,2,3,4
For the years ended December 31
2017
2016
Based on attributable ounces
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%)
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.
Tonnes
(000s)
Grade Ounces
(000s)
(gm/t)
Tonnes
(000s)
Grade
(gm/t)
Ounces
(000s)
13,255
12,465
99,060
15,286
12,580
9,208
16,926
7,813
9,108
2,891
–
12,520
–
–
11,838
2,620
4.78
4.62
1.21
1.16
7.42
9.04
2.73
2.75
0.92
1.04
–
3.45
–
–
0.23
0.58
2,038
1,853
3,858
571
3,001
2,676
1,488
690
269
97
–
1,389
–
–
89
49
14,455
13,775
100,073
14,114
13,958
8,885
15,202
12,888
9,624
16,532
–
14,205
–
5,076
11,331
2,621
4.75
4.07
1.29
0.89
7.29
8.91
2.47
2.36
1.27
1.23
–
3.49
–
2.78
0.24
0.52
2,207
1,802
4,140
402
3,271
2,544
1,209
979
392
654
–
1,594
–
454
86
44
1,294,629
1,954,176
1.55 64,444
1.41 88,565
2,006,898
1,308,770
1.33 85,950
1.79 75,235
94
Barrick Gold Corporation | Financial Report 2017
MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Reserves1
For the year ended
December 31, 2017
In proven
gold reserves
In probable
gold reserves
Total
Based on attributable ounces
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (50.00%)2
Lagunas Norte
Veladero (50.00%)3
Africa
Bulyanhulu (63.90%)4
Total
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)
62,137 17.97
35,909
19,222 15.55
9,612
81,359 17.40
45,521 77.8%
114,851
24,648
1.91
4.36
7,466 12.69
7,043
3,455
3,047
1.43
483,950
29,711
5.94
99,716 14.77
22,300
5,670
47,359
598,801
54,359
1.52
5.22
107,182 14.63
29,343 69.0%
9,125 37.7%
50,406 10.0%
1,864
5.59
335
7,402
8.44
2,009
9,266
7.87
2,344 65.0%
210,966
7.34
49,789
640,001
4.23
86,950
850,967
5.00
136,739 48.0%
1. Silver is accounted for as a by-product credit against reported or projected gold production costs.
2. See accompanying endnote #3.
3. See accompanying endnote #4.
4. See accompanying endnote #6.
Contained Copper Within Reported Gold Reserves1
For the year ended
December 31, 2017
In proven
gold reserves
In probable
gold reserves
Total
Based on attributable pounds
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (50.00%)2
Africa
Bulyanhulu (63.90%)3
Buzwagi (63.90%)
Total
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained
lbs
(millions)
Tonnes Grade
(%)
(000s)
Contained Process
lbs recovery
%
(millions)
62,137 0.097
132.3
19,222 0.100
42.5
81,359 0.097
174.8 47.9%
114,851 0.190
480.9
483,950 0.226
2,408.8
598,801 0.219
2,889.7 87.4%
1,864 0.436
–
–
17.9
–
7,402 0.567
–
–
92.5
–
9,266 0.540
–
–
110.4 90.0%
–
–
178,852 0.160
631.1
510,574 0.226
2,543.8
689,426 0.209
3,174.9 85.4%
1. Copper is accounted for as a by-product credit against reported or projected gold production costs.
2. See accompanying endnote #3.
3. See accompanying endnote #6.
Barrick Gold Corporation | Financial Report 2017
95
MINERAL RESERVES AND MINERAL RESOURCES
Contained Silver Within Reported Gold Resources1
For the year ended December 31, 2017
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable ounces
North America
Pueblo Viejo (60.00%)
South America
Cerro Casale (50.00%)2
Caspiche (50.00%)2
Pascua-Lama3
Lagunas Norte
Veladero (50.00%)4
Africa
Bulyanhulu (63.90%)
Total
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)
7,773
14.25
3,561
93,913
13.61
41,095
44,656
27,637
10.81
9,605
11,478
310,050
1.20
1.20
441
136,846
11,976
391,750
1.06
1.20
4,656
15,147
5,097 247,720
27,123
99,050
1.04
0.91
42,809
57.21
78,747
391,734
52.22 657,718
736,465
15,400
17.83
1,925
3,324
2.71
8.95
168
956
29,017
66,771
2.83
2,642
2,810
1,857
3.35
12.25
26,287
27,243
33,486
10.99
8,253
2,909
8,830
200
11,830
874
7.15
201
8,334
6.55
1,755
1,956
15,469
6.96
3,461
378,233
7.90 96,050 1,118,365
20.84 749,300
845,350 440,619
3.18
45,088
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying endnote #3.
3. See accompanying endnote #5.
4. See accompanying endnote #4.
Contained Copper Within Reported Gold Resources1
For the year ended December 31, 2017
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 (50.00%)2
Caspiche (50.00%)2
Pascua-Lama3
Africa
Bulyanhulu (63.90%)
Buzwagi (63.90%)
Total
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
7,773
0.067
11.5
93,913
0.081
167.6
179.1
27,637
0.086
52.3
11,478
0.132
33.4
136,846
0.164
495.9
529.3 247,720
277,100
0.230 1,405.1
363,950
0.180 1,444.3
2,849.4
97,800
42,809
0.101
95.7
391,734
0.082
704.6
800.3
15,400
0.192
0.120
0.049
1,046.8
258.7
16.5
874
13
0.405
0.349
7.8
0.1
8,334
2,878
0.441
0.109
81.0
6.9
88.8
15,469
7.0
31,898
0.632
0.081
215.5
56.9
340,047
0.207 1,553.6 997,655
0.132 2,900.3
4,453.9 435,924
0.171 1,646.7
1. Resources which are not reserves do not have demonstrated economic viability.
2. See accompanying endnote #3.
3. See accompanying endnote #5.
Nickel Mineral Resources1
For the year ended December 31, 2017
Measured (M)
Indicated (I)
(M) + (I)
Inferred
Based on attributable pounds
Africa
Kabanga (50.00%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
Contained
lbs
(millions)
Tonnes
(000s)
Contained
lbs
(millions)
Grade
(%)
6,905
2.490
379.0
11,705
2.720
701.9
1,080.9
10,400
2.600
596.1
1. Resources which are not reserves do not have demonstrated economic viability.
96
Barrick Gold Corporation | Financial Report 2017
MINERAL RESERVES AND MINERAL RESOURCES
Mineral Reserves and Resources Endnotes
1. Mineral reserves (“reserves”) and mineral resources (“resources”) have been estimated as at December 31, 2017 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. 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, Vice President, 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$1,200 per ounce,
an assumed silver price of US$16.50 per ounce, and an assumed copper price of US$2.75 per pound and long-term average exchange rates of 1.25 CAD/US$ 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, 2017 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 June 9, 2017, the Company sold 25% of its interest in Cerro Casale to Goldcorp Inc. (“Goldcorp”). Goldcorp concurrently purchased Kinross Gold Corporation’s
25% interest in Cerro Casale, resulting in Barrick and Goldcorp each holding a 50% interest in the joint operation. In connection with this transaction, Goldcorp also
acquired the Caspiche Project from Exeter Resource Corporation, which was also contributed to the joint operation. Moving forward, the joint venture will be referred
to as Norte Abierto, which includes the Cerro Casale, Caspiche and Luciano deposits. For additional information, see page 124 of Barrick’s Annual Report 2017.
4. On June 30, 2017, the Company sold 50% of its interest in the Veladero mine to Shandong Gold Group Co., Ltd. For additional information regarding this matter,
see page 124 of Barrick’s Annual Report 2017.
5. On January 17, 2018, Chile’s Superintendencia del Medio Ambiente (SMA) ordered the closure of existing infrastructure on the Chilean side of the Pascua-Lama
project. As a result, the Company has reclassified Pascua-Lama’s proven and probable gold reserves as measured and indicated resources. For additional information,
see page 166 of Barrick’s Annual Report 2017.
6. Silver and copper probable reserve tonnage at the Bulyanhulu mine is less than the gold probable reserve tonnage because the gold reserve includes 3.3 million
tonnes of tailings material which are being separately reprocessed for recovery of gold only.
Barrick Gold Corporation | Financial Report 2017
97
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 14, 2018
98
Barrick Gold Corporation | Financial Report 2017
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, 2017. 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, 2017.
The effectiveness of the Company’s internal control over financial reporting as at December 31, 2017 has been
audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants, as stated in their report which is located
on pages 100 – 101 of Barrick’s 2017 Annual Financial Statements.
Barrick Gold Corporation | Financial Report 2017
99
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
Independent Auditor’s Report
To the Board of Directors and Shareholders
of Barrick Gold Corporation
We have audited the accompanying consolidated balance sheets of Barrick Gold Corporation and its subsidiaries,
(together, the company) as of December 31, 2017 and 2016, and the related consolidated statements of income,
comprehensive income, cash flow and changes in equity for the years then ended, including the related notes
(collectively referred to as the consolidated financial statements). We also have audited the company’s internal control
over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of the company as of December 31, 2017 and 2016, and the results of their
operations and their cash flows for the years then ended in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IFRS). Also in our opinion, the company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The company’s management is responsible for these consolidated financial statements, 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.
Our responsibility is to express opinions on the company’s consolidated financial statements and on the company’s
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.
100
Barrick Gold Corporation | Financial Report 2017
INDEPENDENT AUDITOR’S REPORT
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
Definition and Limitations 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 consolidated 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 consolidated 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 consolidated financial statements.
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.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 14, 2018
We have served as the company’s auditor since at least 1982. We have not determined the specific year we began
serving as auditor of the company.
Barrick Gold Corporation | Financial Report 2017 101
FINANCIAL STATEMENTS
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 (note 10)
Loss on currency translation (note 9b)
Closed mine rehabilitation (note 27b)
Income from equity investees (note 16)
Gain on non-hedge derivatives (note 25e)
Other expense (income) (note 9a)
Income before finance items and income taxes
Finance costs, net (note 14)
Income before income taxes
Income tax expense (note 12)
Net income
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests (note 32)
2017
2016
$ 8,374
$ 8,558
5,300
248
354
(212)
72
55
(76)
(6)
(799)
3,438
(691)
2,747
(1,231)
5,405
256
237
(250)
199
130
(20)
(12)
60
2,553
(775)
1,778
(917)
$ 1,516
$
861
$ 1,438
78
$
$
$
655
206
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 13)
Net income
Basic
Diluted
$ 1.23
$ 1.23
$
$
0.56
0.56
The accompanying notes are an integral part of these consolidated financial statements.
102
Barrick Gold Corporation | Financial Report 2017
Consolidated Statements
of Comprehensive Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Net income
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 $3 and ($9)
Realized (gains) losses on derivatives designated as cash flow hedges, net of tax ($9) and ($8)
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 ($6) and ($4)
Net change on equity investments, net of tax $nil and $nil
Total other comprehensive income
Total comprehensive income
Attributable to:
Equity holders of Barrick Gold Corporation
Non-controlling interests
The accompanying notes are an integral part of these consolidated financial statements.
FINANCIAL STATEMENTS
2017
2016
$ 1,516
$
861
(16)
23
9
18
4
38
16
64
95
7
6
188
$ 1,554
$ 1,049
$ 1,476
78
$
$
$
843
206
Barrick Gold Corporation | Financial Report 2017 103
FINANCIAL STATEMENTS
Consolidated Statements of Cash Flow
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)
Operating Activities
Net income
Adjustments for the following items:
Depreciation
Finance costs (note 14)
Impairment reversals (note 10)
Income tax expense (note 12)
Currency translation losses (note 9b)
Loss (gain) on sale of non-current assets/investments (note 9a)
Change in working capital (note 15)
Other operating activities (note 15)
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 purchases
Net funds (invested) received from equity method investments
Net cash provided by (used in) investing activities
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.
104
Barrick Gold Corporation | Financial Report 2017
2017
2016
$ 1,516
$
861
1,647
705
(212)
1,231
72
(911)
(728)
(181)
3,139
(425)
(649)
2,065
(1,396)
28
990
(7)
48
(337)
–
(1,533)
(125)
13
(139)
(102)
(1,886)
3
(155)
2,389
$ 2,234
1,574
788
(250)
917
199
42
(428)
(63)
3,640
(513)
(487)
2,640
(1,126)
135
588
–
(9)
(412)
5
(2,062)
(86)
70
(95)
(129)
(2,297)
3
(66)
2,455
$ 2,389
Consolidated Balance Sheets
FINANCIAL STATEMENTS
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
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
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,
2016
2017
$ 2,234
239
1,890
321
4,684
1,681
1,213
13,806
255
1,330
1,069
1,270
$ 25,308
$ 1,059
59
298
331
1,747
6,364
3,141
1,245
1,744
14,241
20,893
(11,759)
(169)
321
9,286
1,781
11,067
$ 2,389
249
1,930
306
4,874
1,536
1,185
14,103
272
1,371
977
946
$ 25,264
$ 1,084
143
283
309
1,819
7,788
2,363
1,520
1,461
14,951
20,877
(13,074)
(189)
321
7,935
2,378
10,313
$ 25,308
$ 25,264
Barrick Gold Corporation | Financial Report 2017 105
FINANCIAL STATEMENTS
Consolidated Statements
of Changes in Equity
Attributable to equity holders of the Company
Barrick Gold Corporation
(in millions of United States dollars)
Common Shares
(in thousands) Capital stock
Retained
earnings
(deficit)
Accumulated
other
comprehensive
income (loss)1 Other2
Total equity
attributable to
shareholders
Non-
controlling
interests
Total
equity
At January 1, 2017
1,165,574
$ 20,877 $ (13,074)
$ (189) $ 321
$ 7,935
$ 2,378 $ 10,313
Net income
Total other comprehensive income
Total comprehensive income
–
–
–
–
–
1,438
18
–
20
$
– $ 1,456
$ 20 $
Transactions with owners
Dividends
Dividend reinvestment plan
Decrease in non-controlling interest (note 4b)
Funding from non-controlling interests
Other decrease in non-controlling interests
–
1,003
–
–
–
–
16
–
–
–
(125)
(16)
–
–
–
–
–
–
–
–
Total transactions with owners
1,003
$
16 $
(141)
$
– $
–
–
–
–
–
–
–
–
–
1,438
38
78
–
1,516
38
$ 1,476
$
78 $ 1,554
(125)
–
–
–
–
–
–
(493)
13
(195)
(125)
–
(493)
13
(195)
$
(125) $ (675) $
(800)
At December 31, 2017
1,166,577
$ 20,893 $ (11,759)
$ (169) $ 321
$ 9,286
$ 1,781 $ 11,067
At January 1, 2016
1,165,081
$ 20,869 $ (13,642)
$ (370) $ 321
$ 7,178
$ 2,277 $ 9,455
Net Income
Total other comprehensive income
Total comprehensive income
Transactions with owners
Dividends
Dividend reinvestment plan
Funding from non-controlling interests
Other decrease in non-controlling interests
–
–
–
–
493
–
–
–
–
655
7
–
181
$
– $
662
$ 181 $
–
8
–
–
(86)
(8)
–
–
–
–
–
–
Total transactions with owners
493
$
8 $
(94)
$
– $
–
–
–
–
–
–
–
–
655
188
206
–
861
188
$
843
$ 206 $ 1,049
(86)
–
–
–
–
–
70
(175)
(86)
–
70
(175)
$
(86) $ (105) $
(191)
At December 31, 2016
1,165,574
$ 20,877 $ (13,074)
$ (189) $ 321
$ 7,935
$ 2,378 $ 10,313
1. Includes cumulative translation adjustments as at December 31, 2017: $73 million loss (2016: $82 million).
2. Includes additional paid-in capital as at December 31, 2017: $283 million (December 31, 2016: $283 million) and convertible borrowings – equity component
as at December 31, 2017: $38 million (December 31, 2016: $38 million).
The accompanying notes are an integral part of these consolidated financial statements.
106
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes to Consolidated Financial Statements
Barrick Gold Corporation. Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to A$, 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 (cid:132) 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,
and the Dominican Republic and our producing copper
mine is in Zambia. Following the sale of 50% of our
Veladero gold mine located in Argentina (noted in
note 4a), we hold a 50% interest in the Veladero mine.
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 (cid:132) 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 14, 2018.
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.
Barrick Gold Corporation | Financial Report 2017 107
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2017:
Place of business
Entity type
Economic interest1
Method2
Acacia Mining plc3
Pueblo Viejo3
South Arturo3
Norte Abierto Project4
Donlin Gold Project
Kalgoorlie Mine
Porgera Mine5
Turquoise Ridge Mine5
Veladero6
GNX7,8
Jabal Sayid7
Kabanga Project7,8
Zaldívar7
Tanzania
Dominican Republic
United States
Chile
United States
Australia
Papua New Guinea
United States
Argentina
Chile
Saudi Arabia
Tanzania
Chile
Subsidiary, publicly traded
Subsidiary
Subsidiary
JO
JO
JO
JO
JO
JO
JV
JV
JV
JV
63.9%
60%
60%
50%
50%
50%
47.5%
75%
50%
50%
50%
50%
50%
Consolidation
Consolidation
Consolidation
Our share
Our share
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, Pueblo Viejo and South Arturo and record a non-controlling interest for the 36.1%, 40% and 40%,
respectively, that we do not own.
4. We divested 25% of Cerro Casale on June 9, 2017, bringing our ownership down to 50%. As part of that transaction, we formed a joint operation
with Goldcorp. The joint operation, which is now referred to as Norte Abierto, includes the Cerro Casale and Caspiche deposits.
5. We have joint control given that decisions about relevant activities require unanimous consent of the parties to the joint operation.
6. We divested 50% of Veladero on June 30, 2017, bringing our ownership down to 50%.
7. Barrick has commitments of $301 million relating to its interest in the joint ventures.
8. 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.
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 12 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 value 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.
108
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
d) Non-Current Assets and Disposal Groups
(cid:132) 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:
(cid:132) Property, plant and equipment (“PP&E”), intangible
assets and equity method investments using the rates
at the time of acquisition;
(cid:132) 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”);
(cid:132) 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
(cid:132) 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:
(cid:132) The significant risks and rewards of ownership of the
product have been transferred to the buyer;
(cid:132) Neither continuing managerial involvement to the
degree usually associated with ownership, nor
effective control over the goods sold, has been
retained;
(cid:132) The amount of revenue can be reliably measured;
(cid:132) It is probable that the economic benefits associated
with the sale will flow to us; and
(cid:132) 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
Barrick Gold Corporation | Financial Report 2017 109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
value each period until final settlement occurs, with
changes in fair value classified as provisional price
adjustments and included in revenue in the consolidated
statement of income.
g) Exploration and Evaluation (“E&E”)
Exploration expenditures are the costs incurred in the
initial search for mineral deposits with economic potential
or in the process of obtaining more information about
existing mineral deposits. Exploration expenditures
typically include costs associated with prospecting,
sampling, mapping, diamond drilling and other work
involved in searching for ore.
Evaluation expenditures are the costs incurred to
establish the technical and commercial viability of
developing mineral deposits identified through exploration
activities or by acquisition. Evaluation expenditures
include the cost of (i) establishing the volume and grade
of deposits through drilling of core samples, trenching
and sampling activities in an ore body that is classified
as either a mineral resource or a proven and probable
reserve; (ii) determining the optimal methods of
extraction and metallurgical and treatment processes;
(iii) studies related to surveying, transportation and
infrastructure requirements; (iv) permitting activities;
and (v) economic evaluations to determine whether
development of the mineralized material is commercially
justified, including scoping, prefeasibility and final
feasibility studies.
Exploration and evaluation expenditures are
expensed as incurred unless management determines
that probable future economic benefits will be generated
as a result of the expenditures. Once the technical
feasibility and commercial viability of a program or
project has been demonstrated with a prefeasibility
study, and we have recognized reserves in accordance
with 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 reflects 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 that have an exercise price 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.
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.
110
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred income tax liabilities are recognized for all
taxable temporary differences, except:
(cid:132) 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
(cid:132) 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:
(cid:132) 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
(cid:132) 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 royalties 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
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
Barrick Gold Corporation | Financial Report 2017 111
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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:
(cid:132) Net profits interest (NPI) royalty to other than a
government,
(cid:132) Modified net smelter return (NSR) royalty,
(cid:132) Net smelter return sliding scale (NSRSS) royalty,
(cid:132) Gross proceeds sliding scale (GPSS) royalty,
(cid:132) Gross smelter return (GSR) royalty,
(cid:132) Net value (NV) royalty,
(cid:132) Land tenement (LT) royalty, and a
(cid:132) 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 – 27 years
5 – 7 years
2 – 3 years
2 – 3 years
112
Barrick Gold Corporation | Financial Report 2017
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and probable reserves and the portion of mineral resources
considered to be probable of economic extraction. The
estimated fair value attributable to mineral resources
that are not considered to be probable of economic
extraction at the time of the acquisition is not subject
to depreciation until the resources become probable of
economic extraction in the future. The estimated fair
value attributable to exploration licenses is recorded as
an intangible asset and is not subject to depreciation
until the property enters production.
ii) Underground Mine Development Costs
At our underground mines, we incur development costs
to build new shafts, drifts and ramps that will enable
us to physically access ore underground. The time over
which we will continue to incur these costs depends
on the mine life. These underground development costs
are capitalized as incurred.
Capitalized underground development costs 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 life of mine (“LOM”) plan that benefit from
the development and are considered probable of
economic extraction.
iii) Open Pit Mine Development 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 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: (1) improves access to a
component of the ore body to be mined in the future;
(2) increases the fair value of the mine (or pit) as access
to future mineral reserves becomes less costly; and
(3) 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 that benefit from the development
and are considered probable of economic extraction.
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.
Barrick Gold Corporation | Financial Report 2017 113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Leasing arrangements that transfer substantially
all the risks and rewards of ownership of the asset to
Barrick are classified as finance leases. Assets acquired
via a finance lease are recorded as an asset with a
corresponding liability at an amount equal to the lower
of the fair value of the leased property and the present
value of the minimum lease payments. Each lease
payment is allocated between the liability and finance
costs using the effective interest method, whereby a
constant rate of interest expense is recognized on the
balance of the liability outstanding. The interest element
of the lease is charged to the consolidated statementof
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
114
Barrick Gold Corporation | Financial Report 2017
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
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
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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
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
Barrick Gold Corporation | Financial Report 2017 115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
occurs. When a forecasted transaction is no longer
expected to occur, the cumulative gain or loss that was
recorded in equity is immediately transferred to the
consolidated statements of income.
Non-Hedge Derivatives
Derivative instruments that do not qualify as either fair
value or cash flow hedges are recorded at their fair value
at the balance sheet date, with changes in fair value
recognized in the consolidated statements of income.
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. Abnormal 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 new legal or 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 closure/rehabilitation of
tailings ponds, heap leach pads and waste dumps;
demolition of buildings/mine facilities; ongoing water
treatment; and ongoing care and maintenance and
security of closed mines. Costs included in the provision
encompass all closure and rehabilitation activity expected
to occur progressively over the life of the operation at
the time of closure and post-closure in connection with
disturbances as at the reporting date. Estimated costs
included in the determination of the provision reflect the
risks and probabilities of alternative estimates of cash
flows required to settle the obligation at each particular
operation. The expected rehabilitation costs are
estimated based on the cost of external contractors
performing the work or the cost of performing the work
internally depending on management’s intention.
The timing of the actual rehabilitation expenditure is
dependent upon a number of factors such as the life and
nature of the asset, the operating license conditions and
the environment in which the mine operates. Expenditures
may occur before and after closure and can continue for
an extended period of time depending on rehabilitation
requirements. Rehabilitation provisions are measured at
the expected value of future cash flows, which exclude
the effect of inflation, discounted to their present value
using a current US dollar real risk-free pre-tax discount
rate. The unwinding of the discount, referred to as
accretion expense, is included in finance costs and results
in an increase in the amount of the provision. Provisions
are updated each reporting period for changes to expected
cash flows and for the effect of changes in the discount
rate, and the change in estimate is added or deducted
from the related asset and depreciated over the expected
economic life of the operation to which it relates.
Significant judgments and estimates are involved in
forming expectations of future activities, the amount and
timing of the associated cash flows and the period over
which we estimate those 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
116
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 evaluates 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”)
and Performance Granted Share Units (“PGSU”))
awards to certain employees, officers and directors
of the Company.
Equity-settled awards are measured at fair value,
using the Lattice model for stock options, 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 or general and administrative)
and the corresponding entry is recorded in equity.
Equity-settled awards are not remeasured subsequent
Barrick Gold Corporation | Financial Report 2017 117
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
to the initial grant date. Barrick offers equity-settled
(Employee Stock Option Plan (“ESOP”), Employee Share
Purchase Plan (“ESPP”) 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
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 upon vesting the employee will receive either cash
or common shares, depending on the terms of the grant.
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. We also allow
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 share units 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.
118
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 generally these shares
cannot be sold until the employee retires or leaves
Barrick. PGSUs vest at the end of the third year from
the date of the grant.
The initial fair value of the liability is calculated as of
the grant date and is recognized within compensation
expense using the straight-line method over the vesting
period. Subsequently, at each reporting date and on
settlement, the liability is remeasured, with any changes
in fair value recorded as compensation expense.
Employee Share Purchase Plan (“ESPP”)
Under our ESPP plan, certain 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
Barrick Gold Corporation | Financial Report 2017 119
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 have
not early adopted IFRS 15. In 2017 we completed our
assessment of the impact on our consolidated financial
statements. Our assessment is as follows:
(cid:132) Bullion (gold and silver) sales – these sales will not be
affected by IFRS 15.
(cid:132) Concentrate (gold and copper) and cathode (copper)
sales – the recognition of these sales will not be
affected by IFRS 15, but we will begin separate
presentation of the provisional pricing adjustments
within our revenue note disclosure.
(cid:132) Streaming arrangements – IFRS 15 requires us to treat
deferred revenue earned on streaming transactions
as variable, which must be adjusted each time there
is a change in the underlying production profile.
As at January 1, 2018, an insignificant opening
balance sheet adjustment will be recorded upon
transition to retroactively adjust the historical revenue
recognized from our streaming transactions, resulting
in an increase to our deferred revenue balance and
a decrease in retained earnings. The retroactive
adjustment reflects the change in the transaction
price per unit due to a change in the life of mine
production profile of the mines since the inception
of the streaming agreements and the corresponding
impact on accretion. Going forward, each time we
have an update to the life of mine production profile
(typically in the fourth quarter of each year) we will
record an adjustment to revenue to retroactively
adjust for the new number of ounces expected to be
delivered to our streaming counterparty.
(cid:132) We will use the modified retrospective approach
of adoption.
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 not early adopting 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. We have developed a full
implementation plan to determine the impact on our
financial statements and internal controls. In fourth
quarter 2017, we formed an IFRS 16 working group and
began the process of compiling all of our existing
operating leases and service contracts. In 2018, we will
review the relevant agreements and determine which of
the operating leases and service contracts are in scope
for IFRS 16.
120
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3 (cid:132) 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.
To calculate our gold reserves, as at December 31,
2017 we have used a per ounce gold price of $1,200,
compared to $1,000 short-term and $1,200 long-term
as at December 31, 2016. To calculate our measured,
indicated, and inferred gold resources, as at December 31,
2017 we have used a gold price assumption of $1,500
per ounce, consistent with the prior year. 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
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, capital and closure
Barrick Gold Corporation | Financial Report 2017 121
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 $484 million as at
December 31, 2017 ($429 million as at December 31,
2016) 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 $313 million (2016: $236 million) must be
repaid if the project does not evidence exports for an
amount of $3,538 million within a term that expires
on December 31, 2026. The terms of the current VAT
arrangement in Chile are applicable to either an open
pit or an underground mine design. We have recorded
$221 million in VAT recoverable in Argentina as at
December 31, 2017 ($255 million as at December 31,
2016) relating to the development of the Argentinean 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.
122
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Streaming Transactions
The upfront cash deposit received from Royal Gold on
the gold and silver streaming transaction for production
linked to Barrick’s 60% interest in the Pueblo Viejo mine
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 29 for further details.
Our silver sale agreement with Wheaton Precious
Metals Corp. (“Wheaton”) (formerly Silver Wheaton Corp.)
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
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, 2017 is $262 million.
Refer to note 28 for a summary of our key
financial risks.
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
General and administrative expenses
Income tax expense
Earnings 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 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
124
125
128
128
129
129
129
129
129
131
131
131
132
133
134
134
136
137
141
141
141
141
150
153
153
156
157
159
159
161
161
163
164
Barrick Gold Corporation | Financial Report 2017 123
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4 (cid:132) Acquisitions and Divestitures
For the years ended December 31
2017
2016
Gross cash proceeds on divestiture
Veladero
Bald Mountain
Round Mountain
$ 990
–
–
$ 990
$
–
423
165
$ 588
a) Sale of 50% of Veladero
On April 6, 2017, we announced a strategic cooperation
agreement with Shandong Gold Group Co., Ltd.
(“Shandong”) where Shandong agreed to acquire
50 percent of Barrick’s Veladero mine in Argentina. The
transaction closed on June 30, 2017 and we received
total cash consideration of $990 million, which includes
working capital adjustments of $30 million received in
the fourth quarter of 2017. The transaction resulted in
a gain of $718 million, partially on the sale of 50 percent
to Shandong and partially upon remeasurement of our
remaining interest in Veladero. We have accounted for
our remaining 50 percent interest as a joint operation
and consolidated our proportionate share of the assets
and liabilities. We have recognized our share of the
revenue and expenses of Veladero starting July 1, 2017.
In accordance with the acquisition method of
accounting, the acquisition cost has been allocated to
the underlying assets acquired and liabilities assumed.
We completed the purchase price allocation in the fourth
quarter of 2017 and recognized a deferred tax liability
for the difference between the fair values and the tax
base of those assets and now have an updated goodwill
balance of $154 million, which is not deductible for
tax purposes.
b) Sale of 25% of Cerro Casale
On March 28, 2017, we announced an agreement with
Goldcorp Inc. (“Goldcorp”) to form a new partnership at
the Cerro Casale Project in Chile. The transaction closed
on June 9, 2017. Under the terms of the agreement,
Goldcorp agreed to purchase a 25 percent interest in
Cerro Casale from Barrick. This transaction, coupled with
the concurrent purchase by Goldcorp of Kinross Gold
Corporation’s (“Kinross”) 25 percent interest in Cerro
Casale, resulted in Barrick and Goldcorp each holding
a 50 percent interest in the joint operation.
The total consideration received by Barrick and
Kinross implies a fair value of $1.2 billion for 100 percent
of Cerro Casale, which resulted in a reversal of impairment
of $1.12 billion in the first quarter of 2017. Refer to
note 21 to the Financial Statements for further details
of the impairment reversal. We are accounting for
our remaining 50 percent interest as a joint operation
and consolidate our proportionate share of the assets,
liabilities, revenue and expenses of Cerro Casale.
We recognized a gain of $193 million due to the
deconsolidation of the non-controlling interest in
Cerro Casale in the second quarter of 2017.
As consideration for the 25 percent interest acquired
from Barrick, Goldcorp will fund Barrick’s first $260 million
of expenditures on the project and will spend an
equivalent amount on its own behalf for a total project
investment commitment of $520 million. Under the
agreement, Goldcorp must spend a minimum of
$60 million in the two-year period following closing,
and then $80 million in each successive two-year period.
The outstanding funding commitment will accrue interest
at an annual rate of 4.75 percent. In the event that
Goldcorp does not spend the minimum amount in any
two-year period, 50 percent of any shortfall will be paid
directly to Barrick in cash.
In addition, Goldcorp also funded Cerro Casale’s
acquisition of a 100 percent interest in the adjacent
Quebrada Seca property from Kinross upon closing.
Upon a construction decision Goldcorp will pay Barrick
$40 million in cash and Barrick will receive a 1.25 percent
royalty on 25 percent of the gross revenues derived from
metal production from both Cerro Casale and Quebrada
Seca. The contingent consideration payable to Barrick
has been recorded at its estimated fair value in other
long-term assets.
Goldcorp entered into a separate agreement for the
acquisition of Exeter Resource Corporation, whose sole
asset is the Caspiche Project, located approximately
10 kilometers north of Cerro Casale. The acquisition of
100 percent of Exeter was completed in the third quarter
and Goldcorp contributed the Caspiche Project into the
joint venture at a total acquisition cost of approximately
$157 million. The acquisition costs incurred by Goldcorp
have been deducted from the $520 million total project
investment commitment, but will not count towards the
minimum expenditures for the initial two-year period.
We have recorded a receivable of $181 million, split
$15 million as short-term and $166 million as long-term,
in other current assets and other long-term assets,
respectively. Moving forward, this joint venture will be
referred to as Norte Abierto and includes the Cerro
Casale, Caspiche and Luciano deposits.
124
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
c) Investment in Reunion Gold
On December 1, 2017, we announced the acquisition of
48 million common shares, representing approximately
15 percent of issued and outstanding common shares of
Reunion Gold Corporation in a non-brokered private
placement for total consideration of $9 million.
Subsequent to acquisition of the shares, we will be
accounting for our interest as other investments with
changes in fair value recorded in OCI.
d) Acquisition of Robertson Property in Nevada
On June 7, 2017, we completed the acquisition of the
Robertson Property in Nevada from Coral Gold Resources
(“Coral”). Consideration paid by Barrick consisted of
$16 million, the return of 4.15 million shares (approximate
value of $1 million) held by Barrick and a sliding
scale royalty on any future production from the
Robertson Property.
e) 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.
5 (cid:132) Segment Information
In the first quarter of 2017, we unified the management
and the operation of our Cortez and Goldstrike
minesites, now referred to as Barrick Nevada. Barrick’s
business is organized into eleven individual minesites,
one grouping of two 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, grouping,
Company and/or project level. Therefore, each individual
minesite, with the exception of Barrick Nevada, Acacia
and the Pascua-Lama project, is an operating segment
for financial reporting purposes. Our updated presentation
of our reportable operating segments is now four
individual gold mines (Pueblo Viejo, Lagunas Norte,
Veladero and Turquoise Ridge), Barrick Nevada, Acacia
and our Pascua-Lama project. The remaining operating
segments, 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, 2017
Barrick Nevada
Pueblo Viejo2
Lagunas Norte
Veladero
Turquoise Ridge
Acacia2
Pascua-Lama
Other Mines3
Revenue
$ 2,961
1,417
514
591
280
751
–
1,860
relations Depreciation
$ 1,076
501
177
291
131
362
–
1,086
$ 793
229
68
119
28
107
8
267
$ 8,374
$ 3,624
$ 1,619
Exploration,
evaluation and
project
expenses
Other
expenses
(income)1
Segment
income
(loss)
$ 16
16
6
5
2
91
(10)
31
$ 1,052
671
259
173
119
191
(123)
464
$ 157
$ 2,806
$ 24
–
4
3
–
–
125
12
$ 168
Barrick Gold Corporation | Financial Report 2017 125
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Income Information
Cost of sales
Direct mining,
royalties and
community
For the year ended December 31, 2016
Barrick Nevada
Pueblo Viejo2
Lagunas Norte
Veladero
Turquoise Ridge
Acacia2
Pascua-Lama
Other Mines3
Revenue
$ 2,703
1,548
548
685
322
1,045
–
1,707
relations Depreciation
$ 1,089
497
180
346
128
553
–
958
$ 807
147
96
118
27
166
7
188
$ 8,558
$ 3,751
$ 1,556
Exploration,
evaluation and
project
expenses
Other
expenses
(income)1
Segment
income
(loss)
$ 17
3
9
–
1
–
1
52
$
771
901
260
220
166
299
(67)
503
$ 83
$ 3,053
$ 19
–
3
1
–
27
59
6
$ 115
1. Includes accretion expense, which is included with finance costs in the consolidated statements of income. For the year ended December 31, 2017, accretion
expense was $55 million (2016: $41 million). Refer to note 9a for details of other expenses (income).
2. Includes non-controlling interest portion of revenues, cost of sales and segment income for the year ended December 31, 2017, for Pueblo Viejo, $567 million,
$285 million, $276 million (2016: $623 million, $249 million, $373 million) and Acacia, $271 million, $169 million, $69 million (2016: $377 million, $259 million,
$108 million).
3. Includes cost of sales of Pierina for the year ended December 31, 2017 of $174 million (2016: $82 million).
Reconciliation of Segment Income to Income from Continuing Operations Before Income Taxes
For the years ended December 31
2017
2016
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
Loss on currency translation
Closed mine rehabilitation
Income from equity investees
Finance costs, net (includes non-segment accretion)2
Gain on non-hedge derivatives3
Income before income taxes
1. Includes all realized hedge losses of $27 million (2016: $73 million).
2. Includes debt extinguishment losses of $127 million (2016: $129 million).
3. Includes unrealized non-hedge gains of $1 million (2016: $32 million).
$ 2,806
(57)
(186)
(248)
901
212
(72)
(55)
76
(636)
6
$ 2,747
$ 3,053
(98)
(122)
(256)
(18)
250
(199)
(130)
20
(734)
12
$ 1,778
126
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Geographic Information
Non-current assets
Revenue1
United States
Dominican Republic
Argentina
Chile
Tanzania
Peru
Australia
Zambia
Papua New Guinea
Saudi Arabia
Canada
Unallocated
Total
1. Presented based on the location from which the product originated.
Capital Expenditures Information
Barrick Nevada
Pueblo Viejo
Lagunas Norte
Veladero
Turquoise Ridge
Acacia
Pascua-Lama
Other Mines
Segment total
Other items not allocated to segments
Total
As at Dec. 31, As at Dec. 31,
2016
2017
2017
2016
$ 6,641
3,480
2,217
2,469
1,129
734
463
787
351
371
625
1,357
$ 20,624
$ 6,768
3,540
2,366
1,945
1,673
678
478
473
353
346
503
1,267
$ 20,390
$3,299
1,417
591
–
751
676
456
612
322
–
250
–
$ 8,374
$ 3,081
1,548
685
–
1,045
663
472
466
304
–
294
–
$ 8,558
Segment capital expenditures1
As at
December 31,
2017
As at
December 31,
2016
$ 585
114
25
173
36
148
6
259
$ 1,346
36
$ 1,382
$ 358
101
56
95
32
191
20
230
$ 1,083
36
$ 1,119
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 2017, cash expenditures were $1,396 million (2016: $1,126 million) and the decrease in accrued expenditures was
$14 million (2016: $7 million decrease).
Barrick Gold Corporation | Financial Report 2017 127
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6 (cid:132) Revenue
For the years ended December 31
2017
2016
Gold bullion sales1
Spot market sales
Concentrate sales
Copper concentrate sales1
Other sales2
Total
$ 7,566
65
$ 7,650
258
$ 7,631
$ 7,908
$
$
608
135
$
$
466
184
$ 8,374
$ 8,558
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 $nil (2016: $2 million).
2. Revenues include the sale of by-products from our gold and copper mines and
energy sales to third parties from the Monte Rio power plant at our Pueblo
Viejo mine up until its disposition on August 18, 2016.
Principal Products
All of our gold mining operations produce gold in doré
form, except Acacia’s gold mines of Bulyanhulu and
Buzwagi, which produce both gold doré and gold
concentrate. Gold doré is unrefined gold bullion bars
usually consisting of 90% gold that is refined to pure
gold bullion prior to sale to our customers. Concentrate
is a processing product containing the valuable ore
mineral from which most of the waste mineral has been
eliminated. Our Lumwana and Jabal Sayid mines produce
a concentrate that primarily contains copper. Incidental
revenues from the sale of by-products, primarily copper,
silver and energy at our gold mines, are classified within
other sales.
Provisional Copper and Gold Sales
We have provisionally priced sales for which price
finalization, referenced to the relevant copper and gold
index, is outstanding at the balance sheet date. Our
exposure at December 31, 2017 to the impact of
movements in market commodity prices for provisionally
priced sales is set out in the following table:
Volumes subject to
final pricing
Copper (millions)
Gold (000s)
Impact on net
income before
taxation of 10%
movement in
market price US$
As at December 31
2017
2016
2017
2016
Copper pounds
Gold ounces
40
–
44
13
$ 13
–
$ 11
2
For the year ended December 31, 2017, our provisionally
priced copper sales included provisional pricing gains of
$46 million (2016: $22 million loss) and our provisionally
priced gold sales included provisional pricing adjustments
of $1 million (2016: $nil).
At December 31, 2017, our provisionally priced copper
sales subject to final settlement were recorded at average
prices of $3.29/lb (2016: $2.51/lb). At December 31,
2017, there were no provisionally priced gold sales
subject to final settlement. At December 31, 2016, our
provisionally priced gold sales subject to final settlement
were recorded at an average price of $1,152/oz. 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 (cid:132) Cost of Sales
Gold
Copper
Other5
Total
For the years ended December 31
2017
2016
2017
2016
2017
2016
2017
2016
Direct mining cost1,2,3,4
Depreciation
Royalty expense
Community relations
Total
$ 3,063
1,529
206
38
$ 4,836
$ 3,215
1,504
224
37
$ 4,980
$ 274
83
38
4
$ 399
$
$ 228
45
41
5
$ 319
$
28
35
–
2
65
$
77
25
–
4
$ 3,365
1,647
244
44
$ 3,520
1,574
265
46
$ 106
$ 5,300
$ 5,405
1. Direct mining cost includes charges to reduce the cost of inventory to net realizable value of $21 million (2016: $68 million).
2. Direct mining cost includes the costs of extracting by-products.
3. Includes employee costs of $1,051 million (2016: $1,048 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.
128
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8 (cid:132) Exploration, Evaluation and Project Expenses
10 (cid:132) Impairment Reversals
For the years ended December 31
Minesite exploration and evaluation1
Global exploration and evaluation1
Advanced project costs:
Pascua-Lama
Other
Corporate development
Business improvement and innovation
Total exploration, evaluation and
project expenses
1. Approximates the impact on operating cash flow.
9 (cid:132) Other Expense (Income)
a) Other Expense (Income)
For the years ended December 31
Other Expense:
Bank charges
Bulyanhulu reduced operations
program costs1
Litigation
Miscellaneous write-offs
Other
Total other expense
Other Income:
(Gain) loss on sale of long-lived assets2
Office closure
Other
Total other income
Total
2016
For the years ended December 31
2017
2016
$ 44
88
Impairment reversals of long-lived assets1
Impairment of intangibles1
Total
1. Refer to note 21 for further details.
$ (224)
12
$ (212)
$ (250)
–
$ (250)
2017
$ 47
126
122
14
13
32
59
17
14
15
11 (cid:132) General and Administrative Expenses
$ 354
$ 237
For the years ended December 31
2017
2016
Corporate administration1
Operating segment administration
Total2
$ 227
21
$ 248
$ 201
55
$ 256
1. Includes $3 million (2016: $9 million) related to one-time severance payments.
2. Includes employee costs of $98 million (2016: $153 million).
2017
2016
$ 23
$ 20
12 (cid:132) Income Tax Expense
For the years ended December 31
2017
2016
53
24
11
43
–
–
–
15
Tax on profit
Current tax
Charge for the year
Adjustment in respect of prior years
$ 154
$ 35
$ (911)
–
(42)
$ (953)
$ (799)
Deferred tax
Origination and reversal of temporary
differences in the current year
Adjustment in respect of prior years
$ 42
(4)
(13)
$ 25
$ 60
Income tax expense
1. Primarily consists of severance, contractor, and inventory write-down costs.
2. 2017 includes gains of $718 million from the 50% sale of Veladero and
$193 million from the 25% sale of Cerro Casale. 2016 includes losses of
$17 million from the sale of Bald Mountain and Round Mountain, and
$39 million from the sale of Zaldívar.
b) Loss on Currency Translation
For the years ended December 31
2017
2016
Currency translation losses released as
a result of the disposal and reorganization
of entities
Foreign currency translation losses
Total
$ 11
61
$ 72
$ 91
108
$ 199
Tax expense related to continuing operations
Current
Canada
International
Deferred
Canada
International
Income tax expense
$ 1,125
–
$ 1,125
$ 112
(6)
$ 106
$ 1,231
7
$
1,118
$ 1,125
$
(97)
203
$ 106
$ 1,231
$ 911
(2)
$ 909
$ 10
(2)
$
8
$ 917
7
$
902
$ 909
$ (30)
38
$
8
$ 917
Barrick Gold Corporation | Financial Report 2017 129
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 2017 and 2016, tax expense of $10 million
and $23 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.
Reconciliation to Canadian Statutory Rate
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
Non-taxable gains on sales of long-lived assets
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
United States tax reform
Non-recognition of US AMT credits
Adjustments in respect of prior years
Increase to income tax related
contingent liabilities
Impact of tax rate changes
United States withholding taxes
Other withholding taxes
Mining taxes
Other items
2017
2016
$ 728
$ 471
(96)
215
24
(241)
66
10
(7)
21
(203)
–
(6)
172
–
252
18
266
12
(134)
113
54
–
–
23
(5)
35
–
13
(4)
70
(13)
–
11
267
16
Income tax expense
$ 1,231
$ 917
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.
United States Tax Reform
On December 22, 2017 Tax Reform was enacted in
the United States. The significant changes include:
(i) a reduction from 35% to 21% in the corporate
income tax rate effective January 1, 2018, which resulted
in a deferred tax recovery of $343 million on our net
deferred tax liability in the US, (ii) a repeal of the
corporate Alternative Minimum Tax (AMT) effective
January 1, 2018, (iii) the mandatory repatriation
of earnings and profits of specified foreign corporations
effective December 31, 2017, which resulted in an
estimated one-time 2017 toll charge of $228 million,
offset by (iv) the recognition of our previously
unrecognized deferred tax asset on AMT credits in the
amount of $88 million, which can be used to offset the
one-time toll charge. The net one-time 2017 toll charge
payable amount of $140 million is payable over 8 years.
$129 million of this amount has been recorded in other
non-current liabilities (see note 29). The impact of the
United States Tax Reform may differ from this estimate
due to changes in interpretations and assumptions we
have made and guidance that may be issued.
Proposed Framework for Acacia Operations in
Tanzania and the Increase to Income Tax Related
Contingent Liabilities in Tanzania
The terms of the Proposed Framework for Acacia Mining
Operations in Tanzania were announced on October 19,
2017. The Proposed Framework indicates that in support
of ongoing efforts to resolve outstanding tax claims,
Acacia would make a payment of $300 million to the
government of Tanzania, on terms to be settled by a
working group. A tax provision of $128 million had been
recorded prior to December 31, 2016 in respect of tax
disputes related to Acacia. Of this amount, $70 million
was recorded in 2016. In the third quarter of 2017, an
additional amount of $172 million was recorded as
current tax expense. See note 36 for further information
with respect to these matters.
United States Withholding Taxes
Prior to fourth quarter 2017, we had not previously
recorded withholding tax related to the undistributed
earnings of our United States subsidiaries because our
intention was to reinvest our current and future
undistributed earnings of our United States subsidiaries
indefinitely. During fourth quarter 2017, we reassessed
our intentions regarding those undistributed earnings.
As a result of our reassessment, we concluded that it was
no longer our intent to indefinitely reinvest our current
and future undistributed earnings of our United States
subsidiaries, and therefore in fourth quarter 2017, we
recognized an increase in our income tax provision in
the amount of $252 million, representing withholding
tax on the undistributed United States earnings.
$150 million was recorded in the tax charge for the
year, and $102 million was recorded as deferred tax
expense. Of the $150 million, $130 million has been
recorded in other non-current liabilities (see note 29).
130
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13 (cid:132) Earnings per Share
For the years ended December 31
($ millions, except shares in millions and per share amounts in dollars)
Net income
Net income attributable to non-controlling interests
2017
2016
Basic
Diluted
Basic
Diluted
$ 1,516
(78)
$ 1,516 $
(78)
861
(206)
$
861
(206)
Net income attributable to the equity holders of Barrick Gold Corporation
$ 1,438
$ 1,438 $
655
$
655
Weighted average shares outstanding
1,166
1,166
1,165
1,165
Basic and diluted earnings per share data attributable to the equity holders of
Barrick Gold Corporation
$
1.23
$
1.23 $
0.56
$
0.56
14 (cid:132) Finance Costs, Net
15 (cid:132) Cash Flow – Other Items
For the years ended December 31
2017
2016
Interest1
Amortization of debt issue costs
Amortization of discount
Gain on interest rate hedges
Accretion
Loss on debt extinguishment2
Finance income
Total
$ 511
5
1
(6)
67
127
(14)
$ 691
$ 591
17
2
(1)
50
129
(13)
$ 775
1. Interest in the consolidated statements of cash flow is presented on a cash
basis. In 2017, cash interest paid was $425 million (2016: $513 million).
2. 2017 loss arose from partial repayment of several notes during the year
(4.10% notes due 2023, 6.95% notes due 2019, and Pueblo Viejo Project
Financing). 2016 loss arose from partial repayment of several notes during
the year (2.50% notes due 2018, 4.40% notes due 2021, 4.95% notes due
2020, 6.80% notes due 2018 and 6.95% notes due 2019).
Operating Cash Flows – Other Items
For the years ended December 31
2017
2016
Adjustments for non-cash income statement items:
Gain on non-hedge derivatives (note 25e)
Stock-based compensation expense
$
Income 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
Change in working capital
(6)
80
(76)
55
21
(196)
(59)
$ (181)
$
8
(372)
(278)
(35)
(51)
$ (728)
$
(12)
82
(20)
130
68
(249)
(62)
$
(63)
$
(5)
(190)
(72)
(190)
29
$ (428)
Barrick Gold Corporation | Financial Report 2017 131
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16 (cid:132) Investments
Equity Accounting Method Investment Continuity
Kabanga
Jabal Sayid
Zaldívar
GNX
At January 1, 2016
$ 30
$ 178
$ 990
Equity pick-up (loss) from equity investees
Funds invested
Working capital adjustments
Impairment charges
(1)
1
–
–
2
–
–
–
27
–
6
(49)
At December 31, 2016
$ 30
$ 180
$ 974
$ 1
(8)
8
–
–
$ 1
(10)
11
–
$ 2
No
(1)
1
–
$ 30
No
26
–
–
$ 206
No
61
–
(60)
$ 975
No
Equity pick-up (loss) from equity investees
Funds invested
Dividend
At December 31, 2017
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)
Income from continuing operations before tax
Income tax expense
Income from continuing operations after tax
Total comprehensive income
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
Total
$ 1,199
20
9
6
(49)
$ 1,185
76
12
(60)
$ 1,213
354
87
2
(5)
80
(25)
55
55
$
$
$
2016
$ 102
482
$ 584
1,603
$ 2,187
$
23
84
$ 107
33
80
$ 113
$ 220
$ 1,967
Jabal Sayid
Zaldívar
2016
$ 80
2017
$ 649
2016
$ 518
2017
$ 214
116
33
3
2
$ 60
(8)
$ 52
$ 52
65
12
–
–
3
–
3
3
$
$
$
375
111
1
–
$ 162
(40)
$ 122
$ 122
Jabal Sayid
Zaldívar
2017
$ 50
70
$ 120
485
$ 605
$ 12
35
$ 47
379
13
$ 392
$ 439
$ 166
2016
$ 14
56
$ 70
473
$ 543
$
–
27
$ 27
391
11
$ 402
$ 429
$ 114
$
2017
72
563
$ 635
1,582
$ 2,217
$
19
110
$ 129
20
99
$ 119
$ 248
$ 1,969
1. Zaldívar other current assets include inventory of $451 million (2016: $429 million).
The information above reflects the amounts presented in the financial information of the joint venture adjusted for
differences between IFRS and local GAAP.
132
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation of Summarized Financial Information to Carrying Value
Opening net assets
Income for the period
Dividend
Closing net assets, December 31
Barrick’s share of net assets (50%)
Equity earnings adjustment
Goodwill recognition
Carrying value
Jabal Sayid1
Zaldívar
$ 114
52
–
$ 166
83
–
123
$ 206
$ 1,967
122
(120)
$ 1,969
985
(10)
–
$ 975
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).
17 (cid:132) Inventories
Raw materials
Ore in stockpiles
Ore on leach pads
Mine operating supplies
Work in process
Finished products
Non-current ore in stockpiles1
Gold
Copper
As at
Dec. 31,
2016
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 2,067
406
585
219
50
$ 3,327
(1,536)
$ 1,791
$ 102
–
79
–
3
$ 184
–
$ 184
$ 72
–
62
–
5
$ 139
–
$ 139
As at
Dec. 31,
2017
$ 2,125
405
515
174
168
$ 3,387
(1,681)
$ 1,706
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
2017
2016
Barrick Nevada
Golden Sunlight
Porgera
Pierina
Inventory impairment charges1
$
$
–
6
4
11
21
$
57
7
3
1
$
68
1. Impairment charges in 2017 primarily relate to leach pad inventories at
Pierina. Impairment charges in 2016 primarily relate to stockpiles at Cortez.
Gold
Barrick Nevada
Pueblo Viejo
Porgera
Kalgoorlie
Lagunas Norte
Buzwagi
North Mara
Veladero
Turquoise Ridge
Other
Copper
Lumwana
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 1,040
538
55
138
147
109
47
22
26
3
$ 1,128
475
77
127
91
64
41
38
22
4
102
72
$ 2,227
$ 2,139
Barrick Gold Corporation | Financial Report 2017 133
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Ore on Leach Pads
18 (cid:132) Accounts Receivable and Other Current Assets
Gold
Veladero
Nevada
Lagunas Norte
Pierina
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 145
105
143
12
$ 172
109
97
28
$ 405
$ 406
Accounts receivable
Amounts due from concentrate sales
Receivable from Dominican
Republic government1
Other receivables
Purchase Commitments
At December 31, 2017, we had purchase obligations
for supplies and consumables of approximately
$1,147 million (2016: $970 million).
Other current assets
Derivative assets (note 25f)
Goods and services taxes recoverable2
Prepaid expenses
Other
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 110
$ 110
1
128
30
109
$ 239
$ 249
$
2
167
68
84
$
1
239
48
18
$ 321
$ 306
19 (cid:132) Property, Plant and Equipment
At January 1, 2017
Net of accumulated depreciation
Additions4
Disposals
Depreciation
Impairment reversals
Transfers5
At December 31, 2017
At December 31, 2017
Cost
Accumulated depreciation and impairments
Net carrying amount – December 31, 2017
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 $32 million in Tanzania,
$49 million in Argentina, $3 million in Chile, $19 million in the Dominican
Republic, and $8 million in Peru (Dec. 31, 2016: $124 million, $52 million,
$32 million, $10 million and $6 million, respectively).
Mining
property
costs
subject to
Mining
property
costs not
subject to
depreciation1,3 depreciation1,2
Total
Buildings, plant
and equipment
$ 4,556
$ 7,194
$ 2,353
$ 14,103
158
(72)
(878)
(102)
551
219
(32)
(819)
(359)
449
1,966
(1,093)
–
715
(1,000)
2,343
(1,197)
(1,697)
254
–
$ 4,213
$ 6,652
$ 2,941
$ 13,806
$ 14,209
(9,996)
$ 21,068
(14,416)
$ 14,507
(11,566)
$ 49,784
(35,978)
$ 4,213
$ 6,652
$ 2,941
$ 13,806
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.
134
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Mining
property
costs
subject to
depreciation1,3
Mining
property
costs not
subject to
depreciation1,2
Total
Buildings, plant
and equipment
$ 13,782
(9,098)
$ 19,968
(12,668)
$ 14,734
(12,284)
$ 48,484
(34,050)
At January 1, 2016
Cost
Accumulated depreciation and impairments
Net carrying amount – January 1, 2016
$ 4,684
$ 7,300
$ 2,450
$ 14,434
Additions4
Disposals
Depreciation
Impairment charges
Transfers5
At December 31, 2016
At December 31, 2016
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
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.
a) Mineral Property Costs Not Subject to Depreciation
Carrying
amount at
Dec. 31,
2017
Carrying
amount at
Dec. 31,
2016
$ 640
$ 466
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 2017 was a $91 million decrease (2016:
$67 million decrease).
24
24
1,499
612
166
1,263
444
156
$ 2,941
$ 2,353
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 $118 million at
December 31, 2017 (2016: $103 million) for
construction activities at our sites and projects.
Construction-in-progress1
Acquired mineral resources and
exploration potential
Projects
Pascua-Lama
Norte Abierto
Donlin Gold
1. Represents assets under construction at our operating mine sites.
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
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,
2017, we have operating lease commitments totaling
$68 million, of which $21 million is expected to be paid
within a year, $46 million is expected to be paid within
two to five years and the remaining amount to be paid
beyond five years.
Barrick Gold Corporation | Financial Report 2017 135
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20 (cid:132) Goodwill and Other Intangible Assets
a) Intangible Assets
Opening balance January 1, 2016
$ 87
$ 12
$ 16
$ 156
$ 271
Water
rights1
Technology2
Supply
contracts3
Exploration
potential4
Total
Additions
Amortization
Closing balance December 31, 2016
Additions
Disposals5
Amortization and impairment losses
Closing balance December 31, 2017
Cost
Accumulated amortization and impairment losses
Net carrying amount December 31, 2017
–
–
–
(1)
–
(2)
4
–
4
(3)
$ 87
$11
$14
$160
$272
–
(16)
–
$ 71
$ 71
–
$ 71
–
–
(2)
$ 9
$ 17
(8)
$ 9
–
–
(3)
$ 11
$ 39
(28)
$ 11
16
–
(12)
16
(16)
(17)
$ 164
$ 255
$ 298
(134)
$ 425
(170)
$ 164
$ 255
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. See note 21 for details
of impairment charges recorded against exploration assets.
5. Represents the net disposal as a result of the Cerro Casale sale. Refer to note 4b.
b) Goodwill
Barrick Nevada1
Veladero2
Turquoise Ridge
Hemlo
Kalgoorlie
Total
Closing balance
December 31,
2016
Closing balance
December 31,
2017
Disposals
$ 514
195
528
63
71
$
–
(41)
–
–
–
$
514
154
528
63
71
$ 1,371
$
(41)
$ 1,330
1. In Q1 2017, we unified the management and the operation of our Cortez and Goldstrike minesites, now referred to as Barrick Nevada. The prior period has been
changed to reflect this presentation.
2. Represents the net disposal as a result of the partial Veladero sale. Refer to note 4a.
On a total basis, the gross amount and accumulated impairment losses are as follows:
Cost
Accumulated impairment losses December 31, 2017
Net carrying amount December 31, 2017
$ 8,618
(7,288)
$ 1,330
136
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
21 (cid:132) Impairment and Reversal of Non-Current Assets
Summary of impairments (reversals)
For the year ended December 31, 2017, we recorded
net impairment reversals of $212 million (2016:
$250 million) for non-current assets, as summarized
in the following table:
For the years ended December 31
2017
2016
Cerro Casale
Lumwana
Bulyanhulu
Veladero
Lagunas Norte
Pascua-Lama
Zaldívar
Exploration sites
Other
Total impairment (reversals) of
long-lived assets
$ (1,120)
(259)
740
–
3
407
–
12
5
$
–
–
–
(275)
(28)
–
49
–
4
$
(212)
$
(250)
2017 Indicators of Impairment/Reversal
Fourth Quarter 2017
In the fourth quarter 2017, 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 one indicator of potential impairment reversal.
Additionally, as a result of events that occurred in the
fourth quarter, we identified indicators of impairment
at Acacia and Pascua-Lama as discussed below.
Also as a result of an increase in proven and
probable reserves, we have observed an increase in the
FVLCD of our Lumwana copper mine in Zambia that
has resulted in a partial reversal of the non-current asset
impairment loss recorded in 2014. An impairment
reversal in the amount of $259 million was recorded in
the fourth quarter of 2017. The recoverable amount
based on the mine’s FVLCD, was $747 million.
Pascua-Lama
As described in note 36, on January 17, 2018 the
Pascua-Lama project received a revised notice from the
Chilean environmental regulators, which reduced the
administrative fine and ordered the closure of existing
surface facilities on the Chilean side of the project in
addition to certain monitoring activities. Given the
impact on our ability to advance the project as an open
pit operation and the subsequent reclassification of
Pascua-Lama’s open-pit reserves to resources, this was
determined to be an indicator of impairment in the
fourth quarter of 2017 as it was the resolution of a
condition that existed at December 31, 2017. We
identified that the carrying value of Pascua-Lama
exceeded the FVLCD and we recorded a non-current
asset impairment of $429 million, based on a FVLCD
of $850 million.
Acacia
On March 3, 2017, the Tanzanian Government
announced a general ban on the export of metallic
mineral concentrates (“Ban”), impacting Acacia’s
Bulyanhulu and Buzwagi mines. Subsequently, during
the second quarter of 2017 two Presidential Committees
reported their findings, following investigations, that
Acacia and its predecessor companies have historically
under-declared the contents of the exports of concentrate,
resulting in a significant under-declaration of taxes.
Acacia has refuted the findings of these committees,
affirming that it has declared everything of commercial
value that it has produced since it started operating in
Tanzania and has paid all appropriate royalties and taxes
on all of the payable minerals that it has produced.
In July 2017, new and amended legislation was
passed in Tanzania, including various amendments to
the 2010 Mining Act and a new Finance Act. The
amendments to the 2010 Mining Act increased the
royalty rate applicable to metallic minerals such as gold,
copper and silver to 6% (from 4%), and the new
Finance Act imposes a 1% clearing fee on the value of
all minerals exported from Tanzania from July 1, 2017.
At the beginning of September 2017, as a result
of the ongoing concentrate export ban, Bulyanhulu
commenced a program to reduce operational activity and
expenditure in order to preserve the viability of the mine
over the long term. This decision was identified by
management as a potential indicator of impairment in
the third quarter of 2017.
Barrick Gold Corporation | Financial Report 2017 137
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On October 19, 2017, Barrick announced that it
had agreed on a framework with the Government of
Tanzania for a new partnership between Acacia and the
Government of Tanzania. Barrick and the Government of
Tanzania also agreed to form a working group that will
focus on the resolution of outstanding tax claims against
Acacia. Barrick and the Government of Tanzania are also
reviewing the conditions for the lifting of the Ban. In the
fourth quarter of 2017, the key terms of the proposed
framework was reviewed by Acacia management and
independent board members. Acacia has not yet been
provided with a detailed proposal for a decision around
the ongoing discussions between Barrick and the
Government of Tanzania.
In the fourth quarter of 2017 Barrick identified
several indicators of impairment, including but not
limited to, the continued challenges experienced in the
operating environment in Tanzania, the announcement
of new legislation by the Government of Tanzania in
respect of the natural resources sector and the resulting
decision to reduce operations at Bulyanhulu.
As a result of the updated LOM plan, which reflects
the targeted outcome for a negotiated resolution in line
with the proposed framework, we identified that the
carrying value of Bulyanhulu exceeded the FVLCD
and we recorded a non-current asset impairment of
$740 million, based on a FVLCD of $600 million
(100% basis). Refer to note 36 for further details of
the proposed framework.
Impairment assessments were also performed in the
second and third quarters of 2017 and no impairment
charges were recorded.
Cerro Casale – First Quarter 2017
As noted in note 4(b), on March 28, 2017, we announced
the sale of a 25% interest in the Cerro Casale Project
in Chile, which would result in Barrick retaining a 50%
interest in the Project and this was deemed to be an
indicator of impairment reversal in the first quarter of
2017. As such, in first quarter 2017, we recognized a
partial reversal of the non-current asset impairment
recorded in the fourth quarter of 2014 in the amount
of $1.12 billion. The recoverable amount, based on the
fair value less cost to dispose as implied by the
transaction price, was $1.2 billion.
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 LOM plan, increasing our expected
production and the number of years in our plan. These
changes increased Veladero’s 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 2016. 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 2015.
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
138
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
significant uncertainty as to whether or not a change in
FVLCD existed that warranted a reversal in the previously
recorded impairment.
Third Quarter 2016
In the third quarter of 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 2016, 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.
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 exclude a material portion of total reserves
and resources, we assign value to reserves and resources
not considered in these models. Based on observable
market or publicly available data, including forward
prices and equity sell-side analyst forecasts, we make an
assumption of future gold and silver prices to estimate
future revenues. The future cash flows for each gold
mine are discounted using a real weighted average cost
of capital (“WACC”), which reflects specific market risk
factors for each mine. Some gold companies trade at a
market capitalization greater than the NPV of their
expected cash flows. Market participants describe this as
a “NAV multiple”, which represents the multiple applied
to the NPV to arrive at the trading price. The NAV
multiple is generally understood to take account of a
variety of additional value factors such as the exploration
potential of the mineral property, namely the ability
to find and produce more metal than what is currently
included in the LOM plan or reserve and resource
estimates, and the benefit of gold price optionality.
As a result, we applied a specific NAV multiple to the
NPV of each CGU within each gold segment based
on the NAV multiples observed in the market in recent
periods and that we judged to be appropriate to
the CGU.
Pascua-Lama
The FVLCD for Pascua-Lama was determined by
considering observable market values for comparable
assets expressed as dollar per ounce of measured and
indicated resources (level 3 of the fair value hierarchy).
We used the market approach as the LOM for Pascua-
Lama has significant uncertainty with respect to
the scope and estimated timeline for the project. The
observable market values were adjusted, where
appropriate, for country risk if the comparable asset
was in a different country.
Barrick Gold Corporation | Financial Report 2017 139
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 2017 impairment
testing is $1,200 per ounce. Our gold price assumptions
used in our 2016 impairment testing were 2017: $1,050
per ounce and 2018+: $1,200 per ounce. The other key
assumptions used in our impairment testing, based on
the CGUs tested in each year, 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)
Value per ounce of gold
Value per ounce of silver
$
2.75
3%–11%
6%
9%
1.2
17
$30–$55
$0.41–$0.76
$ 2.75
3%–6%
4%
9%
1.2
15
n/a
n/a
Sensitivities
Should there be a significant increase or 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 each CGU
that was tested as part of the goodwill impairment test,
as well as those CGUs which have had an impairment
or impairment reversal in recent years. We flexed 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
140
Barrick Gold Corporation | Financial Report 2017
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. If the gold price per ounce was
decreased by $100, a further non-current asset impairment
of $172 million, net of tax, would be recognized for
Bulyanhulu, with a similar increase in the gold price per
ounce resulting in a reduction in the impairment of
$172 million. The partial reversal of the non-current asset
impairment reversal recorded for Lumwana would not be
recognized if the copper price per ounce was decreased
by $0.25 and would result in the recognition of a further
impairment reversal of $303 million if the copper price
per ounce was increased by $0.25. Lumwana was
otherwise not affected by the sensitivity analysis.
Other results of the sensitivity analysis are as follows:
2017
2016
Operating Segment
Pueblo Viejo
Lagunas Norte
Veladero
(Impairment)/reversal
based on
Gold price
+$100
Gold price
-$100
$ 546
–
–
$ (651)
(311)
(188)
We also performed a sensitivity analysis on our WACC,
which is another key input that impacts the impairment
calculations. We assumed a +/-1% change on the
WACC, while holding all other assumptions constant, to
determine the impact on impairment losses recorded,
and whether any additional operating segments would
be impacted. The results of this analysis are as follows:
A 1% decrease in the WACC would result in a
partial reversal of $425 million of the non-current asset
impairment recorded in 2015 at Pueblo Viejo. It would
also result in the recognition of a further $63 million
non-current asset impairment at Bulyanhulu, while a 1%
increase in the WACC would result in a reduction of
similar value in the impairment recognized at Bulyanhulu.
In addition, for our Pascua-Lama project, we have
determined our valuation based on a market approach.
The key assumption that impacts the impairment
calculations is the value per ounce of gold and per pound
of silver based on an analysis of comparable companies.
We assumed a negative 10% change for the assumption
of gold and silver value per ounce, while holding all
other assumptions constant, and based on the results of
the impairment testing performed in fourth quarter 2017
for Pascua-Lama, the fair value of the CGU would have
been reduced from $850 million to $750 million.
We note that this sensitivity identifies the decrease in
the value that, in isolation, would cause the carrying
value of the CGU to exceed its recoverable amount. For
Pascua-Lama, this value decrease is linear to the decrease
in value per ounce/pound.
The carrying value of the CGUs that are most sensitive
to changes in the key assumptions used in the FVLCD
calculation are:
As at December 31, 2017
Carrying value
23 (cid:132) Accounts Payable
Accounts payable
Accruals
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at
Dec. 31,
2017
$ 760
299
As at
Dec. 31,
2016
$ 749
335
$ 1,059
$ 1,084
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 152
30
$
85
17
7
40
67
50
77
53
26
36
$ 331
$ 309
24 (cid:132) Other Current Liabilities
Provision for environmental
rehabilitation (note 27b)
Derivative liabilities (note 25f)
Deposit on Pueblo Viejo gold and silver
streaming agreement
Share-based payments (note 34b)
Deposit on Pascua-Lama silver sale agreement
Other
25 (cid:132) Financial Instruments
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);
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,
2017
$ 662
427
1,145
As at
Dec. 31,
2016
$ 1,009
654
726
$ 2,234
$ 2,389
Barrick Gold Corporation | Financial Report 2017 141
Pueblo Viejo1
Veladero2
Lumwana3
Norte Abierto2,4
Bulyanhulu3
Lagunas Norte5
Buzwagi
Pascua-Lama3,6,7
$ 3,077
1,016
849
817
600
458
194
38
$
1. This CGU had an impairment loss in 2015. As there have been no indicators of
impairment or impairment reversal in 2017, the carrying value would remain
sensitive to the key assumptions in the FVLCD model from 2015.
2. As a result of partial divestments that occurred in 2017 (refer to notes 4a and
4b) these CGUs were remeasured to fair value and are sensitive to changes in
the key assumptions used in the purchase price allocations.
3. As a result of the impairment/reversal recorded in 2017 these CGUs were
remeasured to fair value and are sensitive to changes, both positive and
negative, in the key assumptions used to calculate the FVLCD.
4. Norte Abierto is the new name of our joint venture with Goldcorp, comprised
of the Cerro Casale and Caspiche deposits.
5. As a result of the reversal recorded in 2016 this CGU was remeasured to
fair value and is sensitive to changes, both positive and negative, in the key
assumptions used to calculate the FVLCD.
6. The carrying value of Pascua-Lama includes the deferred revenue liability
relating to the Wheaton Precious Metals stream ($812 million).
7. This CGU is most sensitive to changes in the value per ounce of comparable
market entities.
22 (cid:132) Other Assets
Derivative assets (note 25f)
Goods and services taxes recoverable1
Notes receivable2
Restricted cash3
Prepayments
Norte Abierto JV Partner Receivable
Other
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$
1
398
279
119
42
166
265
$
1
303
274
118
51
–
199
$ 1,270
$ 946
1. Includes VAT and fuel tax receivables of $220 million in Argentina, $132 million
in Tanzania and $46 million in Chile (Dec. 31, 2016: $255 million, $8 million
and $40 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Of total cash and cash equivalents as of December 31,
2017, $305 million (2016: $943 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.
b) Debt and Interest1
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
4.10%/5.75% notes8,9
Acacia credit facility10
Less: current portion11
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
Closing
balance
Dec. 31, 2016
$ 1,467
1,078
395
593
1,607
400
114
609
1,569
99
$ 7,931
(143)
$ 7,788
Proceeds
Repayments
$
$
$
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
(279)
(423)
(68)
(4)
(731)
(28)
$ (1,533)
–
$ (1,533)
Amortization
Closing
balance
and other2 Dec. 31, 2017
$ 1
1
–
–
(2)
23
–
(2)
4
–
$ 25
–
$ 25
$ 1,468
1,079
395
593
1,326
–
46
603
842
71
$ 6,423
(59)
$ 6,364
Closing
balance
Dec. 31, 2015
Proceeds
Repayments
Amortization
Closing
balance
and other2 Dec. 31, 2016
$ 2,182
1,077
395
592
2,451
646
153
654
1,690
128
$ 9,968
(203)
$ 9,765
$
–
–
–
–
–
–
2
3
–
–
$
(721)
–
–
–
(848)
(254)
(41)
(46)
(123)
(29)
$ 5
–
$ 5
$ (2,062)
–
$ (2,062)
$ 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
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 (2016: $1.5 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of
$629 million (2016: $629 million) of BNAF notes due 2021 and $850 million (2016: $850 million) of BNAF notes due 2041.
4. Consists of $400 million (2016: $400 million) of 5.80% notes which mature in 2034.
5. Consists of $600 million (2016: $600 million) of 6.35% notes which mature in 2036.
6. Consists of $1.3 billion (2016: $1.6 billion) in conjunction with our wholly-owned subsidiary BNAF and our wholly-owned subsidiary Barrick (PD) Australia Finance
Pty Ltd. (“BPDAF”). This consists of $248 million (2016: $248 million) of BPDAF notes due 2020, $250 million (2016: $250 million) of BNAF notes due 2038 and
$850 million (2016: $850 million) of BPDAF notes due 2039.
7. Consists primarily of capital leases at Pascua-Lama, $13 million and Lagunas Norte, $27 million (2016: $50 million and $56 million, respectively).
8. Consists of $850 million (2016: $1.6 billion) in conjunction with our wholly-owned subsidiary BNAF.
9. We provide an unconditional and irrevocable guarantee on all BNAF, BPDAF, Barrick Gold Finance Company (“BGFC”), and Barrick (HMC) Mining (“BHMC”)
notes and generally provide such guarantees on all BNAF, BPDAF, BGFC, and BHMC notes issued, which will rank equally with our other unsecured and
unsubordinated obligations.
10. Consists of an export credit backed term loan facility.
11 The current portion of long-term debt consists of project financing ($nil; 2016: $72 million), other debt obligations ($4 million; 2016: $5 million), capital leases
($27 million; 2016: $38 million) and Acacia credit facility ($28 million; 2016: $28 million).
142
Barrick Gold Corporation | Financial Report 2017
1.75%/2.9%/4.4%/5.7% Notes
In June 2011, 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 the 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 the 4.95% notes
was repaid.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. During 2017, the
remaining $279 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 was comprised of international financial
institutions including export development agencies and
commercial banks.
We had drawn the entire $1.035 billion. During
2017, the remaining principal balance of the Pueblo
Viejo Financing Agreement was fully repaid.
Barrick Gold Corporation | Financial Report 2017 143
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 London Interbank
Offered Rate (“LIBOR”) plus 2.00% on drawn amounts,
and a commitment rate of 0.35% on undrawn amounts.
In November 2017, $3.977 billion of the $4 billion credit
facility was agreed to be extended from January 2022
to January 2023. The remaining $23 million currently
terminates in January 2020. The Credit Facility is
undrawn as at December 31, 2017.
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 BNAF 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 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
For the years ended December 31
4.4%/5.7% notes
3.85%/5.25% notes
5.80% notes
6.35% notes
Other fixed rate notes
Project financing
Capital leases
Other debt obligations
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)
on the $850 million of 5.75% notes issued by BNAF,
which will rank equally with our other unsecured and
unsubordinated obligations.
During 2013, $398 million of the $650 million
2.50% notes were repaid. During 2015, $769 million of
4.10% notes and $129 million of 2.5% notes were
repaid. During 2016, the remainder ($123 million) of the
$650 million of the 2.50% notes was repaid. During
2017, the remaining $731 million of the 4.10% 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 Facility is collateralized by the Bulyanhulu
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. During 2017, $28 million was repaid.
2017
2016
Interest
cost
Effective
rate1
$ 77
53
23
38
93
14
3
31
72
6
66
35
$ 511
5.23%
4.87%
5.85%
6.41%
6.38%
7.04%
3.60%
6.55%
5.12%
3.59%
8.37%
6.14%
Interest
cost
$ 104
53
23
38
128
33
5
36
82
7
63
37
$ 609
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%
1. The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest
rate contracts designated in a hedging relationship with debt.
144
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Scheduled Debt Repayments1
4.95% notes3
7.31% notes2
4.40% notes
3.85% 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
Acacia credit facility
Issuer
BPDAF
BGC
BNAF
BGC
BGC
BGC
BGC
BGC
BGC
BGC
BGFC
BGC
BHMC
BNAF
BPDAF
BNAF
BGC
BNAF
Maturity
Year
2018
2019
2020
2021
2022
2023 and
thereafter
Total
2020
2021
2021
2022
2025
2025
2026
2026
2033
2034
2034
2035
2036
2038
2039
2041
2042
2043
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
28
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5
28
$ 248
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15
$
–
7
629
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
337
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
– $ 248
7
–
629
–
337
–
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
9
–
71
–
$ 32
$ 33
$ 263
$ 636
$ 337
$ 5,109 $ 6,410
Minimum annual payments
under capital leases
$ 27
$ 11
$
4
$
1
$
1
$
2 $
46
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.
Barrick Gold Corporation | Financial Report 2017 145
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
(cid:132)(cid:3)Sales
Impacted by
(cid:132)(cid:3)(cid:3)Prices of gold, silver
and copper
(cid:132)(cid:3)(cid:3)By-product credits
(cid:132)(cid:3)(cid:3)Prices of silver, copper
and gold
(cid:132)(cid:3)Cost of sales
(cid:132)(cid:3)(cid:3)Consumption of diesel fuel,
propane, natural gas, and
electricity
(cid:3) (cid:132)(cid:3)(cid:3)Prices of diesel fuel,
propane, natural gas,
and electricity
(cid:132)(cid:3)(cid:3)Non-US dollar expenditures
(cid:132)(cid:3)(cid:3)General and administration,
exploration and evaluation costs
(cid:3) (cid:132)(cid:3)(cid:3)Currency exchange rates –
US dollar versus A$, ARS,
C$, CLP, DOP, EUR, PGK,
TZS, ZAR, and ZMW
(cid:132)(cid:3)(cid:3)Currency exchange rates –
US dollar versus A$, ARS,
C$, CLP, DOP, GBP, PGK,
TZS, ZAR, and ZMW
(cid:132)(cid:3)(cid:3)Capital expenditures
(cid:132)(cid:3)(cid:3)Non-US dollar capital
(cid:3) (cid:132)(cid:3)(cid:3)Currency exchange
expenditures
rates – US dollar versus
A$, ARS, C$, CLP, DOP,
EUR, GBP, PGK, and ZAR
(cid:132)(cid:3)(cid:3) Consumption of steel
(cid:3) (cid:132)(cid:3)(cid:3)Price of steel
(cid:132)(cid:3)(cid:3)Interest earned on cash
(cid:132)(cid:3)US dollar interest rates
and equivalents
(cid:132)(cid:3)(cid:3)Interest paid on fixed-rate
(cid:132)(cid:3)US dollar interest rates
borrowings
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 derivatives 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”.
146
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
d) Summary of Derivatives at December 31, 2017
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)
C$:US$ contracts (C$ 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
$ 43
$ –
$ 71
$ 71
$ –
$ 1
21
8
32
105
60
1,244
–
–
–
–
–
42
–
–
–
–
–
–
21
8
32
105
60
1,286
–
–
–
–
60
840
21
8
32
105
–
446
–
–
–
2
(8)
(24)
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,
2017
classification
Fair value
as at
Dec. 31,
2016
Balance
Fair value
as at
sheet Dec. 31,
2017
classification
Fair value
as at
Dec. 31,
2016
Derivatives designated as
hedging instruments
US dollar interest rate contracts
Commodity contracts
Total derivatives classified as
hedging instruments
Derivatives not designated as
hedging instruments
Commodity contracts
Total derivatives not designated as
hedging instruments
Total derivatives
Other assets
Other assets
$ 1
–
$ 1
–
Other liabilities
Other liabilities
$
–
25
$
–
71
$ 1
$ 1
$ 25
$ 71
Other assets
$ 2
$ 1
Other liabilities
$ 7
$ 2
$ 3
$ 1
$ 2
$ 7
$ 32
$
$
7
7
$ 78
Barrick Gold Corporation | Financial Report 2017 147
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2017, we had 18 counterparties to
our derivative positions. We proactively manage our
exposure to individual counterparties in order to mitigate
both credit and liquidity risks. We have six counterparties
with which we hold a net asset position of $2 million,
and 12 counterparties with which we are in a net liability
position, for a total net liability of $31 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, 2017, Acacia has $71 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, 2017, 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 2016, 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 and December 31, 2017.
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, 2017, we have 840 thousand barrels of
WTI designated as cash flow hedges at an average rate
of $79 per barrel of our exposure to forecasted fuel
purchases at our mines.
Non-hedge Derivatives
During the year, Acacia entered into a contract to
purchase 79 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 Acacia has 206 thousand barrels of
Brent swaps outstanding that economically hedge our
exposure to forecasted fuel purchases at our mines.
Metals Contracts
Cash Flow Hedges
During 2017, we purchased 115 million pounds of copper
collars, of which 60 million pounds remain outstanding
at December 31, 2017. The outstanding positions will
mature evenly throughout the first half of 2018. These
contracts contained purchased put and sold call options
with weighted average strike prices of $2.83/lb and
$3.25/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 2014, we early terminated 65 million ounces
of silver hedges. We realized net cash proceeds of
approximately $190 million with $2 million remaining
crystallized in OCI at December 31, 2017, 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,
Acacia purchased gold put options of 210 thousand
ounces. As a result of these activities, we recorded
approximately $4 million in the consolidated statement
of income as gains on non-hedge derivatives. There are
105 thousand ounces of gold positions outstanding at
December 31, 2017.
148
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
At January 1, 2016
Effective portion of change in fair
value of hedging instruments
Transfers to earnings:
On recording hedged items in
earnings/PP&E1
At December 31, 2016
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
$ 14
$ –
$ (102)
$ (30)
$ –
$ –
$ (22)
$ (140)
–
(5)
–
–
23
2
47
28
–
–
–
–
–
2
25
72
$ 9
$ –
$ (32)
$ –
$ –
$ –
$ (20)
$ (43)
–
(11)
(8)
(7)
–
4
–
27
5
–
–
–
–
–
–
–
–
–
–
3
–
(19)
27
5
At December 31, 2017
$ 2
$ (7)
$
(8)
$ –
$ –
$ –
$ (17)
$ (30)
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 2018 earnings2
$ 2
$ (7)
$
(8)
$ –
$ –
$ –
$
(1)
$ (14)
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, 2017.
Cash Flow Hedge Gains (Losses) at December 31
Derivatives in cash flow
hedging relationships
Amount of gain
(loss) recognized
in OCI
2017
2016
Location of gain (loss)
transferred from OCI
into income/PP&E
(effective portion)
Amount of gain
(loss) transferred
from OCI into income
(effective portion)
2017
2016
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)
2017
2016
Interest rate contracts
$
(1) $
– Finance income/finance costs
$
(3) $
(2)
Foreign exchange
contracts
–
2
Cost of sales/general and
administrative costs/PP&E
–
(28)
Commodity contracts
(18)
23
Revenue/cost of sales
(24)
(42)
Gain (loss) on non-
hedge derivatives
Gain (loss) on non-
hedge derivatives
Gain (loss) on non-
hedge derivatives
$
–
$
–
(5)
Total
$ (19) $ 25
$
(27) $
(72)
$
(5)
$
–
–
–
–
Barrick Gold Corporation | Financial Report 2017 149
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
e) Gains (Losses) on Non-hedge Derivatives
2017
For the years ended December 31
Commodity contracts
Gold
Silver1
Copper
Fuel
Currency contracts
Hedge ineffectiveness
1. Relates to the amortization of crystallized OCI.
$
4
7
(1)
–
1
$ 11
(5)
$
6
2016
$
2
6
–
5
(1)
$ 12
–
$ 12
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
2017
2016
$ (76)
$ (263)
62
4
(19)
5
(5)
156
6
25
–
–
At December 31
$ (29)
$
(76)
Classification:
Other current assets
Other long-term assets
Other current liabilities
Other long-term obligations
$
2
1
(30)
(2)
$
1
1
(50)
(28)
$ (29)
$
(76)
26 (cid:132) 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.
150
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
a) Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair Value Measurements
At December 31, 2017
Cash and equivalents
Other investments
Derivatives
Receivables from provisional copper and gold sales
Fair Value Measurements
At December 31, 2016
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)
$ 2,234
33
–
–
$ 2,267
Quoted prices
in active
markets for
identical assets
(Level 1)
$ 2,389
18
–
–
$ 2,407
$
–
–
(29)
110
$ 81
Significant
other
observable
inputs
(Level 2)
$
–
–
(76)
110
$ 34
$ –
–
–
–
$ –
Significant
unobservable
inputs
(Level 3)
$ –
–
–
–
$ –
Aggregate
fair value
$ 2,234
33
(29)
110
$ 2,348
Aggregate
fair value
$ 2,389
18
(76)
110
$ 2,441
At Dec. 31, 2017
At Dec. 31, 2016
Carrying
amount
Estimated
fair value
Carrying
amount
Estimated
fair value
$
572
33
3
$
608
$ 6,423
32
252
$ 6,707
$
$
572
33
3
608
$ 7,715
32
252
$ 7,999
$
399
18
2
$
399
18
2
$
419
$
419
$ 7,931
78
216
$ 8,279
78
216
$ 8,225
$ 8,573
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.
Barrick Gold Corporation | Financial Report 2017 151
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
c) Assets Measured at Fair Value on a Non-Recurring Basis
Other assets1
Property, plant and equipment2
Intangible assets3
Quoted prices
in active
markets for
identical assets
(Level 1)
$ –
–
–
Significant
other
observable
inputs
(Level 2)
$ –
–
–
Significant
unobservable
inputs
(Level 3)
$
45
6,105
34
Aggregate
fair value
$
45
6,105
34
1. Other assets were written down by $30 million, which was included in earnings in this period.
2. Property, plant and equipment were written up by $254 million, which was included in earnings in this period, reflecting the historical impairment loss taken on
these assets.
3. Intangibles were written down by $12 million, which was included in earnings in this period, to their fair value less costs of disposal of $34 million.
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 Credit Default Swap (“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.
152
Barrick Gold Corporation | Financial Report 2017
27 (cid:132) 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 in the year
Settlements
Cash payments
Settlement gains
Accretion
At December 31
Current portion (note 24)
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 2,944
48
37
27
85
$ 2,179
72
34
45
33
$ 3,141
$ 2,363
2017
2016
$ 2,246
(31)
$ 1,982
–
46
(41)
(1)
12
836
(18)
(1)
48
146
(28)
(1)
10
134
(34)
(3)
40
$ 3,096
(152)
$ 2,246
(67)
$ 2,944
$ 2,179
The eventual settlement of substantially all PERs is
expected to take place between 2018 and 2058.
The PER has increased in the fourth quarter of
2017 by $864 million primarily due to changes in cost
estimates at our Pascua-Lama, Lagunas Norte and
Veladero properties, partially offset by changes in
discount rates. For the year ended December 31, 2017,
our PER balance increased by $850 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 $385 million and a
1% decrease in the discount rate would result in an
increase in PER by $257 million, while holding the other
assumptions constant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
28 (cid:132) 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 personnel.
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
Barrick Gold Corporation | Financial Report 2017 153
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
treasury group implements hedging strategies on an
opportunistic basis to protect us from downside price risk
on our gold and copper production. We have 60 million
pounds of copper positions outstanding at December 31,
2017. Acacia has 105 thousand ounces of gold positions
outstanding at December 31, 2017 and purchased an
additional 120 thousand ounces of gold put options
subsequent to year end. 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
($2.2 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
($0.1 billion at December 31, 2017).
The effect on net earnings and equity of a 1% change
in the interest rate of our financial assets and liabilities
as at December 31, is approximately $10 million (2016:
$13 million).
154
Barrick Gold Corporation | Financial Report 2017
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 countries, which are countries rated BBB- or higher
by S&P and include Canada, Chile, Australia and Peru.
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:
(cid:132) Entering into derivatives with high credit-quality
counterparties;
(cid:132) Limiting the amount of net exposure with each
counterparty; and
(cid:132) 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,
2017
$ 2,234
239
As at
Dec. 31,
2016
$ 2,389
249
2
1
$ 2,475
$ 2,639
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 STATEMENTS
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, 2017,
our total debt was $6.4 billion (debt net of cash and
equivalents was $4.2 billion) compared to total debt
as at December 31, 2016 of $7.9 billion (debt net of
cash and equivalents was $5.5 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, 2017) 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 0.27:1 as at December 31, 2017).
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 presented 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, 2017
(in $ millions)
Cash and equivalents
Accounts receivable
Derivative assets
Trade and other payables
Debt
Derivative liabilities
Other liabilities
As at December 31, 2016
(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
$ 2,234
239
2
1,059
59
30
30
$
–
–
1
–
311
2
231
$
–
–
–
–
975
–
64
$
–
–
–
–
5,111
–
186
$ 2,234
239
3
1,059
6,456
32
511
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
Barrick Gold Corporation | Financial Report 2017 155
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 (cid:132) Other Non-Current Liabilities
Deposit on Pascua-Lama silver
sale agreement
Deposit on Pueblo Viejo gold and
silver streaming agreement
Long-term income tax payable
Derivative liabilities (note 25f)
Provision for offsite remediation
Other
As at
Dec. 31,
2017
As at
Dec. 31,
2016
$ 805
$ 749
459
259
2
45
174
499
–
28
48
137
$ 1,744
$ 1,461
Silver Sale Agreement
Our silver sale agreement with Wheaton Precious Metals
Corp. (“Wheaton”) (formerly Silver Wheaton Corp.)
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.
156
Barrick Gold Corporation | Financial Report 2017
Gold and Silver Streaming Agreement
On September 29, 2015, we closed a gold and silver
streaming transaction with Royal Gold, Inc. (“Royal
Gold”) for production linked to Barrick’s 60 percent
interest in the Pueblo Viejo mine. Royal Gold made an
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:
(cid:132) 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.
(cid:132) 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 STATEMENTS
30 (cid:132) 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 $239 million and deferred
income taxes of $155 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 $3,916 million as at December 31, 2017.
Sources of Deferred Income Tax Assets and Liabilities
Deferred tax assets
Tax loss carry forwards
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,
2017
As at
Dec. 31,
2016
$ 926
594
175
$ 735
639
273
49
40
23
74
21
47
75
54
89
41
$ 1,902
$ 1,953
(1,571)
(507)
(1,963)
(533)
$
(176)
$
(543)
$ 1,069
(1,245)
$
(176)
$ 977
(1,520)
$
(543)
The deferred tax asset of $1,069 million includes
$1,064 million expected to be realized in more than
one year. The deferred tax liability of $1,245 million
includes $1,228 million expected to be realized in more
than one year.
Expiry Dates of Tax Losses
Non-capital tax losses1
Canada
Argentina
Barbados
Chile
Tanzania
Zambia
Other
2018
2019
2020
2021
2022+
$
–
–
4,727
–
–
115
7
$
–
–
922
–
–
–
–
$
–
–
217
–
–
–
–
$
–
271
13
–
–
12
–
$ 2,093
–
735
–
–
404
–
No
expiry
date
$
–
–
–
1,052
1,756
–
568
Total
$ 2,093
271
6,614
1,052
1,756
531
575
$ 4,849
$
922
$ 217
$ 296
$ 3,232
$ 3,376
$ 12,892
1. Represents the gross amount of tax loss carry forwards translated at closing exchange rates at December 31, 2017.
Barrick Gold Corporation | Financial Report 2017 157
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The non-capital tax losses include $9,153 million of
losses which are not recognized in deferred tax assets.
Of these, $4,843 million expire in 2018, $922 million
expire in 2019, $217 million expire in 2020, $296 million
expire in 2021, $1,009 million expire in 2022 or later,
and $1,866 million have no expiry date.
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:
(cid:132) Historic and expected future levels of taxable income;
(cid:132) Tax plans that affect whether tax assets can be
realized; and
(cid:132) 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 tax 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 $661 million
(December 31, 2016: $569 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
$98 million (December 31, 2016: $126 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
Canada
United States
Chile
Argentina
Barbados
Tanzania
Zambia
Saudi Arabia
As at
Dec. 31,
2017
$ 158
388
–
993
515
66
209
50
70
$ 2,449
As at
Dec. 31,
2016
$ 162
377
115
890
599
66
183
151
70
$ 2,613
Deferred Tax Assets Not Recognized relate to: non-capital
loss carry forwards of $690 million (2016: $638 million),
capital loss carry forwards with no expiry date of
$452 million (2016: $440 million), US AMT credits of
$nil (2016: $113 million) and other deductible temporary
differences with no expiry date of $1,307 million (2016:
$1,422 million).
Source of Changes in Deferred Tax Balances
For the years ended December 31
2017
2016
Temporary differences
Property, plant and equipment
Environmental rehabilitation
Tax loss carry forwards
Inventory
Derivatives
Other
Intraperiod allocation to:
Income from continuing operations
before income taxes
Cerro Casale disposition
Veladero disposition
OCI
$ 295
(45)
191
26
(16)
(84)
$ 367
$ (106)
469
16
(12)
$ 367
$ (297)
79
259
(94)
(16)
39
$
(30)
$
(8)
–
–
(22)
$
(30)
158
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Tax Related Contingent Liabilities
31 (cid:132) Capital Stock
At January 1
Net additions based on uncertain tax positions
related to prior years
Reductions for tax positions of prior years
At December 311
2017
$ 128
178
–
$ 306
2016
$ 61
70
(3)
$ 128
1. If reversed, the total amount of $306 million would be recognized as a benefit
to income taxes on the income statement, and therefore would impact the
reported effective tax rate.
Tax Years Still Under Examination
Canada
United States
Dominican Republic
Peru
Chile
Argentina
Australia
Papua New Guinea
Saudi Arabia
Tanzania
Zambia
2015–2017
2017
2013–2017
2009, 2011–2017
2013–2017
2011–2017
2013–2017
2006–2017
2007–2017
All years open
2010–2017
Authorized Capital Stock
Our authorized capital stock includes an unlimited number
of common shares (issued 1,166,577,478 common
shares); an unlimited number of first preferred shares
issuable in series (the first series is designated 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 Preferred 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 2017, we declared and paid dividends in US dollars
totaling $125 million (2016: $86 million).
The Company’s dividend reinvestment plan resulted
in $16 million (2016: $8 million) reinvested into
the Company.
32 (cid:132) Non-Controlling Interests
a) Non-Controlling Interests Continuity
NCI in subsidiary at December 31, 2017
40%
36.1%
25%
Various
Pueblo Viejo
Acacia
Cerro Casale
Other
Total
At January 1, 2016
Share of income (loss)
Cash contributed
Disbursements
At December 31, 2016
Share of income (loss)
Cash contributed
Decrease in non-controlling interest
Disbursements
At December 31, 2017
$ 1,232
174
–
(95)
$ 1,311
118
–
–
(139)
$ 1,290
$ 677
34
–
(7)
$ 704
(211)
–
–
(13)
$ 480
$ 318
(1)
2
–
$ 319
173
1
(493)
–
$
–
$ 50
(1)
68
(73)
$ 44
(2)
12
–
(43)
$ 11
$ 2,277
206
70
(175)
$ 2,378
78
13
(493)
(195)
$ 1,781
Barrick Gold Corporation | Financial Report 2017 159
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
Summarized Statements of Income
For the years ended December 31
Revenue
Income (loss) from continuing operations after tax
Other comprehensive income (loss)
Total comprehensive income (loss)
Dividends paid to NCI
Summarized Statements of Cash Flows
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
Net increase (decrease) in cash and cash equivalents
Pueblo Viejo
Acacia
As at
Dec. 31,
2017
$ 488
3,489
$ 3,977
907
248
$ 1,155
As at
Dec. 31,
2016
$ 833
3,703
$ 4,536
1,357
603
$ 1,960
As at
Dec. 31,
2017
$ 464
1,333
$ 1,797
212
280
As at
Dec. 31,
2016
$ 673
1,725
$ 2,398
71
381
$ 492
$ 452
Pueblo Viejo
Acacia
2017
$ 1,417
293
–
$ 293
$
–
2016
2017
2016
$ 1,548
810
–
$ 810
$
–
$ 751
(630)
–
$ (630)
$
13
$ 1,045
81
–
$
$
81
7
Pueblo Viejo
Acacia
2017
2016
$ 283
(112)
(539)
$ (368)
$ 602
(54)
(350)
$ 198
$
2017
(15)
(160)
(62)
2016
$ 324
(190)
(49)
$ (237)
$
85
160
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33 (cid:132) Remuneration of Key Management Personnel
Compensation expense for RSUs was a $42 million
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
Salaries and short-term employee benefits1
Post-employment benefits2
Share-based payments and other3
2017
$ 20
3
12
$ 35
2016
$ 19
2
17
$ 38
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.
34 (cid:132) Stock-Based Compensation
a) Global Employee Share Plan (GESP)
In 2016, Barrick launched a Global Employee Share Plan.
This is a plan awarded to all eligible employees. During
2017, Barrick contributed and expensed $9 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, 2017, the weighted
average remaining contractual life of RSUs was 1.19 years
(2016: 1.09).
charge to earnings in 2017 (2016: $60 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.
DSU and RSU Activity
At January 1, 2016
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
At December 31, 2016
Settled for cash
Forfeited
Granted
Credits for dividends
Change in value
DSUs
Fair
value
RSUs
465
(26)
–
134
–
–
573
–
–
152
–
–
(0.4)
–
$ 3.5 6,627
(1,102)
(2,952)
2.2 3,836
43
–
–
3.8
–
–
$ 9.2 6,452
(3,610)
(121)
2.5 1,760
56
–
–
(0.1)
Fair
value
$ 24.6
(22.7)
(46.3)
55.0
0.7
47.3
$ 58.6
(62.5)
(2.3)
32.7
0.9
10.3
At December 31, 2017
725
$ 11.6 4,537
$ 37.7
At December 31, 2017, Acacia Mining plc had $nil
of DSUs outstanding (2016: $1 million) and $2 million
of RSUs outstanding (2016: $3 million).
Barrick Gold Corporation | Financial Report 2017 161
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2017, no units were outstanding
(2016: 489 thousand units, fair value $6 million).
At December 31, 2017, Acacia Mining plc had
$nil of PRSUs outstanding (2016: $8 million).
d) Performance Granted Share Units (PGSUs)
In 2014, Barrick launched a PGSU plan. Under this plan,
selected employees are granted PGSUs, where each
PGSU has a value equal to one Barrick common share.
At December 31, 2017, 2,174 thousand units had
been granted at a fair value of $14 million (2016:
1,536 thousand units at a value of $11 million).
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
2017, Barrick contributed and expensed $0.4 million
to this plan (2016: $0.3 million).
Employee Stock Option Activity (Number of Shares in Millions)
C$ options
At January 1
Granted
Cancelled/expired
At December 31
US$ options
At January 1
Forfeited
Cancelled/expired
At December 31
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, 2017, 1.0 million (2016: 2.1 million)
stock options were outstanding.
Compensation expense for stock options was $nil
in 2017 (2016: $nil ), 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 2017 and 2016.
Total intrinsic value relating to options exercised in
2017 was $nil (2016: $nil).
2017
2016
Shares Average price
Shares
Average price
0.3
–
–
0.3
1.8
(0.7)
(0.4)
0.7
$ 13
–
–
$ 13
$ 42
40
45
$ 40
0.3
–
–
0.3
2.6
(0.4)
(0.4)
1.8
$ 13
–
–
$ 13
$ 42
45
39
$ 42
162
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stock Options Outstanding (Number of Shares in Millions)
Outstanding
Exercisable
Range of exercise prices
Shares
Average
price
Average
life (years)
Intrinsic
value1
($ millions)
Shares
Average
price
Intrinsic
value1
($ millions)
C$ options
$ 9 – $ 17
$ 18 – $ 21
US$ options
$ 32 – $ 41
$ 42 – $ 55
0.2
0.1
0.3
0.4
0.3
0.7
$ 10
18
$ 13
$ 32
49
$ 40
4.6
2.6
3.9
2.0
1.0
1.5
$ 2
–
$ 2
$
$
–
–
–
0.1
0.1
0.2
0.4
0.3
0.7
$ 10
18
$ 14
$ 33
49
$ 40
$ 1
–
$ 1
$
–
–
$
–
1. Based on the closing market share price on December 31, 2017 of C $18.18 and US $14.47.
As at December 31, 2017, there was $nil (2016:
$0.1 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 (2016: 1 year).
35 (cid:132) 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
2017
2016
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
$ 42
6
$ 48
$ 1
–
$ 1
$ 23
–
$ 23
$ 66
6
$ 72
$ 4
–
$ 4
$ 11
–
$ 11
The amounts recognized in the balance sheet are
determined as follows:
For the years ended December 31
2017
2016
Present value of funded obligations
Fair value of plan assets
(Surplus) deficit of funded plans
Present value of unfunded obligations
Total deficit of defined benefit pension plans
Impact of minimum funding requirement/
asset ceiling
Liability in the balance sheet
$ 122
(134)
$ (12)
54
$ 42
$ 198
(191)
$
7
59
$ 66
–
–
$ 42
$ 66
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.
Barrick Gold Corporation | Financial Report 2017 163
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The significant actuarial assumptions were as follows:
As at December 31
Discount rate
Pension Plans 2017
Other Post-Retirement
Benefits 2017
Pension Plans 2016
Other Post-Retirement
Benefits 2016
2.90–3.95%
3.75%
2.10–3.90%
3.70%
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 (2016: 10 years).
Pension benefits
Other post-retirement benefits
At December 31, 2016
Pension benefits
Other post-retirement benefits
At December 31, 2017
Less than
a year
Between
1–2 years
Between
2–5 years
Over 5 years
$ 18
1
$ 19
14
1
$ 15
$ 19
1
$ 20
14
1
$ 15
$ 54
2
$ 56
39
2
$ 41
$ 313
6
$ 319
200
5
$ 205
Total
$ 404
10
$ 414
267
9
$ 276
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 $33 million
in 2017 (2016: $32 million).
36 (cid:132) 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, evaluates 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 May 10, 2017, Shepard Broadfoot, a purported
shareholder of Barrick Gold Corporation, filed suit in
the United States District Court for the Southern District
of New York (“SDNY”) against the Company, Kelvin
Dushnisky, Catherine Raw, Richard Williams and Jorge
Palmes. The complaint asserted claims against the
164
Barrick Gold Corporation | Financial Report 2017
defendants arising from allegedly false and misleading
statements concerning production estimates and
environmental risks at the Veladero mine, and seeks
unspecified damages and other relief. On May 19, 2017,
a second and substantially identical purported class
action complaint was filed in the SDNY. On October 4,
2017, the Court consolidated the actions and appointed
the lead plaintiff and lead counsel. A briefing schedule
has been set by the Court, and the plaintiffs’ amended
consolidated complaint was filed on December 4, 2017.
The Company filed a motion to dismiss the complaint on
February 2, 2018. The Company believes that the claims
are without merit and intends to defend them vigorously.
No amounts have been accrued for any potential losses
under this matter, as the Company cannot reasonably
predict any potential losses.
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 Canadian proceedings alleged that the Company
made false and misleading statements to the investing
public relating (among other things) to the cost of the
Pascua-Lama project (the “Project”), the amount of time
it would take before production commenced at the
Project, and the environmental risks of the Project, as
well as alleged internal control failures.
The 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 were 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.
The amended claim also reflected 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. As a result of the outcome of
the carriage motion and appeals described below, the
second Ontario action has now been stayed.
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 purported 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 sought
$6 billion in damages for alleged misrepresentations
in the Company’s public disclosure. The action was
dismissed on consent on June 19, 2017.
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, 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 was acting as counsel in the first Ontario
action referred to above and the other of which no
longer exists. In January 2018, plaintiffs’ counsel delivered
a consolidated statement of claim in this action.
In November 2014, an Ontario court heard a motion
to determine which of the competing counsel groups
would 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.
Barrick Gold Corporation | Financial Report 2017 165
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The proposed representative plaintiffs in the Quebec
and Ontario actions have brought motions seeking:
(i) leave to proceed with statutory misrepresentation
claims pursuant to provincial securities legislation; and
(ii) orders certifying the actions as class actions. It is
expected that the Quebec motions will be heard in late
February 2019, while the motion for leave to proceed
in the Ontario action will be heard in early April 2019
(with the certification motion to be heard concurrently
or shortly thereafter).
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 “Original 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 Original 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 Original 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 Original Resolution. The
challenge, which was brought in the Environmental
Court of Santiago, Chile (the “Environmental Court”),
claimed that the fine was inadequate and requested
more severe sanctions against CMN including
the revocation of the Project’s environmental permit.
166
Barrick Gold Corporation | Financial Report 2017
The SMA presented its defense of the Original Resolution
in July 2013. On August 2, 2013, CMN joined as a party
to this proceeding and vigorously defended the Original
Resolution. On March 3, 2014, the Environmental Court
annulled the Original 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 recalculated the amount of the fine to be paid by
CMN using a different methodology and addressed
certain other errors it identified in the Resolution. The
Environmental Court did not annul the portion of the
Original Resolution that required the Company to halt
construction on the Chilean side of the Project until the
water management system is completed in accordance
with the Project’s environmental permit. On December 30,
2014, the Chilean Supreme Court declined to consider
CMN’s appeal of the Environmental Court Decision on
procedural grounds. As a result of the Supreme Court’s
ruling, on April 22, 2015, the SMA reopened the
administrative proceeding against CMN in accordance
with the Environmental Court Decision.
On April 22, 2015, CMN was notified that the
SMA had 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.
On June 8, 2016, the SMA consolidated the two
administrative proceedings against CMN into a single
proceeding encompassing both the reconsideration of
the Original 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.
On January 17, 2018, CMN received the revised
resolution (the “Revised Resolution”) from the SMA, in
which the environmental regulator reduced the original
administrative fine from approximately $16 million to
$11.5 million and ordered the closure of existing surface
facilities on the Chilean side of the Project in addition
to certain monitoring activities. The Revised Resolution
does not revoke the Project’s environmental approval.
CMN filed an appeal of the Revised Resolution on
February 3, 2018.
In light of the SMA’s decision, the Company has
reversed the estimated amount previously recorded for
any additional proposed administrative fines in this
matter. In addition, the Company has reclassified Pascua-
Lama’s proven and probable gold reserves as measured
and indicated resources and recorded a pre-tax impairment
of $429 million. See note 21 of these Financial Statements
for information related to impairment losses arising
from this matter.
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 asserted 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
Closure Plan for the Pascua-Lama project. The plaintiffs
appealed the court’s decision to the Chilean Supreme
Court and on March 13, 2017, the Supreme Court
vacated the Temporary Closure Plan, ruling that additional
information regarding the SMA regulatory sanction
process was required from the environmental regulator,
and ordering Sernageomin to issue a new resolution
on the Temporary Closure Plan after receiving such
information. On August 29, 2017, Sernageomin issued
a new resolution in which it reapproved the Temporary
Closure Plan as originally issued. This approval is valid
through September 2019.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
Environmental Court agreed to consider an appeal of the
Chilean Committee’s decision brought by CMN and the
water users and indigenous residents. A hearing took
place on July 25, 2017. On December 12, 2017, the
water users withdrew their appeal. The Environmental
Court dismissed that appeal on January 5, 2018. A
decision of the Environmental Court on the remaining
appeals is still pending. No amounts have been recorded
for any potential liability arising from this matter, as the
Company cannot reasonably predict any potential losses.
Veladero – September 2015 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 returned
to normal. Monitoring and inspection of the mine site
will continue in accordance with a court order.
Barrick Gold Corporation | Financial Report 2017 167
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 $10 million (at the then-applicable
Argentinean peso/$ exchange rate) while the request
for reconsideration was pending. On December 29,
2016, the request for reconsideration was rejected by
the Provincial mining authority. On July 11, 2017, the
San Juan government rejected MAG’s final administrative
appeal of this decision. On September 5, 2017, the
Company commenced a legal action to continue
challenging certain aspects of the decision before the
San Juan courts. MAG has implemented a remedial
action plan at Veladero in response to the incident as
required by the San Juan mining authority.
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”). On
August 15, 2017, the Court of Appeals confirmed the
indictment against eight of the nine individuals that
had been charged with alleged negligence in connection
with the solution release. The individual defendants
filed a special appeal, called a “cassation” appeal, of
the indictments with the San Juan Supreme Court,
which was rejected on August 31, 2017. The San Juan
Provincial court rejected the defendants’ motion to
dismiss on November 30, 2017, and the defendants
appealed this decision on December 4, 2017. A trial
date has not yet been set. MAG is not a party to the
Provincial Action.
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.
On October 17, 2016, a separate criminal investigation
was initiated by the federal judge overseeing the Federal
Investigation based on the alleged failure of federal
government officials to regulate the Veladero mine under
Argentina’s glacier legislation (see “Argentine Glacier
Legislation and Constitutional Litigation” below). On
June 16, 2017, MAG submitted a motion to challenge
the federal judge’s decision to assign this investigation to
himself. MAG also requested to be admitted as a party
to the proceeding in order to present evidence in support
of the MAG. On September 14, 2017, the Court of
Appeals consolidated the two investigations before the
federal judge and allowed MAG to participate in the
consolidated Federal Investigation. On November 21,
2017, the Court of Appeals clarified that MAG is not
a party to the case and therefore did not have standing
to seek the recusal of the federal judge. The Court
recognized MAG’s right to continue to participate in the
case without clarifying the scope of those rights.
On November 27, 2017, the federal judge indicted
four former federal government officials, alleging abuse
of authority in connection with their actions and omissions
related to the enforcement of Argentina’s national glacier
168
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
legislation including the methodology used to complete
the national inventory of glaciers, a portion of which
was published on October 3, 2016, and also requiring
the National Ministry of the Environment and Sustainable
Development to determine if there has been any
environmental damage to glaciers since the glacier law
went into effect in light of his decision. On December 12,
2017, the National Ministry of the Environment and
Sustainable Development clarified that it does not have
jurisdiction to audit environmental damage to glaciers,
as this is the responsibility of the Provincial authorities.
No amounts have been recorded for any potential
liability arising from these matters, as the Company
cannot reasonably predict any potential losses.
Veladero – September 2016 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.
On September 14, 2017, the San Juan Provincial
mining authority consolidated the administrative
proceeding into a single proceeding against MAG
encompassing both the September 2016 incident
and the March 2017 incident described below (see
“Veladero – Release of Gold-bearing Process Solution”).
On December 27, 2017, MAG received notice of a
resolution from the San Juan Provincial mining authority
requiring payment of an administrative fine of
approximately $5.6 million (calculated at the prevailing
exchange rate on December 31, 2017) encompassing
both the September 2016 incident and the March 2017
incident. On January 23, 2018, in accordance with local
requirements, MAG paid the administrative fine and filed
a request for reconsideration with the San Juan Provincial
mining authority, which remains pending.
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 valley leach facility (“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.
MAG replied to the lawsuit on February 20, 2017.
On March 31, 2017, the plaintiffs supplemented their
original complaint to allege that the risk of environmental
damage had increased as a result of the March 28, 2017
release of gold-bearing process solution incident described
below (see “Veladero – Release of Gold-bearing Process
Solution”). The Company responded to the new
allegations and intends to continue defending 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.
Barrick Gold Corporation | Financial Report 2017 169
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Veladero – March 2017 Release of Gold-bearing
Process Solution
Regulatory Infringement Proceeding and Temporary
Suspension of Addition of Cyanide
On March 28, 2017, the monitoring system at the
Company’s Veladero mine detected a rupture of a pipe
carrying gold-bearing process solution on the leach pad.
This solution was contained within the operating site; no
solution reached any diversion channels or watercourses.
All affected soil was promptly excavated and placed on
the leach pad. The Company notified regulatory authorities
of the situation, and San Juan provincial authorities
inspected the site on March 29, 2017.
On March 29, 2017, the San Juan provincial mining
authority issued a violation notice against MAG in
connection with the incident and ordered a temporary
restriction on the addition of new cyanide to the leach
pad until corrective actions on the system were completed.
The mining authority lifted the suspension on June 15,
2017, following inspection of corrective actions.
On March 30, 2017, the San Juan Mining Minister
ordered the commencement of a regulatory infringement
proceeding against MAG as well as a comprehensive
evaluation of the mine’s operations to be conducted by
representatives of the Company and the San Juan
provincial authorities. The Company filed its defense to
the regulatory infringement proceeding on April 5, 2017.
On September 14, 2017, the San Juan Provincial mining
authority consolidated this administrative proceeding
into a single proceeding against MAG encompassing
both the September 2016 incident described above and
the March 2017 incident. On October 10, 2017, the San
Juan Provincial mining authority notified MAG of two
charges under the infringement proceeding for alleged
violations of the Mining Code in connection with the
March 2017 incident.
On December 27, 2017, MAG received notice of a
resolution from the San Juan Provincial mining authority
requiring payment of an administrative fine of
approximately $5.6 million (calculated at the prevailing
exchange rate on December 31, 2017) encompassing
both the September 2016 incident described above
and the March 2017 incident. On January 23, 2018, in
accordance with local requirements, MAG paid the
administrative fine and filed a request for reconsideration
with the San Juan Provincial mining authority, which
remains pending.
Provincial Amparo Action
On March 30, 2017, MAG was served notice of a
lawsuit, called an “amparo” protection action, filed in the
Jachal First Instance Court (the “Jachal Court”) by
individuals who claimed to be living in Jachal, Argentina,
seeking the cessation of all activities at the Veladero
mine. The plaintiffs sought an injunction as part of the
lawsuit, requesting, among other things, the cessation
of all activities at the Veladero mine or, alternatively,
a suspension of the leaching process at the mine. On
March 30, 2017, the Jachal Court rejected the request
for an injunction to cease all activities at the Veladero
mine, but ordered, among other things, the suspension
of the leaching process at the Veladero mine and for
MAG and the San Juan Provincial mining authority to
provide additional information to the Jachal Court in
connection with the incident.
The Company filed a defense to the provincial
amparo action on April 7, 2017. The Jachal Court lifted
the suspension on June 15, 2017, after the San Juan
Provincial mining authority provided the required
information and a hydraulic assessment of the leach pad
and process plant was implemented. Further developments
in this case are pending a decision by the Argentine
Supreme Court as to whether the Federal Court or
Provincial Court has jurisdiction to assess the merits of
the amparo remedy (see “Veladero – Release of Gold-
bearing Process Solution – Federal Amparo Action”
below). No amounts have been recorded for any
potential liability or asset impairment under this matter,
as the Company cannot reasonably predict the outcome.
Federal Amparo Action
On April 4, 2017, the National Minister of Environment
of Argentina filed a lawsuit in the Buenos Aires federal
court (the “Federal Court”) in connection with the
March 2017 incident. The amparo protection action
sought a court order requiring the cessation and/or
suspension of activities at the Veladero mine. MAG
submitted extensive information to the Federal Court
about the incident, the then-existing administrative and
provincial judicial suspensions, the remedial actions taken
by the Company and the lifting of the suspensions as
described above. MAG also challenged the jurisdiction
of the Federal Court and the standing of the National
Minister of Environment of Argentina and requested that
the matter be remanded to the Jachal Court. The
Province of San Juan also challenged the jurisdiction of
170
Barrick Gold Corporation | Financial Report 2017
the Federal Court in this matter. On June 23, 2017, the
Federal Court decided that it was competent to hear the
case, and referred the case to the Court of Appeals to
determine whether the Federal Court or Provincial Court
in the case described above has the authority to assess
the merits of the amparo remedy. On July 5, 2017,
the Provincial Court issued a request for the Supreme
Court of Argentina to resolve the jurisdictional dispute.
On July 30, 2017, the Court of Appeals referred the
jurisdictional dispute to the Supreme Court and a
decision on the matter is pending. 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 banned new mining exploration
and exploitation activities on glaciers and in the “peri-
glacial” environment, and subjected ongoing mining
activities to an environmental audit. If the 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 Argentinean side of
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 included 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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
response to a motion by the federal government to
dismiss the constitutional challenge to the federal glacier
law on standing grounds. A decision on the motion is
pending. If the federal government’s arguments with
respect to standing are accepted, then the case will be
dismissed. If they are not accepted, then the National
Supreme Court of Argentina will proceed to hear
evidence on the merits. No amounts have been recorded
for any potential liability or asset impairment under this
matter, as the Company cannot reasonably predict the
outcome and in any event the provincial audit concluded
that the Company’s activities do not impact glaciers or
peri-glaciers.
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.
Barrick Gold Corporation | Financial Report 2017 171
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. By Order dated November 9, 2011 the Court
granted a motion to suspend the proceedings filed by
the plaintiffs. It is not known when these motions or the
outstanding motions to dismiss will be decided by the
Court. To date neither the plaintiffs nor the Company
has advised the Court of an intention to resume the
proceedings. 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 “Petitioners”). In March 2011, the
Supreme Court issued an En Banc Resolution and Writ
of Kalikasan, directed service of summons on Placer
Dome Inc. and the Company, ordered Placer Dome Inc.
and the Company to make a verified return of the Writ
with ten (10) days of service and referred the case to the
Court of Appeal for hearing. The Petition alleges that
Placer Dome Inc. violated the petitioners’ constitutional
right to a balanced and healthful ecology as a result of,
among other things, the discharge of tailings into
Calancan Bay, the 1993 Maguila-Guila dam break, the
1996 Boac River tailings spill and failure of Marcopper
to properly decommission the Marcopper mine. The
petitioners have pleaded that the Company is liable for
the alleged actions and omissions of Placer Dome Inc.,
which was a minority indirect shareholder of Marcopper
at all relevant times, and is seeking orders requiring the
Company to environmentally remediate the areas in and
around the mine site that are alleged to have sustained
environmental impacts. The petitioners purported to
serve the Company in March 2011, following which
the Company filed an Urgent Motion For Ruling
on Jurisdiction with the Supreme Court challenging
the constitutionality of the Rules of Procedure in
Environmental Cases (the “Environmental Rules”)
pursuant to which the Petition was filed, as well as the
jurisdiction of the Supreme Court over the Company.
By resolution dated October 12, 2011 the Court of
Appeals granted the Petitioners’ October 4, 2011 motion
to suspend proceedings to permit the Petitioners to
explore the possibility of a settlement. The proceedings
are suspended pending further notice from the
Petitioners. 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.
In November 2016, the Petitioners notified the Court
of Appeals that settlement negotiations did not resolve
the action. In March 2017, the Court of Appeals required
the Petitioners to advise whether they intend to pursue
the action. Without responding to the court, Petitioners’
counsel advised the Court in July 2017 of their withdrawal
as counsel for the Petitioners and informed the Court of
the death of one of the Petitioners. The Court of Appeals
issued a resolution in November 2017 requiring the
172
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Petitioners to notify the Court whether they have
engaged new counsel. Petitioners’ new counsel filed
an entry of appearance in December 2017 with the
Court. To date, the Petitioners have still not advised the
Court whether they intend to pursue the action. The
Company is awaiting receipt of the Petitioners’
notification of their intentions.
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
50 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 was subject to a January 2018 construction
commencement deadline. The Company requested relief
using the same procedure described above, and the
environmental authority confirmed that the initial project
activities were timely commenced.
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.
On June 12, 2017, the Environmental Court ordered
the Chilean Committee of Ministers for the Environment
to review its January 9, 2015 decision to impose new
limitations on the volume of groundwater that the Cerro
Casale project may extract for mining operations. The
Company and the Chilean environmental authority
appealed this decision to the Chilean Supreme Court.
While this appeal was pending, the Chilean
Committee of Ministers for the Environment issued a
new decision on November 23, 2017 in which it
modified the limitations on groundwater extraction
imposed in its original ruling. The decision may provide
additional water resources for the project and therefore
the Company and the Chilean environmental authority
agreed to withdraw the appeal to the Supreme Court.
The matter is now closed.
Acacia Mining plc – Tanzanian Revenue
Authority Assessments
The Tanzanian Revenue Authority (“TRA”) has issued a
number of tax assessments to the Acacia Mining plc
group (“Acacia”) related to past taxation years from
2002–onwards. Acacia believes that the majority of these
assessments are incorrect and has filed objections and
appeals accordingly in an attempt to resolve these
matters by means of discussions with the TRA or through
the Tanzanian appeals process. Overall, it is Acacia’s
current assessment that the relevant assessments and
claims by the TRA are without merit.
The claims include an assessment issued to Acacia
in the amount of $41.3 million for withholding tax on
certain historic offshore dividend payments paid by
Acacia to its shareholders in 2010 to 2013. 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. Accordingly,
no amounts have been recorded for any potential
liability and Acacia intends to continue to defend this
action vigorously.
Barrick Gold Corporation | Financial Report 2017 173
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
In addition, the TRA issued adjusted tax assessments
totaling approximately $190 billion for alleged unpaid
taxes, interest and penalties, apparently issued in respect
of alleged and disputed under-declared export revenues,
and appearing to follow on from the announced findings
of the First and Second Presidential Committees. For
more information about these adjusted tax assessments,
see “Acacia Mining plc – Concentrate Export Ban and
Related Disputes” below.
See note 12 of these Financial Statements for
information related to income tax expenses recorded
with respect to these matters.
Acacia Mining plc – Concentrate Export Ban and
Related Disputes
On March 3, 2017, the Tanzanian Ministry of Energy and
Minerals imposed a general ban on the export of metallic
concentrates (the “Ban”). This includes gold/copper
concentrate exported by Acacia’s Bulyanhulu and Buzwagi
mines. Following the imposition of the Ban, Acacia
immediately ceased all exports of its gold/copper
concentrate, including 27 containers previously approved
for export prior to the Ban.
During the second quarter of 2017, investigations
were conducted on behalf of the Tanzanian Government
by two Tanzanian Government Presidential Committees,
which have resulted in allegations of historical undeclared
revenue and unpaid taxes being made against Acacia
and its predecessor companies. Acacia considers these
findings to be implausible and has fully refuted the
findings of both Presidential Committees. Acacia has
requested copies of the reports issued by the two
Presidential Committees and called for independent
verification of the findings, but has not yet received
a response to these requests.
On July 4, 2017, Acacia’s subsidiaries, Bulyanhulu
Gold Mine Limited (“BGML”), the owner of the
Bulyanhulu mine, and Pangea Minerals Limited (“PML”),
the owner of the Buzwagi mine, each commenced
international arbitrations against the Government of
Tanzania in accordance with the dispute resolution
processes agreed by the Government of Tanzania in the
Mineral Development Agreements (“MDAs”) with BGML
and PML. These arbitrations remain ongoing.
In July 2017, Acacia received adjusted assessments
for the tax years 2000–2017 from the Tanzania
Revenue Authority (the “TRA”) for a total amount of
approximately $190 billion for alleged unpaid taxes,
interest and penalties, apparently issued in respect of
alleged and disputed under-declared export revenues,
and appearing to follow on from the announced findings
of the First and Second Presidential Committees. These
assessments are being disputed and the underlying
allegations are included in the matters that have been
referred to international arbitration.
In addition, following the end of the third quarter,
Acacia was served with notices of conflicting adjusted
corporate income tax and withholding tax assessments
for tax years 2005 to 2011 with respect to Acacia’s
former Tulawaka joint venture, and demands for
payment, for a total amount of approximately $3 billion.
Interest and penalties represent the vast majority of the
new assessments. The TRA has not provided Acacia with
any explanations or reasons for the adjusted assessments,
or with the TRA’s position on how the assessments have
been calculated or why they have been issued. Acacia
disputes these assessments and has requested supporting
calculations, which have not yet been received. Acacia
is objecting to these assessments and defending this
matter through the Tanzanian tax appeals process.
In addition to the Ban, new and amended legislation
was passed in Tanzania in early July 2017, including
various amendments to the 2010 Mining Act and a new
Finance Act. The amendments to the 2010 Mining Act
increased the royalty rate applicable to metallic minerals
such as gold, copper and silver to 6% (from 4%), and
the new Finance Act imposes a 1% clearing fee on the
value of all minerals exported from Tanzania from July 1,
2017. In January 2018, new Mining Regulations were
announced by the Tanzanian Government introducing,
174
Barrick Gold Corporation | Financial Report 2017
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
among other things, local content requirements, export
regulations and mineral rights regulations, the scope and
effect of which remain under review by Acacia. Acacia
continues to monitor the impact of all new legislation in
light of its MDAs with the Government of Tanzania.
However, to minimize further disruptions to its operations
Acacia will, in the interim, satisfy the requirements
imposed as regards the increased royalty rate in addition
to the recently imposed 1% clearing fee on exports.
Acacia is making these payments under protest, without
prejudice to its legal rights under its MDAs.
Acacia has been looking to address all issues in
respect of the Ban along with other ongoing disputes
through dialogue with the Tanzanian Government.
Acacia remains of the view that a negotiated resolution
is the preferable outcome to the current disputes and
Acacia will continue to work to achieve this. During
the third quarter of 2017, Barrick and the Government
of Tanzania engaged in discussions for the potential
resolution of the disputes. Acacia did not participate
directly in these discussions as the Government of
Tanzania had informed Barrick that it wished to continue
dialogue solely with Barrick.
On October 19, 2017, Barrick announced that it had
agreed with the Government of Tanzania on a proposed
framework for a new partnership between Acacia and
the Government of Tanzania. Barrick and the Government
of Tanzania also agreed to form a working group that
will focus on the resolution of outstanding tax claims
against Acacia. Key terms of the proposed framework
announced by Barrick and the Government of Tanzania
include (i) the creation of a new Tanzanian company to
manage Acacia’s Bulyanhulu, Buzwagi and North Mara
mines and all future operations in the country with key
officers located in Tanzania and Tanzanian representation
on the board of directors; (ii) maximization of local
employment of Tanzanians and procurement of goods
and services within Tanzania; (iii) economic benefits from
Bulyanhulu, Buzwagi and North Mara to be shared on
a 50/50 basis, with the Government’s share delivered
in the form of royalties, taxes and a 16% free carry
interest in Acacia’s Tanzanian operations; and (iv) in
support of the working group’s ongoing efforts to
resolve outstanding tax claims, Acacia would make a
payment of $300 million to the Government of Tanzania,
staged over time, on terms to be settled by the working
group. Barrick and the Government of Tanzania are
also reviewing the conditions for the lifting of the Ban.
Negotiations concerning the proposed framework
remain ongoing and the definitive terms of any final
proposal for the implementation of the framework
remain outstanding. Such terms would be subject to
review and approval by Acacia.
See note 12 of these Financial Statements for
information related to income tax expenses recorded
with respect to these matters and note 21 of these
Financial Statements for impairment losses arising from
these matters.
Barrick Gold Corporation | Financial Report 2017 175
SHAREHOLDER INFORMATION
Shareholder Information
Shares are traded on two stock exchanges
New York
Toronto
Ticker Symbol
ABX
Number of Registered Shareholders at
December 31, 2017
16,125
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, 2017
Weighted average 2017
Basic
Fully diluted
1,167
1,166
1,166
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, 2017
NYSE
TSX
2017
2016
3,027
751
4,980
1,218
US$14.47
C$18.18
2017 Dividend per Share
US$0.12
Share Trading Information
New York Stock Exchange
Quarter
First
Second
Third
Fourth
Toronto Stock Exchange
Quarter
First
Second
Third
Fourth
Share Volume
(millions)
2017
993
800
636
598
3,027
2016
1,491
1,246
1,082
1,161
4,980
Share Volume
(millions)
High
Low
2017
2016
2017
2016
US$20.78
20.36
18.35
16.83
US$15.52
21.43
23.47
18.95
US$15.87
15.51
15.26
13.28
US$7.39
13.04
16.75
13.81
High
Low
2017
2016
2017
2016
2017
2016
244
217
147
143
751
389
321
246
262
1,218
C$27.19
27.03
22.70
21.03
C$20.17
27.86
30.44
25.36
C$21.31
20.43
19.25
17.07
C$10.62
17.09
22.02
18.52
176
Barrick Gold Corporation | Financial Report 2017
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 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.
In 2017, the Company paid a cash dividend of $0.12 per
share – $0.03 on March 15, $0.03 on June 15, $0.03 on
September 15, and $0.03 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
AST Trust Company (Canada)
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@astfinancial.com
Website: www.astfinancial.com/ca-en
Auditors
PricewaterhouseCoopers LLP
Toronto, Canada
Annual Meeting
The Annual Meeting of Shareholders will be held on
Tuesday, April 24, 2018 at 10:00 a.m. (Toronto time)
in the Cisco Toronto Innovation Centre,
88 Queens Quay West, 29th Floor,
Toronto, Ontario.
Barrick Gold Corporation | Financial Report 2017 177
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this Annual
Report 2017, 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”,
“target”, “plan”, “objective”, “assume”, “aspire”, “intend”, “project”,
“pursue”, “goal”, “continue”, “budget”, “estimate”, “potential”, “may”,
“will”, “can”, “should”, “could”, “would” and similar expressions identify
forward-looking statements. In particular, this press release 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) Barrick’s expectations regarding the potential benefits
resulting from a new partnership between Acacia Mining plc (“Acacia”)
and the Government of Tanzania; (vi) targeted debt and cost reductions;
(vii) mine life and production rates; (viii) potential mineralization and metal
or mineral recoveries; (ix) savings from our improved capital management
program; (x) Barrick’s Best-in-Class program (including potential improvements
to financial and operating performance that may result from certain
Best-in-Class initiatives); (xi) the timing and results of the prefeasibility study
at Pascua-Lama; (xii) the potential to identify new reserves and resources;
(xiii) our pipeline of high confidence projects at or near existing operations;
(xiv) the extension of mine life at Lagunas Norte; (xv) the benefits of unifying
the Cortez and Goldstrike operations; (xvi) the potential impact and benefits
of removing current constraints on processing at Turquoise Ridge; (xvii) the
potential impact and benefits of Barrick’s ongoing digital transformation;
(xviii) our ability to convert resources into reserves; (xix) asset sales, joint
ventures, and partnerships; and (xx) 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 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 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 ongoing implementation
of Barrick’s digital transformation initiative, and the ability of the projects
under this initiative to meet the Company’s capital allocation objectives; the
duration of the Tanzanian ban on mineral concentrate exports; the ultimate
terms of any definitive agreement between Acacia and the Government of
Tanzania to resolve a dispute relating to the imposition of the concentrate
export ban and allegations by the Government of Tanzania that Acacia
under-declared the metal content of concentrate exports from Tanzania;
the status of certain tax re-assessments by the Tanzanian government; the
manner in which amendments to the 2010 Mining Act (Tanzania) increasing
the royalty rate applicable to metallic minerals such as gold, copper and
silver to 6% (from 4%), the new Finance Act (Tanzania) imposing a 1%
clearing fee on the value of all minerals exported from Tanzania from July 1,
2017 and the new Mining Regulations announced by the Government of
Tanzania in January 2018 will be implemented and the impact of these and
other legislative changes on Acacia; whether Acacia will approve the terms
of any final agreement reached between Barrick and the Government of
Tanzania with respect to the dispute between Acacia and the Government
178
Barrick Gold Corporation | Financial Report 2017
of Tanzania; the benefits expected from recent transactions being realized;
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, targeted investments and projects will
meet the Company’s capital allocation objectives and internal hurdle rate;
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
or its affiliates do 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; the outcome of the appeal of the decision
of Chile’s Superintendencia del Medio Ambiente; damage to the Company’s
reputation due to the actual or perceived occurrence of any number of
events, including negative publicity with respect to the Company’s handling
of environmental matters or dealings with community groups, whether true
or not; the possibility that future exploration results will not be consistent
with the Company’s expectations; risks that exploration data may be
incomplete and considerable additional work may be required to complete
further evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of war,
terrorism, sabotage and civil disturbances; litigation; contests over title
to properties, particularly title to undeveloped properties, or over access
to water, power and other required infrastructure; business opportunities
that may be presented to, or pursued by, the Company; risks associated
with the fact that certain of the initiatives described in this Annual Report
2017 are still in the early stages and may not materialize; 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 2017 are qualified by these cautionary statements. Specific
reference is made to the most recent Form 40-F/Annual Information Form
on file with the SEC and Canadian provincial securities regulatory authorities
for a more detailed discussion of some of the factors underlying forward-
looking statements and the risks that may affect Barrick’s ability to achieve
the expectations set forth in the forward-looking statements contained in
this Annual Report 2017.
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.
a
d
a
n
a
C
n
o
i
t
a
r
o
p
r
o
C
l
l
i
r
r
e
M
/
.
c
n
I
l
e
b
a
e
v
o
M
/
n
g
i
s
e
D
l
d
n
a
r
B
e
v
O
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
Connect with us