Barrick poised to generate substantial future free cash flow
All amounts are in US dollars unless otherwise stated
TORONTO, March 18, 2022 (GLOBE NEWSWIRE) — Barrick Gold Corporation (NYSE: GOLD)(TSX: ABX) is built on a foundation of six levels1 gold mines with rolling 10-year plans that guarantee the company’s ability to generate substantial free cash flow2 for the next decade and beyond, says Executive Chairman John Thornton.
Write in business annual report 2021, released today, Thornton notes that in September 2018, when the Randgold merger was announced, Barrick had more than $4 billion in net debt. Since then, it has not only achieved a clean cash position, but has returned $2.5 billion in cash to shareholders, including last year’s record $1.4 billion payout.
“As previously announced, after careful consideration of our capital allocation, the Board of Directors has implemented a new dividend policy comprising a base dividend with an additional performance dividend linked to net cash on the balance sheet, from of 2022. We believe this will provide guidance to our shareholders on future dividend streams3,” he says.
“The board also approved a $1 billion share buyback plan that will give us the option to buy our shares when they are trading below what we consider their intrinsic value.4.”
President and CEO
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Senior Vice President and Chief Financial Officer
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Investor Relations and Media
Kathy du Plessis
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Email: [email protected]
A Tier 1 gold asset is one with reserve potential to provide a minimum life of 10 years, annual production of at least 500,000 ounces of gold and total cash costs per ounce over the life of mine that are in the lower half of the industry cost. curve.
“Free cash flow” is a non-GAAP financial performance measure that deducts capital expenditures from net cash flow generated from operating activities. Management believes this is a useful indicator of our ability to operate without dependence on additional borrowings or the use of existing cash. Free cash flow is intended to provide supplemental information only and does not have a standardized definition under IFRS and should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS. Other companies may calculate this metric differently. Further details, including a detailed reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure, are incorporated by reference and provided on page 95 of the MD&A accompanying the 2021 financial statements of Barrick, respectively, filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
The declaration and payment of dividends is at the discretion of the Board of Directors and will depend on the company’s financial results, cash requirements, future prospects, number of common shares outstanding and other factors deemed relevant by the board.
The actual number of Common Shares that may be purchased, if any, and the timing of such purchases will be determined by Barrick based on a number of factors, including the Company’s financial performance, cash flow availability and consideration of other uses of cash, including capital investment opportunities, shareholder returns and debt reduction.
Caution regarding forward-looking information
Certain information contained or incorporated by reference in this press release, including any information regarding our strategy, plans, 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 “will”, “will deliver”, “secure”, “capability”, “expect”, “commit”, “would”, “could” and similar expressions identify forward-looking statements . In particular, this press release contains forward-looking statements, including, without limitation, regarding: Barrick’s ability to generate substantial free cash flow for the next decade and beyond; Barrick’s performance dividend policy, including criteria for future dividend payments and guidance on future dividend streams; the expected amount and timing of Barrick’s share buyback program; the expectation that the Company will have the financial strength to undertake the contemplated share buyback program during the relevant period; and the possibility that the share buyback program may be suspended or terminated by the Company at any time.
Forward-looking statements are necessarily based on a number of estimates and assumptions, including significant estimates and assumptions relating to the factors set forth below which, although believed to be reasonable by the Company as of the date of this press 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. These 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; assumptions regarding the price of the Company’s common stock; changes in mineral production performance, mining and exploration success; disruption of supply routes which may cause delays in construction and mining activities at Barrick’s most remote properties; whether the expected benefits of recent transactions are realized; reduction in the quantities or qualities of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; operational or technical difficulties related to mining or development activities, including geotechnical challenges and disruptions in the maintenance or provision of required information technology infrastructure and systems; failure to comply with environmental, health and safety laws and regulations; timing of receipt or non-compliance with necessary permits and approvals; uncertainty as to whether some or all of the targeted investments and projects will achieve the Company’s capital allocation objectives and 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; the impact of inflation; fluctuations in foreign exchange markets; 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 the jurisdictions in which the Company or its subsidiaries do or may do business in the future; lack of certainty about foreign legal systems, corruption and other factors inconsistent with the rule of law; damage to the Company’s reputation due to the occurrence or perceived occurrence of a number of events, including negative publicity regarding the Company’s handling of environmental issues or relationships with community groups, whether true or not; the possibility that future exploration results will not meet the Company’s expectations; the risks that exploration data will be incomplete and that considerable additional work will be required to complete a more in-depth assessment, including but not limited to drilling, engineering and socio-economic studies and investments ; risk of loss due to acts of war, terrorism, sabotage and civil unrest; risks associated with illegal and artisanal mining; risks associated with new diseases, epidemics and pandemics, including the effects of the global Covid-19 pandemic; legal and administrative litigation and proceedings; disputes over title deeds, particularly title to undeveloped properties, or access to water, electricity and other necessary infrastructure; business opportunities that may be presented to, or pursued by, the Company; our ability to successfully integrate acquisitions or complete divestitures; risks associated with working with partners in jointly controlled assets; employee relations, including the loss of key employees; increased physical costs and risks, including extreme weather events and resource shortages, related to climate change; and the increased availability and costs associated with mining inputs and labor. In addition, there are risks and hazards associated with exploration, development and mining activities, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, floods and gold bars, copper cathodes or gold or copper. concentrate losses (and the risk of inadequate insurance or the inability to obtain insurance to cover these risks).
Many of these uncertainties and contingencies may 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 our behalf. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form filed with the SEC and Canadian provincial securities regulators for a more detailed discussion of some of the factors underlying the forward-looking statements and risks that could affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.
Barrick disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.