In 2012, Barrick renewed its focus on maximizing shareholder value under a disciplined capital allocation framework to guide decision-making. This strategy and approach can be summed up as: Returns will drive production; Production will not drive returns.
Barrick’s Board of Directors authorized a quarterly dividend of 20 cents per share1 in the first quarter of 2012, which equates to 80 cents per share on an annualized basis. This represented a 33% increase from the previous quarterly dividend of 15 cents per share. Over the last six years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividends by more than 260%.
Construction of the new Pueblo Viejo mine in the Dominican Republic was completed on schedule and within capital guidance. First gold was poured in August 2012.
2011 marked another successful year for Barrick. Gold production of 7.7 million ounces at total cash costs of $460 per ounce met original guidance as Barrick’s high quality portfolio and effective cost management programs enabled the Company to deliver on its operating targets for the ninth successive year.
As a result of Barrick's positive outlook on the gold price, the Company's strong financial position and robust operating cash flow, Barrick’s Board of Directors authorized an annual dividend increase from $0.48 per common share to $0.60 per common share
in October, 2011. Over the last five years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividends by more than 170%
on a quarterly basis.
In September 2011, Barrick announced two significant gold discoveries on our 100%-owned Cortez property in Nevada. Further infill drilling between the deposits showed that they merge into a single deposit. Known as Goldrush (formerly known as Red Hill-Goldrush), the deposit is located on highly prospective ground, six kilometers southeast of the Cortez Hills mine and 24 kilometers southeast of the Pipeline mine. A total of 468,000 feet of drilling ($64 million) is planned at Goldrush in 2012 to test the full extent of the mineralized system and further expand and upgrade the resource base and a scoping study has commenced.
In April 2011, Barrick announced an offer to acquire all of the issued and outstanding common shares of Equinox Minerals Limited for an all-cash offer of C$8.15 per share. This strategic, all-cash transaction, was accomplished without issuing equity or diluting our shareholder’s exposure to gold and added two attractive copper assets — Lumwana and Jabal Sayid — to our portfolio.
In 2010, Barrick met its original operating guidance for higher gold production and lower cash costs than in 2009. The Company produced 7.8 million ounces of gold at total cash costs of $457 per ounce or net cash costs of $341 per ounce and produced 393 million pounds of copper at total cash costs of $1.11 per pound.
The average gold price increased 26% in 2010 while full year adjusted net income rose 81% to $3.28 billion and adjusted operating cash flow increased 65% to $4.78 billion from 2009, demonstrating the Company's exceptional leverage to the gold price. Full year adjusted net income translated to a higher return on equity of 19% from 12% in 2009. Reported net income and operating cash flow in 2010 were $3.27 billion and $4.13 billion, respectively.
Barrick was added to the Dow Jones Sustainability Index – World for the third consecutive year in 2010 and maintained its listing on the Dow Jones Sustainability Index – North America, for the fourth year in a row. Barrick also became the only Canadian mining company to be ranked among the top 100 companies in the world for its sustainability and performance by the NASDAQ OMX CRD Global Sustainability Index.
Other significant milestones in 2010 include: the creation of African Barrick Gold (ABG), an Africa-focused company, in which Barrick holds a 73.9% interest; the acquisition of an additional 25% interest in the Cerro Casale Project in Chile for an aggregate 75% ownership; the completion of the Cortez Hills project in Nevada; the advancement of the world-class Pueblo Viejo and Pascua-Lama projects; and the move from semi-annual dividend policy to a quarterly dividend policy with a 20% increase in annual dividend.
In 2009, Barrick met its original gold and copper production and cost targets and achieved some significant milestones. In addition to delivering the Buzwagi mine on time and on budget, Barrick significantly advanced its Pueblo Viejo project and advanced its Pascua-Lama project into construction. During 2009, Barrick also grew the industry’s largest reserves which are now 100% unhedged with the elimination of the Gold Hedges in the last quarter of 2009. The Company reported record adjusted net income of $1.8 billion and record adjusted operating cash flow of $2.9 billion, up 9% and 29% over 2008, respectively.
Barrick was added to the Dow Jones Sustainability Index – World in 2009 for the second consecutive year and maintained its listing on the Dow Jones Sustainability Index – North America for the third year in a row. The Company also achieved a 25% reduction in lost time injury rates over 2008.
In 2008, Barrick met original gold production guidance and generated record operating cash flow of $2.2 billion. Early in the year, the Company acquired the remaining 40% interest in the highly prospective Cortez property in Nevada. Three advanced projects, Buzwagi, Cortez Hills, and Pueblo Viejo, are in construction and are expected to contribute lower cost production over the next three years.
In 2007, Barrick met original production and cost guidance, and expanded its project pipeline with the addition of a 51% interest in the large gold-copper deposit, Cerro Casale, from the acquisition of Arizona Star.
The Company also expanded its footprint in the highly prospective region of Papua New Guinea with the purchase of an additional 20% stake in the Porgera mine (bringing total ownership to 95%) and an exploration land package of more than 5,300 square kilometers.
In 2006, Barrick acquired Placer Dome Inc., adding twelve new mines and a number of advanced exploration and development projects to its global portfolio. The combined Company has the size, scale and financial strength to capitalize on industry opportunities and deliver value from its assets, people and projects.
In 2005, Barrick met its original production and cash cost targets and completed development of three new mines on schedule and largely within budget, and continued to make progress with its other development projects. These new mines made a significant contribution to production, earnings and cash flow for the Company.
In 2004, Barrick met its original production and cash cost targets and made significant progress with its development projects. During 2004, the Company also increased reserves through the continued success of its exploration and district-development strategies.
In 2003, Barrick met its production and total cash cost targets for the year, advanced its development projects, and implemented a new organization design using Regional Business Units in keeping with the Company’s growing global footprint.
In 2002, Barrick announced a significant grassroots discovery, Lagunas Norte, on its Alto Chicama District in north-central Peru, which it had acquired earlier. The Company also created a unified district, the Frontera District, which straddles the Chile-Argentina border and contains both Pascua-Lama and Veladero. Pascua-Lama is one of the largest undeveloped gold and silver mining properties in the world.
In 2001, Barrick merged with Homestake Mining Company, and added mines in North America, South America and Australia to its global portfolio. The Australian assets included Kalgoorlie Consolidated Gold Mines (KCGM), a joint venture property, plus three operating mines and the Cowal Property, currently in development. The Barrick-Homestake merger created a combined company with the industry’s only A-rated balance sheet, a portfolio of large, low-cost properties, and commanding land positions in prolific gold-producing regions of the world.
In 2000, in an extension of its district development approach, Barrick acquired Pangea Goldfields Inc., a mining exploration company with properties in Tanzania, Canada and Peru. As part of the acquisition, the Company acquired a 70 percent interest in the Tulawaka exploration property, located 200 road kilometres from the Bulyanhulu Mine. Barrick took Tulawaka through the development phase, and brought it into production in first quarter, 2005.
In 1999, Barrick expanded to Africa, acquiring Sutton Resources Ltd., an exploration company with mineral properties in Tanzania, including the Bulyanhulu Gold Project. At the time of acquisition, the project’s gold reserves were 3.8 million ounces. Eighteen months later, Barrick had increased reserves to 10 million ounces and currently stands at 10.6 million ounces. Bulyanhulu began production in April 2001.
In 1996, Barrick expanded its South American presence, acquiring Arequipa Resources Ltd., which had exploration properties in Peru, including Pierina. Within four months, Barrick had confirmed 6.5 million ounces of gold into reserves. Pierina began production in November 1998.
In 1994, in a move aimed at ensuring growth in reserves and production, Barrick expanded beyond its North American base when it acquired Lac Minerals, Ltd., an international gold mining company with operating mines in Canada, the United States and Chile. The acquisition gave Barrick control of the El Indio Belt and an interest in the Veladero Project in Argentina.