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Financial Review

Graham Shuttleworth

Annual Report 2023

Financial Review

Graham Shuttleworth
Senior Executive Vice-President, Chief Financial Officer

Five years post the transformational merger, the Barrick of today represents the delivery of what was envisaged in September 2018 with one of the strongest balance sheets in the industry, as evidenced by its industry leading credit ratings.

This means Barrick is well positioned to fund its next phase of growth. The year was not without its challenges, notably at Pueblo Viejo and Nevada Gold Mines, with lower production increasing costs per ounce production for the year. Notwithstanding these challenges, Barrick was still able to deliver a strong set of financial results generating more than $11 billion in revenue, attributable EBITDAPlease see pages 141-148 of Barrick’s Annual Report 2023 for corresponding endnotes. margins in excess of 40%, higher year on year operating cash flow, a 50% increase in free cash flowPlease see pages 141-148 of Barrick’s Annual Report 2023 for corresponding endnotes. and a 200% increase in earnings per share.

Barrick 5-Year Gold Outlook

Barrick 5-Year Gold Outlook

Per ounce cost metrics are presented in real terms.
Royalty expenses included in the per ounce cost metrics are based on a gold price assumption of $1,900/oz for 2024 onwards.
Production in 2028 includes production from Reko Diq.
Our realized gold price in 2023 was $1,948/oz.
Gold equivalent ounces (GEO) are calculated using reserve prices – $1,300/oz for gold and $3.00/lb for copper.

Escalating input costs have been a challenge in the prior two years, including higher energy costs, but the company has seen a moderation in these pressures in 2023. Across the portfolio, operating costs per tonne mined were 4% higher relative to 2022, with some benefit from moderating energy prices offset by higher labour costs, particularly in North America. Looking forward, Barrick is expecting this to stabilize and as such the guidance for 2024 has costs in line with 2023. In addition, changes in mix of production with a higher contribution from Pueblo Viejo and grade changes should continue to drive costs per ounce lower over the next five years.

Barrick’s investment in a common system platform across the group over the last few years has allowed it to manage the business with real time data analytics to mitigate the cost pressures and ensure timely interventions. To ensure it can continue to deliver value into the 2030s and beyond, Barrick is embarking on a major investment phase with the organic growth projects at Lumwana and Reko Diq, both of which are now included in Barrick’s capital expenditure forecasts. Importantly, on the back of a strong balance sheet and Tier One assets, Barrick is able to fund these projects from free cash flow and existing sources of liquidity.

Barrick 5-Year Copper Outlook

Barrick 5-Year Copper Outlook

Per pound cost metrics are presented in real terms.
Royalty expenses included in the per pound cost metrics are based on a copper price assumption of $3.50/lb for 2024 onwards.
Production in 2028 includes copper production from Reko Diq and Lumwana Super Pit.
Our realized copper price in 2023 was $3.85/lb.

Turning to shareholder returns, Barrick’s performance dividend policy is designed to provide investors with exposure to the upside that comes from higher gold and copper prices as well as the certainty of the base dividend through the cycle. The company has also renewed the $1 billion share buyback program for another 12 months providing it with another tool to manage its capital structure and enhance shareholder returns. As part of the focus on free cash flowi, Barrick continues to identify opportunities to drive cost efficiencies in the business while maintaining a simplified operating model. Barrick’s industry leading low corporate costs are a function of both the portfolio rationalization it has undertaken in line with its clearly articulated strategy as well as the investment in management systems over the past few years, which allows Barrick to do more with fewer resources.

Identifying and effectively dealing with risk is also key to a safe and sustainable business and is an integral part of how Barrick protects and creates value and this framework will be applied to manage the next growth phase. With Barrick’s world class asset portfolio and exciting growth opportunities, the company continues to be excited by the additional value these projects will deliver to achieve the goal of becoming the world’s most valued gold and copper mining company.

Graham Shuttleworth
Senior Executive Vice-President, Chief Financial Officer

Annual Report 2023

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