John Thornton

When I wrote to you last year, it was about the transformational merger with Randgold Resources and about the targets we had set ourselves in pursuit of Barrick’s new goal of becoming the world’s most valued gold company by owning the best assets, managed by the best people, to produce the industry’s best results.

At that time, none of us could have foreseen the recent outbreak of the Covid-19 pandemic, a global disaster which is changing the way we live and work in a radically disruptive process with currently no clear end in sight. Barrick is fully engaged in managing the impact of Covid-19 on our business and our people, and emergency response measures have been rolled out at all our sites and operations. Our new leadership’s experience in managing pandemics and major crises, combined with Barrick’s financial muscle and its long-established culture of caring for the welfare of its employees and communities, have placed us in a strong position to contend with this challenge.

Turning now to the year under review, I am very pleased to report that under the leadership of Mark Bristow, who was appointed as President and Chief Executive Officer of the merged company, the new Barrick has made enormous progress in delivering on that promise in a year of intense activity. This achievement is directly attributable to a strengthened management team with clear strategic objectives, a fit for purpose structure, a renewed commitment to partnership and strictly defined investment criteria.

Following the merger, this team moved quickly to conceive and consummate three additional value-creating transactions. In the first, Barrick and Newmont merged their Nevada assets in a new joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick. This business is already more than living up to our expectations.

Then Barrick acquired the minority shares in Acacia Mining plc, integrated its mines into our operations, resolved its legacy issues with the Tanzanian government and established Twiga Minerals Corporation, a joint venture with the government, to manage our assets in that country and cement our partnership.

Thirdly, in line with our policy of selling non-core assets, we sold our non-operated stake in Kalgoorlie Consolidated Gold Mines and banked $750 million at the end of November 2019 and sold our interest in the Massawa project in early March of this year for proceeds of up to $430 million. This strategic process is continuing.

Internally, the new corporate executive team is supported by a slimmed-down but agile and highly competent technical, financial, commercial, communication and administration staff, and can exercise full oversight of our business and operations.

Our global business was refocused into three geographical regions – North America, Latin America and Asia Pacific, and Africa and Middle East – where senior executive teams were installed in line with our policy of moving people and skills out of the corporate office and into the operations. We have made sure that each site has the geological, operational and technical abilities to meet its business objectives and introduced a system of parallel work streams that are integrated both laterally and vertically for optimum efficiency.

At the same time, we are upgrading and combining the digital and information systems throughout the group to provide managers with real-time data for decision-making and planning.

The impact of these measures is evident in the results for 2019, which delivered gold production at the top of the guidance range and copper above its range; adjusted net earnings per share This is a non-GAAP financial performance measure 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 107 to 132 of the 2019 Financial Report. rose by 46%; net debt was halved to $2.2 billion; and the year ended with another increase in the quarterly dividend.

Barrick’s focus on operational excellence is matched by a commitment to protecting the health and safety of our people and minimizing the effect of our operations on the environment. There were no fatalities or major environmental events across the group in 2019 but these are areas in which there is no room for complacency, and our sights are set on a zero-harm workplace target.

There are also other goals yet to be achieved, but Barrick has already moved a long way towards building a modern gold mining business capable of sustainably producing around five million ounces of gold per year and delivering significant free cash flow. Our robust balance sheet and substantial liquidity will enable us to invest in our future, regardless of capital market vagaries.

Our journey ahead is rich in value-creating opportunities, particularly in Nevada and Latin America, while Africa remains a place to find world-class deposits to add to our portfolio of Tier One mines. We are also looking closely at expanding our copper base, given that copper co-exists with and complements gold. We are strongly placed to take full advantage of these prospects under the leadership of Mark Bristow, who in 2019 clearly demonstrated that he is the right person to take Barrick to the next level.

Following the merger with Randgold Resources, the Board of Directors was streamlined, and three of its standing committees – Audit & Risk, Corporate Governance & Nominating and Compensation – were reconstituted to enhance dialogue and promote accountability. Consistent with our commitment to increasing the Board’s diversity, in August 2019 we appointed Ms Loreto Silva, the former Chilean Minister of Public Works, to the Board and we are well advanced in our search for a second highly qualified female candidate who will enhance the mix of skills and perspectives the Board needs to address the challenges and opportunities facing the business today.

John L Thornton
Executive Chairman