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John Thornton

John L Thornton

Annual Report 2020


John L Thornton

This time last year, when the Covid-19 pandemic had just descended upon the world, I wrote to you that this was a global disaster which would radically change the way we live and work.

If anything, that has proved to be an understatement. While the vaccination programs now widely under way will curb and may conquer the virus, the destruction it leaves in its wake will exact an as yet incalculable socio-economic toll.

Barrick responded promptly and effectively to the pandemic. Our alert and agile management, our culture of partnership and our commitment to being a good neighbour, not only shielded our people and business from the pandemic’s worst impacts, but also safeguarded the communities in which we operate. We provided substantial financial and operational support to our host countries and, by stimulating small and medium-sized enterprises, we are creating an environment in which our communities and partners can survive the pandemic and thrive in its aftermath.

Performance of Barrick Against Peers
and Other Asset Classes Market data as of December 31, 2020. Indexed (base = 100) at September 21, 2018, one working day before the Barrick-Randgold transaction announcement. Other Senior Gold Producers includes Agnico Eagle, Newcrest, and Newmont, weighted by market capitalization. US Aggregate Bond Index based on ‘Bloomberg Barclays Global-Aggregate Total Return Index’. Source: Bloomberg

Performance of Barrick Against Peers and Other Asset Classes

The challenges posed by the pandemic have brought the importance of strong ESG governance into sharper focus for investors, governments and communities alike. Operating responsibly, however, is not something new for Barrick. It is entrenched in our DNA. Our approach to sustainability governance is simple — we foster accountability at the site level, on the ground where the business is, not from a corporate office. That is why one of the first changes we made following the merger with Randgold (the Merger) was to establish the Environmental and Social Oversight Committee (E&S Committee).

The E&S Committee is chaired by Mark Bristow and brings management and sustainability teams from every site together on a quarterly basis to review our performance against a range of sustainability KPIs. It also reviews emerging challenges and opportunities to enable collective brainstorming and knowledge sharing. The E&S Committee includes an independent sustainability consultant in an advisory role.

Covid-19 was not the only challenge Barrick faced in 2020. After taking over the Tanzanian assets we ended the three-year-long standoff between their former operators and the government, settled all outstanding disputes, re-planned and re-started the mines and established a ground-breaking formal partnership with the state. Elsewhere too we made significant progress in resolving long-standing relationship issues and restoring or reinforcing our social licence to operate. In Papua New Guinea, we continue to negotiate the resumption of mining at Porgera.

Under these circumstances, the Barrick team led by Mark Bristow, supported by the corporate and regional executives, did extremely well to build on 2019’s excellent performance, capitalizing fully on the higher gold price and delivering on our production guidance. We ended 2020 with one of the industry’s strongest balance sheets, having increased the quarterly dividend threefold since the announcement of the Merger more than two years ago. As described in this Annual Report, we also propose to return surplus funds to shareholders through a return of capital in 2021, further increasing returns to our shareholders while maintaining the strength of our balance sheet.

During the year we made significant progress in building our future leadership by injecting youth and diversity into a highly experienced team, thus aligning it not only with technological advances but also with the evolving expectations of a rapidly changing world.

A wide range of skills, experience, perspectives and backgrounds will, we believe, foster continuing innovation, equip us to deal effectively with opportunities, challenges and risks, and draw us even closer to our stakeholders worldwide. Barrick has a high-performance culture and, in order to attract outstanding people who will share our vision and values, our compensation model is ownership-based. A broad spectrum of our employees are also shareholders, with a stake in the future success of the company and a common interest with our other investors.

We are also focused on Board renewal and have increased its diversity, including gender diversity, since the Merger. During these two years we have added two new Directors to our Board of 10. They are highly qualified women who were identified through a rigorous search and selection process: Ms Loreto Silva, who has significant expertise in largescale infrastructure projects and wide-ranging experience in legal and government affairs with a specific focus on South America; and Ms Anne Kabagambe, whose perspective on doing business internationally is informed by her experience in engaging with governments, the private sector and civil society, as well as her knowledge of the global resource, banking, and education sectors, and her previous role as an Executive Director of the World Bank representing the interests of 22 Sub-Saharan African countries.

The Board includes international business leaders and mining industry professionals with expertise and experience in working in all the jurisdictions in which Barrick operates. Its broad range of perspectives, skills, professional experience, and backgrounds is designed to best address the opportunities, challenges and risks of our business, and to effectively represent our global stakeholders.

Board renewal is a continuing process and the Corporate Governance & Nominating Committee is currently looking for an additional appropriately qualified female candidate to appoint to the Board.

The diversity of the team also strengthens our ability to set the sustainability standard for the industry. Last April we became the first mining company to publish a Sustainability Scorecard as part of our annual Sustainability Report. Our grade for 2019 was a B and I am pleased to report that we have improved our performance against almost all sustainability metrics in 2020. Our 2020 Sustainability Report, which will include the new scorecard, will be published in April 2021.

The support and guidance of the Board have been of inestimable value in 2020 and I thank my fellow Directors on the Board of Barrick as well as the members of the International Advisory Board for their close involvement with the company and their sage advice on our strategic direction. While our meetings moved online last year, the Barrick Board strengthened its oversight and stewardship, receiving detailed updates from senior management on the company’s response to the pandemic. The Board’s risk oversight was greatly aided by Mark Bristow’s first-hand knowledge of the operations. He visited each of the mines three times in 2020, observing all the safety protocols, and his early decisive action was instrumental in our effective management of the pandemic.

Barrick has emerged even stronger from a very difficult year and has made significant progress since the transformational merger with Randgold towards our goal of becoming the world’s most valued gold company, with the best assets, managed by the best people, to deliver the best results. There remains more to do, however, and our five and 10 year plans will keep the team firmly focused on the attainment of our next set of goals.

John L Thornton
Executive Chairman