In the first year following its merger with Randgold Resources, the restructured and refocused Barrick Gold Corporation has delivered a strong operational performance and made significant progress towards its goal of becoming the “world’s most valued gold company”, the miner said in its 2019 financial report on March 25.
According to president and CEO Mark Bristow, the NYSE- and TSX-listed company’s new leadership started 2019 “with a long and challenging to-do list and succeeded in ticking all the boxes”.
This is further evidenced by the miner’s adjusted net earnings rising by 46%, and its earnings a share ending off at $2.26 a share for 2019, while net debt was halved to $2.2-billion and the quarterly dividend was increased three times during the year.
The year saw Barrick produce gold at the top end of its guidance range; copper production that exceeded its forecast; and the consummation of the Nevada Gold Mines joint venture (JV), as well as the consolidation of the Tanzanian mines and disposal of some noncore assets.
Behind the scenes, the corporate structure of Barrick was flattened, general and administrative costs were reduced, executive management teams were established for each region, and responsibility for the orebodies was moved back to the operations.
A strong geological and mineral resource management capacity was also introduced throughout the organisation to ensure the optimisation of existing assets, the company said.
“The work we did in 2019 has equipped us well to take Barrick to the next level,” Bristow commented, adding that the miner now stands “on the strong foundation of [the company’s] enormous organic growth potential, which will support a positive production profile and a very robust business, capable of generating a substantial cash flow for at least the next decade”.
There are also opportunities for growth outside the miner’s current ambit which it intends to continue exploring.
Included in the report is Barrick’s ten-year production plan, which showcases a modern gold mining business capable of sustainably producing around five-million ounces of gold a year and delivering significant free cash flow.
Bristow noted that, during the past year, environmental, social and governance (ESG) management had become a key investment criterion and was now generally accepted as a critical measure of the sustainability of a business.
“The principles of ESG have long been embedded in the DNA of both legacy companies. Our long-term strategy recognises that we operate in a changing world where business is expected to meet the highest standards of behaviour, and where ethical issues have become commercial considerations with serious consequences. We call this our social licence and it is a core part of all our operations,” he said.
Barrick is also intent on being at the leading edge of digitalisation and automation in the mining industry, and trials and projects designed to make its operations more efficient as well as safer are driving the increased use of technology across the group.
Also in the yearly report, executive chairperson John Thornton noted that since the year-end, Barrick had been proactive in dealing with the Covid-19 pandemic, which he termed “a global disaster which is changing the way we work and live 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,” he said.
Additionally, he noted that Barrick’s 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 the miner in a strong position to contend with this challenge.