This portion of the Quarterly Report provides management’s discussion and analysis (“MD&A”) of the financial condition and results of operations, to enable a reader to assess material changes in financial condition and results of operations as at, and for the three month period ended March 31, 2023, in comparison to the corresponding prior-year periods. The MD&A is intended to help the reader understand Barrick Gold Corporation (“Barrick”, “we”, “our”, the “Company” or the “Group”), our operations, financial performance as well as our present and future business environment. This MD&A, which has been prepared as of May 2, 2023, is intended to supplement and complement the condensed unaudited interim consolidated financial statements and notes thereto, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), including International Accounting Standard 34 Interim Financial Reporting (“IAS 34”), for the three month period ended March 31, 2023 (collectively, the “Financial Statements”), which are included in this Quarterly Report on pages 74 to 87. You are encouraged to review the Financial Statements in conjunction with your review of this MD&A. This MD&A should be read in conjunction with both the annual audited consolidated financial statements for the two

years ended December 31, 2022, the related annual MD&A included in the 2022 Annual Report, and the most recent Form 40–F/Annual Information Form on file with the U.S. Securities and Exchange Commission (“SEC”) and Canadian provincial securities regulatory authorities. These documents and additional information relating to the Company are available on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Certain notes to the Financial Statements are specifically referred to in this MD&A and such notes are incorporated by reference herein. All dollar amounts in this MD&A are in millions of United States dollars (“$” or “US$”), unless otherwise specified.

For the purposes of preparing our MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances, including potential market sensitivity.

 

 

BAP		Biodiversity Action Plans
BLM		Bureau of Land Management
BMSZ		Bambadji Main Shear Zone
BNL		Barrick Niugini Limited
CDCs		Community Development Committees
CHUG		Cortez Hills Underground
CIL		Carbon-in-leach
Commencement Agreement		Detailed Porgera Project Commencement Agreement between PNG and BNL
DRC		Democratic Republic of Congo
DOI		Department of the Interior
E&S Committee		Environmental and Social Oversight Committee
ESG		Environmental, Social and Governance
ESG & Nominating Committee		Environmental, Social, Governance & Nominating Committee
ESIA		Environmental and Social Impact Assessment
FEIS		Final Environmental Impact Statement
GHG		Greenhouse Gas
GISTM		Global Industry Standard for Tailings Management
GoT		Government of Tanzania
IASB		International Accounting Standards Board
ICMM		International Council on Mining and Metals
IFRS		International Financial Reporting Standards
KCD		Karagba, Chauffeur and Durba
Kumul Minerals		Kumul Minerals Holdings Limited

 

LTI		Lost Time Injury
LTIFR		Lost Time Injury Frequency Rate
MRE		Mineral Resources Enga Limited
MVA		Megavolt-amperes
MW		Megawatt
NOA		Notice of Availability
NGM		Nevada Gold Mines
NSR		Net Smelter Return
OECD		Organisation for Economic Co-operation and Development
PNG		Papua New Guinea
Randgold		Randgold Resources Limited
RC		Reverse Circulation
RIL		Resin-in-leach
ROD		Record of Decision
Roundtable		Environmental, Social and Governance Raters Roundtable
SDG		Sustainable Development Goals
SML		Special Mining Lease
TCFD		Task Force for Climate-related Financial Disclosures
TRIFR		Total Recordable Injury Frequency Rate
TSF		Tailings Storage Facilities
TW		True Width
WGC		World Gold Council
WTI		West Texas Intermediate

 

Certain information contained or incorporated by reference in this MD&A, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipated”, “vision”, “aim”, “strategy”, “target”, “plan”, “opportunities”, “guidance”, “forecast”, “outlook”, “objective”, “intend”, “project”, “pursue”, “continue”, “committed”, “budget”, “estimate”, “potential”, “prospective”, “future”, “focus”, “during”, “ongoing”, “following”, “subject to”, “scheduled”, “may”, “will”, “can”, “could”, “would”, “should” and similar expressions identify forward-looking statements. In particular, this MD&A contains forward-looking statements including, without limitation, with respect to: Barrick’s forward-looking production guidance; estimates of future cost of sales per ounce for gold and per pound for copper, total cash costs per ounce and C1 cash costs per pound, and all-in-sustaining costs per ounce/pound; cash flow forecasts; projected capital, operating and exploration expenditures; the share buyback program and performance dividend policy, including the criteria for dividend payments; mine life and production rates; projected capital estimates and anticipated permitting timelines related to the Goldrush Project; our plans and expected completion and benefits of our growth and capital projects, including the Goldrush Project, Pueblo Viejo plant expansion and mine life extension project, including approval of the final location of the additional tailings storage facility for Pueblo Viejo following submission of the ESIA in the Dominican Republic and changes to the estimated capital cost of that facility following the completion of pre-feasibility engineering, Veladero Phase 7 leach pad project, the Reko Diq project, solar power projects at NGM and Loulo-Gounkoto, the Jabal Sayid Lode 1 project and new mobile equipment fleet at Lumwana; the planned updating of the historical Reko Diq feasibility study and targeted first production; the potential for Lumwana to reach Tier One status through the development of a potential Super Pit; capital expenditures related to upgrades and ongoing management initiatives; Barrick’s global exploration strategy and planned exploration activities; the timeline for execution and effectiveness of definitive agreements to implement the Commencement Agreement between PNG and BNL; the duration of the temporary suspension of operations at Porgera, the conditions for the reopening of the mine and the timeline to recommence operations; our pipeline of high confidence projects at or near existing operations; potential mineralization and metal or mineral recoveries; our ability to convert resources into reserves; asset sales, joint ventures and partnerships; Barrick’s strategy, plans and targets in respect of environmental and social governance issues, including climate change, GHG emissions reduction targets (including with respect to our Scope 3 emissions), safety performance, responsible water use, TSF management, biodiversity and human rights initiatives; and expectations regarding future price assumptions, financial performance and other outlook or guidance.

Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this MD&A in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from

those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel, natural gas and electricity); risks associated with projects in the early stages of evaluation and for which additional engineering and other analysis is required; risks related to the possibility that future exploration results will not be consistent with the Company’s expectations, that quantities or grades of reserves will be diminished, and that resources may not be converted to reserves; risks associated with the fact that certain of the initiatives described in this MD&A are still in the early stages and may not materialize; changes in mineral production performance, exploitation and exploration successes; risks that exploration data may be incomplete and considerable additional work may be required to complete further evaluation, including but not limited to drilling, engineering and socioeconomic studies and investment; the speculative nature of mineral exploration and development; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices; the potential impact of proposed changes to Chilean law on the status of value added tax refunds received in Chile in connection with the development of the Pascua-Lama project; expropriation or nationalization of property and political or economic developments in Canada, the United States or other countries in which Barrick does or may carry on business in the future; risks relating to political instability in certain of the jurisdictions in which Barrick operates; timing of receipt of, or failure to comply with, necessary permits and approvals, including the issuance of a ROD for the Goldrush Project and/or whether the Goldrush Project will be permitted to advance as currently designed under its Feasibility Study, approval of the final location of the additional tailings storage facility for Pueblo Viejo following submission of the ESIA in the Dominican Republic, and permitting activities required to optimize Long Canyon’s life of mine; non-renewal of key licenses by governmental authorities, including the new SML for Porgera; failure to comply with environmental and health and safety laws and regulations; increased costs and physical and transition risks related to climate change, including extreme weather events, resource shortages, emerging policies and increased regulations relating to related to greenhouse gas emission levels, energy efficiency and reporting of risks; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; the liability associated with risks and hazards in the mining industry, and the ability to maintain insurance to cover such losses; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; risks related to operations near communities that may regard Barrick’s operations as being detrimental to them; litigation and legal and administrative proceedings; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges, tailings dam and storage facilities failures, and disruptions in the maintenance or provision of required infrastructure and information technology systems; increased costs, delays, suspensions and technical

 

challenges associated with the construction of capital projects; risks associated with working with partners in jointly controlled assets; risks related to disruption of supply routes which may cause delays in construction and mining activities, including disruptions in the supply of key mining inputs due to the invasion of Ukraine by Russia; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; risks associated with artisanal and illegal mining; risks associated with Barrick’s infrastructure, information technology systems and the implementation of Barrick’s technological initiatives; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the impact of inflation, including global inflationary pressures driven by supply chain disruptions caused by the ongoing Covid-19 pandemic, global energy cost increases following the invasion of Ukraine by Russia and country-specific political and economic factors in Argentina; adverse changes in our credit ratings; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); risks related to the demands placed on the Company’s management, the ability of management to implement its business strategy and enhanced political risk in certain jurisdictions; uncertainty whether some or all of Barrick’s targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; whether benefits expected from recent transactions are realized; business opportunities that may be presented to, or pursued by, the Company; our ability to successfully integrate acquisitions or complete divestitures; risks related to competition in the mining industry; employee relations including loss of key employees; availability and increased costs associated with mining inputs and labor; risks

associated with diseases, epidemics and pandemics, including the effects and potential effects of the global Covid-19 pandemic; risks related to the failure of internal controls; and risks related to the impairment of the Company’s goodwill and assets. Barrick also cautions that its 2023 guidance may be impacted by the ongoing business and social disruption caused by the spread of Covid-19.

In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).

Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this MD&A. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

 

Use of Non-GAAP Financial Measures

 

 

We use the following non-GAAP financial measures in our MD&A:

 

∎

“adjusted net earnings”

 

∎

“free cash flow”

 

∎

“EBITDA”

 

∎

“adjusted EBITDA”

 

∎

“minesite sustaining capital expenditures”

 

∎

“project capital expenditures”

 

∎

“total cash costs per ounce”

 

∎

“C1 cash costs per pound”

 

∎

“all-in sustaining costs per ounce/pound”

 

∎

“all-in costs per ounce” and

 

∎

“realized price”

For a detailed description of each of the non-GAAP financial measures used in this MD&A and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the Non-GAAP Financial Measures section of this MD&A on pages 54 to 67. Each non-GAAP financial measure has been annotated with a reference to an endnote on page 68. The non-GAAP financial measures set out in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Index

 

 

 

 

Factors affecting net earnings and adjusted net earnings¹ - three months ended March 31, 2023 versus December 31, 2022

Net earnings attributable to equity holders of Barrick (“net earnings”) for the three months ended March 31, 2023 were $120 million compared to a loss of $735 million in the prior quarter. The increase was primarily due to following items:

∎

a goodwill impairment of $950 million (net of non-controlling interests) related to Loulo-Gounkoto, a non-current asset impairment of $318 million (net of tax) and a net realizable value impairment of leach pad inventory of $27 million (net of tax) at Veladero, and a non-current asset impairment of $42 million (net of tax and non-controlling interests) at Long Canyon occurring in the prior quarter; partially offset by

∎

an impairment reversal of $120 million and a gain of $300 million following the completion of the transaction allowing for the reconstitution of the Reko Diq project occurring in the prior quarter.

After adjusting for items that are not indicative of future operating earnings, adjusted net earnings¹ of $247 million for the three months ended March 31, 2023 was $27 million higher than the prior quarter. The increase was primarily due to higher realized gold and copper prices¹. The realized gold and copper prices¹ were $1,902 per ounce and $4.20 per pound, respectively, in the three months ended March 31, 2023, compared to $1,728 per ounce and $3.81 per pound, respectively, in the prior quarter. This was partially offset by lower gold sales volumes, primarily at Carlin due to annual roaster maintenance resulting in lower throughput at Goldstrike, the conversion of the Goldstrike autoclave to a conventional carbon-in-leach process and a harsh winter in northern Nevada impacting operations. This was combined with lower grades at Kibali due to mine sequencing. Adjusted net earnings¹ was further impacted by higher gold cost of sales per ounce², mainly due to the impact of lower sales volumes.

Factors affecting net earnings and adjusted net earnings¹ - three months ended March 31, 2023 versus March 31, 2022

Net earnings for the first quarter of 2023 were $120 million compared to $438 million in the same prior year period. The decrease was primarily due to higher gold and copper cost of sales per ounce², a lower realized copper price¹, lower gold and copper sales volumes, partially offset by a higher realized gold price¹, as further discussed below.

After adjusting for items that are not indicative of future operating earnings, adjusted net earnings¹ of $247 million in the first quarter of 2023 were $216 million lower than the same prior year period. The decrease was primarily due to lower gold and copper sales volumes. The decrease in gold sales volume was primarily at Carlin, mainly due to the annual roaster maintenance resulting in lower throughput at Goldstrike, the conversion of the Goldstrike autoclave to a conventional CIL process and a harsh winter in northern Nevada impacting operations. This was partially offset by higher production at Cortez, driven by higher oxide mill and heap leach production from the Crossroads open pit and higher underground production. The lower copper sales volumes was primarily at Lumwana due to lower grades processed, in line with the mine plan.  

These impacts were combined with higher gold cost of sales per ounce², mainly due to lower sales volumes, combined with higher input costs driven by energy and consumables prices; and higher copper cost of sales per ounce², primarily due to lower grades processed and lower capitalized stripping at Lumwana. Adjusted net earnings¹ were further impacted by a higher realized gold price¹, partially offset by a lower realized copper price¹. The realized gold and copper prices¹ were $1,902 per ounce and $4.20 per pound, respectively, in the three months ended March 31, 2023 compared to $1,876 per ounce and $4.68 per pound, respectively, in the same prior year period.

The significant adjusting items in the three months ended March 31, 2023 were:

∎

$57 million ($63 million before tax and non-controlling interests) in other expense adjustments primarily related to the $30 million commitment made towards the expansion of education infrastructure in Tanzania per our community investment obligations under the Twiga partnership, changes in our closed mine rehabilitation as a result of lower discount rate assumptions, and care and maintenance expenses at Porgera;

∎

$48 million in significant tax adjustments, mainly related to foreign currency translation gains and losses on tax balances, changes in the discount rate assumptions on our closed mine rehabilitation provision, foreign exchange losses and the remeasurement of deferred tax balances; and

∎

$29 million ($38 million before tax and non-controlling interests) in a loss on currency translation, primarily due to the devaluation of the Zambian kwacha.

Refer to page 54 for a full list of reconciling items between net earnings and adjusted net earnings¹ for the current and previous periods.

Factors affecting Operating Cash Flow and Free Cash Flow¹ - three months ended March 31, 2023 versus December 31, 2022

In the three months ended March 31, 2023, we generated $776 million in operating cash flow, compared to $795 million in the prior quarter. The decrease of $19 million was primarily due to an unfavorable movement in working capital, mainly in accounts payable, partially offset by a favorable movement in accounts receivable. This was partially offset by a decrease in interest paid as a result of the timing of semi-annual interest payments on our bonds, which primarily occur in Q2 and Q4. Operating cash flow was further impacted by an increase in realized gold and copper prices¹, partially offset by lower gold and copper sales volumes and higher total cash costs/C1 cash costs per ounce/pound¹.

For the three months ended March 31, 2023, we recorded positive free cash flow¹ of $88 million, compared to negative free cash flow¹ of $96 million in the prior quarter, mainly reflecting lower capital expenditures. In the first quarter of 2023, capital expenditures on a cash basis were $688 million compared to $891 million in the prior quarter, due to a decrease in both minesite sustaining capital expenditures¹ and project capital expenditures¹. Minesite sustaining capital expenditures¹ decreased mainly at Lumwana due to lower capitalized stripping in the current

 

quarter and as down payments for replacement mobile equipment occurred in the prior quarter, combined with the timing of mobile equipment deliveries at the end of 2022 at Carlin. The decrease in project capital expenditures¹ was primarily driven by lower expenditures from the plant expansion and mine life extension project at Pueblo Viejo, and following advanced payments made on the new owner mining fleet in the prior quarter at Lumwana.

Factors affecting Operating Cash Flow and Free Cash Flow¹ - three months ended March 31, 2023 versus March 31, 2022

In the first quarter of 2023, we generated $776 million in operating cash flow, compared to $1,004 million in the same prior year period. The decrease of $228 million was primarily due to higher gold and copper total cash costs/C1 cash costs per ounce/pound¹, a lower realized copper price¹, lower gold and copper sales volumes, partially offset by a higher realized gold price¹ and lower cash taxes paid.

In the first quarter of 2023, we generated free cash flow¹ of $88 million compared to $393 million in the same prior year period. The decrease primarily reflects lower operating cash flows and higher capital expenditures. In the first quarter of 2023, capital expenditures on a cash basis were $688 million compared to $611 million in the first quarter of 2022. The increase in capital expenditures of $77 million was due to an increase in both project capital expenditures¹ and minesite sustaining capital expenditures¹. The increase in project capital expenditures¹ is primarily due to investment in the new owner mining fleet at Lumwana, combined with higher expenditures from the solar plant expansion at Loulo-Gounkoto. Minesite sustaining capital expenditures¹ increased compared to the same prior year period, mainly due to increased capitalized stripping at both North Mara and Loulo-Gounkoto.

Key Business Developments

Share Buyback Program

At the February 14, 2023 meeting, the Board of Directors authorized a new share buyback program for the purchase of up to $1 billion of Barrick’s outstanding shares over the next 12 months. As at March 31, 2023, we had not purchased any shares under this program in 2023.

The actual number of common shares that may be purchased, and the timing of any such purchases, will be determined by Barrick based on a number of factors, including the Company’s financial performance, the availability of cash flows, and the consideration of other uses of cash, including capital investment opportunities, returns to shareholders, and debt reduction.

The repurchase program does not obligate the Company to acquire any particular number of common shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

Porgera Special Mining Lease

On April 9, 2021, BNL signed a binding Framework Agreement with the Independent State of PNG and Kumul Minerals, a state-owned mining company, setting out the terms and conditions for the reopening of the Porgera mine. On February 3, 2022, the Framework Agreement was replaced by the Commencement Agreement. The Commencement Agreement was signed by PNG, Kumul Minerals, BNL and its affiliate Porgera (Jersey) Limited on

October 15, 2021, and it became effective on February 3, 2022, following signature by MRE, the holder of the remaining 5% of the original Porgera joint venture. The Commencement Agreement reflects the commercial terms previously agreed to under the Framework Agreement, namely that PNG stakeholders will receive a 51% equity stake in the Porgera mine, with the remaining 49% to be held by BNL or an affiliate. BNL is jointly owned on a 50/50 basis by Barrick and Zijin Mining Group. Accordingly, following the implementation of the Commencement Agreement, Barrick’s current 47.5% interest in the Porgera mine is expected to be reduced to a 24.5% interest as reflected in Barrick’s reserve and resource estimates for Porgera. BNL will retain operatorship of the mine. The Commencement Agreement also provides that PNG stakeholders and BNL and its affiliates will share the economic benefits derived from the reopened Porgera mine on a 53% and 47% basis over the remaining life of mine, respectively, and that the Government of PNG will retain the option to acquire BNL’s or its affiliate’s 49% equity participation at fair market value after 10 years.

On April 21, 2022, the PNG National Parliament passed legislation to provide, among other things, certain agreed tax exemptions and tax stability for the new Porgera joint venture. This legislation was certified on May 30, 2022. Six out of the seven pieces of legislation took effect as of April 11 and 14, 2023, respectively, when they were published in the National Gazette, as required under PNG Law. One individual act awaits publication to take effect.

On September 13, 2022, the Shareholders’ Agreement for the new Porgera joint venture company was executed by Porgera (Jersey) Limited, which is an affiliate of BNL, the state-owned Kumul Minerals (Porgera) Limited and MRE (a previous version of the Shareholders’ Agreement had been signed by the BNL and Kumul parties in April 2022 but was not signed by MRE and therefore did not take effect). New Porgera Limited, the new Porgera joint venture company, was incorporated on September 22, 2022, and this entity will next apply for a new SML, the receipt of which is a condition of the reopening of the Porgera mine under the Commencement Agreement.

On March 31, 2023, BNL, the Independent State of PNG and New Porgera Limited signed the New Porgera Progress Agreement whereby the parties reiterated their commitment to reopening the Porgera mine in line with the terms of the Commencement Agreement and the Shareholders’ Agreement. The provisions of the Commencement Agreement will be fully implemented, and work to recommence full mine operations at Porgera will begin, following the execution of the remaining definitive agreements and satisfaction of a number of conditions. These include an Operatorship Agreement pursuant to which BNL will operate the Porgera mine, as well as a Mine Development Contract to accompany the new SML that the new Porgera joint venture company will apply for. Under the terms of the Commencement Agreement, BNL will remain in possession of the site and maintain the mine on care and maintenance.

Porgera was excluded from our 2023 guidance. We expect to update our guidance following both the execution of all of the definitive agreements to implement the binding Commencement Agreement and the finalization of a timeline for the resumption of full mine operations. Refer to notes 12 and 16 to the Financial Statements for more information.

 

Environmental, Social and Governance (“ESG”)

Sustainability is entrenched in our DNA: our sustainability strategy is our business plan.

Barrick’s approach to sustainability is integrated and holistic; sustainability aspects and impacts do not occur in silos, but rather overlap and interlink, and must be tackled in conjunction with, and reference to, each other. We call this approach Holistic and Integrated Sustainability Management. Although we integrate our sustainability management, we discuss our sustainability strategy within four overarching pillars: (1) respecting human rights; (2) protecting the health and safety of our people and local communities; (3) sharing the benefits of our operations; and (4) managing our impacts on the environment.

We implement this strategy by blending top-down accountability with bottom-up responsibility. This means we place the day-to-day ownership of sustainability, and the associated risks and opportunities, in the hands of individual sites. In the same way that each site must manage its geological, operational and technical capabilities to meet business objectives, it must also manage and identify programs, metrics, and targets that measure progress and deliver real value for the business and our stakeholders, including our host countries and local communities. The Group Sustainability Executive, supported by regional sustainability leads, provides oversight and direction over this site-level ownership, to ensure alignment with the strategic priorities of the overall business.

Governance

The bedrock of our sustainability strategy is strong governance. Our most senior management-level body dedicated to sustainability is the E&S Committee, which connects site-level ownership of our sustainability strategy with the leadership of the Group. It is chaired by the President and Chief Executive Officer and includes: (1) regional Chief Operating Officers; (2) minesite General Managers; (3) Health, Safety, Environment and Closure Leads; (4) the Group Sustainability Executive; (5) in-house legal counsel; and (6) an independent sustainability consultant in an advisory role. The E&S Committee meets on a quarterly basis to review our performance across a range of key performance indicators, and to provide independent oversight and review of sustainability management.

The President and Chief Executive Officer reviews the reports of the E&S Committee at every quarterly meeting of the Board’s ESG & Nominating Committee. The reports are reviewed to ensure the implementation of our sustainability policies and to drive performance of our environmental, health and safety, corporate social responsibility, and human rights programs.

This is supplemented by weekly meetings, at a minimum, between the Regional Sustainability Leads and the Group Sustainability Executive. These meetings examine the sustainability-related risks and opportunities facing the business in real time, as well as the progress and issues integrated into weekly Executive Committee review meetings.

Our industry-first Sustainability Scorecard accounts for 25% of the long-term incentive awards for senior leaders as part of the Barrick Partnership Plan. As we strive for ongoing strong performance, the Sustainability Scorecard targets and metrics are updated annually. The

results of the 2022 Sustainability Scorecard, and updated metrics and targets for 2023, were disclosed in our 2022 Sustainability Report, published in April 2023. The E&S Committee tracks our progress against all metrics.

Human rights

Our commitment to respect human rights is codified in our standalone Human Rights Policy and informed by the expectations of the United Nations Guiding Principles on Business and Human Rights, the Voluntary Principles on Security and Human Rights and the OECD Guidelines for Multinational Enterprises. This commitment is fulfilled on the ground via our Human Rights Program, the fundamental principles of which include: monitoring and reporting, due diligence, training, as well as disciplinary action and remedy.

We continue to assess and manage security and human rights risks at all our operations and provide security and human rights training to security forces across our sites.

Safety

We are committed to the safety, health and well-being of our people, their families and the communities in which we operate. Our safety vision is “Everyone to go home safe and healthy every day.”

As mentioned in the fourth quarter of 2022, our safety performance over the past 12 months has not met our high standards. Regrettably, two incidents occurred in January 2023 that resulted in tragic fatalities: one at Jabal Sayid, which resulted in the fatalities of two mining contractors; and one at Carlin that resulted in the fatality of an employee. Group-wide Safety Intervention and Shift Change Interventions continued to be implemented to reinforce our safety procedures and communicate our core safety messages and expectations.

A safety workshop was held in January 2023 with leadership across the group and across technical expertise to review and reset our approach to safety. We have rebranded our “Journey to Zero Harm” initiative to “Journey to Zero” as zero harm must start with zero fatalities. This initiative has commenced with a phase of honest reflection, review of our global safety standards, and alignment of our fatal risks and controls. The Journey to Zero continued to be focused on engagement with our workforce through Visible Felt Leadership, and by aligning and improving our standards across the Group, ensuring accountability to our safety commitments, and ensuring our employees are fit for duty.

We report our safety performance quarterly as part of both our E&S Committee meetings and to the ESG & Nominating Committee. Our safety performance is a regular standing agenda item on our weekly Executive Committee review meeting.

In terms of other key performance indicators, for the first quarter of 2023, our LTIFR³ was 0.21, in line with the fourth quarter of 2022, and our TRIFR³ was 1.65, an increase from 0.93 in the fourth quarter of 2022.

Social

We regard our host communities and countries as important partners in our business. Our sustainability policies commit us to transparency in our relationships with host communities, government authorities, the public and other key stakeholders. Through these policies, we commit to

 

conducting our business with integrity and with absolute opposition to corruption. We require our suppliers to operate ethically and responsibly as a condition of doing business with us.

Community and economic development

Our commitment to social and economic development is set out in our overarching Sustainable Development and Social Performance policies. Mining has been identified as vital for the achievement of the United Nations SDGs, not only for its role in providing the minerals needed to enable the transition to a lower carbon intensive economy, but also because of its ability to drive socio-economic development and build resilience. Creating long-term value and sharing economic benefits is at the heart of our approach to sustainability, as well as community development. This approach is encapsulated in three concepts:

The primacy of partnership: this means that we invest in real partnerships with mutual responsibility. Partnerships include local communities, suppliers, government, and organizations, and this approach is epitomized through our CDCs with development initiatives and investments.

Sharing the benefits: We hire and buy local wherever possible as this injects money into and keeps it in our local communities and host countries. By doing this, we build capacity, community resilience and create opportunity. We also invest in community development through our CDCs. Sharing the benefits also means paying our fair share of taxes, royalties and dividends and doing so transparently, primarily through the reporting mechanism of the Canadian Extractive Sector Transparency Measures Act. In April 2023, we published our second annual Tax Contribution Report which sets out, in detail, our economic contributions to host governments. We will continue to disclose such contributions on an annual basis.

Engaging and listening to stakeholders: We develop tailored stakeholder engagement plans for every operation and the business as a whole. These plans guide and document how often we engage with various stakeholder groups and allow us to proactively deal with issues before they escalate into significant risks.

We continued our community development initiatives through our CDCs during the first quarter of 2023. Notably, we established our first CDC for the Reko Diq project in Balochistan, Pakistan. This CDC, named Par-e-Koh CDC, is comprised of members from the four closest communities to the project and the CDC is currently compiling a baseline and needs prioritization.

The first quarter is traditionally when we plan community investments for the year ahead and consequently, our spend during this period is lower than the remaining quarters. In the first quarter of 2023, we invested more than $5.8 million in local community development projects.

Environment

We know the environment in which we work and our host communities are inextricably linked, and we apply a holistic and integrated approach to sustainability management. Being responsible stewards of the environment by applying the highest standards of environmental management, using natural resources and energy efficiently, recycling and reducing waste as well as working to protect biodiversity, we can deliver significant cost savings to our business,

reduce future liabilities and help build stronger stakeholder relationships. Environmental matters such as how we use water, prevent incidents, manage tailings, respond to changing climate, and protect biodiversity are key areas of focus.

We maintained our strong track record of stewardship and did not record any Class 1⁴ environmental incidents during the first quarter of 2023.

Climate Change

The ESG & Nominating Committee is responsible for overseeing Barrick’s policies, programs and performance relating to sustainability and the environment, including climate change. The Audit & Risk Committee assists the Board in overseeing the Group’s management of enterprise risks as well as the implementation of policies and standards for monitoring and mitigating such risks. Climate change is built into our formal risk management process, outputs of which are regularly reviewed by the Audit & Risk Committee.

Barrick’s climate change strategy has three pillars: (1) identify, understand and mitigate the risks associated with climate change; (2) measure and reduce our GHG emissions across our operations and value chain; and (3) improve our disclosure on climate change. The three pillars of our climate change strategy do not focus solely on the development of emissions reduction targets, rather, we integrate and consider aspects of biodiversity protection, water management and community resilience in our approach.

We are acutely aware of the impacts that climate change has on our host communities and countries, particularly developing nations which are often the most vulnerable. As the world economy transitions to renewable power, it is imperative that developing nations are not left behind. As a responsible business, we have focused our efforts on building resilience in our host communities and countries, just as we do for our business. Our climate disclosure is based on the recommendations of the TCFD.

Identify, understand and mitigate the risks associated with climate change

We identify and manage risks, build resilience to climate change, as well as position ourselves for new opportunities. Climate change-related factors continue to be incorporated into our formal risk assessment process. We have identified several climate-related risks and opportunities for our business including: physical impacts of climate change; an increase in regulations that seek to address climate change; and an increase in global investment in innovation and low-carbon technologies.

The risk assessment process includes scenario analysis, which is being rolled out to all sites with an initial focus on our Tier One Gold Assets⁵, to assess site-specific climate related risks and opportunities. The key findings and summary of this asset-level physical and transitional risk assessment at Loulo-Gounkoto and Kibali is outlined in our 2022 Sustainability Report.

Measure and reduce the Group’s impact on climate change

Mining is an energy-intensive business, and we understand the important link between energy use and GHG emissions. By measuring and effectively managing our energy use, we can reduce our GHG emissions, achieve more efficient production, and reduce our costs.

 

We have climate champions at each site who are tasked with identifying roadmaps and assessing feasibility for our GHG emissions reductions and carbon offsets for hard-to-abate emissions. Any carbon offsets that we pursue must have appropriate socio-economic and/or biodiversity benefits. We have published an achievable emissions reduction roadmap and continue to assess further reduction opportunities across our operations. The detailed roadmap was first published in our 2021 Sustainability Report and includes committed-capital projects and projects under investigation that rely on technological advances, with a progress summary contained in the 2022 Sustainability Report.

We continue to progress our extensive work across our value chain in understanding our Scope 3 (indirect value chain) emissions and implementing our engagement roadmap to enable our key suppliers to set meaningful and measurable reduction targets, in line with the commitments made through the ICMM Climate Position Paper.

Improve our disclosure on climate change

As part of our commitment to improve our disclosure on climate change, including in our Sustainability Report and on our website, is developed in line with the TCFD recommendations. Barrick continues to monitor the various regulatory climate disclosure standards being developed around the world. In addition, we complete the annual CDP (formerly known as the Carbon Disclosure Project) Climate Change and Water Security questionnaires. This ensures our investor-relevant water use, emissions and climate data is widely available.

Emissions

Barrick’s interim GHG emissions reduction target is for a minimum 30% reduction by 2030 against our 2018 baseline, while maintaining a steady production profile. The basis of this reduction is against a 2018 baseline of 7,541 kt CO₂-e.

Our GHG emissions reduction target is grounded in climate science and has a detailed pathway for achievement. Our target is not static and will be updated as we continue to identify and implement new GHG reduction opportunities.

Ultimately, our vision is net zero GHG emissions by 2050, achieved primarily through GHG reductions, with some offsets for hard-to-abate emissions. Site-level plans to improve energy efficiency, integrate clean and renewable energy sources and reduce GHG emissions will also be strengthened. We plan to supplement our corporate emissions reduction target with context-based site-specific emissions reduction targets.

During the first quarter of 2023, the Group’s total Scope 1 and 2 (location-based) GHG emissions were 1,552 kt CO₂-e, approximately 1% less than the GHG emissions for the same period in 2022.

Water

Water is a vital and increasingly scarce global resource. Managing and using water responsibly is one of the most critical parts of our sustainability strategy. Our commitment to responsible water use is codified in our Environmental Policy. Steady, reliable access to water is critical to the effective operation of our mines. Access to water is also a fundamental human right.

Understanding the water stress in the regions we operate enables us to better understand the risks and manage our water resources through site-specific water balances, based on the ICMM Water Accounting Framework, aimed at minimizing our water withdrawal and maximizing water reuse and recycling within our operations.

We include each mine’s water risks in its operational risk register. These risks are then aggregated and incorporated into the corporate risk register. Our identified water-related risks include: (1) managing excess water in regions with high rainfall; (2) maintaining access to water in arid areas and regions prone to water scarcity; and (3) regulatory risks related to permitting limits as well as municipal and national regulations for water use.

We set an annual water recycling and reuse target of 80%. Our water recycling and reuse rate for the first quarter of 2023 was approximately 82%, in line with our performance in the first quarter of 2022.

Tailings

We are committed to having our TSFs meet global best practices for safety. Our TSFs are carefully engineered and regularly inspected, particularly those in regions with high rainfall and seismic events.

We continue to progress with our conformance to the GISTM. We have completed the consequence classification for a majority of our sites and the self-assessment for selected sites using the Conformance Protocols developed by the ICMM. A summary of our progress is expected to be made public in the third quarter of 2023.

Biodiversity

Biodiversity underpins many of the ecosystem services on which our mines and their surrounding communities depend. If improperly managed, mining and exploration activities have the potential to negatively affect biodiversity and ecosystem services. Protecting biodiversity and preventing nature loss is also critical and inextricably linked to the fight against climate change. We work to proactively manage our impact on biodiversity and strive to protect the ecosystems in which we operate. Wherever possible, we aim to achieve a net neutral biodiversity impact, particularly for ecologically sensitive environments.

We continue to work to implement our BAPs. The BAPs outline our strategy to achieve net-neutral impacts for all key biodiversity features and their associated management plans.

 

Full Year 2023 Outlook

We continue to expect 2023 gold production to be in the range of 4.2 to 4.6 million ounces. We expect stronger year-over-year performance from Cortez, Pueblo Viejo and Turquoise Ridge, together with consistent delivery across the remaining Tier One Gold Assets⁵ as detailed further below. Notably at Turquoise Ridge, the commissioning of the Third Shaft in the fourth quarter of 2022, combined with increased availability and reliability of the Sage autoclave, is expected to deliver stronger production in 2023 relative to the prior year.

As previously guided, the Company’s gold production is expected to be the lowest in the first quarter of 2023. This is mainly due to lower grades at Kibali due to mine sequencing, the commissioning and ramp up of the plant expansion at Pueblo Viejo, as well as roaster maintenance and the completion of the autoclave carbon-in-leach conversion at Goldstrike. Separately, major maintenance for the Gold Quarry roaster at Carlin occurred in April 2023, as planned, and additional planned maintenance on the Sage autoclave at Turquoise Ridge is scheduled for the second quarter. As a result, we expect the Company’s gold production in the second half of 2023 to be stronger than the first half driven by the steady ramp-up of throughput at Pueblo Viejo, the completion of major roaster maintenance at NGM, as well as higher grades from Kibali and Crossroads (Phase 5) at Cortez due to mine sequencing.

Our 2023 gold guidance continues to exclude Porgera. We expect to update our guidance to include Porgera following both the execution of all of the definitive agreements to implement the Commencement Agreement and the finalization of a timeline for the resumption of full mine operations.

Our 2023 gold cost guidance remains unchanged, including cost of sales of $1,170 to $1,250 per ounce², total cash costs of $820 to $880 per ounce¹ and all-in sustaining costs of $1,170 to $1,250 per ounce¹. These ranges were based on a gold price assumption of $1,650 per ounce and a WTI oil price assumption of $90 per barrel. We have previously disclosed a sensitivity of approximately $5 per ounce on our 2023 gold cost guidance metrics for every $100 per ounce change in the gold price.

We continue to expect 2023 copper production to be in the range of 420 to 470 million pounds. Production in the second half of 2023 is expected to be stronger than the first half, mainly due to steadily increasing throughput at Lumwana as we execute on our owner-miner strategy and commission new mining fleet equipment. Separately, major maintenance at Zaldívar is scheduled in the third quarter of 2023 as reported by the operator, Antofagasta. Our copper cost guidance metrics for 2023 remain unchanged, which are based on a copper price assumption of $3.50 per pound.

Taking into account the risks and sensitivities as discussed above, 2023 Company guidance is detailed below, inclusive of the key assumptions that were used as the basis for this guidance as released on February 15, 2023.

Company Guidance         ($ millions, except per ounce/pound data)		2023 Estimate
Gold production (millions of ounces)			4.20 - 4.60
Gold cost metrics
Cost of sales - gold ($/oz)			1,170 - 1,250
Total cash costs ($/oz)a			820 - 880
Depreciation ($/oz)			320 - 350
All-in sustaining costs ($/oz)a			1,170 - 1,250
Copper production (millions of pounds)			420 - 470
Copper cost metrics
Cost of sales - copper ($/lb)			2.60 - 2.90
C1 cash costs ($/lb)a			2.05 - 2.25
Depreciation ($/lb)			0.80 - 0.90
All-in sustaining costs ($/lb)a			2.95 - 3.25
Exploration and project expenses			400 - 440
Exploration and evaluation			180 - 200
Project expenses			220 - 240
General and administrative expenses			~180
Corporate administration			~130
Share-based compensationb			~50
Other expense			70 - 90
Finance costs, net			280 - 320
Attributable capital expenditures:
Attributable minesite sustaininga			1,450 - 1,700
Attributable projecta			750 - 900
Total attributable capital expenditures			2,200 - 2,600
Effective income tax ratec			27% - 32%
Key assumptions (used for guidance)
Gold Price ($/oz)			1,650
Copper Price ($/lb)			3.50
Oil Price (WTI) ($/barrel)			90
AUD Exchange Rate (AUD:USD)			0.75
ARS Exchange Rate (USD:ARS)			170
CAD Exchange Rate (USD:CAD)			1.30
CLP Exchange Rate (USD:CLP)			900
EUR Exchange Rate (EUR:USD)			1.20

 

a.	Further information on these non-GAAP financial measures, including detailed reconciliations, is included on pages 54 to 67 of this MD&A.

b.	Based on a one-month trailing average ending December 31, 2022 of US$17.04 per share.

c.	Based on key assumptions included in this table.