Press Release

DBRS Morningstar Upgrades Barrick Gold Corporation to BBB, Changes Trend to Stable

Natural Resources
June 09, 2020

DBRS Limited (DBRS Morningstar) upgraded the Issuer Rating of Barrick Gold Corporation (Barrick or the Company) to BBB from BBB (low) and changed the trend to Stable from Positive. The upgrade was due to Barrick’s ongoing benefits from its merger with Randgold Resources Limited as well as the successful formation of its 61.5%-owned Nevada Gold Mines (NGM) joint venture with Newmont Corporation (Newmont) in July 2019. With gold prices forecast at $1,638 per ounce (oz), $1,694 per oz, and $1,632 per oz in 2020, 2021, and 2022, respectively (according to the Bloomberg consensus as of May 26, 2020), the Stable trend is based on DBRS Morningstar’s expectations that Barrick’s financial risk profile should remain at or modestly stronger than current levels over the next few years. Although Barrick’s credit metrics are currently robust for the rating, DBRS Morningstar believes that there should be a cautious recognition of the global economic uncertainty as the world deals with the Coronavirus Disease (COVID-19) pandemic and the looming U.S. presidential election. Barrick’s business risk profile remains in the BBB category based on robust reserves, a low operating cost structure, and its position as an industry leader.

The consolidation of the Barrick and Newmont operations (eight mines and associated infrastructure) in Nevada to create NGM provides the Company with the potential to realize synergies of up to $500 million per year until at least 2024. This figure is based on the rationalization of the logistics of supplying both labour and raw materials to the mines as well as optimizing the ore feeds to the processing facilities. From a corporate perspective, there are opportunities to eliminate overheads and redundancies, reduce administrative costs, and benefit from the economies of scale with respect to purchasing and procurement afforded by the combined operations. Management has also announced that it has adopted a district-wide approach toward growing and optimizing geological resources.

During the last 12 months ended March 31, 2020 (LTM March 2020), Barrick completed the sale of its 50% interest in the Kalgoorlie “Super-Pit” mine in Australia for $750 million and, in conjunction with the Company’s Senegalese partner, sold their combined 90% interest in the Massawa project in Senegal for total consideration of $430 million. During LTM March 2020, the Company used a portion of the proceeds to fund the make-whole repurchases of $248 million and $337 million on July 15, 2019, and January 31, 2020, respectively, of the 4.95% Notes due 2020 and 3.85% Notes due 2022 (the 2022 Notes), respectively. These repurchases reduced Barrick’s total debt to $5.2 billion, or by 11% compared with the start of the period, which further strengthened the Company’s key credit metrics. With the repurchase of the 2022 Notes, the Company’s next material debt maturity is not until 2033. Barrick had strong liquidity as of March 31, 2020, with $3.3 billion in cash and $3.0 billion in undrawn credit availability.

If gold prices remain above Bloomberg consensus forecasts (as of May 26, 2020) long enough to increase EBITDA and cash flow sufficiently to materially strengthen the Company’s key credit metrics, then a positive rating action could result. Conversely, a negative rating action could result if gold prices decline below Bloomberg’s consensus estimates for long enough to depress EBITDA and cash flow, leading to a negative impact on Barrick’s key credit metrics.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at:

All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Mining Industry (August 23, 2019) and DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 25, 2019), which can be found on under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

This rating was not initiated at the request of the rated entity.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is an unsolicited credit rating.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit or contact us at [email protected].

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