FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2020

25 n Financial Instruments

Financial instruments include cash; evidence of ownership in an entity; or a contract that imposes an obligation on one party and conveys a right to a second entity to deliver/receive cash or another financial instrument. Information on certain types of financial instruments is included elsewhere in these consolidated financial statements as follows: accounts receivable (note 18); restricted share units (note 34b).

a) Cash and Equivalents

Cash and equivalents include cash, term deposits, treasury bills and money market investments with original maturities of less than 90 days.


	As at December 31, 2020	As at December 31, 2019
Cash deposits	$3,713	$2,571
Term deposits	1,469	728
Money market investments	6	15
	$5,188	$3,314

Of total cash and cash equivalents as of December 31, 2020, $nil (2019: $nil) was held in subsidiaries which have regulatory regulations, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by the Company.

b) Debt and Interest1


	Closing balance December 31, 2019	Proceeds	Repayments	Amortization and other2	Closing balance December 31, 2020
5.7% notes3,9	$842	$—	$—	$—	$842
3.85%/5.25% notes	1,079	—	(337)	2	744
5.80% notes4,9	395	—	—	—	395
6.35% notes5,9	594	—	—	—	594
Other fixed rate notes6,9	1,080	—	—	1	1,081

Leases7	96	—	(26)	(4)	66
Other debt obligations	594	—	(2)	(2)	590
5.75% notes8,9	842	—	—	1	843
Acacia credit facility10	14	—	(14)	—	—
	$5,536	$—	($379)	($2)	$5,155
Less: current portion11	(375)	—	—	—	(20)
	$5,161	$—	($379)	($2)	$5,135


	Closing balance December 31, 2018	Proceeds	Repayments	Amortization and other2	Closing balance December 31, 2019
5.7% notes3,9	$842	$—	$—	$—	$842
3.85%/5.25% notes	1,079	—	—	—	1,079
5.80% notes4,9	395	—	—	—	395
6.35% notes5,9	594	—	—	—	594
Other fixed rate notes6,9	1,326	—	(248)	2	1,080

Leases7	19	—	(28)	105	96
Other debt obligations	598	—	(4)	—	594
5.75% notes8,9	842	—	—	—	842
Acacia credit facility10	43	—	(29)	—	14
	$5,738	$—	($309)	$107	$5,536
Less: current portion11	(43)	—	—	—	(375)
	$5,695	$—	($309)	$107	$5,161

1The agreements that govern our long-term debt each contain various provisions which are not summarized herein. These provisions allow Barrick, at its option, to redeem indebtedness prior to maturity at specified prices and also may permit redemption of debt by Barrick upon the occurrence of certain specified changes in tax legislation.

2Amortization of debt premium/discount and increases (decreases) in capital leases.

3Consists of $850 million (2019: $850 million) of our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”) notes due 2041.

4Consists of $400 million (2019: $400 million) of 5.80% notes which mature in 2034.

5Consists of $600 million (2019: $600 million) of 6.35% notes which mature in 2036.

6Consists of $1.1 billion (2019: $1.1 billion) in conjunction with our wholly-owned subsidiary BNAF and our wholly-owned subsidiary Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”). This consists of $250 million (2019: $250 million) of BNAF notes due 2038 and $850 million (2019: $850 million) of BPDAF notes due 2039.

7Consists primarily of leases at Nevada Gold Mines, $18 million, Loulo-Gounkoto, $28 million, Lumwana, $8 million, Pascua-Lama, $2 million and Porgera, $2 million (2019: $32 million, $32 million, $10 million, $6 million and $5 million, respectively).

8Consists of $850 million (2019: $850 million) in conjunction with our wholly-owned subsidiary BNAF.

9We provide an unconditional and irrevocable guarantee on all BNAF, BPDAF, Barrick Gold Finance Company (“BGFC”), and Barrick (HMC) Mining (“BHMC”) notes and generally provide such guarantees on all BNAF, BPDAF, BGFC, and BHMC notes issued, which will rank equally with our other unsecured and unsubordinated obligations.

10Consists of an export credit backed term loan facility.

11The current portion of long-term debt consists of our 3.85% notes ($nil; 2019: $336 million), leases ($13 million; 2019: $25 million), Acacia credit facility ($nil; 2019: $14 million), and other debt obligations ($7 million; 2019: $nil).

5.7% Notes

In June 2011, BNAF issued an aggregate of $4.0 billion in debt securities consisting of $850 million of 5.70% notes that mature in 2041 issued by BNAF (collectively, the “BNAF Notes”). Barrick provides an unconditional and irrevocable guarantee of the BNAF Notes, which will rank equally with Barrick’s other unsecured and unsubordinated obligations.

3.85% and 5.25% Notes

On April 3, 2012, we issued an aggregate of $2 billion in debt securities comprised of $1.25 billion of 3.85% notes that mature in 2022 and $750 million of 5.25% notes that mature in 2042. During 2015, $913 million of the 3.85% notes was repaid. On January 31, 2020, the remaining $337 million of the 3.85% notes was repaid.

Other Fixed Rate Notes

On October 16, 2009, we issued two tranches of debentures totaling $1.25 billion through our wholly-owned indirect subsidiary BPDAF consisting of $850 million of 30-year notes with a coupon rate of 5.95% and $400 million of 10-year notes with a coupon rate of 4.95%. We also provide an unconditional and irrevocable guarantee of these payments, which rank equally with our other unsecured and unsubordinated obligations. During 2016, $152 million of the $400 million of the 4.95% notes was repaid. During 2019, the remaining $248 million of the 4.95% notes was repaid.

In September 2008, we issued an aggregate of $1.25 billion of notes through our wholly-owned indirect subsidiaries BNAF and BGFC consisting of $250 million of 30-year notes with a coupon rate of 7.5%. We also provide an unconditional and irrevocable guarantee of these payments, which rank equally with our other unsecured and unsubordinated obligations.

5.75% Notes

On May 2, 2013, we issued an aggregate of $3 billion in notes through Barrick and our wholly-owned indirect subsidiary BNAF consisting of $850 million of 5.75% notes issued by BNAF that mature in 2043. $2 billion of the net proceeds from this offering was used to repay amounts outstanding under our revolving credit facility at that time. We provided an unconditional and irrevocable guarantee on the $850 million of 5.75% notes issued by BNAF, which will rank equally with our other unsecured and unsubordinated obligations.

Amendment and Refinancing of the Credit Facility

Barrick has a credit and guarantee agreement (the “Credit Facility”) with certain Lenders, which requires such Lenders to make available to us a credit facility of $3.0 billion or the equivalent amount in Canadian dollars. The Credit Facility, which is unsecured, currently has an interest rate of London Interbank Offered Rate (“LIBOR”) plus 1.125% on drawn amounts, and a commitment rate of 0.125% on undrawn amounts and includes terms to replace LIBOR with a suitable replacement as that issue develops. The replacement of LIBOR is not expected to have an impact on the consolidated financial statements. The Credit Facility currently has a termination date of January 4, 2025 and is undrawn as at December 31, 2020.

Acacia Credit Facility

In January 2013, Acacia concluded negotiations with a group of commercial banks for the provision of an export credit backed term loan facility (the “Facility”) for the amount of $142 million. The Facility was put in place to fund a substantial portion of the construction costs of the carbon in leach (“CIL”) circuit at the process plant at Bulyanhulu. The Facility has a term of seven years and, when drawn, the spread over LIBOR will be 250 basis points. The Facility is repayable in equal installments over the term of the Facility, after a two-year repayment holiday period. At December 31, 2014, the full value of the Facility was drawn. During 2015, $14 million was repaid. During 2016, $29 million was repaid. During 2017, $28 million was repaid. During 2018, $28 million was repaid. During 2019, $29 million was repaid. In January 2020, the final installment of $14 million was paid.

Interest


	2020			2019
For the years ended December 31	Interest cost	Effective rate1		Interest cost	Effective rate1
5.7% notes	$49	5.73	%	$49	5.74	%
3.85%/5.25% notes	41	5.31	%	53	4.87	%
5.80% notes	23	5.84	%	23	5.87	%
6.35% notes	38	6.39	%	38	6.41	%
Other fixed rate notes	70	6.38	%	77	6.33	%

Leases	5	6.09	%	6	7.14	%
Other debt obligations	34	6.16	%	34	6.17	%
5.75% notes	49	5.77	%	49	5.79	%
Acacia credit facility	—	—	%	3	3.36	%
Deposits on Pascua-Lama silver sale agreement (note 29)	1	0.53	%	70	8.75	%
Deposits on Pueblo Viejo gold and silver streaming agreement (note 29)	33	6.44	%	34	6.79	%

	$343			$436
Less: interest capitalized	(24)			(14)
	$319			$422

1The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest rate contracts designated in a hedging relationship with debt.

Scheduled Debt Repayments1


	Issuer	Maturity Year	2021	2022	2023	2024	2025	2026 and thereafter	Total


7.31% notes2	BGC	2021	$7	$—	$—	$—	$—	$—	$7



7.73% notes2	BGC	2025	—	—	—	—	7	—	7
7.70% notes2	BGC	2025	—	—	—	—	5	—	5
7.37% notes2	BGC	2026	—	—	—	—	—	32	32
8.05% notes2	BGC	2026	—	—	—	—	—	15	15
6.38% notes2	BGC	2033	—	—	—	—	—	200	200
5.80% notes	BGC	2034	—	—	—	—	—	200	200
5.80% notes	BGFC	2034	—	—	—	—	—	200	200
6.45% notes2	BGC	2035	—	—	—	—	—	300	300
6.35% notes	BHMC	2036	—	—	—	—	—	600	600
7.50% notes3	BNAF	2038	—	—	—	—	—	250	250
5.95% notes3	BPDAF	2039	—	—	—	—	—	850	850
5.70% notes	BNAF	2041	—	—	—	—	—	850	850
5.25% notes	BGC	2042	—	—	—	—	—	750	750
5.75% notes	BNAF	2043	—	—	—	—	—	850	850



			$7	$—	$—	$—	$12	$5,097	$5,116
Minimum annual payments under leases			$13	$10	$6	$4	$4	$28	$65

1This table illustrates the contractual undiscounted cash flows, and may not agree with the amounts disclosed in the consolidated balance sheet.

2Included in Other debt obligations in the Long-Term Debt table.

3Included in Other fixed rate notes in the Long-Term Debt table.

c) Derivative Instruments (“Derivatives”)

In the normal course of business, our assets, liabilities and forecasted transactions, as reported in US dollars, are impacted by various market risks including, but not limited to:


Item			Impacted by
● Revenue			● Prices of gold, silver and copper
● Cost of sales
o Consumption of diesel fuel, propane, natural gas, and electricity			o Prices of diesel fuel, propane, natural gas, and electricity
o Non-US dollar expenditures			o Currency exchange rates - US dollar versus A$, ARS, C$, CLP, DOP, EUR, PGK, TZS, XOF, ZAR and ZMW
● General and administration, exploration and evaluation costs			● Currency exchange rates - US dollar versus A$, ARS, C$, CLP, DOP, GBP, PGK, TZS, XOF, ZAR, and ZMW
● Capital expenditures
o Non-US dollar capital expenditures			o Currency exchange rates - US dollar versus A$, ARS, C$, CLP, DOP, EUR, GBP, PGK, XOF, ZAR, and ZMW
o Consumption of steel			o Price of steel
● Interest earned on cash and equivalents			● US dollar interest rates
● Interest paid on fixed-rate borrowings			● US dollar interest rates

The time frame and manner in which we manage those risks varies for each item based upon our assessment of the risk and available alternatives for mitigating risk. For these particular risks, we believe that derivatives are an appropriate way of managing the risk.

We use derivatives as part of our risk management program to mitigate variability associated with changing market values related to the hedged item. Many of the derivatives we use meet the hedge effectiveness criteria and are designated in a hedge accounting relationship.

Certain derivatives are designated as either hedges of the fair value of recognized assets or liabilities or of firm commitments (“fair value hedges”) or hedges of highly probable forecasted transactions (“cash flow hedges”), collectively known as “accounting hedges”. Hedges that are expected to be highly effective in achieving offsetting changes in fair value or cash flows are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Some of the derivatives we use are effective in achieving our risk management objectives, but they do not meet the strict hedge accounting criteria. These derivatives are considered to be “non-hedge derivatives”.

During 2020 and 2019, we did not enter into any derivative contracts for US dollar interest rates, currencies, or commodity inputs. During 2020, we sold 57 thousand ounces of producer gold collars (2019: nil). We had no contracts outstanding at December 31, 2020.