For a full explanation of results, the Financial Statements and Management Discussion & Analysis, and mine statistics please see the Company’s website,
SECOND QUARTER REPORT 2010 For a full explanation of results, the Financial Statements JULY 29, 2010 and Management Discussion & Analysis, and mine statistics please see the Company’s website, Based on US GAAP and expressed in US dollars www.barrick.com.
Barrick Reports Q2 2010 Financial and Operating Results
| Highlights | |
| • Reported Q2 net income rose 59% to a record $783 million ($0.79 per share). Adjusted Q2 net income rose 76% to $759 million ($0.77 per share)1 compared to $431 million ($0.49 per share) in Q2 2009. Operating cash flow rose 42% to $1.02 billion from $718 million in the prior year period and exceeded $2 billion in the first half of 2010. • Q2 gold production of 1.94 million ounces at total cash costs of $457 per ounce1 or net cash costs of $358 per ounce1, was ahead of plan on strong performance from the North and South America regions. Barrick remains on track with its original full year production guidance of 7.6-8.0 million ounces at total cash costs of $425-$455 per ounce or net cash costs of $345-$375 per ounce2. • Lower cash costs in 2010 are expected to allow Barrick to fully capture the benefits of higher gold prices. Q2 cash margins increased 56% to $748 per ounce1 from $479 per ounce in Q2 2009 and net cash margins increased 48% to $847 per ounce1 from $571 per ounce in the prior year period. • Cortez Hills continues to exceed plan following its successful ramp-up in Q1. The Cortez property produced 0.29 million ounces at total cash costs of $308 per ounce in Q2 and is on track to exceed its original production guidance for 2010. • The Pueblo Viejo3 and Pascua-Lama projects remain in line with their respective pre-production capital budgets with first production expected in Q4 2011 and Q1 2013, respectively. At full capacity and combined with Cortez Hills, these projects are forecast to contribute about 2.4 million ounces4 of annual production at low cash costs. • The terms for $1.035 billion (100% basis) in non-recourse project financing for the Pueblo Viejo project were finalized during the quarter and approximately $780 million (100% basis) has been received in the first draw on this financing. • Barrick’s Board of Directors has authorized a quarterly dividend of 12 cents per share, which represents a 20% increase from the previous dividend5. The Company expects to move from a semi-annual dividend to a quarterly dividend going forward. The Company’s positive outlook on the gold price, combined with a strong financial position, quarter-end cash of $3.9 billion and $2.1 billion of operating cash flow in H1 2010, has allowed Barrick to continue to make high return investments in its project pipeline and at the same time increase its dividend. As the gold price has increased in the last five years, Barrick has increased its dividend by almost 120%. |
Q2 production of 1.94 million ounces of gold at total margins increased 56% to $748 per ounce from cash costs of $457 per ounce or net cash costs of $479 per ounce in Q2 2009. Net cash margins $358 per ounce was ahead of plan primarily due to increased 48% to $847 per ounce from $571 per strong performances from Cortez, Goldstrike, and ounce in the same prior year period.
Lagunas Norte. The realized gold price for the Adjusted Q2 net income rose 76% to $759 quarter was $1,205 per ounce1, $8 per ounce above million ($0.77 per share), reflecting higher the average spot price of $1,197 per ounce. Cash production and sales in conjunction with higher
1 Adjusted net income, total cash costs per ounce, net cash costs per ounce, realized price, cash margins and net cash margins per ounce are non-GAAP financial measures. See pages 38-44 of Barrick’s Second Quarter Report. 2 Based on an expected realized copper price of $3.00 per pound for full year 2010.
3 Barrick has a 60% share in the Pueblo Viejo project.
4 2.4 million ounces of production is based on the estimated cumulative average annual production in the first full 5 years once all are at full capacity, with the Cortez Complex including Pipeline.
5 Calculated based on converting previous semi-annual dividend of $0.20 per share to a quarterly equivalent.
BARRICK SECOND QUARTER 2010 PRESS RELEASE
realized gold prices, compared to $431 million from the Cortez Hills open pit and underground. ($0.49 per share) in Q2 2009. Reported Q2 net Cortez Hills continues to operate under the terms income of $783 million ($0.79 per share) before net of the tailored injunction issued by the District adjustments of $24 million was a Company record. Court while the Bureau of Land Management Operating cash flow rose 42% to $1.02 billion from completes a Supplementary Environmental Impact $718 million in the prior year period. Study (SEIS) on three aspects identified by the 9th “We had another good quarter with solid Circuit Court of Appeals. The Company continues to operational and financial results. Our operating expect completion of the SEIS and a Record of costs were stable and when combined with the Decision to be issued by year-end.
higher realized gold price led to significant margin The Goldstrike operation also performed ahead expansion, record quarterly earnings and strong of plan, producing 0.30 million ounces at total cash cash flow generation,” said Aaron Regent, Barrick’s costs of $566 per ounce in Q2 primarily due to President and CEO. “We continued to advance our better than expected grades from the open pit and project pipeline in line with our plans. In particular, higher roaster throughput. As planned, Goldstrike is Cortez Hills has been completed and is performing expected to access higher grade material in the exceptionally well and the construction of Pueblo second half of the year.
Viejo and Pascua-Lama continue to move forward. The South American business unit produced The outlook for the price of gold remains very 0.57 million ounces at total cash costs of $233 per positive and Barrick will continue to be a major ounce in Q2. Lagunas Norte exceeded plan, beneficiary.” producing 0.25 million ounces at total cash costs of $163 per ounce due to changes in the mine plan. As PRODUCTION AND COSTS a result, production at Lagunas Norte is expected Q2 production of 1.94 million ounces at total cash to be lower in the second half of the year, before costs of $457 per ounce or net cash costs of $358 increasing again in early 2011. The Veladero mine per ounce exceeded plan. The Company continues produced 0.26 million ounces at total cash costs of to expect 2010 production to increase to 7.6-8.0 $279 per ounce and is expected to produce over 1.0 million ounces of gold at lower total cash costs of million ounces in 2010. Full year production for the $425-$455 per ounce or net cash costs of $345- South America region is now expected to decrease $375 per ounce. Total cash costs are expected to to 2.05-2.10 million ounces of gold at total cash trend toward the higher end of the range primarily costs of $240-$270 per ounce, primarily as a result due to increased royalties as gold prices have of the changes in the mine plan at Lagunas Norte. traded higher6 and as a result of a change in the The Australia Pacific business unit contributed production mix. production of 0.48 million ounces at total cash Following a strong Q1, the North America region costs of $622 per ounce in Q2. The Porgera mine delivered another quarter of results which were produced 0.12 million ounces at total cash costs of ahead of plan, producing 0.76 million ounces at $617 per ounce. The region remains on track with total cash costs of $506 per ounce in Q2 on its original production guidance of 1.85-2.00 million continued strong performances from Cortez and ounces of gold at total cash costs of $600-$625 Goldstrike. With Cortez expected to exceed its per ounce.
original guidance, full year production for the Attributable production from African Barrick region is now anticipated to increase to 3.125-3.175 Gold plc in Q2 was 0.13 million ounces at total cash million ounces of gold and total cash costs are costs of $609 per ounce7. Barrick’s share of full anticipated to be at the higher end of the range of year production is now expected to decrease to $450-$475 per ounce due to increased royalties 0.60-0.64 million ounces at higher total cash costs and production taxes. of $560-$600 per ounce as the Buzwagi mine The Cortez property continued to exceed plan, continues to work through lower grade transition producing 0.29 million ounces at total cash costs of ore. Plant availability in the quarter was also $308 per ounce on higher than expected grades impacted by a series of power outages and
6 Based on an increase in the gold price assumption to $1,150 per ounce from $1,050 per ounce. 7 US GAAP basis. ABG reports under an IFRS basis.
BARRICK SECOND QUARTER 2010 2 PRESS RELEASE
equipment issues which are being addressed. on their footings. Work continues toward Production at Buzwagi is expected to increase in achieving key milestones including the connection the second half of the year as primary sulfide ore of power to the site, which is necessary to becomes available for processing. commence commissioning activities in the second Q2 copper production was 102 million pounds at half of 2011. The terms for $1.035 billion (100% total cash costs of $1.12 per pound and the basis) in non-recourse project financing for the Company remains on track with its full year copper project were finalized during the quarter and production guidance of 340-365 million pounds at approximately $780 million (100% basis) has total cash costs of $1.10-$1.20 per pound. been received in the first draw on this financing. Utilizing option collar strategies, we have put in Barrick’s 60% share of annual gold production in place floor protection on approximately 75% of our the first full five years of operation is expected to expected copper production for the remainder of average 625,000-675,000 ounces at total cash 2010 at an average price of $2.16 per pound and costs of $250-$275 per ounce9.
can participate in copper price upside on At the Pascua-Lama project on the border of approximately 100% of our expected remaining Chile and Argentina, detailed engineering and 2010 copper production to a maximum average procurement is nearing completion and the project price of $3.69 per pound. We have also hedged is on track to enter production in the first quarter approximately 35% of our expected 2011 of 2013. Major items that have been purchased or production through the use of collars with an are subject to firm pricing include the mining average floor price of $3.00 per pound and an equipment fleet, autogenous grinding (AG) and ball average ceiling price of $4.18 per pound. mills, the overland conveyor, and the primary and Barrick’s production base is underpinned by the pebble crushers. The project remains in line with its industry’s largest, fully unhedged gold reserves of pre-production capital budget of $2.8-$3.0 billion 139.8 million ounces, plus measured and indicated with over one-third of the capital committed. In gold resources of 61.8 million ounces and inferred Chile, the Barriales camp is essentially complete gold resources of 31.6 million ounces8. and substantial progress has been made on the Los Amarillos camp in Argentina. Construction PROJECTS UPDATE of the Punta Colorada road is progressing well The Pueblo Viejo project in the Dominican and earthworks have commenced with about 3.0 Republic is advancing in line with its $3.0 billion million tons moved to date. Average annual gold capital budget (100% basis) and initial production production is expected to be 750,000–800,000 continues to be anticipated in the fourth quarter ounces in the first full five years of operation at of 2011. At the end of the second quarter, total cash costs of $20-$50 per ounce10 assuming a overall construction was more than 25% silver price of $12 per ounce. For every $1 per complete, approximately 70% of the capital ounce increase in the silver price, total cash costs had been committed and engineering and are expected to decrease by about $35 per ounce procurement by major EPCM contractors was over this period.
about 95% complete. About 92,000 cubic At the Cerro Casale project in Chile, the review meters of concrete or about 60% of the total of any additional permitting requirements before have been poured and 5,000 tons of steel, considering a construction decision is progressing. representing about 30% of the total, have Engineering contractors have been selected and been erected. Two of the autoclaves are in basic engineering has commenced. Pre-production country, one of which is expected to arrive on site capital is expected to be about $4.2 billion imminently, and all four mills have been installed (100% basis) and Barrick’s 75% share of average annual production is anticipated to be about 8 Calculated as at December 31, 2009 in accordance with National Instrument 43-101 as required by Canadian 750,000-825,000 ounces of gold and 170-190 securities regulatory authorities. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934), as interpreted by the Staff of the SEC, applies different standards in order million pounds of copper in the first five full to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes, Cerro Casale is classified as mineralized material. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 23 -33 of Barrick’s 2009 Form 40-F/Annual Information Form 9 Based on gold price and oil price assumptions of $950 per ounce and $75 per barrel, respectively. on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory 10 Total cash costs are calculated net of silver credits assuming silver, gold, and oil prices of $12 per ounce, authorities. $950 per ounce, $75 per barrel, respectively.
BARRICK SECOND QUARTER 2010 3 PRESS RELEASE
years of operation at total cash costs of about 12 cents per share, which represents a 20% $240-$260 per ounce11 assuming a copper price increase from the previous dividend. The quarterly of $2.50 per pound. A $0.25 per pound change in dividend is to be paid on September 15, 2010 to the copper price would result in an approximate shareholders of record as of the close of business $50 per ounce impact on the expected total cash on August 31, 2010. The Company expects to move costs per ounce over this period. from a semi-annual dividend to a quarterly dividend At the 50% owned Donlin Creek project, going forward13.
further optimization studies are underway, primarily focused on the potential to utilize * * * * natural gas to reduce operating costs. Following completion of a scoping study for the natural gas Barrick’s vision is to be the world’s best gold option, in April 2010, the Board of Donlin Creek company by finding, acquiring, developing and LLC approved a supplemental budget to proceed producing quality reserves in a safe, profitable with revisions to the feasibility study to include and socially responsible manner. Barrick’s shares the natural gas option. The feasibility study are traded on the Toronto and New York revisions are expected to be completed in the stock exchanges.
second quarter of 2011.
At the Reko Diq project, in which Barrick owns a 37.5% interest, the initial mine development feasibility study together with an environmental and social impact assessment are being finalized. The feasibility study indicates pre-production capital of approximately $3.3 billion (100% basis) based on a 120,000 ton per day processing plant, which is capable of future expansions. Barrick’s share of average annual production for the first five full years of operation is expected to be about 100,000 ounces of gold at total cash costs of $420-$450 per ounce and 150-160 million pounds of copper at total cash costs of $1.00-$1.10 per pound12.
Discussions with the Governments of Pakistan and Balochistan continue on such matters as investment protection, the outcome of which will inform the next steps taken by Barrick to advance the project.
FINANCIAL POSITION At June 30, 2010, Barrick had the gold industry’s only ‘A’ credit rating, a cash balance of $3.9 billion and a $1.5 billion undrawn credit facility. The Company generated over $1 billion in operating cash flow during the quarter and $2.1 billion in operating cash flow in the first half of 2010. With the Company’s strong financial position and its positive outlook on the gold price, Barrick’s Board of Directors has authorized a quarterly dividend of
11 Based on gold price, copper price, and oil price assumptions of $950 per ounce, $2.50 per pound and $75 13 The declaration and payment of dividends remains at the discretion of the Board of Directors and will per barrel, respectively, and assuming a Chilean peso foreign exchange rate of 525:1. depend on the Company’s financial results, cash requirements, future prospects and other factors deemed 12 Based on copper and gold price assumptions of $2.20 per pound and $925 per ounce, respectively. relevant by the Board.
BARRICK SECOND QUARTER 2010 4 PRESS RELEASE
Key Statistics
| Barrick Gold Corporation | Three months ended | Six months ended | |
|---|---|---|---|
| (in United States dollars) | June 30, | June 30, | |
| (Unaudited) | 2010 | 2009 | 2010 2009 |
Operating Results Gold production (thousands of ounces)1 1,944 1,866 4,005 3,621 Gold sold (thousands of ounces)1 1,912 1,882 3,965 3,596 Per ounce data Average spot gold price $ 1,197 $ 922 $ 1,152 $ 915 Average realized gold price2 $ 1,205 $ 931 $ 1,158 $ 923 Net cash costs5 358 360 346 378
| Total cash costs3 | 457 | 452 | 446 | 467 | |
| Amortization and other4 | 132 | 116 | 127 | 114 | |
| Total production costs | 589 | 568 | 573 | 581 | |
| Copper credits | 99 | 92 | 100 | 89 | |
| Copper production (millions of pounds) | 102 | 96 | 202 | 191 | |
| Copper sold (millions of pounds) | 105 | 90 | 198 | 176 |
Per pound data Average spot copper price $ 3.18 $ 2.12 $ 3.23 $ 1.83 Average realized copper price2 $ 2.93 $ 3.18 $ 3.10 $ 3.09
| Total cash costs3 | 1.12 | 1.25 | 1.09 | 1.28 |
| Amortization and other4 | 0.21 | 0.21 | 0.21 | 0.23 |
| Total production costs | 1.33 | 1.46 | 1.30 | 1.51 |
Financial Results (millions)
Sales $ 2,642 $ 1,965 $ 5,203 $ 3,740
| Net income | 783 | 492 | 1,541 | 863 |
| Adjusted net income6 | 759 | 431 | 1,500 | 732 |
| Operating cash flow | 1,019 | 718 | 2,070 | 1,067 |
Per Share Data (dollars)
0.79 0.56 1.56 0.99 Net income (basic)
| Adjusted net income (basic)6 | 0.77 | 0.49 | 1.52 | 0.84 |
| Net income (diluted) | 0.79 | 0.56 | 1.55 | 0.98 |
| Weighted average basic common shares (millions) | 985 | 873 | 985 | 873 |
| 997 | 885 | 997 | 885 |
Weighted average diluted common shares (millions)7 As at As at June 30, December 31, 2010 2009 Financial Position (millions)
Cash and equivalents $ 3,851 $ 2,564
| Non-cash working capital | 615 | 655 |
| Adjusted debt8 | 7,337 | 6,919 |
| Net debt9 | 3,696 | 4,355 |
| Equity | 18,111 | 15,547 |
1 Production includes equity gold ounces in Highland Gold.
2 Realized price is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 43 of the Company's MD&A.
3 Total cash costs is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 40 of the Company's MD&A.
4 Represents equity amortization expense, unrealized losses on non-hedge currency and commodity contracts and inventory purchase accounting adjustments at the Company's producing mines, divided by equity ounces of gold sold or pounds of copper sold.
5 Net cash costs is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 40 of the Company's MD&A.
6 Adjusted net income is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 38 of the Company's MD&A.
7 Fully diluted, includes dilutive effect of stock options and convertible debt.
8 Adjusted debt is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 44 of the Company's MD&A.
9 Net debt is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 42 of the Company's MD&A.
BARRICK SECOND QUARTER 2010 5 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs (US$/oz)
| Three months ended | Six months ended | Three months ended | Six months ended | |||||
|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | June 30, | June 30, | |||||
| (Unaudited) | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| North America1 | 755 | 765 | 1,484 | 1,501 | $ |
506 $ 484 $ 513 $
| South America | 566 | 442 | 1,225 | 838 | 233 | 277 | 215 | 283 |
| Australia Pacific | 482 | 488 | 971 | 977 | 622 | 552 | 599 | 580 |
| 132 | 163 | 309 | 290 | 609 | 539 | 613 | 549 |
African Barrick Gold4 Other 9 8 16 15 494 494 494 494 Total 1,944 1,866 4,005 3,621 $ 457 $ 452 $ 446 $
Copper Production (attributable pounds) (Millions) Total Cash Costs (US$/lb)
| Three months ended | Six months ended | Three months ended | Six months ended | |||||
|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | June 30, | June 30, | |||||
| (Unaudited) | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| South America | 78 | 75 | 158 | 151 | $ |
1.27 $ 1.29 Australia Pacific 24 21 44 40 1.31 1.13 1.20 1.27 Total 102 96 202 191 $ 1.12 $ 1.25 $ 1.09 $ 1.28
Total Gold Production Costs (US$/oz) Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 Direct mining costs at market foreign exchange rates $ 440 $ 408 $ 432 $ (Gains) losses realized on currency hedge and commodity hedge/economic hedge
(7) 17 (10) 30 contracts
| Adjustments to direct mining costs3 | (5) | (1) | (5) | - | |
| By-product credits | (15) | (8) | (14) | (8) | |
| Copper credits | (99) | (92) | (100) | (89) | |
| Cash operating costs, net basis | 314 | 324 | 303 | 343 | |
| Royalties | 34 | 30 | 33 | 29 | |
| Production taxes | 10 | 6 | 10 | 6 | |
| Net cash costs2 | 358 | 360 | 346 | 378 | |
| Copper credits | 99 | 92 | 100 | 89 | |
| Total cash costs2 | 457 | 452 | 446 | 467 | |
| Amortization | 127 | 115 | 122 | 114 | |
| Adjustments to direct mining costs3 | 5 | 1 | 5 | - |
589 $ 568 $ 573 $ 581 Total production costs $
Total Copper Production Costs (US$/lb) Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 1.10 $ 1.24 $ 1.07 $ 1.28 Cash operating costs $
| Royalties | 0.02 | 0.01 | 0.02 | - |
| Total cash costs2 | 1.12 | 1.25 | 1.09 | 1.28 |
| Amortization | 0.21 | 0.21 | 0.21 | 0.23 |
1.33 $ 1.46 $ 1.30 $ 1.51 Total production costs $
1 Production includes an additional 50% interest in Hemlo from January 1, 2009 onwards and Barrick's share of total cash costs increased to 100% effective May 1, 2009.
2 Total cash costs and net cash costs are non-GAAP financial performance measures with no standard meaning under US GAAP.
See page 40 of the Company's MD&A.
3 Represents unrealized losses on non-hedge currency and commodity contracts and the impact of Barrick Energy.
4 Figures relating to African Barrick Gold are stated at 100% up to March 31, 2010 and 73.9% thereafter.
BARRICK SECOND QUARTER 2010 6 SUMMARY INFORMATION
Consolidated Statements of Income
Barrick Gold Corporation Three months ended Six months ended June 30, June 30, (in millions of United States dollars, except per share data) (Unaudited)
2010 2009 2010 2009
Sales (notes 4 and 5) $ 2,642 $ 1,965 $ 5,203 $ 3,740 Costs and expenses
| Cost of sales (notes 4 and 6)1 | 1,035 | 949 | 2,052 | 1,877 |
| Amortization and accretion (notes 4 and 14B) | 316 | 265 | 611 | 520 |
| Corporate administration | 45 | 45 | 77 | 80 |
| Exploration (note 7) | 44 | 35 | 76 | 65 |
| Project development expense (note 7) | 32 | 14 | 52 | 38 |
| Other expense (note 8A) | 161 | 62 | 263 | 130 |
| Impairment charges (note 8B) | 7 | - | 7 | - |
| 1,640 | 1,370 | 3,138 | 2,710 | |
| Interest income | 2 | 2 | 6 | 5 |
| Interest expense (note 15B) | (38) | (14) | (73) | (16) |
| Other income (note 8C) | 7 | 96 | 40 | 96 |
| Write-down of investments (note 8B) | - | - | - | (1) |
| (29) | 84 | (27) | 84 | |
| Income from continuing operations before income taxes and other items | 973 | 679 | 2,038 | 1,114 |
| Income tax expense (note 9) | (208) | (189) | (530) | (226) |
| Loss from equity investees (note 12) | (9) | (20) | (29) | (48) |
| Income from continuing operations before non-controlling interests | 756 | 470 | 1,479 | 840 |
| Income from discontinued operations | 36 | 22 | 71 | 25 |
| Income before non-controlling interests | 792 | 492 | 1,550 | 865 |
| Non-controlling interests (note 20) | (9) | - | (9) | (2) |
783 $ 492 $ 1,541 $ Net income $ Earnings per share data (note 10)
Income from continuing operations Basic $ 0.76 $ 0.54 $ 1.49 $ 0.96 Diluted $ 0.75 $ 0.53 $ 1.48 $ 0.95 Income from discontinued operations Basic $ 0.02 $ 0.07 $ Diluted $ 0.04 $ 0.07 $ Net income Basic $ 0.79 $ 0.56 $ 1.56 $ 0.99 Diluted $ 0.79 $ 0.56 $ 1.55 $ 0.98
1 Exclusive of amortization.
The notes to these unaudited interim consolidated financial statements, which are contained in the Second Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2010 7 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Cash Flow
Barrick Gold Corporation Three months ended Six months ended June 30 June 30 (in millions of United States dollars) (Unaudited)
2010 2009 2010 2009 OPERATING ACTIVITIES Net income $ 783 $ 492 $ 1,541 $ 863
| Amortization and accretion (notes 4 and 14B) | 316 | 265 | 611 | 520 |
| Impairment charges and write-down of investments (note 8B) | 7 | - | 7 | 1 |
| Income tax expense (note 9) | 208 | 189 | 530 | 226 |
| (244) | (120) | (345) | (220) |
Income taxes paid
| Net proceeds tax | (1) | (5) | (73) | (23) |
| Increase in inventory | (93) | (84) | (143) | (160) |
| Gain on sale/acquisition of long-lived assets (note 8C) | - | (80) | (33) | (82) |
| Income from discontinued operations | (36) | (22) | (71) | (25) |
| Operating cash flows of discontinued operations | (1) | 4 | (4) | 7 |
| Other items (note 11A) | 80 | 79 | 50 | (40) |
| Net cash provided by operating activities | 1,019 | 718 | 2,070 | 1,067 |
INVESTING ACTIVITIES Property, plant and equipment
| Capital expenditures (note 4) | (762) | (602) | (1,392) | (1,068) |
| Sales proceeds | 3 | 4 | 8 | 7 |
| Acquisitions (note 3) | (305) | (48) | (752) | (48) |
Investments
| Purchases | (1) | - | (2) | (2) |
| Increase in restricted cash | - | 113 | - | 113 |
| Investing cash flows of discontinued operations | - | (3) | - | (7) |
| Other investing activities (note 11B) | (14) | (17) | (32) | (34) |
| Net cash used in investing activities | (1,079) | (553) | (2,170) | (1,039) |
FINANCING ACTIVITIES Capital stock Proceeds on exercise of stock options 26 11 31 21 Proceeds from public issuance of common shares by a subsidiary (note 3E) 50 - 884 - Long-term debt
| Proceeds | 782 | 62 | 782 | 867 |
| Repayments | (69) | (206) | (75) | (293) |
| Dividends | (197) | (174) | (197) | (174) |
| Funding (to) from non-controlling interests | (110) | 60 | (16) | 146 |
| Financing cash flows of discontinued operations | - | - | - | - |
| Other financing activities (note 11C) | (32) | (4) | (18) | (11) |
| Net cash provided by (used in) financing activities | 450 | (251) | 1,391 | 556 |
| Effect of exchange rate changes on cash and equivalents | (7) | 20 | (4) | 17 |
| Net increase in cash and equivalents | 383 | (66) | 1,287 | 601 |
| Cash and equivalents at beginning of period(note 15A) | 3,468 | 2,104 | 2,564 | 1,437 |
| Cash and equivalents at end of period(note 15A) | $3,851 | $2,038 | $ |
3,851 $ 2,038
The notes to these unaudited interim consolidated financial statements, which are contained in the Second Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2010 8 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
(in millions of United States dollars) (Unaudited) As at June 30, As at December 31,
| 2010 | 2009 |
| ASSETS Current assets Cash and equivalents (note 15A) $ 3,851 Accounts receivable 256 Inventories (note 13) 1,671 Other current assets 482 Assets of discontinued operations 36 | $ 2,564 251 1,540 524 59 |
| 6,296 Non-current assets Equity in investees (note 12A) 278 Other investments (note 12B) 85 Property, plant and equipment (note 14) 16,025 Goodwill 5,285 Intangible assets 134 Deferred income tax assets 898 Other assets 1,543 Assets of discontinued operations 41 | 4,938 1,136 92 13,125 5,197 66 949 1,531 41 |
| Total assets $ 30,585 | $ 27,075 |
| LIABILITIES AND EQUITY Current liabilities Accounts payable 1,285 Short-term debt 17 Other current liabilities 525 Liabilities of discontinued operations 20 | 1,221 54 475 23 |
| 1,847 Non-current liabilities Long-term debt (note 15B) 7,021 Asset retirement obligations 1,166 Deferred income tax liabilities 1,190 Other liabilities (note 17) 1,227 Liabilities of discontinued operations 23 | 1,773 6,281 1,122 1,184 1,145 23 |
| Total liabilities 12,474 | 11,528 |
| Equity Capital stock (note 18) 17,427 Additional paid-in capital 239 Deficit (1,038) Accumulated other comprehensive income (loss) (note 19) (94) | 17,390 - (2,382) 55 |
| Total shareholders’ equity 16,534 Non-controlling interests (note 20) 1,577 | 15,063 484 |
| Total equity 18,111 | 15,547 |
| Contingencies and commitments (notes 14 and 21) | |
| Total liabilities and equity $ 30,585 | $ 27,075 |
The notes to these unaudited interim consolidated financial statements, which are contained in the Second Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2010 9 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Equity
For the six months ended June 30 (in millions of United States dollars) (Unaudited)
2010 2009 Common shares (number in thousands)
| At January 1 | 984,328 | 872,739 |
| Issued on exercise of stock options | 1,183 | 711 |
| Issued on redemption of exchangeable shares (note 18B) | - | 267 |
| At June 30 | 985,511 | 873,717 |
Common shares At January 1 $ 17,390 $ 13,372
| Issued on exercise of stock options | 31 | 21 |
| Recognition of stock option expense | 6 | 10 |
| At June 30 | 17,427 | 13,403 |
Additional paid-in capital
| At January 1 | - | - |
| Recognized on initial public offering of African Barrick Gold (note 3E) | 239 | - |
| At June 30 | 239 | - |
Retained earnings (deficit)
| At January 1 | (2,382) | 2,261 |
| Net income | 1,541 | 863 |
| Dividends | (197) | (174) |
| At June 30 | (1,038) | 2,950 |
| Accumulated other comprehensive loss (note 19) | (94) | (96) |
| Total shareholders’ equity | 16,534 | 16,257 |
Non-controlling interests (note 20)
| At January 1 | 484 | 182 |
| Net income attributable to non-controlling interests | 9 | (2) |
| Funding (to) from non-controlling interests | (16) | 146 |
| Other increase in non-controlling interests | 1,100 | - |
| At June 30 | 1,577 | 326 |
18,111 $ 16,583 Total equity at June 30 $
Consolidated Statements of Comprehensive Income
Barrick Gold Corporation Three months ended Six months ended June 30, June 30, (in millions of United States dollars) (Unaudited)
2010 2009 2010 2009 Net income $ 783 $ 492 $ 1,541 $ Other comprehensive income (loss), net of tax (note 19) (228) 372 (149) 260 555 $ 864 $ 1,392 $ 1,123 Comprehensive income $
The notes to these unaudited interim consolidated financial statements, which are contained in the Second Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2010 10 FINANCIAL STATEMENTS (UNAUDITED)
CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS Barrick Gold Corporation CIBC Mellon Trust Company Brookfield Place, TD Canada Trust Tower P.O. Box 7010, Adelaide Street Postal Station Suite 3700 Toronto, Canada M5C 2W9 161 Bay Street, P.O. Box 212 Tel: (416) 643-5500 Toronto, Canada M5J 2S1 Toll-free throughout North America: 1-800-387-0825 Tel: (416) 861-9911 Fax: (416) 861-0727 Fax: (416) 643-5501 Toll-free throughout North America: 1-800-720-7415 Email: [email protected] Email: [email protected] Website: www.cibcmellon.com Website: www.barrick.com BNY MELLON SHAREOWNER SERVICES SHARES LISTED 480 Washington Blvd. – 27th Floor ABX – The New York Stock Exchange Jersey City, NJ 07310 The Toronto Stock Exchange Tel: 1-800-589-9836 Fax: (201) 680-4665 Email: [email protected] Website: www.melloninvestor.com
INVESTOR CONTACT MEDIA CONTACT Deni Nicoski Vincent Borg Vice President, Investor Relations Executive Vice President, Corporate Communications Tel: (416) 307-7410 Tel: (416) 307-7477 Email: [email protected] Email: [email protected]
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained in this Second Quarter Report 2010, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, "expect", "will", “anticipate”, “contemplate”, “target”, “plan”, “continue”, “budget”, “may”, “intend”, “estimate” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: 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; changes in the worldwide price of gold, copper or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; adverse changes in our credit rating, level of indebtedness and liquidity, contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company’s most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.
The Company disclaims 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.