BARRICK SECOND QUARTER 2012 PRESS RELEASE 1 SECOND QUARTER REPORT 2012 Based on IFRS and expressed in US dollars. For a full explanation of results, the Financial Statements and Management Discussion & Analysis,
Based on IFRS and expressed in US dollars. For a full explanation of results, the Financial Statements and Management Discussion & Analysis, please see the company’s website, www.barrick.com.
Barrick Announces Second Quarter 2012 Results Pascua-Lama Cost Estimate Revised — First Production in Mid-2014
TORONTO, July 26, 2012 – Barrick Gold Corporation (NYSE: ABX, TSX: ABX) (Barrick or the “company”) today reported net earnings of $0.75 billion ($0.75 per share) compared to net earnings of $1.16 billion ($1.16 per share) in the same prior year quarter. Adjusted net earnings were $0.78 billion ($0.78 per share)1 compared to $1.12 billion ($1.12 per share) in the second quarter of 2011. Operating cash flow and adjusted operating cash flow of $0.76 billion1 compare to operating cash flow of $0.75 billion and adjusted operating cash flow of $0.94 billion, respectively, in the same prior year quarter.
Operating Highlights
- Gold and copper production of 1.74 million ounces and 109 million pounds, respectively
- Gold total cash costs of $613 per ounce1 and net cash costs of $534 per ounce1
- Gold total cash margins of $995 per ounce1, and net cash margins of $1,074 per ounce1
- C1 copper cash costs of $2.28 per pound1 and C1 copper cash margins of $1.17 per pound1
Pascua-Lama Cost Increase
- Due to lower than expected productivity and persistent inflationary and other cost pressures, as previously disclosed, the company initiated a detailed review of the cost and schedule estimates for Pascua-Lama in the second quarter. Preliminary results currently indicate an approximate 50-60 percent increase in capital costs from the top end of the previously announced estimate of $4.7-$5.0 billion, with first production expected in mid-2014. The company will provide a further progress update with third quarter results.
Pueblo Viejo Completion
- Construction of the Pueblo Viejo and Jabal Sayid projects is essentially complete and capital costs for both projects are anticipated to be within guidance. First gold from Pueblo Viejo is expected in August and initial copper production from Jabal Sayid is anticipated in the third quarter.
2012 and Longer Term Outlook
- Expected gold production for 2012 continues to be in the range of 7.3-7.8 million ounces. Total and net cash costs for gold are now anticipated to be slightly higher in the range of $550-$575 per ounce and $460-$500 per ounce2, respectively, primarily as a result of higher first half costs in Australia Pacific and at African Barrick Gold. Expected copper production for 2012 has been adjusted to 460-500 million pounds, primarily reflecting lower than expected production from Lumwana, and C1 cash costs are expected to be $2.10-$2.30 per pound. Total capital expenditures for 2012 are now anticipated to be $6.0-$6.3 billion.3
- In light of the current economic environment and Barrick’s increased rigor on disciplined capital allocation, the company has determined that various pipeline projects do not currently meet its investment hurdles. As a result, our gold and copper production base is now expected to be 8+ million ounces by 2015 and 600+ million pounds by 2013, respectively, representing a high quality and profitable core from which to expand further.
1 Adjusted net earnings, adjusted operating cash flow, gold total cash costs and net cash costs per ounce, gold total cash margins and net cash margins per ounce, C1 copper cash costs and C1 copper cash margins per pound are non- GAAP financial measures. See pages 44-48 of Barrick’s Q2 2012 Report.
2 Based on an assumed realized copper price of $3.50 per pound for the balance of 2012.
3 Reflects the increase in Pascua-Lama capital expenditures.
BARRICK SECOND QUARTER 2012 PRESS RELEASE
“Our second quarter earnings reflected lower gold cash flow of $0.75 billion and adjusted operating cash production and higher operating costs as anticipated, but flow of $0.94 billion, respectively, in the second quarter we continue to generate strong financial results and of 2011. The higher operating cash flow primarily reflects expect to have a stronger second half,” said Jamie a decrease in net working capital outflows and income Sokalsky, President and Chief Executive Officer. “We have tax payments, as well as the impact of one-time announced a schedule delay and an increase in capital at acquisition related costs on operating cash flow in the Pascua-Lama, as well as some short term production second quarter of 2011, partially offset by lower net challenges at Lumwana. These are disappointing develop- earnings. EBITDA for the second quarter was $1.51 billion4 ments but we are focused on addressing these challenges compared to $2.09 billion in the same prior year period, and they are my top priorities. We are taking immediate reflecting the same factors affecting net earnings, except and strong action to get both on the right path. for income tax expense.
I have also initiated a thorough review of our mines The second quarter realized gold price was $1,608 and projects to evaluate their rates of return and ability per ounce4, six percent higher than the same prior year to generate free cash flow as part of a more disciplined period. Gold total cash margins and net cash margins capital allocation framework. In my view, rate of return were $995 per ounce and $1,074 per ounce compared to should drive production, not the other way around. Our $1,068 per ounce and $1,177 per ounce in the second new Pueblo Viejo mine is an excellent example of an quarter of 2011. The realized copper price in the second investment with an attractive rate of return that will quarter was $3.45 per pound4, 15 percent lower than the generate free cash flow. I am very pleased to report that same prior year quarter.
it has been completed on schedule and will begin contributing low cost ounces shortly.” PRODUCTION AND COSTS Second quarter gold production was 1.74 million ounces FINANCIAL AND OPERATING RESULTS at total cash costs of $613 per ounce and net cash costs Reported net earnings were $0.75 billion or $0.75 per of $534 per ounce. As previously disclosed, gold share compared to $1.16 billion or $1.16 per share in the production in the second quarter was expected to be same prior year quarter. Net adjusting items in the lower and total cash costs higher than the first quarter, quarter totaled $34 million and significant components of with better results anticipated in the second half as lower this include: cost mines contribute to a greater proportion of company
- $29 million in tax adjustments related to a rate production. Second quarter copper production of 109 change in Canada and a foreign income tax million pounds at C1 cash costs of $2.28 per pound assessment primarily reflects the impact of a waste stripping deficit
- $25 million in asset impairment charges (primarily accumulated in prior years as well as planned mill related to available-for-sale investments) maintenance and the expected impact of the rainy
- $17 million in unrealized foreign currency translation season on ground conditions at Lumwana.
losses North America Regional Business Unit
- $12 million in severance costs Second quarter 2012 adjusted net earnings were North America produced 0.85 million ounces at total
$0.78 billion or $0.78 per share compared to $1.12 billion cash costs of $516 per ounce in the second quarter. or $1.12 per share in the same prior year period. The Cortez production of 0.38 million ounces at total cash lower net earnings and adjusted net earnings primarily costs of $286 per ounce in the second quarter exceeded reflect higher cost of sales for gold and copper, lower expectations on higher than expected underground gold sales volumes and lower realized copper prices, grades and higher ore tons from the open pit.
partially offset by higher realized gold prices, higher Goldstrike produced 0.25 million ounces at total cash copper sales volumes and lower income tax expense. costs of $616 per ounce. As indicated with first quarter Operating cash flow and adjusted operating cash 4 EBITDA and realized gold and copper prices per ounce/pound are non-GAAP financial measures. See pages flow of $0.76 billion for the quarter compare to operating 44-48 of Barrick’s Q2 2012 Report.
BARRICK SECOND QUARTER 2012 2 PRESS RELEASE
results, production in the second quarter was impacted higher energy costs. Barrick’s share of 2012 production by lower throughput capacity due to the planned continues to be expected at 0.500-0.535 million ounces. shutdown of the roaster for maintenance. Goldstrike is Total cash costs are expected to be at the top end of the expected to benefit in the second half of the year from original $790-$860 per ounce range.
increased throughput capacity following maintenance improvements implemented during the first half and from Copper access to higher grades with completion of underground The Zaldívar copper mine in Chile produced 73 million development. We continue to expect full year production pounds at C1 cash costs of $1.56 per pound in the second for the region to be in the range of 3.425-3.60 million quarter. The Lumwana mine in Zambia produced 36 million ounces at total cash costs of $475-$525 per ounce. pounds of copper at C1 cash costs of $3.53 per pound. Previous ownership at Lumwana planned and South America Regional Business Unit operated the mine with a view to maximizing short-term South America produced 0.33 million ounces at total production. Production and C1 cash costs have been cash costs of $458 per ounce in the second quarter. The primarily constrained by a historical waste stripping Veladero mine produced 0.16 million ounces at total cash deficit, and, as previously disclosed with our first quarter costs of $397 per ounce. The mine experienced lower results, were expected to be impacted in the second equipment availability as well as lower recoveries due to quarter by planned mill maintenance and poor ground slower leach kinetics in addition to expected lower grades. conditions from the wet season, which also led to lower At Lagunas Norte, production of 0.14 million ounces at than anticipated equipment availability. Barrick has total cash costs of $365 per ounce reflected mine determined it needs to advance a number of key sequencing and was also impacted by water management initiatives at Lumwana in order to improve site issues which restricted access to high grade areas of the performance and maximize longer-term returns and open pit. Lagunas Norte is expected to return to higher value. These initiatives include:
production levels in the second half of the year with • increased waste stripping access to higher grades following the completion of pit • migration to owner maintenance, currently dewatering. We continue to expect full year production underway, to improve maintenance practices and for the region to be in the range of 1.55-1.70 million equipment availability ounces at total cash costs of $430-$480 per ounce. • infrastructure improvements to mitigate the impact of the annual rainy season Australia Pacific Regional Business Unit • key leadership changes at site, the majority of which Australia Pacific produced 0.45 million ounces at total were recently made cash costs of $844 per ounce in the second quarter. The In addition, the company will increasingly focus on Porgera mine produced 0.10 million ounces at total cash advancing work around the large Chimiwungo deposit, costs of $1,014 per ounce, primarily reflecting lower which is the primary future ore supply for the operation. underground tons mined. Expected full year production As a result of a weaker than expected first half for Australia Pacific continues to be 1.80-1.95 million performance from the Malundwe pit and efforts to ounces. Total cash costs are now anticipated to be in the advance these key initiatives, we now expect 2012 $770-$800 per ounce range in 2012 compared to the production from Lumwana to be 145-165 million pounds original guidance range of $700-$750 per ounce, primarily at C1 cash costs of $3.30-$3.50 per pound. Overall higher due to higher total cash costs in the first half of the year grades are expected in 2013, with production anticipated at Porgera and a similar outlook for the second half. to be about 250 million pounds at lower C1 cash costs. Beyond 2013, the scale of the Chimiwungo African Barrick Gold plc (ABG) orebody is expected to allow for more productive Second quarter attributable production from ABG was mining. The expansion into the Chimiwungo deposit is 0.11 million ounces at total cash costs of $950 per ounce, on schedule. Commissioning of the crusher and mainly reflecting lower grades from Buzwagi, as well as overland conveyor system was completed in July and mill
BARRICK SECOND QUARTER 2012 3 PRESS RELEASE
feed is expected in early August. About one million to add to and upgrade gold and copper resources in 2012tonnes of ore have been stockpiled to date. 2013 and directly contribute to various planned scoping, Exploration results to date continue to confirm the prefeasibility and expansion studies.
significant upside potential of Chimiwungo. We are also In Nevada, over 50 drill rigs are currently operating, 12 conducting a substantial infill drilling program to provide of which are located at Goldrush. Overall, the robustness a more precise model of the ore body for mine planning and continuity of the Goldrush system continues to be purposes. These programs are expected to be completed demonstrated. The limits of the entire system still remain at the end of the year and will form the basis for an open in multiple directions. Based on results to date, a updated resource base and life-of-mine plan. They will significant increase is expected by 2012 year end to the also be incorporated into a prefeasibility study on the already defined indicated resource of 1.3 million ounces expansion opportunity for Lumwana, which has the and inferred resource of 5.7 million ounces7.
potential to double processing rates. At Lumwana, the full contingent of 23 exploration The company has floor protection on approximately drill rigs is operating at Chimiwungo. Drilling to date has 60 percent of its expected copper production for the increased confidence in the ability to substantially upgrade remainder of 2012 at an average floor price of $3.75 per resource categorization and has also demonstrated pound5 and has full participation to any upside in copper strong potential for resource expansion outside of prices. current reserve and resource areas. Favorably thickened ore zones, grading 0.8 percent copper on average in the COST MANAGEMENT Equinox and Roan Shoots, are being intersected both Barrick continues to employ key risk management within the current inferred resource areas as well as in strategies which have helped manage our cost areas of no previously defined resources, adjacent to and exposures, maximize margins and give predictability to along the trend of these ore shoots.
our earnings. Results have also identified strong mineralization The largest currency exposure for the company is between the shoots, typically grading 0.7-0.8 percent the Australian dollar/US dollar exchange rate. Barrick is copper. This Intershoot zone appears to project to depths substantially hedged on its remaining Australian of less than 150 meters from surface, which could operating and administrative expenditures for 2012 at an favorably impact near term development opportunities effective average rate of $0.80. The company is also 94 and offer significantly more operational flexibility. percent hedged on expected Australian operating These results are expected to significantly grow 2011 expenditures in 2013 at an effective average rate of copper reserves and resources, which had already been $0.84. Additional hedge coverage is also in place for increased by about 75 percent from the pre-acquisition 2014-2016 at levels below current rates. copper inventory to 4.9 billion pounds of proven and The company has also mitigated the impact of higher probable reserves, 2.1 billion pounds of measured and crude oil prices through the use of financial contracts indicated resources and 10.7 billion pounds of inferred and production from Barrick Energy. The Barrick Energy resources7.
contribution, along with the financial contracts, provides hedge protection for approximately 70 percent of the PROJECT UPDATE expected remaining 2012 fuel consumption. Pueblo Viejo Construction of the 60 percent-owned Pueblo Viejo EXPLORATION UPDATE project in the Dominican Republic has been essentially The 2012 exploration budget is $450-$490 million6, of completed on schedule. Mine construction capital is which over 40 percent is for major exploration programs expected to be within the previously disclosed guidance at Goldrush, Lumwana and Turquoise Ridge. These are of $3.6-$3.8 billion (100 percent basis) or $2.2-$2.3 billion key projects with large drill programs which are expected
5 The average realized price on total 2012 production is expected to be reduced by approximately $0.17 per authorities. For a breakdown of reserves and resources by category and additional information relating to 7 Calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory
pound as a result of the net premium paid for these positions. reserves and resources, see pages 161-166 of Barrick’s 2011 Year-End Report.
6 Barrick’s exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick.
BARRICK SECOND QUARTER 2012 4 PRESS RELEASE
(Barrick’s 60 percent share). First gold is expected in previously announced estimate of $4.7-$5.0 billion. August and commercial production continues to be Approximately $3 billion has been spent to date. anticipated in the fourth quarter of 2012. Pueblo Viejo is Inflationary pressures have also had an impact on total expected to contribute approximately 100,000-125,000 cash costs, which are now expected to be $0 to negative ounces of gold to Barrick at total cash costs of $400- $150 per ounce based on a silver price of $25 per $500 per ounce8 in 2012 as it ramps up to full production ounce10.
in 2013. Barrick’s 60 percent share of annual gold Based on information gathered to date, it is apparent production in the first full five years of operation is that the challenges of building a project of this scale and expected to average 625,000-675,000 ounces at total complexity were greater than we anticipated. We also cash costs of $300-$350 per ounce9. determined that we needed to re-align the project About 16.4 million tonnes of ore, representing management structure between Barrick and our EPCM approximately 1.9 million contained gold ounces, has partners, Fluor and Techint. We have taken immediate been stockpiled to date. During the quarter, construction actions to address these issues. We are strengthening on the tailings starter dam advanced to in excess of 175 the project management structure by seeking to have meters. The mine is now fully connected to the national Fluor take over a greater proportion of the construction grid and has also secured additional supplemental onsite management of the project. Barrick is also working with power. Major systems completed and commissioned Fluor and Techint to develop an integrated action plan include: the water supply system, main switch yard and that ensures the scope of remaining work is well planned harmonic filters, ore and limestone crushing and and executed and has also engaged a leading EPCM grinding, the first two of four autoclaves, the oxygen organization to provide an independent assessment of plant (with the first of two trains in production) and the the status of the project. We will provide a further first of three lime kilns. progress update with third quarter results.
Construction is well advanced on a 215 MW dual fuel The key factors contributing to the capital cost power plant at an estimated net incremental cost of increase are:
approximately $300 million (100 percent basis) or $180 • lower than expected contractor productivity (~30%) million (Barrick’s 60 percent share). The power plant is • engineering and planning gaps (~25%)
expected to commence operations in 2013 utilizing heavy • cost escalation (~25%)
fuel oil, but have the ability to subsequently transition to • schedule extension (~20%)
lower cost liquid natural gas. The delay to the schedule arises primarily from delays to completing the camps, tunnel and process plant. Pascua-Lama In addition to the major change being made to Pascua-Lama is expected to be one of the world’s largest, construction management, we are also taking a series of lowest cost mines and, once in production, is expected to other steps to mitigate the schedule and cost pressures. contribute significant free cash flow to Barrick for many We have expedited procurement of key equipment and years to come. As previously disclosed with our first supplies to protect against adverse forward price quarter results, due to lower than expected productivity movements and expanded procurement efforts in local and persistent inflationary and other cost pressures, the markets. We have had notable successes with the company initiated a detailed review of Pascua-Lama’s fabrication and procurement of tanks and power schedule and cost estimate in the second quarter. transformers which are now being sourced in Argentina. While the review is not yet complete, preliminary We have also been ensuring since last year that, to the results currently indicate that initial gold production is extent possible, new contracts for major work packages now expected in mid-2014, with an approximate 50-60 are done on a fixed fee basis, which should help mitigate percent increase in capital costs from the top end of the significant labor cost increases.
8 Based on a WTI oil price assumption of $90/bbl. The 2012 total cash cost estimate is dependent on the rate at which production ramps up after commercial levels of production are achieved. A change in the efficiency of the ramp up could have a significant impact on this estimate. 10 First full five year average. Based on gold, silver and WTI oil price assumptions of $1,300/oz, $25/oz and 9 Based on gold and WTI oil price assumptions of $1,300/oz and $90/bbl, respectively. Does not include $90/bbl, respectively, and assuming a Chilean Peso assumption of 475:1. Inflation escalation assumptions escalation for future inflation. are as of Q2 2012, and do not include escalation for future inflation.
BARRICK SECOND QUARTER 2012 5 PRESS RELEASE
During the second quarter, the project achieved PROJECTS IN FEASIBILITY AND PERMITTING critical milestones with completion of Phase 1 of the Barrick is evaluating its next tier of projects. Cerro Casale pioneering road and also the water management system and Donlin Gold do not currently meet our investment in Chile, both of which enabled the commencement of criteria, primarily due to their large initial capital pre-stripping activities. At the end of the second quarter, investments, and under our disciplined capital allocation the tunnel was about 40 percent complete, the power- framework we would not make a decision to construct line in Chile was about 50 percent complete, and them at this time. However, they contain large, long life approximately 75 percent of the targeted 10,000 beds mineral resources in stable jurisdictions, have significant were available. leverage to the price of gold, and therefore represent While Pascua-Lama has some unique challenges, it is valuable long-term opportunities for the company. We a world-class resource with nearly 18 million ounces of will maintain and enhance the option value of these proven and probable gold reserves plus silver contained projects by advancing permitting activities at reasonable within gold reserves of 676 million ounces7. Annual gold costs which, in the case of Donlin Gold, will take a number and silver production in the first full five years of a 25 of years. During this time, we will monitor the year mine life is expected to average 800,000-850,000 attractiveness of these projects and evaluate alternatives ounces and 35 million ounces, respectively. to improve their economics. This will provide the company with the option to make construction decisions Jabal Sayid in the future should investment conditions warrant. Construction of the Jabal Sayid copper project in Saudi Arabia has been essentially completed and total project 2012 OUTLOOK capital expenditures are expected to be approximately Barrick maintains its full year gold production guidance of $400 million11, in line with expectations. Current efforts 7.3-7.8 million ounces. As previously indicated, production are focused on completing pre-commissioning testing. is expected to be higher in the second half of 2012 The ore crushing circuit is complete and ore is expected compared to the first half as production commences at to be processed in the third quarter. Pueblo Viejo and as Goldstrike and Lagunas Norte The mine has received approval of the Environmental contribute to a greater proportion of production.
and Social Impact Assessment (ESIA) permit relating to Total and net cash costs for gold are now expected construction and project commissioning. Additional to be slightly higher in the range of $550-$575 per ounce safety and security design engineering is being and $460-$500 per ounce, respectively, mainly due to completed to enable shipments of concentrates to higher costs in Australia Pacific and at African Barrick commence by mid-2013. Gold in the first half of the year. Total cash costs are Approximately 320,000 tons of underground ore had expected to be lower in the second half as a result of been mined at the end of the second quarter, significantly higher overall production levels and lower representing about 17.2 million contained pounds of cost mines contributing to a greater share of total copper. Jabal Sayid is expected to produce 25-35 million company production.
pounds of copper in 2012, slightly below original guidance Full year copper production is now expected to be as plant commissioning has been delayed by one month. 460-500 million pounds, primarily as a result of lower This production will be included within finished goods than anticipated production from Lumwana, at C1 cash inventory until the project is in receipt of authorization to costs of $2.10-$2.30 per pound.
enable the shipment of concentrates. Average annual production from Jabal Sayid is expected to be 100-130 CAPITAL ALLOCATION FRAMEWORK million pounds over the first full five years of operation Barrick’s renewed focus on maximizing shareholder value at C1 cash costs of $1.50-$1.70 per pound12. will be achieved through a disciplined approach to capital allocation based on maximizing returns on investment and free cash flow within the context of the prevailing
11 Includes approximately $125 million in incurred costs prior to Barrick’s acquisition of Equinox Minerals in 2011.
12 Does not include escalation for future inflation.
BARRICK SECOND QUARTER 2012 6 PRESS RELEASE
economic and political environment. Under this approach, As a result, our annual gold production base is now all capital allocation options, which include organic expected to be 8+ million ounces by 2015 once Pueblo investment in exploration and projects, and acquisitions Viejo and Pascua-Lama are in full production. Our annual or divestitures to improve the quality of our portfolio, will base copper production is expected to be 600+ million be assessed on the basis of maximizing risk-adjusted pounds by 2013, with the opportunity to increase to more returns. Our increased emphasis on free cash flow will than 1 billion pounds should the company decide to proceed position the company with the potential to return more with the Zaldívar Sulfides expansion and the Lumwana capital to shareholders, repay debt, and make additional expansion. This production base represents a high quality attractive return investments to upgrade our portfolio. and profitable core on which to expand further.
The company has recently launched a full review of its operations and projects to ensure they meet our * * * * objective of delivering appropriate risk-adjusted returns and maximizing free cash flow generation. In light of the Barrick’s vision is to be the world’s best gold company by current economic environment and this increased rigor finding, acquiring, developing and producing quality on disciplined capital allocation, we have determined that reserves in a safe, profitable and socially responsible various pipeline projects do not currently meet our manner. Barrick’s shares are traded on the Toronto and investment criteria. New York stock exchanges.
BARRICK SECOND QUARTER 2012 7 PRESS RELEASE
Key Statistics
| Barrick Gold Corporation | Three months ended | Six months ended |
| (in United States dollars) | June 30, | June 30, |
| (Unaudited) | 2012 2011 | 2012 2011 |
Operating Results Gold production (thousands of ounces)1 1,742 1,977 3,623 3,934 Gold sold (thousands of ounces) 1,690 1,915 3,473 3,778 Per ounce data Average spot gold price $ 1,609 $ 1,506 $ 1,651 $ 1,445
| Average realized gold price2 | 1,608 | 1,513 | 1,651 | 1,452 |
| Net cash costs2 | 534 | 336 | 483 | 322 |
| Total cash costs2 | 613 | 445 | 580 | 441 |
| Depreciation3 | 185 | 152 | 182 | 147 |
| 12 | 17 | 13 | 16 |
Other4 810 775
| Total production costs | 614 | 604 | ||
| Copper credits | 79 | 109 | 97 | 119 |
| Copper production (millions of pounds) | 109 | 93 | 226 | 168 |
| Copper sold (millions of pounds) | 116 | 82 | 234 | 162 |
Per pound data
| Average spot copper price | $3.57 | $ | ||
| 4.14 | $3.67 | $4.26 | ||
| Average realized copper price2 | 3.45 | 4.07 | 3.62 | 4.16 |
| 2.28 | 1.54 | 2.18 | 1.39 |
C1 cash costs2
| Depreciation3 | 0.55 | 0.26 | 0.50 | 0.25 |
| Other5 | 0.14 | 0.29 | 0.14 | 0.14 |
| 2.97 | 2.09 | 2.82 | 1.78 |
C3 fully allocated costs2 Financial Results (millions)
Revenues $ 3,278 $ 3,416 $ 6,922 $ 6,503 Net earnings6 750 1,159 1,779 2,160 Adjusted net earnings2 784 1,117 1,870 2,121
| EBITDA2 | 1,514 | 2,090 | 3,511 | 3,918 |
| Operating cash flow | 763 | 750 | 2,035 | 2,189 |
| Adjusted operating cash flow2 | 763 | 938 | 2,137 | 2,377 |
Per Share Data (dollars)
Net earnings (basic) 0.75 1.16 1.78 2.16 Adjusted net earnings (basic)2 Adjusted net earnings (basic)2 0 78 0.78 1 12 1.12 1 87 1.87 2 12 2.12
| Net earnings (diluted) | 0.75 | 1.16 | 1.78 | 2.16 |
| Weighted average basic common shares (millions) | 1,000 | 999 | 1,000 | 999 |
| Weighted average diluted common shares (millions)7 | 1,001 | 1,001 | 1,001 | 1,001 |
| Return on equity2 | 13% | 21% | 16% | 21% |
As at As at June 30, December 31, 2012 2011 Financial Position (millions)
Cash and equivalents $ 2,330 $ 2,745
| Non-cash working capital | 2,902 | 2,335 |
| Adjusted debt2 | 13,667 | 13,058 |
| Net debt2 | 11,354 | 10,320 |
| Average shareholders' equity | 24,031 | 21,418 |
1 Production includes our equity share of gold production at Highland Gold up to April 26, 2012, the effective date of our sale of Highland Gold.
2 Realized price, net cash costs, total cash costs, C1 cash costs, C3 fully allocated costs, adjusted net earnings, EBITDA, adjusted operating cash flow, adjusted debt, net debt, and return on equity are non-GAAP financial performance measures with no standard definition under IFRS. See pages 44-48 of the Company's MD&A.
3 Represents equity amortization expense divided by equity ounces of gold sold or pounds of copper sold.
4 Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
5 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound on page 46 of the Company's MD&A.
6 Net earnings represents net income attributable to the equity holders of the Company.
7 Fully diluted includes dilutive effect of stock options.
BARRICK SECOND QUARTER 2012 8 8 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
| Three months ended | Six months ended | Three months ended | Six months ended | ||||
|---|---|---|---|---|---|---|---|
| June 30, | June 30, | June 30, | June 30, | ||||
| (Unaudited) 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| North America 854 | 923 | 1,742 | 1,785 | $516 $ |
404 $ 505 $ 400
| South America | 327 | 453 | 778 | 951 | 458 | 373 | 435 | 358 |
| Australia Pacific | 445 | 463 | 871 | 922 | 844 | 611 | 798 | 597 |
| African Barrick Gold1 | 113 | 127 | 220 | 256 | 950 | 652 | 938 | 655 |
| Other2 | 3 | 11 | 12 | 20 | - | - | - | - |
| Total | 1,742 | 1,977 | 3,623 | 3,934 | $613 $ |
445 $ 580 $ 441
Copper Production (attributable pounds) (Millions) C1 Cash Costs ($/lb)
| Three months ended | Six months ended | Three months ended | Six months ended | |||||
|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | June 30, | June 30, | |||||
| (Unaudited) | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Total | 109 | 93 | 226 | 168 | $ |
2.28 $ 1.54 $ 2.18 $ 1.39
Total Gold Production Costs ($/oz) Three months ended Six months ended June 30, June 30, (Unaudited) 2012 2011 2012 2011 Direct mining costs at market foreign exchange rates $ 642 $ 501 $ 619 $
| Gains realized on currency hedge and commodity hedge/economic hedge contracts | (40) | (57) | (49) | (51) |
| Other3 | (12) | (17) | (13) | (16) |
| By-product credits | (18) | (19) | (17) | (18) |
| Copper credits | (79) | (109) | (97) | (119) |
| Cash operating costs, net basis | 493 | 299 | 443 | 285 |
| Royalties | 41 | 37 | 40 | 37 |
| 534 | 336 | 483 | 322 |
Net cash costs4
| Copper credits | 79 | 109 | 97 | 119 |
| Total cash costs4 | 613 | 445 | 580 | 441 |
| Depreciation | 185 | 152 | 182 | 147 |
12 17 17 13 13 16 Total production costs $ 810 $ 614 $ 775 $
Total Copper Production Costs ($/lb) Three months ended Six months ended June 30, June 30, (Unaudited) 2012 2011 2012 2011 C1 cash costs4 2.28 $ 1.54 $ 2.18 $ 1.39 $ Depreciation 0.55 0.26 0.50 0.25 Other5 0.14 0.29 0.14 0.14 C3 fully allocated costs4 2.97 $ 2.09 $ 2.82 $ 1.78 $
1 Figures relating to African Barrick Gold are presented on a 73.9% basis, which reflects our equity share of production.
2 Includes our equity share of gold production at Highland Gold up to April 26, 2012, the effective date of our sale of Highland Gold.
3 Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
4 Total cash costs, net cash costs, C1 cash costs and C3 fully allocated costs are non-GAAP financial performance measures with no standard meaning under IFRS. See page 45 of the Company's MD&A.
5 For a breakdown, see reconciliation of cost of sales to C1 cash costs and C3 fully allocated costs per pound on page 45 of the Company's MD&A.
BARRICK SECOND QUARTER 2012 9 9 SUMMARY INFORMATION
Consolidated Statements of Income
Three months ended Six months ended Barrick Gold Corporation (in millions of United States dollars, except per share data) (Unaudited) June 30, June 30, 2012 2011 2012 2011
Revenue (notes 4 and 5) $ 3,278 $ 3,416 $ 6,922 $ 6,503 Costs and expenses
| Cost of sales (notes 4 and 6) | 1,830 | 1,486 | 3,600 | 2,840 |
| Corporate administration | 41 | 38 | 89 | 80 |
| Exploration and evaluation (note 7) | 102 | 89 | 198 | 154 |
| Other expense (note 9A) | 144 | 127 | 219 | 256 |
| Impairment charges (note 9B) | 28 | 4 | 122 | 4 |
| 2,145 | 1,744 | 4,228 | 3,334 | |
| Other income (note 9C) | 17 | 91 | 39 | 162 |
| Income (loss) from equity investees (note 13) | (2) | 4 | (6) | 5 |
| Gain (loss) on non-hedge derivatives (note 17D) | (34) | 7 | - | (24) |
| Income before finance items and income taxes | 1,114 | 1,774 | 2,727 | 3,312 |
Finance items (note 10)
| Finance income | 3 | 4 | 6 | 7 |
| Finance costs | (52) | (48) | (100) | (80) |
| Income before income taxes | 1,065 | 1,730 | 2,633 | 3,239 |
| Income tax expense (note 11) | (311) | (550) | (840) | (1,044) |
| Net income | $754 | $1,180 $ |
1,793 $ 2,195 Attributable to:
Equity holders of Barrick Gold Corporation $ 750 $ 1,159 $ 1,779 $ 2,160 Non-controlling interests (note 21) $ 4 $ 21 $ 14 $ 35
E Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 8)
i h d t tt ib t bl t th it h ld f B i k G ld C ti ( t 8)
Net income Basic $ 0.75 $ 1.16 $ 1.78 $ 2.16 Diluted $ 0.75 $ 1.16 $ 1.78 $ 2.16
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2012 10 10 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Comprehensive Income
| Barrick Gold Corporation | Three months ended | Six months ended |
|---|---|---|
| (in millions of United States dollars) (Unaudited) | June 30, | June 30, |
| 2012 | 2011 2012 2011 |
Net income $ 754 $ 1,180 $ 1,793 $ 2,195 Other comprehensive income (loss), net of taxes
| Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $4, $1, $3, $3 | (38) | (5) | (37) | 5 |
| Realized (gains) losses and impairments on AFS financial securities, net of tax $3, $5, $2, $5 | 27 | (44) | 28 | (44) |
| Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax $1, $18, $2, $13 | 73 | 185 | 59 | 327 |
| Realized (gains) on derivatives designated as cash flow hedges, net of tax $17, $30, $45, $46 | (78) | (103) | (159) | (176) |
| Currency translation adjustments, net of tax $nil, $nil, $nil, $nil | (13) | 5 | 1 | 33 |
| Total other comprehensive income (loss) | (29) | 38 | (108) | 145 |
725 $ 1,218 $ 1,685 $ 2,340 Total comprehensive income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 721 $ 1,197 $ 1,671 $ 2,305 Non-controlling interests $ 4 $ 21 $ 14 $ 35
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2012 11 11 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Cash Flow
Barrick Gold Corporation Three months ended Six months ended (in millions of United States dollars) (Unaudited) June 30, June 30, 2012 2011 2012 2011 OPERATING ACTIVITIES Net income $ 754 $ 1,180 $ 1,793 $ 2,195 Adjusted for the following items:
| Depreciation | 404 | 337 | 798 | 641 |
| Impairment charges (note 9B) | 28 | 4 | 122 | 4 |
| Income tax expense (note 11) | 311 | 550 | 840 | 1,044 |
| Increase in inventory | (254) | (200) | (466) | (256) |
| (Gain) loss on non-hedge derivatives | 34 | (7) | - | 24 |
| (Gain) on sale of long-lived assets/investments | (10) | (86) | (20) | (156) |
| Other (note 12A) | 148 | (261) | 2 | (232) |
| Operating cash flows before interest and income taxes | 1,415 | 1,517 | 3,069 | 3,264 |
| Gross interest paid | (46) | (31) | (67) | (51) |
| Income taxes paid | (606) | (736) | (967) | (1,024) |
| Net cash provided by operating activities | 763 | 750 | 2,035 | 2,189 |
INVESTING ACTIVITIES Property, plant and equipment
| Capital expenditures (note 4) | (1,582) | (1,068) | (2,897) | (2,139) |
| Sales proceeds | 9 | 3 | 9 | 33 |
| Acquisitions (note 3) | (15) | (7,315) | (15) | (7,340) |
Investments
| Purchases | - | (2) | - | (9) |
| Sales | 130 | 51 | 167 | 71 |
| Other investing activities (note 12B) | (105) | (123) | (160) | (137) |
| Net cash used in investing activities | (1,563) | (8,454) | (2,896) | (9,521) |
FINANCING ACTIVITIES Proceeds on exercise of stock options 1 10 5 31 Long-term debt Proceeds 2,000 6,500 2,000 6,659 Repayments (1,439) (347) (1,446) (349) Dividends Dividends (200)
(200) (120)
(120) (350)
(350) (240) (240)
| Funding from non-controlling interests | 118 | 122 | 258 | 179 |
| Other financing activities (note 12C) | (11) | (50) | (25) | (65) |
| Net cash provided by (used in) financing activities | 469 | 6,115 | 442 | 6,215 |
| Effect of exchange rate changes on cash and equivalents | (4) | 9 | 4 | 12 |
| Net increase (decrease) in cash and equivalents | (335) | (1,580) | (415) | (1,105) |
| Cash and equivalents at beginning of period(note 17A) | 2,665 | 4,443 | 2,745 | 3,968 |
| Cash and equivalents at end of period(note 17A) | $2,330 | $ |
2,863 $ 2,330 $ 2,863
The notes to these unaudited interim financial statements, which are contained in the Second Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK SECOND QUARTER 2012 12 12 FINANCIAL STATEMENTS (UNAUDITED)