For a full explanation of results, the Financial Statements and Management Discussion & Analysis, 2011 outlook, mine statistics and mineral reserves and resources,
FOURTH QUARTER AND YEAR-END REPORT 2010 For a full explanation of results, the Financial Statements FEBRUARY 17, 2011 and Management Discussion & Analysis, 2011 outlook, mine statistics and mineral reserves and resources, Based on US GAAP and expressed in US dollars please see the Company’s website, www.barrick.com. Barrick Reports Q4 2010 Financial and Operating Results
| Highlights | |
| • Q4 reported net income was a record $896 million ($0.90 per share). Q4 adjusted net income rose 57% to $947 million ($0.95 per share)1 compared to $604 million ($0.61 per share) in Q4 2009. Operating cash flow was $781 million and adjusted operating cash flow set a new Company record rising 56% to $1.44 billion1 from $921 million in the prior year period. • Q4 gold production of 1.70 million ounces at total cash costs of $486 per ounce1 or net cash costs of $326 per ounce1 was in line with expectations on a strong performance from the North America region. Higher production and lower cash costs were realized in 2010 as compared to the prior year. Full year production of 7.77 million ounces at total and net cash costs of $457 and $341 per ounce1, respectively, was in line with original guidance despite higher royalties and taxes associated with higher gold prices. • Q4 cash margins continued to benefit from rising gold prices increasing 35% to $882 per ounce1 from $654 per ounce in Q4 2009 and net cash margins rose 29% to $1,042 per ounce1 from $809 per ounce in the prior year period. • The average gold price increased 26% in 2010 while full year adjusted net income rose 81% to $3.28 billion1 and adjusted operating cash flow increased 65% to $4.78 billion1 from 2009, demonstrating the Company’s exceptional leverage to the gold price. Full year adjusted net income translated to a higher return on equity of 19%1 from 12% in 2009. Reported net income and operating cash flow in 2010 were $3.27 billion and $4.13 billion, respectively. • 2011 production is expected to be comparable to 2010 in the range of 7.6-8.0 million ounces at total cash costs of $450- $480 per ounce and net cash costs of $340-$380 per ounce2 (IFRS basis). • The newly expanded Cortez mine exceeded expectations in its first full year of production and the Company continues to advance its project pipeline, including the world-class Pueblo Viejo and Pascua-Lama projects. Preproduction capital budgets are expected to be higher than previous estimates by about 10-15% to $3.3-$3.5 billion (100% basis) and 10- 20% to $3.3-$3.6 billion for Pueblo Viejo and Pascua-Lama, respectively. Despite these increases, Pueblo Viejo and Pascua-Lama continue to have very strong economics. Once at full capacity, these two mines are anticipated to contribute about 1.4 million ounces3 of annual production at low cash costs. • The Company replaced proven and probable gold reserves to an industry leading 139.8 million ounces4 at the end of 2010. Measured and indicated gold resources increased by 14.5 million ounces or 24% to 76.3 million ounces4 and inferred gold resources grew by 5.6 million ounces or 18% to 37.2 million ounces4. • Barrick continues to have a strong financial position, including a quarter-end cash balance of $4.0 billion, low net debt of $2.5 billion1 and robust operating cash flow generation. |
1 Adjusted net income, adjusted operating cash flow, total cash costs per ounce, net cash costs per ounce, cash margins per ounce, net cash margins per ounce, return on equity, and net debt are non-GAAP financial measures. See pages 56-62 of Barrick’s 2010 Year-End Report.
2 Based on an expected realized copper price of $3.75 per pound.
3 1.4 million ounces of production is based on the estimated cumulative average annual production in the first full 5 years once both are at full capacity.
4 Calculated in accordance with National Instrument 43-101 as required by Canadian 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 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 140-145 of Barrick’s 2010 Year-End Report.
BARRICK FOURTH QUARTER AND YEAR-END 2010 PRESS RELEASE
Q4 production of 1.70 million ounces of gold was in replace reserves and grow measured and indicated line with expectations at total and net cash costs of resources by 24% and inferred resources by 18%. $486 and $326 per ounce, respectively. Full year And our focus on value creation opportunities production of 7.77 million ounces at total and within our existing asset base, has now positioned net cash costs of $457 and $341 per ounce, us to increase production to 9 million ounces within respectively, was in line with original guidance five years.”
despite higher royalties and taxes associated with higher realized gold prices. The realized gold price PRODUCTION AND COSTS for the quarter was a record $1,368 per ounce5, The North America region had a strong quarter, 22% higher than the prior year period. Q4 cash producing 0.70 million ounces at total cash costs of margins increased 35% to $882 per ounce from $486 per ounce. The Cortez property produced $654 per ounce in Q4 2009 and net cash margins 0.21 million ounces at total cash costs of $329 per rose 29% to $1,042 per ounce from $809 per ounce. Due to mine sequencing, production was ounce in the same prior year period. expected to be lower in Q4 as previously disclosed, Q4 adjusted net income rose 57% to $947 but is expected to increase again in the first million ($0.95 per share), compared to $604 million quarter of this year. Full year production of 1.14 ($0.61 per share) in Q4 2009, reflecting higher gold million ounces at Cortez exceeded original sales volume and higher realized prices for both guidance of 1.08-1.12 million ounces on higher than gold and copper. Reported Q4 net income of $896 anticipated grades and recoveries from the Cortez million ($0.90 per share) was a Company record. Hills open pit and underground. The Company Q4 operating cash flow of $781 million reflects expects to receive a new Record of Decision for payments to eliminate the remaining settlement Cortez Hills imminently, which will allow the obligation associated with closing the gold sales operation to revert to its original scope. Production contracts in 2009. Q4 adjusted operating cash flow, at Cortez is anticipated to increase to 1.30-1.45 which excludes the impact of these payments, rose million ounces at total cash costs of $235-$265 per 56% to a record $1.44 billion from $921 million in ounce in 2011.
the prior year period. The Goldstrike operation performed strongly, The average gold price increased 26% in 2010, producing 0.29 million ounces at total cash costs of while full year adjusted net income rose 81% to $490 per ounce in Q4, primarily due to better than $3.28 billion and adjusted operating cash flow expected grades from the open pit and higher increased 65% to $4.78 billion from 2009. Full roaster throughput. Full year 2011 production for year reported net income and operating cash flow the North America region is expected to increase to were $3.27 billion and $4.13 billion, respectively. 3.30-3.46 million ounces at total cash costs of “Looking back at 2010, we are pleased with the $425-$450 per ounce driven largely by higher Company’s performance,” said Aaron Regent, production from Cortez.
President and CEO of Barrick Gold. “We met our The South American business unit performed operating targets with higher production at lower as expected, with production of 0.38 million ounces costs than the previous year. This allowed us to at total cash costs of $297 per ounce in Q4. The fully benefit from the increase in the gold price, Veladero mine produced 0.24 million ounces at which resulted in significant expansion of our total cash costs of $252 per ounce in the fourth margins and record earnings and cash flow. quarter. Full year production at Veladero was 1.12 Development of our project pipeline progressed million ounces at total cash costs of $256 per with the successful completion and ramp up of ounce due to access to higher grades and the Cortez Hills, and the continued construction of increased throughput from a crusher expansion Pueblo Viejo and Pascua-Lama. We were able to completed in Q3 2009. The Lagunas Norte operation contributed 0.11 million ounces at total 5 Realized price per ounce is a non-GAAP financial measure. See pages 56-62 of Barrick’s 2010 Year-End Report.
BARRICK FOURTH QUARTER AND YEAR-END 2010 2 PRESS RELEASE
cash costs of $294 per ounce. Based on previously well as general inflation. In December, the disclosed changes to the mine plan, production was Environmental Impact Assessment for the 240 kV expected to be lower in the fourth quarter but is power transmission line was approved allowing anticipated to increase again in the first quarter of associated construction activities to commence. this year. In 2011, South America production is Alternative temporary power sources are being expected to be 1.80-1.935 million ounces at total secured which will allow project commissioning in cash costs of $350-$380 per ounce primarily due the fourth quarter of 2011. First production is to lower grades at Veladero as anticipated in the expected in the first quarter of 2012. Overall mine plan. construction is about 50% complete, approximately The Australia Pacific business unit produced 75% of the capital has been committed and all four 0.49 million ounces at total cash costs of $639 per of the autoclaves are on site and have been placed ounce in Q4. The Porgera mine, the region’s largest on their footings. About 80% of the planned operation, produced 0.14 million ounces at total concrete has been poured, 55% of the steel has cash costs of $578 per ounce. Australia Pacific is been erected and more than 600,000 tons of ore expected to produce 1.85-2.00 million ounces at have been stockpiled. Work continues toward total cash costs of $610-$635 per ounce in 2011. achieving key milestones including the connection The Company is 92% hedged on all of its Australian of power to the site. Barrick’s 60% share of annual operating and capital expenditures in 2011 at an gold production in the first full five years of average rate of $0.79, 84% hedged for 2012 at an operation is expected to average 625,000-675,000 average rate of $0.75, and has substantial ounces at total cash costs of $275-$300 coverage for the following two years at rates at or per ounce8.
below $0.75. At the Pascua-Lama project on the border of Chile and Argentina, pre-production capital is Attributable production from African Barrick Gold plc (ABG) in Q4 was 0.13 million ounces at expected to increase by 10-20% to $3.3-$3.6 billion. Pressure on capital costs are primarily as a result total cash costs of $679 per ounce. Barrick’s share of 2011 production is expected to be 0.515-0.560 of a stronger Chilean peso, labor, commodity and million ounces at total cash costs of $590-$650 other input cost increases in both countries and higher inflation particularly in Argentina. First per ounce.
Q4 copper production was 82 million pounds at production is expected in the first half of 2013. total cash costs of $1.12 per pound6. Utilizing option Approximately 40% of the capital has been collar strategies, the Company has put in place committed, detailed engineering and procurement floor protection at an average floor price of about are more than 90% complete and about 60% of the earthworks necessary for the process plant and $3.00 per pound on approximately 60% of 2011 production and can participate in upside up to an mining support facilities have been moved. average ceiling price of about $4.85 per pound on Construction of the power transmission line has .
approximately 70% of 2011 production7 commenced and the new access road is almost 75% complete. Development of the tunnel, which connects the mine in Chile and the process plant in PROJECTS UPDATE At the Pueblo Viejo project in the Dominican Argentina, is progressing on both sides. Occupancy Republic, preproduction capital is expected to of the construction camps in Chile and Argentina increase by 10-15% from the previous estimate to continues to ramp up with more than 2,000 housed $3.3-$3.5 billion (100% basis). The increased capital on site. Average annual gold production from Pascua-Lama is expected to be 750,000–800,000 cost estimate is largely due to higher labor, power supply, freight and steel product related costs as ounces in the first full five years of operation at
6 Total cash costs per pound is a non-GAAP financial measure. See pages 56-62 of Barrick’s 2010 Year-End Report.
7 The realized price is expected to be negatively impacted by about $0.12 per pound in 2011 as a result of the net premium paid on option hedging strategies.
8 Based on gold price and oil price assumptions of $1,100 per ounce and $85 per barrel, respectively.
BARRICK FOURTH QUARTER AND YEAR-END 2010 3 PRESS RELEASE
total cash costs of $20-$50 per ounce9 based on a indicated and inferred resources increased with silver price of $16 per ounce. For every $1 per ounce exploration success and the potential to develop an increase in the silver price, total cash costs are open pit mine at Turquoise Ridge, exploration expected to decrease by about $35 per ounce over success at Cortez and from the additional 25% this period. ownership in Cerro Casale.
At the Cerro Casale project in Chile, the review As a result of exploration success in 2010, the of additional permitting requirements before 2011 exploration11 budget has increased to $320considering a construction decision is progressing $340 million, of which approximately one-third will alongside discussions with the government and be capitalized. The budget is weighted towards meetings with local communities and indigenous near-term resource additions and conversion at groups. Given the changed operating environment existing mines while still providing support for in Chile and the Company’s experience at Pascua- earlier stage exploration in operating districts and Lama, a review of the capital cost of the project has other emerging areas. North America is expected to been initiated. Early indications suggest that the be allocated about 43% of the total budget, the capital cost may be higher by about 20-25% from majority of which is targeted for Nevada. About the previous estimate of $4.2 billion (100% basis), 24% is expected to be spent in the Australia Pacific which is based on the feasibility study completed in region. Approximately 15% is to be targeted for the 2009 and reflects the impact of a stronger Chilean South America region with the remainder divided peso, higher labor, commodity and other input between Africa and other emerging areas.
costs. An update will be provided by the end of the second quarter. Barrick’s 75% share of average FINANCIAL POSITION annual production is anticipated to be about At December 31, 2010, Barrick remained in a strong 750,000-825,000 ounces of gold and 170-190 financial position with the gold industry’s only ‘A’ million pounds of copper in the first full five years credit rating, a quarter-end cash balance of $4.0 of operation at total cash costs of about $240- billion and low net debt of $2.5 billion. Full year $260 per ounce , also based on the feasibility 2010 operating cash flow was $4.1 billion, which study completed in 2009. A $0.25 per pound reflects payments to eliminate the remaining change in the copper price would result in an settlement obligation associated with closing the approximate $50 per ounce impact on the expected gold sales contracts in 2009. Adjusted cash flow of total cash costs per ounce over the first full five $4.8 billion excludes the impact of these payments. years of operation. The Company generated free cash flow of about $1.5 billion12 in 2010, compared to $541 million in RESERVES AND RESOURCES 2009, despite the substantial capital investment in Barrick replaced proven and probable gold reserves the Pueblo Viejo and Pascua-Lama projects. to an industry leading 139.8 million ounces at the Barrick’s financial strength positions the Company end of 2010, based on a $1,000 per ounce gold price. well to continue investing in its project pipeline and Measured and indicated gold resources increased by pursue other value-enhancing opportunities. 24% or 14.5 million ounces to 76.3 million ounces and inferred gold resources grew by 18% or 5.6 CORPORATE SOCIAL RESPONSIBILITY In Q4, Barrick announced that it was the first million ounces to 37.2 million ounces, based on a $1,200 per ounce gold price. The Company replaced Canadian mining company to join the Voluntary reserves and grew resources despite the initial Principles on Security and Human Rights, a set of guidelines by which companies in the extractive public offering of ABG in early 2010, which reduced Barrick’s interest in ABG to about 74%. Measured, 11 Barrick’s exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick. For information on the geology, exploration activities 9 Based on silver price, gold price and oil price assumptions of $1,100 per ounce, $16 per ounce, and $85 per generally, and drilling and analysis procedures on Barrick’s material properties, see Barrick’s most recent barrel, respectively and assuming a Chilean peso f/x rate of 500:1. Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the 10 Based on a gold price, copper price and oil price assumptions of $1,100 per ounce, $2.75 per pound and $85 U.S. Securities and Exchange Commission.
per barrel, respectively and a Chilean peso f/x rate of 500:1. 12 Free cash flow is a non-GAAP financial measure. See pages 56-62 of Barrick’s 2010 Year-End Report.
BARRICK FOURTH QUARTER AND YEAR-END 2010 4 PRESS RELEASE
sector can maintain the safety and security of their The Company has secured contracts for essentially operations while ensuring respect for human rights all of its sulfuric acid supply required in 2011 at and fundamental freedoms. The Company is prices well below the average current market price. advancing the implementation of the Voluntary Capital project expenditures for 2011 are Principles, engaging in the tripartite process with expected to be in the range of $2.1-$2.3 billion13 NGOs, extractive companies and government primarily related to construction activities at members. This is particularly important in the Pueblo Viejo and Pascua-Lama. Open pit and complex environments in which Barrick operates, underground development, which includes where it is further strengthening its policies and capitalized waste stripping, is anticipated to be compliance with these human rights principles. The $750-$850 million as Goldstrike and Cortez enter a Company also announced two new Corporate Social period of high waste stripping as anticipated by Responsibility (CSR) initiatives to further their mine plans. The high waste stripping phases at strengthen the Company’s CSR performance. both mines are expected to be substantially Barrick will appoint an independent Director to its complete by the end of 2011. Mine site expansion Board of Directors to support its commitment to capital is expected to be $450-$500 million and CSR and the search is underway to fill this position includes expenditures on development projects at in 2011. The Company will also establish an external Lagunas Norte, Cortez, Turquoise Ridge, Goldstrike, CSR Advisory Board that will provide advice and Bald Mountain, Golden Sunlight and North Mara. guidance on challenging social and environmental Mine site sustaining capital expenditures are issues and encourage further innovation and expected to be $0.90-$1.00 billion. Based on the leadership in CSR. current portfolio of development projects and mine In November, the Company was ranked among plans, total capital expenditures are anticipated to the top 100 companies in the world for its decrease in 2012.
sustainability performance by the NASDAQ OMX * * * * CRD Global Sustainability Index and is the only Barrick’s vision is to be the world’s best gold Canadian mining company to be ranked as such company by finding, acquiring, developing and by NASDAQ. producing quality reserves in a safe, profitable and socially responsible manner. Barrick’s shares are OUTLOOK AND GUIDANCE traded on the Toronto and New York stock The Company expects 2011 gold production to be in exchanges.
a comparable range to 2010 at 7.6-8.0 million ounces at total cash costs of $450-$480 per ounce or net cash costs of $340-$380 per ounce. Higher expected gold cash costs for 2011 primarily reflect lower grades and higher labor costs in South America and Australia. Production is anticipated to increase to 9 million ounces within the next five years and total cash costs are expected to benefit from low cost projects, primarily Pueblo Viejo and Pascua-Lama, as these mines come on stream.
Copper production for 2011 is anticipated to be about 300 million pounds at total cash costs of $1.35-$1.45 per pound. Total cash costs are expected to be higher in 2011 compared to 2010, primarily due to increased market prices for sulfuric acid and the processing of lower grades.
13 Represents Barrick’s share of expenditures and includes capitalized interest of about $350 million.
BARRICK FOURTH QUARTER AND YEAR-END 2010 5 PRESS RELEASE
Outlook Assumptions and Economic Sensitivity Analysis
| 2011 Guidance | Hypothetical | Impact on Impact on EBITDA | |
| Assumption | Change | Total Cash Costs (millions) | |
| Gold revenue | $1,300/oz | $50/oz | n/a $380 - $400 |
| Copper revenue | $3.75/lb | $0.25/lb | n/a $75 |
Gold total cash costs
| Gold price effect on royalties and production taxes | $1,300/oz | $50/oz | $1.25/oz | $9 |
| WTI crude oil price1 | $85/bbl | $10/bbl | $0.20/oz | $2 |
| Australian dollar exchange rate1 | 0.95 : 1 | 10% | - | - |
Copper total cash costs WTI crude oil price1 $85/bbl $10/bbl $0.01/lb $3 Chilean peso exchange rate1 500 : 1 10% $0.01/lb $5
1 Due to hedging activities the Company is largely protected against changes in these factors.
BARRICK FOURTH QUARTER AND YEAR-END 2010 6 PRESS RELEASE
Key Statistics
Barrick Gold Corporation Three months ended Twelve months ended (in United States dollars) December 31, December 31, (Unaudited) 2010 2009 2010 2009 Operating Results Gold production (thousands of ounces)1 1,700 1,871 7,765 7,397 Gold sold (thousands of ounces) 1,825 1,797 7,734 7,279 Per ounce data Average spot gold price $ 1,367 $ 1,100 $ 1,225 $ 972
| Average realized gold price2 | 1,368 | 1,119 | 1,228 | 985 |
| Net cash costs5 | 326 | 310 | 341 | 360 |
| Total cash costs3 | 486 | 465 | 457 | 464 |
| 132 | 129 | 133 | 124 |
Amortization and other4
| Total production costs | 618 | 594 | 590 | 588 | |
| Copper credits | 160 | 155 | 116 | 104 | |
| Copper production (millions of pounds) | 82 | 98 | 368 | 393 | |
| Copper sold (millions of pounds) | 103 | 118 | 391 | 380 |
Per pound data Average spot copper price $ 3.92 $ 3.01 $ 3.42 $ 2.34 Average realized copper price2 3.99 3.44 3.41 3.16
| Total cash costs3 | 1.12 | 1.08 | 1.11 | 1.17 |
| Amortization and other4 | 0.23 | 0.19 | 0.22 | 0.20 |
| Total production costs | 1.35 | 1.27 | 1.33 | 1.37 |
Financial Results (millions)
Sales $ 2,946 $ 2,358 $ 10,924 $ 8,136
| Net income (loss) | 896 | 215 | 3,274 | (4,274) |
| Adjusted net income6 | 947 | 604 | 3,279 | 1,810 |
| Operating cash flow | 781 | (4,300) | 4,127 | (2,322) |
| 1,437 | 921 | 4,783 | 2,899 |
Adjusted operating cash flow7 Free cash flow8 292 173 1,460 541 Per Share Data (dollars)
| Net income (loss) (basic) | 0.90 | 0.22 | 3.32 | (4.73) | |
| Adjusted net income (basic)6 | 0.95 | 0.61 | 3.32 | 2.00 | |
| Net income (loss) (diluted) | 0.90 | 0.21 | 3.28 | (4.73) | |
| Weighted average basic common shares (millions) | 995 | 984 | 987 | 903 | |
| Weighted average diluted common shares (millions)9 | 1,000 | 996 | 997 | 903 |
As at As at December 31, December 31, 2010 2009 Financial Position (millions)
Cash and equivalents $ 3,968 $ 2,564 Non-cash working capital 1,806 1,473 Adjusted debt10 6,392 6,919 Net debt10 2,542 4,355 Shareholders' equity 19,065 15,063 1 Production includes our equity share of gold production at Highland Gold.
2 Realized price is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 60 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 58 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 58 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 56 of the Company's MD&A.
7 Adjusted operating cash flow is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 57 of the Company's MD&A.
8 Free cash flow is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 57 of the Company's MD&A.
9 Fully diluted, includes dilutive effect of stock options and convertible debt.
10 Adjusted debt and net debt are non-GAAP financial performance measures with no standard meaning under US GAAP. See page 62 of the Company's MD&A.
BARRICK YEAR-END 2010 7 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
| Three months ended | Year ended | Three months ended | Year ended | ||||
|---|---|---|---|---|---|---|---|
| December 31, | December 31, | December 31, | December 31, | ||||
| (Unaudited) | 2010 | 2009 | 2010 | 2009 | 2010 2009 | 2010 2009 | |
| North America1 | 697 | 597 | 3,110 | 2,810 | $486 $ |
523 $ 489 $ 504
| South America | 377 | 542 | 2,120 | 1,889 | 297 | 253 | 243 | 265 |
| Australia Pacific | 485 | 511 | 1,939 | 1,950 | 639 | 580 | 613 | 581 |
| 133 | 213 | 564 | 716 | 679 | 617 | 646 | 545 |
African Barrick Gold4 Other 8 8 32 32 494 494 494 494 Total 1,700 1,871 7,765 7,397 $ 486 $ 465 $ 457 $ 464
Copper Production (attributable pounds) (Millions) Total Cash Costs ($/lb)
| Three months ended | Year ended | Three months ended | Year ended | ||||
|---|---|---|---|---|---|---|---|
| December 31, | December 31, | December 31, | December 31, | ||||
| (Unaudited) | 2010 | 2009 | 2010 | 2009 | 2010 2009 | 2010 2009 | |
| South America | 82 | 75 | 318 | 302 | $ |
1.11 $ 1.03 $ 1.09 $ 1.17 Australia Pacific - 23 50 91 1.18 1.25 1.18 1.15 Total 82 98 368 393 $ 1.12 $ 1.08 $ 1.11 $ 1.17
Total Gold Production Costs ($/oz) Three months ended Year ended December 31, December 31, (Unaudited) 2010 2009 2010 2009 Direct mining costs at market foreign exchange rates $ 497 $ 456 $ 450 $ 430 (Gains) losses realized on currency hedge and commodity hedge/economic hedge
(35) (14) (20) 11 contracts Adjustments to direct mining costs3
(13) (3) (6) (2)
| By-product credits | (18) | (15) | (15) | (11) |
| Copper credits | (160) | (155) | (116) | (104) |
| Cash operating costs, net basis | 271 | 269 | 293 | 324 |
| Royalties | 43 | 36 | 36 | 30 |
| Production taxes | 12 | 5 | 12 | 6 |
| 326 | 310 | 341 | 360 |
Net cash costs2
| Copper credits | 160 | 155 | 116 | 104 |
| Total cash costs2 | 486 | 465 | 457 | 464 |
| Amortization | 119 | 126 | 127 | 122 |
| Adjustments to direct mining costs3 | 13 | 3 | 6 | 2 |
Total production costs $ 618 $ 594 $ 590 $ 588
Total Copper Production Costs ($/lb) Three months ended Year ended December 31, December 31, (Unaudited) 2010 2009 2010 2009 Cash operating costs $ 1.10 $ 1.07 $ 1.09 $ 1.16
| Royalties | 0.02 | 0.01 | 0.02 | 0.01 |
| Total cash costs2 | 1.12 | 1.08 | 1.11 | 1.17 |
| Amortization | 0.23 | 0.19 | 0.22 | 0.20 |
Total production costs $ 1.35 $ 1.27 $ 1.33 $ 1.37
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 58 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 FOURTH QUARTER 2010 8 SUMMARY INFORMATION
Consolidated Statements of Income
Barrick Gold Corporation For the years ended December 31, (in millions of United States dollars, except per share data)
| 2010 | 2009 2008 |
| Sales (notes 4 and 5) $ 1 0,924 | $ 8 ,136 $ 7 ,613 |
| Costs and expenses Cost of sales (notes 4 and 6)1 4,201 Amortization and accretion (notes 4 and 15B) 1,196 Corporate administration 154 Exploration (notes 4 and 7) 180 Project development expense (notes 4 and 7) 153 Elimination of gold sales contracts - Other expense (note 8A) 463 Impairment charges (note 8B) 7 | 3,807 3,706 1,073 957 171 155 141 198 85 242 5,933 - 343 302 277 598 |
| 6,354 | 11,830 6,158 |
| Interest income 14 Interest expense (note 20B) (121) Other income (note 8C) 124 Write-down of investments (note 8B) - | 10 39 (57) (21) 112 291 (1) (205) |
| 17 | 64 104 |
| Income (loss) from continuing operations before income taxes and other items 4,587 Income tax expense (note 9) (1,370) Loss from equity investees (note 12) (41) | (3,630) 1,559 (648) (594) (87) (64) |
| Income (loss) from continuing operations before non-controlling interests 3,176 Income (loss) from discontinued operations (note 3I) 121 | (4,365) 901 97 (104) |
| Income (loss) before non-controlling interests 3,297 Non-controlling interests (note 27) (23) | (4,268) 797 (6) (12) |
| Net income (loss) $ 3,274 | $ (4,274) $ 7 85 |
| Earnings (loss) per share data (note 10) Income (loss) from continuing operations Basic $ 3.19 Diluted $ 3.16 | $ (4.84) $ 1 .02 $ (4.84) $ 1.01 |
| Income (loss) from discontinued operations Basic $ 0.13 Diluted $ 0.12 | $ 0.11 $ (0.12) $ 0.11 $ (0.12) |
| Net income (loss) Basic $ 3.32 Diluted $ 3.28 | $ ( 4.73) $ 0.90 $ ( 4.73) $ 0 .89 |
1 Exclusive of amortization.
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2010 9 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Cash Flow
For the years ended December 31,
| 2010 | 2009 2008 |
| OPERATING ACTIVITIES Net income (loss) $ 3,274 Amortization and accretion (notes 4 and 15B) 1,196 Impairment charges and write-down of investments (note 8B) 7 Income tax expense (note 9) 1,370 Income taxes paid (647) Net proceeds taxes paid (85) Increase in inventory (403) Elimination of gold sales contracts - Payment on settlement for gold sales contracts (656) Gain on sale/acquisition of long-lived assets (note 8C) (50) (Income) loss from discontinued operations (note 3I) (121) Operating cash flows of discontinued operations (note 3I) (8) Other operating activities (note 11A) 250 | $ (4,274) $ 785 1,073 957 278 803 648 594 (376) (575) (66) - (372) (370) 5,933 - (5,221) - (85) (187) (97) 104 7 26 230 117 |
| Net cash provided by (used in) operating activities 4,127 | (2,322) 2,254 |
| INVESTING ACTIVITIES Property, plant and equipment Capital expenditures (note 4) (3,323) Sales proceeds 61 Acquisitions (note 3) (813) Investments (note 12) Purchases (61) Sales 15 Decrease in restricted cash - Investing cash flows of discontinued operations (note 3I) - Other investing activities (note 11B) (51) | (2,351) (1,749) 10 185 (101) (2,174) (3) (18) 7 76 113 18 (3) (27) (87) (231) |
| Net cash used in investing activities (4,172) | (2,415) (3,920) |
| FINANCING ACTIVITIES Capital stock Proceeds on exercise of stock options 127 Proceeds on common share offering (note 25) - Proceeds from public issuance of common shares by a subsidiary (note 3E) 884 Long-term debt (note 20B) Proceeds 782 Repayments (149) Dividends (note 25) (436) Funding from non-controlling interests 114 Deposit on silver sale agreement 137 Financing cash flows of discontinued operations (note 3I) - Other financing activities (note 11C) (25) | 65 74 3,885 - - - 2,154 2,717 (397) (1,603) (369) (349) 304 88 213 - - - (26) (34) |
| Net cash provided by financing activities 1,434 | 5,829 893 |
| Effect of exchange rate changes on cash and equivalents 15 | 35 3 |
| Net increase (decrease) in cash and equivalents 1,404 Cash and equivalents at beginning of period (note 20A) 2,564 | 1,127 (770) 1,437 2,207 |
| Cash and equivalents at end of period (note 20A) $ 3,968 | $ 2 ,564 $ 1,437 |
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2010 10 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
At December 31,
| 2010 | 2009 |
| ASSETS Current assets Cash and equivalents (note 20A) $ 3 ,968 Accounts receivable (note 14) 346 Inventories (note 13) 1,852 Other current assets (note 14) 947 Assets of discontinued operations (note 3I) - | $ 2 ,564 251 1,540 524 59 |
| 7,113 Non-current assets Equity in investees (note 12A) 291 Other investments (note 12B) 203 Property, plant and equipment (note 15) 17,751 Goodwill (note 17) 5,287 Intangible assets (note 16) 140 Deferred income tax assets (note 24) 467 Other assets (note 18) 2,070 Assets of discontinued operations (note 3I) - | 4,938 1,136 92 13,125 5,197 66 949 1,531 41 |
| Total assets $ 3 3,322 | $ 2 7,075 |
| LIABILITIES AND EQUITY Current liabilities Accounts payable 1,511 Current portion of long-term debt (note 20B) 14 Other current liabilities (note 19) 964 Liabilities of discontinued operations (note 3I) - | 1,221 54 475 23 |
| 2,489 Non-current liabilities Long-term debt (note 20B) 6,678 Asset retirement obligations (note 22) 1,439 Deferred income tax liabilities (note 24) 1,114 Other liabilities (note 23) 868 Liabilities of discontinued operations (note 3I) - | 1,773 6,281 1,122 1,184 1,145 23 |
| Total liabilities 12,588 | 11,528 |
| Equity Capital stock (note 25) 17,790 Additional paid-in capital 288 Retained earnings (deficit) 456 Accumulated other comprehensive income (note 26) 531 | 17,390 - (2,382) 55 |
| Total shareholders’ equity 19,065 Non-controlling interests (note 27) 1,669 | 15,063 484 |
| Total equity 20,734 | 15,547 |
| Contingencies and commitments (notes 15 and 30) | |
| Total liabilities and equity $ 3 3,322 | $ 2 7,075 |
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2010 11 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Equity Barrick Gold Corporation For the years ended December 31, (in millions of United States dollars)
| 2010 | 2009 2008 |
| Common shares (number in thousands) At January 1 984,328 Issued on public equity offering (note 25) - Issued on exercise of stock options 4,760 Issued on conversion of debentures (note 20B) 9,412 Issued on redemption of exchangeable shares (note 25B) - | 872,739 869,887 108,973 - 2,349 2,383 - - 267 469 |
| At December 31 998,500 | 984,328 872,739 |
| Common shares At January 1 $ 1 7,390 Issued on public equity offering (note 25) - Issued on conversion of debentures (note 20B) 268 Issued on exercise of stock options 127 Recognition of stock option expense 14 Other adjustments (9) | $ 1 3,372 $ 1 3,273 3,926 - - - 65 74 20 25 7 - |
| At December 31 17,790 | 17,390 13,372 |
| Additional paid-in capital At January 1 - Recognized on initial public offering of African Barrick Gold (note 3E) 288 | - - - - |
| At December 31 288 | - - |
| Retained earnings (deficit) At January 1 (2,382) Net income (loss) 3,274 Dividends (note 25) (436) Repurchase of preferred shares of a subsidiary - | 2,261 1,832 (4,274) 785 (369) (349) - (7) |
| At December 31 456 | (2,382) 2,261 |
| Accumulated other comprehensive income (loss) (note 26) 531 | 55 (356) |
| Total shareholders’ equity 19,065 | 15,063 15,277 |
| Non-controlling interests (note 27) At January 1 484 Net income attributable to non-controlling interests 23 Funding from non-controlling interests 114 Other increase (decrease) in non-controlling interests 1,048 | 182 82 6 12 299 90 (3) (2) |
| At December 31 1,669 | 484 182 |
| Total equity at December 31 $ 2 0,734 | $ 1 5,547 $ 15,459 |
Consolidated Statements of Comprehensive Income
Barrick Gold Corporation For the years ended December 31, (in millions of United States dollars)
| 2010 | 2009 2008 |
| Net income (loss) $ 3,274 Other comprehensive income (loss), net of tax (note 26) 476 | $ (4,274) $ 7 85 411 (507) |
| Comprehensive income (loss) $ 3,750 | $ (3,863) $ 2 78 |
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2010 12 FINANCIAL STATEMENTS (UNAUDITED)