BARRICK THIRD QUARTER 2012 PRESS RELEASE 1 THIRD 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 Third Quarter 2012 Results
TORONTO, November 1, 2012 – Barrick Gold Corporation (NYSE: ABX, TSX: ABX) (Barrick or the “company”) today reported net earnings of $0.62 billion ($0.62 per share) compared to net earnings of $1.37 billion ($1.37 per share) in the same prior year quarter. Adjusted net earnings were $0.85 billion ($0.85 per share)1 compared to $1.38 billion ($1.38 per share) in the third quarter of 2011. Operating cash flow of $1.73 billion and adjusted operating cash flow of $1.27 billion1 for the quarter compared to operating cash flow of $1.90 billion and adjusted operating cash flow of $2.00 billion, respectively, in the same prior year period.
Operating Highlights
- Gold and copper production of 1.78 million ounces and 112 million pounds, respectively
- Gold total cash costs of $592 per ounce1 and net cash costs of $537 per ounce1
- Gold total cash margins of $1,063 per ounce1, and net cash margins of $1,118 per ounce1
- C1 cash costs of $2.33 per pound1 and C1 cash margins of $1.19 per pound1
2012 Outlook
- The company expects 2012 gold production of 7.3-7.5 million ounces2, within the original guidance range of 7.3-7.8 million ounces. Total cash costs for gold are anticipated to be $575-$585 per ounce, compared to the previous guidance of $550-$575 per ounce, primarily due to higher cash costs from Australia Pacific and African Barrick Gold (ABG). Net cash costs are anticipated to be $480-$500 per ounce3, within the previous guidance of $460-$500 per ounce.
- Full year 2012 copper production is expected to be about 450 million pounds as a result of the delay in first production at Jabal Sayid in Saudi Arabia. C1 cash costs in 2012 are still anticipated to be $2.10-$2.30 per pound.
Pueblo Viejo First Gold Production on Schedule and Budget
- During the third quarter, the Pueblo Viejo mine in the Dominican Republic poured its first gold on schedule and within capital guidance. The mine is currently undergoing commissioning, with commercial production anticipated in December 2012. Barrick’s 60 percent share of average annual gold production is anticipated to be 625,000-675,000 ounces at total cash costs of $300-$350 per ounce4 in its first full five years of operation.
Pascua-Lama Project Update
- During the quarter, Barrick made substantial progress at Pascua-Lama. Along with construction advancement at site, the company strengthened the construction management team and hired Fluor to assume overall project management. Fluor is a global leader in construction of large mining projects, and the same firm that successfully managed construction of our recently completed Pueblo Viejo mine.
- In July, the company announced preliminary results of a review indicating an increase in capital costs to $7.5-$8.0 billion and a delay in first production to mid-2014. Since then, Barrick has been working with Fluor on a more comprehensive top-to-bottom review. This review will be complete by our 2012 year-end results release; however, work to date suggests capital costs will be closer to $8.0-$8.5 billion, with first production in the second half of 2014.
Disciplined Capital Allocation Framework
- As a result of Barrick’s on-going portfolio review and cost control focus, the company has cut or deferred approximately $1.0 billion in capex from the initial sustaining and minesite expansion budget for 2013. Despite additional spending at Pascua-Lama, and continued inflationary industry cost pressures, Barrick expects 2013 capex to be largely in line with 2012.
1 Adjusted net earnings, adjusted net earnings per share, 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 cash costs and C1 cash margins per pound are non-GAAP financial measures. See pages 42-47 of Barrick’s Q3 2012 Report. See page 42 of Barrick’s Q3 2012 report for a change to the definition of adjusted operating cash flow.
2 All production numbers for Barrick, including expectations for the longer-term outlook, are inclusive of the company’s 73.9% equity interest in ABG.
3 Based on an assumed realized copper price of $3.50/lb for Q4 2012.
4 Based on gold and WTI oil price assumptions of $1,300/oz and $90/bbl, respectively. Does not include escalation for future inflation.
BARRICK THIRD QUARTER 2012 PRESS RELEASE
“We are on track to achieve our production guidance with Third quarter EBITDA was $1.50 billion6 compared to higher production expected in the fourth quarter,” said $2.46 billion in the same prior year period, reflecting the Jamie Sokalsky, President and Chief Executive Officer. same factors affecting net earnings.
“Despite some cost pressures, Barrick remains the lowest The third quarter realized gold price was $1,655 per cost senior gold producer. We poured first gold on ounce6, five percent lower than the same prior year schedule and budget at Pueblo Viejo and made quarter. Gold total cash margins and net cash margins substantial progress at Pascua-Lama, which remains our were $1,063 per ounce and $1,118 per ounce, respectively, top priority. Both are world-class assets that together compared to $1,290 per ounce and $1,420 per ounce in are expected to produce about 1.5 million ounces5 at low the third quarter of 2011. C1 cash margins were $1.19 per operating costs. We’re also making progress in support pound compared to $1.71 per pound in the prior year of our disciplined capital allocation framework. We’ve cut period. C1 cash costs of $2.33 per pound compared to or deferred significant capital expenditures that were $1.83 per pound in the prior year period as lower cost previously budgeted and we’re continuing to work toward production from the Zaldívar mine contributed to a lesser optimizing our asset portfolio. As I have said, returns will proportion of total copper sales. During the third drive production; production will not drive returns.” quarter, sales from Zaldívar were impacted by a labor strike at the port of Antofagasta, which delayed shipment FINANCIAL RESULTS of 26 million pounds. The strike has ended and these Reported net earnings were $0.62 billion or $0.62 per sales will be recorded in the fourth quarter.
share compared to $1.37 billion or $1.37 per share in the same prior year quarter. Net adjusting items in the OPERATING RESULTS quarter totaled $231 million, largely related to: North America Regional Business Unit
- $148 million in impairment charges primarily related The North America Regional Business Unit (RBU) to an exploration property in Papua New Guinea, produced 0.80 million ounces at total cash costs of $508 acquired as a result of the Kainantu acquisition in per ounce in the third quarter. Cortez produced 0.23 2007; and million ounces at total cash costs of $293 per ounce, in
- $71 million in unrealized losses on non-hedge line with expectations, and is anticipated to return to derivative instruments. higher production levels in the fourth quarter primarily Third quarter 2012 adjusted net earnings were $0.85 as a result of mine sequencing.
billion or $0.85 per share compared to $1.38 billion or Goldstrike production of 0.35 million ounces at total $1.38 per share in the same prior year period. The lower cash costs of $507 per ounce benefited, as anticipated, net earnings and adjusted net earnings primarily reflect from increased productivity following maintenance lower gold and copper sales volumes, higher cost of sales improvements in the first half of the year and from applicable to gold, and lower realized gold prices. access to higher grades in the open pit. We expect full Operating cash flow of $1.73 billion and adjusted year production for the region to be 3.425-3.55 million operating cash flow of $1.27 billion for the quarter ounces at total cash costs of $475-$525 per ounce, both compare to operating cash flow of $1.90 billion and within the previous guidance ranges.
adjusted operating cash flow of $2.00 billion, respectively, in the third quarter of 2011. Adjusted South America Regional Business Unit operating cash flow excludes the impact of South America produced 0.39 million ounces at total approximately $0.5 billion of net proceeds related to cash costs of $440 per ounce in the third quarter. The the settlement of a portion of our Australian dollar Veladero mine produced 0.17 million ounces at total cash hedge positions. costs of $523 per ounce, reflecting the impact of lower recoveries due to lower leach pad kinetics during the
6 EBITDA and realized gold price per ounce are non-GAAP financial measures. See pages 42-47 of Barrick’s Q3 2012 Report.
5 Based on Barrick’s share of the estimated combined average annual production in the first full five years of operation.
BARRICK THIRD QUARTER 2012 2 PRESS RELEASE
third quarter. Leach recoveries have improved with Fisher and his team will focus exclusively on optimizing higher solution rates and better ore permeability, which the copper business. “Mark has been an exceptional is expected to continue and result in higher fourth leader at various large scale Barrick operations and has quarter production. Lagunas Norte produced 0.19 million over 30 years of global mining experience,” said Jamie ounces at total cash costs of $337 per ounce with access Sokalsky. “I am confident that this new team is best to higher grades following the completion of pit positioned to maximize the value of the copper assets in dewatering. We expect full year production for the the CBU through the realization of operational region to be 1.55-1.65 million ounces at total cash costs efficiencies and synergies, and its dedicated focus on of $430-$480 per ounce, both within the previous managing all aspects of this significant business.” guidance ranges. The Zaldívar copper mine in Chile produced 66 million pounds at C1 cash costs of $1.63 per pound in the Australia Pacific Regional Business Unit third quarter. The Lumwana mine in Zambia produced 45 Australia Pacific produced 0.48 million ounces at total million pounds of copper at C1 cash costs of $2.90 per cash costs of $815 per ounce in the third quarter. The pound.
Porgera mine produced 0.12 million ounces at total cash Expected 2012 production for Lumwana is 155-165 costs of $1,026 per ounce, primarily reflecting lower million pounds, within prior guidance of 145-165 million equipment availability and lower underground tons pounds, at previously guided C1 cash costs of $3.30mined. Full year production for Australia Pacific is $3.50 per pound. In the second quarter of 2012, we expected to be about 1.80 million ounces at total cash determined the need to advance a number of key costs of approximately $800 per ounce, both in line with initiatives in an effort to achieve better longer-term previous guidance. results. The migration to an owner maintained operation to improve maintenance practices and equipment African Barrick Gold plc availability is progressing. Additional staffing and Third quarter attributable production from ABG was 0.11 training is underway and maintenance technicians have million ounces at total cash costs of $965 per ounce. been redeployed from other sites to assist with the Production and cash costs have been mainly impacted by transition. Infrastructure improvements to help mitigate mill maintenance shutdowns and lower grades at the impact of the annual rainy season have been Buzwagi together with equipment availability issues at completed.
Bulyanhulu. While production from North Mara was in Overall higher grades at Lumwana are expected in line with expectations during the quarter, lower 2013, with production anticipated to be about 250 million equipment availability has delayed access to higher pounds at lower C1 cash costs. The scale of the grade ore. As a result, Barrick’s share of 2012 production Chimiwungo ore body is expected to allow for more is expected to be 5-10 percent below the low end of the productive mining and it will be the primary future supply previous guidance range of 0.500-0.535 million ounces, of ore for the operation. Exploration results to date at total cash costs of $900-$950 per ounce, compared to continue to confirm the upside potential of Chimiwungo. the previous guidance of $790-$860 per ounce. We are nearing completion of a substantial in-fill drilling program to provide a more precise model of the ore body Copper for mine planning purposes. We continue to expect During the third quarter, Barrick strengthened its Global completion of these programs at the end of the year and Copper Business Unit (CBU) in line with its objective of the results will form the basis for an updated resource maximizing returns and free cash flow from its assets. base and life-of-mine plan. They will also be incorporated The changes will further assist in efforts to address the into a prefeasibility study on the expansion opportunity near-term challenges at Lumwana and Jabal Sayid and to for Lumwana, which has the potential to double evaluate the expansion opportunities at Lumwana and processing rates.
Zaldívar. The copper assets now report to a new senior At the recently constructed Jabal Sayid copper mine, leadership team led by a CBU President, Mark Fisher. Mr. a dedicated EPCM team is working toward achieving full
BARRICK THIRD QUARTER 2012 3 PRESS RELEASE
compliance with standards for safety and security in the end of the third quarter, the company continues to order to commence production. During the quarter, the have approximately AUD$1.8 billion hedged, primarily in company was notified the operation is not in compliance 2014-2016, at an average rate of about $0.92.
with standards for safety and security in Saudi Arabia. The company has largely mitigated the direct impact The previous owner originally designed the mine in of higher crude oil prices through the use of financial compliance with Western Australia standards. The contracts and production from Barrick Energy. The operation is currently expected to achieve full contribution from Barrick Energy, along with the financial compliance in 2014, at which time production will start. contracts, provides hedge protection for approximately Initial testing has been completed and about 440,000 75 percent of the expected remaining 2012 fuel tonnes of ore at an average grade of 2.25% copper have consumption.
been stockpiled to date. Average annual production from Jabal Sayid is expected to be 100-130 million pounds at C1 EXPLORATION UPDATE cash costs of $1.50-$1.70 per pound7 in its first full five The 2012 exploration guidance is $450-$490 million10. years of operation. Total project capital expenditures are We have over 100 exploration drill rigs operating globally, still anticipated to be about $400 million8. with over one third of these operating at Goldrush and The company has floor protection on approximately Lumwana.
60 percent of its expected copper production for the In Nevada, over 50 drill rigs are currently operating, 12 remainder of 2012 at an average floor price of $3.75 of which are located at Goldrush. Drilling continues to per pound and has full participation to any upside in expand the footprint. The mineralized corridor has now copper prices. almost doubled, delineated along seven kilometers in strike length. The scale and continuity of the system, and the COST MANAGEMENT extent of high grade zones being defined, is providing Barrick continues to employ key risk management multiple development scenarios. Based on results to date, strategies, which have helped manage our cost we expect significant increases in the already defined exposures, maximize margins and give predictability to indicated and inferred resources by the end of 2012. our earnings. At Lumwana, the full contingent of 25 exploration drill The largest currency exposure for the company is the rigs is operating at Chimiwungo. As the in-fill drilling Australian dollar/US dollar exchange rate. During the program nears completion, results are expected to quarter, with the Australian dollar trading at historically increase reserves by the end of 2012.
elevated levels against the US dollar, and based on our currency outlook, the company opportunistically unwound PROJECT UPDATE approximately AUD$2.6 billion of our Australian dollar Pueblo Viejo hedges at an average spot price of $1.05. We realized net During the third quarter, Pueblo Viejo poured first gold cash proceeds of approximately $0.5 billion upon the on schedule and within capital guidance of $3.6-$3.8 settlement of these contracts in the third quarter. The billion (100% basis). The company’s 60 percent share of corresponding accounting gains will be recognized in the annual gold production in the first full five years of consolidated statement of income based on the original operation is expected to average 625,000-675,000 ounces at total cash costs of $300-$350 per ounce11. hedge contract maturity dates, which are between 2012 and 2014, with locked-in gains of approximately $90 The mine is ramping up to commercial production, million, $280 million, and $110 million positively impacting which is expected in December 2012. Pueblo Viejo is our total reported cash costs per ounce in Q4 2012, 2013 anticipated to produce about 80,000 ounces of gold to and 2014, respectively. For the remainder of 2012, every Barrick in 2012, however, actual results will vary $0.01 movement in the Australian dollar will have a $2 per depending on how the ramp up progresses.
ounce impact on our consolidated total cash costs. As of
7 Does not include escalation for future inflation.
10 Barrick’s exploration programs are designed and conducted under the supervision of Robert Krcmarov, 8 Does not include escalation for future inflation. Senior Vice President, Global Exploration of Barrick.
9 The average realized price on total 2012 production is expected to be reduced by approximately $0.17 per 11 Based on gold and WTI oil price assumptions of $1,300/oz and $90/bbl, respectively. Does not include pound as a result of the net premium paid for these positions. escalation for future inflation.
BARRICK THIRD QUARTER 2012 4 PRESS RELEASE
As part of planned start up activities, the first three To date, approximately $3.7 billion has been spent. autoclaves have been tested at 50 percent to 100 The tunnel is approximately 60 percent complete and 90 percent of design capacity, with results that are in line percent of the required material and equipment for the with expectations for the initial ramp up period. The process plant has been committed. Plans are fourth autoclave is currently undergoing pre- progressing to increase the camp capacity to provide commissioning testing, prior to planned commissioning in additional project construction flexibility.
the fourth quarter. Construction of the tailings starter As disclosed with Barrick’s second quarter report, dam achieved its full height of 182.5 meters and the preliminary results of a review indicated an increase in oxygen plant has been commissioned. Over 2.0 million capital costs to $7.5-$8.0 billion and a delay in first contained ounces of gold have been stockpiled to date. production to mid-2014. Since then, the company has The operations staff have been hired and trained by been working with Fluor to carry out a more experienced personnel from our North America RBU. comprehensive top-to-bottom review. This review will be Construction progress also continued on a 215 MW complete by our 2012 year-end results release; however, dual fuel power plant at an estimated net incremental work to date suggests capital costs will be closer to $8.0cost of approximately $300 million (100 percent basis) or $8.5 billion, with first production in the second half $180 million (Barrick’s 60 percent share). The power of 2014.
plant is expected to commence operations in 2013 Delays in the earthworks and underground works for utilizing heavy fuel oil, but have the ability to the process plant are the main reason for the shift in subsequently transition to lower cost liquid natural gas. schedule to the second half of 2014. The indicated increase in capital costs is split, roughly evenly, among: i) Pascua-Lama the impact of the delay of first gold to the second half of Pascua-Lama is expected to be one of the world’s largest, 2014; ii) increased labor hours and installation rates after lowest cost mines and, once in production, is expected to being reviewed in more detail with Fluor during this contribute significant free cash flow to the company for quarter; and iii) incremental payments to Fluor to assume many years to come. project and additional construction management, as well During the third quarter, we strengthened the as increased incentives for Fluor and other contractors to project management and construction teams, and made come in on time and on budget.
significant progress in a number of key areas: Pascua-Lama is a world class resource of nearly 18
- commenced transfer of project management from million ounces of proven and probable gold reserves and Barrick to Fluor, the leading global EPCM contractor 676 million ounces of silver contained within the gold that successfully managed our recently completed reserves and a mine life of 25 years. It is expected to Pueblo Viejo project; produce an average of 800,000-850,000 ounces of gold
- reorganized and strengthened the Barrick project and 35 million ounces of silver in its first full five years of team, including a new project director and the hiring production. Expected total cash costs remain in the of experienced construction industry experts to range of $0 to negative $150 per ounce12 using a silver improve the oversight and leadership of the project; price assumption of $25 per ounce. The company
- increased the quantity and quality of skilled labor, expects to update production and total cash cost with approximately 1,900 new hires over the past guidance for Pascua-Lama with its year-end 2012 results. quarter primarily from the province of San Juan and the rest of Argentina;
2012 OUTLOOK
- advanced review of all major contracts, material quantities and prices, unit costs, installation rates and productivity; and
- progressed a detailed review of project schedule, including related logistics (e.g. transportation, 12 First full five year average. Based on gold, silver and WTI oil price assumptions of $1,300/oz, $25/oz and $90/bbl, respectively, and assuming a Chilean Peso assumption of 475:1. Inflation escalation assumptions camps). are as of Q2 2012, and do not include escalation for future inflation.
BARRICK THIRD QUARTER 2012 5 PRESS RELEASE
Barrick expects 2012 gold production of 7.3-7.5 million opportunity to increase to more than 1 billion ounces, within its original guidance of 7.3-7.8 million pounds if we proceed with the Zaldívar ounces. sulfides and Lumwana expansions.
Total cash costs for gold are anticipated to be $575- During the third quarter:
$585 per ounce, compared to the previous guidance of • Barrick cut or deferred about $1.0 billion in capex $550-$575 per ounce, primarily as a result of higher cash from the initial sustaining and minesite expansion costs from Australia Pacific and ABG. Net cash costs are budget for 2013 as a result of the company’s onexpected to be $480-$500 per ounce, within the going portfolio review and cost control focus. previous guidance of $460-$500 per ounce. Despite additional spending at Pascua-Lama, and Full year 2012 copper production is expected to be continued inflationary industry cost pressures, about 450 million pounds, as a result of the delay in first Barrick expects 2013 capex to be largely in line production at Jabal Sayid. C1 cash costs in 2012 are still with 2012.
anticipated to be $2.10-$2.30 per pound. • Barrick confirmed it entered into discussions with China National Gold Group related to the potential DISCIPLINED CAPITAL ALLOCATION FRAMEWORK sale of its 73.9% equity holding in ABG, which is in Barrick’s renewed focus on maximizing shareholder value line with the focus on portfolio optimization.
will be achieved through a disciplined approach to capital
- * * *
allocation based on maximizing returns on investment Barrick’s vision is to be the world’s best gold company by and free cash flow. Under this approach, all capital finding, acquiring, developing and producing quality allocation options, which include organic investment in reserves in a safe, profitable and socially responsible exploration and projects, and acquisitions or divestitures manner. Barrick’s shares are traded on the Toronto and to improve the quality of our portfolio, will be assessed New York stock exchanges.
on the basis of maximizing risk-adjusted returns. Our increased emphasis on free cash flow will position the company, in the future, with the potential to return more capital to shareholders, repay debt, and make additional attractive return investments to upgrade our portfolio.
In June 2012, we initiated a full review of our operations and projects. This portfolio review is an ongoing, dynamic process. Cost control is also a vital part of this review and an integral component of our capital allocation framework. The company has been reviewing company-wide costs and evaluating ways to reduce these, including sustaining capital and general and administrative expenses.
Barrick has made significant progress in support of its renewed focus on disciplined capital allocation. In the second quarter:
- The company cut or deferred about $3 billion in capex that was budgeted over a four year period as a result of recalibrating longer-term production to higher quality, more profitable levels.
- Annual gold production is expected to be about 8 million ounces by 2016.
- Annual copper production is expected to be about 600 million pounds by 2015 with the
BARRICK THIRD QUARTER 2012 6 PRESS RELEASE
Key Statistics
Barrick Gold Corporation Three months ended Nine months ended (in United States dollars) September 30, September 30, (Unaudited) 2012 2011 2012 2011 Operating Results Gold production (thousands of ounces)1 1,779 1,928 5,402 5,862 Gold sold (thousands of ounces) 1,792 1,908 5,265 5,685 Per ounce data Average spot gold price $ 1,702 $ 1,534 Average realized gold price2 1,655 1,743 1,652 1,550 Net cash costs2 537 323 501 322 Total cash costs2 592 453 584 445 Depreciation3 190 153 184 149
| Other4 | 11 | 16 | 12 | 16 | |
| Total production costs | 793 | 622 | 780 | 610 | |
| Copper credits | 55 | 130 | 83 | 123 | |
| Copper production (millions of pounds) | 112 | 140 | 338 | 308 | |
| Copper sold (millions of pounds) | 84 | 146 | 318 | 309 |
Per pound data Average spot copper price $ 3.50 $ 4.07 $ 3.61 $ 4.20
| Average realized copper price2 | 3.52 | 3.54 | 3.59 | 3.87 |
| C1 cash costs2 | 2.33 | 1.83 | 2.22 | 1.60 |
| Depreciation3 | 0.53 | 0.29 | 0.50 | 0.27 |
| Other5 | 0.42 | 0.58 | 0.22 | 0.34 |
| C3 fully allocated costs2 | 3.28 | 2.70 | 2.94 | 2.21 |
Financial Results (millions)
Revenues $ 3,436 $ 3,971 $ 10,358 $ 10,474 Net earnings6 618 1,365 2,397 3,525 Adjusted net earnings2 849 1,379 2,719 3,500 EBITDA2 1,499 2,460 5,010 6,378 Operating cash flow 1,732 1,902 3,767 4,091 Adjusted operating cash flow2 1,267 2,004 3,404 4,381 Per Share Data (dollars)
| Net earnings (basic) | 0.62 | 1.37 | 2.40 | 3.53 |
| Adjusted net earnings (basic)2 | 0.85 | 1.38 | 2.72 | 3.50 |
| Net earnings (diluted) | 0.62 | 1.36 | 2.40 | 3.52 |
| Weighted average basic common shares (millions) | 1,001 | 999 | 1,001 | 999 |
| 1,001 | 1,001 | 1,001 | 1,001 |
Weighted average diluted common shares (millions)7 As at As at September 30, December 31, 2012 2011 Financial Position (millions)
Cash and equivalents $ 2,530 $ 2,745 Non-cash working capital 2,890 2,335 Adjusted debt2 13,681 13,058 Net debt2 11,169 10,320 Average shareholders' equity 24,268 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, and net debt are non-GAAP financial performance measures with no standard definition under IFRS. See pages 42-47 of the Company's MD&A.
3 Represents equity depreciation 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 45 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 THIRD QUARTER 2012 7 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
Nine months ended Nine months ended Three months ended Three months ended September 30, September 30, September 30, September 30, (Unaudited) 2012 2011 2012 2011 2012 2011 2012 2011 Gold North America 795 836 2,537 2,621 $ 508 $ 415 $ 506 $
| South America | 394 | 475 | 1,172 | 1,426 | 440 | 358 | 437 | 358 |
| Australia Pacific | 481 | 472 | 1,352 | 1,394 | 815 | 609 | 804 | 601 |
| African Barrick Gold1 | 109 | 135 | 329 | 391 | 965 | 687 | 946 | 666 |
| Other2 | - | 10 | 12 | 30 | - | - | - | - |
| Total | 1,779 | 1,928 | 5,402 | 5,862 | $ |
592 $ 453 $ 584 $
Copper Production (attributable pounds) (Millions) C1 Cash Costs ($/lb)
Nine months ended Nine months ended Three months ended Three months ended
| September 30, | September 30, | September 30, September 30, | ||
|---|---|---|---|---|
| (Unaudited) | 2012 | 2011 | 2012 | 2011 2012 2011 2012 2011 |
| Total | 112 | 140 | 338 | 308 $ |
2.33 $ 1.83 $ 2.22 $ 1.60
Total Gold Production Costs ($/oz) Three months ended Nine months ended September 30, September 30, (Unaudited) 2012 2011 2012 2011 Direct mining costs at market foreign exchange rates $ 617 $ 500 $ 618 $
| Gains realized on currency hedge and commodity hedge/economic hedge contracts | (46) | (58) | (48) | (53) |
| Other3 | (11) | (16) | (12) | (16) |
| By-product credits | (16) | (18) | (17) | (18) |
| Copper credits | (55) | (130) | (83) | (123) |
| Cash operating costs, net basis | 489 | 278 | 458 | 283 |
| Royalties | 48 | 45 | 43 | 39 |
| 537 | 323 | 501 | 322 |
Net cash costs4
| Copper credits | 55 | 130 | 83 | 123 |
| Total cash costs4 | 592 | 453 | 584 | 445 |
| Depreciation | 190 | 153 | 184 | 149 |
| Other3 | 11 | 16 | 12 | 16 |
793 $ 622 $ 780 $ Total production costs $
Total Copper Production Costs ($/lb) Three months ended Nine months ended September 30, September 30, (Unaudited) 2012 2011 2012 2011 C1 cash costs4 $ 2.33 $ 1.83 $ 2.22 $ 1.60 Depreciation 0.53 0.29 0.50 0.27 Other5 0.42 0.58 0.22 0.34 C3 fully allocated costs4 3.28 $ 2.70 $ 2.94 $ 2.21 $
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 pages 44-45 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 THIRD QUARTER 2012 8 SUMMARY INFORMATION
Consolidated Statements of Income
Three months ended Nine months ended Barrick Gold Corporation (in millions of United States dollars, except per share data) (Unaudited) September 30, September 30, 2012 2011 2012 2011
Revenue (notes 4 and 5) $ 3,436 $ 3,971 $ 10,358 $ 10,474 Costs and expenses
| Cost of sales (notes 4 and 6) | 1,825 | 1,694 | 5,425 | 4,534 |
| Corporate administration | 45 | 43 | 134 | 123 |
| Exploration and evaluation (note 7) | 108 | 94 | 306 | 248 |
| Other expense (note 9A) | 142 | 135 | 359 | 391 |
| Impairment charges (note 9B) | 152 | 19 | 274 | 23 |
| 2,272 | 1,985 | 6,498 | 5,319 | |
| Other income (note 9C) | 4 | 76 | 41 | 238 |
| Income (loss) from equity investees (note 13) | (3) | 8 | (9) | 13 |
| Gain (loss) on non-hedge derivatives (note 17D) | (75) | 32 | (75) | 8 |
| Income before finance items and income taxes | 1,090 | 2,102 | 3,817 | 5,414 |
Finance items (note 10)
| Finance income | 3 | 3 | 9 | 10 |
| Finance costs | (33) | (68) | (133) | (148) |
| Income before income taxes | 1,060 | 2,037 | 3,693 | 5,276 |
| Income tax expense (note 11) | (438) | (654) | (1,278) | (1,698) |
| Net income | $622 | $ |
1,383 $ 2,415 $ 3,578 Attributable to:
Equity holders of Barrick Gold Corporation $ 618 $ 1,365 $ 2,397 $ 3,525 Non-controlling interests (note 21) $ 4 $ 18 $ 18 $ 53
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 $ 0.62 $ 1.37 $ 2.40 $ 3.53 Diluted $ 0.62 $ 1.36 $ 2.40 $ 3.52
The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2012 9 9 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Comprehensive Income
| Barrick Gold Corporation | Three months ended | Nine months ended |
|---|---|---|
| (in millions of United States dollars) (Unaudited) | September 30, | September 30, |
| 2012 | 2011 2012 2011 |
Net income $ 622 $ 1,383 $ 2,415 $ 3,578 Other comprehensive income (loss), net of taxes
| Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $2, $10, $1, $7 | 13 | (75) | (24) | (70) |
| Realized (gains) losses and impairments on AFS financial securities, net of tax $nil, $1, $2, $6 | 1 | (6) | 29 | (50) |
| Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax $16, $4, $14, $17 | 82 | (162) | 141 | 165 |
| Realized (gains) on derivatives designated as cash flow hedges, net of tax $25, $3, $70, $49 | (81) | (124) | (240) | (300) |
| Currency translation adjustments, net of tax $nil, $nil, $nil, $nil | 36 | (94) | 37 | (61) |
| Total other comprehensive income (loss) | 51 | (461) | (57) | (316) |
673 $ 922 $ 2,358 $ 3,262 Total comprehensive income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 669 $ 904 $ 2,340 $ 3,209 Non-controlling interests $ 4 $ 18 $ 18 $ 53
The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2012 10 10 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Cash Flow
Barrick Gold Corporation Three months ended Nine months ended (in millions of United States dollars) (Unaudited) September 30, September 30, 2012 2011 2012 2011 OPERATING ACTIVITIES Net income $ 622 $ 1,383 $ 2,415 $ 3,578 Adjusted for the following items:
| Depreciation | 413 | 376 | 1,211 | 1,017 |
| Finance costs (excludes accretion) | 22 | 52 | 92 | 108 |
| Impairment charges (note 9B) | 152 | 19 | 274 | 23 |
| Income tax expense (note 11) | 438 | 654 | 1,278 | 1,698 |
| Increase in inventory | (282) | (199) | (615) | (455) |
| Proceeds from settlement of Australian dollar hedge contracts | 465 | - | 465 | - |
| (Gain) loss on non-hedge derivatives | 75 | (32) | 75 | (8) |
| (Gain) on sale of long-lived assets/investments | 2 | (69) | (18) | (225) |
| Other (note 12A) | 81 | 243 | (120) | (45) |
| Operating cash flows before interest and income taxes | 1,988 | 2,427 | 5,057 | 5,691 |
| Interest paid | (6) | (55) | (73) | (106) |
| Income taxes paid | (250) | (470) | (1,217) | (1,494) |
| Net cash provided by operating activities | 1,732 | 1,902 | 3,767 | 4,091 |
INVESTING ACTIVITIES Property, plant and equipment
| Capital expenditures (note 4) | (1,561) | (1,514) | (4,458) | (3,653) |
| Sales proceeds | 5 | 15 | 14 | 48 |
| Acquisitions (note 3) | - | (337) | (15) | (7,677) |
Investments
| Purchases | - | (63) | - | (72) |
| Sales | 2 | 9 | 169 | 80 |
| Other investing activities (note 12B) | (52) | (21) | (212) | (158) |
| Net cash used in investing activities | (1,606) | (1,911) | (4,502) | (11,432) |
FINANCING ACTIVITIES Proceeds on exercise of stock options 1 10 6 41 Long-term debt
- -
- 2 000 2,000 6 659 6,659
| Repayments | - | (16) | (1,446) | (365) |
| Dividends | (200) | (119) | (550) | (359) |
| Funding from non-controlling interests | 132 | 119 | 390 | 298 |
| Deposit on silver sale agreement | 137 | 138 | 137 | 138 |
| Other financing activities (note 12C) | - | (2) | (25) | (67) |
| Net cash provided by (used in) financing activities | 70 | 130 | 512 | 6,345 |
| Effect of exchange rate changes on cash and equivalents | 4 | (19) | 8 | (7) |
| Net increase (decrease) in cash and equivalents | 200 | 102 | (215) | (1,003) |
| Cash and equivalents at beginning of period(note 17A) | 2,330 | 2,863 | 2,745 | 3,968 |
| Cash and equivalents at end of period(note 17A) | $2,530 | $ |
2,965 $ 2,530 $ 2,965
The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2012 11 11 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
Barrick Gold Corporation (in millions of United States dollars) (Unaudited) As at September 30, As at December 31,
| 2012 | 2011 |
| ASSETS Current assets Cash and equivalents (note 17A) $ 2,530 Accounts receivable 361 Inventories (note 14) 2,851 Other current assets 632 | $ 2 ,745 426 2,498 876 |
| Total current assets 6,374 Non-current assets Equity in investees (note 13) 255 Other investments 98 Property, plant and equipment (note 15) 32,412 Goodwill (note 16) 9,629 Intangible assets 453 Deferred income tax assets 378 Non-current portion of inventory (note 14) 1,553 Other assets 932 | 6,545 440 161 28,979 9,626 569 409 1,153 1,002 |
| Total assets $ 5 2,084 | $ 4 8,884 |
| LIABILITIES AND EQUITY Current liabilities Accounts payable 2,260 Debt (note 17B) 1,299 Current income tax liabilities 148 Other current liabilities 257 | 2,083 196 306 326 |
| Total current liabilities 3,964 Non-current liabilities Debt (note 17B) 12,642 Provisions (note 19) 2,522 Deferred income tax liabilities 4,299 Other liabilities (note 18) 907 | 2,911 13,173 2,326 4,231 689 |
| Total liabilities 24,334 | 23,330 |
| Equity Capital stock (note 20) 17,911 Retained earnings 6,409 Accumulated other comprehensive income 538 Other 314 | 17,892 4,562 595 314 |
| Total equity attributable to Barrick Gold Corporation shareholders 25,172 Non-controlling interests (note 21) 2,578 | 23,363 2,191 |
| Total equity 27,750 | 25,554 |
| Contingencies and commitments (notes 14, 15 and 22) | |
| Total liabilities and equity $ 5 2,084 | $ 4 8,884 |
The notes to these unaudited interim financial statements, which are contained in the Third Quarter Report 2012 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2012 12 12 FINANCIAL STATEMENTS (UNAUDITED)