For a full explanation of results, the Financial Statements and Management Discussion & Analysis, please see the
THIRD QUARTER REPORT 2011 For a full explanation of results, the Financial Statements OCTOBER 27, 2011 and Management Discussion & Analysis, please see the Based on IFRS and expressed in US dollars Company’s website, www.barrick.com.
Barrick Reports Q3 2011 Financial and Operating Results
| Highlights | |
| Financial and Operating Results • Reported net earnings for Q3 rose 45% to a record $1.37 billion ($1.37 per share) from $942 million ($0.96 per share) in the prior year period. Q3 adjusted net earnings increased 52% to $1.39 billion ($1.39 per share)1 from $912 million ($0.93 per share) in Q3 2010, reflecting higher gold and copper prices along with higher copper sales volumes, resulting in an annualized return on equity of approximately 25%1. • Q3 EBITDA increased 47% to $2.46 billion1 from $1.67 billion in the same prior year period. Q3 operating cash flow rose 35% to a record $1.89 billion from $1.40 billion and adjusted operating cash flow increased 33% to $1.92 billion1 from $1.44 billion in Q3 2010. • Q3 gold production was 1.93 million ounces at total cash costs of $453 per ounce and net cash costs of $328 per ounce1. The Company is on track to meet its full year operating guidance, with production expected to be 7.6-7.8 million ounces at total cash costs of $460-$475 per ounce, within original guidance ranges. Net cash costs for 2011 are anticipated to be $330-$350 per ounce2, reflecting a lower copper price assumption than previously assumed. Copper production is expected to be 450-460 million pounds at total cash costs of $1.60-$1.70 per pound in 2011. • Gold cash margins expanded significantly in the third quarter, highlighting Barrick’s leverage to higher gold prices. Gold cash margins increased 55% to $1,290 per ounce1 from $834 per ounce in Q3 2010 and net cash margins rose 51% to $1,415 per ounce1 from $939 per ounce in the same prior year period. Increasing Gold and Copper Reserves and Resources through Exploration and Selective Acquisitions • During the quarter, Barrick announced two significant gold discoveries on the Cortez property in Nevada, Red Hill and Goldrush. Recent drilling continues to expand the mineralization at these two discoveries. In addition, infill drilling between the two deposits is successfully finding new mineralization, advancing the possibility that they will merge into a single deposit. A total of 264,000 feet of drilling is planned in 2011 and the program is approximately 80% complete. • At Lumwana in Zambia, drilling activity has been ramped up with 11 drill rigs active and an additional four rigs being mobilized. Areas of focus include resource definition drilling at the Chimiwungo deposit to convert inferred resources into indicated resources as well as extensional drilling to expand the mineralization. Drilling at Chimiwungo East commenced in September and results received from initial drill holes are in line with expectations. In addition, Barrick is advancing an expansion study that could potentially double processing rates. Investing in and Developing High Return Projects • The development of the Pueblo Viejo3 and Pascua-Lama mines advanced during the third quarter with first production on track to commence in mid-2012 and mid-2013, respectively. • Pueblo Viejo and Pascua-Lama are anticipated to contribute 1.4-1.5 million ounces of average annual gold production over the first full five years of operation at total cash costs significantly lower than Barrick’s overall current cash cost profile4. Continually Improving Corporate Social Responsibility (CSR) Practices to Maintain License to Operate • During the quarter, Barrick was ranked as a global leader in CSR for the fourth consecutive year by the Dow Jones Sustainability Index. Barrick is included on both the Dow Jones Sustainability World Index and North American Index for 2011. Returning Capital to Shareholders • Consistent with Barrick’s practice of paying a progressive dividend, the Board of Directors has authorized a quarterly dividend of 15 cents per share, which represents a 25% increase from the previous dividend. The Company’s strong earnings and operating cash flows, combined with its positive outlook on the gold price, enables it to continue to make high return investments in its project pipeline and also increase its dividend. Over the last five years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividend by more than 170%5 on a quarterly basis. |
1 Adjusted net earnings, adjusted operating cash flow, EBITDA, return on equity, total cash costs, net cash costs, cash margins and net cash margins per ounce/pound are non-GAAP financial measures. See pages 55-62 of Barrick’s Third Quarter 2011 Report.
2 Assumes a market copper price of $3.25/lb for Q4 2011, which will result in a realized price of about $3.40/lb, including the impact of the copper collars.
3 Barrick has a 60% interest in the Pueblo Viejo mine.
4 Based on the estimated combined average annual production in the first full five years of operation.
5 Calculated based on converting the 2006 semi-annual dividend of 11 cents per share to a quarterly equivalent.
BARRICK THIRD QUARTER 2011 PRESS RELEASE
FINANCIAL AND OPERATING RESULTS Q3 adjusted net earnings rose 52% to a record Q3 production was 1.93 million ounces of gold at $1.39 billion ($1.39 per share) compared to adjusted net earnings of $912 million ($0.93 per share) in the total cash costs of $453 per ounce and net cash costs of $328 per ounce. The Company is on track prior year period, reflecting higher gold and copper realized prices and higher copper sales volumes. Q3 to achieve its original full year operating guidance and has narrowed expected gold production and adjusted net earnings translate to an annualized cash cost ranges to 7.6-7.8 million ounces at total return on equity of approximately 25%. Q3 reported net earnings were $1.37 billion ($1.37 per cash costs of $460-$475 per ounce. Net cash costs for 2011 are expected to be $330-$350 per ounce, share) before net adjustments of approximately $20 million. Q3 EBITDA increased 47% to $2.46 reflecting a lower copper price assumption than previously assumed. In 2012, total cash costs are billion from $1.67 billion in the same prior year expected to be approximately 10% higher, primarily period. Q3 operating cash flow rose 35% to a record $1.89 billion from $1.40 billion in the prior due to inflationary cost pressures, as well as a change in the production mix. Gold production in year period and adjusted operating cash flow increased 33% to $1.92 billion from $1.44 billion in 2012 is anticipated to be comparable to 2011.
Q3 gold cash margins increased 55% to Q3 2010.
$1,290 per ounce from $834 per ounce in Q3 “Today, the Company reported another strong quarter of operational and financial results,” said 2010 and net cash margins rose 51% to $1,415 per ounce from $939 per ounce in the same prior Aaron Regent, Barrick’s President and CEO. “We year period. This margin expansion demonstrates remain on track to achieve our original full year the Company’s exceptional leverage to higher operating targets including one of the lowest cash gold prices. cost profiles amongst the senior gold producers. Third quarter copper cash margins of $1.63 per We are making good progress constructing our high pound included a full quarter of production from return Pueblo Viejo and Pascua-Lama mines and the recently acquired Lumwana mine in Zambia. are pleased with further positive exploration results The Company’s Q3 average realized copper price at Goldrush and Red Hill, our new gold discoveries was negatively impacted by about $58 million in in Nevada.”
provisional pricing adjustments due to the The North America region continued to significant decrease in market copper prices at the perform well in Q3, producing 0.84 million ounces end of September. The sales price for copper is at total cash costs of $415 per ounce. The Cortez determined based on market copper prices at a property performed on plan with production of 0.35 future date set by the customer, generally one to million ounces at total cash costs of $230 per six months after the initial date of sale. The prices ounce in Q3. The Cortez Hills open pit continues to on these sales are marked-to-market at the balance be in a higher waste stripping phase, which is sheet date based on the forward copper price for expected to result in lower production in Q4 before the relevant quotational period. All mark-to-market it returns to a higher grade area in Q1 2012.
adjustments are recorded in copper sales revenues. The Goldstrike operation produced 0.26 million As a result, the Company’s Q3 average realized ounces at total cash costs of $516 per ounce in Q3 copper price of $3.54 was below the average as it transitioned to a higher stripping phase in the market copper price of $4.07 per pound. As at second half of 2011 as previously disclosed. Full quarter-end, there were approximately 82 million year 2011 production guidance for the North pounds of copper sales that were provisionally America region is expected to be 3.30-3.40 million priced at the closing market copper price of $3.27 ounces, within the previous guidance range, at the per pound, which are expected to settle by year previous total cash cost guidance of $425-$450 end. Future changes in market copper prices will per ounce.
continue to affect the final realized prices.
BARRICK THIRD QUARTER 2011 2 PRESS RELEASE
The South American business unit performed and leveraging Barrick’s supply chain agreements. ahead of plan with production of 0.48 million An infill drill program at the producing Malundwe ounces at total cash costs of $358 per ounce in Q3. deposit is underway to improve dilution control and Lagunas Norte production of 0.22 million ounces at more accurately model ore body characteristics. total cash costs of $260 per ounce was ahead of The Zaldívar copper mine in Chile produced 65 plan, primarily due to changes in mine sequencing, million pounds at total cash costs of $1.67 per which resulted in higher production in Q3, which pound in Q3 and is expected to produce had previously been anticipated in Q4. Veladero approximately 300 million pounds of copper at contributed 0.22 million ounces at total cash costs $1.40-$1.50 per pound in 2011. Zaldívar’s Q3 of $380 per ounce in Q3. In 2011, the South America performance was impacted by unplanned primary region is expected to produce 1.85-1.90 million crusher maintenance which affected throughput. In ounces at total cash costs of $360-$380 per ounce, 2011, the Company’s total copper production is within the previous production and cost guidance expected to be 450-460 million pounds, which is ranges. slightly lower than the previous guidance of 455- The Australia Pacific business unit produced 475 million pounds. Total copper cash costs in 2011 0.47 million ounces at total cash costs of $609 per are expected to be $1.60-$1.70 per pound, within ounce in Q3. The Porgera mine, which produced the previous guidance range of $1.55-$1.70 per 0.13 million ounces at total cash costs of $545 per pound. In 2012, copper total cash costs are ounce, was impacted by lower underground anticipated to be higher due to inflationary cost production, primarily due to equipment availability pressures and the impact of a full year of issues and unplanned maintenance. The Australia production from Lumwana.
Pacific region is expected to produce about 1.90 Utilizing option collar strategies, the Company million ounces in 2011, within the previous guidance put in place floor protection on substantially all of range, at the previous total cash cost guidance of the remaining expected copper production for 2011 $610-$635 per ounce. at an average floor price of approximately $3.45 Attributable production from African Barrick per pound, with upside participation to an average Gold plc in Q3 was 0.14 million ounces at total cash of approximately $4.85 per pound6. The Company costs of $687 per ounce. Barrick’s share of 2011 also put in place floor protection on just under half production is expected to be 0.515-0.560 million of the expected copper production for 2012 at an ounces at total cash costs of $675-$700 per ounce. average floor price of $3.75 per pound and has sold Q3 copper production of 140 million pounds at call options on approximately 40% of the expected total cash costs of $1.91 per pound included the first 2012 production at an average price of full quarter of production from the newly acquired approximately $5.50 per pound7. The remaining Lumwana mine in Zambia, which produced 75 copper production is subject to market prices. million pounds at total cash costs of $2.13 per Approximately 60% of Barrick’s consolidated pound. Lumwana is expected to produce about 155 production costs are denominated in US dollars. million pounds of copper at total cash costs of The Company’s largest single currency exposure is $1.95-$2.10 per pound from June 1 until year end. the Australian dollar/US dollar exchange rate. Production and cash cost guidance for 2011 reflects Barrick is hedged on substantially all of the the impact of plant availability issues, lower grades expected remaining Australian expenditures in 2011 primarily related to dilution, the mill shut down for and the expected 2012 Australian expenditures at maintenance in Q4 previously scheduled for Q1 effective average rates of $0.76 and $0.82, 2012, and higher costs related to labor and power. respectively, and also has substantial coverage for Areas of focus at Lumwana include mill de- the following two years at rates at or below $0.80. bottlenecking, pit re-optimization, changes to mine 6 The realized price on remaining 2011 production is expected to be reduced by $0.06/lb as a result of the sequencing, dilution control, equipment availability net premium paid on these positions.
7 The realized price on 2012 production is expected to be reduced by $0.12/lb as a result of the net premium paid on these positions.
BARRICK THIRD QUARTER 2011 3 PRESS RELEASE
The Company has also mitigated the impact of mineralized zone. A total of 264,000 feet of drilling higher oil prices through the use of financial is planned at Red Hill and Goldrush in 2011 and the contracts and production from Barrick Energy such program is approximately 80% complete.
that a $10 change in WTI crude oil prices is only At the 75%-owned Turquoise Ridge operation expected to impact 2011, 2012 and 2013 total cash in Nevada, work is advancing on the potential to costs by about $1 per ounce. The Barrick Energy develop a large scale open pit in order to mine the contribution, along with the financial contracts, lower grade halo around the high grade provides hedge protection for approximately 80% underground ore, which could significantly increase of expected remaining 2011 fuel consumption and annual production. A prefeasibility study is approximately 90% of expected 2012 and 2013 fuel expected to be completed by the end of 2012. Nine consumption. Financial contracts also provide drill rigs are currently active on the property. The substantial hedge coverage in 2014 and production focus of open pit drilling is on upgrading resources from Barrick Energy is expected to continue to and mineral inventory. Surface drilling has provide long term natural offsets to changes in intersected significant new mineralization, energy prices. particularly in the south area of the planned pit where the cover is shallower, which could positively INCREASING GOLD AND COPPER RESERVES AND impact economics. Underground drilling is also RESOURCES THROUGH EXPLORATION8 AND yielding strong results, intersecting higher grades SELECTIVE ACQUISITIONS than expected in some areas and zones are open Barrick’s 2011 exploration guidance is $370-$390 up-dip and to the northwest.
million and is weighted towards resource additions At Lumwana, drilling activity has been ramped and reserve conversion at and around mine sites, up with 11 drill rigs active and an additional four rigs while also providing for earlier stage exploration to being mobilized. Areas of focus include resource support longer term growth for the Company. definition drilling at Chimiwungo to convert Major exploration programs are underway in all inferred resources into indicated resources as well regions, with the focus on Nevada and the as extensional drilling to expand the mineralization. Lumwana property. Drilling across the in-pit portion of Chimiwungo In Nevada, recent drilling continues to expand East commenced in September and results received the mineralization at Red Hill and Goldrush. The from initial drill holes indicate the thickness of the Company’s confidence in the potential and shoot is increasing, in line with expectations. continuity of the mineralization has increased. In Barrick is advancing an expansion study that could addition, infill drilling between both deposits is potentially double processing rates. An induced successfully finding new mineralization and there is polarization survey is underway in the Chimiwungo the possibility that the two deposits will merge into South/Mutoma area and a drill program is planned a single deposit. Step out holes north of Red Hill to commence in Q4 2011 to test the potential for have intersected mineralization a further 2,000 shallow mineralization in this area.
feet beyond the currently outlined resource as well as extended mineralization at least 1,000 feet to INVESTING IN AND DEVELOPING HIGH RETURN the southwest. Highlights of major step-out drilling PROJECTS IN CONSTRUCTION include 120 feet at 0.17 ounces per ton (opt), 60 Barrick has targeted growth in production to feet at 0.20 opt, 80 feet at 0.16 opt, and 30 feet at approximately 9 million ounces of gold within the 0.25 opt. Step-out drilling south of Goldrush is now next five years9. Total cash costs are expected to underway to test the southern extension of the benefit from its large, low cost projects, primarily Pueblo Viejo and Pascua-Lama, as these mines 8 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 The target of 9 Moz of annual production within five years reflects a current assessment of the expected generally, and drilling and analysis procedures on Barrick’s material properties, see Barrick’s most recent production and timeline to complete and commission Barrick’s projects currently in construction (Pueblo Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the Viejo and Pascua-Lama) and the Company’s current assessment of existing mine site opportunities, some of U.S. Securities and Exchange Commission. which are sensitive to metal price and various capital and input cost assumptions.
BARRICK THIRD QUARTER 2011 4 PRESS RELEASE
come on stream. Once at full capacity, these two production for the first full five years is expected to mines are expected to contribute 1.4-1.5 million be about 35 million ounces. For every $1 per ounce ounces of average annual production over the first increase in the silver price, total cash costs are full five years of operation at low cash costs. expected to decrease by approximately $35 per At the Pueblo Viejo project in the Dominican ounce over this period. Total mine construction Republic, first production is anticipated in mid-2012. capital is estimated at $4.7-$5.0 billion11, with Barrick’s share of annual gold production in the approximately 50% of the capital committed at the first full five years of operation is expected to end of the third quarter. In Chile, earthworks are average 625,000-675,000 ounces at total cash about 80% complete. In Argentina, good progress costs of $275-$300 per ounce10. was made on earthworks, which are approximately Total mine construction capital is estimated at 60% complete at the end of Q3. Civil concrete $3.6-$3.8 billion10 (100%), or $2.2-$2.3 billion works continue for the structures at the stockpile, (Barrick’s 60% share) of which 80% has been grinding and pebble crusher areas, and have committed at the end of the third quarter. Overall started in the Merrill Crowe process plant area. construction at the Pueblo Viejo project is now Concrete and steel works continued on the more than 75% complete. Remediation of the processing facilities in the third quarter.
starter tailings dam progressed during Q3 with the At the Barriales camp in Chile, the former Company in receipt of all necessary approvals to exploration camp has been demolished and allow construction of the dam to its full height. At construction is nearing completion on various the end of the third quarter, brick lining of all four facilities. The Los Amarillos camp in Argentina, autoclaves was completed. Nearly all of the which is targeted to house about 5,500 beds, concrete has been poured, about 95% of the steel currently houses 2,680 beds, with a targeted has been erected and more than 7.6 million tonnes capacity of 3,500 beds to be completed by year of ore have been stockpiled. Work continues toward end.
The Jabal Sayid copper project in Saudi Arabia achieving key milestones, including the connection of power to the site. is expected to enter production in the second half As part of a longer-term, optimized power of 2012 at a total capital cost of approximately $400 million. Initial production is expected from solution for Pueblo Viejo, the Company is advancing a plan to construct a dual fuel power Lode 2 and total average annual copper production is expected to be 100-130 million pounds over the plant at an estimated incremental cost of approximately $300 million (100% basis) or $180 first full five years of operation. Good potential million (Barrick’s share). The power plant would exists for material extensions to known deposits and new discoveries from an ongoing evaluation of commence operations utilizing heavy fuel oil, but have the ability to subsequently transition to lower the entire Jabal Sayid site. Current exploration is focused on testing Lode 4 at depth, where cost liquid natural gas. The new plant is expected to provide lower cost, long term power to the project. mineralization has been intersected in several Pascua-Lama is a high quality, world class previous drill holes, including an intercept of 111 meters at 2.67% copper. Several geophysical resource, expected to achieve first production in mid-2013. Average annual gold production is surveys are also in progress.
At the end of the third quarter, construction is expected to be 800,000–850,000 ounces in its first full five years of operation at negative total over 60% complete with more than 70% of the cash costs of $225-$275 per ounce11, assuming a capital committed. Bulk earthworks are about 85% complete, underground services are more than silver price of $25 per ounce. Average annual silver 50% complete and concrete poured is 90% complete.
10 Based on gold and oil price assumptions of $1,300/oz and $90/bbl, respectively.
11 Based on gold, silver and oil price assumptions of $1,300/oz, $25/oz, and $90/bbl, respectively and
BARRICK THIRD QUARTER 2011 5 PRESS RELEASE
PROJECTS IN FEASIBILITY protect its interest in the property, including At the Cerro Casale project in Chile, the through international arbitration if necessary. Environmental Impact Assessment was submitted At the 50%-owned Kabanga nickel project in in the third quarter. The permitting process is Tanzania, the draft feasibility study is being anticipated to be approximately 18 months, at reviewed by the partners. The Environmental which time Barrick will consider a construction Impact Assessment is expected to be submitted in decision and commence detailed engineering. Q4 2011. Preliminary engineering will continue for Exploration programs will continue in parallel with the remainder of 2011, as well as initiating completing basic engineering and permitting. negotiations to develop a Mineral Development Discussions with the government and meetings with Agreement with the Tanzanian government, prior local communities and indigenous groups are to making a construction decision in the second continuing in conjunction with these activities. half of 2012.
Barrick’s 75% share of average annual production is anticipated to be 750,000-825,000 RETURNING CAPITAL TO SHAREHOLDERS At September 30, 2011, Barrick had a cash balance ounces of gold and 190-210 million pounds of copper in the first full five years of operation at of $3 billion13 and $1 billion available for drawdown total cash costs of $125-$175 per ounce12. Estimated under its credit facilities, as well as the gold industry’s highest credit rating. The Company total mine construction capital is approximately $6 billion (100% basis)12. generated approximately $4.3 billion in adjusted operating cash flow in the first nine months of 2011. At the 50%-owned Donlin Gold project in Alaska, feasibility study revisions, which include Barrick’s strong earnings and operating cash flows, updated costs and the utilization of natural gas, are combined with its positive outlook on the gold price, enables it to continue to make high return being finalized for submission to the Board of Donlin Gold LLC in Q4 2011. Mine construction investments in its project pipeline and also increase the dividend. The Board of Directors has authorized capital is expected to be approximately $6 billion (100% basis) with an additional $1 billion (100% a quarterly dividend of 15 cents per share, which basis) for the construction of a natural gas pipeline, represents a 25% increase from the previous dividend. Over the last five years, Barrick has had a which is anticipated to lower long term power costs and offer a better environmental and operational consistent track record of returning capital to shareholders, increasing its dividend by more than solution for power connection to the site.
Permitting is expected to commence in the first half 170% on a quarterly basis14. The quarterly dividend of 2012. is payable on December 15, 2011 to shareholders on record as of the close of business on November 30, At the Reko Diq copper-gold project, in which Barrick holds a 37.5% interest, the Supreme Court 2011.
of Pakistan affirmed the jurisdiction of the * * * * provincial Government of Baluchistan (GoB) to Barrick’s vision is to be the world’s best gold grant the mining license in the third quarter. In company by finding, acquiring, developing and September 2011, the GoB informed Tethyan Copper producing quality reserves in a safe, profitable and Company (TCC), the project company, that it socially responsible manner. Barrick’s shares are considered the mining lease application to be traded on the Toronto and New York stock incomplete and unsatisfactory. TCC has recently exchanges.
responded to the government's comments on the application and will take appropriate steps to
13 Includes $525 million cash held at ABG, which may not be readily deployed outside ABG. It also includes $6 million held at Pueblo Viejo as a result of the first and second draw on the project financing. These funds are to be used to fund the further construction of the project and are not readily deployable by Barrick for other purposes.
12 Based on gold, copper and oil price assumptions of $1,300/oz, $3.25/lb and $90/bbl, respectively and 14 The declaration and payment of dividends remains at the discretion of the Board of Directors and will depend on the Company’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.
BARRICK THIRD QUARTER 2011 6 PRESS RELEASE
Key Statistics
Barrick Gold Corporation Three months ended Nine months ended (in United States dollars) September 30, September 30, (Unaudited) 2011 2010 2011 2010 Operating Results Gold production (thousands of ounces)1 1,928 2,060 5,862 6,065 Gold sold (thousands of ounces) 1,908 1,949 5,685 5,911 Per ounce data Average spot gold price $ 1,702 $ 1,227 $ 1,534 $ 1,178 Average realized gold price2 1,743 1,237 1,550 1,184 Net cash costs2 328 298 325 297
| Total cash costs2 | 453 | 403 | 445 | 399 |
| Depreciation3 | 153 | 141 | 149 | 138 |
| Other4 | 16 | 7 | 16 | 6 |
| Total production costs | 622 | 551 | 610 | 543 |
| Copper credits | 125 | 105 | 120 | 102 |
| Copper production (millions of pounds) | 140 | 84 | 308 | 286 |
| Copper sold (millions of pounds) | 146 | 90 | 309 | 288 |
Per pound data Average spot copper price $ 4.07 $ 3.29 $ 4.20 $ 3.25
| Average realized copper price2 | 3.54 | 3.43 | 3.87 | 3.20 |
| Total cash costs2 | 1.91 | 1.12 | 1.65 | 1.10 |
| Depreciation3 | 0.29 | 0.25 | 0.27 | 0.22 |
| Total production costs | 2.20 | 1.37 | 1.92 | 1.32 |
Financial Results (millions)
Revenues $ 4,007 $ 2,788 $ 10,523 $ 7,990
| Net earnings5 | 1,365 | 942 | 3,525 | 2,621 |
| Adjusted net earnings2 | 1,385 | 912 | 3,506 | 2,499 |
| EBITDA2 | 2,460 | 1,669 | 6,378 | 4,751 |
| Operating cash flow | 1,889 | 1,397 | 4,014 | 3,635 |
| 1,918 | 1,441 | 4,295 | 3,719 |
Adjusted operating cash flow2 Per Share Data (dollars)
Net earnings (basic) 1.37 0.96 3.53 2.66 Adjusted net earnings (basic)2 1.39 0.93 3.51 2.54
| Net earnings (diluted) | 1.36 | 0.94 | 3.52 | 2.63 |
| Weighted average basic common shares (millions) | 1,000 | 986 | 999 | 985 |
| Weighted average diluted common shares (millions)6 | 1,001 | 998 | 1,001 | 997 |
| Return on equity2 | 25% | 21% | 22% | 20% |
As at As at September 30, December 31, 2011 2010 Financial Position (millions)
Cash and equivalents $ 2,965 $ 3,968 Non-cash working capital 1,991 1,696 Adjusted debt2 13,049 6,392 Net debt2 10,086 2,427 Average shareholders' equity 20,924 17,352 1 Production includes our equity share of gold production at Highland Gold.
2 Realized price, net cash costs, total cash 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 55 - 62 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 impact of Barrick Energy and realized gains and losses on non-hedge commodity contracts at the Company's producing mines divided by equity ounces of gold sold or pounds of copper sold.
5 Net earnings represents net income attributable to the equity holders of the Company.
6 Fully diluted includes dilutive effect of stock options and convertible debt.
BARRICK THIRD QUARTER 2011 7 SUMMARY INFORMATION
Production and Cost Summary Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
| Three months ended | Nine months ended | Three months ended | Nine months ended | ||
|---|---|---|---|---|---|
| September 30, | September 30, | September 30, | September 30, | ||
| (Unaudited) 2011 | 2010 | 2011 | 2010 | 2011 2010 | 2011 2010 |
| North America 836 | 929 | 2,621 | 2,413 | $415 $ |
394 $ 405 $ 426
| South America | 475 | 518 | 1,426 | 1,743 | 358 | 213 | 358 | 196 |
| Australia Pacific | 472 | 483 | 1,394 | 1,454 | 609 | 587 | 601 | 567 |
| 135 | 122 | 391 | 431 | 687 | 618 | 666 | 552 |
African Barrick Gold3 Other 10 8 30 24 475 494 475 494 Total 1,928 2,060 5,862 6,065 $ 453 $ 403 $ 445 $ 399
Copper Production (attributable pounds) (Millions) Total Cash Costs ($/lb)
| Three months ended | Nine months ended | Three months ended | Nine months ended | |||
|---|---|---|---|---|---|---|
| September 30, | September 30, | September 30, | September 30, | |||
| (Unaudited) | 2011 | 2010 | 2011 | 2010 | 2011 2010 | 2011 2010 |
| South America | 65 | 78 | 209 | 236 | 1.67 $ |
1.12 $ 1.44 $ 1.08 Australia Pacific 75 6 99 50 2.13 1.11 2.08 1.19 Total 140 84 308 286 $ 1.91 $ 1.12 $ 1.65 $ 1.10
Total Gold Production Costs ($/oz) Three months ended Nine months ended September 30, September 30, (Unaudited) 2011 2010 2011 2010 Direct mining costs at market foreign exchange rates $ 500 $ 398 $ 493 $
| Gains realized on currency hedge and commodity hedge/economic hedge contracts | (58) | (11) | (53) | (10) |
| Adjustments to direct mining costs2 | (16) | (7) | (16) | (6) |
| By-product credits | (18) | (11) | (18) | (14) |
| Copper credits | (125) | (105) | (120) | (102) |
| Cash operating costs, net basis | 283 | 264 | 286 | 264 |
| Royalties | 45 | 34 | 39 | 33 |
| 328 | 298 | 325 | 297 |
Net cash costs1
| Copper credits | 125 | 105 | 120 | 102 |
| Total cash costs1 | 453 | 403 | 445 | 399 |
| Depreciation | 153 | 141 | 149 | 138 |
| Adjustments to direct mining costs2 | 16 | 7 | 16 | 6 |
Total production costs $ 622 $ 551 $ 610 $ 543
Total Copper Production Costs ($/lb) Three months ended Nine months ended September 30, September 30, (Unaudited) 2011 2010 2011 2010 1.83 $ 1.11 $ 1.60 $ 1.08 Cash operating costs $
| Royalties | 0.08 | 0.01 | 0.05 | 0.02 |
| Total cash costs1 | 1.91 | 1.12 | 1.65 | 1.10 |
| Depreciation | 0.29 | 0.25 | 0.27 | 0.22 |
2.20 $ 1.37 $ 1.92 $ 1.32 Total production costs $
1 Total cash costs and net cash costs are non-GAAP financial performance measures with no standard meaning under IFRS.
See page 57 of the Company's MD&A.
2 Represents realized gains and losses on non-hedge currency and commodity contracts and the impact of Barrick Energy's net contribution.
3 Figures relating to African Barrick Gold are presented on a 100% basis up to March 31, 2010 and a 73.9% basis thereafter, which reflects our equity share of production.
BARRICK THIRD QUARTER 2011 8 SUMMARY INFORMATION
Consolidated Statements of Income
Three months ended Nine months ended (in millions of United States dollars, except per share data) (Unaudited) September 30, September 30, 2011 2010 2011 2010
Revenue (notes 5 and 6) $ 4,007 $ 2,788 $ 10,523 $ 7,990 Costs and expenses
| Cost of sales (notes 5 and 7) | 1,730 | 1,301 | 4,583 | 3,831 |
| Corporate administration | 43 | 37 | 123 | 115 |
| Exploration and evaluation (note 8) | 94 | 56 | 248 | 156 |
| Other expense (note 10A) | 135 | 96 | 391 | 330 |
| Impairment charges (reversals) (note 10B) | 19 | (29) | 23 | (53) |
| 2,021 | 1,461 | 5,368 | 4,379 | |
| Other income (note 10C) | 76 | 35 | 238 | 92 |
| Income (loss) from equity investees (note 14) | 8 | (3) | 13 | (27) |
| Gain (loss) on non-hedge derivatives (note 18E) | 32 | (4) | 8 | 84 |
| Income before finance items and income taxes | 2,102 | 1,355 | 5,414 | 3,760 |
Finance items (note 11)
| Finance income | 3 | 5 | 10 | 11 |
| Finance costs | (68) | (40) | (148) | (153) |
| Income before income taxes | 2,037 | 1,320 | 5,276 | 3,618 |
| Income tax expense (note 12) | (654) | (376) | (1,698) | (1,052) |
| Income from continuing operations | 1,383 | 944 | 3,578 | 2,566 |
| Income from discontinued operations (note 4G) | - | 11 | - | 82 |
1,383 $ 955 $ 3,578 $ 2,648 Net income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 1,365 $ 942 $ 3,525 $ 2,621 Non-controlling interests (note 22) $ 13 $ 53 $ 18 $
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 9)
Income from continuing operations Basic $ 1.37 $ 0.94 $ 3.53 $ 2.58 Diluted $ 1.36 $ 0.93 $ 3.52 $ 2.55 Income from discontinued operations Basic $
- $ 0.02 $
- $ 0.08
Diluted $
- $ 0.01 $
- $ 0.08
Net income Basic $ 1.37 $ 0.96 $ 3.53 $ 2.66 Diluted $ 1.36 $ 0.94 $ 3.52 $ 2.63
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2011 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2011 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, |
| 2011 | 2010 2011 2010 |
Net income $ 1,383 $ 955 $ 3,578 $ 2,648 Other comprehensive income, net of taxes
| Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $10, $3, $7, $1 | (75) | 28 | (70) | 27 |
| Realized (gains) losses and impairments on AFS financial securities, net of tax $1, $1, $6, $nil | (6) | (7) | (50) | (8) |
| Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax $4, $118, $17, $76 | (162) | 435 | 165 | 294 |
| Realized gains on derivatives designated as cash flow hedges, net of tax $3, $4, $49, $13 | (124) | (15) | (300) | (52) |
| Currency translation adjustments, net of tax $nil, $nil, $nil, $nil | (94) | 14 | (61) | 1 |
| Total other comprehensive income (loss) | (461) | 455 | (316) | 262 |
922 $ 1,410 $ 3,262 $ 2,910 Total comprehensive income $ Attributable to:
Equity holders of Barrick Gold Corporation $ 904 $ 1,397 $ 3,209 $ 2,883 Non-controlling interests $ 18 $ 13 $ 53 $
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2011 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2011 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, 2011 2010 2011 2010 OPERATING ACTIVITIES Net income $ 1,383 $ 955 $ 3,578 $ 2,648 Adjusted for the following items:
| Depreciation | 376 | 316 | 1,017 | 936 |
| Accretion | 16 | 5 | 40 | 17 |
| Impairment charges (reversals) (note 10B) | 19 | (29) | 23 | (53) |
| Income tax expense (note 12) | 654 | 376 | 1,698 | 1,052 |
| Increase in inventory | (199) | (110) | (455) | (242) |
| Gain on sale/acquisition of long-lived assets/investments | (69) | (16) | (225) | (66) |
| Other (note 13A) | 234 | 148 | (62) | 120 |
| Operating cash flows before interest and income taxes | 2,414 | 1,645 | 5,614 | 4,412 |
| Net interest paid | (55) | (97) | (106) | (208) |
| Income taxes paid | (470) | (151) | (1,494) | (569) |
| Net cash provided by operating activities | 1,889 | 1,397 | 4,014 | 3,635 |
INVESTING ACTIVITIES Property, plant and equipment
| Capital expenditures (note 5) | (1,514) | (907) | (3,653) | (2,467) |
| Sales proceeds | 15 | 27 | 48 | 35 |
| Acquisitions (note 4) | (337) | (61) | (7,677) | (813) |
Investments
| Purchases | (63) | (26) | (72) | (28) |
| Sales | 9 | 10 | 80 | 10 |
| Other investing activities (note 13B) | (8) | (12) | (81) | (44) |
| Net cash used in investing activities | (1,898) | (969) | (11,355) | (3,307) |
FINANCING ACTIVITIES Proceeds on exercise of stock options 10 18 41 49 Proceeds from public issuance of common shares by a subsidiary (note 4E) - - - 884 Long-term debt
| Proceeds | - | - | 6,659 | 782 |
| Repayments | (16) | (72) | (365) | (147) |
| Dividends | (119) | (118) | (359) | (315) |
| Funding from non-controlling interests | 119 | 28 | 298 | 12 |
| Deposit on silver sale agreement | 138 | 137 | 138 | 137 |
| Other financing activities (note 13C) | (2) | (4) | (67) | (22) |
| Net cash provided by (used in) financing activities | 130 | (11) | 6,345 | 1,380 |
| Effect of exchange rate changes on cash and equivalents | (19) | 13 | (7) | 9 |
| Net increase (decrease) in cash and equivalents | 102 | 430 | (1,003) | 1,717 |
| Cash and equivalents at beginning of period(note 18A) | 2,863 | 3,851 | 3,968 | 2,564 |
| Cash and equivalents at end of period(note 18A) | $2,965 $ |
4,281 $ 2,965 $ 4,281
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2011 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2011 11 FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets
As at September 30, As at December 31, As at January 1, (in millions of United States dollars) (Unaudited)
| 2011 | 2010 | 2010 |
| ASSETS Current assets Cash and equivalents (note 18A) $ 2 ,965 Accounts receivable 444 Inventories (note 15) 2,249 Other current assets 906 | $ 3,968 370 1,798 935 | $ 2 ,564 259 1,488 518 |
| Total current assets (excluding assets classified as held for sale) 6,564 Assets classified as held for sale - | 7,071 - | 4,829 100 |
| Total current assets 6,564 Non-current assets Equity in investees (note 14) 440 Other investments 188 Property, plant and equipment (note 16) 27,007 Goodwill (note 17) 9,557 Intangible assets 500 Deferred income tax assets 537 Other assets 2,034 | 7,071 396 171 17,890 6,096 475 625 1,913 | 4,929 1,124 62 13,378 5,197 275 601 1,358 |
| Total assets $ 4 6,827 | $ 34,637 | $ 2 6,924 |
| LIABILITIES AND EQUITY Current liabilities Accounts payable 1,890 Debt 198 Current income tax liabilities 451 Other current liabilities 354 | 1,511 14 550 416 | 1,221 54 104 366 |
| Total current liabilities (excluding liabilities classified as held for sale) 2,893 Liabilities classified as held for sale - | 2,491 - | 1,745 49 |
| Total current liabilities 2,893 Non-current liabilities Debt (note 18B) 13,185 Provisions (note 20) 2,137 Deferred income tax liabilities 3,396 Other liabilities (note 19) 752 | 2,491 6,624 1,768 1,971 566 | 1,794 6,124 1,408 960 884 |
| Total liabilities 22,363 | 13,420 | 11,170 |
| Equity Capital stock (note 21) 17,873 Retained earnings (deficit) 3,777 Accumulated other comprehensive income 411 Other 314 | 17,820 611 727 314 | 17,392 (2,535) 232 143 |
| Total equity attributable to Barrick Gold Corporation shareholders 22,375 Non-controlling interests (note 22) 2,089 | 19,472 1,745 | 15,232 522 |
| Total equity 24,464 | 21,217 | 15,754 |
| Contingencies and commitments (note 16 and 23) | ||
| Total liabilities and equity $ 4 6,827 | $ 34,637 | $ 2 6,924 |
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2011 available on our website are an integral part of these consolidated financial statements.
BARRICK THIRD QUARTER 2011 12 FINANCIAL STATEMENTS (UNAUDITED)