Barrick Gold Corporation
NYSE : ABX
TSX : ABX

Barrick Gold Corporation

October 29, 2009 07:00 ET

Barrick Reports Q3 Results; Significantly Reduces Gold Hedge Position

TORONTO, ONTARIO--(Marketwire - Oct. 29, 2009) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) -

THIRD QUARTER REPORT 2009

Based on US GAAP and expressed in US dollars

For a full explanation of results, the Financial Statements and Management Discussion & Analysis, and mine statistics please see the Company's website, www.barrick.com.

Highlights

- Barrick Gold reported a net loss of $5.4 billion ($6.07 per share) compared to net income of $254 million ($0.29 per share) in Q3 2008. The net loss primarily reflects a $5.7 billion charge to earnings for a change in accounting treatment following the Company's previously announced intention to eliminate its Gold Hedges(1). Adjusted net income of $473 million ($0.54 per share)(2) compares to $404 million ($0.46 per share) in the same prior year period. Operating cash flow was a record $911 million in the third quarter, up 67% compared to $544 million in the same prior year period.

- Q3 gold production of 1.90 million ounces at total cash costs of $456 per ounce or net cash costs of $371 per ounce(2) was on plan. Barrick remains on track with its full year 2009 production guidance of 7.2-7.6 million ounces of gold at total cash costs of $450-$475 per ounce or net cash costs of $360-$385 per ounce. Production is expected to increase to approximately 7.7-8.1 million ounces in 2010 at lower total cash costs than in 2009.

- In early September, Barrick announced a plan to provide investors with full leverage to the gold price on future production by eliminating its Gold Hedges and a substantial portion of the liability related to its fully participating Floating Contracts(1) using $3.9 billion in net proceeds from an equity offering. In October, the Company completed the sale of $1.25 billion of long-term debt securities to further reduce the Floating Contracts liability. As of October 28, the Gold Hedges have been reduced to 1.9 million ounces with a remaining liability of $1.3 billion and the Floating Contracts liability has been reduced to $1.5 billion.

- Construction of Barrick's new generation of low cost mines remains on schedule and in line with their budgets. Buzwagi has ramped up production and Cortez Hills is 85% complete. Pueblo Viejo is progressing well with 60% of the capital budget committed, and Pascua-Lama has started construction. At full capacity, these projects are expected to contribute about 2.6 million ounces of annual production at lower than current cash costs.

- Barrick agreed to sell an amount equivalent to 25% of the life-of-mine silver production from Pascua-Lama and silver production from three existing mines until project completion at Pascua-Lama for $625 million in cash and ongoing payments as silver is delivered. The transaction surfaces the value of Pascua-Lama, shares overall risk, increases the expected rate of return on Barrick's investment and provides an additional source of financing, while maintaining full upside on 100% of the gold and 75% of the silver production.

- Subsequent to quarter end, Barrick entered into an agreement to purchase a 70% interest in the El Morro project in Chile for $465 million in cash. The transaction is expected to add another large, high quality gold-copper project to Barrick's portfolio near its Pascua-Lama and Cerro Casale projects.

- The Company has completed an internal review to improve its organizational structure and expects to realize annualized savings of at least $50 million once fully implemented.

Q3 production of 1.90 million ounces of gold at total cash costs of $456 per ounce or net cash costs of $371 per ounce (applying credit for non-gold sales) was on plan.

The average realized gold price for the quarter was $971 per ounce(2), $11 higher than the average spot price of $960 per ounce. The Company reported a third quarter net loss of $5.4 billion ($6.07 per share) compared to net income of $254 million ($0.29 per share) in the prior year period. The current period net loss primarily reflects a $5.7 billion charge to earnings for a change in accounting treatment following the Company's decision to eliminate its Gold Hedges and a $155 million impairment charge for the Sedibelo platinum project. Q3 2009 adjusted net income of $473 million ($0.54 per share) compares to $404 million ($0.46 per share) in the prior year period and reflects higher gold revenues and lower cost of sales, partly offset by lower realized copper prices and higher income tax expense.

Q3 2009 operating cash flow increased by 67% to a record $911 million compared to $544 million in Q3 2008, and reflects higher adjusted net income and lower income taxes paid as a result of the production mix and the use of tax loss carry-forwards. The Company has generated almost $2.0 billion in operating cash flow in the first 9 months.

"Our operations delivered another strong quarter, positioning us well to meet our production and cost targets for the year," said Aaron Regent, Barrick's President and Chief Executive Officer. "In addition to our continued focus on achieving our production goals, the Company took a number of important steps during the quarter to enhance our strategic positioning in what we expect to be a strong gold price environment. We have dealt decisively with our Gold Hedges which will be completely eliminated within 12 months. We further increased our exposure to metal prices by monetizing 25% of the silver at Pascua-Lama, which provided additional financial capacity to purchase 70% of El Morro, adding another high quality gold-copper project to our portfolio. We have also completed an organization review which will improve our decision making processes and reduce our administrative costs by at least $50 million per year."

PLAN TO ELIMINATE GOLD HEDGES

In September, Barrick announced a plan to eliminate all of its Gold Hedges within 12 months and a substantial portion of the liability related to its fully participating Floating Contracts. The Gold Hedges are contracts where Barrick has sold forward gold ounces and will receive a fixed price upon delivering into these contracts. As such, Barrick does not benefit from any increase in the price of gold but the mark-to-market (MTM) liability, or costs of these contracts, will increase with a rise in the gold price. The Floating Contracts were previously fixed contracts that have been neutralized by entering into an offsetting contract where the gold has been repurchased. The impact was to fix the loss on these contracts at that point, such that it will not change with subsequent movements in the gold price but will incur a financing charge. Conversely, the Company will fully benefit from any subsequent increase in the price of gold.

Barrick made this decision to gain full leverage to the gold price on all future production based on an increasingly positive outlook for gold. In addition, the gold hedge book has been a particular concern among our shareholders. We believe the hedge book obscured the many positive developments within the Company and adversely impacted the investment community's ability to analyze and evaluate the Company, thereby reducing its appeal to the broader market. By eliminating the Gold Hedges, Barrick will now fully participate in the movement of the gold price and will be able to provide greater clarity around its capital structure. To fund the elimination of the Gold Hedges and a substantial portion of the Floating Contracts liability, Barrick issued new equity for net proceeds of $3.9 billion and subsequent to the third quarter issued $1.25 billion in new long-term debt securities. The debt securities are comprised of $400 million of 4.95% notes due 2020 and $850 million of 5.95% notes due 2039.

"We were able to secure very attractive terms for this long-term debt that will further simplify and strengthen our capital structure," said Jamie Sokalsky, Executive Vice President and Chief Financial Officer.



Reconciliation of Gold Hedges and Floating Contracts from September 30 to
October 28, 2009 and to September 2010

Floating
Gold Hedges Contracts Total
Ounces MTM Liability Liability Liability
(millions) ($ billions) ($ billions) ($ billions)
------------------------------------------------------------ --------------
As at September
30, 2009 2.9 1.9 3.7 5.6(i)
Change in
mark-to-market -- 0.2 -- 0.2
Ounces eliminated/
net proceeds used
to date (1.0) (0.8) (2.2) (3.0)
------------------------------------------------------------ --------------
As at October
28, 2009 1.9 1.3(ii) 1.5 2.8
Ounces to be
eliminated/
net proceeds
to be used (1.9) (1.3)(ii) (0.8) (2.1)
------------------------------------------------------------ --------------
Remaining Floating
Contracts liability
by September 2010 -- -- 0.7(iii) 0.7
------------------------------------------------------------ --------------
(i) The total liability excludes a $0.1 billion settlement obligation for
silver sales contracts.
(ii) At a gold price of $1,050 per ounce.
(iii) Assuming no change in the mark-to-market position as a result of
interest rate movements. The remaining Floating Contracts liability
will increase by the current average financing charge of about 5% at
the date of reset.


At the end of Q3, 2.9 million ounces of Gold Hedges with a liability of $1.9 billion and $3.7 billion of the Floating Contracts liability remained.

As of October 28, the Gold Hedges have been significantly reduced to 1.9 million ounces with a remaining liability of $1.3 billion. Barrick can purchase the remaining 1.9 million ounces in the open market or deliver physical gold into these contracts in order to terminate them. The Floating Contracts liability is economically similar to a fixed US dollar obligation with an average financing charge of about 5%. This liability has been reduced to $1.5 billion as of October 28 and does not require any activity in the gold market to be eliminated.

As of October 28, the remaining proceeds available from the equity offering and the debt offering to be applied to the Gold Hedges and Floating Contracts is $2.1 billion.

The Gold Sales Contracts have previously been accounted for as "normal sales" under US GAAP, where the impact is recorded in Barrick's financial statements as revenue on delivery of gold production under the contracts at the contracted price. Contracts were not recorded as assets or liabilities on the balance sheet prior to delivery and the mark-to-market position has been regularly disclosed on a quarterly basis in the Company's Management Discussion and Analysis. In light of the Company's decision to eliminate the contracts, the negative MTM position of $5.6 billion has been recorded on the balance sheet as a liability with a corresponding charge to earnings in the third quarter. Until elimination, any changes in the MTM from quarter to quarter will be recorded in the Company's income statement. The MTM liability will be extinguished as the contracts are eliminated, and all settlements will flow through operating cash flow.

A $10 per ounce increase or decrease in the spot price will result in an increase or decrease in the MTM position of $19 million on the remaining 1.9 million ounces of Gold Hedges. The MTM position of the Floating Contracts is impacted by changes in US dollar interest rates but such impact is not material when compared to the impact of the change in the gold price on the Gold Hedges.

PRODUCTION AND COSTS

Q3 2009 production of 1.90 million ounces at total cash costs of $456 per ounce was on plan, primarily as a result of strong operating performance from North America and South America. The Company is on track with its full year production guidance of 7.2-7.6 million ounces of gold at total cash costs of $450-$475 per ounce or net cash costs of $360-$385 per ounce.

The North America region continued to perform well, with production of 0.71 million ounces at total cash costs of $518 per ounce meeting plan. The result was significantly driven by Goldstrike, which produced 0.34 million ounces at total cash costs of $495 per ounce. Mining from the open pit transitioned at the end of the quarter into a waste stripping phase which is expected to continue for the balance of the year. Production at Cortez increased to 0.14 million ounces at total cash costs of $554 per ounce as a result of higher grades which are expected to continue in Q4.

The South America business unit met plan with production of 0.51 million ounces at total cash costs of $247 per ounce. The Lagunas Norte mine had a strong Q3 with production of 0.30 million ounces at total cash costs of $128 per ounce on higher grades and tons processed compared to each of the prior two quarters. Veladero's production of 0.13 million ounces at total cash costs of $502 per ounce benefited from access to higher grade areas in the latter part of the quarter, which is expected to continue into Q4. The commissioning of the crusher expansion is now in the ramp-up phase and is designed to increase processing capacity from 50,000 to 85,000 tons per day.

The Australia Pacific region produced 0.46 million ounces at total cash costs of $585 per ounce. Porgera, the region's largest operation, produced 0.12 million ounces at total cash costs of $583 per ounce. Higher production and lower total cash costs are expected at Porgera in Q4.

Production from the African business unit was 0.21 million ounces at total cash costs of $477 per ounce with a strong contribution from the new Buzwagi mine, which produced 87,000 ounces at total cash costs of $315 per ounce. The flotation plant was commissioned during Q3 and processing is expected to transition from oxide to sulfide ore in Q4. Buzwagi is anticipated to produce about 200,000 ounces of gold at total cash costs of about $335 per ounce in 2009.

The Company is on track with its full year copper production guidance of 375-400 million pounds and is expecting to come in at the low end of its total cash costs guidance of $1.25-$1.35 per pound. Q3 copper production of 104 million pounds was on plan and total cash costs of $1.05 per pound were better than plan. The Company again benefited from its copper hedge position, realizing $2.90 per pound, 9% higher than the average spot price.

PROJECTS UPDATE

Barrick's three world-class projects in construction remain on schedule and in line with their respective pre-production capital budgets. Together with Buzwagi, they are expected to collectively contribute about 2.6 million ounces(3) of lower cost average annual production once at full capacity. Production is expected to increase to 7.7-8.1 million ounces in 2010 with new production from Cortez Hills(4).

Overall construction of the Cortez Hills project in Nevada is approximately 85% complete and in line with its $500 million capital budget. Production continues to be anticipated in Q1 2010. The Cortez property is expected to contribute approximately one million ounces per year at total cash costs of $350-$400 per ounce in the first full five years once Cortez Hills is in operation.

The Pueblo Viejo project in the Dominican Republic is progressing well and is in line with its pre-production capital budget of approximately $2.7 billion (100% basis)(5), with approximately 60% of the capital committed. First gold continues to be expected in Q4 2011. Site demolition is now complete and earthworks are about 80% complete. Autoclave construction and steel erection on the autoclave building is well advanced and the first of the mills have arrived in the Dominican Republic. Barrick's 60% share of annual gold production in the first full five years of operation is anticipated to be 600,000-650,000 ounces per year at total cash costs of about $275-$300 per ounce. Pueblo Viejo is a long life asset with an expected mine life of more than 25 years.

Pascua-Lama has recently entered construction, with the project team mobilizing to site and beginning work on installation of construction infrastructure. Orders have been placed for long lead time items including mills, the Chilean camp, and mining and earthworks equipment. Pascua-Lama is expected to produce about 750,000-800,000 ounces of gold and 35 million ounces of silver annually in its first full five years at anticipated total cash costs of $20-$50 per ounce(6), making it one of the lowest cost gold mines in the world. Commissioning is expected in late 2012 and initial production in the first quarter of 2013.

A draft feasibility study on the Cerro Casale project in Chile was completed during the quarter. Barrick and its joint venture partner Kinross Gold Corporation continue to study various options to further optimize the project and expect to report results of this work with Q4 disclosure in February, 2010.

After a review of the development alternatives for Sedibelo, we have decided not to exercise our right to increase our interest from 10% to 65%, which would have required a payment of approximately $106 million in the fourth quarter of 2009 and a decision to develop the project. As a result, we recorded a pre-tax impairment charge of $158 million in Q3 2009.

CORPORATE DEVELOPMENT

Barrick recently entered into an agreement to acquire Xstrata Plc's 70% interest in the El Morro project for $465 million in cash. El Morro is expected to add another large, high quality gold-copper resource to Barrick's portfolio in Chile, an attractive country for mine development. El Morro is located between Pascua-Lama and Cerro Casale in the Atacama Region of Chile, where the Company will look to capture potential construction and future operating synergies. The Company's immediate focus will be on optimizing the current feasibility study and exploring the associated 800 square kilometer land position. As reported by Xstrata, total measured and indicated gold and copper resources are approximately 8.3 million ounces and 6.3 billion pounds (100% basis), respectively(7). The other 30% interest in El Morro is owned indirectly by New Gold Inc. which holds a right of first refusal to purchase Xstrata's interest and has until January 11, 2010 to exercise this right. Barrick's agreement to purchase Xstrata's interest is subject to the expiration or waiver of the New Gold right of first refusal and other customary closing conditions. The transaction is expected to close prior to January 30, 2010.

The Company has completed a transaction with Silver Wheaton Corp. to sell an amount equivalent to 25% of the life-of-mine silver production from Pascua-Lama and silver production from three existing mines until project completion at Pascua-Lama for a cash deposit of $625 million payable over three years and ongoing payments for each ounce of silver delivered under the agreement. The transaction shares risk, increases the expected rate of return of Pascua-Lama, and in addition, the upfront payment represents an additional source of financing for a portion of the $2.8-$3.0 billion cost of construction at Pascua-Lama(8).

ORGANIZATION REVIEW

Barrick has completed an internal organization review and is making improvements to its organizational structure. The purpose of this review was to ensure clear alignment within the Company on key priorities, appropriate resources are in place to support these priorities and clarity around roles and responsibilities. An additional goal was to identify ways to simplify work practices and reduce our overall general and administrative (G & A) cost structure. An internal team of senior executives worked with colleagues throughout the Company to determine their recommendations, without using outside consultants.

Many of the recommendations will result in changes in work practices and in particular improving the level of communication and coordination throughout the Company. Areas of overlap have been identified and will be eliminated. More responsibility and accountability will be held by the regional business units. As a result, there will be a net reduction of about 80 positions, primarily in Toronto. These positions will be largely phased out over the next six months. A non-recurring charge of approximately $30 million will be split between the third and fourth quarters of this year. Corporate and regional pre-tax savings of at least $50 million are expected to be realized on an annualized basis once fully implemented.

Barrick's vision is to be the world's best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. Barrick's shares are traded on the Toronto and New York stock exchanges.

(1) Gold Hedges are fixed price (non-participating) gold contracts. Floating Contracts are floating spot-price (fully participating) gold contracts which are economically similar to a fixed US dollar obligation and do not require any activity in the gold market to eliminate.

(2) Adjusted net income, net cash costs per ounce, total cash costs per ounce and realized price are non-GAAP financial measures with no standard meaning under US GAAP. See pages 40-45 of the Company's MD&A.

(3) 2.6 million ounces of production is based on the estimated cumulative average annual production in the first full 5 years once all are at full capacity, with the Cortez Complex including Pipeline. Lower cost refers to total cash costs per ounce.

(4) In Q4 2008, a number of opponents of the Cortez Hills expansion filed suit in the U.S. District Court for the District of Nevada seeking to overturn the Bureau of Land Management's approval of the Cortez Hills project on environmental and religious grounds. The plaintiffs unsuccessfully sought to enjoin construction of the project pending consideration of their claims. The District Court's denial of the requested injunction has been appealed and a decision is pending.

(5) Pre-production, followed by $0.3 billion to complete phased expansion from 18,000 tpd to 24,000 tpd (on a 100% basis including 40% partner Goldcorp).

(6) Total cash costs per ounce are calculated assuming a gold price of $800 per ounce and applying silver by-product credits assuming a silver price of $12 per ounce.

(7) Calculated on a 100% basis from Xstrata's June 2008 reported 70% equity share of measured mineral resources of 208 million tonnes grading 0.55 g/t gold and 0.66% copper and indicated mineral resources of 274 million tonnes grading 0.53 g/t gold and 0.55% copper applying a cut-off grade of 0.3% on total copper in accordance with JORC standards.

(8) Based on an assumed gold price of $800 per ounce and silver price of $12 per ounce.



Key Statistics

Barrick Gold Corporation Three months ended Nine months ended
(in United States dollars) September 30, September 30,
---------------------------------------------
(Unaudited) 2009 2008 2009 2008
----------------------------------------------------------------------------
Operating Results
Gold production (thousands of
ounces)(1) 1,904 1,945 5,525 5,545
Gold sold (thousands of ounces)(1) 1,884 1,809 5,480 5,404

Per ounce data
Average spot gold price $ 960 $ 872 $ 931 $ 897
Average realized gold price(2) 971 874 940 899
Net cash costs(3) 371 380 376 319
Total cash costs(4) 456 466 463 432
Amortization and other(5) 127 134 118 116
Copper credits 85 86 87 113
Total production costs 583 600 581 548

Copper production (millions of
pounds) 104 87 295 260
Copper sold (millions of pounds) 86 85 262 262

Per pound data
Average spot copper price $ 2.65 $ 3.49 $ 2.12 $ 3.61
Average realized copper price(2) 2.90 3.49 3.03 3.56
Total cash costs(4) 1.05 1.60 1.21 1.20
Amortization and other(5) 0.19 0.38 0.21 0.37
Total production costs 1.24 1.98 1.42 1.57
----------------------------------------------------------------------------
Financial Results (millions)
Sales $ 2,096 $ 1,878 $ 5,952 $ 5,803
Net income (loss) (5,350) 254 (4,487) 1,253
Adjusted net income (loss)(6) 473 404 1,205 1,384
Operating cash flow 911 544 1,978 1,767

Per Share Data (dollars)
Net income (loss)(basic) (6.07) 0.29 (5.12) 1.44
Adjusted net income (loss)
(basic)(6) 0.54 0.46 1.38 1.59
Net income (loss)(diluted) (6.07) 0.29 (5.12) 1.42

Weighted average basic common
shares (millions)(7) 882 872 876 872
Weighted average diluted common
shares (millions)(7)(8) 882 884 876 885
----------------------------------------------------------------------------



As at As at
September 30, December 31,
------------- ------------
2009 2008
----------------------------------------------------------------------------
Financial Position (millions)
Cash and equivalents $ 6,531 $ 1,437
Non-cash working capital 809 1,037
Long-term debt 5,131 4,556
Equity 402 182
----------------------------------------------------------------------------
(1) Production includes equity gold ounces in Highland Gold. Production also
includes an additional 40% share of production from the Cortez mine
from March 1, 2008 onwards, an additional 50% interest in Hemlo from
January 1, 2009 onwards and 100% of Storm from October 1, 2008 onwards.
(2) Realized price is a non-GAAP financial performance measure with no
standard meaning under US GAAP. See page 43 of the Company's MD&A.
(3) Net cash costs is a non-GAAP financial performance measure with no
standard meaning under US GAAP. See page 41 of the Company's MD&A.
(4) Total cash costs is a non-GAAP financial performance measure with no
standard meaning under US GAAP. See page 41 of the Company's MD&A.
(5) 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.
(6) Adjusted net income is a non-GAAP financial performance measure with no
standard meaning under US GAAP. See page 40 of the Company's MD&A.
(7) Our weighted average basic and diluted common shares outstanding for
the three and nine month periods ended September 30, 2009, and
consequently our net income (loss) per share data for these periods,
do not reflect the full dilutive impact of approximately 12% from the
109 million common shares that were issued on September 23, 2009. The
full impact of this dilution will be reflected in our net income (loss)
per share data on a go forward basis.
(8) Fully diluted, includes dilutive effect of stock options and
convertible debt.



Production and Cost Summary

Gold Production
(attributable ounces)(000's) Total Cash Costs (US$/oz)
------------------------------ ---------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
--------------- ------------- ------------- --------------
(Unaudited) 2009 2008 2009 2008 2009 2008 2009 2008
--------------------------------- ------------- ------------- --------------
North America(1) 712 775 2,212 2,082 $ 518 $ 499 $ 499 $ 498
South America 509 522 1,347 1,599 247 265 270 243
Australia Pacific 462 503 1,439 1,410 585 608 582 524
Africa 213 136 503 430 477 614 517 532
Other 8 9 24 24 410 410 410 410
----------------------------------------------------------------------------
Total 1,904 1,945 5,525 5,545 $ 456 $ 466 $ 463 $ 432
----------------------------------------------------------------------------

Copper Production
(attributable pounds)(Millions) Total Cash Costs (US$/lb)
------------------------------- ---------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
---------------- ------------- ------------- --------------
(Unaudited) 2009 2008 2009 2008 2009 2008 2009 2008
--------------------------------- ------------- ------------- --------------
South America 76 64 227 205 $ 1.11 $ 1.56 $ 1.23 $ 1.06
Australia Pacific 28 23 68 55 0.87 1.76 1.09 1.69
----------------------------------------------------------------------------
Total 104 87 295 260 $ 1.05 $ 1.60 $ 1.21 $ 1.20
----------------------------------------------------------------------------



Total Gold Production Costs (US$/oz)
-------------------------------------
Three months Nine months
ended ended
September 30, September 30,
---------------------- --------------
(Unaudited) 2009 2008 2009 2008
------------------------------------------------------------- --------------
Direct mining costs at market foreign
exchange rates $ 437 $ 483 $ 420 $ 452
(Gains) losses realized on currency
hedge and commodity hedge/economic
hedge contracts (1) (39) 19 (37)
By-product credits (12) (9) (9) (15)
Copper credits (85) (86) (87) (113)
----------------------------------------------------------------------------
Cash operating costs, net basis 339 349 343 287
Royalties 28 26 28 28
Production taxes 4 5 5 4
----------------------------------------------------------------------------
Net cash costs(2) 371 380 376 319
Copper credits 85 86 87 113
----------------------------------------------------------------------------
Total cash costs(2) 456 466 463 432
Amortization 123 112 117 112
Unrealized losses (gains) on
non-hedge currency and commodity
contracts 1 18 (1) -
Inventory purchase accounting
adjustments and other 3 4 2 4
----------------------------------------------------------------------------
Total production costs $ 583 $ 600 $ 581 $ 548
----------------------------------------------------------------------------



Total Copper Production Costs (US$/lb)
---------------------------------------
Three months Nine months
ended ended
September 30, September 30,
------------------------ --------------
(Unaudited) 2009 2008 2009 2008
------------------------------------------------------------- --------------
Cash operating costs $ 1.04 $ 1.58 $ 1.20 $ 1.18
Royalties 0.01 0.02 0.01 0.02
----------------------------------------------------------------------------
Total cash costs(2) 1.05 1.60 1.21 1.20
Amortization 0.19 0.38 0.21 0.37
----------------------------------------------------------------------------
Total production costs $ 1.24 $ 1.98 $ 1.42 $ 1.57
----------------------------------------------------------------------------
(1) Barrick's share of Cortez production and total cash costs increased to
100% effective March 1, 2008. Barrick's share of Storm production and
total cash costs increased to 100% effective October 1, 2008. Production
includes an additional 50% interest in Hemlo from January 1, 2009
onwards and Barrick's share of Hemlo 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 41 of the
Company's MD&A.



Consolidated Statements of Income

Barrick Gold Corporation
(in millions of United States
dollars, except per share data) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------

Sales (notes 4 and 5) $ 2,096 $1,878 $ 5,952 $5,803
----------------------------------------------------------------------------
Costs and expenses
Cost of sales (notes 4 and 6)(1) 971 1,028 2,901 2,685
Amortization and accretion
(notes 4 and 14) 282 262 810 767
Corporate administration 40 39 120 110
Exploration (notes 4 and 7) 43 55 110 152
Project development expense (note 7) 21 41 59 171
Elimination of gold and silver
sales contracts (note 16E) 5,692 - 5,692 -
Impairment charges (note 8B) 158 - 158 -
Other expense (note 8A) 79 74 213 165
----------------------------------------------------------------------------
7,286 1,499 10,063 4,050
----------------------------------------------------------------------------
Interest income 2 12 7 34
Interest expense (note 16B) (12) (7) (28) (21)
Other income (note 8C) 16 39 98 111
Write-down of investments (note 8B) - (112) (1) (151)
----------------------------------------------------------------------------
6 (68) 76 (27)
----------------------------------------------------------------------------
Income (loss) before income taxes
and other items (5,184) 311 (4,035) 1,726
Income tax expense (note 9) (141) (25) (377) (426)
Income (loss) from equity investees
(note 12) (23) (22) (71) (29)
----------------------------------------------------------------------------
Income (loss) before non-controlling
interests (5,348) 264 (4,483) 1,271
Non-controlling interests (note 8D) (2) (10) (4) (18)
----------------------------------------------------------------------------
Net income (loss) $ (5,350) $ 254 $ (4,487) $ 1,253
----------------------------------------------------------------------------
Earnings (loss) per share data
(note 10)
Net income (loss)
Basic $ (6.07) $ 0.29 $ (5.12) $ 1.44
Diluted $ (6.07) $ 0.29 $ (5.12) $ 1.42
----------------------------------------------------------------------------
(1) Exclusive of amortization.

The notes to these unaudited interim consolidated financial statements,
which are contained in the Third Quarter Report 2009 available on our
website, are an integral part of these consolidated financial statements.



Consolidated Statements of Cash Flow

Barrick Gold Corporation
(in millions of United States
dollars, except per share data) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $ (5,350) $ 254 $ (4,487) $ 1,253
Amortization and accretion
(notes 4 and 14) 282 262 810 767
Income tax expense (note 9) 141 25 377 426
Income taxes paid (44) (141) (264) (498)
Impairment charges (note 8B) 158 112 159 151
Increase in inventory (80) (176) (240) (415)
Elimination of gold and silver
sales contracts (note 16E) 5,692 - 5,692 -
Gain on sale/acquisition of
long-lived assets (note 8C) (4) (9) (86) (13)
Other items (note 11) 116 217 17 96
----------------------------------------------------------------------------
Net cash provided by operating
activities 911 544 1,978 1,767
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Property, plant and equipment
Capital expenditures (note 4) (535) (571) (1,610) (1,162)
Sales proceeds 3 14 10 19
Acquisitions (note 3) (53) (396) (101) (2,122)
Investments (note 12)
Purchases - - (2) (16)
Sales 3 19 3 76
Decrease in restricted cash
(note 16A) - - 113 -
Long-term supply contract - - - (35)
Other investing activities (37) (45) (71) (117)
----------------------------------------------------------------------------
Net cash used in investing
activities (619) (979) (1,658) (3,357)
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Capital stock
Proceeds on exercise of stock
options 10 1 31 71
Proceeds on common share
offering (note 19) 3,885 - 3,885 -
Long-term debt (note 16B)
Proceeds 69 1,401 936 2,391
Repayments (65) (1,197) (358) (1,247)
Dividends - - (174) (174)
Funding from non-controlling
interests 78 57 224 93
Deposit on silver contracts
(note 6) 213 - 213 -
Other financing activities (2) - (13) -
----------------------------------------------------------------------------
Net cash provided by (used in)
financing activities 4,188 262 4,744 1,134
Effect of exchange rate changes
on cash and equivalents 13 (15) 30 (5)
----------------------------------------------------------------------------
Net increase (decrease) in cash
and equivalents 4,493 (188) 5,094 (461)
Cash and equivalents at
beginning of period (note 16A) 2,038 1,934 1,437 2,207
----------------------------------------------------------------------------
Cash and equivalents at end of
period (note 16A) $ 6,531 $ 1,746 $ 6,531 $ 1,746
----------------------------------------------------------------------------

The notes to these unaudited interim consolidated financial statements,
which are contained in the Third Quarter Report 2009 available on our
website, are an integral part of these consolidated financial statements.



Consolidated Balance Sheets

Barrick Gold Corporation
(in millions of United States
dollars, except per share data) As at September 30, As at December 31,
(Unaudited) 2009 2008
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and equivalents (note 16A) $ 6,531 $ 1,437
Accounts receivable 210 197
Inventories (note 13) 1,537 1,309
Other current assets 532 1,169
----------------------------------------------------------------------------
8,810 4,112

Non-current assets
Investments (note 12) 1,216 1,145
Property, plant and equipment (note 14) 12,636 11,547
Goodwill (note 15) 5,260 5,280
Intangible assets 67 75
Deferred income tax assets 851 869
Other assets 1,437 1,133
----------------------------------------------------------------------------
Total assets $ 30,277 $ 24,161
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 1,093 970
Short-term debt 71 206
Other current liabilities 377 668
----------------------------------------------------------------------------
1,541 1,844

Non-current liabilities
Long-term debt (note 16B) 5,060 4,350
Settlement obligation to close out
gold and silver sales contracts
(note 16E) 5,692 -
Asset retirement obligations 1,071 973
Deferred income tax liabilities 928 754
Other liabilities (note 18) 603 781
----------------------------------------------------------------------------
Total liabilities 14,895 8,702
----------------------------------------------------------------------------
Equity
Capital stock (note 19) 17,343 13,372
Retained earnings (deficit) (2,400) 2,261
Accumulated other comprehensive
income (loss) (note 20) 37 (356)
----------------------------------------------------------------------------
Total shareholders' equity 14,980 15,277
Non-controlling interests 402 182
----------------------------------------------------------------------------
Total equity 15,382 15,459
----------------------------------------------------------------------------
Contingencies and commitments
(notes 14 and 21)
----------------------------------------------------------------------------
Total liabilities and equity $ 30,277 $ 24,161
----------------------------------------------------------------------------

The notes to these unaudited interim consolidated financial statements,
which are contained in the Third Quarter Report 2009 available on our
website, are an integral part of these consolidated financial statements.



Consolidated Statements of Equity

Barrick Gold Corporation
For the nine months ended September 30 (in millions of United States
dollars)(Unaudited)
----------------------------------------------------------------------------
2009 2008
----------------------------------------------------------------------------
Common shares (number in millions)
At January 1 873 870
Issued on public equity offering (note 19) 109 -
Issued on exercise of stock options 1 2
----------------------------------------------------------------------------
At September 30 983 872
----------------------------------------------------------------------------
Common shares
At January 1 $ 13,372 $ 13,273
Issued on public equity offering (note 19) 3,926 -
Issued on exercise of stock options 31 71
Recognition of stock option expense 14 12
----------------------------------------------------------------------------
At September 30 17,343 13,356
----------------------------------------------------------------------------
Retained earnings (deficit)
At January 1 2,261 1,832
Net income (loss) (4,487) 1,253
Dividends (174) (174)
Repurchase of preferred shares of a subsidiary
(note 19) - (7)
----------------------------------------------------------------------------
At September 30 (2,400) 2,904
----------------------------------------------------------------------------
Accumulated other comprehensive income (loss)
(note 20) 37 (100)
Total shareholders' equity 14,980 16,160
----------------------------------------------------------------------------
Non-controlling interests
At January 1 182 82
Net loss attributable to non-controlling interests 4 18
Funding to non-controlling interests 216 93
----------------------------------------------------------------------------
At September 30 402 193
----------------------------------------------------------------------------
Total equity at September 30 $ 15,382 $ 16,353
----------------------------------------------------------------------------



Consolidated Statements of Comprehensive Income

Barrick Gold Corporation
(in millions of United States dollars) Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------------------------------------------------------------
2009 2008 2009 2008
----------------------------------------------------------------------------
Net income (loss) $(5,350) $ 254 $(4,487) $ 1,253
Other comprehensive income (loss),
net of tax (note 20) 133 (345) 393 (251)
----------------------------------------------------------------------------
Comprehensive income (loss) $(5,217) $(91) $(4,094) $ 1,002
----------------------------------------------------------------------------

The notes to these unaudited interim consolidated financial statements,
which are contained in the Third Quarter Report 2009 available on our
website, are an integral part of these consolidated financial statements.



CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CIBC Mellon Trust Company
Brookfield Place, TD Canada Trust P.O. Box 7010,
Tower, Suite 3700 Adelaide Street Postal Station
161 Bay Street, P.O. Box 212 Toronto, Canada M5C 2W9
Toronto, Canada M5J 2S1 Tel: (416) 643-5500
Tel: (416) 861-9911 Toll-free throughout
Fax: (416) 861-0727 North America: 1-800-387-0825
Toll-free throughout Fax: (416) 643-5501
North America: 1-800-720-7415 Email: inquiries@cibcmellon.com
Email: investor@barrick.com Website: www.cibcmellon.com
Website: www.barrick.com




SHARES LISTED BNY MELLON SHAREOWNER SERVICES
ABX - The Toronto Stock Exchange 480 Washington Blvd. - 27th Floor
The New York Stock Exchange Jersey City, NJ 07310
Tel: 1-800-589-9836
Fax: (201) 680-4665
Email: shrrelations@mellon.com
Website: www.melloninvestor.com


CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this Third Quarter Report 2009, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", "anticipate", "contemplate", "target", "plan", "continue", "budget", "may", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; changes in the worldwide price of gold, copper or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets; changes in U.S. dollar interest rates or gold lease rates; risks arising from holding derivative instruments; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; adverse changes in our credit rating, level of indebtedness and liquidity, contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact Information

  • INVESTOR CONTACT: Deni Nicoski
    Vice President, Investor Relations
    (416) 307-7410
    Email: dnicoski@barrick.com
    or
    MEDIA CONTACT: Vincent Borg
    Executive Vice President, Corporate Communications
    (416) 307-7477
    Email: vborg@barrick.com