Barrick Gold Corporation
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Barrick Gold Corporation

July 28, 2005 16:10 ET

Barrick Earns $53 Million-$0.10 per Share-in Second Quarter. Higher Production and Lower Costs Expected for Second Half of Year

TORONTO, ONTARIO--(CCNMatthews - July 28, 2005) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX)(LSE:BGD)(SWX:ABX)(BOURSE:ABX)

SECOND QUARTER REPORT 2005 - JULY 28, 2005

Based on US GAAP and expressed in US dollars

Highlights

- Second-quarter 2005 net income was $53 million, or $0.10 per share, and cash flow from operations was $101 million, or $0.19 per share, compared to net income of $34 million, or $0.06 per share, and cash flow from operations of $108 million, or $0.20 per share, in the prior-year period. Second-quarter 2005 cash flow from operations was reduced by $15 million, or $0.03 per share, due to increases in supplies and ore stockpiles inventories at our new mines and projects.

- Second-quarter gold sales were 1.1 million ounces at a total cash cost of $243 per ounce(1). The Company remains on track with its original guidance to produce between 5.4 - 5.5 million ounces of gold for the year at an average total cash cost of about $225 per ounce(2). The second half of 2005 is expected to have higher production and lower cash costs with Lagunas Norte in operation and a stronger operating performance expected at Goldstrike.

- The Lagunas Norte mine achieved start-up during the quarter, ahead of the original third-quarter schedule and within its $340-million budget, and will be a significant contributor to the Company's gold production for the second half of 2005 and in the years to come.

- Significant progress continues to be made on the remaining development projects. Veladero is on schedule to commence production in the fourth quarter of this year and Cowal is expected to pour its first gold in the first quarter of 2006.

- During the quarter, the Company increased its investment in Highland and acquired an interest in Diamondex, which it subsequently increased in early July. Barrick currently holds 20% and 14% of the outstanding shares of Highland and Diamondex, respectively.

Barrick Gold Corporation today reported earnings of $53 million ($0.10 per share) and operating cash flow of $101 million ($0.19 per share) for second quarter 2005 compared to earnings of $34 million ($0.06 per share) and operating cash flow of $108 million ($0.20 per share) in the year-earlier period.

"Eighteen months ago we embarked on an aggressive growth program without comparison in the industry. As of today, two of the four new mines are in production, and we are substantially advanced on the other two," said Greg Wilkins, President and Chief Executive Officer. "The Company is now entering the phase of reaping benefits and delivering value to our shareholders."

In second quarter 2005, earnings were favorably impacted by a $52-per-ounce higher realized gold price, and lower interest and amortization expense compared to the prior-year period, offset by lower gold sales volumes due to lower production levels and higher total cash costs. The Company's second-quarter 2005 earnings also included a number of special items, including a change in accounting policy for stripping costs as described below, with a positive effect totaling $24 million post-tax ($0.05 per share), compared to a positive effect of $34 million in the prior-year quarter ($0.06 per share). See page 8 of Management's Discussion and Analysis for further details.

Operating cash flow in second quarter 2005 was negatively impacted by $15 million due to an increase in supplies and ore stockpiles inventories at our new mines and development projects.

During the second quarter, the Company adopted a new accounting pronouncement on stripping costs incurred during the production stage of a mine (EITF 04-6). As a result, second-quarter results include a $10-million post-tax ($0.02 per share) credit in earnings and $6 per ounce reduction in total cash costs statistics. For the first half of 2005, there was a $19-million post-tax ($0.04 per share) credit to earnings, and lower total cash costs statistics of $8 per ounce. In accordance with EITF 04-6, cost of sales and related total cash costs per ounce statistics for 2004 and prior periods have not been restated and are therefore not comparable to current-year results and statistics. The Company expects the impact of this new policy to reduce cost of sales and therefore total cash costs statistics by approximately $8 per ounce for the full year 2005. See page 18 of Management's Discussion and Analysis for further details.

Furthermore, the Company has commenced including accretion expense in its definition of total cash costs per ounce which had the effect of increasing reported total cash costs statistics by $3 per ounce in the second quarter, year-to-date and for all comparable periods in 2004. This change was made to conform total cash cost statistics more closely with US GAAP. The expected impact of this change is to increase total cash costs by $3 per ounce for the full year in 2005. The Company expects total cash costs to be about $225 per ounce, at the top end of original guidance for the year, after adjusting for these net accounting changes of about $5 per ounce.

PRODUCTION AND COSTS

In second quarter 2005, Barrick produced 1.2 million ounces of gold and sold 1.1 million ounces at a total cash cost of $243 per ounce, compared to 1.3 million ounces produced and 1.2 million ounces sold at a total cash cost of $209 per ounce for the prior-year quarter. As previously announced, the second half of 2005 is expected to have higher production and lower cash costs than the first half, with Lagunas Norte now in production, Veladero expected to come on stream in the fourth quarter and a stronger operating performance expected at Goldstrike. The Company is on track with its original guidance to produce 5.4 - 5.5 million ounces of gold for the year at a total cash cost of about $225 per ounce, but remains subject to increasing cost pressures affecting the entire industry.

The North American region saw a decline in production over the first quarter 2005 at higher total cash costs, due in part to scheduled roaster downtime at Goldstrike in the second quarter 2005 and the mining of lower-grade ore at both the Goldstrike open pit and underground. In both cases, production is expected to increase in the second half of 2005 as higher-grade areas are mined.

The South American region had a solid production quarter, with second quarter production higher than the first quarter 2005 due to Lagunas Norte commencing operations in mid-June 2005. Pierina is expected to exceed its full-year production target and meet its total cash cost per ounce guidance target, as it sequences into higher-grade areas of the pit.

The Australian/African region's production in the second quarter was slightly higher than the first quarter 2005. Despite lower production at Plutonic due to the cessation of open-pit mining and lower grades from the underground Timor area, and high total cash costs at Bulyanhulu, the region is expected to meet its full-year guidance as a result of a stronger performance from Kalgoorlie.

GOLD HEDGE POSITION UPDATE

Barrick reduced its gold hedge commitments by a further 200,000 ounces in the quarter, bringing the Corporate Gold Sales Contracts position down to 6.6 million committed ounces, or 9% of year-end reserves excluding Pascua-Lama.

DEVELOPMENT PROJECTS UPDATE

On June 16, 2005 Lagunas Norte poured its first gold and went into production. This project was built in 15 months, ahead of schedule and within budget. In the last two weeks of June, it produced over 41,000 ounces of gold at a total cash cost of $116 per ounce, and is forecast to produce 550,000 ounces of gold in 2005 at total cash costs of $100-$110 per ounce, after reflecting the change in accounting policy on stripping costs. This new mine is the largest grassroots discovery in the industry in the last decade, and will be a key driver of the Company's growth in 2005, and in the years to come.

At Veladero in the Frontera district in Argentina, progress continues with overall mine development over 90% complete. Production is expected to commence in fourth quarter 2005.

The Company's Cowal project in Australia is progressing well. Engineering is 95% complete, mine development earthworks are well advanced, and prestrip activities are progressing well. Production is expected to commence in the first quarter 2006.

At the East Archimedes project located at the Ruby Hill mine site in Nevada, steady progress continues. Permitting approvals are expected by the end of the year. The first gold pour is targeted for mid-2007.

At the Pascua-Lama project in Chile/Argentina, work continues on community and government relations, permitting, protocol implementation and tax stability. While approvals for the environmental impact assessments and resolution of fiscal/tax matters are targeted for the end of 2005, timing of the receipt is largely beyond the Company's control. The Company reached an agreement with important stakeholders in the Huasco Valley of Chile's Region III. The protocol agreement proposes a joint board with the Water Users Cooperative to administer and invest in water management and infrastructure projects over the operating mine life.

At the Nevada power plant, building erection was completed and the first ten generator sets were received by mid-July. The plant is expected to commence operation in fourth quarter 2005.

EXPLORATION UPDATE

During the quarter, Barrick had drill programs underway on 24 properties(3). Early-stage exploration was carried out in all regions during the quarter and is helping to identify areas for follow up and drilling later in the year.

In the Frontera district in South America, exploration drilling stopped at the end of May due to the onset of winter conditions. Additional fieldwork, including extensive mapping, geochemical sampling and geophysics, was carried out in the quarter and has helped define and prioritize additional areas for follow up. The drilling and field programs will resume in September.

A drill program testing for mineralization beyond the currently defined resource continues at Buzwagi in Tanzania with positive results that confirm the potential for the project. Engineering studies are ongoing with the objective of bringing the project to pre-feasibility by the end of the year.

Barrick is building a new generation of mines around the globe and has the lowest total cash costs among the major gold producers. Its vision is to be the world's best gold company by finding, developing and producing quality reserves in a profitable and socially responsible manner. Barrick's shares are traded on the Toronto, New York, London and Swiss stock exchanges and the Paris Bourse.

(1) Total cash cost per ounce is defined as cost of sales divided by ounces sold.

(2) The Company's original guidance of $220-$230 per ounce restated for the impact of the new accounting policy for stripping costs and the inclusion of accretion expense.

(3) Barrick's exploration programs are designed and conducted under the supervision of Alexander J. Davidson, P. Geo., Executive Vice President, Exploration and Corporate Development of Barrick. For information on the geology, exploration activities generally, and drilling and analysis procedures on Barrick's material properties, see Barrick's most recent Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the US Securities and Exchange Commission.



Key Statistics

Three months ended Six months ended
(in United States dollars) June 30 June 30
---------------------------------------
(Unaudited) 2005 2004 2005 2004
--------------------------------------------------- ----------------
Operating Results
Gold production (thousands
of ounces)(3) 1,156 1,279 2,291 2,558
Gold sold (thousands of
ounces) 1,085 1,222 2,214 2,469

Per Ounce Data
Average spot gold price $ 427 $ 393 $ 427 $ 401
Average realized gold price 424 372 426 377
Total cash costs(1) 243 217 242 209
Amortization(4) 81 88 79 90
Total production costs 324 305 321 299
--------------------------------------------------- ----------------
Financial Results (millions)
Gold sales $ 463 $ 454 $ 947 $ 931
Net income 53 34 113 60
Operating cash flow 101 108 225 234

Per Share Data (dollars)
Net income (basic and diluted) 0.10 0.06 0.21 0.11
Operating cash flow 0.19 0.20 0.42 0.44
Weighted average common shares
outstanding (millions)(2) 535 534 535 535
--------------------------------------------------- ----------------

As at As at
June 30, December 31,
-----------------------
2005 2004
---------------------------------------------------------
Financial Position (millions)
Cash and equivalents $ 1,131 $ 1,398
Non-cash working capital 249 141
Long-term debt 1,774 1,655
Shareholders' equity 3,632 3,576
---------------------------------------------------------
(1) Comprises cash operating costs, royalties, production taxes and
accretion expense.
(2) Fully diluted, includes shares issuable upon exchange of BGI
(Barrick Gold Inc.) exchangeable shares.
(3) Excludes equity ounces in Highland Gold.
(4) Represents amortization expense at the Company's producing mines
divided by ounces of gold sold.


Production and Cost Summary

Production (attributable ounces)
----------------------------------------
Three months Six months
ended ended
June 30, June 30,
----------------------------------------
(Unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
North America
Open Pit 257,110 334,584 543,848 652,111
Underground 133,680 133,450 279,044 287,497
---------------------------------------------------------------------
Goldstrike Property Total 390,790 468,034 822,892 939,608
Eskay Creek 51,322 90,732 106,127 156,405
Round Mountain (50%) 99,160 98,102 193,058 191,598
Hemlo (50%) 58,162 66,367 120,517 127,509
Holt-McDermott(2) - 20,620 - 39,429
Marigold (33%) 20,559 11,094 34,668 19,696
---------------------------------------------------------------------
619,993 754,949 1,277,262 1,474,245
---------------------------------------------------------------------
South America
Pierina 155,206 186,831 301,189 418,729
Lagunas Norte 41,333 - 41,333 -
---------------------------------------------------------------------
196,539 186,831 342,522 418,729
---------------------------------------------------------------------
Australia/Africa
Plutonic 63,824 75,497 134,242 158,345
Darlot 27,939 35,894 55,359 70,144
Lawlers 29,665 26,245 60,898 52,863
Kalgoorlie (50%) 112,137 103,116 236,660 205,328
---------------------------------------------------------------------
233,565 240,752 487,159 486,680
Bulyanhulu 83,754 96,938 157,128 177,956
Tulawaka (70%) 22,147 - 26,701 -
---------------------------------------------------------------------
339,466 337,690 670,988 664,636
---------------------------------------------------------------------
Total 1,155,998 1,279,470 2,290,772 2,557,610
---------------------------------------------------------------------
Highland equity portion 3,000 5,000 12,000 10,000
---------------------------------------------------------------------
1,158,998 1,279,470 2,302,772 2,557,610
---------------------------------------------------------------------
(1) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs. Refer to pages 18 and 19 for further details.
(2) Holt-McDermott ceased production in fourth quarter 2004.



Total Cash Costs (US$/oz)
----------------------------------------
Three months Six months
ended ended
June 30, June 30,
----------------------------------------
(Unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
North America
Open Pit $ 295 $ 254 $ 281 $ 261
Underground 289 262 288 258
---------------------------------------------------------------------
Goldstrike Property Total 293 256 284 260
Eskay Creek 42 68 52 32
Round Mountain (50%) 218 218 231 215
Hemlo (50%) 297 238 280 233
Holt-McDermott(2) - 204 - 224
Marigold (33%) 184 160 201 200
---------------------------------------------------------------------
257 224 254 225
---------------------------------------------------------------------
South America
Pierina 141 109 131 96
Lagunas Norte 116 - 116 -
---------------------------------------------------------------------
138 109 130 96
---------------------------------------------------------------------
Australia/Africa
Plutonic 276 231 259 211
Darlot 331 197 292 203
Lawlers 285 253 278 244
Kalgoorlie (50%) 214 239 213 231
---------------------------------------------------------------------
257 232 244 22
Bulyanhulu 372 344 363 311
Tulawaka (70%) 267 - 267 -
---------------------------------------------------------------------
279 260 272 243
---------------------------------------------------------------------
Total 243 217 242 209
---------------------------------------------------------------------
Highland equity portion 323 212 268 202
---------------------------------------------------------------------
$ 243 $ 217 $ 242 $ 209
---------------------------------------------------------------------
(1) Holt-McDermott ceased production in fourth quarter 2004.



Total Production Costs (US$/oz)
----------------------------------------
Three months Six months
ended ended
June 30, June 30,
----------------------------------------
(Unaudited) 2005 2004 2005 2004
---------------------------------------------------------------------
Direct mining costs at market
foreign exchange rates $ 286 $ 242 $ 279 $ 240
Gains realized on currency and
commodity hedge contracts (25) (16) (24) (20)
By-product credits (35) (29) (30) (28)
---------------------------------------------------------------------
Cash operating costs 226 197 225 192
Royalties 12 10 12 10
Production taxes 2 2 2 2
Accretion expense 3 8 3 5
---------------------------------------------------------------------
Total cash costs 243 217 242 209
Amortization 81 88 79 90
---------------------------------------------------------------------
Total production costs $ 324 $ 305 $ 321 $ 299
---------------------------------------------------------------------


MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A")

This portion of the Quarterly Report provides management's discussion and analysis of the financial condition and results of operations to enable a reader to assess material changes in financial condition and results of operations as at and for the three and six month periods ended June 30, 2005, in comparison to the corresponding prior-year periods. This MD&A has been prepared as of July 21, 2005. This MD&A is intended to supplement and complement the unaudited interim consolidated financial statements and notes thereto, prepared in accordance with US generally accepted accounting principles ("US GAAP"), for the three and six month periods ended June 30, 2005 (collectively, the "Financial Statements"), which are included in this Quarterly Report on pages 21 to 38. You are encouraged to review the Financial Statements in conjunction with your review of this MD&A. This MD&A should be read in conjunction with both the annual audited consolidated financial statements for the three years ended December 31, 2004, the related annual MD&A included in the 2004 Annual Report, and the most recent Form 40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities. Certain notes to the Financial Statements are specifically referred to in this MD&A and such notes are incorporated by reference herein. All dollar amounts in this MD&A are in millions of US dollars, unless otherwise specified.

For the purposes of preparing this MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Barrick Gold Corporation's shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision, or if it would significantly alter the total mix of information available to investors. Materiality is evaluated by reference to all relevant circumstances, including potential market sensitivity.



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CONTENTS
Executive Summary 6
Key Economic Trends 7
Results 8
Overview of 2005 versus 2004 8
Consolidated Gold Production and Sales 9
Results of Operating Segments 9
Other Costs and Expenses 13
Cash Flow 15
Balance Sheet 16
Quarterly Information 17
Off-Balance Sheet Arrangements 17
Critical Accounting Policies and Estimates 18
---------------------------------------------------------------------


EXECUTIVE SUMMARY

In second quarter 2005 we produced 1.2 million ounces of gold and sold 1.1 million ounces at a total cash cost of $243 per ounce(1). We are on track with our original guidance to produce between 5.4-5.5 million ounces of gold for the year at an average total cash cost of about $225 per ounce(2). The second half of 2005 is expected to have higher production and lower cash costs with Lagunas Norte in operation and a stronger operating performance expected at Goldstrike.

(1) Total cash cost per ounce is defined as cost of sales divided by ounces sold.

(2) The Company's original guidance of $220-$230 per ounce restated for the impact of the new accounting policy for stripping costs and the inclusion of accretion expense.

During the second quarter, we adopted a new accounting pronouncement on stripping costs incurred during the production stage of a mine (EITF 04-6). The new accounting rules require the actual stripping costs incurred each period be reflected in the cost of ore mined for the same period, and will likely lead to greater period-to-period volatility in total cash costs. Previously, stripping costs were deferred and amortized based on a life-of-mine stripping ratio that smoothed the costs over time. As a result of the implementation of the new policy, second-quarter results include a $6-million ($4-million earnings increase or $0.01 earnings per share increase) reduction in cost of sales, or $6 per ounce lower total cash costs, and an additional $6-million ($0.01 earnings per share increase) post-tax credit in earnings to reflect the cumulative effect of the policy for periods prior to January 1, 2005. The cumulative effect adjustment has not impacted second quarter total cash costs. For the first half of 2005, cost of sales was reduced by $18 million ($0.02 earnings per share increase), or $8 per ounce lower total cash costs. In accordance with the transition rules for EITF 04-6, cost of sales and related total cash costs per ounce statistics for 2004 and prior periods have not been restated and are therefore not comparable to current-year results and statistics. The impact of EITF 04-6 on our balance sheet was a decrease in capitalized mining costs of $226 million; and an increase in inventories, mainly ore in stockpiles, of $232 million as the new method of accounting results in the costs incurred being included in inventory rather than as a separate asset on the balance sheet. We expect the impact of this new policy to reduce cost of sales and therefore total cash costs statistics by approximately $8 per ounce for the full year 2005. Furthermore, we have commenced including accretion expense in our definition of total cash costs per ounce which had the effect of increasing reported total cash costs statistics by $3 per ounce in the second quarter, year-to-date and for all comparable periods in 2004. This change was made to conform the statistics more closely with US GAAP, and is consistent with changes made by other senior gold producers. The expected impact of this change is to increase total cash costs by $3 per ounce for the full year in 2005. We expect total cash costs to be about $225 per ounce, at the top end of the original guidance for the year, after adjusting for these two changes that net to about $5 per ounce.

Earnings of $53 million in second quarter ($0.10 earnings per share) were 56% higher than second quarter 2004. We generated operating cash flow of $101 million ($0.19 per share) in second quarter 2005. Operating cash flow was negatively impacted in second quarter 2005 by a $15-million increase in mine operating supplies and ore in stockpiles at our development projects and new mines.

We continue to make significant progress on the development of our new generation of mines. The Lagunas Norte mine in Peru was completed within budget and made its first gold pour in mid-June 2005, ahead of schedule. At Veladero in Argentina, we are on track to commence production in fourth quarter 2005. Lagunas Norte and Pierina are expected to contribute to higher production and lower total cash costs per ounce in the second half of 2005. At our fourth new mine, Cowal in Australia, production is expected to commence in the first quarter 2006. We continued work on advancing our two other projects in development, Pascua-Lama in Chile/Argentina and East Archimedes in Nevada. Although the approvals of the Pascua-Lama environmental impact assessments are targeted by year-end 2005, the timing of the receipt of these approvals, as well as resolution of some other external issues, is largely beyond our control.

KEY ECONOMIC TRENDS

The MD&A included in our 2004 Annual Report contained a discussion of the key economic trends that affect our business and how they impact our financial statements. In this interim MD&A, we have included an update to reflect any significant changes in those trends since the preparation of the 2004 Annual MD&A.

Gold Prices

The gold price ranged from $415 to $441 per ounce during second quarter 2005 with an average market gold price of $427 per ounce. We sold the majority of our production at market gold prices, with 0.1 million ounces of production delivered into existing fixed-price gold sales contracts for an opportunity cost of $4 million, resulting in an average realized selling price of $424 per ounce. We view the outlook for market gold prices to be positive.

Silver Prices

With an average market price of $7.15 per ounce during second quarter 2005, silver prices continue to be strong in 2005. Higher silver prices help to reduce total cash costs per ounce of gold as silver sales are recorded as a by-product credit.

Currency Exchange Rates

At the end of second quarter 2005, through our currency hedge position, we have protected local currency-based expenditures for approximately the next three years at average exchange rates that are more favorable than current market rates. The average rates for currency contracts designated against operating costs over the next three years are $0.66 for Australian dollar contracts and $0.73 for Canadian dollar contracts. Further details of our currency hedge position are included in note 13 to the Financial Statements.

Energy Prices

Diesel Fuel

Crude oil prices rose from $55 per barrel at the end of the first quarter 2005 to $57 per barrel at the end of the second quarter 2005. To help control costs, we have a fuel hedge position totaling 2.3 million barrels, representing approximately 40% of our estimated future diesel fuel consumption over the next three years, with an average cap price of $42 per barrel and participation to an average floor price of $29 per barrel on almost a quarter of the position.

Electricity

Electricity prices continue to rise in 2005 as a result of diesel fuel and natural gas price increases as well as the increasing demand for electricity. To partially mitigate rising electricity costs, we are building a 115-megawatt natural gas-fired power plant that will supply our Goldstrike mine from fourth quarter 2005 onwards.

Other Inflationary Cost Pressures

The mining industry has been experiencing significant inflationary cost pressures and supply constraints for certain items such as tires. Prices for tires and oil-related consumables have risen significantly over the past few quarters and continue to rise, mainly impacting mining costs. We are focusing on supply chain management and continuous improvement initiatives to mitigate the impact of constraints on supply and higher prices, but if these issues persist they could potentially impact our production and total cash costs per ounce statistics. Labor costs in Australia are higher in 2005 when compared to 2004, as a result of a supply shortage of skilled labor, which has been impacting costs at our Australian mines.

US Dollar Interest Rates

Over the first six months of 2005, short-term US interest rates have risen, while long-term rates (10-30 years) have declined, although rates remain at relatively low levels. In periods of higher interest rates, we earn higher interest income on cash balances and expect higher forward selling prices under our gold sales contracts. A significant portion of our long-term debt has fixed interest rates and therefore interest expense has not historically been materially affected by changing interest rates.



RESULTS

Selected Quarterly Information

---------------------------------------------------------------------
Three months ended Six months ended
($ millions, except per share June 30 June 30
and per ounce data in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------
Gold production ('000s oz)(3) 1,156 1,279 2,291 2,558
---------------------------------------------------------------------
Gold sales
'000s oz 1,085 1,222 2,214 2,469
$ millions $ 463 $ 454 $ 947 $ 931
---------------------------------------------------------------------
Market gold price(1) 427 393 427 401
---------------------------------------------------------------------
Realized gold price(1) 424 372 426 377
---------------------------------------------------------------------
Total cash costs(1),(2) 243 217 242 209
---------------------------------------------------------------------
Amortization(1) 81 88 79 90
---------------------------------------------------------------------
Net income 53 34 113 60
---------------------------------------------------------------------
Net income per share - basic
and diluted 0.10 0.06 0.21 0.11
---------------------------------------------------------------------
Cash inflow (outflow)
---------------------------------------------------------------------
Operating activities 101 108 225 234
---------------------------------------------------------------------
Capital expenditures (270) (189) (512) (318)
---------------------------------------------------------------------
Other investing activities (53) (5) (78) (40)
---------------------------------------------------------------------
Financing activities $ 25 $ (73) $ 101 $ (155)
---------------------------------------------------------------------
(1) Per ounce weighted average.
(2) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs. Refer to page 18 for further details.
(3) Excludes equity ounces from Highland.


OVERVIEW OF SECOND QUARTER 2005 VERSUS SECOND QUARTER 2004

Earnings

Earnings in second quarter 2005 were $19 million higher than second quarter 2004. The main trends were higher realized gold sales prices ($56 million), lower amortization rates per ounce ($8 million) and lower interest expense ($3 million) partially offset by higher total cash costs per ounce ($28 million) and lower ounces sold ($8 million). These trends similarly affected results for the first six months of 2005, contributing to higher earnings compared to the same period in 2004.

Earnings in second quarter 2005 reflected various special items that combined had a positive effect of $24 million post-tax, compared with 2004 when similar items had a positive effect of $34 million post-tax. The items in second quarter 2005 mainly included a $15-million accounting gain recorded on closing of the Kabanga transaction as a result of a dilution of Barrick's ownership in Kabanga; $10 million post-tax for the effect of adopting a new accounting rule for stripping costs; a $4-million post-tax non-hedge derivative gain; and revisions to cost estimates that caused a $4-million post-tax increase in asset retirement obligations at closed mines. In the first six months of 2005, special items also included a $9-million gain on investments caused by the sale of investments in a deferred compensation plan upon change of the plan trustee. In the first six months of 2004, the main special item was a $30-million deferred tax credit related to a change in the Australian tax regime.



Special Items - Effect on earnings increase (decrease)

---------------------------------------------------------------------
Three month period ended June 30,
($ millions) 2005 2004
Pre-Tax Post-Tax Pre-Tax Post-Tax
---------------------------------------------------------------------
Non-hedge derivative gains
(losses) $ 3 $ 4 $ 6 $ 4
---------------------------------------------------------------------
Gains on investment sales - - - -
---------------------------------------------------------------------
Gains on asset sales - - 1 1
---------------------------------------------------------------------
Gain on Kabanga transaction 15 15 - -
---------------------------------------------------------------------
Foreign currency translation
gains (losses) (1) (1) (1) (1)
---------------------------------------------------------------------
Deferred stripping accounting
changes
---------------------------------------------------------------------
Cumulative effect 6 6 - -
---------------------------------------------------------------------
Impact on the period compared
to previous policy 6 4 - -
---------------------------------------------------------------------
Changes in AROs at closed mines (5) (4) - -
---------------------------------------------------------------------
Income tax credits - - - 30
---------------------------------------------------------------------
Total $ 24 $ 24 $ 6 $ 34
---------------------------------------------------------------------



---------------------------------------------------------------------
Six month period ended June 30,
($ millions) 2005 2004
Pre-Tax Post-Tax Pre-Tax Post-Tax
---------------------------------------------------------------------
Non-hedge derivative gains
(losses) $ 9 $ 7 $ (9) $ (6)
---------------------------------------------------------------------
Gains on investment sales 9 8 2 1
---------------------------------------------------------------------
Gains on asset sales 1 1 3 2
---------------------------------------------------------------------
Gain on Kabanga transaction 15 15 - -
---------------------------------------------------------------------
Foreign currency translation
gains (losses) (5) (4) 1 1
---------------------------------------------------------------------
Deferred stripping accounting
changes
---------------------------------------------------------------------
Cumulative effect 6 6 - -
---------------------------------------------------------------------
Impact on the period compared
to previous policy 18 13 - -
---------------------------------------------------------------------
Changes in AROs at closed mines (5) (4) - -
---------------------------------------------------------------------
Income tax credits - - - 30
---------------------------------------------------------------------
Total $ 48 $ 42 $ (3) $ 28
---------------------------------------------------------------------


Cash Flow

Our cash position decreased by $267 million compared to year-end 2004. We generated $101 million of operating cash flow in second quarter 2005, $7 million lower than in second quarter 2004, mainly because of lower gold sales volumes and increases in working capital at our development projects to support the start-up of production. Capital expenditures were $270 million, $81 million higher than in second quarter 2004 mainly due to the levels of construction activity at our development projects, and we spent $55 million on investments including Highland Gold and Diamondex Resources. We received $89 million on the drawdown of cash from financing facilities used to fund construction at our development projects, and we paid $59 million in dividends in second quarter 2005.

CONSOLIDATED GOLD PRODUCTION AND SALES

Gold production in second quarter 2005 was 0.1 million ounces lower than in second quarter 2004 primarily as a result of lower throughput levels at Goldstrike open pit and Eskay Creek and mining of lower-grade ore at Goldstrike open pit and Eskay Creek, partly offset by the commencement of production at Lagunas Norte and Tulawaka. Ounces sold decreased by 0.1 million ounces compared to second quarter 2004, consistent with the lower production levels. In the first six months of 2005, ounces produced decreased by 0.3 million ounces and ounces sold decreased by 0.3 million ounces for similar reasons as the changes in second quarter 2005.



Consolidated total cash costs per ounce

---------------------------------------------------------------------
Three month period Six month period
ended June 30, ended June 30,
(in dollars per ounce) 2005 2004 2005 2004
---------------------------------------------------------------------
Cost of goods sold(1),(2) $ 286 $ 242 $ 279 $ 240
---------------------------------------------------------------------
Currency and commodity
hedge gains (25) (16) (24) (20)
---------------------------------------------------------------------
By-product credits (35) (29) (30) (28)
---------------------------------------------------------------------
Royalties/mining taxes 14 12 14 12
---------------------------------------------------------------------
Accretion and other costs 3 8 3 5
---------------------------------------------------------------------
Total cash costs $ 243 $ 217 $ 242 $ 209
---------------------------------------------------------------------
(1) At market currency exchange rates.
(2) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs. Refer to page 18 for further details.


Total cash costs per ounce in second quarter 2005 were higher than in second quarter 2004, primarily because of lower production, the mining of lower-grade ore, and increases in the cost of input consumables, partly offset by higher silver by-product credits. In the second half of 2005, production is expected to increase and total cash costs per ounce to decrease, as our lower-cost Lagunas Norte and Pierina mines contribute gold production as well as higher mining rates and ore grades at Goldstrike open pit.

We realized an average selling price of $424 per ounce for our gold production in second quarter 2005. In second quarter 2005, we sold substantially all of our production at market prices, and we delivered 0.1 million ounces of production into fixed-price gold sales contracts. The price realized in second quarter 2005 was $52 per ounce higher than second quarter 2004, reflecting $34 per ounce higher market gold prices and fewer deliveries into fixed-price gold sales contracts. The price realized for gold sales in 2005 will depend upon market conditions and the selling prices of any gold sales contracts into which we voluntarily deliver, which could be below prevailing spot market prices.

RESULTS OF OPERATING SEGMENTS

In our Financial Statements, we present a measure of historical segment income that reflects gold sales at average consolidated realized gold prices, less segment operating costs and amortization of segment property, plant and equipment. Our segments mainly include producing mines and development projects. We monitor segment operating costs using "total cash costs per ounce" statistics that represent segment cost of sales divided by ounces of gold sold in each period. The discussion of results for producing mines focuses on this statistic in explaining changes in segment operating costs, and should be read in conjunction with the mine statistics presented on pages 39 to 42. Total cash costs per ounce statistics for 2005 and 2004 are not comparable due to the change in accounting for deferred stripping costs. Refer to page 18 for further details.

NORTH AMERICA

In second quarter 2005, the region produced 619,993 ounces at total cash costs of $257 per ounce, compared to production of 754,949 ounces at total cash costs of $224 per ounce in second quarter 2004. The lower gold production in 2005 was mainly due to lower throughput and ore grades at both the Goldstrike open pit and at Eskay Creek, which also resulted in higher total cash costs per ounce. Also in 2005, higher power and fuel costs were partly offset by higher silver by-product credits. The higher power costs were mainly due to increases in the price of natural gas and increasing demand for electricity. Power costs are expected to benefit, starting in fourth quarter 2005, from the start-up of a Barrick-owned power plant for Goldstrike. Higher fuel costs reflect the rise in the market price for oil, which we have partly mitigated through our fuel hedge position. Results for the first six months of 2005 in North America were affected by similar factors. The region is expected to meet its full-year total cash costs and production guidance. We expect increases in Goldstrike underground total cash costs guidance for 2005 to be offset by a decrease in the total cash costs guidance for Eskay Creek.

Goldstrike Open Pit, United States

Above average rainfall in the first half of 2005 led to a temporary lower mining rate in the first half of 2005. By the beginning of third quarter 2005, mining rates are expected to be back up to previously-expected levels. These factors, combined with lower processing rates at the roaster, due to scheduled downtime for maintenance, and harder ore encountered in 2005, caused the quantity of tons mined and processed to be lower than in 2004.

Lower mining rates resulted in a temporary delay in completing the ninth west layback, which caused us to mine in different areas of the pit than planned and also process some lower-grade stockpiled ore. Consequently, the grade of ore mined and processed in 2005 was lower than in 2004. In the second half of the year we expect mining rates, as well as the average grade of ore mined and processed, to increase with higher production, resulting in lower total cash costs per ounce than in the first half of the year.

We incurred higher maintenance costs at the roaster as well as higher power and fuel costs. The impact of higher costs, combined with lower gold production and lower-than-expected toll milling volumes, partly offset by the impact of the effect of a change in accounting for stripping costs, led to higher total cash costs per ounce in the first half of 2005 compared to 2004.

Goldstrike Underground, United States

In 2005, stope tonnages were lower due to a plugged backfill raise, partly mitigated by a reallocation of resources to drift-and-fill mining. Although mining rates were lower in second quarter 2005, tons processed were higher as we processed some stockpiled ore to compensate for temporary lower mining and processing rates. Overall, in the first half of 2005, tons mined and processed were lower than the first half of 2004 as incremental ore was mined at Rodeo in 2004.

The allocation of resources to drift-and-fill mining, combined with difficult ground conditions and lower availability of critical equipment, led to lower levels of underground development in 2005 than in 2004. Consequently a greater proportion of costs in 2005 were allocated to mining operations, rather than capitalized to underground development. Higher costs were also incurred for ground support due to higher steel and freight costs, as well as higher backfill tons leading to increased consumption of fly ash. The mine also experienced higher power and fuel costs for the same reasons as the open pit. Combined, these factors caused total cash costs per ounce in the first half of 2005 to exceed 2004. Goldstrike underground's full-year guidance for total cash costs has been revised upwards to $275-$285 per ounce.

Reserve increases at the end of 2004 resulted in lower amortization rates and a lower amortization expense.

Eskay Creek, Canada

Stope sequencing changes and lower availability of ore led to a fall in mining rates in 2005. Ore grades were lower and resulted in reduced recovery rates. Combined, these factors resulted in a fall in gold production in the first half of 2005, compared with 2004.

The mine is experiencing higher fuel, power and smelter costs in 2005, which were more than offset by higher silver by-product credits, due to higher silver content in the ore processed and higher silver prices, and overall resulted in lower total cash costs per ounce in 2005. Eskay Creek's full-year guidance for total cash costs has been revised slightly downwards to an average total cash cost of $110-$120 per ounce. Eskay Creek is expected to meet its full-year production guidance.

Lower production levels in second quarter 2005, combined with the reduction in book values of property, plant and equipment at the end of 2004, after recording an impairment charge, led to lower amortization in the first half of 2005.

Power Plant for Goldstrike, United States

The construction of a 115-megawatt natural gas-fired power plant in Nevada to supply our Goldstrike mine is on schedule, with the plant expected to commence operations in fourth quarter 2005. Project highlights include:

- Construction costs of $25 million were incurred in second quarter.

- All engineering work is essentially complete.

- First ten power generator sets were in place by mid-July. We expect to receive the rest of generators in third quarter 2005.

- Gas transmission and pressure reduction pipeline system was completed and construction of the secondary pressure reduction station for the fuel gas commenced in second quarter 2005.

- Building erection was completed in May.

- Plant Operating and Maintenance contract was awarded and the related workforce is being mobilized.

Round Mountain (50% owned), United States

Higher quantities of material were placed on the pad in 2004 than in 2005. Tons processed each period do not necessarily correlate to the ounces produced in the period as there is a time delay between placing tons on the leach pad and pouring ounces.

Higher fuel and power costs, higher royalties and the effect of the change in accounting for stripping costs resulted in higher total cash costs per ounce in the first half of 2005 versus 2004.

East Archimedes, United States

The East Archimedes project remains on schedule with production expected to commence by mid-2007. Project highlights include:

- Construction costs of $11 million were incurred in second quarter 2005.

- Preparations in progress included the setup of equipment, workforce recruitment and construction of the dewatering system.

- Permits are targeted to be received by the end of 2005.

SOUTH AMERICA

In second quarter 2005 the region produced 196,539 ounces at cash costs of $138 per ounce, compared to production of 186,831 ounces at total cash costs of $109 per ounce in second quarter 2004. Lagunas Norte achieved production start-up ahead of schedule in mid-June 2005, and Veladero is expected to begin production in the fourth quarter. We expect Lagunas Norte and Pierina to make a significant contribution to the region's results in the second half of 2005. The region is expected to exceed its full-year production guidance, and its full-year total cash cost guidance has been revised upwards to $115-$125 per ounce in 2005.

Pierina, Peru

In 2005, the mine achieved higher throughput levels following productivity improvements at the crusher. While mining occurred in lower-grade areas in first quarter 2005, in second quarter 2005 we were able to mine in higher-grade areas.

The mine experienced higher maintenance, power and fuel costs in 2005, partly offset by higher silver by-product credits. Combined with the lower gold production levels and the impact of the change in accounting for stripping costs, these cost pressures led to higher total cash costs per ounce in the first half of 2005. Pierina's full-year guidance for production has been revised upwards as the mine sequences into higher-grade areas of the pit. We now expect to produce between 635,000 to 645,000 ounces in 2005.

Lower gold production levels and increases in reserves at the end of 2004 resulted in a lower amortization expense in 2005.

Lagunas Norte, Peru

At Lagunas Norte, the mine was completed on budget and production start-up was achieved during the quarter, ahead of the original third-quarter schedule. Second quarter 2005 results included the sale of 27,000 ounces at total cash costs of $116 per ounce. Lagunas Norte is expected to be a significant low total cash cost contributor to our gold production in the second half of 2005 and in the years to come. The segment loss in 2004 relates to the expensing of development costs until May 1, 2004.

Veladero, Argentina

The Veladero project is on schedule to commence gold production in fourth quarter 2005. Project highlights include:

- Construction costs of $66 million were incurred in second quarter 2005 and construction at the project is about 90% complete.

- Industry-wide cost inflation has been impacting costs, and we have been taking steps to mitigate cost increases where possible. Veladero's full-year guidance for total cash costs has been revised upwards to $230-$240 per ounce in 2005 on forecast production of 50,000 to 55,000 ounces.

- The primary and secondary crushers are 95% complete. Testing of a primary crusher commenced in June 2005.

- Process plant steel erection, exterior architectural finishes and equipment installation are substantially complete.

- Ten power generators were installed, with five of the generators operating and providing power in preparation for plant commissioning.

- Phase 1 of the valley-fill leach facility, including the facility embankment, was substantially complete.

- About 2.2 million tons of ore has been stacked at the base of the leach facility to support the pumping system platform in preparation for process solution and production.

Pascua-Lama, Chile/Argentina

In 2004, we made a decision to proceed with the development of the Pascua-Lama project in Chile/Argentina, contingent upon obtaining the necessary permits, approvals and fiscal regimes. While approvals for the environmental impact assessments are targeted by the end of 2005, the timing of the receipt of these approvals, as well as the resolution of some of the other external issues, such as permitting and licensing; cross-border operating issues; and fiscal, tax and royalty issues, is largely beyond Barrick's control.

Barrick reached an agreement with important agricultural stakeholders in the Huasco Valley of Chile's Region III. The protocol agreement proposes a joint board with the Water Users Cooperative to administer and invest in water management and infrastructure projects over the operating mine life.

AUSTRALIA/AFRICA

In second quarter 2005, the region produced 339,466 ounces at total cash costs of $279 per ounce, compared to production of 337,690 ounces at total cash costs of $260 per ounce in second quarter 2004. In second quarter 2005 higher production at Kalgoorlie and Tulawaka was offset by lower production at Plutonic and Bulyanhulu. Total cash costs per ounce were higher than in second quarter 2004 mainly because of labor cost inflation in Australia, higher prices for fuel and grinding media, lower throughput at Plutonic and lower ore grades at Bulyanhulu. Results for the first six months of 2005 were affected to a similar extent by these factors compared to 2004. Full-year 2005 cash costs guidance for the region has been revised upwards to $265-$275 per ounce to reflect an increase in the guidance range for Plutonic, Bulyanhulu, and Tulawaka. The region is expected to meet its full-year production guidance.

Kalgoorlie (50% owned), Australia

In 2005, mining occurred in higher-grade areas of the pit although fewer tons were mined due to reduced shovel capacity. Mill throughput was higher than in 2004 due to lower maintenance downtime, and the positive impact of processing finer ore sizes. Production exceeded sales in 2005 as a build-up of concentrate inventory occurred due to limitations in roaster capacity.

The mine is experiencing higher labor costs and fuel prices in 2005, but this was more than offset by the higher production levels and effect of the change in accounting for stripping costs, leading to lower total cash costs per ounce in the first half of 2005 compared to the same period in 2004. Kalgoorlie's full-year production guidance has been revised upwards slightly to between 450,000 to 455,000 ounces.

Kalgoorlie, jointly owned by Newmont and Barrick, has indicated to Western Australian regulatory authorities that it will take measures to reduce mercury air emissions. Kalgoorlie is installing a mercury scrubber on its carbon kilns and is assessing process changes, controls and other management measures for the roaster facility. When that assessment is complete, we will be able to estimate any capital requirements and operating cost impact associated with such measures.

Plutonic, Australia

Open-pit mining ended in second quarter 2005 which, combined with difficult stoping conditions in the underground Timor area and a shortage of skilled operators, led to lower mining rates in the first half of 2005 than in the same period of 2004. The lower mining rates led to a decrease in ore tons processed, but because a higher percentage of ore came from the underground mine in the first half of 2005, the average grade of ore processed was higher than in the same period of 2004. Gold production was lower in the first half of 2005 as lower tons processed were only partly offset by higher ore grades.

The mine is experiencing higher labor and fuel costs in 2005. Combined with the lower gold production, these cost pressures, although partly offset by the impact of the change in accounting for stripping costs, resulted in an increase in total cash costs per ounce in the first half of 2005. Plutonic's full-year guidance has been revised to reflect lower-than-expected production and higher-than-expected total cash costs. We now expect to produce between 250,000 to 255,000 ounces in 2005 at an average total cash cost of $250-$260 per ounce.

Bulyanhulu, Tanzania

Mining rates were lower in 2005 due to equipment availability, power supply issues, mining schedule changes, hoist gearbox failure and labor issues due to roster changes. The lower mining rates led to a decrease in tons processed in the first half of 2005, which combined with lower average ore grades due to underperforming stopes and higher mining dilution, led to a fall in gold production compared to the first half of 2004. Inventory levels of unsold production were higher at 2005 quarter end as a result of some container delays that impacted shipment to the smelter.

The lower gold production levels, combined with equipment downtime and lower by-product credits resulted in higher total cash costs in the first half of 2005. Bulyanhulu's full-year guidance for total cash costs has been revised upwards to $340-$350 per ounce in 2005.

Lower gold production levels in second quarter 2005 resulted in lower amortization expense as a significant proportion of assets are amortized on a units of production basis.

Cowal, Australia

The project remains on schedule for production to commence in first quarter 2006. Project highlights include:

- Capital expenditures incurred were $65 million in second quarter 2005. Inflationary cost pressures in Australia have been impacting ongoing capital costs, and we have been taking steps to mitigate cost increases where possible.

- Engineering is 95% complete.

- Plant-site concrete is 65% complete and reagent and water tanks were erected.

- Mine development earthworks is progressing with the completion of the northern tailings storage facilities.

- With the installation of power poles in second quarter 2005, the electricity transmission line is anticipated to be completed in third quarter 2005.

- Pre-strip activity commenced in April 2005.

Russia/Central Asia

In second quarter 2005, we spent $50 million to increase our ownership in Highland Gold Mining PLC ("Highland") from 14% to 20%. Our 20% ownership interest is reflected in our financial statements and production statistics on an equity basis.

We continue to work with both Highland Gold and Celtic Resources on projects where we have the option to acquire a joint interest. In second quarter 2005, we agreed to exercise our right to acquire a 50% joint venture interest in the Taseevskoye deposit, subject to certain conditions.



OTHER COSTS AND EXPENSES

Exploration, Development and Business Development Expense

---------------------------------------------------------------------
Three months Six months Comments on significant
ended June 30 ended June 30 trends and variances
---------------------------------------------------------------------
($ millions) 2005 2004 2005 2004
---------------------------------------------------------------------
Exploration
---------------------------------------------------------------------
North America $ 5 $ 8 $ 12 $ 14
---------------------------------------------------------------------
Australia/Africa 12 8 24 16 Increased activity at
the Buzwagi project in
2005.
---------------------------------------------------------------------
South America 6 6 11 10
---------------------------------------------------------------------
Russia/Central
Asia 2 2 3 3
---------------------------------------------------------------------
Other countries - 1 1 1
---------------------------------------------------------------------
25 25 51 44
---------------------------------------------------------------------
Mine development
---------------------------------------------------------------------
Cowal 2 - 2 -
---------------------------------------------------------------------
Veladero - - 1 -
---------------------------------------------------------------------
Lagunas Norte - 3 - 9 In 2004, we expensed
development costs until
May 1, which was the
date when the project
achieved the criteria
to classify
mineralization as a
reserve for US
reporting purposes.
---------------------------------------------------------------------
Other 2 - 2 -
---------------------------------------------------------------------
4 3 5 9
---------------------------------------------------------------------
Non-capitalizable
project costs(1)
---------------------------------------------------------------------
Cowal 1 - 2 -
---------------------------------------------------------------------
Pascua-Lama 1 - 2 -
---------------------------------------------------------------------
Veladero 2 - 2 -
---------------------------------------------------------------------
Lagunas Norte 1 - 1 -
---------------------------------------------------------------------
5 - 7 -
---------------------------------------------------------------------
Business
development/other 3 6 5 10 Decrease in overhead
costs associated with
the administration of
exploration and
development of
projects.
---------------------------------------------------------------------
$ 37 $ 34 $ 68 $ 63
---------------------------------------------------------------------
(1) Non-capitalizable costs mainly represent items incurred in the
development/construction phase that cannot be capitalized under
US GAAP.



Amortization, Administration and Interest Expense

---------------------------------------------------------------------
($ millions,
except per Comments on
ounce data Three months ended Six months ended significant
and June 30 June 30 trends and
percentages) 2005 2004 % Change 2005 2004 % Change variances
---------------------------------------------------------------------
Amortization
---------------------------------------------------------------------
Absolute
amount $ 94 $ 115 (18)% $ 187 $ 235 (20)% Decrease due
to lower
sales volumes
and lower
amortization
rates per
ounce.
---------------------------------------------------------------------
Per ounce
(dollars) 81 88 (8)% 80 90 (11)% Lower rates
in 2005 are
due to
reserve
increases at
the end of
2004
(particularly
Goldstrike
open pit and
Pierina - see
pages 10 and
11), and the
lower book
value of
Eskay Creek
after an
impairment
charge was
recorded in
fourth
quarter 2004.
We do not
expect the
overall
average rate
per ounce to
change
significantly
for the
second half
of 2005.
---------------------------------------------------------------------
Administration 19 18 6% 36 34 6% Higher
regulatory
compliance
costs in 2005.
---------------------------------------------------------------------
Interest costs
---------------------------------------------------------------------
Incurred 31 11 182% 59 23 157% Increase
mainly due to
new financing
put in place
in 2004 and
2005. Average
long-term
debt
outstanding
increased
from $0.7
billion in
the first
half of 2004
to $1.7
billion in
2005.
---------------------------------------------------------------------
Capitalized 30 7 329% 58 11 427% Increased
amounts were
capitalized
to Lagunas
Norte,
Veladero and
Cowal
development
projects as
construction
costs were
incurred and
capitalized.
Average book
value of
these three
projects was
$0.9 billion
in the first
half of 2005
compared to
$0.2 billion
in the first
half of 2004.
Capitalization
at Pascua-Lama
also began in
third quarter
2004.
---------------------------------------------------------------------
Expensed 1 4 (75)% 1 12 (92)% With the
start-up of
the Lagunas
Norte mine and
after our
Veladero
project begins
production, we
expect that
interest
expense each
quarter will
begin to
increase as
the combined
book value of
Cowal and
Pascua-Lama
will likely
be lower than
outstanding
long-term
debt.
---------------------------------------------------------------------



Other (Income) Expense

---------------------------------------------------------------------
Three months Six months Comments on
ended June 30 ended June 30 significant trends
($ millions) 2005 2004 2005 2004 and variances
---------------------------------------------------------------------
Non-hedge derivative
(gains)/losses $ (3) $ (6) $ (9) $ 9 In second quarter
2005, gains mainly
arose from ongoing
hedge
ineffectiveness
calculated under
FAS 133, whereas in
second quarter
2004, gains mainly
represented gains
on non-hedge
interest rate
contracts partly
offset by losses
on non-hedge
Australian dollar
contracts caused by
movements in market
rates.
---------------------------------------------------------------------
Gains on asset sales - (1) (1) (3)
---------------------------------------------------------------------
Gain on Kabanga
transaction (15) - (15) - Gain recorded in
second quarter 2005
relates to the
closing of a
transaction in
which Falconbridge
acquired a 50%
indirect interest
in Kabanga.
---------------------------------------------------------------------
Gains on investment
sales - - (9) (2) Gains in first
quarter 2005 relate
to the sale of
investments held in
a rabbi trust for a
deferred
compensation plan
as a result of a
change in the plan
trustee.
---------------------------------------------------------------------
Environmental
remediation costs 9 4 14 12 The higher expense
in second quarter
2005 reflects a
revision to cost
estimates at
certain closed
mines and
development
projects.
---------------------------------------------------------------------
Currency translation
(gains)/losses 1 1 5 (1)
---------------------------------------------------------------------
Other items 11 11 20 14
---------------------------------------------------------------------
$ 3 $ 9 $ 5 $ 29
---------------------------------------------------------------------


Income Taxes

Income tax expense of $7 million or 13% in second quarter 2005 was lower than second quarter 2004 when it was 73% (excluding the impact of a deferred tax credit of $30 million in 2004). Our underlying expected effective tax rate for 2005 is 22%. The actual tax rate in second quarter 2005 was lower mainly because the gain recorded on the Kabanga transaction occurred in a low tax-rate jurisdiction. The higher actual effective tax rate in second quarter 2004 of 73% was mainly due to a $26-million opportunity cost through a voluntary reduction of outstanding fixed-price gold sales contracts that occurred in a low tax-rate jurisdiction. Excluding the impact of this opportunity cost, the effective rate in 2004 would have been similar to second quarter 2005. The expected rate for 2005 is based on a market gold price assumption of $425 per ounce. If actual average market gold prices vary from this assumption, our actual effective tax rate will also vary. The expected underlying tax rate excludes the effect of gains and losses on non-hedge derivatives; the effect of delivering into forward gold sales contracts at prices below prevailing market prices; and any release of deferred tax valuation allowances.

Operating Activities

Operating cash flow decreased by $7 million to $101 million in second quarter 2005 compared to second quarter 2004. A $15-million increase in mine operating supplies and ore in stockpiles at our development projects and new mines partly contributed to our operating cash flow decrease. The key factors that contributed to the period over period decrease are summarized in the table below.

NOTE: A chart is available on CCNMatthews' website at: http://www2.ccnmatthews.com/database/fax/2000/abx0728.pdf



Key factors affecting operating cash flow
---------------------------------------------------------------------
Impact Impact
on on
Three compar- Six compar-
months ative months ative
ended oper- ended oper- Comments on
June 30 ating June 30 ating significant
cash cash trends and
2005 2004 flow 2005 2004 flow variances
---------------------------------------------------------------------
Gold
sales
volumes
('000s
oz) 1,085 1,222 $(21) 2,214 2,469 $(43) See page 9.
---------------------------------------------------------------------
Realized
gold
prices
($/oz) $424 $372 56 $426 $377 108 See page 9.
---------------------------------------------------------------------
Total
cash
costs
($/oz)(1) 243 217 (28) 242 209 (73) See page 9.
---------------------------------------------------------------------
Sub-total 7 (8)
---------------------------------------------------------------------
Other
inflows
(outflows)
---------------------------------------------------------------------
Income (17) (22) 5 (29) (51) 22 Lower required
tax income tax
payments payments.
---------------------------------------------------------------------
Increase (51) (21) (30) (74) (26) (48) Higher inventory
in at development
inven- projects to
tories support the
start-up of
production and
impact of
production
exceeding sales
at some mines in
the first half
of 2005.
---------------------------------------------------------------------
Other 36 23 13 41 20 21 Recovery of
non-cash goods
working and services
capital taxes
for Veladero in
second quarter
2005, partly
offset by an
increase in
amounts due from
contractors at
Lagunas Norte
for fuel
consumption
and the timing
of supplier
payments.
---------------------------------------------------------------------
Interest
expense 1 4 3 1 12 11 See page 14.
---------------------------------------------------------------------
Effect
of
other
factors (5) (7)
---------------------------------------------------------------------
Total (7) $(9)
---------------------------------------------------------------------
(1) Variances between the 2005 and 2004 cash costs per ounce can be
partially attributed to the change in accounting for stripping
costs as the change was adopted on a cumulative basis with no
restatement of 2004 cash costs per ounce.


Investing Activities

In second quarter 2005 we spent $270 million on capital expenditures, we received $15 million on closing of the Kabanga transaction, and we spent $55 million on investments. Investments included $50 million to increase our ownership interest in Highland Gold Mining PLC from 14% to 20%, as well as $5 million on the first tranche of a private placement with Diamondex Resources Ltd.



---------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
($ $ $
millions) 2005 2004 Change 2005 2004 Change Comments
---------------------------------------------------------------------
Growth
capital
expendi-
tures(1)
---------------------------------------------------------------------
Veladero $66 $78 $(12) $135 $142 $(7) Construction activity
at similar levels in
each period.
---------------------------------------------------------------------
Lagunas 47 26 21 100 32 68 Construction activity
Norte started in
second quarter 2004.
Production start-up in
mid-June 2005, with
lower capital
expenditures expected in
second half of 2005 on
completion of
construction.
---------------------------------------------------------------------
Cowal 65 11 54 109 31 78 Construction activity
started in second
quarter 2004. Higher
levels of activity
generally in 2005.
---------------------------------------------------------------------
Tulawaka 3 12 (9) 8 15 (7) Production began in
first quarter 2005, with
lower levels of capital
expenditure expected
from second quarter 2005
onwards.
---------------------------------------------------------------------
Pascua- 20 6 14 39 10 29 Higher levels of
Lama activity since decision
in mid-2004 to proceed
with the project as well
as higher capitalized
interest.
---------------------------------------------------------------------
Nevada 25 - 25 34 - 34 Construction activity
Power started in fourth
Plant quarter 2004.
---------------------------------------------------------------------
East 11 - 11 12 - 12 Construction activity
Archimedes started in first quarter
2005.
---------------------------------------------------------------------
Sub-
total 237 133 104 437 230 207
---------------------------------------------------------------------
Sustaining
capital
expenditures
---------------------------------------------------------------------
North 18 32 (14) 33 46 (13) Deferral of 2005
America expenditures until later
in the year.
---------------------------------------------------------------------
Australia/ 11 23 (12) 34 38 (4) Deferral of 2005
Africa expenditures until later
in the year.
---------------------------------------------------------------------
South America 2 - 2 5 2 3
---------------------------------------------------------------------
Other 2 1 1 3 2 1
---------------------------------------------------------------------
Sub-total 33 56 (23) 75 88 (13)
---------------------------------------------------------------------
Total $270 $189 $81 $512 $318 $194
---------------------------------------------------------------------
(1) Includes construction costs and capitalized interest.


Financing Activities

The most significant financing cash inflows in second quarter 2005 were proceeds of $89 million from various financings, including $28 million from two lease facilities for Lagunas Norte, a $50 million public debt offering in Peru, and drawdowns of $11 million under the Veladero project financing. We also received $10 million on the exercise of employee stock options. We made scheduled repayments under long-term debt obligations totaling $14 million and paid dividends of $59 million in second quarter 2005.

BALANCE SHEET

SHAREHOLDERS' EQUITY

Outstanding Share Data

As at July 15, 2005, 534.8 million of our common shares, one special voting share and 1.4 million Exchangeable Shares not owned by Barrick (exchangeable into 0.7 million of our common shares) were issued and outstanding. As at July 15, 2005, options to purchase 21.9 million common shares were outstanding under our option plans, as well as options to purchase 0.9 million common shares under certain option plans inherited by us in connection with prior acquisitions.

Comprehensive Income

Comprehensive income consists of net income or loss, together with certain other economic gains and losses that collectively are described as "other comprehensive income", and excluded from the income statement.

In second quarter 2005, the other comprehensive loss of $24 million mainly included gain reclassification adjustments totaling $32 million on hedge contracts that were transferred to earnings in second quarter 2005; partly offset by gains of $5 million on hedge contracts designated for future periods caused primarily by changes in currency exchange rates, interest rates and fuel prices.



QUARTERLY INFORMATION ($ millions, except where indicated)
---------------------------------------------------------------------
2005 2004 2003
---------- ----------------------- -----------
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
---------------------------------------------------------------------
Gold sales $463 $484 $501 $500 $454 $477 $536 $549
---------------------------------------------------------------------
Net income 53 60 156 32 34 26 77 35
---------------------------------------------------------------------
Net income per share
- basic (dollars) 0.10 0.11 0.30 0.06 0.06 0.05 0.14 0.07
---------------------------------------------------------------------


Our financial results for the last eight quarters reflect the following general trends: rising spot gold prices with a corresponding rise in prices realized from gold sales; and declining gold production, sales volumes, and rising total cash costs per ounce as a number of our mines have been processing lower-grade ore and experienced rising input costs for labor, fuel, power, and other consumables due to inflationary cost pressures. The trend of lower gold production and sales and higher total cash costs per ounce is expected to reverse in the second half of 2005 as our lower-cost Lagunas Norte mine began production in mid-June 2005 and the Veladero mine is expected to commence production in fourth quarter 2005. Net income in each quarter also reflects the timing of various special items. The items affecting the first and second quarters of 2005 and 2004 are presented in a table on page 8.

OFF-BALANCE SHEET ARRANGEMENTS

The MD&A included in our 2004 Annual Report contained a detailed discussion of off-balance sheet arrangements. In this interim MD&A, we have included an update of any significant changes in off-balance sheet arrangements.

Gold and Silver Sales Contracts

We have historically used gold and silver sales contracts as a means of selling a portion of our gold and silver production. The contracting parties are bullion banks whose business includes entering into contracts to purchase gold or silver from mining companies. All our gold and silver sales contracts (including Corporate Gold Sales Contracts, Pascua-Lama Gold Sales Contracts and Floating Spot-Price Gold Sales Contracts) retain all the benefits of our Master Trading Agreements ("MTAs") and are not subject to margining, downgrade or unilateral and discretionary "right to break" provisions. Furthermore, as part of our MTAs, Pascua-Lama Gold Sales Contracts are not subject to any provisions regarding any final go-ahead decisions with Pascua-Lama construction, or any possible delay or change in the Pascua-Lama project. Barrick guarantees the performance of all its gold and silver sales contracts.

Corporate Gold Sales and Floating Spot-Price Gold Sales Contracts

Fixed-price Corporate Gold Sales Contracts, which at June 30, 2005 totaled 6.6 million ounces, represent just over one year of expected future gold production and approximately 9% of our proven and probable reserves, excluding Pascua-Lama. We reduced our fixed-price Corporate Gold Sales contract commitments by 0.2 million ounces in second quarter 2005 via delivery of 0.1 million ounces and conversion of 0.1 million ounces into floating spot-price gold sales contracts.

At June 30, 2005, we had floating spot-price gold sales contracts under which we are committed to deliver 0.8 million ounces of gold over the next ten years at spot prices, less an average fixed-price adjustment of $78 per ounce.



Key Aspects of Corporate Gold Sales Contracts
(at June 30, 2005)
---------------------------------------------------------------------
Current termination date of contracts. 2015 in most cases.
---------------------------------------------------------------------
Average estimated realizable price in
2015. $423/oz.(1)
---------------------------------------------------------------------
Mark-to-market value at June 30, 2005.
Corporate Gold Sales Contracts $(892) million.(2)
Floating Spot-Price Gold Sales Contracts. $(60) million.(2)
---------------------------------------------------------------------
(1) Approximate estimated value based on current market US dollar
interest rates and an average lease rate assumption of 1%.
Accelerating gold deliveries would likely lead to reduced
contango that would otherwise have built up over time. Barrick
may choose to settle any gold sales contract in advance of this
termination date at any time, at its discretion. Historically,
delivery has occurred in advance of the contractual termination
date.
(2) At a spot gold price of $437 per ounce, and market interest
rates.


Pascua-Lama Gold Sales Contracts

In anticipation of building Pascua-Lama and in support of any related financing, we have 6.5 million ounces of existing fixed-price gold sales contracts specifically allocated to Pascua-Lama (the "Pascua-Lama Gold Sales Contracts"). The allocation of these contracts will help reduce gold price risk at Pascua-Lama and is expected to help secure the financing for its construction. We expect the allocation of these contracts to eliminate any requirement by lenders to add any incremental gold sales contracts in the future to support the financing of Pascua-Lama. The forward sales prices on our Pascua-Lama Gold Sales Contracts have not been fully fixed, and thus remain sensitive to long-term (2009-2017) interest rates. Declining long-term interest rates in the second quarter have resulted in a lower expected realizable sales price for these contracts. If these interest rates rise, we anticipate the expected realizable sales price to increase (in 2009-2017).



Key Aspects of Pascua-Lama Gold Sales Contracts
(at June 30, 2005)
---------------------------------------------------------------------
Expected delivery dates.(1) 2009-2017, the term of the
expected financing.
---------------------------------------------------------------------
Future estimated average realizable price. $365/oz.(2)
---------------------------------------------------------------------
Mark-to-market value at June 30, 2005. $(950) million.(3)
---------------------------------------------------------------------
(1) The contract termination dates are 2014-2017 in most cases, but
we expect to deliver Pascua-Lama production against these
contracts starting in 2009, subject to the timing of receipt of
approvals of the environmental impact assessments, as well as the
resolution of other external issues, both of which are largely
beyond our control.
(2) Upon delivery of production from 2009-2017, the term of expected
financing. Approximate estimated value based on current market
contango which is sensitive to US interest rates.
(3) At a spot gold price of $437 per ounce and market interest rates.


These contracts represent just over 36% of the 17.6 million ounces of gold reserves at Pascua-Lama, and do not impact any of the 643 million ounces of silver contained in gold reserves.



Fair Value of Derivative Positions
---------------------------------------------------------------------
Unrealized Gain/(Loss) At Jun.30, 2005 At Dec.31, 2004
---------------------------------------------------------------------
Corporate Gold Sales Contracts(1) $(952) $(975)
---------------------------------------------------------------------
Pascua-Lama Gold Sales Contracts (950) (966)
---------------------------------------------------------------------
Silver Sales Contracts(1) (30) (26)
---------------------------------------------------------------------
Currency contracts 207 298
---------------------------------------------------------------------
Interest and lease rate contracts 46 45
---------------------------------------------------------------------
Fuel contracts 41 4
---------------------------------------------------------------------
$(1,638) $(1,620)
---------------------------------------------------------------------
(1) Includes floating spot-price contracts.


Contractual Obligations and Commitments

Purchase obligations include only those items where binding commitments have been entered into. They do not include the full amount of future capital expenditures required to complete construction of our development projects, because commitments have yet to be made for a portion of these estimated future capital costs. Significant changes to the December 31, 2004 contractual obligations and commitments include an additional $0.3 billion of purchase obligations for supplies and consumables and power contracts that we expect to incur mainly in 2005 to 2008.

In second quarter 2005, we drew down a further $11 million under our Veladero project financing, $28 million under lease facilities in Peru, and issued a $50-million Peruvian public debenture for Lagunas Norte that matures in 2013. The additional Veladero project financing results in repayments of about $1 million each year for 2006 to 2010, with the remainder repayable in 2011 to 2012. The lease facilities drawdown will be repaid evenly on a quarterly basis over five years starting in fourth quarter 2005.

Capital expenditures not yet committed

We expect to incur about $2.2 billion in capital to complete the development of our present projects over the next five years (Veladero, Cowal, Pascua-Lama and East Archimedes and the Nevada Power Plant). A total of about $0.2 billion of these amounts had been committed at the end of second quarter 2005, with the remainder not yet committed.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management has discussed the development and selection of our critical accounting estimates with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the disclosure relating to such estimates in conjunction with its review of this MD&A. The accounting policies and methods we utilize determine how we report our financial condition and results of operations, and they may require management to make estimates or rely on assumptions about matters that are inherently uncertain.

In this MD&A, we have not repeated information provided in our 2004 annual MD&A. We have provided an update for any changes or expected changes in accounting policies and critical accounting estimates that were not included in our 2004 annual MD&A.

Accounting Policy Changes

There was one change in accounting policies in the second quarter of 2005 that significantly impacted our Financial Statements, the adoption of EITF 04-6.

EITF Issue No. 04-6, Accounting for Stripping Costs Incurred during Production in the Mining Industry ("EITF 04-6")
In second quarter 2005, the FASB approved EITF 04-6, and we chose to adopt it in second quarter 2005. EITF 04-6 relates to the accounting for stripping costs in the production stage at a mine. Previously we capitalized stripping costs incurred in the production phase. We included amortization of capitalized costs in inventory based on a "stripping ratio" using the units of production method. Under EITF 04-6, stripping costs incurred each period during the production phase are recorded as a component of the cost of inventory produced each period. EITF 04-6 allows either retroactive restatement of all prior periods, or restatement of results for the current year, with the cumulative effect on prior years reflected as a charge or credit to earnings in the period of adoption. On adoption of EITF 04-6 in second quarter 2005, we recorded a decrease in capitalized mining costs of $226 million; an increase in inventory of $232 million; and a $6-million credit in second quarter 2005 earnings for the cumulative effect of adopting EITF 04-6. Results for second quarter 2005 reflect the method of accounting under EITF 04-6. The effect of implementing EITF 04-6 on restated earnings for first quarter 2005 was a decrease in cost of sales by $12 million, and an increase in income tax expense by $3 million, and is reflected in results for the six months ended June 30, 2005. The adoption of EITF 04-6 had no impact on our cash flow statement.



Impact of EITF 04-6 on Total Cash Costs Per Ounce Statistics
---------------------------------------------------------------------
Three months Six months
ended ended
June 30, 2005 June 30, 2005
Increase Increase
(dollars per ounce) (decrease) (decrease)
---------------------------------------------------------------------
Goldstrike open pit $(9) $(9)
---------------------------------------------------------------------
Round Mountain 6 11
---------------------------------------------------------------------
Hemlo 16 11
---------------------------------------------------------------------
Pierina (27) (26)
---------------------------------------------------------------------
Lagunas Norte (18) (18)
---------------------------------------------------------------------
Kalgoorlie (19) (28)
---------------------------------------------------------------------
Plutonic (19) (32)
---------------------------------------------------------------------
Lawlers 43 (12)
---------------------------------------------------------------------
Tulawaka 33 33
---------------------------------------------------------------------
Total cash costs per ounce 6 8
---------------------------------------------------------------------


FAS 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FAS 3

FAS 154 relates to the accounting for and reporting of a change in accounting principle and applies to all voluntary changes in accounting principles. The reporting of corrections of an error by restating previously issued financial statements is also addressed by this statement. FAS 154 applies to pronouncements in the event they do not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. FAS 154 requires retrospective application to prior periods' financial statements of changes in accounting principle, unless the period specific effects or cumulative effects of an accounting change are impracticable to determine, in which case the new accounting principle is required to be applied to the assets and liabilities as of the earliest period practicable, with a corresponding adjustment made to opening retained earnings. Prior to FAS 154, most accounting changes were recorded effective at the beginning of the year of change, with the cumulative effect at the beginning of the year of change recorded as a charge or credit to earnings in the period a change was adopted. FAS 154 will be effective for us on accounting changes and corrections of errors beginning in 2006. FAS 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in the transition phase as of the effective date of FAS 154.

Critical Accounting Estimates

Certain accounting estimates have been identified as being "critical" to the presentation of our financial condition and results of operations because they require management to make particularly subjective and/or complex judgments about matters that are inherently uncertain; and there is a reasonable likelihood that materially different amounts could be reported under different conditions or using different assumptions and estimates. Following the adoption of EITF 04-6, stripping ratios are no longer a critical accounting estimate. Critical accounting estimates include:

- Reserve estimates used to measure amortization of property, plant and equipment;

- Impairment assessments of long-lived assets;

- The fair value of asset retirement obligations; and

- The measurement of deferred income tax assets and liabilities and assessments of the amounts of valuation allowances recorded.

Reserve Estimates Used to Measure Amortization of Property, Plant and Equipment

We record amortization expense based on the estimated useful economic lives of long-lived assets. Effective December 31, 2004, we updated our estimates of proven and probable gold mineral reserves. Following the update of these estimates, we prospectively revised calculations of amortization and caused amortization during second quarter 2005 and year-to-date 2005 to decrease by $9 million and $18 million, respectively, for the mines listed below, which had reserve estimate changes (other than production) greater than 10%.



Impact of Historic Changes in Reserve Estimates on Amortization
---------------------------------------------------------------------
($millions, except reserves Reserves Amortization increase
in millions of contained oz) increase (decrease)
(decrease)(1) Periods ended June 30, 2005
Three months Six months
---------------------------------------------------------------------
Goldstrike open pit 1.8 $(3) $(7)
---------------------------------------------------------------------
Round Mountain 0.3 (2) (4)
---------------------------------------------------------------------
Lawlers 0.1 (1) (2)
---------------------------------------------------------------------
Eskay Creek (0.1) 2 4
---------------------------------------------------------------------
Pierina 0.3 (5) (9)
---------------------------------------------------------------------
Total 2.1 (9) (18)
---------------------------------------------------------------------
Impact on overall
amortization rate per
ounce (dollars) - (6) (6)
---------------------------------------------------------------------
(1) Each year we update our reserve estimates as at the end of the
year as part of our normal business cycle. Reserve changes, shown
in millions of contained ounces, affect amortization expense on a
prospective basis.


Impairment Assessments of Investments

Each reporting period we review all investments whose fair value at the end of the period is below cost to determine whether an other-than-temporary impairment has occurred. We consider both positive and negative evidence in order to reach a conclusion on whether any impairment is other-than-temporary, and if necessary, record any losses that are other-than-temporary in earnings within other (income)/expense. Changes in the values of investments are caused by market factors beyond our control and could be significant. Consequently, the amount of any impairment charge recorded could materially impact earnings in a particular reporting period. In second quarter 2005, we reviewed two investments for impairment purposes, which had an aggregate fair value that was $2 million below cost, and concluded that the impairment in value was not other-than-temporary, as disclosed in note 11 to the interim financial statements. If a further or prolonged deterioration in value of these investments occurs, we may reach a different conclusion that could lead to the recognition of an impairment charge in earnings of a future period.

Impairment Assessments of Property, Plant and Equipment

At the end of 2004, we conducted detailed impairment assessments for Eskay Creek and Cowal. In second quarter 2005, we did not perform any detailed impairment assessments on any groups of assets, but we are monitoring the impact of industry-wide inflationary cost pressures on our mining operations. It is reasonably possible that another detailed assessment could be required at these mines in future periods if cost pressures persist or increase in the future.



Consolidated Statements of Income

Barrick Gold Corporation Three months Six months
(in millions of United States dollars, ended ended
except per share data) (Unaudited) June 30, June 30,
-----------------------------
2005 2004 2005 2004
-------------- -------------
Gold sales (notes 3 and 4) $ 463 $ 454 $ 947 $ 931
------------------------------------------------------ -------------
Costs and expenses
Cost of sales(1) (note 5) 266 266 537 516
Amortization (note 3) 94 115 187 235
Administration 19 18 36 34
Exploration, development and
business development 37 34 68 63
Other (income) expense (note 6) 3 9 5 29
------------------------------------------------------ -------------
419 442 833 877
------------------------------------------------------ -------------

Interest income 11 7 19 13
Equity in investees (note 11) - - (1) -
Interest expense (note 13) (1) (4) (1) (12)
------------------------------------------------------ -------------
Income before income taxes and
other items 54 15 131 55
Income tax (expense) recovery (note 7) (7) 19 (24) 5
------------------------------------------------------ -------------
Income before cumulative effect of
change in accounting principles 47 34 107 60
Cumulative effect of changes in
accounting principles (note 2b) 6 - 6 -
------------------------------------------------------ -------------
Net income for the period $ 53 $ 34 $ 113 $ 60
------------------------------------------------------ -------------
Earnings per share data (note 8):
Income before cumulative effect of
change in accounting principles
Basic and diluted $ 0.09 $ 0.06 $ 0.20 $ 0.11
Net income
Basic and diluted $ 0.10 $ 0.06 $ 0.21 $ 0.11
------------------------------------------------------ -------------
(1) Exclusive of amortization (note 3).

The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.



Consolidated Statements of Cash Flow

Barrick Gold Corporation Three months Six months
(in millions of United States dollars) ended ended
(Unaudited) June 30, June 30,
-----------------------------
2005 2004 2005 2004
------------------------------------------------------ -------------
OPERATING ACTIVITIES
Net income for the period $ 53 $ 34 $ 113 $ 60
Amortization (note 3) 94 115 187 235
Deferred income taxes (note 7) (1) (31) 5 (35)
Increase in inventory (51) (21) (74) (26)
Gain on Kabanga transaction (note 6) (15) - (15) -
Other items (note 9) 21 11 9 -
------------------------------------------------------ -------------
Net cash provided by operating
activities 101 108 225 234
------------------------------------------------------ -------------
INVESTING ACTIVITIES
Property, plant and equipment
Capital expenditures (note 3) (270) (189) (512) (318)
Sales proceeds - 2 3 8
Cash receipts from Kabanga transaction 15 - 15 -
Investments
Purchases (note 11) (55) (8) (83) (53)
Sales proceeds - 4 - 8
Other items (13) (3) (13) (3)
------------------------------------------------------ -------------
Net cash used in investing activities (323) (194) (590) (358)
------------------------------------------------------ -------------
FINANCING ACTIVITIES
Capital stock
Proceeds on exercise of stock options 10 13 38 26
Repurchased for cash - - - (95)
Long-term debt
Proceeds (note 13) 89 - 138 -
Repayments (14) (27) (15) (27)
Dividends (note 14) (59) (59) (59) (59)
Other items (1) - (1) -
------------------------------------------------------ -------------
Net cash provided by (used in)
financing activities 25 (73) 101 (155)
------------------------------------------------------ -------------
Effect of exchange rate changes on
cash and equivalents (2) (6) (3) (6)
Net decrease in cash and equivalents (197) (159) (264) (279)
Cash and equivalents at beginning
of period 1,330 850 1,398 970
------------------------------------------------------ -------------
Cash and equivalents at end of period $ 1,131 $ 685 $ 1,131 $ 685
------------------------------------------------------ -------------

The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.



Consolidated Balance Sheets

Barrick Gold Corporation
(in millions of United States As at June 30, As at December 31,
dollars) (Unaudited) 2005 2004
------------------------------------------------- ------------------
ASSETS
Current assets
Cash and equivalents $1,131 $ 1,398
Accounts receivable 62 58
Inventories (note 10) 336 215
Other current assets 301 286
------------------------------------------------- ------------------
1,830 1,957
Investments (note 11) 56 59
Equity in investees (note 11) 143 88
Property, plant and equipment
(note 12) 3,732 3,391
Capitalized mining costs (note 2b) - 226
Other assets 722 566
------------------------------------------------- ------------------
Total assets $6,483 $ 6,287
------------------------------------------------- ------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 367 $ 335
Other current liabilities 83 83
------------------------------------------------- ------------------
450 418
Long-term debt (note 13) 1,774 1,655
Other long-term obligations 497 499
Deferred income tax liabilities 130 139
------------------------------------------------- ------------------
Total liabilities 2,851 2,711
------------------------------------------------- ------------------
Shareholders' equity
Capital stock (note 14) 4,168 4,129
Deficit (568) (622)
Accumulated other comprehensive
income (note 16) 32 69
------------------------------------------------- ------------------
Total shareholders' equity 3,632 3,576
------------------------------------------------- ------------------
Contingencies and commitments
(note 12 and 17)
------------------------------------------------- ------------------
Total liabilities and shareholders'
equity $6,483 $ 6,287
------------------------------------------------- ------------------

The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.



Consolidated Statements of Shareholders' Equity

Barrick Gold Corporation
(in millions of United States dollars) (Unaudited) 2005 2004
---------------------------------------------------------------------
Common shares (number in millions)
At January 1 534 535
Issued on exercise of stock options 1 2
Repurchased (note 14a) - (5)
---------------------------------------------------------------------
At June 30 535 532
---------------------------------------------------------------------
Common shares (dollars in millions)
At January 1 $ 4,129 $4,115
Issued on exercise of stock options 39 26
Repurchased (note 14a) - (35)
---------------------------------------------------------------------
At June 30 $ 4,168 $4,106
---------------------------------------------------------------------
Deficit
At January 1 $ (622) $ (694)
Net income 113 60
Dividends (59) (59)
Adjustment on repurchase of common shares
(note 14a) - (60)
---------------------------------------------------------------------
At June 30 $ (568) $ (753)
---------------------------------------------------------------------
Accumulated other comprehensive income (loss)
(note 16) $ 32 $ (42)
---------------------------------------------------------------------
Total shareholders' equity at June 30 $ 3,632 $3,311
---------------------------------------------------------------------



Consolidated Statements of Comprehensive Income

Barrick Gold Corporation Three months ended Six months ended
June 30, June 30,
(in millions of United States ------------------ -----------------
dollars)(Unaudited) 2005 2004 2005 2004
-------------------------------------------------- -----------------
Net income $ 53 $ 34 $ 113 $ 60
Other comprehensive loss, net
of tax (note 16) (24) (89) (37) (102)
-------------------------------------------------- -----------------
Comprehensive income (loss) $ 29 $ (55) $ 76 $ (42)
-------------------------------------------------- -----------------

The accompanying notes are an integral part of these unaudited
interim consolidated financial statements.


NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to C$, A$ and EUR are to Canadian dollars, Australian dollars and Euros, respectively.

1. NATURE OF OPERATIONS

Barrick Gold Corporation ("Barrick" or the "Company") engages in the production and sale of gold from underground and open-pit mines, including related activities such as exploration and mine development. Our operations are mainly located in North America, South America, Australia and Africa.

2. SIGNIFICANT ACCOUNTING POLICIES

A Basis of preparation

The United States dollar is the principal currency of our operations. These unaudited interim consolidated financial statements have been prepared in United States dollars and under United States generally accepted accounting principles ("US GAAP") for the preparation of interim financial information. Accordingly, they do not include all of the information and disclosures required by US GAAP for annual consolidated financial statements. The accounting policies used in the preparation of the accompanying unaudited interim consolidated financial statements are the same as those described in our audited consolidated financial statements and the notes thereto for the three years ended December 31, 2004, except as noted below in note 2b.

In the opinion of management, all adjustments considered necessary for the fair presentation of results for the periods presented have been reflected in these financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and the notes thereto for the three years ended December 31, 2004.

The preparation of these financial statements requires us to make estimates and assumptions. The most significant estimates and assumptions are: quantities of proven and probable gold reserves; expected value of mineral resources not considered proven and probable reserves; expected future costs and expenses to produce proven and probable reserves; expected future commodity prices and foreign currency exchange rates; and expected costs to meet asset retirement obligations. Decisions and assessments affected by our critical estimates and assumptions include:

- decisions as to whether mine development costs should be capitalized or expensed;

- assessments of whether groups of long-lived assets are impaired and the fair value of those groups of assets that are the basis for measuring impairment charges;

- assessments of our ability to realize the benefits of deferred income tax assets;

- the useful lives of long-lived assets and the measurement of amortization recorded in earnings;

- the fair value of asset retirement obligations; and

- assessments of whether investments are impaired.

We regularly review these estimates and assumptions that affect our financial statements however, actual outcomes could differ from estimates and assumptions.

B Accounting changes

EITF Issue No. 04-6, Accounting for Stripping Costs Incurred during Production in the Mining Industry (EITF 04-6)

In second quarter 2005, we adopted EITF 04-6 and changed our accounting policy for stripping costs. Previously we capitalized stripping costs incurred in the production phase. We included amortization of capitalized costs in inventory based on a "stripping ratio" using the units of production method. Under EITF 04-6, stripping costs incurred each period during the production phase are recorded as a component of the cost of inventory produced each period. On adoption of EITF 04-6 in second quarter 2005, we recorded a decrease in capitalized mining costs of $226 million; an increase in inventory of $232 million; and a $6 million credit in earnings for the cumulative effect of adopting EITF 04-6. For the three month period ended June 30, 2005, the effect on earnings of adopting EITF 04-6 was an increase in income, before the cumulative effect of accounting changes, of $4 million ($0.01 per share), and for the six month period ended June 30 2005, the effect was an increase in income, before the cumulative effect of accounting changes, of $13 million ($0.02 per share).

C Accounting developments

FAS 123R, Accounting for Stock-Based Compensation (FAS 123R)

In December 2004, the Financial Accounting Standards Board ("FASB") issued FAS 123R. FAS 123R is applicable to transactions in which an entity exchanges its equity instruments for goods and services. It focuses primarily on transactions in which an entity obtains employee services in share-based payment transactions. FAS 123R requires that the fair value of such equity instruments be recorded as an expense as services are performed. Prior to FAS 123R, only certain pro forma disclosures of accounting for these transactions at fair value were required. FAS 123R will be effective for our first quarter 2006 financial statements, and permits varying transition methods including: retroactive adjustment of prior periods as far back as 1995 to give effect to the fair value based method of accounting for awards granted in those prior periods; or prospective application beginning in 2006. We are presently evaluating the effect of the varying methods of adopting FAS 123R. We expect to adopt FAS 123R using the prospective method effective January 1, 2006. Under this transition method we will begin recording stock option expense prospectively, starting in first quarter 2006.

FIN 47, Accounting for Conditional Asset Retirement Obligations (FIN 47)

FIN 47 was issued in March 2005 and relates to the accounting for a legal obligation to perform an asset retirement activity, when the timing or method of settlement are conditional on a future event, which may not be within the control of the entity. FIN 47 requires recognition of a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after December 31, 2005. We are presently evaluating the impact of FIN 47.

FAS 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FAS 3

FAS 154 relates to the accounting for and reporting of a change in accounting principle and applies to all voluntary changes in accounting principles. The reporting of corrections of an error by restating previously issued financial statements is also addressed by this statement. FAS 154 applies to pronouncements in the event they do not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. FAS 154 requires retrospective application to prior periods' financial statements of changes in accounting principle, unless the period specific effects or cumulative effects of an accounting change are impracticable to determine, in which case the new accounting principle is required to be applied to the assets and liabilities as of the earliest period practicable, with a corresponding adjustment made to opening retained earnings. Prior to FAS 154, most accounting changes were recorded effective at the beginning of the year of change, with the cumulative effect at the beginning of the year of change recorded as a charge or credit to earnings in the period a change was adopted. FAS 154 will be effective for us for accounting changes and corrections of errors beginning in 2006. FAS 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in the transition phase as of the effective date of FAS 154.

D Changes in estimates

Gold Mineral Reserves

Effective December 31, 2004, we updated our estimates of proven and probable gold mineral reserves. Following the update of these estimates, we prospectively revised calculations of amortization of property, plant and equipment. The effect of the change in reserve estimates on amortization of property, plant and equipment for the three months ended June 30, 2005 was a decrease in this expense by approximately $9 million and for the six months ended June 30, 2005, a decrease in amortization of property, plant and equipment of $18 million, for mines with a greater than 10% change (excluding production for the period) in the reserve estimates.

Asset Retirement Obligations (AROs)

In second quarter 2005, we revised cost estimates at various closed mines and recorded an increase in the fair value of AROs by $5 million, which was included as a charge within environmental remediation costs in other income/expense.



3. SEGMENT INFORMATION

Income statement information
---------------------------------------------------------------------
Segment
Gold Segment income
sales expenses(1) (loss)
---------------------------------------------------------------------
For the three months ended June 30 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Goldstrike $161 $172 $113 $118 $15 $17
Round Mountain 42 36 21 22 17 8
Eskay Creek 22 33 3 6 12 15
Hemlo 25 23 17 15 5 4
Other producing mines 9 10 4 6 2 2
---------------------------------------------------------------------
North America 259 274 158 167 51 46
---------------------------------------------------------------------
Kalgoorlie 40 36 21 23 14 9
Plutonic 29 27 19 18 8 7
Bulyanhulu 22 30 19 27 (2) (5)
Other producing mines 36 24 24 13 4 7
Cowal - - 2 - (2) -
---------------------------------------------------------------------
Australia/Africa 127 117 85 81 22 18
---------------------------------------------------------------------
Pierina 65 63 22 18 25 16
Lagunas Norte 12 - 4 3 7 (3)
Veladero - - 2 - (2) -
Pascua-Lama - - 1 - (1) -
---------------------------------------------------------------------
South America 77 63 29 21 29 13
---------------------------------------------------------------------
Exploration group - - 30 25 (30) (25)
---------------------------------------------------------------------
Segment total $463 $454 $302 $294 $72 $52
---------------------------------------------------------------------


---------------------------------------------------------------------
Segment
Gold Segment income
sales expenses(1) (loss)
---------------------------------------------------------------------
For the six months ended June 30 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Goldstrike $354 $335 $236 $231 $47 $32
Round Mountain 82 69 44 40 30 18
Eskay Creek 45 58 6 5 26 29
Hemlo 53 47 35 29 11 12
Other producing mines 15 22 7 13 4 3
---------------------------------------------------------------------
North America 549 531 328 318 118 94
---------------------------------------------------------------------
Kalgoorlie 89 81 45 49 34 23
Plutonic 58 62 35 35 19 22
Bulyanhulu 59 58 50 48 (7) (6)
Other producing mines 60 49 39 28 10 14
Cowal - - 3 - (3) -
---------------------------------------------------------------------
Australia/Africa 266 250 172 160 53 53
---------------------------------------------------------------------
Pierina 120 150 37 38 50 46
Lagunas Norte 12 - 4 9 7 (9)
Veladero - - 3 - (3) -
Pascua-Lama - - 2 - (2) -
---------------------------------------------------------------------
South America 132 150 46 47 52 37
---------------------------------------------------------------------
Exploration group - - 56 44 (56) (44)
---------------------------------------------------------------------
Segment total $947 $931 $602 $569 $167 $140
---------------------------------------------------------------------
(1) In second quarter 2005, we revised our internal definition of
segment expenses to include accretion expense. Segment
information for all the periods presented reflects this change
in the measurement of segment expenses.


Reconciliation of segment income
---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Segment income $72 $52 $167 $140
Amortization of corporate assets (5) (7) (9) (13)
Business development costs (1) (6) (3) (10)
Administration (19) (18) (36) (34)
Equity in investee - - (1) -
Interest income 11 7 19 13
Interest expense (1) (4) (1) (12)
Other income (expense) (3) (9) (5) (29)
---------------------------------------------------------------------
Income before income taxes and other items $54 $15 $131 $55
---------------------------------------------------------------------


Asset information
---------------------------------------------------------------------
Segment
capital
Amortization expenditures
---------------------------------------------------------------------
For the three months ended June 30 2005 2004 2005 2004
---------------------------------------------------------------------
Goldstrike $33 $37 $40 $20
Round Mountain 4 6 1 2
Eskay Creek 7 12 - 3
Hemlo 3 4 1 2
Other operating segments 3 2 12 5
---------------------------------------------------------------------
North America 50 61 54 32
---------------------------------------------------------------------
Plutonic 2 2 4 6
Kalgoorlie 5 4 1 3
Cowal - - 65 11
Bulyanhulu 5 8 2 10
Tulawaka 4 - 3 12
Other operating segments 4 4 4 4
---------------------------------------------------------------------
Australia/Africa 20 18 79 46
---------------------------------------------------------------------
Pierina 18 29 2 -
Veladero - - 66 78
Pascua-Lama - - 20 6
Lagunas Norte 1 - 47 26
---------------------------------------------------------------------
South America 19 29 135 110
---------------------------------------------------------------------
Segment total 89 108 268 188
Other items not allocated to segments 5 7 2 1
---------------------------------------------------------------------
Enterprise total $94 $115 $270 $189
---------------------------------------------------------------------


---------------------------------------------------------------------
Segment
capital
Amortization expenditures
---------------------------------------------------------------------
For the six months ended June 30 2005 2004 2005 2004
---------------------------------------------------------------------
Goldstrike $71 $72 $60 $29
Round Mountain 8 11 1 2
Eskay Creek 13 24 1 4
Hemlo 7 6 3 3
Other operating segments 4 6 14 8
---------------------------------------------------------------------
North America 103 119 79 46
---------------------------------------------------------------------
Plutonic 4 5 7 8
Kalgoorlie 10 9 3 5
Cowal - - 109 31
Bulyanhulu 16 16 16 18
Tulawaka 4 - 8 15
Other operating segments 7 7 8 7
---------------------------------------------------------------------
Australia/Africa 41 37 151 84
---------------------------------------------------------------------
Pierina 33 66 5 2
Veladero - - 135 142
Pascua-Lama - - 39 10
Lagunas Norte 1 - 100 32
---------------------------------------------------------------------
South America 34 66 279 186
---------------------------------------------------------------------
Segment total 178 222 509 316
Other items not allocated to segments 9 13 3 2
---------------------------------------------------------------------
Enterprise total $187 $235 $512 $318
---------------------------------------------------------------------


4. REVENUE AND GOLD SALES CONTRACTS

---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Gold bullion sales
Spot market sales $409 $180 $861 $369
Gold sales contracts 38 249 38 509
---------------------------------------------------------------------
447 429 899 878
Concentrate sales 16 25 48 53
---------------------------------------------------------------------
$463 $454 $947 $931
---------------------------------------------------------------------


At June 30, 2005, we had fixed-price Corporate gold sales contracts with various counterparties for 6.6 million ounces of future gold production, fixed-price gold sales contracts specifically allocated to Pascua-Lama for 6.5 million ounces of future gold production and floating-price forward gold sales contracts for 0.8 million ounces. In 2004, we allocated 6.5 million ounces of fixed-price gold sales contracts specifically to Pascua-Lama. The allocation of these contracts will help reduce gold price risk at Pascua-Lama and is expected to help secure financing for its construction. In addition to the gold sales contracts allocated to Pascua-Lama, we had 6.6 million ounces of corporate gold sales contracts that we intend to settle through delivery of future gold production from our operating mines and development projects, excluding Pascua-Lama. The mark-to-market on the fixed-price gold sales contracts (at June 30, 2005) was negative $950 million for the Pascua-Lama Gold Sales Contracts and negative $892 million for the Corporate Gold Sales Contracts.

Floating spot price sales contracts were previously fixed-price forward sales contracts for which, in accordance with the terms of our master trading agreements, we have elected to receive floating spot gold and silver prices, adjusted by the difference between the spot price and the contract price at the time of such election. Floating prices were elected for these contracts so that we could economically regain spot gold price leverage under the terms of delivery into these contracts. Floating price mechanisms were elected for these contracts at a time when the then current market price was higher than the fixed price in the contract resulting in a mark-to-market on these contracts (at June 30, 2005) of negative $60 million, which equates to an average reduction to the future spot sales price of approximately $78 per ounce, when we deliver gold at spot prices against these contracts. At June 30, 2005, we held gold lease rate swaps, under which we receive a fixed gold lease rate, and pay a floating gold lease rate, on a notional 1.4 ounces of gold spread from 2005 to 2013. The swaps are associated with fixed-price gold sales contracts with expected delivery dates beyond 2006. Lease rate swaps are classified as non-hedge derivatives (note 13b).



5. COST OF SALES

---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Cost of goods sold(1) $289 $288 $573 $556
By-product revenues(2) (37) (36) (66) (70)
Royalty expense 13 12 26 24
Mining taxes 1 2 4 6
---------------------------------------------------------------------
$266 $266 $537 $516
---------------------------------------------------------------------
(1) Cost of goods sold includes accretion expense at producing mines
of $3 million (2004 - $3 million) in the three months ended June
30, 2005 and $6 million in the six months ended June 30, 2005
(2004 - $5 million). The cost of inventory sold in the period
reflects all components capitalized to inventory, except that,
for presentation purposes, the component of inventory cost
relating to amortization of property, plant and equipment is
classified in the income statement under "amortization". Some
companies present this amount under "cost of sales". The amount
presented in amortization rather than cost of sales was $89
million in the three months ended June 30, 2005 (2004 - $108
million) and $178 million in the six months ended June 30, 2005
(2004 - $222 million).
(2) We use silver sales contracts to sell a portion of silver
produced as a by-product. Silver sales contracts have similar
delivery terms and pricing mechanisms as gold sales contracts.
At June 30, 2005, we had fixed-price commitments to deliver 12.0
million ounces of silver at an average price of $5.87 per ounce,
and floating spot price sales contracts for 11.2 million ounces,
over periods primarily of up to 10 years.


6. OTHER (INCOME) EXPENSE

---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Non-hedge derivative (gains) losses (note 13b) $(3) $(6) $(9) $ 9
Gains on sale of assets - (1) (1) (3)
Gain on Kabanga transaction (15) - (15) -
Environmental remediation costs(1) 9 4 14 12
Gains on sale of investments - - (9) (2)
World Gold Council fees 2 3 4 5
Currency translation (gains) losses 1 1 5 (1)
Pension expense 1 1 2 2
Other items 8 7 14 7
---------------------------------------------------------------------
$3 $9 $5 $29
---------------------------------------------------------------------
(1) Includes costs at development projects and closed mines.


Kabanga transaction

In April 2005 we finalized a joint-venture agreement with Falconbridge Limited ("Falconbridge") for the Kabanga nickel deposit and related concessions located in Tanzania. Under the terms of the agreement, Falconbridge has acquired a 50% indirect joint venture interest for $15 million cash and will be the operator of the joint venture. On closing of the transaction with Falconbridge we recorded a gain of $15 million.



Pension expense
---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Expected return on plan assets $(3) $(3) $(6) $(6)
Interest cost on benefit obligation 3 4 6 8
Actuarial losses 1 - 2 -
---------------------------------------------------------------------
$1 $1 $2 $2
---------------------------------------------------------------------


7. INCOME TAX (EXPENSE) RECOVERY

---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Current $(8) $(12) $(19) $(30)
Deferred 1 1 (5) 5
---------------------------------------------------------------------
$(7) $(11) $(24) $(25)
Recognition of deferred tax assets due
to changes in the Australian tax regime - 30 - 30
---------------------------------------------------------------------
(7) $19 (24) $ 5
---------------------------------------------------------------------
Actual effective income tax rate,
excluding recognition of deferred tax assets 13% 73% 18% 45%
---------------------------------------------------------------------


The primary reasons why our actual effective income tax rate differs from the 38% Canadian statutory rate are due to certain allowances and special deductions unique to extractive industries, and also because we operate in multiple tax jurisdictions that have different tax rates than the Canadian federal rate.



8. EARNINGS PER SHARE

---------------------------------------------------------------------
Three months Six months
ended ended
($ millions, except shares in millions June 30 June 30
and per share amounts in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------
Income available to common stockholders
Basic $53 $34 $113 $60
Effect of dilutive stock options - - - -
---------------------------------------------------------------------
Diluted $53 $34 $113 $60
---------------------------------------------------------------------
Weighted average shares outstanding
Basic 535 532 535 533
Effect of dilutive stock options 1 2 1 2
---------------------------------------------------------------------
Diluted 536 534 536 535
---------------------------------------------------------------------
Earnings per share
Basic and diluted $0.10 $0.06 $0.21 $0.11
---------------------------------------------------------------------


9. SUPPLEMENTAL CASH FLOW INFORMATION

---------------------------------------------------------------------
Three months Six months
ended ended
($ millions, except shares in millions June 30 June 30
and per share amounts in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------
Income statement items:
Currency translation (gains) losses $(1) $7 $2 $5
Accretion expense 5 4 10 8
Non-hedge derivative (gains) losses (3) (6) (9) 9
Current income tax expense 8 12 19 30
Revisions to expected cost of AROs
at closed mines 5 - 5 -
Cumulative effect of changes in
accounting principles (note 2b) (6) - (6) -
(Gains) losses on sale of investments - 1 (9) (1)
Gains on sale of assets - (1) (1) (3)
Changes in:
Accounts receivable (10) (2) (4) (5)
Accounts payable 18 20 36 20
Capitalized mining costs - 2 - 3
Taxes recoverable 24 (11) 7 (17)
Other assets and liabilities 4 14 2 19
Cash payments:
Asset retirement obligations (6) (7) (14) (17)
Current income taxes (17) (22) (29) (51)
---------------------------------------------------------------------
Other net operating activities $21 $11 $9 $-
---------------------------------------------------------------------


10. INVENTORIES

---------------------------------------------------------------------
At June 30, At Dec.31,
2005 2004
---------------------------------------------------------------------
Inventories
Gold in process and ore in stockpiles $495 $198
Mine operating supplies 107 82
---------------------------------------------------------------------
602 280
Non-current ore in stockpiles(1) (266) (65)
---------------------------------------------------------------------
$336 $215
---------------------------------------------------------------------
(1) Ore that we do not expect to process in the next 12 months is
classified in other assets. On adoption of EITF 04-6, amounts
totaling $233 million were transferred from capitalized mining
costs to ore in stockpiles (see note 2b).


11. INVESTMENTS

A Available-for-sale securities
---------------------------------------------------------------------
At June 30, 2005 At Dec.31, 2004
Gains Gains
Fair (Losses) Fair (Losses)
value in OCI value in OCI
---------------------------------------------------------------------
Securities in an unrealized
gain position
Benefit plans:(1)
Fixed-income securities $1 $- $11 $-
Equity securities 3 - 19 10
Strategic investments:
Equity securities(2) 47 12 24 13
---------------------------------------------------------------------
$51 $12 $54 $23
---------------------------------------------------------------------
Securities in an unrealized
loss position(3)
Strategic investments:
Equity securities $5 $(2) $5 $(2)
---------------------------------------------------------------------
$56 $10 $59 $21
---------------------------------------------------------------------
(1) Under various benefit plans for certain former Homestake
executives, a portfolio of marketable fixed-income and equity
securities are held in a rabbi trust that is used to fund
obligations under the plans. As at June 30, 2005, the majority of
the portfolio consisted of cash that is restricted as to its use,
which was classified within "other current assets".
(2) Mainly includes an investment in the ordinary shares of Celtic
Resources (fair value of $26 million at June 30, 2005).
(3) All securities have been in a continuous unrealized loss position
for less than twelve months.


Strategic equity investments in an unrealized loss position include companies that operate in the gold mining industry, and their market share prices are significantly impacted by the price of gold. In evaluating whether these impairments were "other than temporary" we took into consideration the relatively recent decline in value; our positive outlook for the price of gold; the prospective nature of mineral properties held by these companies; and also the relative amount of the unrealized loss at June 30, 2005 compared to the fair value of the investments. We concluded that the impairments were not "other than temporary", and no impairment charges were recorded at June 30, 2005.

Investment in Celtic Resources Holdings PLC ("Celtic")

On January 5, 2005 we completed a subscription for 3,688,191 units of Celtic for $7.562 per unit for a total cost of $28 million. Each unit consisted of one ordinary share of Celtic and one-half of one share purchase warrant. On acquisition we allocated $27 million to the ordinary shares and $1 million to the share purchase warrants. On completion, we held a 9% direct and indirect interest in Celtic's outstanding common shares. On June 1, 2005, the number of warrants held increased under the terms of the subscription agreement by 922,048 warrants to 2,766,143 warrants. Each whole warrant entitles us to acquire one ordinary share of Celtic for $7.562, expiring on December 31, 2007. We determined that the share purchase warrants are derivative instruments as defined by FAS 133. The warrants are classified as non-hedge derivatives in the balance sheet with changes in fair value subsequent to acquisition recorded in earnings. We also entered into the following agreements:

- We have a pre-emptive right to subscribe for up to $75 million of Celtic shares at $7.562 per share.

- Celtic has granted us a right of first refusal on any proposed sale of its direct or indirect interest in Nezhdaninskoye, as well as the right to indirectly purchase 51% of its interest in Nezhdaninskoye for $195 million, exercisable for a period of six months starting if and when Celtic acquires 100% of Nezhdaninskoye.

Celtic has granted us the right to acquire 50% of any interest in any mineral property in Kazakhstan that Celtic acquires for a period of 12 months after any such acquisition for an amount equal to 50% of the cost to Celtic of its interest in the mineral property.



B Equity Method Investments
---------------------------------------------------------------------
At June 30, At Dec.31,
2005 2004
---------------------------------------------------------------------
Carrying amount
Highland Gold Mining PLC $ 138 $88
Diamondex Resources Limited 5 -
---------------------------------------------------------------------
$143 $88
---------------------------------------------------------------------


Highland Gold Mining PLC ("Highland")

On May 6, 2005, we purchased 11 million common shares of Highland for cash consideration of $50 million, increasing our equity ownership to 20%. Following this increase in ownership we re-evaluated the accounting method for this investment and concluded that the equity method is the most appropriate accounting treatment for this investment. Under the equity method we record our share of income or loss of Highland each period based on our actual ownership interest in each period from fourth quarter 2003, when we first purchased an equity interest in Highland. On transition to equity accounting, US GAAP requires financial statements for prior periods to be revised to reflect the new accounting treatment.

The difference between the cost of our investment in Highland and the underlying net assets of Highland was $94 million at June 30, 2005. We are in the process of determining whether mineralized material at mining properties owned by Highland meets the definition of a reserve for US reporting purposes and also finalizing valuations for the assets and liabilities of Highland to allocate the cost of the purchase, with any residual unallocated amount representing goodwill. Once this process is complete, we will evaluate the need for any revisions to the equity pick up to reflect the results of Highland on a US GAAP basis.

Diamondex Resources Limited ("Diamondex")

On May 18, 2005, we completed a subscription for 7,550,000 units of Diamondex for $5 million. Each unit consists of one ordinary share of Diamondex and one share purchase warrant. On completion, we held an 11% interest in the outstanding common shares of Diamondex (20% assuming exercise of the share purchase warrants). $4 million was allocated to the ordinary shares and $1 million to the share purchase warrants. The share purchase warrants are classified as available-for-sale securities. On July 4, 2005, we purchased an additional 3,561,111 units for $3 million, increasing our ownership to 14% of the outstanding common shares of Diamondex (25% assuming exercise of the share purchase warrants).



12. PROPERTY, PLANT AND EQUIPMENT

The following assets are not being amortized.

---------------------------------------------------------------------
Carrying Carrying Targeted
amount at amount at timing of
June 30, December production
2005 31, 2004 start-up
---------------------------------------------------------------------
Development projects
Veladero $486 $349 2005
Cowal 246 128 2006
Pascua-Lama 282 243 2009
Buzwagi exploration project 102 102 -
Nevada Power Plant 52 18 2005
---------------------------------------------------------------------
Total $1,168 $ 840
---------------------------------------------------------------------


Capital commitments

In addition to entering into various operational commitments in the normal course of business, we have commitments of approximately $150 million to be paid during 2005 for construction activities at our development projects and for construction of a power plant in Nevada to supply the Goldstrike mine.



13. FINANCIAL INSTRUMENTS

A Long-term debt
Interest expense
---------------------------------------------------------------------
Three months Six months
ended ended
June 30 June 30
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------
Interest incurred $31 $11 $59 $23
Less: capitalized (30) (7) (58) (11)
---------------------------------------------------------------------
Interest expense $1 $4 $1 $12
---------------------------------------------------------------------


Veladero project financing

In the three months ended June 30, 2005, we drew down $11 million (six months ended June 30, 2005: $35 million) under the $250 million Veladero financing facility, resulting in a total amount of $233 million outstanding under the facility at June 30, 2005.

Peru lease facilities

In the three months ended June 30, 2005, we drew down $25 million (six months ended June 30, 2005: $50 million) under an $80 million build to suit lease facility held by one of our wholly owned subsidiaries, Minera Barrick Misquichilca (MBM). Since the end of the quarter, we have secured an expansion of the facility to a total facility of $110 million. At June 30, 2005, a total of $80 million had been drawn down, which is being used to finance the construction of the leach pad and process facilities at the Lagunas Norte project. In second quarter 2005 MBM finalized a second build to suit lease facility for $20 million, which is being used to finance the extension of the leach pad at the Lagunas Norte project. In the three months ended June 30, 2005, $3 million was drawn down under this second facility.

Peruvian bonds

In second quarter 2005, MBM issued $50 million of debt securities in the Peruvian capital markets. The net proceeds will be used to partially fund the construction of the Lagunas Norte project. The securities bear interest at Libor plus 1.72%, and mature in 2013.

Bulyanhulu project financing

In June 2005, the terms of our Bulyanhulu financing were amended, with the lender having recourse to Barrick going forward in return for a reduction in the credit spread over Libor on the financing, from Libor plus 1.5% to Libor plus 0.35%. The covenants governing the financing have also been simplified. Kahama Mining Corporation Ltd. had a variable-rate recourse amortizing loan for $136 million at June 30, 2005.

Corporate loan facility

In July 2005, we extended our $1 billion Corporate loan facility by two years from April 2008 to April 2010.



B Derivative instruments ("derivatives")
Summary of derivatives at June 30, 2005(1)
---------------------------------------------------------------------
Accounting
Notional Amount by Classification Fair
Term to Maturity by Notional Amount value
-------------------------- ---------------------- -------
Cash Fair
Within 2 to 5 flow value Non-
1 year years Total hedge hedge Hedge
------------------------------------ ---------------------- -------
US dollar
interest
rate
contracts
Receive-
fixed
swaps
(millions) $ - $ 1,050 $ 1,050 $ 550 $ 500 $ - $ (10)
Pay-fixed
swaps
(millions) - 261 261 136 - 125 (21)
------------------------------------ ---------------------- -------
Net notional
position $ - $ 789 $ 789 $ 414 $ 500 $ (125) $ (31)
------------------------------------ ---------------------- -------
Currency
contracts
C$:US$
contracts
(C$
millions) C$ 280 C$ 482 C$ 762 C$ 762 C$ - C$ -(3) $ 69
A$:US$
contracts
(A$
millions) A$ 662 A$ 1,457 A$ 2,119 A$ 2,113 A$ - A$ 6 $ 140
EUR:US$
contracts
(EUR
millions) EUR 26 EUR - EUR 26 EUR 26 EUR - EUR - EUR (2)
ARS:US$
contracts
(ARS
millions) $ 36 $ 18 $ 54 $ 54 $ - $ - $ -
------------------------------------ ---------------------- -------
Commodity
contracts
Fuel
contracts
(thousands
of
barrels)(2) 690 1,657 2,347 2,254 - 93 $ 39
Propane
contracts
(millions
of
gallons) 17 9 26 26 - - $ 2
------------------------------------ ---------------------- -------
(1) Excludes gold sales contracts (see note 4), gold lease rate swaps
(see note 4) and Celtic share purchase warrants (see note 13b).
(2) Includes WTI, Mean of Platts Singapore (MOPS) and US Waterborne
contracts.
(3) $62 million of non-hedge currency contracts were economically
closed out by entering into offsetting positions albeit with
differing counterparties.


US dollar interest rate contracts

Cash flow hedges - cash balances

Receive-fixed swaps have been designated against the first $550 million of our cash balances as a hedge of the variability of forecasted interest receipts on the balances caused by changes in Libor.

Cash flow hedges - Bulyanhulu financing

Pay-fixed swaps totaling $136 million have been designated against the Bulyanhulu financing as a hedge of the variability in forecasted interest payments caused by changes in Libor.

Fair value hedges

Receive-fixed swaps totaling $500 million have been designated against the 7 1/2% debentures as a hedge of the variability in the fair value of the debentures caused by changes in Libor.

Non-hedge contracts

We use gold lease rate swaps to achieve a more economically optimal term structure for gold lease rates implicit in fixed-price gold sales contracts (see note 4). The valuation of gold lease rate swaps is impacted by market US dollar interest rates. Our non-hedge pay-fixed swap position largely mitigates the impact of changes in US dollar interest rates on the valuation of gold lease rate swaps.

Currency contracts

Cash flow hedges

Currency contracts totaling C$762 million, A$2,113 million, EUR 26 million and 54 million Argentinean Pesos have been designated against forecasted local currency denominated expenditures as a hedge of the variability of the US dollar amount of those expenditures caused by changes in currency exchange rates.

Commodity contracts

Cash flow hedges

Commodity contracts totaling 2,254 thousand barrels of crude oil and 26 million gallons of propane have been designated against forecasted purchases of the commodities for expected consumption at our mining operations.

Non-hedge contracts

Non-hedge fuel contracts are used to mitigate the risk of oil price changes on consumption at the Lagunas Norte mine. On completion of regression analysis, we concluded that the contracts do not meet the "highly effective" criterion in FAS 133 due to currency and basis differences between contract prices and the prices charged to the mines by oil suppliers. Despite not qualifying as an accounting hedge, the contracts protect the Company to a significant extent from the effects of oil price changes.



Non-hedge derivative gains (losses)(1)
---------------------------------------------------------------------
Three months Six months
($ millions, except shares in millions ended June 30 ended June 30
and per share amounts in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------
Non-hedge derivatives
Commodity contracts $ 2 $ 3 $ 6 $ (9)
Currency contracts (1) (10) 1 (10)
Interest rate contracts - 12 1 8
Share purchase warrants (1) - - -
---------------------------------------------------------------------
- 5 8 (11)
Hedge ineffectiveness
Ongoing hedge inefficiency 3 - - -
Due to changes in timing of hedged items - 1 1 2
---------------------------------------------------------------------
$ 3 $ 6 $ 9 $ (9)
---------------------------------------------------------------------

(1) Non-hedge derivative gains (losses) are classified as a component
of other (income) expense.



Cash Flow Hedge Gains (Losses) in OCI
---------------------------------------------------------------------
Commodity
price Interest rate
hedges Currency hedges hedges
--------- ------------------------ --------------
Opera- Adminis- Capital Long-
ting tration expend- Cash term
Fuel costs costs itures balances debt Total
---------------------------------------------------------------------
At Dec.31, 2004 $ 2 $ 240 $ 33 $ 48 $ 3 $ (25) $ 301
Effective
portion of
change in fair
value of
hedging
instruments 35 (20) (1) 2 6 4 26
Transfers to
earnings:
On recording
hedged items
in earnings (4) (50) (6) (2) (2) 1 (63)
Hedge
ineffectiveness
due to changes
in timing of
hedged items - - - (1) - - (1)
---------------------------------------------------------------------
At June 30,
2005 $ 33 $ 170 $ 26 $ 47 $ 7 $ (20) $ 263
---------------------------------------------------------------------
Hedge gains/
losses Cost Cost Inte-
classified of of Adminis- Amorti- Interest rest
within sales sales tration zation income cost
---------------------------------------------------------------------
Portion of
hedge gain
(loss)
expected to
affect
earnings in
the next
twelve
months(1) $ 10 $ 89 $ 13 $ 2 $ 7 $ (2) $ 119
---------------------------------------------------------------------

(1) Based on the fair value of hedge contracts at June 30, 2005.


14. CAPITAL STOCK

A Common Shares

In the three month period ended June 30, 2005, we declared and paid dividends in US dollars totaling $0.11 per share (three months ended June 30, 2004: $0.11 per share). During the three month period ended March 31, 2004, we repurchased 4.47 million common shares for $95 million, at an average cost of $21.20 per share. This resulted in a reduction of common share capital by $35 million and a $60 million charge (being the difference between the repurchase cost and the average historic book value of shares repurchased) to retained earnings.

B Exchangeable Shares

In connection with a 1998 acquisition, Barrick Gold Inc. ("BGI"), issued 11.1 million BGI exchangeable shares, which are each exchangeable for 0.53 of a Barrick common share at any time at the option of the holder, and have essentially the same voting, dividend (payable in Canadian dollars), and other rights as 0.53 of a Barrick common share. BGI is a subsidiary that holds our interest in the Hemlo and Eskay Creek Mines.

At June 30, 2005, 1.4 million BGI exchangeable shares were outstanding, which are equivalent to 0.7 million Barrick common shares (2004 - 0.8 million common shares). While there are exchangeable shares outstanding, we are required to present summary consolidated financial information relating to BGI.



Summarized financial information for BGI
---------------------------------------------------------------------
Three months Six months
($ millions, except shares in millions ended June 30 ended June 30
and per share amounts in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------

Total revenues and other income $ 46 $ 60 $ 98 $ 112
Less: costs and expenses (19) (31) (76) (84)
---------------------------------------------------------------------
Income before taxes $ 27 $ 29 $ 22 $ 28
---------------------------------------------------------------------
Net income $ 25 $ 26 $ 20 $ 23
---------------------------------------------------------------------



At June 30, At Dec.31,
2005 2004
---------------------------------------------------------------------
Assets
Current assets $ 85 $ 67
Non-current assets 99 119
---------------------------------------------------------------------
$ 184 $ 186
---------------------------------------------------------------------
Liabilities and shareholders' equity
Other current liabilities 29 24
Intercompany notes payable 356 395
Other long-term liabilities 35 36
Deferred income taxes 11 20
Deficit (247) (289)
---------------------------------------------------------------------
$ 184 $ 186
---------------------------------------------------------------------


15. STOCK-BASED COMPENSATION

We record compensation cost for stock options based on the excess of the market price of the stock at the grant date of an award over the exercise price. Historically, the exercise price for stock options has equaled the market price of stock at the grant date, resulting in no compensation cost. We provide information in the following table to illustrate the pro forma effect of following an accounting policy of expensing the fair value of stock options.



Stock option expense
---------------------------------------------------------------------
Three months Six months
($ millions, except shares in millions ended June 30 ended June 30
and per share amounts in dollars) 2005 2004 2005 2004
---------------------------------------------------------------------
Pro forma effects
Net income, as reported $ 53 $ 34 $ 113 $ 60
Stock-option expense (8) (7) (15) (14)
---------------------------------------------------------------------
Pro forma net income $ 45 $ 27 $ 98 $ 46
---------------------------------------------------------------------
Net income per share:
As reported(1) $ 0.10 $ 0.06 $ 0.21 $ 0.11
Pro forma(1) $ 0.08 $ 0.05 $ 0.18 $ 0.09
---------------------------------------------------------------------
(1) Basic and diluted.



16. OTHER COMPREHENSIVE INCOME (LOSS) ("OCI")

---------------------------------------------------------------------
Three months Six months
ended June 30 ended June 30
2005 2004 2005 2004
---------------------------------------------------------------------
Accumulated OCI at beginning of period
Cash flow hedge gains, net of tax
of $91, $91, $95, $99 $ 199 $ 181 $ 206 $ 189
Investments, net of tax of
$nil, $nil, $nil, $nil 15 20 21 25
Currency translation adjustments, net
of tax of $nil, $nil, $nil, $nil (146) (147) (146) (147)
Additional pension liability, net of
tax of $nil, $nil, $nil, $nil (12) (7) (12) (7)
---------------------------------------------------------------------
$ 56 $ 47 $ 69 $ 60
---------------------------------------------------------------------
Other comprehensive income (loss) for
the period:
Changes in fair value of cash flow
hedges 5 (102) 26 (84)
Changes in fair value of investments (5) (4) (2) (9)
Less: reclassification adjustments for
gains/losses recorded in earnings:
Transfers of cash flow hedge gains
to earnings:
On recording hedged items in
earnings (32) (22) (63) (55)
Hedge ineffectiveness due to
changes in timing of hedged items - (1) (1) (2)
Investments:
Other than temporary impairment
charges - 1 - 1
Gains realized on sale - (3) (9) (3)
---------------------------------------------------------------------
Other comprehensive loss, before tax (32) (131) (49) (152)
Income tax recovery related to OCI 8 42 12 50
---------------------------------------------------------------------
Other comprehensive loss, net of tax $ (24) $ (89) $ (37) $ (102)
---------------------------------------------------------------------
Accumulated OCI at June 30
Cash flow hedge gains, net of tax
of $83, $49, $83, $49 180 98 180 98
Investments, net of tax of
$nil, $nil, $nil, $nil 10 14 10 14
Currency translation adjustments, net
of tax of $nil, $nil, $nil, $nil (146) (147) (146) (147)
Additional pension liability, net
of tax of $nil, $nil, $nil, $nil (12) (7) (12) (7)
---------------------------------------------------------------------
$ 32 $ (42) $ 32 $ (42)
---------------------------------------------------------------------


17. CONTINGENCIES

Bre-X Minerals

In 1998, we were added as a defendant in a class action lawsuit initiated against Bre-X Minerals Ltd., and certain others in the United States District Court for the Eastern District of Texas, Texarkana Division. The class action alleges, among other things, that statements made by us in connection with our efforts to secure the right to develop and operate the Busang gold deposit in East Kalimantan, Indonesia were materially false and misleading and omitted to state material facts relating to the preliminary due diligence investigation undertaken by us in late 1996.

On March 31, 2003, the Court denied all of the Plaintiffs' motions to certify the case as a class action. Following the March 31, 2003 denial of the Plaintiffs' motions, the Court received a proposed Trial Plan along with full briefings from the parties with respect to the Plan. On March 31, 2005, the Court treated Plaintiffs' submission as a motion to vacate or change its class certification order of March 31, 2003. The Court denied Plaintiffs' motion because the Plaintiffs did not identify any new legal authority or changed circumstance that justified modification of the prior order. On April 14, 2005, Plaintiffs filed a petition with the Fifth Circuit Court of Appeals requesting permission to file an appeal of the Court order. In May 2005, Plaintiffs' petition was dismissed by the Court of Appeals. The amount of potential loss, if any, which we may incur arising out of the Plaintiffs' claim is not determinable.

Blanchard complaint

On January 7, 2003, we were served with a Complaint for Injunctive Relief by Blanchard and Company, Inc. ("Blanchard"), and Herbert Davies ("Davies"). The complaint, which is pending in the U.S. District Court for the Eastern District of Louisiana, also names J.P. Morgan Chase & Company ("J.P. Morgan") as a defendant, along with an unspecified number of additional defendants to be named later. The complaint, which has been amended several times, alleges that we and bullion banks with whom we entered into spot deferred gold sales contracts have manipulated the price of gold, in violation of U.S. anti-trust laws and the Louisiana Unfair Trade Practices and Consumer Protection Law. Blanchard and Davies both allege that they have been injured as a seller of gold due to reduced interest in gold as an investment. The complaint seeks damages and an injunction terminating certain of our trading agreements with J.P. Morgan and other bullion banks. In September 2003, the Court issued an Order granting in part and denying in part Barrick's motions to dismiss this action. In February 2005, the Court granted Blanchard's motion to amend their complaint to add an allegation of a violation of the Commodity Exchange Act and amend its allegation of Barrick's violation of anti-trust laws. Discovery has commenced in the case and a trial date has been tentatively set for January 2006. We have and will continue to vigorously defend the action.

McKenzie complaint

On September 21, 2004, a putative class action complaint was filed in the U.S. District Court for the Eastern District of Louisiana against Barrick and J.P. Morgan. The plaintiffs, Dr. Gregg McKenzie and others are alleged purchasers of gold and gold derivatives. The complaint alleges violations of the U.S. anti-trust laws and also of the Commodity Exchange Act, based upon the same conduct as alleged in the Blanchard complaint. The complaint seeks damages and an injunction terminating certain of our trading agreements with J.P. Morgan. On December 17, 2004, a second and substantially identical complaint was filed in the same court against the same defendants. We have and will continue to vigorously defend both actions.

Wagner complaint

On June 12, 2003, a complaint was filed against Barrick and several of its current or former officers in the U.S. District Court for the Southern District of New York. The complaint is on behalf of Barrick shareholders who purchased Barrick shares between February 14, 2002 and September 26, 2002. It alleges that Barrick and the individual defendants violated U.S. securities laws by making false and misleading statements concerning Barrick's projected operating results and earnings in 2002. The complaint seeks an unspecified amount of damages. Other parties on behalf of the same proposed class of Barrick shareholders filed several other complaints, making the same basic allegations against the same defendants. In September 2003, the cases were consolidated into a single action in the Southern District of New York. The Plaintiffs filed a Consolidated and/or Amended Complaint on November 5, 2003. On January 14, 2004, Barrick filed a motion to dismiss the complaint. On September 29, 2004, the Court issued an order granting in part and denying in part Barrick's motion to dismiss the action. The Plaintiffs filed a Second Amended Complaint on October 20, 2004. The Plaintiffs filed a Third Amended Complaint on January 6, 2005. On May 23, 2005, Barrick filed a motion to dismiss the Third Amended Complaint. On July 5, 2005, the Plaintiffs filed their opposition to Barrick's motion to dismiss. We have and will continue to vigorously defend the action.

Wilcox complaint

On September 8, 2004, two of our U.S. subsidiaries, Homestake Mining Company of California ("Homestake California") and Homestake Mining Company ("Homestake") were served with a First Amended Complaint by persons alleging to be current or former residents of a rural area near the former Grants Uranium Mill. The Complaint, which was filed in the U.S. District Court for the District of New Mexico, identifies 26 plaintiffs. Homestake and Homestake California, along with an unspecified number of unidentified defendants, are named as defendants. The plaintiffs allege that they have suffered a variety of physical, emotional and financial injuries as a result of exposure to radioactive and other hazardous substances. The Complaint seeks an unspecified amount of damages. A motion to dismiss the claim was filed with the Court, but the Court has not yet ruled on the motion. We have and will continue to vigorously defend the action.



Mine Statistics


UNITED STATES
---------------------------------------------------
Goldstrike Round
Open Pit Underground Total Mountain
Three months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Tons mined
(thousands) 33,554 35,748 383 397 33,937 36,145 4,104 5,296
Tons processed
(thousands) 2,563 2,751 406 391 2,969 3,142 8,755 9,540
Average grade
(ounces per
ton) 0.121 0.145 0.367 0.383 0.155 0.174 0.013 0.015
Recovery rate
(percent) 82.8% 84.1% 89.7% 89.0% 85.1% 84.6% n/a n/a
---------------------------------------------------------------------
Production
(thousands
of ounces) 257 334 134 133 391 467 99 99

Production costs
per ounce
Cash operating
costs $ 282 $ 236 $ 263 $ 243 $ 275 $ 238 $ 180 $ 184
Royalties and
production
taxes 11 16 26 19 16 17 34 30
Accretion
expense 2 2 - - 2 1 4 4
---------------------------------------------------------------------
Total cash
costs(1) 295 254 289 262 293 256 218 218
Amortization 75 60 111 134 87 81 42 56
---------------------------------------------------------------------
Total production
costs $ 370 $ 314 $ 400 $ 396 $ 380 $ 337 $ 260 $ 274
---------------------------------------------------------------------
Capital
expenditures
(US$ millions) $ 34 $ 14 $ 6 $ 6 $ 40 $ 20 $ 1 $ 2
---------------------------------------------------------------------


Six months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Tons mined
(thousands) 65,966 69,834 765 835 66,731 70,669 8,601 10,082
Tons processed
(thousands) 4,892 5,412 795 843 5,687 6,255 17,851 19,149
Average grade
(ounces per
ton) 0.134 0.144 0.389 0.383 0.170 0.177 0.014 0.015
Recovery rate
(percent) 83.0% 83.4% 90.3% 89.0% 85.3% 84.2% n/a n/a
---------------------------------------------------------------------
Production
(thousands of
ounces) 544 652 279 287 823 939 193 192

Production costs
per ounce
Cash operating
costs $ 267 $ 242 $ 263 $ 236 $ 265 $ 240 $ 192 $ 180
Royalties and
production
taxes 12 17 25 21 17 18 34 32
Accretion
expense 2 2 - 1 2 2 5 3
---------------------------------------------------------------------
Total cash
costs(1) 281 261 288 258 284 260 231 215
Amortization 70 61 115 127 84 81 43 57
---------------------------------------------------------------------
Total production
costs $ 351 $ 322 $ 403 $ 385 $ 368 $ 341 $ 274 $ 272
---------------------------------------------------------------------
Capital
expenditures
(US$ millions) $ 45 $ 17 $ 15 $ 12 $ 60 $ 29 $ 1 $ 2
---------------------------------------------------------------------
(1) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs.



AUSTRALIA
----------------------------------------------------
Plutonic Darlot Lawlers Kalgoorlie
Three months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Tons mined
(thousands) 734 2,973 198 226 181 1,617 11,288 11,615
Tons processed
(thousands) 520 710 226 202 218 212 1,897 1,883
Average grade
(ounces per
ton) 0.138 0.130 0.130 0.184 0.141 0.129 0.069 0.066
Recovery rate
(percent) 88.9% 88.5% 95.8% 96.7% 96.5% 96.6% 85.2% 85.2%
---------------------------------------------------------------------
Production
(thousands
of ounces) 64 75 28 36 30 26 112 103

Production costs
per ounce
Cash operating
costs $ 264 $ 222 $ 322 $ 189 $ 276 $ 245 $ 202 $ 228
Royalties and
production
taxes 12 9 9 8 9 8 10 9
Accretion
expense - - - - - - 2 2
---------------------------------------------------------------------
Total cash
costs(1) 276 231 331 197 285 253 214 239
Amortization 35 33 69 55 56 58 52 45
---------------------------------------------------------------------
Total production
costs $ 311 $ 264 $ 400 $ 252 $ 341 $ 311 $ 266 $ 284
---------------------------------------------------------------------
Capital
expenditures
(US$ millions) $ 4 $ 6 $ 3 $ 3 $ 1 $ 1 $ 1 $ 3
---------------------------------------------------------------------


Six months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------
Tons mined
(thousands) 2,934 5,928 382 438 358 2,211 21,685 23,479
Tons processed
(thousands) 1,161 1,404 399 420 430 420 3,728 3,433
Average grade
(ounces per
ton) 0.130 0.126 0.145 0.172 0.146 0.130 0.073 0.069
Recovery rate
(percent) 89.1% 89.7% 95.7% 97.0% 96.2% 96.8% 87.1% 86.2%
---------------------------------------------------------------------
Production
(thousands
of ounces) 134 158 55 70 61 53 237 205

Production costs
per ounce
Cash operating
costs $ 248 $ 203 $ 283 $ 195 $ 269 $ 237 $ 201 $ 222
Royalties and
production
taxes 11 8 8 8 8 7 10 8
Accretion
expense - - 1 - 1 - 2 1
---------------------------------------------------------------------
Total cash
costs(1) 259 211 292 203 278 244 213 231
Amortization 33 32 68 52 53 51 46 42
---------------------------------------------------------------------
Total production
costs $ 292 $ 243 $ 360 $ 255 $ 331 $ 295 $ 259 $ 273
---------------------------------------------------------------------
Capital
expenditures
(US$ millions) $ 7 $ 8 $ 5 $ 5 $ 3 $ 2 $ 3 $ 5
---------------------------------------------------------------------
(1) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs.



CANADA
---------------------------------------------
Hemlo Eskay Creek Holt-McDermott
Three months
ended June 30, 2005 2004 2005 2004 2005 2004
-------------------------------------- ------------- --------------
Tons mined (thousands) 1,237 1,239 55 67 - 135
Tons processed (thousands) 491 515 56 72 - 152
Average grade (ounces
per ton) 0.012 0.137 0.990 1.359 - 0.146
Recovery rate (percent) 93.9% 94.5% 90.9% 93.6% - 93.1%
-------------------------------------- ------------- --------------
Production (thousands
of ounces) 59 67 51 91 - 20

Production costs per
ounce
Cash operating costs $ 286 $ 228 $ 32 $ 64 $ - $ 202
Royalties and
production taxes 10 9 7 4 - -
Accretion expense 1 1 3 - - 2
-------------------------------------- ------------- --------------
Total cash costs (1) 297 238 42 68 - 204
Amortization 59 50 137 132 - 120
-------------------------------------- ------------- --------------
Total production costs $ 356 $ 288 $ 179 $ 200 $ - $ 324
-------------------------------------- ------------- --------------
Capital expenditures
(US$ millions) $ 1 $ 2 $ - $ 3 $ - $ -
-------------------------------------- ------------- --------------


Six months
ended June 30, 2005 2004 2005 2004 2005 2004
-------------------------------------- ------------- --------------
Tons mined (thousands) 2,369 2,361 111 132 - 274
Tons processed (thousands) 983 992 113 132 - 287
Average grade (ounces
per ton) 0.123 0.137 1.025 1.262 - 0.148
Recovery rate (percent) 93.8% 94.3% 91.1% 93.4% - 92.9%
-------------------------------------- ------------- --------------
Production (thousands
of ounces) 121 128 106 156 - 39

Production costs per
ounce
Cash operating costs $ 269 $ 222 $ 43 $ 26 $ - $ 223
Royalties and
production taxes 11 9 6 5 - -
Accretion expense - 2 3 1 - 1
-------------------------------------- ------------- --------------
Total cash costs (1) 280 233 52 32 - 224
Amortization 57 45 126 151 - 134
-------------------------------------- ------------- --------------
Total production costs $ 337 $ 278 $ 178 $ 183 $ - $ 358
---------------------------------------------------------------------
Capital expenditures
(US$ millions) $ 3 $ 3 $ 1 $ 4 $ - $ -
-------------------------------------- ------------- --------------
(1) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs.



PERU TANZANIA
----------------------------------------------------
Pierina Lagunas Norte Bulyanhulu Tulawaka
Three months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
----------------------------------------- --------------------------
Tons mined
(thousands) 11,788 10,312 2,086 - 273 284 1,673 -
Tons processed
(thousands) 4,159 3,889 1,456 - 274 294 96 -
Average grade
(ounces per
ton) 0.043 0.034 0.083 - 0.342 0.373 0.241 -
Recovery rate
(percent) - - - - 89.1% 88.5% - -
----------------------------------------- --------------------------
Production
(thousands
of ounces) 155 186 41 - 84 97 22 -

Production costs
per ounce
Cash operating
costs $ 134 $ 104 $ 104 $ - $ 350 $ 240 $ 238 $ -
Royalties and
production
taxes - - 12 - 20 13 28 -
Accretion
expense 7 5 - - 2 91 1 -
----------------------------------------- --------------------------
Total cash
costs(1) 141 109 116 - 372 344 267 -
Amortization 115 165 51 - 109 103 150 -
----------------------------------------- --------------------------
Total production
costs $ 256 $ 274 $ 167 $ - $ 481 $ 447 $ 417 $ -
----------------------------------------- --------------------------
Capital
expenditures
(US$ millions) $ 2 $ - $ 47 $ 26 $ 2 $ 10 $ 3 $ 12
----------------------------------------- --------------------------


Six months
ended June 30, 2005 2004 2005 2004 2005 2004 2005 2004
----------------------------------------- --------------------------
Tons mined
(thousands) 23,162 20,635 2,086 - 501 568 2,589 -
Tons processed
(thousands) 8,176 7,927 1,456 - 518 566 120 -
Average grade
(ounces per
ton) 0.035 0.042 0.083 - 0.341 0.356 0.237 -
Recovery rate
(percent) - - - - 88.8% 88.4% 96.1% -
----------------------------------------- --------------------------
Production
(thousands of
ounces) 301 419 41 - 157 178 27 -

Production costs
per ounce
Cash operating
costs $ 123 $ 91 $ 104 $ - $ 347 $ 251 $ 238 $ -
Royalties and
production
taxes - - 12 - 14 13 28 -
Accretion
expense 8 5 - - 2 47 1 -
----------------------------------------- --------------------------
Total cash
costs(1) 131 96 116 - 363 311 267 -
Amortization 115 165 51 - 118 104 151 -
----------------------------------------- --------------------------
Total production
costs $ 246 $ 261 $ 167 $ - $ 481 $ 415 $ 418 $ -
----------------------------------------- --------------------------
Capital
expenditures
(US$ millions) $ 5 $ 2 $ 100 $ 32 $ 16 $ 18 $ 8 $ 15
---------------------------------------------------------------------
(1) Total cash costs per ounce statistics for 2005 and 2004 are not
comparable due to the change in accounting for deferred stripping
costs.



CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CIBC Mellon Trust Company
BCE Place, Canada Trust Tower, P.O. Box 7010,
Suite 3700 Adelaide Street Postal Station
161 Bay Street, P.O. Box 212 Toronto, Ontario 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 within Canada and Fax: (416) 643-5501
United States: 1-800-720-7415 Email: inquiries@cibcmellon.ca
Email: investor@barrick.com Website: www.cibcmellon.com
Website: www.barrick.com

SHARES LISTED Mellon Investor Services L.L.C.
ABX-The Toronto Stock Exchange 85 Challenger Road,
The New York Stock Exchange Overpeck Center
The Swiss Stock Exchange Ridgefield Park, New Jersey
La Bourse de Paris 07660
BGD-The London Stock Exchange Tel: (201) 329-8660
Toll-free within the
United States:
1-800-589-9836
Website: www.mellon-investor.com

INVESTOR CONTACT: MEDIA CONTACT:
James Mavor Vincent Borg
Vice President, Vice President,
Investor Relations Corporate Communications
Tel: (416) 307-7341 Tel: (416) 307-7477
Email: jmavor@barrick.com Email: vborg@barrick.com


FORWARD-LOOKING INFORMATION

Certain information contained or incorporated by reference in this Second Quarter Report 2005, including any information as to our future financial or operating performance, constitutes "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" 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 us, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: fluctuations in the currency markets (such as the Canadian and Australian dollars versus the U.S. dollar); fluctuations in the spot and forward price of gold or certain other commodities (such as silver, copper, diesel fuel and electricity); changes in U.S. dollar interest rates or gold lease rates that could impact the mark to market value of outstanding derivative instruments and ongoing payments/receipts under interest rate swaps and variable rate debt obligations; risks arising from holding derivative instruments (such as credit risk, market
liquidity risk and mark to market risk); changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, Australia, Chile, Peru, Argentina, Tanzania, Russia or Barbados or other countries in which we do or may carry on business in the future; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; the speculative nature of gold exploration and development, including the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit rating; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this Second Quarter Report 2005 are qualified by these cautionary statements. Specific reference is made to Barrick's most recent Form 40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.

We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Contact Information

  • Barrick Gold Corporation
    Vincent Borg
    Vice President, Corporate Communications
    (416) 307-7477
    (416) 861-1509 (FAX)
    media@barrick.com