Barrick Gold Corporation
NYSE : ABX
TSX : ABX

Barrick Gold Corporation

February 17, 2011 06:30 ET

Barrick Reports Q4 2010 Financial and Operating Results

TORONTO, ONTARIO--(Marketwire - Feb. 17, 2011) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) -

FOURTH QUARTER AND YEAR-END REPORT 2010

Based on US GAAP and expressed in US dollars

For a full explanation of results, the Financial Statements and Management Discussion & Analysis, 2011 outlook, mine statistics and mineral reserves and resources, please see the Company's website, www.barrick.com.

Highlights:

  • Q4 reported net income was a record $896 million ($0.90 per share). Q4 adjusted net income rose 57% to $947 million ($0.95 per share)1 compared to $604 million ($0.61 per share) in Q4 2009. Operating cash flow was $781 million and adjusted operating cash flow set a new Company record rising 56% to $1.44 billion1 from $921 million in the prior year period.
  • Q4 gold production of 1.70 million ounces at total cash costs of $486 per ounce1 or net cash costs of $326 per ounce1 was in line with expectations on a strong performance from the North America region. Higher production and lower cash costs were realized in 2010 as compared to the prior year. Full year production of 7.77 million ounces at total and net cash costs of $457 and $341 per ounce1, respectively, was in line with original guidance despite higher royalties and taxes associated with higher gold prices.
  • Q4 cash margins continued to benefit from rising gold prices increasing 35% to $882 per ounce1 from $654 per ounce in Q4 2009 and net cash margins rose 29% to $1,042 per ounce1 from $809 per ounce in the prior year period.
  • The average gold price increased 26% in 2010 while full year adjusted net income rose 81% to $3.28 billion1 and adjusted operating cash flow increased 65% to $4.78 billion1 from 2009, demonstrating the Company's exceptional leverage to the gold price. Full year adjusted net income translated to a higher return on equity of 19%1 from 12% in 2009.  Reported net income and operating cash flow in 2010 were $3.27 billion and $4.13 billion, respectively.
  • 2011 production is expected to be comparable to 2010 in the range of 7.6-8.0 million ounces at total cash costs of $450-$480 per ounce and net cash costs of $340-$380 per ounce2 (IFRS basis).
  • The newly expanded Cortez mine exceeded expectations in its first full year of production and the Company continues to advance its project pipeline, including the world-class Pueblo Viejo and Pascua-Lama projects. Preproduction capital budgets are expected to be higher than previous estimates by about 10-15% to $3.3-$3.5 billion (100% basis) and 10-20% to $3.3-$3.6 billion for Pueblo Viejo and Pascua-Lama, respectively. Despite these increases, Pueblo Viejo and Pascua-Lama continue to have very strong economics. Once at full capacity, these two mines are anticipated to contribute about 1.4 million ounces3 of annual production at low cash costs.
  • The Company replaced proven and probable gold reserves to an industry leading 139.8 million ounces4 at the end of 2010. Measured and indicated gold resources increased by 14.5 million ounces or 24% to 76.3 million ounces4 and inferred gold resources grew by 5.6 million ounces or 18% to 37.2 million ounces4.
  • Barrick continues to have a strong financial position, including a quarter-end cash balance of $4.0 billion, low net debt of $2.5 billion1 and robust operating cash flow generation.

Q4 production of 1.70 million ounces of gold was in line with expectations at total and net cash costs of $486 and $326 per ounce, respectively. Full year production of 7.77 million ounces at total and net cash costs of $457 and $341 per ounce, respectively, was in line with original guidance despite higher royalties and taxes associated with higher realized gold prices. The realized gold price for the quarter was a record $1,368 per ounce5, 22% higher than the prior year period. Q4 cash margins increased 35% to $882 per ounce from $654 per ounce in Q4 2009 and net cash margins rose 29% to $1,042 per ounce from $809 per ounce in the same prior year period.

Q4 adjusted net income rose 57% to $947 million ($0.95 per share), compared to $604 million ($0.61 per share) in Q4 2009, reflecting higher gold sales volume and higher realized prices for both gold and copper. Reported Q4 net income of $896 million ($0.90 per share) was a Company record. Q4 operating cash flow of $781 million reflects payments to eliminate the remaining settlement obligation associated with closing the gold sales contracts in 2009. Q4 adjusted operating cash flow, which excludes the impact of these payments, rose 56% to a record $1.44 billion from $921 million in the prior year period.

The average gold price increased 26% in 2010, while full year adjusted net income rose 81% to $3.28 billion and adjusted operating cash flow increased 65% to $4.78 billion from 2009. Full year reported net income and operating cash flow were $3.27 billion and $4.13 billion, respectively.

"Looking back at 2010, we are pleased with the Company's performance," said Aaron Regent, President and CEO of Barrick Gold. "We met our operating targets with higher production at lower costs than the previous year. This allowed us to fully benefit from the increase in the gold price, which resulted in significant expansion of our margins and record earnings and cash flow. Development of our project pipeline progressed with the successful completion and ramp up of Cortez Hills, and the continued construction of Pueblo Viejo and Pascua-Lama. We were able to replace reserves and grow measured and indicated resources by 24% and inferred resources by 18%. And our focus on value creation opportunities within our existing asset base, has now positioned us to increase production to 9 million ounces within five years."

PRODUCTION AND COSTS

The North America region had a strong quarter, producing 0.70 million ounces at total cash costs of $486 per ounce. The Cortez property produced 0.21 million ounces at total cash costs of $329 per ounce. Due to mine sequencing, production was expected to be lower in Q4 as previously disclosed, but is expected to increase again in the first quarter of this year. Full year production of 1.14 million ounces at Cortez exceeded original guidance of 1.08-1.12 million ounces on higher than anticipated grades and recoveries from the Cortez Hills open pit and underground. The Company expects to receive a new Record of Decision for Cortez Hills imminently, which will allow the operation to revert to its original scope. Production at Cortez is anticipated to increase to 1.30-1.45 million ounces at total cash costs of $235-$265 per ounce in 2011.

The Goldstrike operation performed strongly, producing 0.29 million ounces at total cash costs of $490 per ounce in Q4, primarily due to better than expected grades from the open pit and higher roaster throughput. Full year 2011 production for the North America region is expected to increase to 3.30-3.46 million ounces at total cash costs of $425-$450 per ounce driven largely by higher production from Cortez.

The South American business unit performed as expected, with production of 0.38 million ounces at total cash costs of $297 per ounce in Q4. The Veladero mine produced 0.24 million ounces at total cash costs of $252 per ounce in the fourth quarter. Full year production at Veladero was 1.12 million ounces at total cash costs of $256 per ounce due to access to higher grades and the increased throughput from a crusher expansion completed in Q3 2009. The Lagunas Norte operation contributed 0.11 million ounces at total cash costs of $294 per ounce. Based on previously disclosed changes to the mine plan, production was expected to be lower in the fourth quarter but is anticipated to increase again in the first quarter of this year. In 2011, South America production is expected to be 1.80-1.935 million ounces at total cash costs of $350-$380 per ounce primarily due to lower grades at Veladero as anticipated in the mine plan. 

The Australia Pacific business unit produced 0.49 million ounces at total cash costs of $639 per ounce in Q4. The Porgera mine, the region's largest operation, produced 0.14 million ounces at total cash costs of $578 per ounce. Australia Pacific is expected to produce 1.85-2.00 million ounces at total cash costs of $610-$635 per ounce in 2011. The Company is 92% hedged on all of its Australian operating and capital expenditures in 2011 at an average rate of $0.79, 84% hedged for 2012 at an average rate of $0.75, and has substantial coverage for the following two years at rates at or below $0.75.

Attributable production from African Barrick Gold plc (ABG) in Q4 was 0.13 million ounces at total cash costs of $679 per ounce. Barrick's share of 2011 production is expected to be 0.515-0.560 million ounces at total cash costs of $590-$650 per ounce.

Q4 copper production was 82 million pounds at total cash costs of $1.12 per pound6. Utilizing option collar strategies, the Company has put in place floor protection at an average floor price of about $3.00 per pound on approximately 60% of 2011 production and can participate in upside up to an average ceiling price of about $4.85 per pound on approximately 70% of 2011 production7.  

PROJECTS UPDATE

At the Pueblo Viejo project in the Dominican Republic, preproduction capital is expected to increase by 10-15% from the previous estimate to $3.3-$3.5 billion (100% basis). The increased capital cost estimate is largely due to higher labor, power supply, freight and steel product related costs as well as general inflation. In December, the Environmental Impact Assessment for the 240 kV power transmission line was approved allowing associated construction activities to commence. Alternative temporary power sources are being secured which will allow project commissioning in the fourth quarter of 2011. First production is expected in the first quarter of 2012. Overall construction is about 50% complete, approximately 75% of the capital has been committed and all four of the autoclaves are on site and have been placed on their footings. About 80% of the planned concrete has been poured, 55% of the steel has been erected and more than 600,000 tons of ore have been stockpiled. Work continues toward achieving key milestones including the connection of power to the site. Barrick's 60% share of annual gold production in the first full five years of operation is expected to average 625,000-675,000 ounces at total cash costs of $275-$300 per ounce8.

At the Pascua-Lama project on the border of Chile and Argentina, pre-production capital is expected to increase by 10-20% to $3.3-$3.6 billion. Pressure on capital costs are primarily as a result of a stronger Chilean peso, labor, commodity and other input cost increases in both countries and higher inflation particularly in Argentina. First production is expected in the first half of 2013. Approximately 40% of the capital has been committed, detailed engineering and procurement are more than 90% complete and about 60% of the earthworks necessary for the process plant and mining support facilities have been moved. Construction of the power transmission line has commenced and the new access road is almost 75% complete. Development of the tunnel, which connects the mine in Chile and the process plant in Argentina, is progressing on both sides. Occupancy of the construction camps in Chile and Argentina continues to ramp up with more than 2,000 housed on site. Average annual gold production from Pascua-Lama is expected to be 750,000–800,000 ounces in the first full five years of operation at total cash costs of $20-$50 per ounce9 based on a silver price of $16 per ounce. For every $1 per ounce increase in the silver price, total cash costs are expected to decrease by about $35 per ounce over this period.

At the Cerro Casale project in Chile, the review of additional permitting requirements before considering a construction decision is progressing alongside discussions with the government and meetings with local communities and indigenous groups. Given the changed operating environment in Chile and the Company's experience at Pascua-Lama, a review of the capital cost of the project has been initiated. Early indications suggest that the capital cost may be higher by about 20-25% from the previous estimate of $4.2 billion (100% basis), which is based on the feasibility study completed in 2009 and reflects the impact of a stronger Chilean peso, higher labor, commodity and other input costs. An update will be provided by the end of the second quarter. Barrick's 75% share of average annual production is anticipated to be about 750,000-825,000 ounces of gold and 170-190 million pounds of copper in the first full five years of operation at total cash costs of about $240-$260 per ounce10, also based on the feasibility study completed in 2009. A $0.25 per pound change in the copper price would result in an approximate $50 per ounce impact on the expected total cash costs per ounce over the first full five years of operation. 

RESERVES AND RESOURCES

Barrick replaced proven and probable gold reserves to an industry leading 139.8 million ounces at the end of 2010, based on a $1,000 per ounce gold price. Measured and indicated gold resources increased by 24% or 14.5 million ounces to 76.3 million ounces and inferred gold resources grew by 18% or 5.6 million ounces to 37.2 million ounces, based on a $1,200 per ounce gold price. The Company replaced reserves and grew resources despite the initial public offering of ABG in early 2010, which reduced Barrick's interest in ABG to about 74%. Measured, indicated and inferred resources increased with exploration success and the potential to develop an open pit mine at Turquoise Ridge, exploration success at Cortez and from the additional 25% ownership in Cerro Casale.

As a result of exploration success in 2010, the 2011 exploration11 budget has increased to $320-$340 million, of which approximately one-third will be capitalized. The budget is weighted towards near-term resource additions and conversion at existing mines while still providing support for earlier stage exploration in operating districts and other emerging areas. North America is expected to be allocated about 43% of the total budget, the majority of which is targeted for Nevada. About 24% is expected to be spent in the Australia Pacific region. Approximately 15% is to be targeted for the South America region with the remainder divided between Africa and other emerging areas.

FINANCIAL POSITION

At December 31, 2010, Barrick remained in a strong financial position with the gold industry's only 'A' credit rating, a quarter-end cash balance of $4.0 billion and low net debt of $2.5 billion. Full year 2010 operating cash flow was $4.1 billion, which reflects payments to eliminate the remaining settlement obligation associated with closing the gold sales contracts in 2009. Adjusted cash flow of $4.8 billion excludes the impact of these payments. The Company generated free cash flow of about $1.5 billion12 in 2010, compared to $541 million in 2009, despite the substantial capital investment in the Pueblo Viejo and Pascua-Lama projects. Barrick's financial strength positions the Company well to continue investing in its project pipeline and pursue other value-enhancing opportunities.

CORPORATE SOCIAL RESPONSIBILITY

In Q4, Barrick announced that it was the first Canadian mining company to join the Voluntary Principles on Security and Human Rights, a set of guidelines by which companies in the extractive sector can maintain the safety and security of their operations while ensuring respect for human rights and fundamental freedoms. The Company is advancing the implementation of the Voluntary Principles, engaging in the tripartite process with NGOs, extractive companies and government members. This is particularly important in the complex environments in which Barrick operates, where it is further strengthening its policies and compliance with these human rights principles. The Company also announced two new Corporate Social Responsibility (CSR) initiatives to further strengthen the Company's CSR performance. Barrick will appoint an independent Director to its Board of Directors to support its commitment to CSR and the search is underway to fill this position in 2011. The Company will also establish an external CSR Advisory Board that will provide advice and guidance on challenging social and environmental issues and encourage further innovation and leadership in CSR.

In November, the Company was ranked among the top 100 companies in the world for its sustainability performance by the NASDAQ OMX CRD Global Sustainability Index and is the only Canadian mining company to be ranked as such by NASDAQ.

OUTLOOK AND GUIDANCE

The Company expects 2011 gold production to be in a comparable range to 2010 at 7.6-8.0 million ounces at total cash costs of $450-$480 per ounce or net cash costs of $340-$380 per ounce. Higher expected gold cash costs for 2011 primarily reflect lower grades and higher labor costs in South America and Australia. Production is anticipated to increase to 9 million ounces within the next five years and total cash costs are expected to benefit from low cost projects, primarily Pueblo Viejo and Pascua-Lama, as these mines come on stream.

Copper production for 2011 is anticipated to be about 300 million pounds at total cash costs of $1.35-$1.45 per pound. Total cash costs are expected to be higher in 2011 compared to 2010, primarily due to increased market prices for sulfuric acid and the processing of lower grades. The Company has secured contracts for essentially all of its sulfuric acid supply required in 2011 at prices well below the average current market price. 

Capital project expenditures for 2011 are expected to be in the range of $2.1-$2.3 billion13 primarily related to construction activities at Pueblo Viejo and Pascua-Lama. Open pit and underground development, which includes capitalized waste stripping, is anticipated to be $750-$850 million as Goldstrike and Cortez enter a period of high waste stripping as anticipated by their mine plans. The high waste stripping phases at both mines are expected to be substantially complete by the end of 2011. Mine site expansion capital is expected to be $450-$500 million and includes expenditures on development projects at Lagunas Norte, Cortez, Turquoise Ridge, Goldstrike, Bald Mountain, Golden Sunlight and North Mara. Mine site sustaining capital expenditures are expected to be $0.90-$1.00 billion. Based on the current portfolio of development projects and mine plans, total capital expenditures are anticipated to decrease in 2012.

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


Outlook Assumptions and Economic Sensitivity Analysis
  2011 Guidance Assumption Hypothetical
Change
Impact on
Total Cash Costs
Impact on EBITDA
(millions)
Gold revenue $1,300/oz $50/oz n/a $380 - $400
Copper revenue $3.75/lb $0.25/lb n/a $75
Gold total cash costs        
  Gold price effect on royalties and production taxes $1,300/oz $50/oz $1.25/oz $9
  WTI crude oil price1 $85/bbl $10/bbl $0.20/oz $2
  Australian dollar exchange rate1 0.95 : 1 10% - -
Copper total cash costs        
  WTI crude oil price1 $85/bbl $10/bbl $0.01/lb $3
  Chilean peso exchange rate1 500 : 1 10% $0.01/lb $5
1 Due to hedging activities the Company is largely protected against changes in these factors.

1 Adjusted net income, adjusted operating cash flow, total cash costs per ounce, net cash costs per ounce, cash margins per ounce, net cash margins per ounce, return on equity, and net debt are non-GAAP financial measures. See pages 56-62 of Barrick's 2010 Year-End Report.

2 Based on an expected realized copper price of $3.75 per pound.

3 1.4 million ounces of production is based on the estimated cumulative average annual production in the first full 5 years once both are at full capacity.

4 Calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934), as interpreted by the Staff of the SEC, applies different standards in order to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes, Cerro Casale is classified as mineralized material. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 140-145 of Barrick's 2010 Year-End Report.

5 Realized price per ounce is a non-GAAP financial measure. See pages 56-62 of Barrick's 2010 Year-End Report.

6 Total cash costs per pound is a non-GAAP financial measure. See pages 56-62 of Barrick's 2010 Year-End Report.

7 The realized price is expected to be negatively impacted by about $0.12 per pound in 2011 as a result of the net premium paid on option hedging strategies.

8 Based on gold price and oil price assumptions of $1,100 per ounce and $85 per barrel, respectively.

9 Based on silver price, gold price and oil price assumptions of $16 per ounce, $1,100 per ounce, and $85 per barrel, respectively and assuming a Chilean peso f/x rate of 500:1.

10 Based on a gold price, copper price and oil price assumptions of $1,100 per ounce, $2.75 per pound and $85 per barrel, respectively and a Chilean peso f/x rate of 500:1.

11 Barrick's exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick. For information on the geology, exploration activities 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 U.S. Securities and Exchange Commission.

12 Free cash flow is a non-GAAP financial measure. See pages 56-62 of Barrick's 2010 Year-End Report.

13 Represents Barrick's share of expenditures and includes capitalized interest of about $350 million.

   
   
Key Statistics  
   
Barrick Gold Corporation   Three months ended     Twelve months ended  
(in United States dollars)     December 31,      December 31,  
(Unaudited)   2010   2009     2010   2009  
Operating Results                    
Gold production (thousands of ounces)1   1,700   1,871     7,765   7,397  
Gold sold (thousands of ounces)   1,825   1,797     7,734   7,279  
Per ounce data                    
  Average spot gold price $ 1,367  $  1,100   $ 1,225 $ 972  
  Average realized gold price2   1,368   1,119     1,228   985  
  Net cash costs5   326   310     341   360  
  Total cash costs3   486   465     457   464  
  Amortization and other4   132   129     133   124  
  Total production costs   618   594     590   588  
  Copper credits   160   155     116   104  
Copper production (millions of pounds)   82   98     368   393  
Copper sold (millions of pounds)   103   118     391   380  
Per pound data                    
  Average spot copper price $ 3.92  $  3.01   $ 3.42 $ 2.34  
  Average realized copper price2   3.99   3.44     3.41   3.16  
  Total cash costs3   1.12   1.08     1.11   1.17  
  Amortization and other4   0.23   0.19     0.22   0.20  
  Total production costs   1.35   1.27     1.33   1.37  
Financial Results (millions)                    
Sales $ 2,946  $  2,358   $ 10,924 $ 8,136  
Net income (loss)   896   215     3,274   (4,274 )
Adjusted net income6   947   604     3,279   1,810  
Operating cash flow   781   (4,300 )   4,127   (2,322 )
Adjusted operating cash flow7   1,437   921     4,783   2,899  
Free cash flow8   292   173     1,460   541  
Per Share Data (dollars)                    
  Net income (loss) (basic)   0.90   0.22     3.32   (4.73 )
  Adjusted net income (basic)6   0.95   0.61     3.32   2.00  
  Net income (loss) (diluted)   0.90   0.21     3.28   (4.73 )
Weighted average basic common shares (millions)   995   984     987   903  
Weighted average diluted common shares (millions)9   1,000   996     997   903  
              As at   As at  
            December 31, December 31,  
              2010   2009  
Financial Position (millions)                    
Cash and equivalents           $ 3,968 $ 2,564  
Non-cash working capital             1,806   1,473  
Adjusted debt10             6,392   6,919  
Net debt10             2,542   4,355  
Shareholders' equity             19,065 15,063  
1  Production includes our equity share of gold production at Highland Gold.
 
2  Realized price is a non-GAAP financial performance measure with no standard meaning under US GAAP.  See page 60 of the Company's MD&A.
 
3  Total cash costs is a non-GAAP financial performance measure with no standard meaning under US GAAP.  See page 58 of the Company's MD&A.
 
4  Represents equity amortization expense, unrealized losses on non-hedge currency and commodity contracts and inventory purchase accounting adjustments at the Company's producing mines, divided by equity ounces of gold sold or pounds of copper sold.
 
5  Net cash costs is a non-GAAP financial performance measure with no standard meaning under US GAAP.  See page 58 of the Company's MD&A.
 
6  Adjusted net income is a non-GAAP financial performance measure with no standard meaning under US GAAP.  See page 56 of the Company's MD&A.
 
7  Adjusted operating cash flow is a non-GAAP financial performance measure with no standard meaning under US GAAP.  See page 57 of the Company's MD&A.
 
8  Free cash flow is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 57 of the Company's MD&A.
 
9  Fully diluted, includes dilutive effect of stock options and convertible debt.
 
10  Adjusted debt and net debt are non-GAAP financial performance measures with no standard meaning under US GAAP.  See page 62 of the Company's MD&A.
 
 
Production and Cost Summary
 
  Gold Production (attributable ounces) (000's) Total Cash Costs ($/oz)
  Three months ended Year ended   Three months ended   Year ended
  December 31, December 31,   December 31,   December 31,
(Unaudited) 2010 2009 2010 2009   2010   2009   2010   2009
North America 1 697 597 3,110 2,810 $ 486 $ 523 $ 489 $        504
South America 377 542 2,120 1,889   297   253   243  265
Australia Pacific 485 511 1,939 1,950   639   580   613  581
African Barrick Gold4 133 213 564 716   679   617   646  545
Other 8 8 32 32   494   494   494  494
Total 1,700 1,871 7,765 7,397 $ 486 $ 465 $ 457 $        464
 
  Copper Production (attributable pounds) (Millions) Total Cash Costs ($/lb)
  Three months ended Year ended   Three months ended    Year ended
  December 31, December 31,   December 31,   December 31,
(Unaudited) 2010 2009 2010 2009   2010   2009   2010   2009
South America 82 75 318 302 $ 1.11 $ 1.03 $ 1.09 $ 1.17
Australia Pacific - 23 50 91   1.18   1.25   1.18   1.15
Total 82 98 368 393 $ 1.12 $ 1.08 $ 1.11 $ 1.17
     
  Total Gold Production Costs ($/oz)  
  Three months ended   Year ended  
  December 31,   December 31,  
(Unaudited)   2010     2009     2010   2009  
 Direct mining costs at market foreign exchange rates $ 497   $ 456   $ 450   $ 430  
 (Gains) losses realized on currency hedge and commodity hedge/economic hedge contracts   (35 )   (14 )   (20 )   11  
 Adjustments to direct mining costs3   (13 )   (3 )   (6 )   (2 )
 By-product credits   (18 )   (15 )   (15 )   (11 )
 Copper credits   (160 )   (155 )   (116 )   (104 )
Cash operating costs, net basis   271     269     293     324  
 Royalties   43     36     36     30  
 Production taxes   12     5     12     6  
Net cash costs2   326     310     341     360  
 Copper credits   160     155     116     104  
Total cash costs2   486     465     457     464  
 Amortization   119     126     127     122  
 Adjustments to direct mining costs3   13     3     6     2  
Total production costs $ 618   $ 594   $ 590   $ 588  
                         
  Total Copper Production Costs ($/lb)  
  Three months ended     Year ended  
  December 31,     December 31,  
(Unaudited)   2010     2009     2010     2009  
Cash operating costs $ 1.10     $1.07   $ 1.09   $ 1.16  
 Royalties   0.02     0.01     0.02     0.01  
Total cash costs2   1.12     1.08     1.11     1.17  
 Amortization   0.23     0.19     0.22     0.20  
Total production costs $ 1.35   $ 1.27   $ 1.33   $ 1.37  
1Production includes an additional 50% interest in Hemlo from January 1, 2009 onwards and Barrick's share of total cash costs increased to 100% effective May 1, 2009.
 
2Total cash costs and net cash costs are non-GAAP financial performance measures with no standard meaning under US GAAP. See page 58 of the Company's MD&A.
 
3Represents unrealized losses on non-hedge currency and commodity contracts and the impact of Barrick Energy.
 
4Figures relating to African Barrick Gold are stated at 100% up to March 31, 2010 and 73.9% thereafter.
                   
                   
Consolidated Statements of Income         
   
Barrick Gold Corporation  
For the years ended December 31,  
(in millions of United States dollars, except per share data)  
    2010     2009     2008  
   
Sales (notes 4 and 5) $ 10,924   $ 8,136   $ 7,613  
Costs and expenses                  
Cost of sales (notes 4 and 6)1   4,201     3,807     3,706  
Amortization and accretion (notes 4 and 15B)   1,196     1,073     957  
Corporate administration   154     171     155  
Exploration (notes 4 and 7)   180     141     198  
Project development expense (notes 4 and 7)   153     85     242  
Elimination of gold sales contracts   -     5,933     -  
Other expense (note 8A)   463     343     302  
Impairment charges (note 8B)   7     277     598  
    6,354     11,830     6,158  
Interest income   14     10     39  
Interest expense (note 20B)   (121 )   (57 )   (21 )
Other income (note 8C)   124     112     291  
Write-down of investments (note 8B)   -     (1 )   (205 )
    17     64     104  
Income (loss) from continuing operations before income taxes and other items   4,587     (3,630 )   1,559  
Income tax expense (note 9)   (1,370 )   (648 )   (594 )
Loss from equity investees (note 12)   (41 )   (87 )   (64 )
Income (loss) from continuing operations before non-controlling interests   3,176     (4,365 )   901  
Income (loss) from discontinued operations (note 3I)   121     97     (104 )
Income (loss) before non-controlling interests   3,297     (4,268 )   797  
Non-controlling interests (note 27)   (23 )   (6 )   (12 )
Net income (loss) $ 3,274   $ (4,274 ) $ 785  
Earnings (loss) per share data (note 10)                  
Income (loss) from continuing operations                  
  Basic $ 3.19   $ (4.84 ) $ 1.02  
  Diluted $ 3.16   $ (4.84 ) $ 1.01  
Income (loss) from discontinued operations                  
  Basic $ 0.13   $ 0.11   $ (0.12 )
  Diluted $ 0.12   $ 0.11   $ (0.12 )
Net income (loss)                  
  Basic $ 3.32   $ (4.73 ) $ 0.90  
  Diluted $ 3.28   $ (4.73 ) $ 0.89  
1 Exclusive of amortization.
 
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
 
 
Consolidated Statements of Cash Flow
 
Barrick Gold Corporation
For the years ended December 31,
(in millions of United States dollars)
    2010     2009     2008  
OPERATING ACTIVITIES                  
Net income (loss) $ 3,274   $ (4,274 ) $ 785  
Amortization and accretion (notes 4 and 15B)   1,196     1,073     957  
Impairment charges and write-down of investments (note 8B)   7     278     803  
Income tax expense (note 9)   1,370     648     594  
Income taxes paid   (647 )   (376 )   (575 )
Net proceeds taxes paid   (85 )   (66 )   -  
Increase in inventory   (403 )   (372 )   (370 )
Elimination of gold sales contracts   -     5,933     -  
Payment on settlement for gold sales contracts   (656 )   (5,221 )   -  
Gain on sale/acquisition of long-lived assets (note 8C)   (50 )   (85 )   (187 )
(Income) loss from discontinued operations (note 3I)   (121 )   (97 )   104  
Operating cash flows of discontinued operations (note 3I)   (8 )   7     26  
Other operating activities (note 11A)   250     230     117  
Net cash provided by (used in) operating activities   4,127     (2,322 )   2,254  
INVESTING ACTIVITIES                  
Property, plant and equipment                  
  Capital expenditures (note 4)   (3,323 )   (2,351 ) (1,749 )
  Sales proceeds   61     10     185  
Acquisitions (note 3)   (813 )   (101 ) (2,174 )
Investments (note 12)                  
  Purchases   (61 )   (3 )   (18 )
  Sales   15     7     76  
Decrease in restricted cash   -     113     18  
Investing cash flows of discontinued operations (note 3I)   -     (3 )   (27 )
Other investing activities (note 11B)   (51 )   (87 )   (231 )
Net cash used in investing activities   (4,172 )   (2,415 ) (3,920 )
FINANCING ACTIVITIES                  
Capital stock                  
  Proceeds on exercise of stock options   127     65     74  
  Proceeds on common share offering (note 25)   -     3,885     -  
Proceeds from public issuance of common shares by a subsidiary (note 3E)   884     -     -  
Long-term debt (note 20B)                  
  Proceeds   782     2,154     2,717  
  Repayments   (149 )   (397 ) (1,603 )
Dividends (note 25)   (436 )   (369 )   (349 )
Funding from non-controlling interests   114     304     88  
Deposit on silver sale agreement   137     213     -  
Financing cash flows of discontinued operations (note 3I)   -     -     -  
Other financing activities (note 11C)   (25 )   (26 )   (34 )
Net cash provided by financing activities   1,434     5,829     893  
Effect of exchange rate changes on cash and equivalents   15     35     3  
Net increase (decrease) in cash and equivalents   1,404     1,127     (770 )
Cash and equivalents at beginning of period (note 20A)   2,564     1,437     2,207  
Cash and equivalents at end of period (note 20A) $ 3,968   $ 2,564   $ 1,437  
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.

 

 
Consolidated Balance Sheets
 
Barrick Gold Corporation
At December 31,
(in millions of United States dollars)
    2010   2009
ASSETS        
Current assets        
  Cash and equivalents (note 20A) $ 3,968 $ 2,564
  Accounts receivable (note 14)   346   251
  Inventories (note 13)   1,852   1,540
  Other current assets (note 14)   947   524
  Assets of discontinued operations (note 3I)   -   59
    7,113   4,938
Non-current assets        
  Equity in investees (note 12A)   291   1,136
  Other investments (note 12B)   203   92
  Property, plant and equipment (note 15)   17,751   13,125
  Goodwill (note 17)   5,287   5,197
  Intangible assets (note 16)   140   66
  Deferred income tax assets (note 24)   467   949
  Other assets (note 18)   2,070   1,531
  Assets of discontinued operations (note 3I)   -   41
Total assets $ 33,322 $ 27,075
LIABILITIES AND EQUITY        
Current liabilities        
  Accounts payable   1,511   1,221
  Current portion of long-term debt (note 20B)   14   54
  Other current liabilities (note 19)   964   475
  Liabilities of discontinued operations (note 3I)   -   23
    2,489   1,773
Non-current liabilities        
  Long-term debt (note 20B)   6,678   6,281
  Asset retirement obligations (note 22)   1,439   1,122
  Deferred income tax liabilities (note 24)   1,114   1,184
  Other liabilities (note 23)   868   1,145
  Liabilities of discontinued operations (note 3I)   -   23
Total liabilities   12,588   11,528
Equity        
  Capital stock (note 25)   17,790   17,390
  Additional paid-in capital   288   -
  Retained earnings (deficit)   456   (2,382)
  Accumulated other comprehensive income (note 26)   531   55
Total shareholders' equity   19,065   15,063
  Non-controlling interests (note 27)   1,669   484
Total equity   20,734   15,547
Contingencies and commitments (notes 15 and 30)        
Total liabilities and equity $ 33,322 $ 27,075
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
 
 
 
Consolidated Statements of Equity
 
Barrick Gold Corporation
For the years ended December 31,
(in millions of United States dollars)
  2010 2009   2008
Common shares (number in thousands)        
At January 1 984,328 872,739   869,887
  Issued on public equity offering (note 25) - 108,973   -
  Issued on exercise of stock options 4,760 2,349   2,383
  Issued on conversion of debentures (note 20B) 9,412 -   -
  Issued on redemption of exchangeable shares (note 25B) - 267   469
At December 31 998,500 984,328   872,739
Common shares        
At January 1 $ 17,390 $ 13,372 $ 13,273
  Issued on public equity offering (note 25) - 3,926   -
  Issued on conversion of debentures (note 20B) 268 -   -
  Issued on exercise of stock options 127 65   74
  Recognition of stock option expense 14 20   25
  Other adjustments (9) 7   -
At December 31 17,790 17,390   13,372
Additional paid-in capital        
At January 1 - -   -
  Recognized on initial public offering of African Barrick Gold (note 3E) 288 -   -
At December 31 288 -   -
Retained earnings (deficit)        
At January 1 (2,382) 2,261   1,832
  Net income (loss) 3,274 (4,274)   785
  Dividends (note 25) (436) (369)   (349)
  Repurchase of preferred shares of a subsidiary - -   (7)
At December 31 456 (2,382)   2,261
Accumulated other comprehensive income (loss) (note 26) 531 55   (356)
Total shareholders' equity 19,065 15,063   15,277
Non-controlling interests (note 27)        
At January 1 484 182   82
  Net income attributable to non-controlling interests 23 6   12
  Funding from non-controlling interests 114 299   90
  Other increase (decrease) in non-controlling interests 1,048 (3)   (2)
At December 31 1,669 484   182
Total equity at December 31 $ 20,734 $ 15,547 $ 15,459
   
   
Consolidated Statements of Comprehensive Income  
   
Barrick Gold Corporation  
For the years ended December 31,  
(in millions of United States dollars)  
    2010   2009     2008  
Net income (loss) $ 3,274 $ (4,274 ) $ 785  
Other comprehensive income (loss), net of tax (note 26)   476   411     (507 )
Comprehensive income (loss) $ 3,750 $ (3,863 ) $ 278  
The notes to these unaudited consolidated financial statements, which are contained in the Fourth quarter and Year-end report, available on our website, are an integral part of these consolidated financial statements.
   
   
CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CIBC Mellon Trust Company
Brookfield Place, TD Canada Trust Tower P.O. Box 7010, Adelaide Street Postal Station
Suite 3700 Toronto, Canada M5C 2W9
161 Bay Street, P.O. Box 212 Tel: (416) 643-5500
Toronto, Canada M5J 2S1 Toll-free throughout North America: 1-800-387-0825
Tel: (416) 861-9911 Fax: (416) 861-0727 Fax: (416) 643-5501
Toll-free throughout North America: 1-800-720-7415 Email: inquiries@cibcmellon.com
Email: investor@barrick.com Website: www.cibcmellon.com
Website: www.barrick.com  
   
SHARES LISTED BNY MELLON SHAREOWNER SERVICES
ABX – The New York Stock Exchange 480 Washington Blvd. – 27th Floor
        The Toronto Stock Exchange Jersey City, NJ 07310
  Tel: 1-800-589-9836 Fax: (201) 680-4665
  Email: shrrelations@mellon.com
  Website: www.melloninvestor.com
   
   

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this Fourth Quarter and Year-End Report 2010, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", "anticipate", "contemplate", "target", "plan", "continue", "budget", "may", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; changes in the worldwide price of gold, copper or certain other commodities (such as silver, fuel and electricity); fluctuations in currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; ability to successfully complete announced transactions and integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves; changes in costs and estimates associated with our projects; adverse changes in our credit rating, level of indebtedness and liquidity, contests over title to properties, particularly title to undeveloped properties; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.

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

Contact Information

  • INVESTOR CONTACT: Deni Nicoski
    Vice President, Investor Relations
    (416) 307-7410
    dnicoski@barrick.com
    or
    MEDIA CONTACT: Rod Jimenez
    Vice President, Corporate Affairs
    (416) 307-7427
    rjimenez@barrick.com