Barrick Gold Corporation
NYSE : ABX
TSX : ABX

Barrick Gold Corporation

February 16, 2012 06:55 ET

Barrick Reports Q4 2011 Financial and Operating Results

TORONTO, ONTARIO--(Marketwire - Feb. 16, 2012) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) -

FOURTH QUARTER AND YEAR-END REPORT 2011

Based on IFRS and expressed in US dollars

For a full explanation of results, the Financial Statements and Management Discussion & Analysis, 2012 outlook, mine statistics and mineral reserves and resources, please see the Company's website, www.barrick.com.

Highlights

Financial and Operating Results

- Reported net earnings for Q4 were $959 million ($0.96 per share) compared to $961 million ($0.97 per share) in the prior year period. Adjusted net earnings rose 15% to $1.17 billion ($1.17 per share)(1) from $1.02 billion ($1.02 per share) in the prior year period, primarily reflecting higher realized gold prices and higher copper sales volumes. Q4 operating cash flow increased 41% to $1.22 billion and adjusted operating cash flow was $1.30 billion1. Gold cash margins increased 25% to $1,159 per ounce1 in Q4 from $928 per ounce in the prior year period and net cash margins rose 18% to $1,282 per ounce1 from $1,090 per ounce in the prior year period.

- Full year adjusted net earnings increased 33% from $3.52 billion in the prior year to $4.67 billion ($4.67 per share), demonstrating the Company's strong gold price leverage, and translating to a higher return on equity of 22%1 from 20% in 2010. Adjusted operating cash flow rose 8% to $5.68 billion from $5.24 billion in the prior year. Reported net earnings and operating cash flow in 2011 increased 25% and 16% to $4.48 billion ($4.49 per share) and $5.32 billion, respectively, compared to the prior year, and were Company records.

- Q4 gold production of 1.81 million ounces at total cash costs of $505 per ounce1 or net cash costs of $382 per ounce1 included a strong performance from the North America region. Full year gold production of 7.68 million ounces at total cash costs of $460 per ounce met original guidance while net cash costs of $339 per ounce were below original guidance. Copper production of 451 million pounds in 2011 also met guidance at total cash costs of $1.75 per pound1, which were slightly above guidance.

- 2012 gold production is anticipated to be 7.3-7.8 million ounces at total cash costs of $520-$560 per ounce or net cash costs of $400-$450 per ounce2, positioning Barrick as one of the lowest cost senior gold producers. Copper production for 2012 is expected to be 550-600 million pounds at total cash costs of $1.90-$2.20 per pound.

Investing in and Developing High Return Projects

- The world-class Pueblo Viejo and Pascua-Lama projects are on track to enter production in mid-2012 and mid-2013, respectively. These two mines are expected to contribute about 1.5 million ounces3 of low cost annual production and provide combined annual average EBITDA of about $2.5 billion4 to Barrick in their first full five years.

Replacing Gold Reserves and Increasing Copper Reserves through Exploration and Selective Acquisitions

- Barrick replaced proven and probable gold reserves to an industry-leading 139.9 million ounces5 in 2011. Our focused exploration program is yielding excellent results, including the high grade Red Hill/Goldrush greenfield discovery in Nevada. Copper reserves nearly doubled from 6.5 billion pounds to 12.7 billion pounds5, measured and indicated copper resources rose 17% to 15.3 billion pounds and inferred copper resources increased 117% to 19.9 billion pounds5 with the addition of Lumwana and Jabal Sayid.

Returning Capital to Shareholders

Consistent with Barrick's practice of paying a progressive dividend, the Company increased its quarterly dividend by 25% to $0.15 per share during 2011, representing more than a 170%6 increase in capital returned to shareholders in the last five years, or a 22% annual compound growth rate over this period.

FINANCIAL AND OPERATING RESULTS

Q4 production was 1.81 million ounces of gold at total and net cash costs of $505 per ounce and $382 per ounce, respectively. Full year production of 7.68 million ounces at total cash costs of $460 per ounce met original guidance as Barrick's high quality portfolio and effective cost management programs enabled the Company to deliver on its operating targets for the ninth successive year. Net cash costs of $339 per ounce for the year were below original guidance. The realized gold price for the quarter was $1,664 per ounce7, 22% higher than the same prior year period. Q4 cash margins increased 25% to $1,159 per ounce from $928 per ounce in the comparable prior year period and net cash margins rose 18% to $1,282 per ounce from $1,090 per ounce in the same prior year period.

Q4 adjusted net earnings rose 15% to $1.17 billion ($1.17 per share), compared to $1.02 billion ($1.02 per share) in the same prior year period, primarily reflecting higher realized gold prices and higher copper sales volumes. Reported Q4 net earnings of $0.96 billion ($0.96 per share) include the after-tax impact of $153 million in impairment charges, mainly related to redundant power assets and investment portfolio write-downs, as well as a one-time withholding tax charge of about $75 million on repatriation of funds out of the U.S.

Q4 operating cash flow was up 41% to $1.22 billion from the same prior year period. Adjusted operating cash flow of $1.30 billion in Q4 compares to $1.52 billion in the same prior year period and adjusts for the one-time withholding tax payment.

Full year adjusted net earnings rose 33% from the same prior year period to $4.67 billion ($4.67 per share) and translated to a 22% return on equity, up from 20% in 2010. Adjusted operating cash flow increased 8% to $5.68 billion from 2010. Full year reported net earnings and operating cash flow of $4.48 billion ($4.49 per share) and $5.32 billion, respectively, were Company records.

"2011 was an excellent year for Barrick," said Aaron Regent, President and CEO. "We met our production and cost targets, enabling us to maximize the benefits of higher gold prices and realize record earnings and cash flow. We advanced our world-class projects, Pueblo Viejo and Pascua-Lama, which are scheduled to begin contributing low cost ounces in 2012 and 2013. We replaced our reserves, and our growing high grade gold discovery in Nevada, Red Hill/Goldrush, clearly demonstrates the value that a focused and disciplined exploration program can create. We added two quality copper mines to our portfolio and significantly expanded the copper reserves and resources at Lumwana. Finally, we continue to strengthen and be recognized for our CSR practices which are a critical component of our success."

PRODUCTION AND COSTS

The North America business unit performed above plan, producing 0.76 million ounces at total cash costs of $498 per ounce in Q4 on strong performances from Cortez and Goldstrike. The Cortez property contributed 0.28 million ounces at total cash costs of $331 per ounce for the quarter on higher tonnage from the open pit. With full year production of 1.42 million ounces at total cash costs of $245 per ounce, Cortez is one of the world's largest and lowest cost gold mines, and the property also has excellent upside exploration potential. Production in 2012 is anticipated to be 1.20-1.25 million ounces at total cash costs of $300-$350 per ounce, reflecting a higher proportion of underground ounces and lower open pit grades as part of planned mine sequencing.

The Goldstrike operation also performed well, producing 0.25 million ounces at total cash costs of $570 per ounce in Q4, primarily due to more underground tons and higher open pit grades than anticipated. Production in 2012 is expected to be 1.25-1.30 million ounces as the open pit moves back into a higher ore phase. Full year 2012 production for the North America business unit is forecast to be 3.425-3.600 million ounces at total cash costs of $475-$525 per ounce.

The South America business unit performed on plan, with production of 0.45 million ounces at total cash costs of $357 per ounce in Q4. The Veladero mine contributed 0.23 million ounces at total cash costs of $355 per ounce in Q4 and 0.96 million ounces at total cash costs of $353 per ounce for 2011. Lagunas Norte produced 0.18 million ounces in Q4 at total cash costs of $268 per ounce. Production from South America in 2012 is expected to be 1.550-1.700 million ounces at total cash costs of $430-$480 per ounce, primarily due to lower grades at Veladero and lower grades and recoveries at Lagunas Norte as anticipated in their mine plans.

The Australia Pacific business unit produced 0.49 million ounces at total cash costs of $677 per ounce in Q4. The Porgera mine, the region's largest operation, produced 0.12 million ounces at total cash costs of $679 per ounce. Australia Pacific is expected to produce 1.800-1.950 million ounces in 2012 at total cash costs of $700-$750 per ounce, primarily reflecting higher power costs for Porgera.

Attributable production from African Barrick Gold plc (ABG) in Q4 was 0.12 million ounces at total cash costs of $779 per ounce. Barrick's share of 2012 production is expected to be 0.500-0.535 million ounces at total cash costs of $790-$860 per ounce.

Q4 copper production of 143 million pounds at total cash costs of $1.99 per pound included 60 million pounds from the Lumwana mine at total cash costs of $2.47 per pound. Lumwana is expected to produce 230-260 million pounds of copper in 2012 at total cash costs of $2.40-$2.75 per pound. Cash costs in 2012 reflect mining of lower grade areas of the current Malundwe pit and as mining transitions to the initial lower grade benches of the Chimiwungo deposit, which starts to produce during the second half, as well as higher costs related to labor and royalties. The Chimiwungo deposit has three lodes, one of which is significantly thicker than Malundwe as shown by recent exploration drill results over the eastern shoot, consequently we expect more flexibility in managing the mined grade going forward. The Zaldívar mine in Chile produced 83 million pounds at total cash costs of $1.65 per pound in Q4 and is expected to produce approximately 285-300 million pounds of copper at total cash costs of $1.45-$1.75 per pound in 2012. The Company has put floor protection in place on approximately half of total anticipated 2012 copper production at an average floor price of about $3.75 per pound8 and can fully participate in copper price upside.

Approximately 60% of Barrick's consolidated production costs are denominated in US dollars. The Company's largest single currency exposure is the Australian dollar/US dollar exchange rate. Barrick is fully hedged on its Australian operating expenditures in 2012 and is about 70% hedged on expected 2013 Australian operating expenditures at effective average rates of $0.81 and $0.74, respectively, and also has additional coverage for 2014-2016 at levels substantially below current rates.

The Company has also mitigated the impact of higher oil prices through the use of financial contracts and production from Barrick Energy such that a $10 change in WTI crude oil prices would impact 2012 total cash costs by less than $1 per ounce. The Barrick Energy contribution, along with the financial contracts, provides hedge protection for approximately 80% of expected 2012 fuel consumption. Production from Barrick Energy is expected to continue to provide long term natural offsets to changes in energy prices.

INCREASING GOLD AND COPPER RESERVES AND RESOURCES THROUGH EXPLORATION9 AND SELECTIVE ACQUISITIONS

Barrick replaced proven and probable gold reserves to an industry-leading 139.9 million ounces at the end of 2011, based on a $1,200 per ounce gold price, and also has measured and indicated gold resources of 80.4 million ounces and inferred gold resources of 40.2 million ounces5, based on a $1,400 per ounce gold price. With the addition of Lumwana and Jabal Sayid, copper reserves nearly doubled from 6.5 billion pounds to 12.7 billion pounds5, measured and indicated copper resources rose 17% to 15.3 billion pounds and inferred copper resources increased 117% to 19.9 billion pounds5, based on a $2.75 per pound copper price and a $3.25 per pound copper price, respectively. At Lumwana, reserves grew 9% to 4.9 billion pounds and inferred resources nearly doubled from 5.5 billion pounds to 10.7 billion pounds5. In addition, 2.1 billion pounds were added in the measured and indicated category5, and the Chimiwungo deposit remains open to the east and south.

As a result of exploration success in 2011, the 2012 exploration budget is $450-$490 million, of which approximately 40% 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 45% of the total budget, the majority of which is targeted for Nevada. About 20% is expected to be spent in the Australia Pacific business unit and about 20% is targeted for copper in Zambia. Approximately 10% will be allocated to the South America business unit, with the remainder being African Barrick Gold.

In Nevada, recent drilling continues to grow the potential at Red Hill/Goldrush. At Red Hill, a resource of 1.27 million ounces was calculated in the indicated category and 3.30 million ounces in the inferred category5, and the resource remains open in multiple directions. Step-out holes have intersected mineralization a further 2,800 feet north beyond the initial 2010 resource as well as extended mineralization at least 1,000 feet to the southwest. Highlights of major step-out drilling include 90 feet at 0.15 ounces per ton (opt), 120 feet at 0.32 opt, 20 feet at 1.18 opt, and 110 feet at 0.12 opt. Infill drilling between the deposits has shown that Red Hill and Goldrush merge into a single deposit. A small portion of the Goldrush deposit had sufficient drill density to report an initial inferred resource of 2.45 million ounces5. The step-out drilling continues to suggest a high likelihood of major resource expansion. A total of 468,000 feet of drilling ($64 million) is planned at Red Hill/Goldrush in 2012 to test the full extent of the mineralized system and further expand and upgrade the resource base and a scoping study has commenced.

At Lumwana, activity has been ramped up with 17 drill rigs on the property focusing on resource definition drilling at Chimiwungo to convert inferred resources into the indicated category and step-out drilling to the south and east to extend the mineralization. Drilling to date has confirmed the thickened eastern shoot of Chimiwungo and selected highlights include 44 meters grading 1.00% copper, 44 meters at 1.07%, 41 meters at 0.80%, 37 meters at 0.91% and 20 meters at 1.60%. In addition to these strong results within the resource area, drilling further to the east is intersecting shallower than expected mineralization. A prefeasibility study on an expansion that could potentially double processing rates at Lumwana is expected to be completed by year end 2012.

INVESTING IN AND DEVELOPING HIGH RETURN PROJECTS IN CONSTRUCTION

Barrick has targeted growth in production to approximately nine million ounces of gold by 201610, driven largely by Pueblo Viejo and Pascua-Lama. Total cash costs per ounce are expected to benefit from these two large, low cost projects as they come on stream in 2012 and 2013, respectively. These two high quality mines are expected to contribute about 1.5 million ounces11 of average annual production and have a significant positive impact on Barrick's overall total cash costs.

At the Pueblo Viejo project in the Dominican Republic, first production continues to be expected in mid-2012 and overall construction is currently about 90% complete. At the end of Q4, approximately 85% of the expected total mine construction capital of $3.6-$3.8 billion12 (100% basis) or $2.2-$2.3 billion (Barrick's 60% share) had been committed. About 13 million tonnes of ore, representing approximately 1.4 million contained gold ounces, has been stockpiled to date. Construction of the tailings facility progressed during Q4 with the receipt of approvals to re-commence construction. The oxygen plant is expected to undergo pre-commissioning testing in Q1 2012, with the first two autoclaves undergoing pre-commissioning in Q2 2012. Construction of the transmission line connecting the site to the national power grid was completed during Q4 2011, and the inter-connect to the grid has been achieved. As part of a longer-term, optimized power solution for Pueblo Viejo, the Company has started early works to construct a dual fuel power plant at an estimated incremental cost of approximately $300 million (100% basis). The power plant would commence operations utilizing heavy fuel oil, but have the ability to subsequently transition to lower cost liquid natural gas. The new plant is expected to provide lower cost, long term power to the project.

Pueblo Viejo is expected to contribute approximately 100,000-125,000 ounces to Barrick at total cash costs of $400-$500 per ounce13 in 2012 as it ramps up to full production in 2013. 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 $300-$350 per ounce12.

At the Pascua-Lama project, approximately 55% of the previously announced pre-production capital of $4.7-$5.0 billion(14) has been committed and first production is expected in mid-2013. The project is being impacted by labor and commodity cost pressures as a result of inflation, competition for skilled labor, the impact of increased Argentinean customs restrictions on equipment procurement and lower than expected labor productivity.

In Chile, earthworks were about 95% complete at the end of Q4, and in Argentina, earthworks construction was approximately 65% complete at year end. Approximately 40% of the concrete has been poured at the processing facilities in Argentina and about 15% of the structural steel has been erected to date. Occupancy of the construction camps in Chile and Argentina continues to ramp up with 6,500 beds available by the end of 2011. The camps are expected to reach their full capacity of 10,000 beds in mid-2012. Average annual gold production from Pascua-Lama is expected to be 800,000-850,000 ounces in the first full five years of operation at negative total cash costs of $225-$275 per ounce14 based on a silver price of $25 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.

Overall construction of the Jabal Sayid copper project in Saudi Arabia was about 75% complete at the end of Q4. Subject to receipt of final approvals, the operation is expected to enter production in the second half of 2012 at total construction capital of approximately $400 million, of which 85% had been committed at the end of Q4. Underground mine development for first ore production and concrete works was completed in Q4 and bulk earthworks were about 90% complete. Jabal Sayid is expected to produce 35-45 million pounds of copper in 2012 at total cash costs of $2.15-$2.50 per pound15. Average annual production from Lodes 2 and 4 is expected to be 100-130 million pounds over the first full five years of operation at total cash costs of $1.50-$1.70 per pound. Results from recent drilling beneath Lode 4 demonstrate that the width of mineralization towards the base of the current resource model had been underestimated by lack of drilling. In addition to the previous intercept of 111 meters grading 2.67% copper, recent drilling has intersected 119 meters at 1.2% copper. This area will be the focus of ongoing drilling and resource/reserve upgrades and additions in 2012.

PROJECTS IN FEASIBILITY

At the Cerro Casale project in Chile, basic engineering was completed on schedule in Q4. The EIA permitting process is anticipated to be completed by the end of 2012, after which Barrick will consider a construction decision, commencement of detailed engineering and sectoral permitting. Ongoing consultation with the government, local communities and indigenous groups is continuing in parallel with permitting.

Barrick's 75% share of average annual production is anticipated to be 750,000-825,000 ounces of gold and 190-210 million pounds of copper in the first full five years of operation at total cash costs of $200-$250 per ounce16. Estimated total mine construction capital is approximately $6.0 billion (100% basis)16, 17.

At the 50%-owned Donlin Gold project in Alaska, the revised feasibility study, which includes updated costs and the utilization of natural gas, has been completed and acceptance of the study by the Board of Donlin Gold LLC is expected in the first half of 2012. Mine construction capital is expected to be approximately $6.7 billion (100% basis)18, which includes a natural gas pipeline that is anticipated to lower long term power costs and offer a better environmental and operational solution for power connection to the site. Permitting is expected to commence following approval by the Board of the revised feasibility study. Donlin Gold is anticipated to produce about 1.5 million ounces of gold annually (100% basis) in its first full five years of operation.

At the 75%-owned Turquoise Ridge mine in Nevada, work is advancing on the potential to develop a large scale open pit in order to mine the lower grade halo around the high grade underground ore, which could significantly increase annual production. Work in 2012 will focus on resource conversion, mine planning, environmental data collection, geotechnical and hydrologic evaluation, metallurgical and trade-off studies for processing as part of the prefeasibility study which is expected to be completed by the end of 2012. Twelve drill rigs are currently active on the property and the focus of open pit drilling is on upgrading resources. Additionally, surface drilling has intersected new mineralization, particularly in the shallower south area of the planned pit, which could positively impact economics. Underground drilling is also yielding strong results, intersecting higher grades than expected in some areas, and zones are open up-dip and to the northwest.

Scoping work has been completed on the Lagunas Norte deep sulfide potential and the project is undergoing metallurgical and geotechnical work as part of a prefeasibility study which is anticipated to be completed by year end 2012. A scoping study has also been completed on the Zaldívar deep sulfides and a prefeasibility study is expected by year end 2012.

FINANCIAL STRENGTH

At December 31, 2011, Barrick remained in a strong financial position with the gold industry's only 'A' credit rating, a quarter-end cash balance of $2.7 billion, and 2011 adjusted operating cash flow of $5.7 billion. The Company's existing $2.0 billion revolving credit facility was replaced with a new five-year, $4.0 billion revolving credit facility in January, 2012, of which $3.0 billion remains available. Barrick's financial strength positions the Company well to continue investing in its project pipeline, maintain a progressive dividend and pursue other value-enhancing opportunities. Consistent with Barrick's practice of paying a progressive dividend, the Company increased its quarterly dividend by 25% to $0.15 per share during 2011, representing a 170% increase in capital returned to shareholders in the last five years, or a 22% annual compound growth rate over this period.

CORPORATE SOCIAL RESPONSIBILITY

Barrick continues to be recognized for its strong Corporate Social Responsibility culture and was awarded the Best Practice of CSR Award for 2011 by IR Magazine. In 2011, the Company was listed for the fourth consecutive year on the Dow Jones Sustainability World Index and is also the only Canadian mining company to be ranked as one of the world's top 100 sustainable companies by NASDAQ.

BOARD APPOINTMENT

Barrick's Board of Directors has appointed a new board member, John Thornton. Mr. Thornton is a Professor and Director of the Global Leadership Program and Chairman of the Advisory Board at the Tsinghua University School of Economics and Management in Beijing. He is also Chairman of the Board of Trustees of the Brookings Institution, a director of HSBC Holdings plc and a director and non-executive Chairman of HSBC North America Holdings Inc., as well as past President and board member of the Goldman Sachs Group.

OUTLOOK AND GUIDANCE

The Company expects 2012 gold production to be in the range of 7.3-7.8 million ounces on lower expected grades and production at Cortez and Veladero. Total cash costs of $520-$560 per ounce or net cash costs of $400-$450 per ounce for 2012 principally reflect a change in the production mix, smaller amounts of capitalized waste stripping and higher labor and other inflationary costs. Barrick continues to be well positioned in the lower third of the global gold cost curve based on the high quality of its reserves, its active input cost management, focus on best practices and supply chain initiatives.

Copper production is expected to increase to 550–600 million pounds in 2012. Total cash costs of $1.90-$2.20 per pound anticipated for 2012 reflect a full year of production from Lumwana, higher sulfuric acid costs in Chile, higher royalties in Zambia and the second half start up of Jabal Sayid.

Capital project expenditures for 2012 are expected to be in the range of $2.60-$2.75 billion19 primarily related to construction activities at Pueblo Viejo and Pascua-Lama. Open pit and underground mine development, which includes capitalized waste stripping, is anticipated to be $850-$925 million and mine site expansion capital is expected to be $850-$925 million, including expenditures on development projects at Lagunas Norte, Cortez, Turquoise Ridge, Pueblo Viejo, Goldstrike and Lumwana. Mine site sustaining capital expenditures are expected to be $1.20-$1.30 billion, reflecting a full year of expenditures at Lumwana and the inclusion of sustaining capital for Pueblo Viejo.

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
2012 Guidance AssumptionHypothetical
Change
Impact on
Total Cash Costs
Impact on EBITDA (millions)
Gold revenue$1,700/oz1$50/ozn/a$375 - $400
Copper revenue2$3.50/lb1$0.25/lbn/a$72
Gold total cash costs
Gold price effect on royalties$1,700/oz$50/oz$1.25/oz$10
WTI crude oil price3$100/bbl$10/bbl$0.25/oz$2
Australian dollar exchange rate31 : 110%$0/oz$0
Copper total cash costs
WTI crude oil price3$100/bbl$10/bbl$0.02/lb$11
Chilean peso exchange rate3500 : 110%$0/lb$0
1 Barrick has assumed a gold price of $1,700 per ounce and copper price of $3.50/lb, which are consistent with current market prices. This assumption does not represent a forecast of what we expect gold or copper prices to average in 2012.
2 Barrick has put in place floor protection on approximately half of its expected copper production for 2012 at an average floor price of $3.75 per pound and can fully participate in copper price upside. At prices above $3.75 per pound, the impact on EBITDA of a $0.25/lb change in the copper price is approximately $140 million.
3 Due to hedging activities we are largely protected against changes in these factors.

1 Adjusted net earnings, adjusted operating cash flow, EBITDA, return on equity, total cash costs per ounce, total cash costs per pound, net cash costs, total cash margins and net cash margins per ounce/pound are non-GAAP financial measures. See pages 72-79 of Barrick's Year-End 2011 Report.

2 Based on an assumed realized copper price of $3.50 per pound for 2012.

3 ~1.5 million ounces of production is based on the estimated cumulative average annual production in the first full five years once both mines are at full capacity.

4 Based on a $1,600 per ounce gold price, a $30 per ounce silver price and a $100/bbl oil price and estimated average annual production in the first full five years once both mines are at full capacity.

5 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, approximately 2.15 million ounces of reserves at Pueblo Viejo (Barrick's 60% interest) is classified as mineralized material. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 161-166 of Barrick's 2011 Year-End Report.

6 Calculated based on converting the 2006 semi-annual dividend of 11 cents per share to a quarterly dividend.

7 Realized price per ounce is a non-GAAP financial measure. See pages 72-79 of Barrick's 2011 Year-End Report.

8 The realized price on 2012 production is expected to be reduced by $0.13/lb as a result of the net premium paid on this position.

9 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.

10 The target of 9 Moz of annual production by 2016 reflects a current assessment of the expected production and timeline to complete and commission Barrick's projects currently in construction (Pueblo Viejo and Pascua-Lama) and the Company's current assessment of existing mine site opportunities, some of which are sensitive to metal price and various capital and input cost assumptions.

11 Based on the estimated cumulative average annual production in the first full five years once both are at full capacity.

12 Based on gold and oil price assumptions of $1,300/oz and $100/bbl, respectively.

13 Based on 2012 gold and oil price assumptions of $1,700/oz and $100/bbl, respectively. The 2012 total cash cost estimate is dependent on the rate at which production ramps up after commercial levels of production are achieved. A change in the efficiency of the ramp up could have a significant impact on this estimate.

14 Based on gold, silver and oil price assumptions of $1,300/oz, $25/oz, and $100/bbl, respectively and assuming a Chilean peso f/x rate of 475:1.

15 Based on 2012 copper and gold price assumptions of $3.50/lb and $1,700/oz, respectively. The 2012 total cash cost estimate is dependent on the rate at which production ramps up after commercial levels of production are achieved. A change in the efficiency of the ramp up could have a significant impact on this estimate.

16 Based on gold, copper and oil price assumptions of $1,300/oz, $3.25/lb and $100/bbl, respectively and assuming a Chilean peso f/x rate of 475:1.

17 Based on Q2 2011 prices and does not include escalation for inflation.

18 Based on Q2 2011 prices and does not include escalation for inflation.

19 Represents Barrick's share of expenditures and includes capitalized interest of about $350-$375 million.

Key Statistics
Barrick Gold Corporation
(in United States dollars) Three months ended December 31, Twelve months ended December 31,
(Unaudited) 2011 2010 2011 2010
Operating Results
Gold production (thousands of ounces)1 1,814 1,700 7,676 7,765
Gold sold (thousands of ounces) 1,865 1,831 7,550 7,742
Per ounce data
Average spot gold price $ 1,688 $ 1,367 $ 1,572 $ 1,225
Average realized gold price2 1,664 1,368 1,578 1,228
Net cash costs2 382 278 339 293
Total cash costs2 505 440 460 409
Depreciation3 168 127 154 136
Other4 17 11 16 7
Total production costs 690 578 630 552
Copper credits 123 162 121 116
Copper production (millions of pounds) 143 82 451 368
Copper sold (millions of pounds) 135 103 444 391
Per pound data
Average spot copper price $ 3.40 $ 3.92 $ 4.00 $ 3.42
Average realized copper price2 3.69 3.99 3.82 3.41
Total cash costs2 1.99 1.08 1.75 1.10
Depreciation3 0.48 0.23 0.38 0.23
Total production costs 2.47 1.31 2.13 1.33
Financial Results (millions)
Revenues $ 3,789 $ 3,011 $ 14,312 $ 11,001
Net earnings5 959 961 4,484 3,582
Adjusted net earnings2 1,166 1,018 4,666 3,517
EBITDA2 1,998 1,770 8,376 6,521
Operating cash flow 1,224 866 5,315 4,585
Adjusted operating cash flow2 1,299 1,522 5,680 5,241
Per Share Data (dollars)
Net earnings (basic) 0.96 0.97 4.49 3.63
Adjusted net earnings (basic)2 1.17 1.02 4.67 3.56
Net earnings (diluted) 0.96 0.96 4.48 3.59
Weighted average basic common shares (millions) 1,000 995 999 987
Weighted average diluted common shares (millions)6 1,002 1,000 1,001 997
Return on equity2 20 % 22 % 22 % 20 %
As at As at
December 31, December 31,
2011 2010
Financial Position (millions)
Cash and equivalents $ 2,745 $ 3,968
Non-cash working capital 2,335 1,695
Adjusted debt2 13,058 6,392
Net debt2 10,320 2,427
Average shareholders' equity 21,418 17,352
1Production includes our equity share of gold production at Highland Gold.
2Realized price, net cash costs, total cash costs, adjusted net earnings, EBITDA, adjusted operating cash flow, adjusted debt, net debt and return on equity are non-GAAP financial performance measures with no standard definition under IFRS. See pages 72 - 79 of the Company's MD&A.
3Represents equity amortization expense divided by equity ounces of gold sold or pounds of copper sold.
4Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
5Net earnings represents net income attributable to the equity holders of the Company.
6Fully diluted includes dilutive effect of stock options and convertible debt.
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) 2011 2010 2011 2010 2011 2010 2011 2010
North America 761 697 3,382 3,110 $ 498 $ 437 $ 426 $ 429
South America 446 377 1,872 2,120 357 251 358 208
Australia Pacific 485 485 1,879 1,939 677 602 621 576
African Barrick Gold3 118 133 509 564 779 622 692 570
Other 4 8 34 32 475 494 475 494
Total 1,814 1,700 7,676 7,765 $ 505 $ 440 $ 460 $ 409
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) 2011 2010 2011 2010 2011 2010 2011 2010
Total 143 82 451 368 $ 1.99 $ 1.08 $ 1.75 $ 1.10
Total Gold Production Costs ($/oz)
Three months ended Year ended
December 31, December 31,
(Unaudited) 2011 2010 2011 2010
Direct mining costs at market foreign exchange rates $ 549 $ 464 $ 506 $ 412
Gains realized on currency hedge and commodity hedge/economic hedge contracts (53) (34) (53) (16)
Other2 (17) (11) (16) (7)
By-product credits (18) (20) (18) (15)
Copper credits (123) (162) (121) (116)
Cash operating costs, net basis 338 237 298 258
Royalties 44 41 41 35
Net cash costs1 382 278 339 293
Copper credits 123 162 121 116
Total cash costs1 505 440 460 409
Depreciation 168 127 154 136
Other2 17 11 16 7
Total production costs $ 690 $ 578 $ 630 $ 552
Total Copper Production Costs ($/lb)
Three months ended Year ended
December 31, December 31,
(Unaudited) 2011 2010 2011 2010
Cash operating costs $ 1.97 $ 1.06 $ 1.71 $ 1.08
Royalties 0.02 0.02 0.04 0.02
Total cash costs1 1.99 1.08 1.75 1.10
Depreciation 0.48 0.23 0.38 0.23
Total production costs $ 2.47 $ 1.31 $ 2.13 $ 1.33
1 Total cash costs and net cash costs are non-GAAP financial performance measures with no standard meaning under IFRS. See page 74 of the Company's MD&A.
2 Represents the Barrick Energy gross margin divided by equity ounces of gold sold.
3 Figures relating to African Barrick Gold are presented on a 100% basis up to March 31, 2010 and a 73.9% basis thereafter, which reflects our equity share of production.
Consolidated Statements of Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars, except per share data) 2011 2010
Revenue (notes 5 and 6) $ 14,312 $ 11,001
Costs and expenses
Cost of sales (notes 5 and 7) 6,316 5,162
Corporate administration 166 156
Exploration and evaluation (notes 5 and 8) 346 229
Other expense (note 9a) 576 455
Impairment charges (reversals) (note 9b) 235 (73 )
7,639 5,929
Other income (note 9c) 248 116
Income (loss) from equity investees (note 14a) 8 (24 )
Gain on non-hedge derivatives (note 22e) 81 69
Income before finance items and income taxes 7,010 5,233
Finance items (note 12)
Finance income 13 14
Finance costs (199 ) (180 )
Income before income taxes 6,824 5,067
Income tax expense (note 10) (2,287 ) (1,561 )
Income from continuing operations 4,537 3,506
Income from discontinued operations (note 4g) - 124
Net income $ 4,537 $ 3,630
Attributable to:
Equity holders of Barrick Gold Corporation $ 4,484 $ 3,582
Non-controlling interests (note 29) $ 53 $ 48
4,537 3,630
Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 11)
Income from continuing operations
Basic $ 4.49 $ 3.50
Diluted $ 4.48 $ 3.47
Income from discontinued operations
Basic $ - $ 0.13
Diluted $ - $ 0.12
Net income
Basic $ 4.49 $ 3.63
Diluted $ 4.48 $ 3.59
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 Comprehensive Income
Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars, except per share data) 2011 2010
Net income $ 4,537 $ 3,630
Other comprehensive income, net of taxes
Unrealized gains (losses) on available-for-sale ("AFS") financial securities, net of tax $9, $5 (91 ) 64
Realized (gains) losses and impairments on AFS financial securities, net of tax $5, $1 36 (11 )
Unrealized gains on derivative investments designated as cash flow hedges, net of tax $41, $131 370 518
Realized (gains) on derivative investments designated as cash flow hedges, net of tax $93, $22 (413 ) (88 )
Actuarial (losses) on post employment benefit obligations, net of tax $13, $nil (22 ) (2 )
Currency translation adjustments gain (loss), net of tax $nil, $nil (36 ) 14
Total other comprehensive income (loss) (156 ) 495
Total comprehensive income $ 4,381 $ 4,125
Attributable to:
Equity holders of Barrick Gold Corporation $ 4,328 $ 4,077
Non-controlling interests $ 53 $ 48
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) 2011 2010
OPERATING ACTIVITIES
Net income $ 4,537 $ 3,630
Adjustments for the following items:
Depreciation 1,419 1,212
Accretion 52 21
Impairment charges (reversals) (note 9b) 235 (73 )
Income tax expense (note 10) 2,287 1,561
Increase in inventory (708 ) (381 )
Gain on sale/acquisition of long-lived assets/investments (229 ) (79 )
Other operating activities (note 13a) (173 ) (421 )
Operating cash flows before interest and income taxes 7,420 5,470
Gross interest paid (137 ) (153 )
Income taxes paid (1,968 ) (732 )
Net cash provided by operating activities 5,315 4,585
INVESTING ACTIVITIES
Property, plant and equipment
Capital expenditures (note 5) (4,973 ) (3,778 )
Sales proceeds 48 61
Acquisitions (note 4) (7,677 ) (813 )
Investments
Purchases (72 ) (61 )
Sales 80 15
Other investing activities (note 13b) (233 ) (54 )
Net cash used in investing activities (12,827 ) (4,630 )
FINANCING ACTIVITIES
Proceeds on exercise of stock options 57 127
Proceeds from public issuance of common shares by a subsidiary (note 4e) - 884
Long-term debt
Proceeds 6,648 782
Repayments (380 ) (149 )
Dividends (509 ) (436 )
Funding from non-controlling interests 403 114
Deposit on silver sale agreement (note 26) 138 137
Other financing activities (note 13c) (66 ) (25 )
Net cash provided by financing activities 6,291 1,434
Effect of exchange rate changes on cash and equivalents (2 ) 15
Net increase (decrease) in cash and equivalents (1,223 ) 1,404
Cash and equivalents at beginning of year (note 22a) 3,968 2,564
Cash and equivalents at the end of year (note 22a) $ 2,745 $ 3,968
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 As at As at As at
(in millions of December 31 December 31 January 1
United States dollars) 2011 2010 2010
ASSETS
Current assets
Cash and equivalents (note 22a) $ 2,745 $ 3,968 $ 2,564
Accounts receivable (note 16) 426 370 259
Inventories (note 15) 2,498 1,798 1,488
Other current assets (note 16) 876 935 518
Total current assets (excluding assets classified as held for sale) 6,545 7,071 4,829
Assets classified as held for sale - - 100
Total current assets 6,545 7,071 4,929
Non-current assets
Equity in investees (note 14a) 440 396 1,124
Other investments (note 14b) 161 171 62
Property, plant and equipment (note 17) 28,979 17,890 13,378
Goodwill (note 18a) 9,626 6,096 5,197
Intangible assets (note 18b) 569 475 275
Deferred income tax assets (note 27) 409 625 601
Non-current portion of inventory (note 15) 1,153 1,040 709
Other assets (note 19) 1,002 873 649
Total assets $ 48,884 $ 34,637 $ 26,924
LIABILITIES AND EQUITY
Current liabilities
Accounts payable (note 20) 2,083 1,511 1,221
Debt (note 22b) 196 14 54
Current income tax liabilities 306 550 104
Other current liabilities (note 21) 326 416 366
Total current liabilities (excluding liabilities classified as held for sale) 2,911 2,491 1,745
Liabilities classified as held for sale - - 49
Total current liabilities 2,911 2,491 1,794
Non-current liabilities
Debt (note 22b) 13,173 6,624 6,124
Provisions (note 24) 2,326 1,768 1,408
Deferred income tax liabilities (note 27) 4,231 1,971 960
Other liabilities (note 26) 689 566 884
Total liabilities 23,330 13,420 11,170
Equity
Capital stock (note 28) 17,892 17,820 17,392
Retained earnings (deficit) 4,562 609 (2,535 )
Accumulated other comprehensive income 595 729 232
Other 314 314 143
Total equity attributable to Barrick Gold Corporation shareholders 23,363 19,472 15,232
Non-controlling interests (note 29) 2,191 1,745 522
Total equity 25,554 21,217 15,754
Contingencies and commitments (notes 17 and 33)
Total liabilities and equity $ 48,884 $ 34,637 $ 26,924
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 Changes in Equity
Barrick Gold Corporation Attributable to equity holders of the company
(in millions of United States dollars) Common Shares (in thousands) Capital stock Retained earnings (deficit) Accumulated other comprehensive income (loss) Other1 Total equity attributable to shareholders Non-controlling interests Total equity
At January 1, 2011 998,500 $ 17,820 $ 609 $ 729 $ 314 $ 19,472 $ 1,745 $ 21,217
Net income - - 4,484 - - 4,484 53 4,537
Total other comprehensive income (loss) - - (22) (134) - (156) - (156)
Total comprehensive income 998,500 $ - $ 4,462 $ (134) $ - $ 4,328 $ 53 $ 4,381
Transactions with owners
Dividends - - (509) - - (509) - (509)
Issued on exercise of stock options 1,923 57 - - - 57 - 57
Recognition of stock option expense - 15 - - - 15 - 15
Funding from non-controlling interests - - - - - - 403 403
Other decrease in non-controlling interests - - - - - - (10) (10)
Total transactions with owners 1,923 $ 72 $ (509) $ - $ - $ (437) $ 393 $ (44)
At December 31, 2011 1,000,423 $ 17,892 $ 4,562 $ 595 $ 314 $ 23,363 $ 2,191 $ 25,554
At January 1, 2010 984,328 $ 17,392 $ (2,535) $ 232 $ 143 $ 15,232 $ 522 $ 15,754
Net income - - 3,582 - - 3,582 48 3,630
Total other comprehensive income (loss) - - (2) 497 - 495 - 495
Total comprehensive income 984,328 $ - $ 3,580 $ 497 $ - $ 4,077 $ 48 $ 4,125
Transactions with owners -
Dividends - - (436) - - (436) - (436)
Issued on conversion of debentures 9,381 294 - - - 294 - 294
Issued on exercise of stock options 4,791 127 - - - 127 - 127
Recognition of stock option expense - 7 - - - 7 - 7
Recognized on initial public offering of African Barrick Gold (note 4e) - - - - 171 171 - 171
Funding from non-controlling interests - - - - - - 114 114
Other increase in non-controlling interests - - - - - - 1,061 1,061
Total transactions with owners 14,172 $ 428 $ (436) $ - $ 171 $ 163 $ 1,175 $ 1,338
At December 31, 2010 998,500 $ 17,820 $ 609 $ 729 $ 314 $ 19,472 $ 1,745 $ 21,217

1 Includes additional paid-in capital as at December 31, 2011: $276 million (December 31, 2010: $276 million; January 1, 2010: $ nil) and convertible borrowings - equity component as at December 31, 2011: $38 million (December 31, 2010: $38 million; January 1, 2010: $143 million).

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, P.O. Box 700, Postal Station B
TD Canada Trust Tower Toronto, Canada M5C 2W9
Suite 3700 or
161 Bay Street, P.O. Box 212 American Stock Transfer
Toronto, Canada M5J 2S1 & Trust Company, LLC
Tel: (416) 861-9911 6201 - 15 Avenue
Fax: (416) 861-0727 Brooklyn, NY 11219
Toll-free throughout
North America: 1-800-720-7415 Tel: 1-800-387-0825
Email: investor@barrick.com Toll-free throughout North America
Website: http://www.barrick.com/ Fax: (416) 643-5501
Email: inquiries@canstockta.com
SHARES LISTED Website: http://www.canstockta.com/
ABX - The New York Stock Exchange
The Toronto Stock Exchange *Effective November 2010,
shareholder records are maintained
by Canadian Stock Transfer ("CST")
as administrative agent for CIBC Mellon Trust Company.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this Fourth Quarter and Year-End Report 2011, 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; the ability of the Company to complete or successfully integrate an announced acquisition proposal; legislative, political or economic developments in the jurisdictions in which the Company carries on business, including Zambia and Saudi Arabia; 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 organization of our previously held African gold operations under a separate listed entity; 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.

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