Barrick Reports Q3 2010 Financial and Operating Results
TORONTO, ONTARIO -- (Marketwire) -- 10/28/10 -- Barrick Gold Corporation (NYSE: ABX)(TSX: ABX) -
THIRD QUARTER REPORT 2010
Based on US GAAP and expressed in US dollars
For a full explanation of results, the Financial Statements and Management Discussion & Analysis, and mine statistics please see the Company's website, www.barrick.com.
Highlights
-- Reported Q3 net income was a record $837 million ($0.85 per share).
Adjusted Q3 net income rose 75% to $829 million ($0.84 per share)(1)
compared to $473 million ($0.54 per share) in Q3 2009. Operating cash
flow also set a new Company record, rising 40% to $1.28 billion from
$911 million in the prior year period, demonstrating Barrick's strong
leverage to the gold price.
-- Q3 gold production of 2.06 million ounces was ahead of plan at lower
than expected total cash costs of $454 per ounce(1) or net cash costs of
$349 per ounce(1) on strong performance from the North America region,
including the new Cortez Hills mine, which continues to exceed
expectations. Barrick is on track with its original operating guidance
for higher gold production and lower total cash costs in 2010, with full
year production expected to be 7.65-7.85 million ounces at total cash
costs of about $455 per ounce or net cash costs of $350-$360 per
ounce(2).
-- Barrick's cash margins continue to benefit from rising gold prices and
lower cash costs. Q3 cash margins increased 52% to $783 per ounce(1)
from $515 per ounce in Q3 2009 and net cash margins rose 48% to $888 per
ounce(1) from $600 per ounce in the prior year period.
-- The Company is targeting growth in gold production to 9.0 million ounces
within five years once the world class Pueblo Viejo(3) and Pascua-Lama
projects come onstream, and as additional opportunities are developed
around existing mine sites.
-- Barrick's positive outlook on the gold price, combined with its strong
balance sheet, has positioned the Company to continue to invest in its
high return projects and also to return additional capital to
shareholders. As a result, Barrick's Board of Directors has authorized a
fourth quarter dividend of 12 cents per share, consistent with the
dividend declared in the third quarter which represents a 20% increase
from the previous dividend on an annualized basis(4). Barrick continues
to maintain a robust financial position with the gold industry's only
'A' credit rating, a quarter-end cash balance of $4.3 billion and $1.5
billion in undrawn credit after generating record operating cash flow in
excess of $3.3 billion in the first nine months.
-- During the quarter, Barrick was ranked as a global leader in corporate
social responsibility for the third consecutive year by the Dow Jones
Sustainability Index (DJSI). Barrick is included on both the Dow Jones
Sustainability World Index and North American Index for 2010.
Q3 production of 2.06 million ounces of gold was ahead of plan at lower than expected total cash costs of $454 per ounce or net cash costs of $349 per ounce, primarily due to strong performances from Cortez, Goldstrike and Veladero. The realized gold price for the quarter was $1,237 per ounce(1), $10 per ounce above the average spot price of $1,227 per ounce and 27% higher than the prior year period. Cash margins increased 52% to $783 per ounce from $515 per ounce in Q3 2009. Net cash margins increased 48% to $888 per ounce from $600 per ounce in the same prior year period.
Adjusted Q3 net income rose 75% to $829 million ($0.84 per share), reflecting higher sales and realized prices for both gold and copper, in conjunction with lower gold cash costs, compared to $473 million ($0.54 per share) in Q3 2009. Reported Q3 net income of $837 million ($0.85 per share) before net adjustments of $8 million was a Company record. Operating cash flow rose 40% to a record $1.28 billion from $911 million in the prior year period.
'Operationally we had an excellent quarter, meeting our production and cost targets. Our project pipeline continues to be advanced and the focus on value creation opportunities has surfaced new investment and growth opportunities within our existing asset base. This will support our goal of producing nine million ounces annually within the next five years,' said Aaron Regent, Barrick's President and CEO. 'The leverage we have to the gold price is also clear and is reflected in the 50% growth in our operating margins and in our record net income and operating cash flow.'
PRODUCTION AND COSTS
Q3 production of 2.06 million ounces was ahead of plan at lower than expected total cash costs of $454 per ounce or net cash costs of $349 per ounce, primarily as a result of a strong performance from the North America region. The Company is on track to increase production in 2010 to 7.65-7.85 million ounces of gold at total cash costs of about $455 per ounce or net cash costs of $350-$360 per ounce, in line with original guidance despite higher royalties associated with the increase in gold prices(5).
The North America region delivered another quarter of results which were ahead of expectations, producing 0.93 million ounces at total cash costs of $454 per ounce in Q3.
The Cortez property continues to perform strongly, producing 0.37 million ounces at total cash costs of $277 per ounce on higher than anticipated grades and recoveries from the Cortez Hills open pit and underground. Due to mine sequencing, production from Cortez is expected to be lower in the final quarter of the year before increasing again in the first quarter of 2011. Full year production from Cortez is anticipated to be at the higher end of the original guidance range of 1.08-1.12 million ounces. Total cash costs are also expected to be within the original guidance range of $295-$315 per ounce. Cortez Hills continues to operate under the terms of the tailored injunction issued by the District Court while the Bureau of Land Management completes a Supplementary Environmental Impact Study (SEIS) on three aspects identified by the 9th Circuit Court of Appeals. The Company expects completion of the SEIS and a Record of Decision to be issued by year-end or early 2011.
The Goldstrike operation also performed ahead of expectations, producing 0.38 million ounces at total cash costs of $494 per ounce in Q3, primarily due to better than expected grades from the open pit and higher roaster throughput. Full year production for the North America region is expected to be in the range of 3.07-3.10 million ounces, which is in line with original guidance. Higher expected total cash costs of $480-$500 per ounce reflect the impact of higher gold prices on royalties and production taxes.
The South American business unit had a strong quarter, producing 0.52 million ounces at total cash costs of $263 per ounce in Q3. The Veladero mine outperformed expectations, producing 0.36 million ounces at total cash costs of $250 per ounce on higher grades from the Amable and Filo Federico pits, and is expected to produce over 1.0 million ounces in 2010. The Lagunas Norte operation contributed 0.12 million ounces at total cash costs of $204 per ounce. Based on previously disclosed changes to the mine plan, production is expected to be lower in the fourth quarter but is anticipated to increase again in early 2011. Full year production for the South America region is expected to be 2.10-2.15 million ounces compared to our revised guidance of 2.05-2.10 million ounces. Total cash costs are expected to be $240-$260 per ounce, in line with original guidance.
The Australia Pacific business unit produced 0.48 million ounces at total cash costs of $613 per ounce in Q3. Strong results from Kalgoorlie and Cowal, both ahead of plan on higher grades, partially offset lower than plan production from Porgera, which produced 0.11 million ounces at total cash costs of $676 per ounce. Full year production for the Australia Pacific region is expected to be 1.925-1.975 million ounces at total cash costs of $610-$625 per ounce, which is in line with original guidance. The Company is fully hedged on all of its Australian dollar costs for the balance of the year at an average rate of 0.81, effectively fully hedged for 2011 at an average rate of 0.77, and has substantial coverage for the following three years at rates at or below 0.75.
Attributable production from African Barrick Gold plc in Q3 was 0.12 million ounces at total cash costs of $696 per ounce(6). Barrick's share of full year production is now expected to decrease to about 0.575 million ounces at total cash costs of $620-$640 per ounce.
Q3 copper production was 84 million pounds at total cash costs of $1.12 per pound. The Company remains on track with its full year copper guidance and expects to produce about 360 million pounds at total cash costs of $1.10-$1.15 per pound.
Utilizing option collar strategies, we have put in place floor protection on approximately 80% of our expected copper production for the remainder of 2010 at an average price of $2.18 per pound and can participate in copper price upside on effectively all of our expected remaining 2010 copper production to a maximum average price of $3.76 per pound. We have currently hedged approximately 60% of our expected 2011 production through the use of collars with an average floor price of $3.00 per pound and an average ceiling price of $4.36 per pound.
Barrick's production base is underpinned by the industry's largest, fully unhedged gold reserves of 139.8 million ounces, plus measured and indicated gold resources of 61.8 million ounces and inferred gold resources of 31.6 million ounces(7).
PROJECTS UPDATE
The Pueblo Viejo project in the Dominican Republic is advancing in line with its $3.0 billion capital budget (100% basis). Initial production continues to be anticipated in the fourth quarter of 2011, although timing delays principally associated with the issuance of certain approvals related to power supply may result in first production occurring in Q1 2012. At the end of the third quarter, overall construction was nearly 40% complete, approximately 75% of the capital had been committed and engineering and procurement was about 95% complete. About 65% of the planned concrete has been poured and 45% of the steel has been erected. Two of the four autoclaves have been placed on their footings, with the final two units shipped and expected to be onsite in Q4, and 90% of the materials required for the oxygen plant have been shipped to site. Pre-stripping has been completed and ore stockpiling has commenced. Work continues toward achieving key milestones including the connection of power to the site, which is necessary to commence commissioning activities in the fourth quarter of 2011. 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 ounce(8).
At the Pascua-Lama project on the border of Chile and Argentina, detailed engineering and procurement is nearly 90% complete and the project is on track to enter production in the first quarter of 2013. The project remains in line with its pre-production capital budget of about $3.0 billion with over 40% of the capital committed. Earthworks have commenced with about 6.8 million cubic meters moved to date and major earthworks for the mill and Merrill Crowe platforms are expected to be completed in November. In Chile, the Barriales camp is substantially complete, allowing the work-force to be increased to the permitted capacity, and initial occupancy of the Los Amarillos camp in Argentina is expected in Q4 2010. 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 ounce(9).
At the Cerro Casale project in Chile, the review of any additional permitting requirements before considering a construction decision is progressing alongside discussions with the government and meetings with local communities and indigenous groups. Detailed engineering has commenced and is about 20% complete. Pre-production capital is expected to be about $4.2 billion (100% basis)(10) and 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 ounce(11).
We continue to advance the Donlin Creek project in Alaska. Further optimization studies are underway, primarily focused on the potential to utilize natural gas to reduce operating costs. These feasibility study revisions are expected to be completed in the second quarter of 2011. At the Reko Diq project in Pakistan, the initial mine development feasibility study is complete and the environmental and social impact assessment is in its final stages.
FINANCIAL POSITION
At September 30, 2010, Barrick remained in a robust financial position with the gold industry's only 'A' credit rating, a cash balance of $4.3 billion and a $1.5 billion undrawn credit facility. The Company generated about $1.3 billion in operating cash flow during the quarter and more than $3.3 billion in operating cash flow in the first nine months of 2010. As a result of the Company's positive outlook on the gold price, its strong financial position and robust operating cash flows, Barrick's Board of Directors has authorized a fourth quarter dividend of 12 cents per share payable on December 15 to shareholders of record on November 30, consistent with the dividend declared in the third quarter which represents a 20% increase from the previous dividend on an annualized basis. The Company has now moved from a semi-annual dividend to a quarterly dividend(12).
CORPORATE SOCIAL RESPONSIBILITY
During Q3, Barrick was ranked as a global leader in corporate social responsibility for the third consecutive year by the Dow Jones Sustainability Index (DJSI) and is included on both the Dow Jones Sustainability World Index and North American Index for 2010. DJSI tracks the performance of 2,500 leading companies worldwide and independently evaluates their long-term economic, environmental, and social performance using objective benchmarks.
Barrick was also recognized during the quarter as a global carbon disclosure leader in an annual survey of companies conducted by the Carbon Disclosure Project. This independent not-for-profit organization serves as the only global climate change reporting system and holds the largest database of primary corporate climate change information in the world. This builds on Barrick's long standing commitment and action in corporate social responsibility.
Barrick's vision is to be the world's best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. Barrick's shares are traded on the Toronto and New York stock exchanges.
(1) Adjusted net income, total cash costs per ounce, net cash costs per ounce, realized price, cash margins and net cash margins per ounce are non-GAAP financial measures. See pages 41-48 of Barrick's Third Quarter Report.
(2) Based on an expected realized copper price of $3.25 per pound for full year 2010.
(3) Barrick has a 60% share in the Pueblo Viejo project.
(4) Calculated based on converting previous semi-annual dividend of $0.20 per share to a quarterly equivalent.
(5) Based on an increase in the full year gold price assumption to $1,200 per ounce from $1,150 per ounce.
(6) US GAAP basis. ABG reports under an IFRS basis.
(7) Calculated as at December 31, 2009 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 23-33 of Barrick's 2009 Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.
(8) Based on gold price and oil price assumptions of $1,100 per ounce and $75 per barrel, respectively.
(9) Total cash costs are calculated net of silver credits assuming silver, gold, and oil prices of $16 per ounce, $1,100 per ounce, $75 per barrel, respectively, and assuming a Chilean peso f/x rate of 500:1.
(10) Based on June, 2009 prices and assuming Chilean peso f/x rate of 500:1.
(11) Based on gold price, copper price, and oil price assumptions of $1,100 per ounce, $2.75 per pound and $75 per barrel, respectively, and assuming a Chilean peso f/x exchange rate of 500:1.
(12) The declaration and payment of dividends remains at the discretion of the Board of Directors and will depend on the Company's financial results, cash requirements, future prospects and other factors deemed relevant by the Board.
Key Statistics
Barrick Gold Corporation
Three months ended Nine months ended
--------------------------------------------------------
(in United September 30, September 30,
States dollars) --------------------------------------------------------
(Unaudited) 2010 2009 2010 2009
----------------------------------------------------------------------------
Operating Results
Gold production
(thousands of 2,060 1,904 6,065 5,525
ounces)(1)
Gold sold (thousands
of ounces)(1) 1,944 1,884 5,909 5,480
Per ounce data
Average spot gold
price $ 1,227 $ 960 $ 1,178 $ 931
Average realized
gold price(2) 1,237 971 1,184 940
Net cash costs(5) 349 371 346 376
Total cash costs(3) 454 456 448 463
Amortization and
other(4) 139 131 135 122
Total production
costs 593 587 583 585
Copper credits 105 85 102 87
Copper production
(millions of
pounds) 84 104 286 295
Copper sold
(millions of
pounds) 90 86 288 262
Per pound data
Average spot copper
price $ 3.29 $ 2.65 $ 3.25 $ 2.12
Average realized
copper price(2) 3.39 2.90 3.19 3.03
Total cash costs(3) 1.12 1.05 1.10 1.21
Amortization and
other(4) 0.25 0.19 0.22 0.21
Total production
costs 1.37 1.24 1.32 1.42
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Financial Results
(millions)
Sales $ 2,775 $ 2,038 $ 7,978 $ 5,778
Net income (loss) 837 (5,350) 2,378 (4,487)
Adjusted net
income(6) 829 473 2,329 1,205
Operating cash flow 1,276 911 3,346 1,978
Per Share Data
(dollars)
Net income (loss)
(basic) 0.85 (6.07) 2.41 (5.12)
Adjusted net income
(basic)(6) 0.84 0.54 2.36 1.38
Net income (loss)
(diluted) 0.84 (6.07) 2.39 (5.12)
Weighted average
basic common shares
(millions) 986 882 985 876
Weighted average
diluted common
shares (millions)(7) 998 882 997 876
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As at As at
September 30, December 31,
-------------- --------------
2010 2009
----------------------------------------------------------------------------
Financial Position
(millions)
Cash and equivalents $ 4,281 $ 2,564
Non-cash working
capital 575 655
Adjusted debt(8) 7,272 6,919
Net debt(9) 3,116 4,355
Equity 19,307 15,547
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(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 46 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 43 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 43 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 41 of the Company's MD&A.
(7) Fully diluted, includes dilutive effect of stock options and convertible debt.
(8) Adjusted debt is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 47 of the Company's MD&A.
(9) Net debt is a non-GAAP financial performance measure with no standard meaning under US GAAP. See page 47 of the Company's MD&A.
Production and Cost Summary
Gold Production
(attributable ounces) Total Cash Costs
(000's) (US$/oz)
-------------------------- -----------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September September September September
30, 30, 30, 30,
------------- ------------- ---------------- -----------------
(Unaudited) 2010 2009 2010 2009 2010 2009 2010 2009
-------------------------- ------------- ---------------- -----------------
North America
(1) 929 712 2,413 2,212 $ 454 $ 518 $ 490 $ 499
South America 518 509 1,743 1,347 263 247 228 270
Australia
Pacific 483 462 1,454 1,439 613 585 603 582
African
Barrick 122 213 431 503 696 477 635 517
Gold(4)
Other 8 8 24 24 494 410 494 410
----------------------------------------------------------------------------
Total 2,060 1,904 6,065 5,525 $ 454 $ 456 $ 448 $ 463
----------------------------------------------------------------------------
Copper Production
(attributable pounds) Total Cash Costs
(Millions) (US$/lb)
-------------------------- -----------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September September September September
30, 30, 30, 30,
------------ ------------- ---------------- -----------------
(Unaudited) 2010 2009 2010 2009 2010 2009 2010 2009
-------------------------- ------------- ---------------- -----------------
South America 78 76 236 227 $ 1.12 $ 1.11 $ 1.08 $ 1.23
Australia
Pacific 6 28 50 68 1.11 0.87 1.19 1.09
----------------------------------------------------------------------------
Total 84 104 286 295 $ 1.12 $ 1.05 $ 1.10 $ 1.21
----------------------------------------------------------------------------
Total Gold Production Costs
(US$/oz)
-----------------------------------
Three months Nine months
ended ended
September 30, September 30,
---------------- -----------------
(Unaudited) 2010 2009 2010 2009
----------------------------------------------------------------------------
Direct mining costs at market foreign
exchange rates $ 431 $ 441 $ 438 $ 421
(Gains) losses realized on currency
hedge and commodity hedge/economic
hedge contracts (12) (1) (17) 19
Adjustments to direct mining costs(3) (5) (4) (5) (1)
By-product credits (11) (12) (14) (9)
Copper credits (105) (85) (102) (87)
----------------------------------------------------------------------------
Cash operating costs, net basis 298 339 300 343
Royalties 35 28 34 28
Production taxes 16 4 12 5
----------------------------------------------------------------------------
Net cash costs(2) 349 371 346 376
Copper credits 105 85 102 87
----------------------------------------------------------------------------
Total cash costs(2) 454 456 448 463
Amortization 134 127 130 121
Adjustments to direct mining costs(3) 5 4 5 1
----------------------------------------------------------------------------
Total production costs $ 593 $ 587 $ 583 $ 585
----------------------------------------------------------------------------
Total Copper Production Costs
(US$/lb)
-----------------------------------
Three months Nine months
ended ended
September 30, September 30,
---------------- -----------------
(Unaudited) 2010 2009 2010 2009
--------------------------------------------------------- -----------------
Cash operating costs $ 1.11 $ 1.04 $ 1.08 $ 1.20
Royalties 0.01 0.01 0.02 0.01
----------------------------------------------------------------------------
Total cash costs(2) 1.12 1.05 1.10 1.21
Amortization 0.25 0.19 0.22 0.21
----------------------------------------------------------------------------
Total production costs $ 1.37 $ 1.24 $ 1.32 $ 1.42
----------------------------------------------------------------------------
(1) Production 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.
(2) Total cash costs and net cash costs are non-GAAP financial performance measures with no standard meaning under US GAAP. See page 43 of the Company's MD&A.
(3)Represents unrealized losses on non-hedge currency and commodity contracts and the impact of Barrick Energy.
(4) Figures 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
(in millions of United States Three months ended Nine months ended
dollars, except per share September September
data)(Unaudited) 30, 30,
----------------------------------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
Sales (notes 4 and 5) $ 2,775 $ 2,038 $ 7,978 $ 5,778
----------------------------------------------------------------------------
Costs and expenses
Cost of sales (notes 4
and 6)(1) 1,065 952 3,117 2,829
Amortization and
accretion (notes 4 and 317 281 928 801
14B)
Corporate administration 36 40 113 120
Exploration (note 7) 47 42 123 107
Project development
expense (note 7) 38 21 90 59
Elimination of gold sales
contracts - 5,692 - 5,692
Other expenses (note 8A) 86 85 333 213
Impairment charges (note
8B) - 158 7 158
----------------------------------------------------------------------------
1,589 7,271 4,711 9,979
----------------------------------------------------------------------------
Interest income 5 2 11 7
Interest expense (note
15B) (42) (12) (115) (28)
Other income (note 8C) 61 15 85 109
Write-down of investments
(note 8B) - - - (1)
----------------------------------------------------------------------------
24 5 (19) 87
----------------------------------------------------------------------------
Income (loss) from
continuing operations
before income taxes and
other items 1,210 (5,228) 3,248 (4,114)
Income tax expense (note 9) (368) (127) (898) (353)
Loss from equity
investees (note 12) (10) (23) (39) (71)
----------------------------------------------------------------------------
Income (loss) from
continuing operations
before non-controlling
interests 832 (5,378) 2,311 (4,538)
Income from discontinued
operations 10 30 81 55
----------------------------------------------------------------------------
Income (loss) before non-
controlling interests 842 (5,348) 2,392 (4,483)
Non-controlling interests
(note 20) (5) (2) (14) (4)
----------------------------------------------------------------------------
Net income (loss) $ 837 $ (5,350) $ 2,378 $ (4,487)
----------------------------------------------------------------------------
Earnings (loss) per share
data (note 10)
Income (loss) from
continuing operations
Basic $ 0.84 $ (6.10) $ 2.33 $ (5.18)
Diluted $ 0.83 $ (6.10) $ 2.31 $ (5.18)
----------------------------------------------------------------------------
Income from discontinued
operations
Basic $ 0.01 $ 0.03 $ 0.08 $ 0.06
Diluted $ 0.01 $ 0.03 $ 0.08 $ 0.06
----------------------------------------------------------------------------
Net income (loss)
Basic $ 0.85 $ (6.07) $ 2.41 $ (5.12)
Diluted $ 0.84 $ (6.07) $ 2.39 $ (5.12)
----------------------------------------------------------------------------
(1)Exclusive of amortization.
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flow
Barrick Gold Corporation
(in millions of United Three months ended Nine months ended
States dollars) September September
(Unaudited) 30 30
----------------------------------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ 837 $ (5,350) $ 2,378 $ (4,487)
Amortization and
accretion (notes 4 and 317 281 928 801
14B)
Impairment charges and
write-down of - 158 7 159
investments (note 8B)
Income tax expense (note
9) 368 127 898 353
Income taxes paid (148) (44) (493) (264)
Net proceeds taxes paid (3) (3) (76) (26)
Increase in inventory (124) (80) (267) (240)
Elimination of gold sales
contracts - 5,692 - 5,692
(Gain) loss on
sale/acquisition of
long-lived assets (note (8) 1 (41) (81)
8C)
Income from discontinued
operations (10) (30) (81) (55)
Operating cash flows of
discontinued operations - (1) (4) 6
Other items (note 11A) 47 160 97 120
----------------------------------------------------------------------------
Net cash provided by
operating activities 1,276 911 3,346 1,978
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Property, plant and
equipment
Capital expenditures
(note 4) (786) (535) (2,178) (1,603)
Sales proceeds 27 3 35 10
Acquisitions (note 3) (61) (53) (813) (101)
Investments
Purchases (26) - (28) (2)
Sales 10 3 10 3
Increase in restricted
cash - - - 113
Investing cash flows of
discontinued operations - - - (7)
Other investing
activities (note 11B) (12) (37) (44) (71)
----------------------------------------------------------------------------
Net cash used in
investing activities (848) (619) (3,018) (1,658)
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Capital stock
Proceeds on exercise of
stock options 18 10 49 31
Proceeds on common
share offering - 3,885 - 3,885
Proceeds from public
issuance of common
shares by a subsidiary - - 884 -
Long-term debt
Proceeds - 69 782 936
Repayments (72) (65) (147) (358)
Dividends (118) - (315) (174)
Funding from non-
controlling interests 28 78 12 224
Deposit on silver sale
agreement 137 213 137 213
Financing cash flows of
discontinued operations - - - -
Other financing
activities (note 11C) (4) (2) (22) (13)
----------------------------------------------------------------------------
Net cash provided by
(used in) financing
activities (11) 4,188 1,380 4,744
----------------------------------------------------------------------------
Effect of exchange rate
changes on cash and
equivalents 13 13 9 30
----------------------------------------------------------------------------
Net increase in cash and
equivalents 430 4,493 1,717 5,094
Cash and equivalents at
beginning of period
(note 15A) 3,851 2,038 2,564 1,437
----------------------------------------------------------------------------
Cash and equivalents at
end of period (note 15A) $ 4,281 $ 6,531 $ 4,281 $ 6,531
----------------------------------------------------------------------------
The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
Consolidated Balance Sheets
Barrick Gold Corporation
(in millions of United States
dollars) (Unaudited) As at September 30, As at December 31,
----------------------------------------------------------------------------
2010 2009
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and equivalents (note
15A) $ 4,281 $ 2,564
Accounts receivable 288 251
Inventories (note 13) 1,800 1,540
Other current assets 649 524
Assets of discontinued
operations - 59
----------------------------------------------------------------------------
7,018 4,938
Non-current assets
Equity in investees (note
12A) 283 1,136
Other investments (note 12B) 131 92
Property, plant and equipment
(note 14) 16,669 13,125
Goodwill 5,287 5,197
Intangible assets 134 66
Deferred income tax assets 895 949
Other assets 1,872 1,531
Assets of discontinued
operations - 41
----------------------------------------------------------------------------
Total assets $ 32,289 $ 27,075
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities
Accounts payable 1,477 1,221
Short-term debt 295 54
Other current liabilities 685 475
Liabilities of discontinued
operations - 23
----------------------------------------------------------------------------
2,457 1,773
Non-current liabilities
Long-term debt (note 15B) 6,673 6,281
Asset retirement obligations 1,204 1,122
Deferred income tax
liabilities 1,318 1,184
Other liabilities (note 17) 1,330 1,145
Liabilities of discontinued
operations - 23
----------------------------------------------------------------------------
Total liabilities 12,982 11,528
----------------------------------------------------------------------------
Equity
Capital stock (note 18) 17,449 17,390
Additional paid-in capital 288 -
Deficit (319) (2,382)
Accumulated other
comprehensive income (note
19) 331 55
----------------------------------------------------------------------------
Total shareholders' equity 17,749 15,063
Non-controlling interests
(note 20) 1,558 484
----------------------------------------------------------------------------
Total equity 19,307 15,547
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Contingencies and commitments
(notes 14 and 21)
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Total liabilities and equity $ 32,289 $ 27,075
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The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2010 available on our website, are an integral part of these consolidated financial statements.
Consolidated Statements of Equity
Barrick Gold Corporation
For the nine months ended September 30 (in millions of United States
dollars) (Unaudited)
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2010 2009
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Common shares (number in thousands)
At January 1 984,328 872,739
Issued on public equity offering - 108,973
Issued on exercise of stock options 1,916 977
Issued on redemption of exchangeable shares 2 267
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At September 30 (note 18) 986,246 982,956
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Common shares
At January 1 $ 17,390 $ 13,372
Issued on public equity offering - 3,926
Issued on exercise of stock options 49 31
Recognition of stock option expense 10 14
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At September 30 17,449 17,343
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Additional paid-in capital
At January 1 - -
Recognized on initial public offering of African
Barrick Gold (note 3E) 288 -
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At September 30 288 -
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Retained earnings (deficit)
At January 1 (2,382) 2,261
Net income (loss) 2,378 (4,487)
Dividends (315) (174)
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At September 30 (319) (2,400)
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Accumulated other comprehensive income (note 19) 331 37
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Total shareholders' equity 17,749 14,980
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Non-controlling interests (note 20)
At January 1 484 182
Net income attributable to non-controlling
interests 14 4
Funding from non-controlling interests 12 216
Other increase in non-controlling interests 1,048 -
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At September 30 1,558 402
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Total equity at September 30 $ 19,307 $ 15,382
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Consolidated Statements of Comprehensive Income
Barrick Gold Corporation
Three months ended Nine months ended
(in millions of United States September September
dollars) (Unaudited) 30, 30,
----------------------------------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
Net income (loss) $ 837 $ (5,350) $ 2,378 $ (4,487)
Other comprehensive income,
net of tax (note 19) 425 133 276 393
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Comprehensive income (loss) $ 1,262 $ (5,217) $ 2,654 $ (4,094)
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The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2010 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 P.O. Box 7010, Adelaide Street Postal
Trust Tower 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:
Tel: (416) 861-9911 1-800-387-0825
Fax: (416) 861-0727 Fax: (416) 643-5501
Toll-free throughout North America: Email: inquiries@cibcmellon.com
1-800-720-7415 Website: www.cibcmellon.com
Email: investor@barrick.com
Website: www.barrick.com
BNY MELLON SHAREOWNER SERVICES
SHARES LISTED 480 Washington Blvd. - 27th Floor
ABX - The New York Stock Exchange Jersey City, NJ 07310
The Toronto Stock Exchange Tel: 1-800-589-9836
Fax: (201) 680-4665
Email: shrrelations@mellon.com
Website: www.melloninvestor.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained in this Third Quarter Report 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.
Contacts:
INVESTOR CONTACT:
Deni Nicoski
Vice President, Investor Relations
(416) 307-7410
dnicoski@barrick.com
MEDIA CONTACT:
Rod Jimenez
Vice President, Corporate Affairs
(416) 307-7427
rjimenez@barrick.com