FOR: BARRICK GOLD CORPORATION
PARIS, NYSE, TSX, Swiss SYMBOL: ABX
LSE SYMBOL: BGD
February 23, 2006
Barrick Earns $175 Million-$0.32 per share-in Q4
TORONTO, ONTARIO--(CCNMatthews - Feb. 23, 2006) - Barrick Gold Corporation
(NYSE:ABX)(TSX:ABX)(LSE:BGD)(SWX:ABX)(EURONEXT PARIS:ABX) -
YEAR-END REPORT 2005 - FEBRUARY 22, 2006
Based on US GAAP and expressed in US dollars
Full-Year Net Income Increased 62% to $401 Million
Highlights
- Q4 net income was $175 million, or $0.32 per share, and cash flow from operations was $269 million, or $0.50
per share. Full-year net income was $401 million, or $0.75 per share, and full-year cash flow from operations
was $726 million, or $1.35 per share.
- Gold sales were 1.65 million ounces at total cash costs of $221 per ounce(1) in Q4 2005. Full-year production
was 5.46 million ounces of gold at total cash costs of $227 per ounce - in line with Barrick's original
production and cost targets during a year of significant cost pressures for the mining industry.
- Gold reserves as at December 31, 2005 were 89 million ounces(2) based on a $400 gold price, excluding
reserves at Placer Dome mines and projects.
- Significant progress continues at the Company's development projects, including Cowal in Australia which is
on target to achieve its first gold production in Q1 2006, and approval by the Chilean environmental
authorities of the Pascua-Lama project in Chile/Argentina.
- On October 31, 2005, Barrick announced its offer to acquire all the outstanding shares of Placer Dome Inc. to
further strengthen its competitive position within the gold mining industry. The Company has subsequently taken
up and paid for shares which represent approximately 94% of the common shares of Placer Dome and expects to
acquire the remaining shares by the end of Q1.
- Donald J. Carty, John W. Crow, Robert M. Franklin and J. Brett Harvey have been appointed to the Board of
Directors as independent directors.
Barrick Gold Corporation today reported earnings of $175 million ($0.32 per share) for fourth quarter 2005
compared to earnings of $156 million ($0.29 per share) in the year-earlier period. Earnings included a number
of special items that had a $52-million post-tax ($0.10 per share) favorable impact in fourth quarter 2005,
compared to a positive effect of $127 million post-tax ($0.24 per share) in the prior-year quarter. (See page
26 of Management's Discussion and Analysis for further details.) Cash flow from operations for fourth quarter
2005 was $269 million ($0.50 per share) compared to $123 million ($0.23 per share) in the year-earlier period.
Fourth-quarter 2005 earnings were favorably impacted by a $50-per-ounce higher realized gold price, higher
sales volumes and lower total cash costs compared to the prior-year period.
"The fourth quarter capped off a strong year for Barrick. As our new generation of mines began to deliver
shareholder value through strong production, earnings and cash flow, the time was right for another major value-
add initiative - the Placer Dome transaction," said Greg Wilkins, President and CEO. "The result is a Canadian-
based powerhouse in the global gold-mining industry with the size, scale, strength, and experience to develop
world-class assets."
For 2005, net income increased 62% to $401 million ($0.75 per share) and cash flow from operations increased
43% to $726 million ($1.35 per share), compared to net income of $248 million ($0.46 per share) and cash flow
from operations of $509 million ($0.95 per share) in 2004. (See page 15 of Management's Discussion and Analysis
for details of various items significantly impacting the comparability of results.) The Company's results
primarily benefited from an 8% increase in gold sales volumes, a 12% higher realized gold price, and the lowest
total cash costs amongst the senior gold producers.
Barrick reduced its gold hedge commitments by a further 400,000 ounces in the quarter, bringing the total
reduction in the year to one million ounces. The Corporate Gold Sales Contracts position was 6.0 million
committed ounces at year-end, or 9% of reserves excluding Pascua-Lama.
PRODUCTION AND COSTS
In fourth quarter 2005, Barrick sold 1.65 million ounces of gold at total cash costs of $221 per ounce,
compared to 1.2 million ounces sold at total cash costs of $223 per ounce for the prior-year quarter.
The fourth quarter benefited from another strong quarter at Lagunas Norte and Goldstrike. For the full-year
2005, the Company was in line with its production and total cash costs guidance despite the significant cost
pressures faced by the mining industry during the year. This is the third straight year that Barrick has met
its operating targets and demonstrates the Company's ability to deliver on its targets and its cost containment
initiatives.
The North America region fourth-quarter production was in line with the third quarter 2005, but at slightly
higher total cash costs, due primarily to higher power costs at Goldstrike.
The South America region saw a significant increase in production in the fourth quarter versus the third
quarter 2005 at slightly higher total cash costs. Lagunas Norte's production and total cash costs both improved
over the third quarter. Commissioning activities were completed at Veladero and production levels are ramping
up.
The Australia/Africa region's operating performance in the fourth quarter was similar to the third quarter 2005
and the region met its most recent guidance.
RESERVES AND RESOURCES
Excluding reserves and resources acquired in the Placer Dome transaction, the Company had proven and probable
gold reserves of 89 million ounces at year-end 2005, based on a $400-per-ounce gold price. The Company also
reported gold mineral resources of 17.6 million ounces and inferred resources of 12.3 million ounces based on a
$450-per-ounce gold price.
Silver contained in Barrick's gold reserves at year end is 933 million ounces and is primarily derived from the
Pascua-Lama deposit, one of the largest silver resources in the world, which contains 685 million ounces of
silver.
DEVELOPMENT PROJECTS UPDATE
The Company's Cowal project in Australia is nearing completion with construction of the systems necessary for
processing oxide ore over 85% complete. Pre-commissioning of the process plant commenced in mid December. Ore
is being mined and stockpiled. First gold production is expected to commence by the end of the first quarter
2006.
At the East Archimedes project at the Ruby Hill mine site in Nevada, all major mine equipment is now in service
and pre-stripping activities are progressing well. Initial staffing of the project is complete and the first
gold pour is targeted for mid-2007.
The Company continued to make progress advancing its Pascua-Lama project in Chile/Argentina. Barrick recently
received approval of the environmental impact assessment from Chilean environmental regulatory authorities and
the Company is committed to working within the framework of the Resolution. Barrick is currently assessing the
Resolution and it is possible that upon completion of this assessment, up to one million ounces of
mineralization at the Pascua-Lama project may be reclassified from reserves to mineralized material for U.S.
reporting purposes but will remain as reserves for Canadian reporting purposes. The next milestone is the
approval of the environmental impact assessment by Argentine regulatory authorities. The project remains on
target to commence construction later in 2006, for first production in 2009.
The Western 102 power plant in Nevada was deemed complete in early December 2005 after performance testing.
Cost savings are expected with the start-up of the power plant.
At Buzwagi in Tanzania, the pre-feasibility study was completed and the feasibility study is underway.
Permitting and work on the environmental impact assessment is proceeding, and construction efforts will
commence as soon as necessary permits are received.
EXPLORATION UPDATE(3)
Drilling was carried out on 15 properties in the quarter and exploration spending was $46 million. Exploration
highlights from the quarter were at South Arturo, North Post, Buzwagi and Tusker.
In Nevada, 28 holes were completed by year end at the South Arturo target on the Dee property with all holes
intersecting oxide mineralization. At year end, gold mineral resources at Dee totaled 158,000 ounces with
significant potential to increase resources. At the North Post target on the Goldstrike property, initial
results from the underground drill program confirmed the potential of the northern extension of the lower zone.
In Tanzania, drill programs at Buzwagi converted 2.4 million ounces of resources to reserves for Canadian
reporting purposes. The drill program at the Tusker target on the Nyanzaga property extended the mineralization
along strike and at depth.
Drill programs in the Frontera district in South America resumed in the fourth quarter, with drilling carried
out at Guanaco Zonzo, Regalito and Cerro Pecos.
In Russia, field work commenced on three new exploration licenses which were acquired through the auction
process.
PLACER DOME INTEGRATION AND 2006 OUTLOOK
On October 31, 2005, Barrick announced its offer to acquire all the outstanding shares of Placer Dome Inc. to
further strengthen its competitive position within the gold mining industry. As of February 3, 2006, the
Company has taken up and paid for approximately 94% of the common shares of Placer Dome. The remaining shares
will be acquired by compulsory acquisition by the end of the first quarter and, upon its completion, Barrick
will sell certain assets to Goldcorp under its previously-announced agreement.
"The powerful combination of Barrick and Placer Dome provides us with an unrivalled pipeline of projects and
opportunities that solidifies our future for many years," said Greg Wilkins, President and CEO.
On January 20, 2006, the Company launched its integration plan that includes visits to all operations and
offices, working with Placer Dome personnel and to begin the capture of the estimated $200 million of annual
synergies in an orderly and timely manner.
The Company expects 2006 gold production of 8.6 - 8.9 million ounces and copper production of approximately 350
million pounds. This preliminary guidance reflects Barrick's proportionate share of Placer Dome production
since it acquired control on January 20, 2006, and will be confirmed at a later date. Total cash costs are
expected to be in the range of $275 - $290 per ounce of gold and about $1.10 per pound of copper, and include
the impact of purchase accounting fair value adjustments. Excluding these one-time, non-cash accounting
adjustments, copper cash costs would be approximately $0.75 per pound. The Company has purchased put options to
protect revenue on approximately 300 million pounds of expected 2006 copper production. These options guarantee
a minimum price of $2.00 per pound, while allowing the Company to fully participate in higher spot copper
prices.
At year-end 2005, proven and probable gold reserves of Barrick, including its interest in Placer Dome reserves
acquired, adjusted for the anticipated sale of certain assets to Goldcorp, were 139 million ounces(4),
containing 933 million ounces of silver. It also has 6.1 billion pounds of copper reserves.
As a result of the Placer Dome acquisition, Barrick's gold sales contracts amounted to 20.0 million ounces on a
pro forma basis as at December 31, 2005. Since year end, Placer Dome's gold hedge program has been reduced and
simplified with all outstanding sold call options eliminated. As of February 22, 2006, the combined gold sales
contracts totaled 18.5 million ounces, a reduction of 1.5 million ounces since year-end 2005. Of this total,
9.5 million ounces are allocated as Project Gold Sales Contracts in support of the Pascua-Lama and Pueblo Viejo
development projects. The remaining 9.0 million ounces of Corporate Gold Sales Contracts represent 8% of total
reserves excluding Pascua-Lama and Pueblo Viejo. Further reductions can be expected as the Company remains
committed to reducing its gold sales contracts in this favorable gold price environment.
CORPORATE GOVERNANCE
As part of its continued commitment to strong governance practices, the Company announced that it appointed J.
Brett Harvey to the Board of Directors effective December 15, 2005. Mr. Harvey is President and CEO of CONSOL
Energy Inc., a leading multi-energy producer of coal, gas and electricity, and brings a wealth of experience in
the mining and energy sectors to his position as an independent director of Barrick.
Barrick also announced that it has appointed Donald J. Carty, John W. Crow and Robert M. Franklin to the Board
of Directors effective February 22, 2006. Messrs. Carty, Crow and Franklin are Directors of Placer Dome, and
the Company welcomes them as independent directors of Barrick. Mr. Carty is the retired Chairman and Chief
Executive Officer of AMR Corporation. Mr. Crow is the former Governor of the Bank of Canada and now is
President of J&R Crow Inc., an economic and financial consulting firm. Mr. Franklin is the former Chairman of
Placer Dome, holding that position since 1993 and has served on the Placer Dome Board of Directors since 1987.
Barrick's vision is to be the world's best gold company by finding, acquiring, developing and producing quality
reserves in a profitable and socially responsible manner. Barrick's shares are traded on the Toronto, New York,
London, Euronext-Paris and Swiss stock exchanges.
(1) Total cash costs per ounce is defined as cost of sales divided by ounces sold. Total cash costs per ounce
exclude amortization expense, which was $74 per ounce in fourth quarter 2005. For further information on this
performance measure see page 17.
(2) 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, Buzwagi is classified as mineralized material. Barrick
is currently assessing the resolution issued by Chilean regulatory authorities approving the environmental
impact assessment for the Pascua-Lama project. It is possible that upon completion of this assessment, up to 1
million ounces of mineralization at the Pascua-Lama project may be reclassified from reserves to mineralized
material for U.S. reporting purposes but will remain as reserves for Canadian reporting purposes. For
additional information on reserves see the tables and related footnotes on pages 89 - 93.
(3) Barrick's exploration programs are designed and conducted under the supervision of Alexander J. Davidson,
P. Geo., Executive Vice President, Exploration and Corporate Development of Barrick. For information on the
geology, exploration activities generally, and drilling and analysis procedures on Barrick's material
properties, see Barrick's most recent Annual Information Form/Form 40-F on file with Canadian provincial
securities regulatory authorities and the US Securities and Exchange Commission.
(4) For a breakdown of Placer Dome's reserves and resources by category and additional information relating to
such reserves and resources, see Placer Dome's press release of February 20, 2006. Such reserves and resources
were calculated by employees of Placer Dome in accordance with National Instrument 43-101, as required by
Canadian securities regulatory authorities, and in accordance with Placer Dome's previously established
policies and procedures, and have not been independently verified by Barrick Gold Corporation. Industry Guide 7
(under the Securities and Exchange Act of 1934), as interpreted by Staff of the SEC, applies different
standards to classify mineralization as a reserve. Based on a preliminary review, Barrick does not intend to
report mineralization at the Pueblo Viejo project as a reserve for U.S. reporting purposes at this time.
/T/
Key Statistics
Three months
ended Year ended
(in United States dollars) December 31, December 31,
------------------------ ----------------
(Unaudited) 2005 2004 2005 2004
---------------------------------------------------- ----------------
Operating Results
Gold production (thousands of
ounces)(1) 1,648 1,169 5,460 4,958
Gold sold (thousands of
ounces) 1,650 1,200 5,320 4,936
Per Ounce Data
Average spot gold price $ 486 $ 434 $ 444 $ 409
Average realized gold price 467 417 439 391
Total cash costs(2) 221 223 227 214
Amortization(3) 74 76 76 86
Total production costs 295 299 303 300
---------------------------------------------------- ----------------
Financial Results (millions)
Gold sales $ 776 $ 501 $ 2,350 $ 1,932
Net income 175 156 401 248
Operating cash flow 269 123 726 509
Per Share Data (dollars)
Net income (basic) 0.33 0.30 0.75 0.47
Net income (diluted) 0.32 0.29 0.75 0.46
Operating cash flow (basic
and diluted) 0.50 0.23 1.35 0.95
Weighted average common shares
outstanding (millions)(4) 541 534 538 534
---------------------------------------------------- ----------------
As at As at
December 31, December 31,
-------------------------
2005 2004
----------------------------------------------------
Financial Position (millions)
Cash and equivalents $ 1,037 $ 1,398
Non-cash working capital 151 141
Long-term debt(5) 1,721 1,655
Shareholders' equity(6) 3,850 3,574
----------------------------------------------------
(1) Includes equity ounces in Highland Gold.
(2) Represents cost of goods sold plus royalties, production taxes
and accretion expense, less by-product revenues, divided by
ounces of gold sold. For further information on this performance
measure, refer to page 17.
(3) Represents amortization expense at the Company's producing mines
divided by ounces of gold sold.
(4) Fully diluted, includes shares issuable upon exchange of BGI
(Barrick Gold Inc.) exchangeable shares.
(5) We drew down $1 billion under our credit agreement subsequent
to December 31, 2005 to pay for the cash component of the Placer
acquisition. We expect to repay the amounts borrowed with
proceeds realized on closing of the Goldcorp agreement.
(6) Shareholders' equity increased subsequent to
December 31, 2005, in connection with the Placer Dome
acquisition, refer to Note 3 to the Financial Statements.
Production and Cost Summary
Production (attributable Total Cash
ounces) (000's) Costs (US$/oz)(1)
-------------------------- -------------------------
Three months Three months
ended Year ended ended Year ended
------------- ------------ ------------ ------------
December 31, December 31, December 31, December 31,
(Unaudited) 2005 2004 2005 2004 2005 2004 2005 2004
------------------------------ ------------ ------------ ------------
North America
Open Pit 495 373 1,514 1,381 $ 217 $ 230 $ 235 $ 249
Underground 127 134 510 562 345 233 314 255
------------------------------ ------------ ------------ ------------
Goldstrike
Property
Total 622 507 2,024 1,943 242 231 255 250
Eskay Creek 25 73 172 290 15 7 49 32
Round Mountain
(50%) 78 84 368 381 291 267 246 225
Hemlo (50%) 51 66 230 247 317 232 288 241
Holt-McDermott(2) - - - 55 - - - 197
Marigold (33%) 19 15 69 47 213 194 219 198
------------------------------ ------------ ------------ ------------
795 745 2,863 2,963 2
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