FOR: BARRICK GOLD CORPORATION
NYSE, TSX SYMBOL: ABX
LSE SYMBOL: BGD
November 2, 2006
Barrick Earns Over $1 Billion in First Nine Months of 2006; Earnings and Cash Flow Per Share Rise Over 100%
TORONTO, ONTARIO--(CCNMatthews - Nov. 2, 2006) - Barrick Gold Corporation (NYSE:ABX)(TSX:ABX)(LSE:BGD) -
THIRD QUARTER REPORT 2006 - NOVEMBER 2, 2006
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/Investors/Annual&QuarterlyReports/
Highlights
- Q3 net income was $405 million ($0.46 per share) compared to $113 million ($0.21 per share) in the prior-year
period, and Q3 operating cash flow was a record $805 million ($0.92 per share) compared to $232 million ($0.43
per share) in the prior-year period.
- Q3 equity gold production was 2.2 million ounces at total cash costs of $281 per ounce(1), for year-to-date
gold production of 6.2 million ounces at total cash costs of $282 per ounce. The Company expects to meet its
original 2006 gold production and cash cost guidance and is targeting to produce about 8.6 million ounces of
gold at total cash costs of about $285 per ounce.
- Q3 copper production was 95 million pounds at total cash costs of $0.81 per pound(1), for a year-to-date
total of 267 million pounds at total cash costs of $0.77 per pound. The Company is on track to meet its
production guidance of 370 million pounds at total cash costs of about $0.80 per pound.
- During Q3, the Company announced that it had entered into an agreement to sell its interest in the South Deep
mine to Gold Fields Limited for total consideration of $1.525 billion. The transaction is expected to close in
early 2007.
- During Q3, Barrick announced all-cash offers for NovaGold Resources Inc. and Pioneer Metals Corporation. On
October 24, 2006, Barrick announced its best and final offer price for NovaGold of US$16.00 per common share
and extended the offer to November 7, 2006.
- In October 2006, Barrick successfully completed the issuance of $1 billion of copper-linked notes. Proceeds
of this offering were used to repay existing short-term debt and will be used to fund Barrick's development
projects.
- On November 1, 2006, Barrick entered into a preliminary agreement with Highland Gold Mining Limited to
contribute its 50% interest in the Taseevskoye deposit and other exploration properties to Highland and
increased its ownership to 34%.
Barrick Gold Corporation today reported net income of $405 million ($0.46 per share) for third quarter 2006, up
significantly from net income of $113 million ($0.21 per share) in the year-earlier period. Third quarter 2006
net income was reduced by $45 million ($0.05 per share) of special items (see page 9 of Management's Discussion
and Analysis for further details).
Operating cash flow for third quarter 2006 was a Company record of $805 million ($0.92 per share), compared
with the prior-year period of $232 million ($0.43 per share).
"Our third-quarter results demonstrate the Company's ability to generate robust earnings and cash flow through
expanded margins from its global portfolio of assets," said Greg Wilkins, President and CEO. "This has
translated into impressive per share growth as we benefit from leverage to higher metal prices."
PRODUCTION AND COSTS
In third quarter 2006, Barrick produced 2.2 million ounces of gold at total cash costs of $281 per ounce,
compared to 1.5 million ounces produced at total cash costs of $210 per ounce for the prior-year quarter. The
increase in production year-over-year is due to the successful acquisition of Placer Dome.
Barrick's financial results benefited from the strong gold price, as it realized $581 per ounce on its gold
sales. During the third quarter, Barrick sold all its gold production at spot prices, and incurred a $79-
million charge against gold sales for the impact of the previously-announced Placer Dome hedge book close-out.
In the first nine months, the Company's margin over its total cash costs has increased by 47% year-over-year
due to the rising gold price environment. The Company also produced 95 million pounds of copper during the
third quarter 2006, and realized $3.32 per pound on its copper sales relative to its total cash costs of $0.81
per pound.
REGIONAL RESULTS
North America
The North America region's third-quarter gold production was 0.8 million ounces, similar to the prior-year's
production levels, at total cash costs of $344 per ounce compared to $224 per ounce in the prior-year period.
Production from Goldstrike was lower in the third quarter due to lower-grade ore processed from the open-pit
stockpiles. The Company expects North American gold production for the fourth quarter of 2006 to be higher
primarily due to higher production from Goldstrike and Cortez. Total cash costs for the region increased over
the same period primarily due to the mix of production from the acquired mines, and lower production from
Goldstrike.
The Cortez Hills project is nearing the end of its first year, with about $40 million of the $480-million
project budget spent to date. The Company targets completion of the environmental impact statement and receipt
of required approvals in the second half of 2007, thereby allowing the 15-month construction period to
commence. At present, open-pit mining equipment is being procured, and development of twin declines for
underground exploration continues to advance.
At the Pueblo Viejo project, the Company continues to update the feasibility analysis prepared by Placer Dome
prior to the acquisition, while concurrently undertaking government and community relations, and environmental
permitting. During the quarter, a 10,000-meter follow-up exploration drill program was approved and initiated.
The objective of the program is to confirm continuity of the new mineralization defined this year and add
mineralized resources to the project.
Barrick continues to advance the Donlin Creek project. An expanded 82,000-meter drill program is in progress
with the objective of upgrading mineralization in the inferred category to measured and indicated resources.
Approximately 68,000 meters of core drilling were completed by the end of the quarter, including 57,000 meters
of infill drilling. The drilling program is slightly ahead of schedule, however, approximately 17,000 meters of
core backlog has accumulated, which should be logged by the end of the year. Grades encountered in the drilling
are consistent with the resource model. The Company has ensured that the appropriate financial, technical and
human resources are being devoted to the timely completion of the feasibility study.
South America
The South America region produced 0.6 million ounces of gold at total cash costs of $125 per ounce in the third
quarter 2006 versus 0.4 million ounces of gold at $122 per ounce in the prior-year quarter. The year-over-year
increase is due to production from the Veladero mine which opened in late 2005. Lagunas Norte produced more
gold as a result of increased primary crusher throughput and higher grades, and the mine continues to target
production of over one million ounces in 2006.
The Zaldivar copper mine produced 80 million pounds of copper during third quarter 2006 at total cash costs of
$0.65 per pound. Production benefited in the quarter due to improved crusher availability.
At the Pascua-Lama project in Chile/Argentina, the Company filed a report consolidating all environmental
impact assessments in Argentina and related documentation, including responses to public questions. Approvals
from the Argentine environmental regulatory authorities are targeted for the fourth quarter of 2006.
Construction is expected to commence after receipt of approvals and issuance of sectoral permits, with Pascua-
Lama's first gold pour now targeted for 2010.
Barrick is the recent recipient of the Award for Excellence in Corporate Social and Ethical Responsibility for
the Integrated Agricultural and Livestock Project in Cuncashca, Peru. The award was presented by the Canadian
Manufacturers & Exporters (CME) and Canadian International Development Agency (CIDA) in recognition of
Barrick's corporate responsibility policies and its outstanding work in international cooperation.
Australia Pacific
The Australia Pacific region's third-quarter gold production was 0.6 million ounces at total cash costs of $372
per ounce versus 0.2 million ounces at total cash costs of $245 per ounce in the prior-year period. At
Kalgoorlie, production continues to be lower due to reduced throughput caused by harder ore and lower-than-
planned ore grades, which resulted in higher total cash costs. At Cowal, production is continuing to ramp up,
as grades and throughput rates are expected to improve. Total cash costs for the region increased over the
prior-year period due to the new mix of mines, higher labor costs, and increases in currency exchange rates.
Africa
The Africa region produced 0.3 million ounces of gold in the quarter at total cash costs of $254 per ounce
versus 0.1 million ounces at total cash costs of $318 per ounce in the prior-year period. At North Mara,
production improved during the quarter as a result of increased shovel efficiencies and drilling capacity, and
mining from the higher-grade Gokona ore body. South Deep production was impacted by the skip accident that
occurred in the second quarter of 2006 as well as an underground fire that occurred late in third quarter 2006.
Total cash costs for the third quarter 2006 are lower as a result of higher production levels. At South Deep,
insurance arrangements have mitigated the impact of the skip accident on total cash costs.
CORPORATE DEVELOPMENT
Early in the third quarter, Barrick announced all-cash offers for NovaGold Resources Inc. and Pioneer Metals
Corporation. Subsequently, the Company has acquired approximately 90% of the outstanding common shares of
Pioneer, and has extended its offer to November 9. On October 24, 2006, Barrick increased its all-cash offer to
acquire the outstanding common shares of NovaGold to US$16.00 per common share and extended the offer to
November 7, 2006. The increased price is Barrick's best and final offer price for NovaGold.
During the third quarter, the Company announced it had entered into a definitive purchase and sale agreement
with Gold Fields Limited regarding Barrick's indirectly held 50% interest in the South Deep asset and its
rights under the joint venture agreement with Western Areas Limited in the Republic of South Africa. The
consideration is comprised of $1.525 billion of which $1.2 billion will be paid in cash and the balance of $325
million in Gold Fields shares. The agreement is subject to customary conditions including the receipt of South
African regulatory approvals and is expected to close in early 2007.
On November 1, 2006, Barrick entered into a preliminary agreement with Highland Gold Mining Limited whereby
Barrick would transfer ownership of certain companies holding Russian and Kyrgyz licenses in return for
additional Highland shares. In effect, Barrick will be contributing its 50% interest in the Taseevskoye
deposit, as well as other exploration properties in Russia and Central Asia, to Highland, thereby consolidating
ownership of these properties under one company. In exchange, Highland will issue to Barrick approximately 34.5
million shares, which will increase Barrick's ownership in Highland from 20% to approximately 34%. As part of
the transaction, Barrick will second several of its employees to Highland, and will receive two additional
Board seats. Completion of the transaction is subject to regulatory approval and approval by Highland
shareholders. The Fedorova PGM deposit is not included in this transaction.
FINANCIAL POSITION
In October 2006, Barrick successfully completed the issuance of $1 billion of copper-linked notes, comprised of
$400 million of 5.75% notes due 2016 and $600 million of 6.35% notes due 2036. During the first three years of
these notes, the original $1 billion of funding is to be repaid from the sales proceeds of approximately 324
million pounds of copper (equating to approximately $3.08 per pound), and is to be replaced with $1 billion of
funding in the form of conventional interest-bearing notes. Debt outstanding at any time from issue date to
maturity is $1 billion. Proceeds of this offering have been used to repay $490 million of short-term debt, and
will also be used to fund Barrick's development projects and to finance upcoming debt maturities.
In August 2006, Barrick increased its $1-billion credit facility to $1.5 billion, and currently has the full
amount available for use.
OUTLOOK
The Company expects gold production in the fourth quarter to be its best quarterly performance and to meet its
original 2006 full year guidance. The Company is targeting to produce about 8.6 million ounces of gold at total
cash costs of about $285 per ounce.
The Company expects to meet its 2006 copper production guidance of 370 million pounds at total cash costs of
about $0.80 per pound.
The Company is planning to sell its interests in the South Deep mine and the Paddington operations in
Australia. As well, production at Goldstrike is expected to be about 15% lower in 2007 as the site will be
processing lower-grade ore stockpiles for about eight months due to waste stripping in the open pit. Production
at Veladero is expected to continue at 2006 levels until we access high-grade areas of the Filo Federico ore
body beginning in early 2009. As a result of an overall decrease in the grades to be processed in 2007, part of
which is the result of processing material that has been re-classified to ore due to higher gold prices, along
with continued inflationary pressures, total cash costs per ounce are expected to increase by about 15-18% in
2007.
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, New
York and London stock exchanges.
(1) Total cash costs is defined as cost of sales divided by ounces of gold sold or pounds of copper sold. Total
cash costs exclude amortization expense and inventory purchase accounting adjustments. For further information
on this performance measure see pages 17 to 18 of the Company's MD&A.
/T/
Key Statistics
Three months ended Nine months ended
(in United States dollars) September 30, September 30,
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
Operating Results
Gold production (thousands of
ounces)(1) 2,162 1,509 6,203 3,812
Gold sold (thousands of ounces)(1) 2,169 1,456 6,107 3,670
Per ounce data
Average spot gold price $ 622 $ 439 $ 601 $ 432
Average realized gold price(5) 581 427 571 426
Total cash costs(2) 281 210 282 229
Amortization(3) 73 72 76 77
Total production costs 354 282 358 306
Copper production (millions
of pounds) 95 n/a 267 n/a
Copper sold (millions of pounds) 99 n/a 276 n/a
Per pound data
Average spot copper price $ 3.48 n/a $ 3.00 n/a
Average realized copper price 3.32 n/a 3.09 n/a
Total cash costs(2) 0.81 n/a 0.77 n/a
Amortization(3) 0.23 n/a 0.39 n/a
Total production costs 1.04 n/a 1.16 n/a
---------------------------------------------------------------------------
Financial Results (millions)
Sales $ 1,632 $ 627 $ 4,347 $ 1,574
Net income 405 113 1,088 226
Operating cash flow 805 232 1,803 457
Per Share Data (dollars)
Net income (diluted) 0.46 0.21 1.29 0.42
Operating cash flow (diluted) 0.92 0.43 2.12 0.85
Weighted average diluted common
shares (millions)(4) 879 539 850 537
---------------------------------------------------------------------------
As at As at
September 30, December 31,
--------------------------
2006 2005
--------------------------------------------------------
Financial Position
(millions)
Cash and equivalents $ 1,766 $ 1,037
Non-cash working capital 418 151
Long-term debt 2,888 1,721
Shareholders' equity 13,677 3,850
--------------------------------------------------------
(1) Includes equity gold ounces in Tulawaka, South Deep and Porgera.
Production also includes equity gold ounces in Highland Gold.
(2) Represents equity cost of goods sold plus royalties, production taxes
and accretion expense, less by-product revenues, divided by equity
ounces of gold sold or pounds of copper sold. For further information
on this performance measure, refer to page 17. Excludes amortization
and inventory purchase accounting adjustments.
(3) Represents equity amortization expense and inventory purchase
accounting adjustments at the Company's producing mines divided by
equity ounces of gold sold or pounds of copper sold.
(4) Fully diluted, includes dilutive effect of stock options, convertible
debt and preferred shares.
(5) Calculated as consolidated gold sales divided by consolidated ounces
sold.
Production and Cost Summary
Gold Production
(attributable ounces) (000's) Total Cash Costs (US$/oz)
------------------------------ -------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30,(1) September 30, September 30,(1)
------------- ---------------- -------------- ----------------
(Unaudited) 2006 2005 2006 2005 2006 2005 2006 2005
------------------------- ---------------- -------------- ----------------
North
America 765 791 2,439 2,068 $ 344 $ 224 $ 307 $ 243
South
America 566 368 1,450 711 125 122 159 126
Australia
Pacific 570 232 1,615 719 372 245 334 245
Africa 256 109 675 293 254 318 322 336
Russia/
Central
Asia 5 9 24 21 467 314 456 297
---------------------------------------------------------------------------
Total 2,162 1,509 6,203 3,812 $ 281 $ 210 $ 282 $ 229
---------------------------------------------------------------------------
Copper Production
(attributable pounds) (Millions) Total Cash Costs (US$/lb)
-------------------------------- -------------------------------
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30,(1) September 30, September 30,(1)
--------------- ---------------- -------------- ----------------
(Unaudited) 2006 2005 2006 2005 2006 2005 2006 2005
------------------------- ---------------- -------------- ----------------
South
America 80 - 222 - $ 0.65 - $ 0.62 -
Australia
Pacific 15 - 45 - 1.56 - 1.46 -
---------------------------------------------------------------------------
Total 95 - 267 - $ 0.81 - $ 0.77 -
---------------------------------------------------------------------------
Total Gold Production Costs (US$/oz)
------------------------------------
Three months Nine months
ended ended
September 30, September 30,
------------------- ----------------
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
Direct mining costs at market
foreign exchange rates $ 282 $ 237 $ 285 $ 263
Gains realized on currency and
commodity hedge contracts (11) (21) (11) (23)
By-product credits (12) (23) (16) (27)
---------------------------------------------------------------------------
Cash operating costs 259 193 258 213
Royalties 17 11 18 11
Production taxes 2 4 3 3
Accretion and other costs 3 2 3 2
---------------------------------------------------------------------------
Total cash costs(2) 281 210 282 229
Amortization 73 72 74 77
Inventory purchase accounting
adjustments - - 2 -
---------------------------------------------------------------------------
Total production costs $ 354 $ 282 $ 358 $ 306
---------------------------------------------------------------------------
Total Copper Production Costs (US$/lb)
--------------------------------------
Three months Nine months
ended ended
September 30, September 30,
--------------------- ----------------
(Unaudited) 2006 2005 2006 2005
---------------------------------------------------------- ----------------
Cash operating costs $ 0.79 - $ 0.76 -
Royalties 0.02 - 0.01 -
---------------------------------------------------------------------------
Total cash costs(2) 0.81 - 0.77 -
Amortization 0.14 - 0.13 -
Inventory purchase accounting
adjustments 0.09 - 0.26 -
---------------------------------------------------------------------------
Total production costs $ 1.04 $ - $ 1.16 $ -
---------------------------------------------------------------------------
(1) Barrick's share of acquired Placer Dome mines' production and total
cash costs for the period January 20, 2006 to September 30, 2006.
(2) Total cash costs per ounce/pound excludes amortization and inventory
purchase accounting adjustments. Total cash costs per ounce/pound is a
performance measure that is used throughout this Third Quarter Report
2006. For more information see pages 17 to 18 of the Company's MD&A.
CORPORATE OFFICE TRANSFER AGENTS AND REGISTRARS
Barrick Gold Corporation CIBC Mellon Trust Company
BCE Place, TD Canada Trust Tower, P.O. Box 7010,
Suite 3700 Adelaide Street Postal Station
161 Bay Street, P.O. Box 212 Toronto, Ontario M5C 2W9
Toronto, Canada M5J 2S1 Tel: (416) 643-5500
Tel: (416) 861-9911 Toll-free throughout
Fax: (416) 861-0727 North America: 1-800-387-0825
Toll-free within Canada and Fax: (416) 643-5660
United States: 1-800-720-7415 Email: inquiries@cibcmellon.ca
Email: investor@barrick.com Website: www.cibcmellon.com
Website: www.barrick.com
SHARES LISTED Mellon Investor Services L.L.C.
ABX - The Toronto Stock Exchange 480 Washington Blvd.
The New York Stock Exchange Jersey City, NJ 07310
BGD - The London Stock Exchange Email: shrrelations@mellon.com
Website: www.mellon-investor.com
INVESTOR CONTACT MEDIA CONTACT
James Mavor Vincent Borg
Vice President, Senior Vice President,
Investor Relations Corporate Communications
Tel: (416) 307-7463 Tel: (416) 307-7477
Email: jmavor@barrick.com Email: vborg@barrick.com
/T/
ADDITIONAL INFORMATION
On August 4, 2006, Barrick Gold Corporation filed a tender offer statement related to its tender offer for the
outstanding common shares of NovaGold Resources Inc. On September 15, 2006, September 29, 2006, October 12,
2006 and October 25, 2006, Barrick filed a Notices of Extension relating to the tender offer statement.
Investors and security holders of NovaGold are urged to read the tender offer statement and related documents,
because they contain important information. Investors and security holders of NovaGold may obtain a free copy
of the tender offer statement and other documents filed by Barrick Gold Corporation with the SEC at the SEC's
website at www.sec.gov. The tender offer statement may also be obtained for free from Barrick Gold Corporation
on its website or by directing a request to Barrick Gold Corporation's investor relations department.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included in this press release, including any information as to our future financial or
operating performance and other statements that express management's expectations or estimates of future
performance, constitute "forward-looking statements." The words "expect", "will", "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: changes in the worldwide price of gold or
certain other commodities (such as copper, silver, fuel and electricity) and currencies; changes in U.S. dollar
interest rates or gold lease rates; risks arising from holding derivative instruments; ability to successfully
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; the speculative nature of gold exploration and development, including the risks
of diminishing quantities or grades of reserves, adverse changes in our credit rating, contests over title to
properties, particularly title to undeveloped properties; and the risks involved in the exploration,
development and mining business. These factors are discussed in greater detail in the Company's most recent
Form 40-F/Annual Information Form on file with the US 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.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Barrick Gold Corporation
Vincent Borg
Senior Vice President, Corporate Communications
(416) 307-7477
(416) 861-1509 (FAX)
Email: vborg@barrick.com
-0-
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