First Year Reporting Combined Operations - Barrick/Homestake
TORONTO--(BUSINESS WIRE)--Feb. 14, 2002--Barrick Gold Corporation (NYSE:ABX) (LSE:ABX) (PARIS:ABX) (SWISS:ABX) (TSE:ABX) today reported operating results for 2001, with record production of 6.1 million ounces of gold at cash costs of US$162 per ounce, while proven and probable gold reserves increased to 82.3 million ounces.
"With the Homestake merger completed," said Barrick President and Chief Executive Officer Randall Oliphant, "we have eight major properties on four continents, a promising exploration portfolio and -- with our strong balance sheet -- we have the ability to grow organically or through disciplined acquisitions."
For the fourth quarter of 2001, the Company reported net income of US$55 million (US11 cents per share) before one-time charges. After recording costs associated with the merger of US$117 million (US$107 million after tax) and a provision for the judgement rendered in the Troilus lawsuit of US$59 million (US$42 million after tax), Barrick reported a fourth quarter loss of US$94 million (US17 cents per share). The Company has appealed the Troilus judgment.
Barrick's earnings for 2001 were US$245 million (US46 cents per share) compared to US$168 million in 2000 (US32 cents per share), before the charges referred to above. Net income was US$96 million (US18 cents per share) compared to a loss of US$1,189 million (US$2.22 per share) in 2000. Operating cash flows were US$721 million (US$1.35 per share) in 2001 compared to US$940 million (US$1.76 per share) in 2000.
Premium Gold Sales Program
The Company achieved a premium over the spot price of gold for the 14th year in a row, generating US$289 million in additional revenue in 2001. Barrick realized US$341 per ounce on its gold sales (61 percent of pro forma production); a premium of US$70 per ounce over the average spot price of US$271. Overall, the combined company realized US$317 per ounce, a US$46 per ounce premium over the spot price of gold.
The total number of forward sales contracts stands at 18.2 million ounces at December 31, 2001, including the addition of 1.9 million ounces from Homestake. This equates to 22 percent of reserves, which is in line with Barrick's historic average of 21 percent.
For 2002, the Company currently intends to deliver 50 percent of its production at US$365 per ounce with the balance sold on the spot market. Considering current market conditions and the larger production base with the merger, the Company lowered the percentage of production delivered into the Program to 50 percent.
Production and cost targets in line for 2001, reserves increase
Gold production in 2001 increased to a record 6.1 million ounces, from 5.95 million ounces in 2000 for the combined Barrick/Homestake. Total cash costs per ounce were US$162 per ounce, compared to US$155 per ounce in 2000.
For 2002, Barrick expects production of 5.7 million ounces of gold at total cash costs of US$167 per ounce. The lower production is due principally to the planned closure of several mines.
The Company reported proven and probable gold reserves for 2001 of
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82.3 million ounces, up from 79.3 million ounces of gold for the combined Barrick/Homestake in 2000, after producing more than 6 million ounces during the year. Reserve increases at Veladero, Bulyanhulu and the Cowal project more than offset lower reserves in North and South America including a 1.7 million ounce decrease of reserves at the Meikle Mine.
"We are pleased with our increased gold reserves and we have plans to advance our development projects," said John Carrington, Vice Chairman and Chief Operating Officer. "Overall, each of our operations made strides to improve their operating contribution."
Outlook
Production for 2002 is expected to be 5.7 million ounces of gold, of which one half is expected to be sold at US$365 per ounce under the Company's Premium Gold Sales Program, with the balance being sold on the spot market. Cash costs and total production costs are expected to be US$167 and US$254 per ounce, respectively. In addition, the Company expects administration and exploration expenses to decline to US$55 million each. Interest expense is expected to be US$55 million, as the Company will no longer be capitalizing interest, with the completion of Bulyanhulu and Rodeo and the deferral of Pascua-Lama. Capital spending is expected to decrease to less than US$230 million (excluding non-cash amortization of deferred mining costs).
Barrick is also focused on the opportunity the merger brings to a unified Pascua-Lama and Veladero district, with 25 million ounces of proven and probable reserves. The Company anticipates both capital and operating cost synergies between the two deposits, which are located just 5 kilometers apart. At Veladero, a feasibility study for a phase one, valley-fill heap leach operation is expected to be completed in the first quarter of 2002. Further optimization of the project and permitting work will take place during the year.
Barrick enters 2002 with the strongest balance sheet in the gold mining industry, high quality assets, a cash and short-term investment position of US$733 million and virtually no net debt.
Certain statements included herein, including those regarding, production, realized gold prices and costs constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Barrick or of the gold mining industry to be materially different from future results, performance or achievements expressed or implied by those forward looking statements. These risks, uncertainties and other factors include, but are not limited to, changes in the worldwide price of gold or certain other commodities and currencies and the risks involved in the exploration, development and mining business. These factors are discussed in greater detail in Barrick's most recent Annual Information Form and Management's Discussion and Analysis of Financial and Operating Results" on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.
Key Statistics
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Twelve months ended Dec. 31,
(in United States dollars) (Unaudited) 2001 2000
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Operating Results
Gold production (000's ounces) 6,124 5,950
Gold sold (000's ounces) 6,278 5,794
Per Ounce Data
Average spot gold price $271 $279
Average realized gold price 317 334
Cash operating costs 155 147
Total cash costs (1) 162 155
Total production costs 247 240
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Financial Results (millions)
Revenue from gold sales $1,989 $1,936
Net income (loss) 96 (1,189)
Operating cash flow 721 940
Per Share Data (dollars)
Net income (loss) (fully diluted) $0.18 ($2.22)
Operating cash flow 1.35 1.76
Common shares (as at Dec. 31) (millions)
Outstanding 536 536
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As at As at
Dec. 31, Dec. 31,
2001 2000
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Financial Position (millions)
Cash and short-term investments $733 $822
Working capital 484 576
Long-term debt 793 901
Shareholders' equity 3,192 3,190
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(1) Includes royalties and production taxes.
Gold Production and Cost Summary
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Production Total Cash Costs
For the year ended December 31, 2001 2000 2001 2000
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North America
Betze-Post 1,549,975 1,646,640 $215 $195
Meikle 712,688 805,718 147 117
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Goldstrike Property 2,262,663 2,452,358 193 169
Round Mountain 373,475 243,734 187 202
Hemlo 307,514 304,882 196 190
Eskay Creek 320,784 333,167 49 19
Holt-McDermott 83,577 90,712 165 148
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3,348,013 3,424,853 179 157
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Australia
Plutonic 288,360 253,643 166 198
Darlot 125,024 127,099 173 192
Lawlers 103,915 101,144 191 214
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Yilgarn District Total 517,299 481,886 173 200
Kalgoorlie 384,362 393,794 203 189
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901,661 875,680 186 195
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South America - Pierina 911,076 821,614 40 43
Africa - Bulyanhulu 241,575 - 197 -
Other/mines closing in 2002 721,771 827,524 198 212
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Total 6,124,096 5,949,671 $162 $155
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Consolidated Production Costs per Ounce
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For the year ended December 31, 2001 2000
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Direct mining costs $157 $143
Applied stripping 7 15
By-product credits (9) (11)
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Cash operating costs 155 147
Royalties 6 7
Production taxes 1 1
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Total cash costs 162 155
Amortization 76 79
Reclamation 9 6
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Total production costs $247 $240
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Management's Discussion and Analysis
For the year, the Company produced 6.1 million ounces of gold at total cash costs of $162 per ounce, with the recently acquired Homestake mines contributing 2.4 million ounces at $167 per ounce to the 2001 total. Barrick benefited from record production and costs at Pierina, Round Mountain and from the Yilgarn operations, as well as strong contributions from Goldstrike and Eskay Creek and production from the Company's newest mine, Bulyanhulu in Tanzania. Net income, before one-time merger related costs ($117 million) and a litigation ($59 million) initiated several years ago against Homestake, was $245 million, while operating cash flows were $721 million for 2001. Those totals compare to net income (before a provision for mining assets) of $168 million and operating cash flow of $940 million for 2000.
Overview
Barrick completed the merger with Homestake Mining Company ("Homestake"), an international gold mining company with operating mines in the United States, Canada, Chile, and Australia on December 14, 2001. The Company is projected to be the world's second-largest gold producer, with among the lowest cash costs of any major producer and the industry's strongest balance sheet. Barrick issued approximately 140 million shares to acquire Homestake at a total cost of $2.3 billion.
During the second half of the year, the Financial and Administrative Integration Team increased the estimated annual merger-related cost savings from $55 million a year, beginning in 2002, to $60 million, with the Company anticipating further costs savings in 2003 and 2004. A second integration team, focused on operations, undertook a comprehensive assessment of the potential to expand production and cost savings opportunities at the combined company's properties on four continents. Some of the opportunities identified in this exercise are reflected in the 2002 mine operating plans, while mine management looks to implement additional opportunities this year and next. A third integration team, tasked with examining development opportunities, is assessing synergies at the Pascua-Lama/Veladero properties as a unified district, with an emphasis on greater speed in development, as well as reduced capital and operating expenditures.
Gold Sales
Revenue for 2001 reached $1,989 million on gold sales of 6,278,000 ounces, compared with $1,936 million on gold sales of 5,794,000 ounces in 2000. The higher revenues result from an 8 percent increase in gold sales, partially offset by a $17 per ounce or 5 percent decline in the realized price. For the year, Barrick realized a $70 per ounce premium over the average spot price of $271 on the 61 percent of production delivered into the Company's Premium Gold Sales Program, compared with a realized price of $360 in 2000 and a premium of $84 on the 63 percent of production delivered into the Program. The balance of the ounces sold -- principally Homestake's production -- were sold at an average price of $277 per ounce in 2001. Overall, the Company realized $317 per ounce, $46 higher than the average spot price for the year, generating an additional $289 million in revenue.
The number of spot deferred contracts in the Company's Premium Gold Sales Program totaled 18.2 million ounces at December 31. This represents approximately 22 percent of reserves, deliverable over the next 15 years at an average minimum price of $345 per ounce, with a minimum floor price of $365 per ounce on 50 percent of planned production in 2002. The balance of 2002 production is expected to be sold at spot gold prices.
OPERATIONS OVERVIEW
For the year 2001, the Company reported total operating costs, including reclamation, of $1,080 million, compared with $950 million for the year prior. On a per-ounce basis, total cash costs for the year were $162, compared to $155 per ounce for 2000. With the continued weakness in gold prices, all of the Company's mines have focused on reducing costs under their control across all areas of their operation, including unit mining, processing and administrative costs per ton. At the same time, higher power costs and lower grades at Goldstrike and lower recovery rates during start-up at Bulyanhulu have resulted in the higher cash costs per ounce compared to the prior year period. Barrick's Other Properties include seven mines in various stages of closure. Two of the mines were closed in 2001 (Homestake and Mount Charlotte), with five scheduled to close in 2002 (El Indio, Bousquet, McLaughlin, Ruby Hill and Agua de la Falda).
Reconciliation of Total Cash Costs Per Ounce to Financial Statements
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(in millions of United States dollars Twelve months ended Dec. 31,
except per ounce amounts) 2001 2000
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Operating costs per financial
statements $1,080 $950
Reclamation accrual and other 60 50
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Operating costs for per ounce
calculation $1,020 $900
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Ounces sold (thousands) 6,278 5,794
Total cash costs per ounce $162 $155
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Total cash costs per ounce data is calculated in accordance with The Gold Institute Production Cost Standard (the "Standard"). The Gold Institute is a worldwide association of suppliers of gold and gold products and includes leading North American gold producers. Adoption of the Standard is voluntary, and the data presented may not be comparable to data presented by other gold producers. Cash costs per ounce are derived from amounts included in the Statements of Income and include mine site operating costs such as mining, processing, administration, royalties and production taxes, but exclude amortization, reclamation costs, financing costs, capital, development and exploration costs.
North American Operations
Barrick's North American operations produced 3,348,013 ounces of gold, 55 percent of the Company's total production, at $179 per ounce. Round Mountain (Nevada) reported record results, while Eskay Creek (British Columbia) produced its second best results in the mine's history. The Goldstrike Property again contributed solid results, despite higher power costs and lower processed gold grades.
Goldstrike Property (Nevada)
The Goldstrike Property produced 2,262,663 ounces of gold in 2001, an 8 percent decrease compared to the property's record 2000 production, largely due to an anticipated 22 percent reduction in grades processed and marginally lower recovery rates, partially offset by higher throughput at the process facilities. At $193 per ounce, total cash costs for 2001 were higher than the year earlier of $169 per ounce because of the lower grades processed.
The Goldstrike Property has essentially moved to reserve grade in 2002, increasing throughput to maintain its consistent 2 million-ounce production level. For 2002, the property is expecting to produce 2.1 million ounces of gold, 7 percent lower than 2001, while total cash costs are expected to rise 6 percent to $205 per ounce. Through productivity improvements, the Property expects to be able to partially offset the anticipated 15% reduction in ore grades processed and a power cost increase -- the third in the last two years -- totaling $10 million, or $5 per ounce.
Betze-Post Mine
The Betze-Post Mine produced 1,549,975 ounces of gold for the year, 6 percent lower than the previous year, as mining of high-grade ore in the 7th West Layback was completed in the second quarter 2001. Total cash costs were $215 per ounce, compared to $195 in 2000. Recovery rates were 2.5 percent lower than the year earlier, due to a significant amount of transitional ore (1.5 million tons) processed primarily in the third quarter. The Mine is expecting to experience lower recovery rates on the planned 2 million tons of transitional ore to be encountered over the next two years.
The Mine expects to produce about 1.4 million ounces of gold in 2002 at total cash costs of $220 per ounce. The lower production and higher costs relate to 20 percent lower grades processed, partially offset by lower unit mining, processing and administration costs.
Meikle Mine
The Meikle Mine produced 712,688 ounces of gold for the year, 7 percent higher than plan. Total cash costs were $147 per ounce, compared to $117 per ounce in 2000 with higher costs attributable to planned mining of lower grade ore in Meikle, more low-grade development ore and higher training costs.
Tons mined surpassed plan by 13 percent in 2001, due to an increase in development ore from Griffin and to the earlier than expected access to Rodeo development ore.
Production for 2002 is expected to total 708,000 ounces. Total cash costs are expected to be $173 per ounce, with the higher costs related to a decrease of 14 percent in ore grades processed, an increase of 18 percent in tons mined and higher mining costs.
Round Mountain (Nevada)
Round Mountain contributed 373,475 ounces of gold in 2001, at a total cash cost of $187 per ounce, to Barrick's 50 percent account. The record production and costs were due to higher gold grades through the mill, as well as to Round Mountain's reusable leach pad. In addition, the run-of-mine leach pad contributed 5 percent more gold than in 2000.
For 2002, the Mine is expected to contribute 362,500 ounces of gold to Barrick's account at cash costs of $198 per ounce. The marginally lower production and higher costs are primarily due to lower production from the run-of-mine leach pad. The Mine has a $2.5 million exploration program planned to follow up on the Gold Hill target, where wide space drilling identified prospective opportunities in 2000.
Eskay Creek (British Columbia)
Eskay Creek produced 320,784 ounces of gold and 15.5 million ounces of silver in 2001 at a total cash cost of $49 per ounce. The low cash costs are attributable to the richness of the ore body. 2001 was the second best year in the Mine's seven-year history. Productivity improvement in the underground, new equipment purchases and relaxing of the blending constraints led to a 8 percent improvement in tons mined in 2001. Eskay Creek's mining and processing rates are expected to continue to increase an additional 12 percent in 2002.
For 2002, production is expected to rise to 366,000 ounces of gold and 16 million ounces of silver, at total cash costs of $51 per ounce, despite marginally lower gold and silver grades. The Mine has an extensive exploration program set to begin in 2002 to follow up on encouraging drill results from the fourth quarter of 2001.
Hemlo (Ontario)
Hemlo is a joint venture of the David Bell and Williams underground mines and the Williams open pit, of which Barrick owns a 50 percent interest. In 2001, Hemlo produced 307,514 ounces of gold to Barrick's account, at total cash costs of $196 per ounce. The increase in production and decrease in cash costs are attributable to productivity improvements in the underground and the mill since the closure of the David Bell mill in 1999. Increased production from the Williams pit also contributed to the strong results. Exploration in 2001 added 900,000 ounces - before production (450,000 ounces to Barrick's account) to reserves, primarily from the expansion of the Williams pit.
For 2002, production is expected to total 304,000 ounces of gold at a total cash cost of $192 per ounce. The marginal decrease in cash costs relates to a slight reduction in grades processed and the additional cost of operating a new grinding mill, offset by improved recovery rates and throughput from the new mill scheduled to be completed in the first quarter of 2002.
South American Operations
Barrick's South American operations consist of the Company's second largest cash flow generator, the low-cost Pierina Mine, which set property records for production and costs in 2001, and the Company's largest development project, the Pascua-Lama and Veladero district, which straddles the Chilean and Argentinean border. Barrick also has significant exploration programs in Peru, and, to a lesser extent, in Chile and Argentina, where the Company believes prospects for discovery of large gold mines are good.
Pierina Property (Peru)
The Pierina Mine reported record production of 911,076 ounces of gold in 2001, at the lowest costs in the Mine's history of $40 per ounce. In 2000, Pierina's production totaled 821,614 ounces at a total cash cost of $43 per ounce. Unit operating costs -- particularly administrative, labor and reagent costs -- continue to decrease from earlier life-of-mine estimates. In 2001, 220,000 ounces were added to reserves through an infill drilling program, which successfully converted material previously defined as waste into ore. The 2002 program will follow up on targets located near surface at the north end of the pit, as well as one adjacent to the final wall of the south end of the pit. In addition, in 2002, the Mine will finalize the optimization plan that began in 2001, with an expected further reduction in life-of-mine cash costs.
Pierina expects to produce 820,000 ounces of gold in 2002, at a total cash cost of $77 per ounce. The higher costs reflect a 20 percent reduction in grades processed, a 26 percent increase in tons processed and higher applied mining costs.
Pascua-Lama and Veladero Project
(Chile / Argentina)
Current work on the Pascua-Lama project is directed at investigating improvements to infrastructure and process costs. On the process front, initial studies indicate opportunities to lower the capital cost of developing the project. The Company has made the decision to postpone construction start-up, based on current low gold and silver prices; however, optimization work on the development plan as well as permitting is continuing. The Company is evaluating unified development opportunities made possible by the merger with Homestake and early work suggests that both Pascua-Lama and Veladero will benefit in a variety of ways, both in terms of capital and operating cost savings. Immediate synergies include the sharing of infrastructure, administration costs and background environmental work, as well as the incorporation of Barrick's Filo Norte reserves into the Veladero mine plan.
The Veladero Project is currently half way through its 2001/2002-field season. Activities in 2001 consisted of over 50,000 meters of definition drilling to expand reserves to 8.4 million ounces, for Canadian reserve reporting purposes. Extensive metallurgical test work is underway, which includes tunneling into the ore body for approximately 825 tons of ore for test heap leaching on site, as well as work for the environmental permits. An updated feasibility study is expected to be completed in early 2002 to bring the project into reserves for US GAAP purposes. The feasibility study envisions an open pit mining operation with a two stage crushing circuit and conventional valley-fill heap leach, very similar to the Company's Pierina Mine. Veladero could be the first phase of development of the consolidated district that extends approximately 125 kilometers along the Chilean/Argentinean border.
The Pascua-Lama/Veladero District has the capability to be a low cost, long-life gold producing district that could provide the Company with significant growth in production, earnings, and cash flow in the future.
Australian Operations
With the Homestake merger providing two key assets -- a 50 percent interest in the Kalgoorlie Super Pit, Australia's largest gold mine, and three mines comprising the Yilgarn district -- Barrick now ranks as the second largest gold producer in Australia. In addition, the merger adds a portfolio of exploration properties, the most advanced of which is the Cowal project, with 2.8 million ounces of proven and probable reserves and an updated development plan underway.
Plutonic
(Western Australia)
Plutonic, the largest of the three Yilgarn district mines, produced 288,360 ounces of gold, a 14 percent increase over 2000, at total cash costs 16 percent lower than last year at $166 per ounce. A higher open pit mining rate, higher gold grades from the underground and improved recovery rates combined with a favorable exchange rate led to the higher production at lower cost.
For 2002, production is expected to increase an additional 13 percent to 325,000, at total cash costs of $156 per ounce. The higher production and lower costs are primarily due to the expanding higher-grade underground operations, where the mining rate is increasing 33 percent, increasing the overall average grade processed by 40 percent.
Darlot and Lawlers
(Western Australia)
The Darlot Mine produced 125,024 ounces of gold in 2001, similar to the previous year, while total cash costs declined 10 percent to $173 per ounce. The Lawlers Mine produced 103,915 ounces of gold at $191 per ounce, with production marginally higher than 2000 and costs 11 percent lower than the prior year, due to the favorable exchange rates.
For 2002, Darlot is expecting to increase production to 139,000 ounces at total cash costs of $154 per ounce, while Lawlers expects to increase production to 108,000 ounces at total cash costs of $178 per ounce.
Kalgoorlie (Super Pit)
(Western Australia)
The Kalgoorlie Super Pit produced 768,725 ounces of gold, of which 384,362 were on the Company's account at total cash costs of $203 per ounce. Production was marginally lower than in the prior year, while total cash costs were 7 percent higher. These results were due to marginally lower grades in both the open pit and underground and higher unit mining, processing and administration costs than the previous year. The higher open pit costs were due to higher fuel costs and lower productivity in areas around historical underground working voids. The higher underground costs were a result of winding down operations during the year. The underground ceased operations in the fourth quarter of 2001. Higher processing costs were due to higher maintenance costs and higher power and reagent costs.
For 2002, Barrick expects the Mine to produce 734,867 ounces of gold, 367,433 to the Company's account, at total cash costs of $205 per ounce with marginally lower overall gold grades after the closing of the higher-grade underground operation in 2001
Cowal Project
(New South Wales)
The Company acquired the Cowal project through the merger with Homestake, which had acquired Cowal in the spring of 2001. In the latter part of 2001, Homestake/Barrick began a technical program, including drilling and engineering studies to update the feasibility study. At year-end, 2.8 million ounces were added to reserves. The preliminary estimates are production of 250,000 ounces per year. In 2002, the Company will continue with the program, including further drilling, and finalize the technical program.
Tanzania
(East Africa)
Tanzania represents Barrick's newest frontier, with the opening of its first mine at Bulyanhulu in April 2001, as well as the Company's largest and most aggressive early stage exploration program in its history. The Company holds over 6,000 square kilometers in the Lake Victoria goldfields of northern Tanzania, one of the top exploration areas of the world for major new discoveries. In 2001, six areas underwent initial drill testing with positive results. The 2002 program will follow up drilling on targets initially tested last year, while completing a feasibility study for the Tulawaka Property in the second half of 2002.
Bulyanhulu Property
The Company's newest mine enjoyed a smooth start-up in 2001, working at or better than expectation in most areas. Recovery rates provided the only exception, running 7 percent below plan for most of the year. Improvements during the second half of the year led to recovery rates rising to 86 percent in December. The Mine produced 241,575 ounces of gold at total cash costs of $197 per ounce.
Mining rates averaged almost 1,700 tons per day, and unit-mining costs were on plan. The shaft should reach its planned depth and be fully equipped early in 2003, well ahead of the original plan's fourth quarter 2003 completion date.
Bulyanhulu's process facilities operated at 13 percent above forecast throughput levels for the year, while unit-processing costs were lower than plan, due to the higher throughput levels. The mill processed lower grade ore during the second half of the year while the process group worked on improving recovery rates. Gold recoveries, while lower than plan, improved to 86 percent in December, as modifications to the gravity circuit were completed. Modifications to the flotation plant to increase the recovery rate to design are expected to be implemented in the first half of 2002 at a cost of about $5 million.
As a result of significant exploration success during the first half of the year, Bulyanhulu's 2001 exploration program was doubled to more than 170,000 meters at an additional cost of $7 million. Second quarter development of an incline to access the east ore zone from the 4,700-meter elevation level is expected to be completed by the second half of 2002, at a cost of $7 million, and should provide a platform for additional exploration to begin in mid-2002. Preliminary engineering continues on the west and deep extensions of the ore body. As the ore body expands at depth and along strike, Bulyanhulu's development team is focused on how best to develop this expanding reserve base.
For 2002, production is expected to increase to 362,000 ounces of gold at $173 per ounce, benefiting from higher grades and recovery rates, particularly in the second half of the year.
Other Properties
Other Properties include seven mines in various stages of closure. Two of the mines were closed in 2001 (Homestake and Mount Charlotte), with five more scheduled to close in 2002 (El Indio, Bousquet, McLaughlin, Ruby Hill and Agua de la Falda). In 2001, Other Properties produced 721,771 ounces of gold, 12 percent of Company production, at an average total cash cost of $198 per ounce.
For 2002, the plan calls for Other Properties to produce 340,000 ounces of gold, 6 percent of Company production, at an average total cash cost of $193 per ounce. By year-end 2002, all of the mines in this group are expected to have ceased operations.
Exploration and Business Development
Total exploration and business development expenditures for the Company were $103 million in 2001, compared to $149 million in 2000. About half of the expensed exploration came in South America, with the balance spent in North America (17 percent), Tanzania (9 percent), Australia (8 percent) and the remainder on business development activities. The Company's exploration strategy is to maintain a geographic mix of projects at different stages in the exploration sequence. The world's changing economic conditions demand that major mining companies undertake more early-stage exploration than in the past because junior exploration companies are no longer active, and there are fewer new discoveries to buy or joint ventures to fund. Accordingly, Barrick is engaged in significant early stage exploration in four major areas where it has significant infrastructure: Peru, Tanzania, Australia and Chile/Argentina.
For 2002, exploration and business development expenditures are expected to total $52 million, of which 32% is expected to be spent in South America, 23% in North America, with 15% spent in Tanzania and Australia. The lower exploration expense reflects the expected conversion of Veladero to reserves under US GAAP early in 2002, allowing ongoing development work at the property to be capitalized, and $13 (after-tax) million in synergies from combining regional exploration offices and projects as a result of the Homestake merger.
Amortization
Amortization totaled $501 million, or $76 per ounce in 2001, compared to $493 million, or $79 per ounce in 2000. The increase in amortization is due in large part to 7 percent higher gold sales, partially offset by lower per ounce amortization at Other Properties, principally Bousquet. For 2002, amortization is expected to decrease to $492 million due to a 10 percent decrease in production, partially offset by higher amortization at certain properties. On a per ounce basis, amortization is expected to increase to $83 per ounce, due to higher amortization at Goldstrike with the completion of Rodeo in 2001, the reduction of reserves at Meikle and higher amortization at the Canadian Properties.
Administration
In 2001, administration costs increased $11 million, or 15 percent over the prior year. For 2002, administration costs are expected to decline 36 percent to $55 million, reflecting the first year of integrating the two companies and the associated administrative synergies. The costs for 2002 include the costs of certain Homestake offices through the first quarter of the year, at which time closures will occur.
Interest Expense
The Company incurred $67 million in interest costs in 2001, related primarily to the Company's $500 million of debentures, $200 million Bulyanhulu project financing and Homestake's $140 million line of credit. Of the amount incurred, $25 million was expensed, with the balance of $42 million capitalized to development and construction activities at Bulyanhulu, Rodeo and Pascua-Lama.
For 2002, interest costs are expected to decline to $55 million, $12 million lower than 2001, as a result of declining interest rates and the repayment in December of Homestake's $140 million line of credit. With the completion of Bulyanhulu and Rodeo and the deferral of Pascua-Lama, the Company expects to expense virtually all of the interest incurred.
Merger and Related Costs
Under US GAAP, the cost of the merger ($117 million) - including severance payments, advisory, legal, accounting, and other costs associated with combining the two companies - was charged to income in the fourth quarter, upon completion of the merger. The costs were higher than the original estimate of $75 to $100 million at the time of the merger announcement, due to higher than planned severance costs as the organizational structure was streamlined more than initially planned. As the integration unfolded, the mandate of the operational review team expanded to involve site visits to the combined Company's eight key assets on four continents during the five months between the date of the announcement and the completion of the merger. While this expanded mandate also contributed to higher merger-related costs, the review team identified opportunities for improvements at each of the Company's properties with implications for increased cost savings and production, and management intends to work with its mine managers to implement changes this year and next.
Litigation
On Jan. 16th, 2002 the Supreme Court of British Columbia ruled in favour of Inmet Mining Corporation, against Homestake Canada relating to the sale of the Troilus gold mine in 1997. The judgment, which has since been appealed, was for $59 million. Barrick has recorded a provision for this amount, which was recorded in the fourth quarter of 2001.
Income Taxes
The Company's effective tax rate for 2001 was 5 percent, compared to 27 percent in 2000, before merger costs and provisions. The 22 percent decline in the effective tax rate is attributable to a higher portion of earnings being realized in a lower-tax jurisdiction. The Company expects the tax rate to remain below 10 percent in 2002, with the benefit of $20 million of tax synergies, primarily related to integrating Barrick and Homestake's North American operations and the Company's corporate office.
Capital Expenditures
Capital expenditures for 2001 totaled $607 million. Principal expenditures included $312 million in North America, comprised of: Betze-Post applied stripping costs ($129 million), underground development of Meikle and Rodeo ($90 million) at the Goldstrike Property, and underground development at the Canadian Mines. In Tanzania, capital expenditures included development work at the Bulyanhulu Mine ($153 million). In Australia, capital expenditures ran $46 million to cover underground development and new mining equipment, while South America incurred $96 million, primarily for engineering and development work at Pascua-Lama and Veladero ($69 million) and $27 million at Pierina.
For 2002, capital expenditures are expected to decline to the lowest level in 14 years, totaling $354 million, including $126 million of deferred stripping costs from prior years. The principal expenditures include $195 million in North America, primarily due to applied stripping costs at Betze-Post ($110 million) and underground development at Meikle and the Canadian Mines; in Tanzania, underground development and processing upgrades at the Bulyanhulu Mine ($56 million); in Australia, million, primarily to expand underground operations, and $40 million in South America, primarily for metallurgical test work and the feasibility and environmental work at Veladero ($39 million), plus applied deferred stripping at Pierina ($16 million).
Cash Flow
Operating cash flow totaled $721 million for 2001, compared to $940 million in 2000. The lower cash flow in 2001 is due in large part to lower accounts payable with the completion of construction at Bulyanhulu and Rodeo, as well as higher cash costs and lower realized prices compared to the prior year.
The Company realized an average price of $317 per ounce on its gold sales, a $46 premium over the average spot price of $271 in 2001. 61 percent of production was sold at an average price of $341 per ounce, representing Barrick's stand-alone production before the merger, while Homestake's largely unhedged production was sold at an average price of $277 per ounce. As per plan, capital expenditures in 2001 were funded by cash flow from operations and the final draw down of Bulyanhulu's project financing.
For 2002, the Company should continue to benefit from its Premium Gold Sales Program, which expects a minimum realized price of $365 per ounce on 50 percent of planned 2002 production, with the balance to be sold at spot.
Outlook for the New Barrick
Half of the Company's 2002 production of 5.7 million ounces of gold is expected to be sold at US$365 per ounce with the balance at spot gold prices. With total cash costs of US$167 per ounce, total production costs are expected to be US$254 per ounce. In addition, the Company expects administration and exploration expenses to decline to US$55 million each, benefiting from the synergies from the merger. Interest expense is expected to be US$55 million, as the Company will no longer be capitalizing interest, with the completion of Bulyanhulu and Rodeo and the deferral of Pascua-Lama. Capital spending is expected to decrease to less than US$230 million (excluding non-cash amortization of deferred mining costs). This would be the lowest level in 14 years, which, based on current gold prices, would result in the highest free cash flows in the Company's history.
Barrick enters 2002 with the strongest balance sheet in the gold mining industry, high quality assets, a cash and short-term investment position of US$733 million and virtually no net debt.
The Company has included cash costs per ounce data because it understands that certain investors use this information to determine the Company's ability to generate cash flow for use in investing and other activities. Management believes that conventional measures of performance prepared in accordance with generally accepted accounting principles ("GAAP") do not fully illustrate the ability of the operating mines to generate cash flow. The data is furnished to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.
Consolidated Statements of Income
----------------------------------------------------------------------
(in millions of United States dollars,
except per share data, US GAAP basis) Twelve months ended Dec. 31,
(Unaudited) 2001 2000
----------------------------------------------------------------------
Gold sales $1,989 $1,936
----------------------------------------------------------------------
Costs and expenses
Operating 1,080 950
Amortization 501 493
Administration 86 75
Exploration and business
development 103 149
Merger and related costs 117 -
Provision for mining assets
and other unusual charges 59 1,627
----------------------------------------------------------------------
1,946 3,294
----------------------------------------------------------------------
Interest and other income 32 14
Interest on long-term debt (25) (26)
Non-hedge derivative gains
(loss) 33 (5)
----------------------------------------------------------------------
Income (loss) before income
taxes and other items 83 (1,375)
Income taxes 14 209
----------------------------------------------------------------------
Income (loss) before changes
in accounting principles 97 (1,166)
Cumulative effect of changes
in accounting principles (1) (23)
----------------------------------------------------------------------
Net income (loss) for the year $96 ($1,189)
----------------------------------------------------------------------
Net income (loss) for the year
per share
Basic and fully diluted $0.18 ($2.22)
----------------------------------------------------------------------
see accompanying notes to consolidated financial statements
Consolidated Statements of Cash Flow
----------------------------------------------------------------------
(in millions of United States dollars, Twelve months ended Dec. 31,
US GAAP basis) (Unaudited) 2001 2000
----------------------------------------------------------------------
Cash provided by operating activities $721 $940
----------------------------------------------------------------------
Cash provided by (used in)
investing activities
Property, plant and equipment (607) (710)
Short-term investments (153) 130
Restricted cash (24) 2
Purchase and sale of mining
properties - (141)
Other 5 10
----------------------------------------------------------------------
Cash (used in) investing activities (779) (709)
----------------------------------------------------------------------
Cash provided by (used in)
financing activities
Capital stock 7 6
Long-term debt
Proceeds 55 236
Repayments (152) (187)
Dividends (93) (94)
----------------------------------------------------------------------
Cash (used in) financing activities (183) (39)
----------------------------------------------------------------------
Effect of exchange rate
changes on cash and equivalents (1) (6)
Increase (decrease) in cash
and equivalents (242) 186
Cash and equivalents at
beginning of year 816 630
----------------------------------------------------------------------
Cash and equivalents at end of year $574 $816
----------------------------------------------------------------------
see accompanying notes to consolidated financial statements
Consolidated Balance Sheets
----------------------------------------------------------------------
As at As at
(in millions of United States dollars, Dec. 31, Dec. 31,
US GAAP basis) (Unaudited) 2001 2000
----------------------------------------------------------------------
Assets
Current assets
Cash and equivalents $574 $816
Short-term investments 159 6
Accounts receivable 58 59
Inventories and deferred expenses 223 285
----------------------------------------------------------------------
1,014 1,166
Property, plant and equipment 3,912 3,994
Other assets 276 233
----------------------------------------------------------------------
$5,202 $5,393
----------------------------------------------------------------------
Liabilities
Accounts payable and accrued
liabilities $521 $587
Current portion of long-term
debt 9 3
----------------------------------------------------------------------
530 590
Long-term debt 793 901
Other long-term obligations 443 401
Deferred income taxes 244 311
----------------------------------------------------------------------
2,010 2,203
----------------------------------------------------------------------
Shareholders' equity
Capital stock 4,062 4,051
Deficit (763) (766)
Accumulated other
comprehensive loss (107) (95)
----------------------------------------------------------------------
3,192 3,190
----------------------------------------------------------------------
$5,202 $5,393
----------------------------------------------------------------------
Notes to Consolidated Financial Statement
The accompanying unaudited annual financial statements are prepared in accordance with generally accepted accounting principles ("GAAP") in the United States. They do not include all of the information and disclosures required by United States GAAP for annual financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included in these financial statements.
On December 14, 2001, a wholly owned subsidiary of Barrick merged with Homestake Mining Company. Under the terms of the agreement, approximately 139.5 million shares of Barrick common stock were issued in exchange for all the outstanding shares of Homestake common shares based upon an exchange ratio of 0.53:1. The merger was accounted for as a pooling-of-interests. Accordingly, the consolidated financial statements give retroactive effect to the merger, with all periods presented as if Barrick and Homestake had always been combined. Certain reclassifications have been made to conform the presentation of Barrick and Homestake.
Premium Gold Sales Program
Barrick's Premium Gold Sales Program as at December 31, 2001 is made up as follows and incorporates all positions associated with the Homestake merger on December 14, 2001.
The average price of the spot deferred contracts reflects the expected future value incorporating an average lease rate assumption of 2.00 percent. Lease rates are fixed on 100 percent of the position to 2005. The weighted average lease rate on the total spot deferred position is 1.97 percent.
At December 31, 2001, the mark-to-market gain on Barrick's Premium Gold Sales Program was $356 million calculated at a spot price of $279 per ounce, prevailing market interest rates and volatilities.
---------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 2008+ Totals
---------------------------------------------------------------------
Spot Deferred
Contracts
Ounces (000) 2,800 2,600 2,800 1,400 1,500 1,500 5,600 18,200
Average Price
($/oz.) 365 340 340 340 341 343 345 345
Min-Max Contracts
Ounces (000) 1,600 1,600
Average Floor
Price ($/oz.) 272 272
Average Cap Price
($/oz.) 297 297
Short-Term Call
Options Sold
Ounces (000) 1,330 1,330
Average Strike
($/oz.) 303 303
Long-Term Call
Options Sold
Ounces (000) 425 570 550 370 190 900 3,005
Average Strike ($/oz.) 363 328 336 364 377 358 350
---------------------------------------------------------------------
All dollar amounts are in United States dollars, unless otherwise
indicated.
Silver Sales Program
Barrick's Silver Sales Program as at December 31, 2001 is made up as follows:
Lease rates are fixed on 100 percent of the hedged positions to their intended delivery date. At December 31, 2001, the unrealized mark-to-market gain on the Silver Sales Program was $9 million calculated at a spot price of $4.61 per ounce, prevailing market interest rates and volatilities.
Spot Deferred Investments
Barrick's total spot deferred position has a nominal value of approximately $5.5 billion on which it earns an interest return. The Company achieves an interest return on this asset and the credit rating associated with this return is that of its hedging counterparties (average "AA"). The Company has conservatively diversified this investment by exchanging a portion of this return for a return based on a professionally managed diversified basket of bond funds/indices.
At December 31, 2001, 83 percent of the position was invested with "AA" hedging counterparties and the balance of 16 percent was invested in a basket of bond funds/indices with an average credit rating of "A-". The credit quality on the entire hedge position asset of $5.5 billion is "AA-".
Call Options Sold
The sold options can only be exercised by the counterparties on the expiry date and can be converted, at Barrick's option, into spot deferred contracts and rolled forward for up to 15 years. There is no requirement for Barrick to cash settle these transactions.
Credit Lines
Barrick's Program is not subject to margin requirements at any market price.
---------------------------------------------------------------------
2002 2003 2004 2005+ Totals
---------------------------------------------------------------------
Spot Deferred Contracts
Ounces (000) 11,000 7,000 3,000 3,000 24,000
Average Price ($/oz) 5.00 5.10 5.10 5.10 5.05
Short-Term Call Options Sold
Ounces (000) 12,000 12,000
Average Strike ($/oz) 4.88 4.88
Long-Term Call Options Sold
Ounces (000) 3,750 2,000 2,000 7,750
Average Strike ($/oz) 5.25 5.50 5.00 5.26
---------------------------------------------------------------------
Other Items
Barrick's Currency Program as at December 31, 2001 is made up as follows:
At December 31, 2001, the unrealized mark-to-market loss on the Currency Program was $8 million calculated at prevailing spot prices, market interest rates and volatilities.
---------------------------------------------------------------------
2002 2003 2004 2005+ Totals
---------------------------------------------------------------------
CANADIAN DOLLAR
Forwards
C$ (millions) 16 16
Average Price (US cents) 0.63 0.63
Min-Max Contracts
C$ (millions) 80 88 168
Average Floor Price
(US cents) 0.64 0.64 0.64
Average Cap Price (US cents) 0.67 0.67 0.67
AUSTRALIAN DOLLAR
Forwards
A$ (millions) 10 10 10 20 50
Average Price (US cents) 0.52 0.52 0.52 0.52 0.52
Min-Max Contracts
A$ (millions) 20 20 20 40 100
Average Floor Price
(US cents) 0.51 0.51 0.51 0.51 0.51
Average Cap Price (US cents) 0.52 0.52 0.52 0.52 0.52
---------------------------------------------------------------------
4. Segment Information
----------------------------------------------------------------------
For the twelve months ended Dec. 31,
(in millions of United States dollars,
US GAAP basis) (Unaudited) 2001 2000
----------------------------------------------------------------------
Revenues - gold sales Goldstrike $ 823 $ 850
Pierina 319 295
Bulyanhulu 60 -
Kalgoorlie 104 111
Eskay Creek 87 88
Hemlo 83 80
Plutonic 79 71
Round Mountain 103 63
Other 331 378
----------------------------------------------------------------------
1,989 1,936
----------------------------------------------------------------------
Operating costs Goldstrike 473 401
Pierina 45 41
Bulyanhulu 35 -
Kalgoorlie 80 76
Eskay Creek 16 7
Hemlo 61 56
Plutonic 49 54
Round Mountain 77 50
Other 244 265
----------------------------------------------------------------------
1,080 950
----------------------------------------------------------------------
Amortization Goldstrike 138 128
Pierina 175 176
Bulyanhulu 17 -
Kalgoorlie 17 18
Eskay Creek 40 58
Hemlo 10 10
Plutonic 12 10
Round Mountain 18 12
Other 74 81
----------------------------------------------------------------------
501 493
----------------------------------------------------------------------
Segment income Goldstrike 212 321
before income taxes Pierina 99 78
Bulyanhulu 8 -
Kalgoorlie 7 17
Eskay Creek 31 24
Hemlo 12 14
Plutonic 18 7
Round Mountain 8 1
Other 13 31
----------------------------------------------------------------------
408 493
----------------------------------------------------------------------
Provision for mining assets & other
unusual changes
Pascua-Lama - (1,036)
Goldstrike - (300)
Pierina - (184)
Homestake - (42)
Other (59) (65)
----------------------------------------------------------------------
(59) (1,627)
----------------------------------------------------------------------
Exploration and business development (103) (149)
Merger and related costs (117) -
Corporate expenses, net (46) (92)
Income taxes 14 209
----------------------------------------------------------------------
Net income (loss) before changes in
accounting principles 97 (1,166)
Cumulative effect of changes in
accounting principles (1) (23)
----------------------------------------------------------------------
Net income (loss) $ 96 $ (1,189)
----------------------------------------------------------------------
5. Supplemental Cash Flow Information
----------------------------------------------------------------------
(in millions of United States dollars, Twelve months ended Dec. 31,
US GAAP basis) (Unaudited) 2001 2000
----------------------------------------------------------------------
Components of cash provided by operating activities are as follows:
Net income (loss) $96 $(1,189)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Amortization 501 493
Amortization of deferred stripping
costs 150 137
Deferred income taxes (50) (287)
Provision for mining assets - 1,627
Reclamation and closure costs (net) 19 (4)
Deferred gains on closeout of forward
sales contracts (11) 4
Unrealized foreign currency exchange
losses on intercompany debt - 16
Change in fair value of derivative
instruments 16 13
Recovery of taxes on development costs - 27
Cumulative effect of changes in
accounting principles 1 23
Other items 4 11
Change in operating assets and liabilities:
Accounts receivable (2) 21
Inventories and deferred expenses 67 (33)
Accounts payable and accrued
liabilities (70) 81
----------------------------------------------------------------------
Cash provided by operating activities $721 $940
----------------------------------------------------------------------
Mine Statistics
-----------------------------------------------------------------------
UNITED STATES
For the twelve months Betze-Post Meikle
ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 154,233 143,205 1,373 1,257
Tons milled (thousands) 9,187 7,438 1,375 1,239
Average grade (ounces per ton) 0.200 0.250 0.560 0.700
Recovery rate (percent) 85.1% 87.5% 93.0% 92.9%
-----------------------------------------------------------------------
Production (thousands of ounces) 1,550 1,646 713 806
Production costs per ounce
Cash operating costs $ 207 $ 183 $ 133 $ 97
Royalties and production taxes 8 12 14 20
-----------------------------------------------------------------------
Total cash costs 215 195 147 117
Amortization 49 49 72 62
Reclamation 3 3 2 2
-----------------------------------------------------------------------
Total production costs 267 247 221 181
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $ 161 $ 46 $ 90 $ 80
-----------------------------------------------------------------------
-----------------------------------------------------------------------
AUSTRALIA
For the twelve months Plutonic Darlot
ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 12,134 11,677 794 784
Tons milled (thousands) 3,496 3,347 806 768
Average grade (ounces per ton) 0.091 0.085 0.161 0.171
Recovery rate (percent) 91.3% 89.1% 96.5% 96.8%
-----------------------------------------------------------------------
Production (thousands of ounces) 288 254 125 127
Production costs per ounce (A$)
Cash operating costs $ 308 $ 331 $ 323 $ 321
Royalties and production taxes 14 9 12 9
-----------------------------------------------------------------------
Total cash costs 322 340 335 330
Amortization 79 76 83 72
Reclamation 8 6 4 4
-----------------------------------------------------------------------
Total production costs (A$) 409 422 422 406
-----------------------------------------------------------------------
Total cash costs (US$) $ 166 $ 198 $ 173 $ 192
-----------------------------------------------------------------------
Total Production Costs (US$) $ 211 $ 246 $ 219 $ 236
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $ 11 $ 12 $ 11 $ 12
-----------------------------------------------------------------------
Mine Statistics
-----------------------------------------------------------------------
UNITED STATES
For the twelve months Goldstrike Total Round Mountain
ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 155,606 144,462 70,243 69,975
Tons milled (thousands) 10,562 8,677 3,702 3,387
Average grade (ounces per ton) 0.250 0.320 0.050 0.045
Recovery rate (percent) 87.4% 89.2% 83.7% 83.1%
-----------------------------------------------------------------------
Production (thousands of ounces) 2,263 2,452 373 244
Production costs per ounce
Cash operating costs $ 183 $ 154 $ 176 $ 191
Royalties and production taxes 10 15 11 11
-----------------------------------------------------------------------
Total cash costs 193 169 187 202
Amortization 57 53 46 53
Reclamation 3 3 16 17
-----------------------------------------------------------------------
Total production costs 253 225 249 272
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $ 251 $ 126 $ 15 $ 3
-----------------------------------------------------------------------
-----------------------------------------------------------------------
AUSTRALIA
For the twelve months Lawlers Kalgoorlie
ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 628 517 92,601 92,999
Tons milled (thousands) 775 729 13,192 13,822
Average grade (ounces per ton) 0.141 0.145 0.066 0.068
Recovery rate (percent) 95.2% 95.9% 84.3% 87.2%
-----------------------------------------------------------------------
Production (thousands of ounces) 104 101 384 394
Production costs per ounce (A$)
Cash operating costs $ 357 $ 359 $ 380 $ 315
Royalties and production taxes 13 9 13 10
-----------------------------------------------------------------------
Total cash costs 370 368 393 325
Amortization 88 62 87 72
Reclamation 15 20 9 10
-----------------------------------------------------------------------
Total production costs (A$) 473 450 489 407
-----------------------------------------------------------------------
Total cash costs (US$) $ 191 $ 214 $ 203 $ 189
-----------------------------------------------------------------------
Total Production Costs (US$) $ 243 $ 262 $ 252 $ 237
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $ 5 $ 10 $ 19 $ 15
-----------------------------------------------------------------------
Mine Statistics
-----------------------------------------------------------------------
CANADA
For the twelve Hemlo Eskay Creek
months ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 6,876 5,271 230 212
Tons milled (thousands) 3,849 3,247 108 96
Average grade
(ounces per ton) 0.170 0.190 0.940 0.940
Recovery rate (percent) 93.1% 94.8% 89.8% 89.4%
-----------------------------------------------------------------------
Production
(thousands of ounces) 308 305 321 333
Production costs
per ounce
Cash operating
costs $189 $183 $46 $15
Royalties and
production taxes 7 7 3 4
-----------------------------------------------------------------------
Total cash costs 196 190 49 19
Amortization 31 32 126 126
Reclamation 5 3 1 1
-----------------------------------------------------------------------
Total production costs 232 225 176 146
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $6 $5 $10 $6
-----------------------------------------------------------------------
-----------------------------------------------------------------------
PERU AFRICA
Pierina Bulyanhulu
For the twelve
months ended Dec. 31, 2001 2000 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 30,742 30,712 455 -
Tons milled (thousands) - - 778 -
Average grade
(ounces per ton) 0.097 0.100 0.380 -
Recovery rate (percent) - - 82.3% -
-----------------------------------------------------------------------
Production (thousands
of ounces) 911 822 242
Production costs
per ounce
Cash operating costs $40 $43 $186 -
Royalties and
production taxes - - 11 -
-----------------------------------------------------------------------
Total cash costs 40 43 197 -
Amortization 187 207 97 -
Reclamation 8 7 1 -
-----------------------------------------------------------------------
Total production costs 235 257 295 177
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $27 $49 $153 $177
-----------------------------------------------------------------------
Mine Statistics
-----------------------------------------------------------------------
CANADA
For the twelve Holt-McDermott
months ended Dec. 31, 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands) 489 525
Tons milled (thousands) 497 536
Average grade
(ounces per ton) 0.177 0.177
Recovery rate (percent) 95.4% 95.6%
-----------------------------------------------------------------------
Production (thousands
of ounces) 84 91
Production costs
per ounce
Cash operating costs $163 $146
Royalties and
production taxes 2 2
-----------------------------------------------------------------------
Total cash costs 165 148
Amortization 88 101
Reclamation 5 5
-----------------------------------------------------------------------
Total production costs 258 254
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $7 $6
-----------------------------------------------------------------------
-----------------------------------------------------------------------
OTHER MINES
For the twelve closing in 2002
months ended Dec. 31, 2001 2000
-----------------------------------------------------------------------
Tons mined (thousands)
Tons milled (thousands)
Average grade
(ounces per ton)
Recovery rate (percent)
-----------------------------------------------------------------------
Production (thousands
of ounces) 721 827
Production costs
per ounce
Cash operating
costs
Royalties and
production taxes
-----------------------------------------------------------------------
Total cash costs 198 212
Amortization 48 63
Reclamation 32 17
-----------------------------------------------------------------------
Total production costs 278 292
-----------------------------------------------------------------------
Capital expenditures
(US$ millions) $6 $10
-----------------------------------------------------------------------
Summary of Gold Mineral Reserves and Mineral Resources
For the year ended December 31, 2001
-----------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's)(oz/ton) (000's)
-----------------------------------------------------------------------
UNITED STATES
Betze-Post (proven and probable) 108,854 0.151 16,433
(mineral resource) 49,861 0.069 3,450
-----------------------------------------------------------------------
Meikle (proven and probable) 8,992 0.439 3,946
(mineral resource) 13,512 0.433 5,847
-----------------------------------------------------------------------
Goldstrike Property
Total (proven and probable) 117,846 0.173 20,379
(mineral resource) 63,373 0.147 9,297
-----------------------------------------------------------------------
Round Mountain (50%) (proven and probable) 118,489 0.019 2,245
(mineral resource) 32,857 0.015 493
-----------------------------------------------------------------------
Marigold (33%) (proven and probable) 25,177 0.027 680
(mineral resource) 44,115 0.014 632
-----------------------------------------------------------------------
CANADA
Eskay Creek (proven and probable) 1,426 1.245 1,775
(mineral resource) 575 0.504 290
-----------------------------------------------------------------------
Hemlo (50%) (proven and probable) 21,788 0.116 2,517
(mineral resource) 17,823 0.067 1,203
-----------------------------------------------------------------------
Holt-McDermott (proven and probable) 1,371 0.214 293
(mineral resource) 2,188 0.237 518
-----------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama (proven and probable) 296,411 0.057 16,862
(mineral resource) 242,686 0.030 7,166
-----------------------------------------------------------------------
Veladero (proven and probable) 196,573 0.043 8,416
(mineral resource) 133,003 0.030 3,954
-----------------------------------------------------------------------
Pierina (proven and probable) 89,233 0.053 4,748
(mineral resource) 89,056 0.015 1,332
-----------------------------------------------------------------------
AUSTRALIA
Plutonic (proven and probable) 8,526 0.186 1,588
(mineral resource) 19,991 0.134 2,686
-----------------------------------------------------------------------
Lawlers (proven and probable) 3,539 0.143 505
(mineral resource) 4,386 0.195 854
-----------------------------------------------------------------------
Darlot (proven and probable) 8,062 0.166 1,341
(mineral resource) 4,654 0.118 549
-----------------------------------------------------------------------
Yilgarn District
Total (proven and probable) 20,127 0.171 3,434
(mineral resource) 29,031 0.141 4,089
-----------------------------------------------------------------------
Kalgoorlie (50%) (proven and probable) 93,641 0.061 5,724
(mineral resource) 118,443 0.079 9,303
-----------------------------------------------------------------------
Cowal (proven and probable) 56,395 0.049 2,770
(mineral resource) 68,413 0.031 2,133
-----------------------------------------------------------------------
AFRICA
Bulyanhulu (proven and probable) 28,026 0.428 12,009
(mineral resource) 9,255 0.465 4,308
-----------------------------------------------------------------------
OTHER (proven and probable) 3,795 0.111 420
(mineral resource) 12,555 0.141 1,773
-----------------------------------------------------------------------
TOTAL (proven and probable) 1,070,298 0.077 82,272
(mineral resource) 863,373 0.054 46,491
-----------------------------------------------------------------------
Summary of Gold Mineral Reserves and Mineral Resources
For the year ended December 31, 2000
--------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's)(oz/ton) (000's)
--------------------------------------------------------------------
UNITED STATES
Betze-Post (proven and probable) 116,449 0.155 18,000
(mineral resource) 55,892 0.063 3,509
--------------------------------------------------------------------
Meikle (proven and probable) 14,100 0.458 6,451
(mineral resource) 10,234 0.365 3,739
--------------------------------------------------------------------
Goldstrike Property
Total (proven and probable) 130,549 0.187 24,451
(mineral resource) 66,126 0.110 7,248
--------------------------------------------------------------------
Round Mountain (50%) (proven and probable) 136,600 0.019 2,609
(mineral resource) 9,353 0.022 206
--------------------------------------------------------------------
Marigold (33%) (proven and probable) 10,085 0.035 355
(mineral resource) 6,880 0.029 200
--------------------------------------------------------------------
CANADA
Eskay Creek (proven and probable) 1,617 1.310 2,118
(mineral resource) 456 0.387 176
--------------------------------------------------------------------
Hemlo (50%) (proven and probable) 14,610 0.164 2,397
(mineral resource) 442 0.141 62
--------------------------------------------------------------------
Holt-McDermott (proven and probable) 2,088 0.194 406
(mineral resource) 2,829 0.155 438
--------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama (proven and probable) 296,411 0.057 16,862
(mineral resource) 242,685 0.030 7,166
--------------------------------------------------------------------
Veladero (proven and probable) 88,843 0.044 3,920
(mineral resource) 135,558 0.044 5,930
--------------------------------------------------------------------
Pierina (proven and probable) 92,925 0.061 5,655
(mineral resource) 17,753 0.033 586
--------------------------------------------------------------------
AUSTRALIA
Plutonic (proven and probable) 9,501 0.131 1,240
(mineral resource) 9,272 0.163 1,511
--------------------------------------------------------------------
Lawlers (proven and probable) 2,605 0.145 378
(mineral resource) 2,638 0.188 496
--------------------------------------------------------------------
Darlot (proven and probable) 8,921 0.157 1,405
(mineral resource) 3,904 0.111 433
--------------------------------------------------------------------
Yilgarn District
Total (proven and probable) 21,027 0.144 3,023
(mineral resource) 15,814 0.154 2,440
--------------------------------------------------------------------
Kalgoorlie (50%) (proven and probable) 104,555 0.060 6,270
(mineral resource) 81,020 0.072 5,833
--------------------------------------------------------------------
Cowal (proven and probable) - - -
(mineral resource) - - -
--------------------------------------------------------------------
AFRICA
Bulyanhulu (proven and probable) 23,373 0.428 10,015
(mineral resource) 7,383 0.618 4,566
--------------------------------------------------------------------
OTHER (proven and probable) 10,763 0.113 1,219
(mineral resource) 17,208 0.146 2,507
--------------------------------------------------------------------
TOTAL (proven and probable) 933,446 0.085 79,300
(mineral resource) 603,507 0.062 37,358
--------------------------------------------------------------------
Gold Mineral Reserves
As at December 31, 2001 PROVEN PROBABLE
---------------------------------------------------------------------
Tons Grade Ounces Tons Grade Ounces
Based on
attributable
ounces (000's) (oz/ton) (000's) (000's) (oz/ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 54,445 0.135 7,340 54,409 0.167 9,093
Meikle 2,288 0.549 1,256 6,704 0.401 2,690
Goldstrike
Property Total 56,733 0.152 8,596 61,113 0.193 11,783
Round
Mountain (50%) 87,983 1.587 1,587 30,506 0.022 658
Marigold (33%) 5,047 0.030 154 20,130 0.026 526
---------------------------------------------------------------------
CANADA
Eskay Creek 756 1.697 1,283 670 0.734 492
Hemlo (50%) 15,756 0.116 1,835 6,032 0.113 682
Holt-McDermott 127 0.196 25 1,244 0.215 268
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 37,738 0.062 2,355 258,673 0.056 14,507
Veladero 14,781 0.053 787 181,792 0.042 7,629
Pierina 53,540 0.054 2,891 35,693 0.052 1,857
---------------------------------------------------------------------
AUSTRALIA
Plutonic 2,112 0.045 96 6,414 0.233 1,492
Lawlers 1,036 0.141 146 2,503 0.143 359
Darlot 5,218 0.156 815 2,844 0.185 526
Yilgarn District
Total 8,366 0.126 1,057 11,761 0.202 2,377
Kalgoorlie (50%) 42,108 0.057 2,417 51,533 0.064 3,307
Cowal 3,058 0.055 169 53,337 0.049 2,601
---------------------------------------------------------------------
AFRICA
Bulyanhulu 1,463 0.412 603 26,563 0.429 11,406
---------------------------------------------------------------------
OTHER 3,652 0.110 401 143 0.133 19
---------------------------------------------------------------------
TOTAL 331,108 0.073 24,160 739,190 0.079 58,112
---------------------------------------------------------------------
Gold Mineral Reserves
As at December 31, 2001 TOTAL
--------------------------------------------------------------------
Tons Grade Ounces
Based on
attributable
ounces (000's) (oz/ton) (000's)
--------------------------------------------------------------------
UNITED STATES
Betze-Post 108,854 0.151 16,433
Meikle 8,992 0.439 3,946
Goldstrike
Property Total 117,846 0.173 20,379
Round
Mountain (50%) 118,489 0.019 2,245
Marigold (33%) 25,177 0.027 680
--------------------------------------------------------------------
CANADA
Eskay Creek 1,426 1.245 1,775
Hemlo (50%) 21,788 0.116 2,517
Holt-McDermott 1,371 0.214 293
--------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 296,411 0.057 16,862
Veladero 196,573 0.043 8,416
Pierina 89,233 0.053 4,748
--------------------------------------------------------------------
AUSTRALIA
Plutonic 8,526 0.186 1,588
Lawlers 3,539 0.143 505
Darlot 8,062 0.166 1,341
Yilgarn District
Total 20,127 0.171 3,434
Kalgoorlie (50%) 93,641 0.061 5,724
Cowal 56,395 0.049 2,770
--------------------------------------------------------------------
AFRICA
Bulyanhulu 28,026 0.428 12,009
--------------------------------------------------------------------
OTHER 3,795 0.111 420
--------------------------------------------------------------------
TOTAL 1,070,298 0.077 82,272
--------------------------------------------------------------------
Gold Mineral Resources
As at December 31, 2001 MEASURED (M)
---------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's) (oz/ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 14,497 0.067 968
Meikle 2,784 0.756 2,104
Goldstrike Property Total 17,281 0.178 3,072
Round Mountain (50%) 1,479 0.023 34
Marigold (33%) 4,922 0.017 84
---------------------------------------------------------------------
CANADA
Eskay Creek - - -
Hemlo (50%) 3,845 0.047 181
Holt-McDermott 115 0.200 23
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 3,962 0.055 216
Veladero 3,951 0.034 133
Pierina 10,061 0.011 112
---------------------------------------------------------------------
AUSTRALIA
Plutonic 1,499 0.057 85
Lawlers 1,491 0.172 256
Darlot 2,100 0.132 277
Yilgarn District Total 5,090 0.121 618
Kalgoorlie (50%) 26,125 0.069 1,791
Cowal 1,480 0.019 28
---------------------------------------------------------------------
AFRICA
Bulyanhulu - - -
---------------------------------------------------------------------
OTHER 1,236 0.121 150
---------------------------------------------------------------------
TOTAL 79,547 0.081 6,442
---------------------------------------------------------------------
Gold Mineral Resources
As at December 31, 2001 INDICATED (I) (M) + (I)
---------------------------------------------------------------------
Tons Grade Ounces Ounces
Based on attributable ounces (000's) (oz/ton)(000's)(000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 34,626 0.070 2,429 3,397
Meikle 4,912 0.370 1,819 3,923
Goldstrike Property Total 39,538 0.107 4,248 7,320
Round Mountain (50%) 2,434 0.024 58 92
Marigold (33%) 31,707 0.014 432 516
---------------------------------------------------------------------
CANADA
Eskay Creek 426 0.460 196 196
Hemlo (50%) 3,884 0.050 196 377
Holt-McDermott 1,247 0.236 295 318
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 111,883 0.031 3,475 3,691
Veladero 60,731 0.030 1,831 1,964
Pierina 73,281 0.015 1,130 1,242
---------------------------------------------------------------------
AUSTRALIA
Plutonic 12,994 0.136 1,761 1,846
Lawlers 1,972 0.210 413 669
Darlot 2,526 0.105 264 541
Yilgarn District Total 17,492 0.139 2,438 3,056
Kalgoorlie (50%) 50,265 0.081 4,090 5,881
Cowal 30,024 0.019 567 595
---------------------------------------------------------------------
AFRICA
Bulyanhulu 5,429 0.402 2,184 2,184
---------------------------------------------------------------------
OTHER 9,264 0.087 805 955
---------------------------------------------------------------------
TOTAL 437,605 0.050 21,945 28,387
---------------------------------------------------------------------
Gold Mineral Resources
As at December 31, 2001 INFERRED
---------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's) (oz/ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 738 0.071 53
Meikle 5,816 0.331 1,924
Goldstrike Property Total 6,554 0.302 1,977
Round Mountain (50%) 28,944 0.014 401
Marigold (33%) 7,486 0.016 116
---------------------------------------------------------------------
CANADA
Eskay Creek 149 0.629 94
Hemlo (50%) 10,094 0.082 826
Holt-McDermott 826 0.243 200
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 126,841 0.027 3,475
Veladero 68,321 0.029 1,990
Pierina 5,714 0.016 90
---------------------------------------------------------------------
AUSTRALIA
Plutonic 5,498 0.153 840
Lawlers 923 0.200 185
Darlot 28 0.286 8
Yilgarn District Total 6,449 0.160 1,033
Kalgoorlie (50%) 42,053 0.081 3,422
Cowal 36,909 0.042 1,538
---------------------------------------------------------------------
AFRICA
Bulyanhulu 3,826 0.555 2,124
---------------------------------------------------------------------
OTHER 2,055 0.398 818
---------------------------------------------------------------------
TOTAL 346,221 0.052 18,104
---------------------------------------------------------------------
Gold Mineral Resources
As at December 31, 2001 TOTAL
---------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's) (oz/ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 49,861 0.069 3,450
Meikle 13,512 0.433 5,847
Goldstrike Property Total 63,373 0.147 9,297
Round Mountain (50%) 32,857 0.015 493
Marigold (33%) 44,115 0.014 632
---------------------------------------------------------------------
CANADA
Eskay Creek 575 0.504 290
Hemlo (50%) 17,823 0.067 1,203
Holt-McDermott 2,188 0.237 518
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 242,686 0.030 7,166
Veladero 133,003 0.030 3,954
Pierina 89,056 0.015 1,332
---------------------------------------------------------------------
AUSTRALIA
Plutonic 19,991 0.134 2,686
Lawlers 4,386 0.195 854
Darlot 4,654 0.118 549
Yilgarn District Total 29,031 0.141 4,089
Kalgoorlie (50%) 118,443 0.079 9,303
Cowal 68,413 0.031 2,133
---------------------------------------------------------------------
AFRICA
Bulyanhulu 9,255 0.465 4,308
---------------------------------------------------------------------
OTHER 12,555 0.141 1,773
---------------------------------------------------------------------
TOTAL 863,373 0.054 46,491
---------------------------------------------------------------------
--30--LS/na*
| CONTACT: |
Barrick Gold Corp. |
|
Vincent Borg, 416/307-7477 |
|
416/861-1509 (Fax) |
|
media@barrick.com |
|
www.barrick.com |
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