TORONTO, ONTARIO--(Marketwire - Oct. 27, 2011) - Barrick Gold Corporation (NYSE:ABX)(News - Market indicators) -

THIRD QUARTER REPORT 2011

Based on IFRS and expressed in US dollars

For a full explanation of results, the Financial Statements and Management Discussion & Analysis, please see the Company's website, www.barrick.com.

Highlights

Financial and Operating Results

- Reported net earnings for Q3 rose 45% to a record $1.37 billion ($1.37 per share) from $942 million ($0.96 per share) in the prior year period. Q3 adjusted net earnings increased 52% to $1.39 billion ($1.39 per share)¹ from $912 million ($0.93 per share) in Q3 2010, reflecting higher gold and copper prices along with higher copper sales volumes, resulting in an annualized return on equity of approximately 25%¹.

- Q3 EBITDA increased 47% to $2.46 billion¹ from $1.67 billion in the same prior year period. Q3 operating cash flow rose 35% to a record $1.89 billion from $1.40 billion and adjusted operating cash flow increased 33% to $1.92 billion¹ from $1.44 billion in Q3 2010.

- Q3 gold production was 1.93 million ounces at total cash costs of $453 per ounce and net cash costs of $328 per ounce¹. The Company is on track to meet its full year operating guidance, with production expected to be 7.6-7.8 million ounces at total cash costs of $460-$475 per ounce, within original guidance ranges. Net cash costs for 2011 are anticipated to be $330-$350 per ounce², reflecting a lower copper price assumption than previously assumed. Copper production is expected to be 450-460 million pounds at total cash costs of $1.60-$1.70 per pound in 2011.

- Gold cash margins expanded significantly in the third quarter, highlighting Barrick's leverage to higher gold prices. Gold cash margins increased 55% to $1,290 per ounce¹ from $834 per ounce in Q3 2010 and net cash margins rose 51% to $1,415 per ounce¹ from $939 per ounce in the same prior year period.

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

- During the quarter, Barrick announced two significant gold discoveries on the Cortez property in Nevada, Red Hill and Goldrush. Recent drilling continues to expand the mineralization at these two discoveries. In addition, infill drilling between the two deposits is successfully finding new mineralization, advancing the possibility that they will merge into a single deposit. A total of 264,000 feet of drilling is planned in 2011 and the program is approximately 80% complete.

- At Lumwana in Zambia, drilling activity has been ramped up with 11 drill rigs active and an additional four rigs being mobilized. Areas of focus include resource definition drilling at the Chimiwungo deposit to convert inferred resources into indicated resources as well as extensional drilling to expand the mineralization. Drilling at Chimiwungo East commenced in September and results received from initial drill holes are in line with expectations. In addition, Barrick is advancing an expansion study that could potentially double processing rates.

Investing in and Developing High Return Projects

- The development of the Pueblo Viejo³ and Pascua-Lama mines advanced during the third quarter with first production on track to commence in mid-2012 and mid-2013, respectively.

- Pueblo Viejo and Pascua-Lama are anticipated to contribute 1.4-1.5 million ounces of average annual gold production over the first full five years of operation at total cash costs significantly lower than Barrick's overall current cash cost profile⁴.

Continually Improving Corporate Social Responsibility (CSR) Practices to Maintain License to Operate 

- During the quarter, Barrick was ranked as a global leader in CSR for the fourth consecutive year by the Dow Jones Sustainability Index. Barrick is included on both the Dow Jones Sustainability World Index and North American Index for 2011.

Returning Captial to Shareholders

- Consistent with Barrick's practice of paying a progressive dividend, the Board of Directors has authorized a quarterly dividend of 15 cents per share, which represents a 25% increase from the previous dividend. The Company's strong earnings and operating cash flows, combined with its positive outlook on the gold price, enables it to continue to make high return investments in its project pipeline and also increase its dividend. Over the last five years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividend by more than 170%⁵ on a quarterly basis.

FINANCIAL AND OPERATING RESULTS

Q3 production was 1.93 million ounces of gold at total cash costs of $453 per ounce and net cash costs of $328 per ounce. The Company is on track to achieve its original full year operating guidance and has narrowed expected gold production and cash cost ranges to 7.6-7.8 million ounces at total cash costs of $460-$475 per ounce. Net cash costs for 2011 are expected to be $330-$350 per ounce, reflecting a lower copper price assumption than previously assumed. In 2012, total cash costs are expected to be approximately 10% higher, primarily due to inflationary cost pressures, as well as a change in the production mix. Gold production in 2012 is anticipated to be comparable to 2011.

Q3 gold cash margins increased 55% to $1,290 per ounce from $834 per ounce in Q3 2010 and net cash margins rose 51% to $1,415 per ounce from $939 per ounce in the same prior year period. This margin expansion demonstrates the Company's exceptional leverage to higher gold prices.

Third quarter copper cash margins of $1.63 per pound included a full quarter of production from the recently acquired Lumwana mine in Zambia. The Company's Q3 average realized copper price was negatively impacted by about $58 million in provisional pricing adjustments due to the significant decrease in market copper prices at the end of September. The sales price for copper is determined based on market copper prices at a future date set by the customer, generally one to six months after the initial date of sale. The prices on these sales are marked-to-market at the balance sheet date based on the forward copper price for the relevant quotational period. All mark-to-market adjustments are recorded in copper sales revenues. As a result, the Company's Q3 average realized copper price of $3.54 was below the average market copper price of $4.07 per pound. As at quarter-end, there were approximately 82 million pounds of copper sales that were provisionally priced at the closing market copper price of $3.27 per pound, which are expected to settle by year end. Future changes in market copper prices will continue to affect the final realized prices. 

Q3 adjusted net earnings rose 52% to a record $1.39 billion ($1.39 per share) compared to adjusted net earnings of $912 million ($0.93 per share) in the prior year period, reflecting higher gold and copper realized prices and higher copper sales volumes. Q3 adjusted net earnings translate to an annualized return on equity of approximately 25%. Q3 reported net earnings were $1.37 billion ($1.37 per share) before net adjustments of approximately $20 million. Q3 EBITDA increased 47% to $2.46 billion from $1.67 billion in the same prior year period. Q3 operating cash flow rose 35% to a record $1.89 billion from $1.40 billion in the prior year period and adjusted operating cash flow increased 33% to $1.92 billion from $1.44 billion in Q3 2010.

"Today, the Company reported another strong quarter of operational and financial results," said Aaron Regent, Barrick's President and CEO. "We remain on track to achieve our original full year operating targets including one of the lowest cash cost profiles amongst the senior gold producers. We are making good progress constructing our high return Pueblo Viejo and Pascua-Lama mines and are pleased with further positive exploration results at Goldrush and Red Hill, our new gold discoveries in Nevada."

The North America region continued to perform well in Q3, producing 0.84 million ounces at total cash costs of $415 per ounce. The Cortez property performed on plan with production of 0.35 million ounces at total cash costs of $230 per ounce in Q3. The Cortez Hills open pit continues to be in a higher waste stripping phase, which is expected to result in lower production in Q4 before it returns to a higher grade area in Q1 2012.

The Goldstrike operation produced 0.26 million ounces at total cash costs of $516 per ounce in Q3 as it transitioned to a higher stripping phase in the second half of 2011 as previously disclosed. Full year 2011 production guidance for the North America region is expected to be 3.30-3.40 million ounces, within the previous guidance range, at the previous total cash cost guidance of $425-$450 per ounce.

The South American business unit performed ahead of plan with production of 0.48 million ounces at total cash costs of $358 per ounce in Q3. Lagunas Norte production of 0.22 million ounces at total cash costs of $260 per ounce was ahead of plan, primarily due to changes in mine sequencing, which resulted in higher production in Q3, which had previously been anticipated in Q4. Veladero contributed 0.22 million ounces at total cash costs of $380 per ounce in Q3. In 2011, the South America region is expected to produce 1.85-1.90 million ounces at total cash costs of $360-$380 per ounce, within the previous production and cost guidance ranges.

The Australia Pacific business unit produced 0.47 million ounces at total cash costs of $609 per ounce in Q3. The Porgera mine, which produced 0.13 million ounces at total cash costs of $545 per ounce, was impacted by lower underground production, primarily due to equipment availability issues and unplanned maintenance. The Australia Pacific region is expected to produce about 1.90 million ounces in 2011, within the previous guidance range, at the previous total cash cost guidance of $610-$635 per ounce.

Attributable production from African Barrick Gold plc in Q3 was 0.14 million ounces at total cash costs of $687 per ounce. Barrick's share of 2011 production is expected to be 0.515-0.560 million ounces at total cash costs of $675-$700 per ounce.

Q3 copper production of 140 million pounds at total cash costs of $1.91 per pound included the first full quarter of production from the newly acquired Lumwana mine in Zambia, which produced 75 million pounds at total cash costs of $2.13 per pound. Lumwana is expected to produce approximately 155 million pounds of copper at total cash costs of $1.95-$2.10 per pound from June 1 until year end. Production and cash cost guidance for 2011 reflects the impact of plant availability issues, lower grades primarily related to dilution, the mill shut down for maintenance in Q4 previously scheduled for Q1 2012, and higher costs related to labor and power. Areas of focus at Lumwana include mill de-bottlenecking, pit re-optimization, changes to mine sequencing, dilution control, equipment availability and leveraging Barrick's supply chain agreements. An infill drill program at the producing Malundwe deposit is underway to improve dilution control and more accurately model ore body characteristics. The Zaldívar copper mine in Chile produced 65 million pounds at total cash costs of $1.67 per pound in Q3 and is expected to produce approximately 300 million pounds of copper at $1.40-$1.50 per pound in 2011. Zaldívar's Q3 performance was impacted by unplanned primary crusher maintenance which affected throughput. In 2011, the Company's total copper production is expected to be 450-460 million pounds, which is slightly lower than the previous guidance of 455-475 million pounds. Total copper cash costs in 2011 are expected to be $1.60-$1.70 per pound, within the previous guidance range of $1.55-$1.70 per pound. In 2012, copper total cash costs are anticipated to be higher due to inflationary cost pressures and the impact of a full year of production from Lumwana.

Utilizing option collar strategies, the Company put in place floor protection on substantially all of the remaining expected copper production for 2011 at an average floor price of approximately $3.45 per pound, with upside participation to an average of approximately $4.85 per pound⁶. The Company also put in place floor protection on just under half of the expected copper production for 2012 at an average floor price of $3.75 per pound and has sold call options on approximately 40% of the expected 2012 production at an average price of approximately $5.50 per pound⁷. The remaining copper production is subject to market prices.

Approximately 60% of Barrick's consolidated production costs are denominated in US dollars. The Company's largest single currency exposure is the Australian dollar/US dollar exchange rate. Barrick is hedged on substantially all of the expected remaining Australian expenditures in 2011 and the expected 2012 Australian expenditures at effective average rates of $0.76 and $0.82, respectively, and also has substantial coverage for the following two years at rates at or below $0.80.

The Company has also mitigated the impact of higher oil prices through the use of financial contracts and production from Barrick Energy such that a $10 change in WTI crude oil prices is only expected to impact 2011, 2012 and 2013 total cash costs by about $1 per ounce. The Barrick Energy contribution, along with the financial contracts, provides hedge protection for approximately 80% of expected remaining 2011 fuel consumption and approximately 90% of expected 2012 and 2013 fuel consumption. Financial contracts also provide substantial hedge coverage in 2014 and production from Barrick Energy is expected to continue to provide long term natural offsets to changes in energy prices.

INCREASING GOLD AND COPPER RESERVES AND RESOURCES THROUGH EXPLORATION⁸ AND SELECTIVE ACQUISITIONS

Barrick's 2011 exploration guidance is $370-$390 million and is weighted towards resource additions and reserve conversion at and around mine sites, while also providing for earlier stage exploration to support longer term growth for the Company. Major exploration programs are underway in all regions, with the focus on Nevada and the Lumwana property.

In Nevada, recent drilling continues to expand the mineralization at Red Hill and Goldrush. The Company's confidence in the potential and continuity of the mineralization has increased. In addition, infill drilling between both deposits is successfully finding new mineralization and there is the possibility that the two deposits will merge into a single deposit. Step out holes north of Red Hill have intersected mineralization a further 2,000 feet beyond the currently outlined resource as well as extended mineralization at least 1,000 feet to the southwest. Highlights of major step-out drilling include 120 feet at 0.17 ounces per ton (opt), 60 feet at 0.20 opt, 80 feet at 0.16 opt, and 30 feet at 0.25 opt. Step-out drilling south of Goldrush is now underway to test the southern extension of the mineralized zone. A total of 264,000 feet of drilling is planned at Red Hill and Goldrush in 2011 and the program is approximately 80% complete.

At the 75%-owned Turquoise Ridge operation in Nevada, work is advancing on the potential to develop a large scale open pit in order to mine the lower grade halo around the high grade underground ore, which could significantly increase annual production. A prefeasibility study is expected to be completed by the end of 2012. Nine drill rigs are currently active on the property. The focus of open pit drilling is on upgrading resources and mineral inventory. Surface drilling has intersected significant new mineralization, particularly in the south area of the planned pit where the cover is shallower, which could positively impact economics. Underground drilling is also yielding strong results, intersecting higher grades than expected in some areas and zones are open up-dip and to the northwest.

At Lumwana, drilling activity has been ramped up with 11 drill rigs active and an additional four rigs being mobilized. Areas of focus include resource definition drilling at Chimiwungo to convert inferred resources into indicated resources as well as extensional drilling to expand the mineralization. Drilling across the in-pit portion of Chimiwungo East commenced in September and results received from initial drill holes indicate the thickness of the shoot is increasing, in line with expectations. Barrick is advancing an expansion study that could potentially double processing rates. An induced polarization survey is underway in the Chimiwungo South/Mutoma area and a drill program is planned to commence in Q4 2011 to test the potential for shallow mineralization in this area.

INVESTING IN AND DEVELOPING HIGH RETURN PROJECTS IN CONSTRUCTION

Barrick has targeted growth in production to approximately 9 million ounces of gold within the next five years⁹. Total cash costs are expected to benefit from its large, low cost projects, primarily Pueblo Viejo and Pascua-Lama, as these mines come on stream. Once at full capacity, these two mines are expected to contribute 1.4-1.5 million ounces of average annual production over the first full five years of operation at low cash costs.

At the Pueblo Viejo project in the Dominican Republic, first production is anticipated in mid-2012. Barrick's share of annual gold production in the first full five years of operation is expected to average 625,000-675,000 ounces at total cash costs of $275-$300 per ounce¹⁰.

Total mine construction capital is estimated at $3.6-$3.8 billion¹⁰ (100%), or $2.2-$2.3 billion (Barrick's 60% share) of which 80% has been committed at the end of the third quarter. Overall construction at the Pueblo Viejo project is now more than 75% complete. Remediation of the starter tailings dam progressed during Q3 with the Company in receipt of all necessary approvals to allow construction of the dam to its full height. At the end of the third quarter, brick lining of all four autoclaves was completed. Nearly all of the concrete has been poured, about 95% of the steel has been erected and more than 7.6 million tonnes of ore have been stockpiled. Work continues toward achieving key milestones, including the connection of power to the site.

As part of a longer-term, optimized power solution for Pueblo Viejo, the Company is advancing a plan to construct a dual fuel power plant at an estimated incremental cost of approximately $300 million (100% basis) or $180 million (Barrick's share). The power plant would commence operations utilizing heavy fuel oil, but have the ability to subsequently transition to lower cost liquid natural gas. The new plant is expected to provide lower cost, long term power to the project.

Pascua-Lama is a high quality, world class resource, expected to achieve first production in mid-2013. Average annual gold production is expected to be 800,000–850,000 ounces in its first full five years of operation at negative total cash costs of $225-$275 per ounce¹¹, assuming a silver price of $25 per ounce. Average annual silver production for the first full five years is expected to be about 35 million ounces. For every $1 per ounce increase in the silver price, total cash costs are expected to decrease by approximately $35 per ounce over this period. Total mine construction capital is estimated at $4.7-$5.0 billion¹¹, with approximately 50% of the capital committed at the end of the third quarter. In Chile, earthworks are about 80% complete. In Argentina, good progress was made on earthworks, which are approximately 60% complete at the end of Q3. Civil concrete works continue for the structures at the stockpile, grinding and pebble crusher areas, and have started in the Merrill Crowe process plant area. Concrete and steel works continued on the processing facilities in the third quarter.

At the Barriales camp in Chile, the former exploration camp has been demolished and construction is nearing completion on various facilities. The Los Amarillos camp in Argentina, which is targeted to house about 5,500 beds, currently houses 2,680 beds, with a targeted capacity of 3,500 beds to be completed by year end.

The Jabal Sayid copper project in Saudi Arabia is expected to enter production in the second half of 2012 at a total capital cost of approximately $400 million. Initial production is expected from Lode 2 and total average annual copper production is expected to be 100-130 million pounds over the first full five years of operation. Good potential exists for material extensions to known deposits and new discoveries from an ongoing evaluation of the entire Jabal Sayid site. Current exploration is focused on testing Lode 4 at depth, where mineralization has been intersected in several previous drill holes, including an intercept of 111 meters at 2.67% copper. Several geophysical surveys are also in progress.

At the end of the third quarter, construction is over 60% complete with more than 70% of the capital committed. Bulk earthworks are about 85% complete, underground services are more than 50% complete and concrete poured is 90% complete.

PROJECTS IN FEASIBILITY

At the Cerro Casale project in Chile, the Environmental Impact Assessment was submitted in the third quarter. The permitting process is anticipated to be approximately 18 months, at which time Barrick will consider a construction decision and commence detailed engineering. Exploration programs will continue in parallel with completing basic engineering and permitting. Discussions with the government and meetings with local communities and indigenous groups are continuing in conjunction with these activities.

Barrick's 75% share of average annual production is anticipated to be 750,000-825,000 ounces of gold and 190-210 million pounds of copper in the first full five years of operation at total cash costs of $125-$175 per ounce¹². Estimated total mine construction capital is approximately $6 billion (100% basis)¹².

At the 50%-owned Donlin Gold project in Alaska, feasibility study revisions, which include updated costs and the utilization of natural gas, are being finalized for submission to the Board of Donlin Gold LLC in Q4 2011. Mine construction capital is expected to be approximately $6 billion (100% basis) with an additional $1 billion (100% basis) for the construction of a natural gas pipeline, which is anticipated to lower long term power costs and offer a better environmental and operational solution for power connection to the site. Permitting is expected to commence in the first half of 2012.

At the Reko Diq copper-gold project, in which Barrick holds a 37.5% interest, the Supreme Court of Pakistan affirmed the jurisdiction of the provincial Government of Baluchistan (GoB) to grant the mining license in the third quarter. In September 2011, the GoB informed Tethyan Copper Company (TCC), the project company, that it considered the mining lease application to be incomplete and unsatisfactory. TCC has recently responded to the government's comments on the application and will take appropriate steps to protect its interest in the property, including through international arbitration if necessary.

At the 50%-owned Kabanga nickel project in Tanzania, the draft feasibility study is being reviewed by the partners. The Environmental Impact Assessment is expected to be submitted in Q4 2011. Preliminary engineering will continue for the remainder of 2011, as well as initiating negotiations to develop a Mineral Development Agreement with the Tanzanian government, prior to making a construction decision in the second half of 2012.

RETURNING CAPITAL TO SHAREHOLDERS

At September 30, 2011, Barrick had a cash balance of $3 billion¹³ and $1 billion available for drawdown under its credit facilities, as well as the gold industry's highest credit rating. The Company generated approximately $4.3 billion in adjusted operating cash flow in the first nine months of 2011. Barrick's strong earnings and operating cash flows, combined with its positive outlook on the gold price, enables it to continue to make high return investments in its project pipeline and also increase the dividend. The Board of Directors has authorized a quarterly dividend of 15 cents per share, which represents a 25% increase from the previous dividend. Over the last five years, Barrick has had a consistent track record of returning capital to shareholders, increasing its dividend by more than 170% on a quarterly basis¹⁴. The quarterly dividend is payable on December 15, 2011 to shareholders on record as of the close of business on November 30, 2011.

Barrick's vision is to be the world's best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. Barrick's shares are traded on the Toronto and New York stock exchanges.

¹ Adjusted net earnings, adjusted operating cash flow, EBITDA, return on equity, total cash costs, net cash costs, cash margins and net cash margins per ounce/pound are non-GAAP financial measures. See pages 55-62 of Barrick's Third Quarter 2011 Report.

² Assumes a market copper price of $3.25/lb for Q4 2011, which will result in a realized price of about $3.40/lb, including the impact of the copper collars.

³ Barrick has a 60% interest in the Pueblo Viejo mine.

⁴ Based on the estimated combined average annual production in the first full five years of operation.

⁵ Calculated based on converting the 2006 semi-annual dividend of 11 cents per share to a quarterly equivalent.

⁶ The realized price on remaining 2011 production is expected to be reduced by $0.06/lb as a result of the net premium paid on these positions.

⁷ The realized price on 2012 production is expected to be reduced by $0.12/lb as a result of the net premium paid on these positions.

⁸ Barrick's exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick. For information on the geology, exploration activities generally, and drilling and analysis procedures on Barrick's material properties, see Barrick's most recent Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission.

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

¹⁰ Based on gold and oil price assumptions of $1,300/oz and $90/bbl, respectively.

¹¹ Based on gold, silver and oil price assumptions of $1,300/oz, $25/oz, and $90/bbl, respectively and assuming a Chilean peso f/x rate of 475:1.

¹² Based on gold, copper and oil price assumptions of $1,300/oz, $3.25/lb and $90/bbl, respectively and assuming a Chilean peso f/x rate of 475:1.

¹³ Includes $525 million cash held at ABG, which may not be readily deployed outside ABG. It also includes $6 million held at Pueblo Viejo as a result of the first and second draw on the project financing. These funds are to be used to fund the further construction of the project and are not readily deployable by Barrick for other purposes.

¹⁴ The declaration and payment of dividends remains at the discretion of the Board of Directors and will depend on the Company's financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

The notes to these unaudited interim consolidated financial statements, which are contained in the Third Quarter Report 2011 available on our website are an integral part of these consolidated financial statements.