Barrick Earns $54 Million or $0.10 Per Share in Fourth Quarter, Part 2 of 2; Reserves Increase 6 Percent to 86.9 Million Ounces.Part 2. Notes to Unaudited Interim Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) Tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. dollar amounts in millions of United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollars, unless otherwise indicated, US GAAP basis. References to C$ and A$ are to Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. and Australian dollars Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents , respectively. 1 BASIS OF PREPARATION The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. unaudited interim consolidated financial statements have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with United States generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("US GAAP") for the preparation of interim financial information. Accordingly, they do not include all of the information and disclosures required by US GAAP for annual consolidated financial statements. Except as disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in note 2, the accounting policies used in the preparation of the accompanying unaudited interim consolidated financial statements are the same as those described in our audited consolidated financial statements and the notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. for the three years ended December December: see month. 31, 2001. In the opinion of management, all adjustments considered necessary for fair presentation of results for the periods presented have been reflected in these financial statements. These unaudited interim consolidated financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the audited annual financial statements and the notes thereto for the three years ended December 31, 2001. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets Contingent Asset An asset in which the possibility of ownership depends solely upon future events uncontrollable by the company. Notes: An example might be a settlement from a lawsuit. See also: Asset, Balance Sheet, Contingent Liability, Liability and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On December 14, 2001, a wholly-owned subsidiary of Barrick merged with Homestake Mining Company ("Homestake"). The merger was accounted for as a pooling-of-interests. The unaudited interim consolidated financial statements give retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a 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. 2 ACCOUNTING CHANGES A Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. We adopted FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 142, Goodwill and Other Intangible Assets (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142), effective January January: see month. 1, 2002. Since we had no goodwill or other intangible assets at the date of adoption, the implementation of this accounting change had no effect on our consolidated financial statements. B Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or Disposal of Long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. Assets We adopted FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-lived Assets (SFAS 144), effective January 1, 2002. The adoption of this new statement had no effect on our consolidated financial statements. C Deferred stripping costs Historically, we classified deferred stripping costs as part of property, plant and equipment on our Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . In 2002 we began classifying these costs as a separate line item, Capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. mining costs. Total capitalized mining costs at December 31, 2002 were $272 million. The comparative amount at December 31, 2001 of $301 million, has also been reclassified. Also, we historically classified expenditures for stripping costs as part of purchases of property, plant and equipment in Investing activities in our Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Cash Flows. In 2002, we began classifying these expenditures as part of Changes in capitalized mining costs, in Operating activities. Expenditures for stripping costs for the year ended December 31, 2002 were $121 million. We also reclassified the comparative amount for 2001 of $133 million. We made these changes to reflect the operating nature of stripping activities. The changes had no effect on earnings. 3 CAPITAL STOCK A Net income per share Net income per share was calculated on the basis of the weighted average number of common shares outstanding for the three and twelve month periods ended December 31, 2002 which amounted to 541 million shares (2001 - 536 million shares). Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per share reflects the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the exercise of the common share purchase options outstanding as at the end of the period. The number of shares for the diluted net income per share calculation for the three month and twelve month periods ended December 31, 2002 and 2001 were 541 million shares and 538 million shares, respectively.
B Common share purchase options
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Weighted Weighted
Common average Common average
shares price shares price
(millions) (C$) (millions) (US$)
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Outstanding as at December
31, 2001 19 $ 28.29 6 $ 16.67
Granted 6 24.71 - -
Exercised (4) 24.79 (2) 11.99
Cancelled or expired (2) 33.99 (1) 25.10
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Outstanding as at
December 31, 2002 19 $ 27.19 3 $ 18.33
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FASB Statement No. 123 ( SFAS 123) encourages, but does not require, companies to include in compensation cost the fair value of stock options granted to employees. A Company that does not adopt the fair-value method must disclose the cost of stock compensation awards, at their fair value on the date the award is granted. The fair value of common share purchase options granted in the twelve month period ended December 31, 2002 was $38 million, estimated using the Black-Scholes model with the following assumptions: a 6-year expected term, 40% volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , interest rates of 5% and an expected dividend yield Expected dividend yield Total amount of dividends received during the life of a futures contract or total dividends received for holding a particular stock one year. See: Current yield. of 1.4%. Under SFAS 123, the cost of stock compensation, and the resulting pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income and net income per share would be as follows:
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Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
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Stock compensation cost $ 6 $ 8 $ 21 $ 31
Pro forma net income (loss) $ 48 $ (117) $ 172 $ 65
Pro forma net income (loss)
per share (dollars) $ 0.09 $ (0.22) $ 0.32 $ 0.12
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C Dividends In the twelve months ended December 31, 2002, the Company declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. and paid dividends in United States dollars totaling $0.22 per share. 4 INVENTORIES AND OTHER CURRENT ASSETS Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable.
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Dec. 31, 2002 Dec. 31, 2001
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Gold in process and ore in stockpiles $ 100 $ 134
Mine operating supplies 59 57
Derivative assets (note 5) 37 17
Prepaid expenses 10 15
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$ 206 $ 223
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Gold in process and ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. in stockpiles excludes $61 million (December 31, 2001 - $46 million) of stockpiled ore which is not expected to be processed in the following 12 months. This amount is included in other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . 5 DERIVATIVE INSTRUMENTS Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. A Derivative instruments We utilize over-the-counter ("OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ") contracts as the primary basis for entering into derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. transactions. These privately negotiated agreements, compared to exchange traded contracts, allow us to incorporate favourable credit, tenor and flexible terms into the contracts. The underlyings in the contracts include commodities, interest rates, foreign currency exchange rates and bond indices with diversified diversified (di·verˑ·s credit exposure. We do not enter into derivative instruments which we would consider to be leveraged. For a full description of our objectives and strategies for using derivative instruments; the nature and principal terms of the derivative instruments we use; the valuation techniques used to estimate the fair value of derivative instruments; and the nature of credit and market risks associated with the derivative instruments we use, refer to our audited consolidated financial statements for the three years ended December 31, 2001. B Gold and silver contracts outstanding at December 31, 2002 --------------------------------------------------------------------- Maturity/Scheduled for delivery in 2003 2004 2005 2006 2007 2008+ Total --------------------------------------------------------------------- Gold contracts Spot deferred contracts Ounces (thousands) 2,800 1,350 1,550 1,540 1,500 7,200 15,940 Average price per ounce $ 340 $ 345 $ 335 $ 338 $ 340 $ 343 $ 341 Variable price gold sales and option contracts With "caps" Ounces (thousands) 250 300 300 250 - 900 2,000 Average price per ounce at cap expiry date $ 344 $ 310 $ 317 $ 332 - $ 369 $ 345 With "caps" and "floors" Ounces (thousands) 150 - - - - - 150 Cap price per ounce $ 310 - - - - - $ 310 Floor price per ounce $ 280 - - - - - $ 280 --------------------------------------------------------------------- Total gold ounces (thousands) 3,200 1,650 1,850 1,790 1,500 8,100 18,090 Average price per ounce $ 339 $ 339 $ 332 $ 337 $ 340 $ 346 $ 341 --------------------------------------------------------------------- Silver contracts Spot deferred contracts Ounces (thousands) 11,000 9,000 9,000 3,300 3,000 - 35,300 Average price per ounce $ 4.95 $ 5.14 $ 5.14 $ 5.19 $ 5.19 - $ 5.09 Written silver call options Ounces (thousands) 3,750 5,000 2,000 - - - 10,750 Average exercise price per ounce $ 5.27 $ 5.28 $ 5.00 - - - $ 5.22 --------------------------------------------------------------------- Total silver ounces (thousands) 14,750 14,000 11,000 3,300 3,000 - 46,050 Average price per ounce $ 5.03 $ 5.19 $ 5.11 $ 5.19 $ 5.19 - $ 5.12 --------------------------------------------------------------------- In addition to the above-noted contracts, we also have off-take contracts for the sale of 1.7 million ounces of gold spread over 10 years, at then prevailing spot prices. The largest single counterparty Counterparty The other participant, including intermediaries, in a swap or contract. as of December 31, 2002 made up 13% of outstanding gold sales commitments. Spot deferred gold sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. We have entered into spot deferred gold sales contracts, with various counterparties Counterparties The parties on either side of an interest rate swap or a currency, equity or commodity swap, or to an options or futures position. , that fix selling prices at interim delivery dates for future gold production, and which act as an economic hedge against possible price fluctuations in gold. The contracts have a final delivery date of up to 15 years from the start date, but we have the right to set a delivery date for any time during this period. At the time an interim delivery date is rescheduled, the contract price is adjusted based on the difference between the prevailing forward gold market price and the original contract price. The average price of the spot deferred gold sales contracts in the table above reflects fixed prices at interim delivery dates and expected future price assumptions for periods where expected delivery dates differ from interim delivery dates. The large majority of contracts are fixed through 2006. The expected contract prices are determined based on estimated gold forward market prices. Forward gold market prices are principally influenced by the spot price of gold, gold lease rates and U.S. dollar interest rates. In estimating these forward prices, we have incorporated an average gold lease rate assumption of 1.5% and assumptions of U.S. dollar interest rates consistent with market quotations for such rates. Variations between the estimated and actual forward price, influenced by variations between estimated and actual gold lease rates and U.S. dollar interest rates, will affect the final realized selling price. Gold lease rate exposure is accounted for separately from our spot deferred gold sales contracts, and the economic impact flows through our earnings each quarter as part of "non-hedge derivative gains (losses)". This gold lease rate exposure is 6.4 million ounces spread from 2004 to 2012, mainly for contracts with expected delivery dates beyond 2006. Variable price gold sales contracts Variable price gold sales contracts are contracts to deliver a specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. quantity of gold on a future date determined by us. The contracts have a final delivery date of up to 15 years from the start date, but we have the right to set a delivery date at any time during this 15-year period. All of the variable price gold sales contracts have expected delivery dates beyond 2007. The contract price equals the gold spot price on the interim delivery date subject to a specified maximum ("cap") based on market conditions in the years shown in the table above, plus a fixed premium payable to us. The contract price will be adjusted in the same manner as price adjustments to spot deferred contracts for the period from these interim delivery dates to the expected delivery date beyond 2007. Certain of these contracts also have a specified minimum ("floor") price. Spot deferred silver sales contracts and written silver call options Spot deferred silver sales contracts have the same delivery terms and pricing mechanism as spot deferred gold sales contracts. A group of these contracts totaling 14.3 million ounces of silver are accounted for as normal sales contracts, as it is probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. that we will physically deliver silver production into the contracts. For a separate group of contracts totaling 21 million ounces, we intend to financially settle these contracts, and therefore they are accounted for as derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. under FAS 133. These contracts were marked to market until November November: see month. 8, 2002 when we designated these contracts as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
Changes in fair value of our written silver call options are recorded in earnings as they occur. C Other derivative instruments outstanding as at December 31, 2002 --------------------------------------------------------------------- Maturity 2003 2004 2005 2006 2007 2008+ Total --------------------------------------------------------------------- Interest rate contracts Receive fixed - swaps and swaptions Notional amount (millions) - $ 250 $ 75 $ 100 $ 475 - $ 900 Fixed rate (%) - 3.5% 2.7% 3.0% 5.6% - 4.5% Pay fixed - swaps and swaptions Notional amount (millions) - - - - - $ 344 $ 344 Fixed rate (%) - - - - - 5.6% 5.6% --------------------------------------------------------------------- Net notional position $ 250 $ 75 $ 100 $ 475 $(344) $ 556 --------------------------------------------------------------------- Total return swaps Notional amount (millions) - - $ 17 - - - $ 17 --------------------------------------------------------------------- Foreign currency contracts Canadian Dollar Forwards C$ (millions) $ 101 $ 118 $ 91 - - - $ 310 Average Price (US cents) 0.65 0.64 0.63 - - - 0.64 Canadian Dollar Min-Max Contracts C$ (millions) $ 173 - - - - - $ 173 Average Cap Price (US cents) 0.65 - - - - - 0.65 Average Floor Price (US cents) 0.63 - - - - - 0.63 Australian Dollar Forwards A$ (millions) $ 175 $ 311 $ 283 $ 10 - - $ 779 Average Price (US cents) 0.51 0.51 0.51 0.52 - - 0.51 Australian Dollar Min-Max Contracts A$ (millions) $ 339 $ 10 $ 10 $ 10 - - $ 369 Average Cap Price (US cents) 0.55 0.52 0.52 0.52 - - 0.55 Average Floor Price (US cents) 0.52 0.51 0.51 0.51 - - 0.52 Fuel contracts Barrels WTI (thousands) 240 - - - - - 240 Cap $ 30 - - - - - $ 30 Floor $ 18 - - - - - $ 18 --------------------------------------------------------------------- Our interest rate and foreign currency contracts are recorded at fair value on our balance sheet, with changes in fair value recorded in earnings as they occur, with the following exceptions: -- we have elected cash flow hedge accounting treatment for Canadian dollar foreign currency contracts with a total notional amount of C$457 million, and Australian dollar foreign currency contracts with a total notional amount of A$1,065 million; -- we have elected receive fixed interest rate swaps with a total notional amount of $650 million to be accounted for as cash flow hedges of expected future interest receipts arising on our cash and short-term investments; and we have elected receive fixed interest rate swaps with a total notional amount of $250 million to be accounted for as a fair value hedge of fixed-rate debentures. -- we have elected an amortizing pay fixed interest rate swap with a total notional amount of $194 million as at December 31, 2002 to be accounted as a cash flow hedge of future interest payments relating to the project financing for Bulyanhulu. D Unrealized fair value of derivative instruments (excluding normal sales contracts)
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Three months ended Twelve months ended
December 31, 2002 December 31, 2002
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Fair value of derivative
instruments at beginning of period $ 8 $ (16)
Derivative instruments entered into
or settled - (2)
Change in fair value of derivative
instruments:
Non-hedge derivative gains (losses) (14) (6)
Cash flow hedges 31 49
Fair value hedges 4 4
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Fair value of derivative instruments
at end of period $ 29 $ 29
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E Non-hedge derivative gains (losses)
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Three months ended Twelve months ended
December 31, 2002 December 31, 2002
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2002 2001 2002 2001
Commodity contracts $ (3) $ 42 $ (2) $ 57
Currency contracts 4 6 8 (15)
Interest and lease rate contracts (15) (45) (12) (9)
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$ (14) $ 3 $ (6) $ 33
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Contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. Management and, where appropriate, legal counsel, assess such contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. , which inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. that are pending against us or unasserted claims that may result in such proceedings, the Company and its legal counsel evaluate the perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. merits The strict legal rights of the parties to a lawsuit. The word merits refers to the substance of a legal dispute and not the technicalities that can affect a lawsuit. A judgment on the merits is the final resolution of a particular dispute. MERITS. of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency contingency n. an event that might not occur. suggests that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in the financial statements. If the assessment suggests that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent Fortuitous; dependent upon the possible occurrence of a future event, the existence of which is not assured. The word contingent denotes that there is no present interest or right but only a conditional one which will become effective upon the happening of the loss, together with an estimate of the range of possible loss, if determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. , is disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case we disclose the nature of the guarantee. A Environmental Our mining and exploration activities are subject to various federal, provincial Provincial has several meanings and may refer to:
v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the protection of the environment. These laws and regulations are continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. changing and generally becoming more restrictive. We conduct our operations so as to protect public health and the environment, and we believe that our operations are materially in compliance with all applicable laws and regulations. We have made, and expect to make in the future, expenditures to meet such laws and regulations. The Comprehensive Environmental Response, Compensation and Liability Act imposes heavy liabilities on persons who discharge To liberate or free; to terminate or extinguish. A discharge is the act or instrument by which a contract or agreement is ended. A mortgage is discharged if it has been carried out to the full extent originally contemplated or terminated prior to total execution. hazardous substances. The Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and publishes a National Priorities List ("NPL 1. NPL - New Programming Language. IBM's original (temporary) name for PL/I, changed due to conflict with England's "National Physical Laboratory." MPL and MPPL were considered before settling on PL/I. Sammet 1969, p.542. 2. ") of known or threatened releases of such substances. Homestake's former uranium uranium (y  rā`nēəm), radioactive metallic chemical element; symbol U; at. no. 92; at. wt. 238.0289; m.p. 1,132°C;; b.p. 3,818°C;; sp. gr. 19. millsite
near Grants, New Mexico Grants is a city in Cibola County, New Mexico, United States. The population was 8,806 at the 2000 census. It is the county seat of Cibola CountyGR6. is listed on the NPL.B Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and claims Inmet litigation In October October: see month. 1997, Homestake Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of Inc. ("HCI (Human Computer Interaction) Refers to the design and implementation of computer systems that people interact with. It includes desktop systems as well as embedded systems in all kinds of devices. "), a wholly-owned subsidiary of Barrick, entered into an agreement with Inmet Mining The 'Inmet Mining Corporation is a Canadian mining corporation that currently holds an 18% stake in Ok Tedi Mining Limited. Corporation ("Inmet") to purchase the Troilus Troi·lus n. A son of King Priam of Troy, depicted as Cressida's lover in medieval romance. mine in Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. for $110 million plus working capital. In December 1997, HCI terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: the agreement after deciding that, on the basis of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. studies, conditions to closing the arrangement would not be satisfied. On February February: see month. 23, 1998, Inmet filed suit against HCI in the British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography Supreme Court, disputing the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the agreement and alleging that HCI had breached the agreement. On January 15, 2002, the Supreme Court of British Columbia The Supreme Court of British Columbia (SCBC) is the superior trial court for the Canadian province of British Columbia. The SCBC hears civil and criminal law cases as well as appeals from the Provincial Court of British Columbia. released its decision in the matter and found in favour Favor or favour (see spelling differences) may be
EQUITABLE. damages in the amount of C$88.2 million, which was accrued at December 31, 2001. The Court did not award Inmet pre-judgement interest. Inmet requested the Court to re-open the trial to let Inmet make submissions on its claim for pre-judgement interest from the date of the breach by HCI. The request to re-open was denied by the Court on May 17, 2002. On February 7, 2002, HCI filed a Notice of Appeal of the decision with the British Columbia Court of Appeal
The British Columbia Court of Appeal (BCCA) is the highest appellate court in the province of British Columbia, Canada. . Inmet filed a notice of Appeal of the decision denying Inmet the pre-judgment interest. A letter of credit of about C$95 million was posted on August 20, 2002 by HCI with the British Columbia Court of Appeal, pending a decision on the appeal. Bre-X Bre-X Minerals Ltd., a member of the Bre-X group of companies, was a junior Canadian mining company, based in Calgary, that was once reported to be sitting on an enormous gold deposit at Busang, Indonesia (on Borneo). Minerals On April 30, 1998, we were added as a defendant in a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax initiated against Bre-X Minerals Ltd., certain of its directors and officers or former directors and officers and others in the United States District Court for the Eastern District of Texas The United States District Court for the Eastern District of Texas is the Federal district court with jurisdiction over the eastern part of Texas and is a part of the Fifth Circuit. The court's headquarters are in Tyler, Texas and has five subdivision offices. , Texarkana Division. The class action alleges, among other things, that statements made by us in connection with our efforts to secure the right to develop and operate the Busang gold deposit in East Kalimantan East Kalimantan (Indonesian: Kalimantan Timur abbrv. Kaltim) is Indonesian province on the east of Borneo island. The resource-rich province has two major cities, Samarinda (the capital and a center for timber product) and Balikpapan (a petroleum center with oil , Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. were materially false and misleading and omitted to state material facts relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the preliminary due diligence investigation undertaken by us in late 1996. On July July: see month. 13, 1999, the Court dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. the claims against us and several other defendants on the grounds that the plaintiffs had failed to state a claim under United States securities laws. On August 19, 1999, the plaintiffs filed an amended complaint amended complaint n. what results when the party suing (plaintiff or petitioner) changes the complaint he/she has filed. It must be in writing, and can be done before the complaint is served on any defendant, by agreement between the parties (usually their lawyers), restating their claims against us and certain other defendants and on June June: see month. 14, 2000 filed a further amended complaint, the Fourth Amended Complaint. On March 31, 2001, the Court granted in part and denied in part our Motion to Dismiss dismiss v. the ruling by a judge that all or a portion (one or more of the causes of action) of the plaintiff's lawsuit is terminated (thrown out) at that point without further evidence or testimony. the Fourth Amended Complaint. As a result, we remain a defendant in the case. We believe that the remaining claims against us are without merit. We filed our formal answer to the Fourth Amended Complaint on April 27, 2001 denying all relevant allegations of the plaintiffs against us. Discovery in the case has been stayed by the Court pending the Court's decision on whether or not to certify cer·ti·fy v. cer·ti·fied, cer·ti·fy·ing, cer·ti·fies v.tr. 1. a. To confirm formally as true, accurate, or genuine. b. the case as a class action. The amount of potential loss, if any, which we may incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. arising out of the plaintiffs' claims is not presently determinable. Blanchard Blanchard may refer to: People
On January 7, 2003, we were served with a Complaint for Injunctive Relief injunctive relief n. a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. by Blanchard and Company, Inc. ("Blanchard"), and Herbert Davies Da·vies , Arthur Bowen 1862-1928. American painter who was the chief organizer of the revolutionary Armory Show in 1913. ("Davies"). The complaint, which is pending in the U. S. District Court for the Eastern District of Louisiana The District of Louisiana or Louisiana District was an official United States government designation for the portion of the Louisiana Purchase that had not been organized into Orleans Territory. The area north of present-day Arkansas was also known as Upper Louisiana. , also names J. P. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. Chase & Company ("J.P. Morgan") as the defendant, along with an unspecified Adj. 1. unspecified - not stated explicitly or in detail; "threatened unspecified reprisals" specified - clearly and explicitly stated; "meals are at specified times" number of additional defendants to be named later. The complaint alleges that we and bullion BULLION. In its usual acceptation, is uncoined gold or silver, in bars, plates, or other masses. 1 East, P. C. 188. 2. In the acts of Congress, the term is also applied to copper properly manufactured for the purpose of being coined into money. banks with which we entered into spot deferred contracts have manipulated the price of gold, in violation VIOLATION. An act done unlawfully and with force. In the English stat. of 25 E. III., st. 5, c. 2, it is declared to be high treason in any person who shall violate the king's companion; and it is equally high treason in her to suffer willingly such violation. of U.S. antitrust laws antitrust laws n. acts adopted by Congress to outlaw or restrict business practices considered to be monopolistic or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared illegal "every contract, combination.... and the Louisiana Louisiana (ləwē'zēăn`ə, l ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Unfair
Trade Practices and Consumer Protection Law. Blanchard alleges that it
has been injured in·jure tr.v. in·jured, in·jur·ing, in·jures 1. To cause physical harm to; hurt. 2. To cause damage to; impair. 3. as a seller of gold due to reduced interest in gold as an investment. Davies, a customer of Blanchard, alleges injury due to the reduced value of his gold investments. The complaint does not seek damages, but seeks an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to terminating certain of our trading agreements with J. P. Morgan and other bullion banks. We intend to defend the action vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. . Peruvian tax assessment On December 27, 2002, one of our Peruvian subsidiaries received an income tax assessment of $41 million, excluding interest and penalties, from the Peruvian tax authority SUNAT SUNAT Superintendencia Nacional de Administración Tributaria (National Superintendency of Tax Administration; Peru) . The tax assessment relates to a recently completed tax audit of our Pierina Mine for the 1999-2000 fiscal years. The assessment mainly relates to the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of the Pierina mining concession CONCESSION. A grant. This word is frequently used in this sense when applied to grants made by the French and Spanish governments in Louisiana. and associated tax basis. Under the valuation proposed by SUNAT, the tax basis of Pierina assets would change from what we have previously assumed with a resulting increase in current and deferred income taxes. While we believe the tax assessment is incorrect Incorrect means to not be correct and may also refer to:
We intend to pursue all available administrative and judicial appeals. If we are successful on appeal and our original asset valuation is confirmed as the appropriate tax basis of assets, we would benefit from a $141 million reduction in tax liabilities recorded at December 31, 2002. The effect of this contingent gain, if any, will be recorded in the period the contingency is resolved. Under Peruvian law, we are not required to make payment pending the outcome of the appeal process, which routinely takes several years. We have not provided for $51 million of potential interest and penalties assessed in the audit. Even if the tax assessment is upheld, we believe that we will prevail on the interest and penalties part, because the assessment runs counter to applicable law and previous Peruvian tax audits. The potential amount of interest and penalties, will increase over time while we contest the tax assessment. A liability for interest and penalties will only be recorded should it become probable that SUNAT's position on interest and penalties will be upheld, or if we exhaust Exhaust may refer to: In mathematics:
Other From time to time, we are involved in various claims, legal proceedings and complaints arising in the ordinary course of business. We are also subject to reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. for income and mining taxes for certain years. We do not believe that adverse decisions in any pending or threatened proceedings related to any potential tax assessments or other matters, or any amount which we may be required to pay by reason thereof, will have a material adverse effect on our financial condition or future results of operations.
7 SEGMENT INFORMATION
---------------------------------- ----------------------------------
Three Twelve Three Twelve
months months months months
ended ended ended ended
December 31, December 31, December 31, December 31,
2002 2001 2002 2001 2002 2001 2002 2001
---------------------------------- ----------------------------------
Income before
Gold sales income taxes
Goldstrike $181 $ 194 $ 676 $ 767 Goldstrike 37 27 89 156
Pierina 96 84 303 297 Pierina 2 22 46 77
Eskay Creek 31 21 121 98 Eskay Creek 11 8 57 42
Bulyanhulu 42 8 134 56 Bulyanhulu 9 - 16 4
Kalgoorlie 33 23 124 117 Kalgoorlie 5 (3) 21 20
Hemlo 30 22 97 93 Hemlo 10 3 22 22
Plutonic 28 17 105 89 Plutonic 9 3 36 28
Round Round
Mountain 29 22 132 116 Mountain 5 (3) 32 21
Other 56 115 275 356 Other 10 27 58 38
---------------------------------- ----------------------------------
526 506 1,967 1,989 98 84 377 408
Operating Exploration and
costs business
Goldstrike 109 118 440 473 development(27) (27) (104) (103)
Pierina 44 12 96 45 Corporate
Eskay Creek 6 3 16 16 expenses,
Bulyanhulu 20 5 78 35 net (27) (31) (92) (80)
Kalgoorlie 23 22 84 80 Merger and
Hemlo 17 14 65 61 related
Plutonic 16 11 58 49 costs 2 (117) 2 (117)
Round Non-hedge
Mountain 19 20 79 77 derivative
Other 30 73 155 244 gain (loss)(14) 3 (6) 33
---------------------------------- Provision for
284 278 1,071 1,080 mining assets
---------------------------------- and other unusual
charges - (59) - (59)
Income taxes 22 38 16 14
----------------------------------
Net Income
(loss) $ 54 $(109) $ 193 $ 96
Amortization ----------------------------------
Goldstrike 35 49 147 138 Capital expenditures
Pierina 50 50 161 175 Goldstrike $11 $ 23 $ 46 $ 122
Eskay Creek 14 10 48 40 Bulyanhulu 12 28 56 153
Bulyanhulu 13 3 40 17 Pierina 1 8 5 23
Kalgoorlie 5 4 19 17 Eskay Creek - 2 8 10
Hemlo 3 5 10 10 Kalgoorlie 7 - 14 6
Plutonic 3 3 11 12 Hemlo 1 2 6 6
Round Plutonic 6 4 20 11
Mountain 5 5 21 18 Round
Other 16 15 62 74 Mountain 1 3 8 15
---------------------------------- Pascua-Lama 2 12 11 69
144 144 519 501 Cowal 6 - 13 13
---------------------------------- Other 15 5 41 46
----------------------------------
$ 62 $ 87 $ 228 $ 474
----------------------------------
8 COMPREHENSIVE INCOME
---------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
---------------------------------------------------------------------
Net income $ 54 $ (109) $ 193 $ 96
Foreign currency
translation adjustments 2 8 (21) (26)
Transfers of (gains)
losses on derivative
instruments to earnings
(note 5C) (8) (2) (21) 25
Change in fair value of
cash flow hedges (note
5C) (net of tax effects) 17 - 28 -
SFAS 133 transition
adjustment - - - -
Other - (6) (4) (11)
---------------------------------------------------------------------
Comprehensive income
(loss) $ 65 $ (109) $ 175 $ 84
---------------------------------------------------------------------
9 RECONCILIATION OF NET INCOME TO CASH PROVIDED BY
OPERATING ACTIVITIES
---------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
---------------------------------------------------------------------
Net income (loss) $ 54 $ (109) $ 193 $ 96
Non-cash charges
(credits):
Merger and related costs (2) 117 (2) 117
Amortization 144 144 519 501
Reclamation costs 8 13 34 54
Deferred income taxes (66) (49) (75) (50)
Changes in operating
assets and liabilities:
Payments of reclamation
and closure costs (27) - (70) (35)
Changes in capitalized
mining costs 18 18 29 17
Accounts receivable (7) (79) (12) (2)
Inventories and other
current assets (2) 98 32 67
Accounts payable and
other current liabilities 142 6 50 (135)
Payments of merger and
related costs (12) (13) (50) (13)
Other items (55) (39) (59) (29)
---------------------------------------------------------------------
Cash provided by
operating activities $ 195 $ 107 $ 589 $ 588
---------------------------------------------------------------------
10 HOMESTAKE CANADA INC. ("HCI") In connection with a 1998 acquisition, HCI issued 11.1 million HCI exchangeable shares. Each HCI exchangeable share is exchangeable for 0.53 of a Barrick common share at any time at the option of the holder and has essentially the same voting, dividend (payable in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents ), and other rights as 0.53 of a Barrick common share. A share of special voting stock Voting stock The shares in a corporation that entitle the shareholder to vote. voting stock Stock for which the holder has the right to vote in the election of directors, in the appointment of auditors, or in other matters brought up at the , which was issued to the transfer agent in trust for the holders of the HCI exchangeable shares, provides the mechanism for holders of the HCI exchangeable shares to receive their voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. . As at December 31, 2002, 1.6 million of the HCI exchangeable shares were outstanding and are equivalent to 0.8 million Barrick common shares. As at December 31, 2002, we had reserved 0.8 million Barrick shares for issuance on exchange of the HCI exchangeable shares outstanding. Summarized consolidated financial information for HCI is as follows:
---------------------------------------------------------------------
December 31, 2002 December 31, 2001
---------------------------------------------------------------------
Current assets $ 91 $ 43
Non-current assets 236 345
---------------------------------------------------------------------
Total assets $ 327 $ 388
---------------------------------------------------------------------
Other current liabilities $ 75 $ 76
Notes payable 407 416
Other long-term liabilities 18 12
Deferred income taxes 122 121
Shareholders' equity (295) (237)
---------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 327 $ 388
---------------------------------------------------------------------
---------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
---------------------------------------------------------------------
Total revenues and other income $ 62 $ 73 $ 203 $ 175
Less: costs and expenses 53 160 191 281
---------------------------------------------------------------------
Income (loss) before
taxes $ 9 $ (87) $ 12 $ (106)
---------------------------------------------------------------------
Net income (loss) $ 6 $ (70) $ (1) $ (84)
---------------------------------------------------------------------
Mine Statistics
UNITED STATES
---------------------------------------------------------------------
Betze-Post Meikle
Three months ended December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 34,123 36,761 441 350
Tons processed
(thousands) 2,697 2,604 448 354
Average grade (ounces per
ton) 0.181 0.173 0.468 0.481
Recovery rate (percent) 83.2% 83.6% 92.0% 92.3%
---------------------------------------------------------------------
Production (thousands of
ounces) 406 366 193 157
Production costs per ounce
Cash operating costs $212 $193 $168 $154
Royalties and production taxes 8 5 16 8
---------------------------------------------------------------------
Total cash costs 220 198 184 162
Amortization 44 43 122 148
Reclamation 4 3 2 2
---------------------------------------------------------------------
Total production costs $268 $244 $308 $312
---------------------------------------------------------------------
Capital expenditures (US$
millions) $6 $5 $5 $18
---------------------------------------------------------------------
Twelve months ended December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 142,898 154,233 1,635 1,373
Tons processed
(thousands) 10,322 9,187 1,638 1,375
Average grade (ounces per ton) 0.164 0.200 0.428 0.560
Recovery rate (percent) 83.3% 85.1% 91.3% 93.0%
---------------------------------------------------------------------
Production (thousands of
ounces) 1,410 1,550 640 713
Production costs per ounce
Cash operating costs $221 $207 $184 $133
Royalties and production taxes 7 8 14 14
---------------------------------------------------------------------
Total cash costs 228 215 198 147
Amortization 54 49 119 72
Reclamation 4 3 2 2
---------------------------------------------------------------------
Total production costs $286 $267 $319 $221
---------------------------------------------------------------------
Capital expenditures (US$
millions) $12 $32 $34 $90
---------------------------------------------------------------------
Mine Statistics
UNITED STATES
---------------------------------------------------------------------
Goldstrike Total Round Mountain
Three months ended December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 34,564 37,111 7,359 8,888
Tons processed
(thousands) 3,145 2,958 7,234 7,503
Average grade (ounces per ton) 0.222 0.211 0.015 0.016
Recovery rate (percent) 85.9% 86.0% n/a n/a
---------------------------------------------------------------------
Production (thousands of
ounces) 599 523 89 72
Production costs per ounce
Cash operating costs $199 $180 $191 $208
Royalties and production taxes 11 7 21 13
---------------------------------------------------------------------
Total cash costs 209 187 212 221
Amortization 69 77 58 52
Reclamation 3 3 14 14
---------------------------------------------------------------------
Total production costs $281 $267 $284 $287
---------------------------------------------------------------------
Capital expenditures (US$
millions) $11 $23 $1 $3
---------------------------------------------------------------------
Twelve months ended December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 144,533 155,606 31,573 35,122
Tons processed
(thousands) 11,960 10,562 31,111 29,330
Average grade (ounces per ton) 0.200 0.250 0.018 0.017
Recovery rate (percent) 85.7% 87.4% n/a n/a
---------------------------------------------------------------------
Production (thousands of
ounces) 2,050 2,263 378 373
Production costs per ounce
Cash operating costs $209 $183 $172 $176
Royalties and production taxes 9 10 15 11
---------------------------------------------------------------------
Total cash costs 218 193 187 187
Amortization 74 57 54 46
Reclamation 3 3 15 16
---------------------------------------------------------------------
Total production costs $295 $253 $256 $249
---------------------------------------------------------------------
Capital expenditures (US$
millions) $46 $122 $8 $15
---------------------------------------------------------------------
Mine Statistics
AUSTRALIA
---------------------------------------------------------------------
Plutonic Darlot
Three months ended December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 3,486 2,699 211 206
Tons processed
(thousands) 938 888 220 210
Average grade (ounces per ton) 0.101 0.070 0.182 0.147
Recovery rate (percent) 88.4% 92.6% 97.5% 96.3%
---------------------------------------------------------------------
Production (thousands of
ounces) 84 62 40 30
Production costs per ounce
Cash operating costs $177 $175 $155 $187
Royalties and production taxes 10 6 8 7
---------------------------------------------------------------------
Total cash costs 187 181 163 194
Amortization 42 39 49 48
Reclamation 3 4 2 2
---------------------------------------------------------------------
Total production costs $232 $224 $214 $244
---------------------------------------------------------------------
Capital expenditures (US$
millions) $6 $4 $2 $1
---------------------------------------------------------------------
Twelve months ended
December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 14,289 12,134 840 794
Tons processed
(thousands) 3,532 3,496 849 806
Average grade (ounces per ton) 0.097 0.091 0.176 0.161
Recovery rate (percent) 89.5% 91.3% 97.2% 96.5%
---------------------------------------------------------------------
Production (thousands of
ounces) 307 288 145 125
Production costs per ounce
Cash operating costs $175 $159 $160 $167
Royalties and production taxes 9 7 8 6
---------------------------------------------------------------------
Total cash costs 184 166 168 173
Amortization 36 41 45 44
Reclamation 2 4 2 2
---------------------------------------------------------------------
Total production costs $222 $211 $215 $219
---------------------------------------------------------------------
Capital expenditures (US$
millions) $20 $11 $7 $11
---------------------------------------------------------------------
Mine Statistics
AUSTRALIA
---------------------------------------------------------------------
Lawlers Kalgoorlie
Three months ended
December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 1,960 158 12,143 11,522
Tons processed
(thousands) 183 196 1,785 1,704
Average grade (ounces per ton) 0.161 0.174 0.063 0.061
Recovery rate (percent) 97.4% 96.0% 80.7% 83.6%
---------------------------------------------------------------------
Production (thousands of
ounces) 29 33 98 93
Production costs per ounce
Cash operating costs $180 $153 $224 $240
Royalties and production taxes 8 6 7 7
---------------------------------------------------------------------
Total cash costs 188 159 231 247
Amortization 38 48 53 45
Reclamation 5 7 5 5
---------------------------------------------------------------------
Total production costs $231 $214 $289 $297
---------------------------------------------------------------------
Capital expenditures (US$
millions) $3 $1 $7 -
---------------------------------------------------------------------
Twelve months ended
December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 4,746 628 46,324 46,301
Tons processed
(thousands) 718 775 7,051 6,596
Average grade (ounces per
ton) 0.162 0.141 0.061 0.066
Recovery rate (percent) 97.3% 95.2% 82.6% 84.3%
---------------------------------------------------------------------
Production (thousands of
ounces) 113 104 360 384
Production costs per ounce
Cash operating costs $171 $184 $215 $196
Royalties and production taxes 8 7 7 7
---------------------------------------------------------------------
Total cash costs 179 191 222 203
Amortization 37 45 52 42
Reclamation 5 7 5 7
---------------------------------------------------------------------
Total production costs $221 $243 $279 $252
---------------------------------------------------------------------
Capital expenditures (US$
millions) $7 $5 $14 $6
---------------------------------------------------------------------
Mine Statistics
CANADA
---------------------------------------------------------------------
Holt-
Three months ended Hemlo Eskay Creek McDermott
December 31, 2002 2001 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 1,102 902 69 62 142 133
Tons processed
(thousands) 494 491 67 60 142 133
Average grade (ounces per
ton) 0.177 0.196 1.511 1.551 0.162 0.194
Recovery rate (percent) 95.5% 94.1% 92.5% 93.1% 94.2% 95.5%
---------------------------------------------------------------------
Production (thousands of
ounces) 83 91 97 82 22 26
Production costs per ounce
Cash operating costs $177 $157 $47 $38 $193 $150
Royalties and production
taxes 7 6 4 3 - 2
---------------------------------------------------------------------
Total cash costs 184 163 51 41 193 152
Amortization 35 32 141 126 88 88
Reclamation 3 4 1 1 2 8
---------------------------------------------------------------------
Total production costs $222 $199 $193 $168 $283 $248
---------------------------------------------------------------------
Capital expenditures (US$
millions) $1 $2 $- $2 $2 $2
---------------------------------------------------------------------
Twelve months ended
December 31, 2002 2001 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 4,114 3,438 254 230 520 489
Tons processed
(thousands) 1,906 1,925 256 229 520 497
Average grade (ounces per
ton) 0.149 0.167 1.502 1.546 0.170 0.177
Recovery rate (percent) 94.7% 93.1% 92.5% 93.1% 94.6% 95.4%
---------------------------------------------------------------------
Production (thousands of
ounces) 269 308 359 321 84 84
Production costs per ounce
Cash operating costs $216 $189 $36 $46 $173 $163
Royalties and production
taxes 8 7 4 3 - 2
---------------------------------------------------------------------
Total cash costs 224 196 40 49 173 165
Amortization 36 31 133 126 92 88
Reclamation 4 5 1 1 4 5
---------------------------------------------------------------------
Total production costs $264 $232 $174 $176 $269 $258
---------------------------------------------------------------------
Capital expenditures (US$
millions) $6 $6 $8 $10 $7 $7
---------------------------------------------------------------------
Mine Statistics
PERU TANZANIA
---------------------------------------------------------------------
Three months ended Pierina Bulyanhulu
December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 8,865 8,051 260 153
Tons processed
(thousands) - - 274 272
Average grade (ounces per ton) 0.095 0.092 0.426 0.403
Recovery rate (percent) - - 86.2% 84.4%
---------------------------------------------------------------------
Production (thousands of
ounces) 281 219 101 93
Production costs per ounce
Cash operating costs $95 $40 $177 $181
Royalties and production taxes - - 8 8
---------------------------------------------------------------------
Total cash costs 95 40 185 189
Amortization 180 185 115 97
Reclamation 11 8 1 1
---------------------------------------------------------------------
Total production costs $286 $233 $301 $287
---------------------------------------------------------------------
Capital expenditures (US$
millions) $1 $8 $12 $28
---------------------------------------------------------------------
Twelve months ended
December 31, 2002 2001 2002 2001
---------------------------------------------------------------------
Tons mined (thousands) 32,311 30,742 944 455
Tons processed
(thousands) - - 1,075 778
Average grade (ounces per ton) 0.080 0.097 0.385 0.380
Recovery rate (percent) - - 86.1% 82.3%
---------------------------------------------------------------------
Production (thousands of
ounces) 898 911 356 242
Production costs per ounce
Cash operating costs $80 $40 $190 $186
Royalties and production taxes - - 8 11
---------------------------------------------------------------------
Total cash costs 80 40 198 197
Amortization 180 187 101 97
Reclamation 11 8 1 1
---------------------------------------------------------------------
Total production costs $271 $235 $300 $295
---------------------------------------------------------------------
Capital expenditures (US$
millions) $5 $23 $56 $153
---------------------------------------------------------------------
SUMMARY GOLD MINERAL RESERVES AND MINERAL RESOURCES
For the year ended
December 31, 2002 2001
---------------------------------------------------------------------
Tons Grade Ounces Tons Grade Ounces
Based on attributable (oz/ (oz/
ounces (000's) ton) (000's) (000's) ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post (proven and
probable) 107,130 0.150 16,051 108,854 0.151 16,433
(mineral
resource) 47,617 0.070 3,321 49,861 0.069 3,450
---------------------------------------------------------------------
Meikle (proven and
probable) 9,770 0.398 3,888 8,992 0.439 3,946
(mineral
resource) 12,926 0.396 5,119 13,512 0.433 5,847
---------------------------------------------------------------------
Goldstrike
Property
Total (proven and
probable) 116,900 0.171 19,939 117,846 0.173 20,379
(mineral
resource) 60,543 0.139 8,440 63,373 0.147 9,297
---------------------------------------------------------------------
Round Mountain
(50%) (proven and
probable) 96,057 0.020 1,875 118,489 0.019 2,245
(mineral
resource) 27,282 0.012 333 32,857 0.015 493
---------------------------------------------------------------------
Marigold
(33%) (proven and
probable) 26,351 0.026 678 25,177 0.027 680
(mineral
resource) 43,248 0.014 621 44,115 0.014 632
---------------------------------------------------------------------
CANADA
Eskay
Creek (proven and
probable) 1,433 0.998 1,430 1,426 1.245 1,775
(mineral
resource) 480 0.442 212 575 0.504 290
---------------------------------------------------------------------
Hemlo
(50%) (proven and
probable) 19,726 0.107 2,118 21,788 0.116 2,517
(mineral
resource) 6,678 0.119 798 17,823 0.067 1,203
---------------------------------------------------------------------
Holt-
McDermott (proven and
probable) 847 0.182 154 1,371 0.214 293
(mineral
resource) 755 0.254 192 2,188 0.237 518
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-
Lama (proven and
probable) 296,411 0.057 16,862 296,411 0.057 16,862
(mineral
resource) 242,686 0.029 6,962 242,686 0.030 7,166
---------------------------------------------------------------------
Veladero (proven and
probable) 254,311 0.037 9,384 196,573 0.043 8,416
(mineral
resource) 213,971 0.024 5,154 133,003 0.030 3,954
---------------------------------------------------------------------
Pierina (proven and
probable) 70,343 0.051 3,602 89,233 0.053 4,748
(mineral
resource) 41,072 0.016 649 89,056 0.015 1,332
---------------------------------------------------------------------
Alto
Chicama (proven and
probable) 120,948 0.054 6,535 - - -
(mineral
resource) 81,172 0.037 3,043 - - -
---------------------------------------------------------------------
AUSTRALIA
Plutonic (proven and
probable) 13,976 0.181 2,533 8,526 0.186 1,588
(mineral
resource) 26,682 0.130 3,470 19,991 0.134 2,686
---------------------------------------------------------------------
Lawlers (proven and
probable) 3,407 0.149 509 3,539 0.143 505
(mineral
resource) 10,705 0.131 1,401 4,386 0.195 854
---------------------------------------------------------------------
Darlot (proven and
probable) 8,202 0.155 1,269 8,062 0.166 1,341
(mineral
resource) 4,225 0.131 552 4,654 0.118 549
---------------------------------------------------------------------
Yilgarn
District
Total (proven and
probable) 25,585 0.168 4,311 20,127 0.171 3,434
(mineral
resource) 41,612 0.130 5,423 29,031 0.141 4,089
---------------------------------------------------------------------
Kalgoorlie
(50%) (proven and
probable) 96,898 0.057 5,551 93,641 0.061 5,724
(mineral
resource) 48,690 0.054 2,621 118,443 0.079 9,303
---------------------------------------------------------------------
Cowal (proven and
probable) 75,922 0.037 2,835 56,395 0.049 2,770
(mineral
resource) 64,673 0.034 2,222 68,413 0.031 2,133
---------------------------------------------------------------------
AFRICA
Bulyanhulu (proven and
probable) 27,420 0.425 11,653 28,026 0.428 12,009
(mineral
resource) 9,018 0.465 4,195 9,255 0.465 4,308
---------------------------------------------------------------------
OTHER (proven and
probable) - - - 3,795 0.111 420
(mineral
resource) 1,816 0.389 706 12,555 0.141 1,773
---------------------------------------------------------------------
TOTAL (proven and
probable) 1,229,152 0.071 86,927 1,070,298 0.077 82,272
(mineral
resource) 883,696 0.047 41,571 863,373 0.054 46,491
---------------------------------------------------------------------
MINERAL RESERVES AND RESOURCES NOTE Mineral reserves ("reserves") have been calculated as at December 31, 2002 (except for Alto alto, singing voice the range of which is lower than the soprano by the interval of a fifth. More generally, the term refers to the register in which this voice sings, i.e. Chicama Chicama is a port and small coastal town in northwestern Peru, located in the La Libertad Region, north of the city of Trujillo. The town and beach are also called Puerto Malabrigo. , which was calculated as at January 31, 2003) in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934) as interpreted Translated from source code into machine code one line at a time. See interpreted language and interpreter. interpreted - interpreter by the Staff of the U.S. Securities and Exchange Commission applies different standards in order to classify clas·si·fy tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies 1. To arrange or organize according to class or category. 2. To designate (a document, for example) as confidential, secret, or top secret. mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. as a reserve. Accordingly, Alto Chicama and Veladero are classified for U.S. reporting purposes as mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. material. Calculations have been prepared by employees of Barrick under the supervision of Alan A`lan´ n. 1. A wolfhound. R. Hill, P.Eng P.Eng Professional Engineer ., Executive Vice-President vice president or vice-pres·i·dent n. Abbr. VP 1. An officer ranking next below a president, usually empowered to assume the president's duties under conditions such as absence, illness, or death. 2. , Development of Barrick and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. Alexander J. Davidson Da·vid·son , Jo(seph) 1883-1952. American sculptor best remembered for his vigorous portrait busts of Woodrow Wilson, Franklin D. Roosevelt, and Albert Einstein, among others. , P. Geol., Senior Vice-President, Exploration of Barrick. Except with respect to the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. properties, reserves have been calculated using an assumed long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. average gold price of US$300 and a silver price of US$4.75. Reserves at the KCGM KCGM Kalgoorlie Consolidated Gold Mines Pty Ltd property assumed a gold price of US$297 (A$550 and an exchange rate of $0.54 $US/$A). Such calculations incorporate current and/or expected mine plans and cost levels at each property. Varying cut-off cut-off Anesthesiology The point at which elongation of the carbon chain of the 1-alkanol family of anesthetics results in a precipitous drop in the anesthetic potential of these agents–eg, at > 12 carbons in length, there is little anesthetic activity, grades have been used depending on the mine and type of ore contained in the reserves. Barrick's normal data verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. procedures have been employed in connection with the calculations. For a more detailed description of the key assumptions, parameters and methods used in calculating Barrick's reserves and resources, see Barrick's most recent Annual Information Form on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange.
GOLD MINERAL RESERVES
As at December
31, 2002 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 60,229 0.132 7,924 46,901 0.173 8,127
Meikle 2,641 0.512 1,352 7,129 0.356 2,536
Goldstrike
Property
Total 62,870 0.148 9,276 54,030 0.197 10,663
Round Mountain
(50%) 47,282 0.017 815 48,775 0.022 1,060
Marigold
(33%) 3,700 0.032 120 22,651 0.025 558
---------------------------------------------------------------------
CANADA
Eskay Creek 575 1.483 853 858 0.672 577
Hemlo (50%) 11,708 0.116 1,359 8,018 0.095 759
Holt-McDermott 23 0.174 4 824 0.182 150
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 37,738 0.062 2,355 258,673 0.056 14,507
Veladero 19,123 0.046 877 235,188 0.036 8,507
Pierina 29,232 0.068 1,994 41,111 0.039 1,608
Alto Chicama 120,948 0.054 6,535
---------------------------------------------------------------------
AUSTRALIA
Plutonic 2,983 0.146 436 10,993 0.191 2,097
Lawlers 1,456 0.134 195 1,951 0.161 314
Darlot 3,776 0.133 501 4,426 0.174 768
Yilgarn
District
Total 8,215 0.138 1,132 17,370 0.183 3,179
Kalgoorlie
(50%) 34,580 0.052 1,788 62,318 0.060 3,763
Cowal 6,197 0.044 271 69,725 0.037 2,564
---------------------------------------------------------------------
AFRICA
Bulyanhulu 1,846 0.397 733 25,574 0.427 10,920
---------------------------------------------------------------------
TOTAL 263,089 0.082 21,577 966,063 0.068 65,350
---------------------------------------------------------------------
GOLD MINERAL RESERVES
As at December 31, 2002 TOTAL
---------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's) (oz/ton) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 107,130 0.150 16,051
Meikle 9,770 0.398 3,888
Goldstrike Property Total 116,900 0.171 19,939
Round Mountain (50%) 96,057 0.020 1,875
Marigold (33%) 26,351 0.026 678
---------------------------------------------------------------------
CANADA
Eskay Creek 1,433 0.998 1,430
Hemlo (50%) 19,726 0.107 2,118
Holt-McDermott 847 0.182 154
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 296,411 0.057 16,862
Veladero 254,311 0.037 9,384
Pierina 70,343 0.051 3,602
Alto Chicama 120,948 0.054 6,535
---------------------------------------------------------------------
AUSTRALIA
Plutonic 13,976 0.181 2,533
Lawlers 3,407 0.149 509
Darlot 8,202 0.155 1,269
Yilgarn District Total 25,585 0.168 4,311
Kalgoorlie (50%) 96,898 0.057 5,551
Cowal 75,922 0.037 2,835
---------------------------------------------------------------------
AFRICA
Bulyanhulu 27,420 0.425 11,653
---------------------------------------------------------------------
TOTAL 1,229,152 0.071 86,927
---------------------------------------------------------------------
GOLD MINERAL RESOURCES
As at December
31, 2002 MEASURED (M) INDICATED (I) (M)+(I)
---------------------------------------------------------------------
Tons Grade Ounces Tons Grade Ounces Ounces
Based on
attributable
ounces (000's)(oz/ton) (000's) (000's)(oz/ton) (000's) (000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 16,445 0.069 1,139 29,955 0.070 2,092 3,231
Meikle 1,932 0.584 1,129 3,175 0.393 1,249 2,378
Goldstrike
Property
Total 18,377 0.123 2,268 33,130 0.101 3,341 5,609
Round
Mountain
(50%) 13,545 0.008 104 3,910 0.018 72 176
Marigold
(33%) - - - 13,665 0.016 219 219
---------------------------------------------------------------------
CANADA
Eskay Creek - - - 382 0.401 153 153
Hemlo (50%) 888 0.128 114 1,789 0.075 134 248
Holt-McDermott - - - 246 0.248 61 61
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 3,962 0.055 216 111,883 0.029 3,271 3,487
Veladero 9,000 0.023 209 126,760 0.024 3,051 3,260
Pierina 8,599 0.016 137 31,339 0.016 489 626
Alto Chicama - - - 56,352 0.035 1,998 1,998
---------------------------------------------------------------------
AUSTRALIA
Plutonic 4,523 0.073 331 14,826 0.132 1,956 2,287
Lawlers 2,178 0.154 336 6,201 0.126 779 1,115
Darlot 1,157 0.175 202 3,012 0.112 338 540
Yilgarn
District
Total 7,858 0.111 869 24,039 0.128 3,073 3,942
Kalgoorlie
(50%) 14,558 0.054 791 27,353 0.054 1,488 2,279
Cowal 1,588 0.041 65 33,623 0.035 1,190 1,255
---------------------------------------------------------------------
AFRICA
Bulyanhulu - - - 4,765 0.352 1,678 1,678
---------------------------------------------------------------------
OTHER - - - 1,085 0.335 364 364
---------------------------------------------------------------------
TOTAL 78,375 0.061 4,773 470,321 0.044 20,582 25,355
---------------------------------------------------------------------
GOLD MINERAL RESOURCES
As at December 31, 2002 INFERRED
---------------------------------------------------------------------
Tons Grade Ounces
Based on attributable ounces (000's) (oz/ton)(000's)
---------------------------------------------------------------------
UNITED STATES
Betze-Post 1,217 0.074 90
Meikle 7,819 0.351 2,741
Goldstrike Property Total 9,036 0.313 2,831
Round Mountain (50%) 9,827 0.016 157
Marigold (33%) 29,583 0.014 402
---------------------------------------------------------------------
CANADA
Eskay Creek 96 0.615 59
Hemlo (50%) 4,001 0.137 550
Holt-McDermott 509 0.257 131
---------------------------------------------------------------------
SOUTH AMERICA
Pascua-Lama 126,841 0.027 3,475
Veladero 78,211 0.024 1,894
Pierina 1,134 0.020 23
Alto Chicama 24,820 0.042 1,045
---------------------------------------------------------------------
AUSTRALIA
Plutonic 7,333 0.161 1,183
Lawlers 2,326 0.123 286
Darlot 56 0.214 12
Yilgarn District Total 9,715 0.152 1,481
Kalgoorlie (50%) 6,779 0.050 342
Cowal 29,462 0.033 967
---------------------------------------------------------------------
AFRICA
Bulyanhulu 4,253 0.592 2,517
---------------------------------------------------------------------
OTHER 731 0.468 342
---------------------------------------------------------------------
TOTAL 334,998 0.048 16,216
---------------------------------------------------------------------
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