•BARR cover 3/28/01 12:42 PM Page 1 (1,1)
You can contact us toll-free within
Canada and the United States at
1-800-720-7415
E-mail us at investor@barrick.com
Visit our investor relations
Web site at www.barrick.com
Barrick
S&P 500
1991
2000
OPERATING CASH FLOW
B
A
R
R
I
C
K
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
0
B A R R I C K A N N U A L R E P O R T 2 0 0 0
•BARR cover 3/28/01 12:42 PM Page 1 (2,1)
Barrick
S&P 500
B
A
R
R
I
C
K
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
0
1991
2000
OPERATING CASH FLOW
B A R R I C K A N N U A L R E P O R T 2 0 0 0
PROFILE
Barrick Gold Corporation is a leading international gold company
with operating mines and development projects in the United
States, Peru, Tanzania, Chile, Argentina and Canada. The Company
produced 3.7 million ounces of gold in 2000 at $145 per ounce, the
lowest cash costs in the industry.
Barrick is positioned to prosper, with competitive advantages that
include the industry’s only ‘A’-rated balance sheet, the highest margins,
a unique Premium Gold Sales Program, and rising free cash flows.
Barrick’s shares trade under the ticker symbol ABX on the Toronto,
New York, London and Swiss stock exchanges, as well as the Paris Bourse.
CONTENTS
Highlights .....................................................................2
Chairman’s Message ................................................4
Gold Mineral Reserves
and Mineral Resources...........................................67
Letter to Shareholders ............................................6
Premium Gold Sales Program Schedules ..........71
Objectives ..................................................................19
Supplemental Information ....................................74
Premium Gold Sales Program..............................20
Corporate Governance & Committees ...............77
Corporate Responsibility ......................................22
Board of Directors and Officers ..........................78
Management’s Discussion and Analysis ...........25
Shareholder Information ......................................80
Financial Statements ............................................44
Corporate Information...........................................82
All dollar amounts given in United States dollars unless otherwise indicated.
•BARR cover 3/28/01 12:42 PM Page 2 (1,1)
BARRICK. BUILT TO LAST.
In the ebb and flow of the capital markets, it’s the innovative companies that
stand the test of time.
Anchored in rock solid values, these companies are driven to change and
improve everything except their guiding principles.
Looking out to the horizon, innovative companies anticipate change, and act
decisively – prospering over longer periods of time than their contemporaries.
Furthermore, while not impervious to market turbulence, innovative
companies possess the determination to address economic realities head on –
creating value, even in times of adversity.
Finally, more than being just enduring or successful, innovative companies
are the leaders across industries and have been so – seamlessly – through
multiple generations.
From the beginning, Barrick set out to be such a company. And, if financial
strength, management, discipline and superior long-term business performance
are any indication, we are right on target.
l
y
a
e
S
n
y
e
c
o
J
l
,
a
r
d
n
a
x
e
O
a
i
s
e
L
l
:
I
N
O
T
C
U
D
O
R
P
l
r
o
y
a
T
e
s
i
u
o
L
:
I
N
O
T
C
E
R
D
T
R
A
I
n
g
i
s
e
D
g
g
E
:
I
N
G
S
E
D
.
c
n
I
l
s
n
o
i
t
a
e
R
r
o
t
s
e
v
n
I
d
e
t
a
r
g
e
t
n
I
y
g
o
l
i
r
T
:
T
N
E
M
E
G
A
N
A
M
T
C
E
J
O
R
P
D
N
A
E
V
T
A
E
R
C
I
COMPARISON OF OPERATING CASH FLOWS PER SHARE
Barrick
S&P 500
%
300
250
200
150
100
50
1991
2000
Over the past 10 years, the average annual operating cash flow
per share of S&P 500 companies has more than doubled. In that same
period, Barrick’s annual operating cash flow per share has tripled.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B U I L T T O L A S T
1
H I G H L I G H T S
OPERATING EARNINGS *
millions of dollars
OPE RAT ING CASH F LOW
millions of dollars
334
331
Operating earnings
have grown by more
than 10% over the
301
past two years.
Operating cash
flow has increased
by more than 30%
since 1998.
705
702
539
250
98
99
00
450
98
99
00
*Net income excluding non-cash provision
CASH BALANCE
millions of dollars
MINERAL RESERVES - GOLD
millions of ounces
Barrick’s cash
623
Calculated at $300
59.3
58.5
balance has increased
by 33% since 1998.
500
416
per ounce, $25 less
51.5
than last year,
mineral reserves
remain virtually
unchanged.
0
98
99
00
20
98
99
00
GOLD PRODUCTION
millions of ounces
TOTAL CASH COSTS
dollars per ounce
Gold production rose
to a record level.
3.74
3.66
3.20
180
145
134
Cash costs remain
the lowest of any
major producer in
the industry.
2.00
98
99
00
0
98
99
00
2
H I G H L I G H T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
H I G H L I G H T S
Financial Highlights (in millions of dollars except per share data)
1998
1999
2000
change
1999-2000
Revenue from gold sales
Net income (loss) for the year
Before provision
After provision
Operating cash flow
Cash
Shareholders’ equity
Net income (loss) per share
Before provision
After provision
Operating cash flow per share
Dividends per share
Operating Highlights
Gold production (thousands of ounces)
Total cash costs per ounce*
Total production costs per ounce – net**
$ 1,287
$ 1,421
$ 1,330
301
301
539
416
331
331
702
500
334
(766)
705
623
3,592
4,154
3,023
0.79
0.79
1.43
0.18
0.83
0.83
1.80
0.20
0.84
(1.93)
1.78
0.22
3,205
$
$
180
223
3,660
$
$
134
205
3,744
$
$
145
204
Gold Mineral Reserves and Mineral Resources (thousands of ounces)***
Mineral reserves: proven and probable
Mineral resources (including inferred)
51,456
16,789
59,283
21,959
58,510
26,082
* Calculated in accordance with the Gold Institute Standard.
** Not including amortization related to acquisition costs.
*** For a detailed breakdown of mineral reserves and resources by category, see pages 67-70.
-6%
+1%
+25%
-27%
+1%
-1%
+10%
+2%
+8%
-1%
+19%
B A R R I C K A N N U A L R E P O R T 2 0 0 0
H I G H L I G H T S
3
B U I LT T O L A S T
r
e
d
n
u
o
F
d
n
a
n
a
m
r
i
a
h
C
,
k
n
u
M
r
e
t
e
P
“Barrick competes
with the best, not
just the best gold
companies, but the
and a refusal to be driven by the price of a volatile
commodity. From the start, I wanted Barrick to be a
business first; a mining house second. I envisioned a
company that would combine an aggressive operating
style with a conservative business approach – entre-
best companies,
preneurial verve tempered by fiscal discipline.
period.”
Today, this discipline is apparent throughout
There is a simple chart on the cover of
this annual report. It shows vividly how
much faster Barrick’s cash flow has grown
than that of the other S&P 500 companies as a
Barrick, from the strength of our balance sheet
and the quality of our reserves, to our no-nonsense
style of operating. We don’t shrink from making
tough decisions, which is why we decided this
year to adjust the book value of our mines to
reflect current gold prices. In the process, we have
group. It speaks volumes about Barrick’s compar-
maintained our ‘A’ credit rating.
ative performance in one of the most important
Barrick has been built on the principles
drivers of a company’s value: cash flow.
mentioned here, but it continues to excel because it
As the founder of this Company, I am gratified
is managed and run by an extraordinary team
by this simple chart because it demonstrates that
of talented and dedicated men and women.
Barrick can prosper in any environment, even a
On behalf of our entire team, I thank you, my
hostile one in which the price of gold sinks to
fellow shareholders, for your ongoing support.
twenty-year lows. It proves that Barrick competes
We continue to devote ourselves to increasing
effectively with the world’s best, not just the best
the long-term value of Barrick.
gold companies, but the best companies, period.
Barrick is built to last. You have our word.
Our success is not an accident. We have achieved
this performance by sticking to our five guiding prin-
ciples, listed on the opposite page. These principles
grew out of my vision for Barrick at its founding in 1983.
Peter Munk
I wanted to create a different kind of gold company,
Chairman
characterized by a commitment to shareholder value
March 9, 2001
4
C H A I R M A N ’ S M E S S A G E
B A R R I C K A N N U A L R E P O R T 2 0 0 0
G U I D I N G P R I N C I P L E S
1 . E N T R E P R E N E U R I A L M A N A G E M E N T
2 . F I N A N C I A L D I S C I P L I N E
3 . C O N S I S T E N T L Y H I G H M A R G I N S /
H I G H R E T U R N S
4 . C O R P O R A T E R E S P O N S I B I L I T Y
5 . V A L U E C R E A T I O N I N A N Y
E C O N O M I C E N V I R O N M E N T
B A R R I C K A N N U A L R E P O R T 2 0 0 0
F I N A N C I A L H I G H L I G H T S
5
F E L L O W S H A R E H O L D E R S,
t
n
e
d
i
s
e
r
P
,
t
n
a
h
p
i
l
O
l
l
a
d
n
a
R
r
e
c
i
f
f
O
e
v
i
t
u
c
e
x
E
f
e
i
h
C
d
n
a
“We have the financial
strength, the flexibility
and discipline required
to prosper in any gold
A company that has the resources and
strategies to build this business – your business –
in any environment, even at a 20-year-low
gold price.
All in all, an innovative company that is built
environment. And I am
to last . . . and built to grow.
confident that we will.”
The principles that Peter talks about in the
strength at Barrick. You can see it in our
preceding pages have created lasting
rising operating cash flows and operating earnings,
First, I’d like to give you an overview of the year,
highlighting the most salient features. After that,
I will take a look at the year from the perspective
of our guiding principles, which will put our
activities and achievements in a proper context.
It was a year of gathering strength, in which we
and in the quality of our balance sheet and assets.
launched value-building initiatives for the future
You can also see it, I believe, in the caliber of our
and made tough decisions in line with the market
people and the optimism we share for the future.
realities of the present. We improved the ability of
Barrick has arrived at a position of strength,
our mines to spin off cash flow, one of the main
even as our industry has grown weaker, because
drivers of value for the future. And we exercised
we have stuck to unchanging principles while
discipline in assessing how best to deploy that
adapting our tactics to changing circumstances.
cash flow, or more to the point, preserve that cash
In the process, we have created a company that
in an environment where cash is king.
is grounded in market realities, yet charged with a
Our shareholders’ interests are always foremost
sense of the opportunities before us.
in our thinking. We are confident that we are
A company that has the ability to size up those
serving those interests by building economic value
opportunities and the flexibility, the discipline and
that we believe will be recognized by the market.
the will to act on them decisively in the best
interests of our shareholders.
6
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
A Y E A R O F G AT H E R I N G S T R E N G T H
“Our Premium Gold Sales Program
During 2000, we produced more gold than ever –
at the lowest cost among the majors in the
earned $300 million in additional
industry – and consolidated our financial strength.
revenues in 2000 alone.”
• Our production rose to a new level, 3.7 million
ounces at a cash cost of $145 an ounce.
A Y E A R O F VA L U E - B U I L D I N G I N I T I AT I V E S
• Operating earnings rose to $334 million
In 2000, we continued our focused approach to
($0.84 per share) and operating cash flow was
building value and pursuing the highest possible
$705 million ($1.78 per share), both new levels
return on capital. On the acquisitions front, we
in our history. After a non-cash provision to
acquired Pangea Goldfields Inc., complementing
adjust our balance sheet to reflect low gold
our extensive land position in Tanzania, where
prices, a prudent thing to do, we recorded a
our new Bulyanhulu Mine is situated.
loss of $766 million.
On the development front, construction of
• Our Premium Gold Sales Program maintained
Bulyanhulu proceeded smoothly, as did work on
its 52-quarter winning streak – that’s 13 straight
Rodeo at the Goldstrike Property in Nevada –
years of exceeding the spot price. The program
two low-cost, long-life producers scheduled to
earned $300 million in additional revenues in
come on-line this year.
2000 alone.
We also completed the new roaster at our
• Barrick’s operating mines generated $530 mil-
Goldstrike Property. The new facility had a
lion of free cash flow, some of which we used
smooth start-up, and since then has exceeded
to acquire, explore and develop new projects
our expectations for both throughput and costs.
that will add earnings and free cash flow, not
The roaster success is one reason Goldstrike
just this year, but for years to come. We paid
set a production record last year, at one of the
$87 million in dividends last year and increased
lowest cash costs in its history.
our cash balance by 25% to $623 million.
• We achieved high cash margins of $215
A Y E A R O F R E A L I T Y- B A S E D D E C I S I O N S
an ounce.
The Provision: At Barrick we deal with market
• We maintained our ‘A’-rated balance sheet,
realities as they are – not as we might wish them
the strongest in the industry.
to be. In light of the low gold price environment,
Barrick conducted a comprehensive review of both
the asset values carried on its books and its gold
reserves. The review resulted in a non-cash
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
7
provision of $1.1 billion, taken in the fourth quarter,
to adjust the carrying value of gold-related assets.
There are two key points to keep in mind about
this provision:
1.
It is non-cash and has no impact on Barrick’s
cash flows, reserves, production profile or
employment levels.
2. It reflects the reduced value of assets that were
acquired prior to 1997 with higher-valued shares
when gold prices were nearly $400 an ounce.
EAR N IN GS
(millions of dollars)
213
175
92
334
292
251
256
262
331
301
218*
-123*
To put this decision in proper perspective, over
91
92 93 94 95 96 97 98 99 00
-766*
the past four years, we’ve cut our costs by
*includes non-cash provision
one-third. We’ve dropped our mineral reserve
calculation price from $400 per ounce in 1996
ounces for 2000, as compared to 59.3 million
to $300 this year. Now we’ve brought our
ounces in 1999. Even at $275 per ounce, our
Results-oriented:
further demonstrates the quality of our asset base.
mineral reserves are only reduced by 3%. This
John Carrington and
his team have reduced
cash costs at a rate
that is second to none
in the industry.
The decision to delay Pascua-Lama: In December
of 2000, we made another decision that reflected
the realities of a weak gold and silver price
environment – we deferred the start-up of
construction at our Pascua-Lama Project in
Chile and Argentina. In so doing, we retained
balance sheet up to date. The markets have recog-
complete financial flexibility without diminishing
nized lower values for gold producers’ assets.
Pascua-Lama’s potential. In other words, the vast
Our balance sheet now reflects these lower values
Pascua-Lama gold and silver deposit isn’t going
as well.
anywhere. We are continuing with engineering
Our decision to calculate our gold mineral
work and enhancing the project’s development
reserves on a gold price of $300 per ounce, as
plan. Pascua-Lama remains a long-life, quality
compared to $325 an ounce in 1999, has minimal
asset that should be a significant contributor to
impact on mineral reserves. This can be seen in the
our production, earnings and cash flow in a more
fact that Barrick’s mineral reserves remain virtually
favorable gold and silver price environment.
unchanged, on the same asset base, at 58.5 million
8
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
n
a
m
r
i
a
h
C
e
c
i
V
,
n
o
t
g
n
i
r
r
a
C
n
h
o
J
r
e
c
i
f
f
O
g
n
i
t
a
r
e
p
O
f
e
i
h
C
d
n
a
B U I L T
T O L A S T
1E N T R E P R E N E U R I A L
M A N A G E M E N T
people whose expertise and dedication built your
company into an industry leader. For example,
the same people who brought the Betze-Post,
E N T R E P R E N E U R I A L
M A N A G E M E N T
I think our willingness to take the tough decisions,
to do what is right for shareholders, not just what
Holt-McDermott, Meikle and Pierina mines into
is easy or convenient, is an ingrained ability within
production in years past are bringing Bulyanhulu
our management. There are others. And we
believe they work to your benefit.
“Barrick still has the key people whose
We like to say that the qualities that have made
expertise and dedication built your
Peter Munk so successful are encoded in our DNA –
the focus on shareholders, the ability to identify
company into an industry leader.”
an opportunity and seize it, the discipline to make
and Rodeo into production in 2001. I’m proud of
the tough decisions, the courage to act decisively
them, and of the team that did a wonderful job of
when the time is right.
bringing the roaster on-stream at Goldstrike last
Experience helps. While we have reinforced
year without a hitch. We have the same kind of
our ranks over the years with some of the best
accumulated expertise in financial management.
talent in the industry, Barrick still has the key
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
9
t
n
e
d
i
s
e
r
P
e
c
i
V
r
o
i
n
e
S
,
y
k
s
l
a
k
o
S
i
e
m
a
J
r
e
c
i
f
f
O
l
a
i
c
n
a
n
i
F
f
e
i
h
C
d
n
a
Continuity in leadership has led to continuity
F I N A N C I A L D I S C I P L I N E
in the key traits I’m talking about. The single
At Barrick, we have always combined a disciplined
premise around which all our thinking revolves
financial approach with an aggressive operating
at Barrick is this: we are shareholder-focused.
style. The key elements of that conservative
How do we ensure a shareholder focus? It starts
financial approach are the Premium Gold Sales
with leadership. When a meaningful part of our
Program, our strong, conservative balance sheet,
managers’ compensation is tied to our share price,
and the prudent use of our capital.
you get a shareholder mentality quite naturally.
Disciplined: Jamie
Sokalsky’s disciplined
approach to financial
management is evident
in our ‘A’-rated
balance sheet.
T H E P R E M I U M G O L D S A L E S P R O G R A M
During 2000, our program realized an average
price of $360 per ounce, an $81 premium to
the average spot price, which translated into
$300 million in additional revenues.
The benefits flow to our shareholders. Our
Premium Gold Sales Program enables us to set
a minimum selling price for our product for a
number of years in advance. This not only
From our executives to our miners working at the
increases our revenues, it makes them more
drift face, all our employees have incentive-based
predictable and lowers risk. Few other lines
pay, which is tied to individual and company
of business have a comparable capacity to predict
performance. You have entrusted us with your
the prices they will receive for their product.
capital and we take that trust seriously.
We are in a business where we continually make
This keeps our culture performance-oriented.
more money for our product simply by selling
Throughout the Company, teamwork and quick
it in advance. It’s like getting paid a premium to
decision-making are prevalent. We act decisively
take out insurance.
to seize opportunities that are right for us.
Our acquisition last year of Pangea Goldfields,
which added to our extensive land position in
Tanzania, is an example.
We assess acquisitions with the same disciplined
approach that led us to take the provision last
PRE MIUM G OLD SALES
PROGRAM POSITION
(millions of ounces)
14.9
year, and to delay Pascua-Lama. Every acquisition
43.6
Uncommitted
Mineral Reserves
Committed
Mineral Reserves
must not only be accretive to earnings and cash
flow but also exceed our cost of capital –
generating at least a double-digit rate of return.
10
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B U I L T
T O L A S T
2F I N A N C I A L
D I S C I P L I N E
PR EM IU M GOLD SALES
R EV EN UE VS. SPOT G OLD PRIC E
(dollars per ounce)
As with all aspects of our business, we manage our
Premium Gold Sales Program with market realities in
mind. For 2001, we re-designated certain contracts,
which had the effect of lowering our realized price
by $20 to $340 an ounce. This value will be realized
in future years, ensuring strong realized prices for
a longer period of time. We now have two years’ pro-
duction protected at a minimum price of $340 per
ounce – and the remaining 7.3 million ounces in the
program at an average price of $360 per ounce.
While reducing our realized price will lower 2001
revenues, we expect to make up more than half of
the reduction through higher production, lower
amortization, lower exploration, and lower income
taxes. This will reduce the impact on our bottom
line, with earnings in 2001 expected to be in the
70-75 cent per share range.
438
76
422
77
362
345
402
18
384
406
22
384
415
27
388
409
49
360
420
88
332
400
106
385
106
360
81
294
279
279
91
92 93 94 95 96 97 98 99 00
Premium Gold
Sales Revenue
Spot Gold Price
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
11
,
t
n
e
d
i
s
e
r
P
e
c
i
V
e
v
i
t
u
c
e
x
E
,
l
l
i
H
n
a
l
A
t
n
e
m
p
o
l
e
v
e
D
S T R O N G , C O N S E R VAT I V E
B A L A N C E S H E E T
C O N S I S T E N T LY H I G H
M A R G I N S / H I G H R E T U R N S
At a time when many companies in our industry
The realized prices we achieve with our Premium
are faced with declining cash balances and rising
Gold Sales Program help us to excel in another key
debts, Barrick’s balance sheet remains solid. At
measure of corporate performance: our consistently
year-end we had cash of $623 million, virtually no
high cash margins, which lead the industry.
net debt, and shareholders’ equity of $3 billion – and
During 2000, we achieved cash margins of
$215 per ounce. And we’ve been achieving margins
Experienced: Alan Hill,
of about $200 an ounce for 13 consecutive years.
who oversaw the deve-
High margins begin with high quality assets.
lopment of Goldstrike and
Pierina, is now leading
the team developing
our Bulyanhulu mine.
Our focus is on large, high-yield properties with
long lives and low costs. They must be capable of
significant cash flow, offer attractive returns and
hold potential for growth in mineral reserves,
production and cash generation. We build our
asset base through acquisitions and our District
an ‘A’ credit rating. The potential for growth created
Development Programs. These development
by this robust financial position is augmented by a
programs are focused on and around all our major
$1-billion line of credit at our disposal.
properties. You’ve seen over the years how our
T H E B U LYA N H U L U F I N A N C I N G
Now, we have another growing success on our
We aim to maintain this balance sheet strength as
hands at Bulyanhulu, where mineral reserve
strategy has paid off at Goldstrike and Pierina.
well as the flexibility it provides. A case in point is
the Bulyanhulu Project financing. While we had
plenty of cash to go it alone, we chose instead
to put in place a $200-million project financing,
for two reasons:
• First, it was prudent to partner with some of
the largest banks and government agencies in
the world. The success of this financing is a
testament to our financial strength and the
quality of the Bulyanhulu project.
• Second, cash is king in today’s environment –
and all things being equal, we liked the idea of
CASH M ARG INS
(dollars per ounce)
243
222
223
208 208
198
251
214 220
215
keeping ours.
91
92 93 94 95 96 97 98 99 00
12
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B U I L T
T O L A S T
3C O N S I S T E N T LY H I G H
M A R G I N S / H I G H R E T U R N S
High quality assets go hand in hand with the
increases have already led us to consider major
future expansions.
other ingredient of high margins, which is low
TOTAL CASH COSTS
production costs. We strive continually to lower
(dollars per ounce)
costs and increase productivity at our mines, with
the aim of remaining the lowest cost producer of
gold globally.
In 2000, all our mines reduced their unit costs,
as they have each year since 1996. In that period,
we have decreased our cash costs by fully one-third
to $145 an ounce, giving us the lowest cost of any
major gold producer in the industry.
That is a rate of improvement that I’m sure
is second to none in this industry. All of our
operations have contributed to this success.
216
12
204
198
18
180
194
29
165
186
18
168
179
17
162
217
24
193
206
24
180
182
20
160
145
9
136
134
10
124
91
92 93 94 95 96 97 98 99 00
Royalties and
Production Taxes
Cash Operating Costs
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
13
Pierina is a striking example of the attention to
Our aim is to continuously improve our return
costs. That property already had our lowest cash
on shareholders’ equity, which last year (before
costs – but the team wasn’t satisfied. By reworking
provision) stood at 8%, or roughly our cost
the mine plan and seeking operating improvements,
of capital. We are confident we can. With our
they have reduced average cash costs of the full
mine life from $100 per ounce . . . to less than $90.
“Over the past few years, the Betze-
Goldstrike remained a leader on this front. Over
Post Pit has cut some $400 million
the past few years, the Betze-Post pit has cut some
$400 million from its mine life cost structure. In
from its cost structure.”
addition, the new roaster at Goldstrike will reduce
high quality assets, low production costs, our
processing costs over the life of the property by
Premium Gold Sales Program and disciplined
roughly $350 million, net of investment. Longer
approach to investment, we are well positioned
term, we expect roaster throughput to be higher
to generate the rates of return that investors
than design – and costs to be 10% lower.
expect in today’s marketplace.
,
t
n
e
d
i
s
e
r
P
e
c
i
V
r
o
i
n
e
S
,
n
o
s
d
i
v
a
D
x
e
l
A
n
o
i
t
a
r
o
l
p
x
E
Value-added: Alex
Davidson oversees our
C O R P O R AT E R E S P O N S I B I L I T Y
At Barrick, we believe that we cannot achieve
these returns in isolation. As a leading international
District Development
gold company, Barrick’s ability to achieve success
Programs to add high-
for our shareholders is tied to our record as
quality mineral reserves.
corporate citizens. Quite simply, good corporate
citizenship is good business. It is the cement that
makes for long-lasting relationships with the
H I G H R E T U R N S
countries wherever we operate. And it is a calling
High returns are another priority. Every project
card that precedes us wherever opportunities
at Barrick must compete for capital, and must earn
might arise in the world.
a return that exceeds the cost of that capital.
We seek double-digit returns on invested capital,
based on the current spot price of gold. For
example, both the new roaster and the develop-
ment of the Rodeo underground deposit at
Goldstrike are expected to generate rates of
return exceeding 20%. And that is before the
benefit of the Premium Gold Sales Program.
14
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B U I L T
T O L A S T
4C O R P O R A T E
Peru: Barrick has applied the same model to the
Pierina Mine in Peru. Since 1998, Barrick has built
roads, houses, and water reservoirs, funded new
R E S P O N S I B I L I T Y
T H E G O L D S T R I K E M O D E L
The touchstone for excellence in corporate
responsibility is our Goldstrike Property in Nevada,
where Barrick pioneered the high standards
health care facilities, and provided educational
that have become our trademark. It has played
support for school children.
a seminal role in the development of the infra-
structure of local communities, from roads to
houses, and schools to hospitals. Community
cohesion benefits everyone, including Barrick
employees, their families and the Company itself.
Care that counts:
A Barrick-financed
medical facility near
So, too, does Goldstrike’s outstanding track
the Pierina Mine is
record of environmental protection, which has
a lasting benefit to
been widely recognized by a number of awards
people in the region.
and citations, and has set the standard for
Barrick worldwide.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
15
I’m proud to report that in the Goldstrike
VA L U E C R E AT I O N I N A N Y
tradition, Pierina received the Mining Development
E C O N O M I C E N V I R O N M E N T
of the Year Award last year. This award recognized
At Barrick, we are relentlessly looking for the
Pierina’s contribution to mining in Peru and
best way to create economic value that should
its leadership in promoting social and economic
ultimately translate into a higher share price.
development, not only in the region but also
During 2000, we completed a comprehensive
throughout the country.
assessment to determine whether our capital
and core skills could be better directed elsewhere.
Next stop Tanzania: Around the Bulyanhulu Mine in
While there are clearly good opportunities
Tanzania, Barrick has already made significant head-
available for a company like Barrick, at this time
way in developing a mutually beneficial relationship.
we concluded that the best business for Barrick to
We have brought in water and power lines, roads
be in . . . is the business we’re in. We’re sticking with
and medical facilities that benefit tens of thousands
gold – not just as the business to be in, but as a
of villagers; we have trained Tanzanian miners and
base to build on. It is the business where we are
begun education and training programs for local
ideally placed to thrive, with a single goal in mind –
entrepreneurs and crafts people. We also are build-
growing economic value. Let me explain.
ing hundreds of houses for our employees, and offer-
Unfortunately, most companies in this industry
ing financing arrangements to make them affordable.
find themselves in a difficult spot. They’re
The net effect, I believe, is a win-win situation
rapidly depleting their high-quality reserve base –
for us and our hosts. Don’t take my word for it, just
and it is tougher to fill the pipeline with new
ask our neighbors in the communities in which
projects because of declining exploration
we operate.
spending across the industry. Many players
OPERATING CASH FLOW
OPE RAT ING E AR NINGS
(millions of dollars)
(millions of dollars)
702
705
539
502
463
470
376
317
283
160
331
334*
292
256*
262*
301
251
213
175
92
91
92
93 94 95 96 97 98 99 00
91
92 93 94 95 96 97 98 99 00
*before non-cash provision
16
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B U I L T
T O L A S T
5V A L U E C R E AT I O N I N A N Y
E C O N O M I C E N V I R O N M E N T
some much-needed discipline – something this
circumstances. As a result, we’re going to see
face deteriorating operating and financial
CONTRIB UTION TO
GOLD MINE RA L R ESERVES
(%)
1
industry has lacked for decades. That can only
be positive for the gold industry. I know it will be
positive for Barrick. The beauty is that given our
focus on discipline, financial strength and market
capitalization, Barrick benefits even if others
do the consolidating. The fewer the hands, the
17
30
Goldstrike
42
10
Pierina
Pascua-Lama
Bulyanhulu
Other
healthier the industry.
We can achieve these objectives through four
Going forward, our financial objectives are
operating strategies. We will continue our drive to:
threefold. We aim to:
•
Increase profitable production,
•
•
Increase earnings and cash flow,
• Expand high quality mineral reserves,
Improve our return on equity, and
• Lower costs, and
• Maintain our strong balance sheet.
• Maximize revenues through our Premium Gold
Sales Program.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
L E T T E R T O S H A R E H O L D E R S
17
“The picture I am painting for you
If gold prices move higher, we can open the
is one of a company in control of
its destiny.”
throttle on assets under our control, like Pascua-
Lama. If the present gold prices persist or soften
further, we’ll still generate strong earnings and
cash flow – and explore options for growth from
Note the distinctions. Not just more production,
a position of strength.
but more profitable production; not just more
mineral reserves, but more high quality mineral
T H E O U T L O O K
reserves; and always lower costs. We can accomplish
The picture I am painting for you is one of a
this through internal growth alone – by investing
company in control of its destiny. A company
in our large, high-yield properties capable of
generating strong and steady free cash flow.
significant cash flow, returns and growth.
A company with an achievable plan for growth
This year we’re looking at:
through its current asset base, and a credible
• An April start-up of Bulyanhulu, a major new
plan for growth through disciplined acquisitions.
mine with capacity for expansion,
Barrick is strong and getting stronger, quarter
• The underground potential at Goldstrike,
by quarter, through a combination of financial
beyond this year’s Rodeo start-up,
strength, flexibility and discipline. We have an
• The potential of Pascua-Lama and the adjacent
‘A’-rated balance sheet, high-quality assets and
Veladero project, and the possible synergies of
plenty of free cash flow. We have more flexibility
the two projects down the road, and
than ever before, more options open to us –
• District Development Programs, which are
and the discipline to choose among them with
underway around our key assets – with all the
the best interests of our shareholders in mind.
efficiencies that flow from the existing
Most significantly of all, I think, we have a
infrastructure.
talented team of the right people to accomplish
But this is only our base case for growth.
our goals on your behalf.
It does not take into account the potential for
growth through acquisitions or joint ventures.
With the strategies Barrick has in place,
we have the ability to grow our asset base,
generate strong earnings and cash flow – and
Randall Oliphant
more importantly free cash flow – not just
President and Chief Executive Officer
in an advantageous environment, but even in
March 9, 2001
the current weak gold price environment.
18
L E T T E R T O S H A R E H O L D E R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
O B J E C T I V E S
2 0 0 0 O B J E C T I V E S
R E S U LT S
1 Produce 3.7 million ounces of
gold, including 2.45 million ounces
• Achieved record production of
3.7 million ounces.
from the Goldstrike Property and more
• The Goldstrike Property produced
than 800,000 ounces from Pierina.
2.45 million ounces while Pierina
contributed 821,614 ounces.
2 Maintain low cash costs of $145 per
ounce, with Meikle and Pierina
contributing 1.65 million ounces
• Met cash cost target of $145 per ounce, with
Meikle and Pierina contributing 1.63 million
ounces at $80 per ounce, reflecting higher
at $75 per ounce.
costs at Meikle.
3 Achieve operating earnings and
cash flow to match 1999 record levels.
• Operating earnings of $334 million
exceeded the 1999 record of $331 million.
• Operating cash flow was $705 million vs.
the 1999 record of $702 million.
• Free cash flow from operating assets
totaled $530 million.
4 Begin construction at Pascua-Lama.
At Bulyanhulu and Rodeo, keep mine
• Pascua-Lama construction deferred
pending a more favorable gold and
construction on schedule and on budget
silver price environment.
for 2001 start-up.
• Bulyanhulu and Rodeo on budget and on
schedule for second and fourth quarter
start-up, respectively.
2 0 0 1 O B J E C T I V E S
1 Smooth start-ups of Bulyanhulu
and Rodeo, which will contribute to
an estimated 3.8 million ounces of
4 Achieve operating cash flow of over
$600 million and free cash flow of more
than $400 million from operating assets.
total production.
ounce.
2 Maintain low cash costs of $156 per
3 Achieve earnings in the 70-75 cent
per share range.
5 Continue work on phased expansion
of Bulyanhulu and expansion of mineral
reserves and mineral resources.
6 Pursue disciplined acquisitions.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
O B J E C T I V E S
19
P R E M I U M G O L D S A L E S P R O G R A M
Barrick’s high quality, low-cost asset base and the Premium Gold Sales Program
generate greater value together than separately. The strategy of revenue
maximization and minimization of gold price risk over time is based on two funda-
mental principles: earning a premium on gold mineral reserves in the ground
and providing predictable revenues.
The hedging program’s strength and reliability
are derived from its unique flexibility, which is a
reflection of the financial and operating attributes
of the Company.
A N I N T E G R AT E D S U C C E S S
The financial strength the program builds allows the
Company to invest in and expand its low-cost asset
base – further adding value to the Company – which
in turn enhances the Premium Gold Sales Program.
The acquisition of Sutton Resources in March
of 1999 is an example of the Company’s financial
strength, allowing it to build a much stronger asset
R EAL IZE D VS. SPOT PR ICE
(dollars per ounce)
350
325
300
2000
2001
2002
2003
2004
2005
Realized price
Spot price
Spot deferred price
This graph illustrates the complete flexibility Barrick has
to sell its gold at the spot price or its locked-in minimum
spot deferred price, whichever is higher.
base in the current weak gold price environment.
in Tanzania. A portion of the premiums earned
“Reducing gold price risk and generating
in 2000 were used to further expand Barrick’s
dominant land position in Tanzania, with the
higher revenues makes good sense to us.”
acquisition of Pangea Goldfields for $115 million.
– Randall Oliphant
Hedging allows the Company to expand its
asset base at a time when others are retreating,
The additional premiums earned on the
increase its mineral reserves and production and,
Company’s gold sales in 1999 more than paid
more importantly, provide predictable earnings
for the acquisition of Sutton Resources, bringing
and cash flow.
Barrick the world-class Bulyanhulu Mine Project
20
P R E M I U M G O L D S A L E S P R O G R A M
B A R R I C K A N N U A L R E P O R T 2 0 0 0
T H E B A R R I C K A D VA N TA G E
T H E PA S T 1 9 8 8 – 2 0 0 0
Three key factors allow this program to benefit
• Gold production of 27.4 million ounces
from high returns:
• Average premium of $66 per ounce –
1. Consistency: While the Company is selective
52 consecutive quarters earning a premium
about the timing of its gold sales, it adds to
to the spot gold price
the program on a regular and disciplined basis.
• Additional revenue of $1.8 billion
2. Favorable Terms: Because of the size and
quality of its mineral reserves and balance
T H E P R E S E N T
sheet, Barrick enjoys the most flexible terms
• Spot deferred ounces of 14.9 million
in the industry.
• Minimum guaranteed prices of $340 per ounce
3. Active Management: The program represents a
for 2001 and 2002 and $360 on the remaining
$4.5 billion off-balance sheet asset of gold sales
7.3 million ounces
contracts. Barrick manages this asset as closely
• No margin at any gold price
as it does its mines to generate the highest
• Complete flexibility to sell gold at the higher
returns at the lowest risk.
of contract price or spot price and defer
delivery for up to 15 years
H O W T H E T R A N S A C T I O N W O R K S - E X A M P L E
BARRICK
BULLION DEALER
CENTRAL BANK
BARRICK
BULLION DEALER
CENTRAL BANK
SPOT GOLD MARKET
INTEREST EARNED 6%
1.5%
LEASE RATE
+
1. The bullion dealer borrows gold from a central bank
2. The $275 is placed on deposit and earns interest of 6%.
and sells it onto the spot market at a price of $275
A fee of 1.5% (gold lease rate) is paid by the bullion dealer to
per ounce.
the central bank. The difference of 4.5% is called “contango”.
+
CONTANGO 4.5%
+
SPOT + CONTANGO
4. The bullion dealer returns the borrowed gold to the
central bank. Barrick receives the original proceeds from
3. Barrick delivers the gold from mine production
the spot sale ($275) plus the five years of accrued
against the spot deferred contract.
contango ($65) for a total amount of $340 per ounce.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
P R E M I U M G O L D S A L E S P R O G R A M
21
C O R P O R A T E R E S P O N S I B I L I T Y
Barrick believes that corporate responsibility begins at home and belongs
wherever we operate. This serves our shareholders’ interests, just as it benefits
the people and countries that host us.
It starts at the corporate level. Barrick’s policy is
C O M M U N I T Y- B U I L D I N G
to give 1% of annual pre-tax income to charitable
Barrick applies a good-neighbor policy wherever
endeavors. That’s the beginning of our commit-
it operates. For over a decade, our Goldstrike
ment to corporate responsibility and to society at
Property in Nevada has not only been the biggest
large but it is not the sum total. Barrick ensures
gold producing property in North America, it has
that its operations are models of modern mining
been an engine of prosperity for local communities
at its best – in every sense, everywhere. This
and the state.
means extending the same level of excellence
The Pierina Mine is following that example. Since
Self-reliance:
Furniture-making
1998, Barrick has worked with the local community
to improve standards of living, meet health and
educational needs and, above all, develop self-
sufficiency for an ever-growing number of people.
classes for Peruvians
The focus is on long-term benefits for the
are part of Barrick’s
community – not just for Barrick employees. For
community-building
efforts near Pierina.
example, Barrick has built the Robert M. Smith
School, named after the Company’s former
president, to provide children in the area with first-
class education, from kindergarten through to
to anywhere we mine. Our programs are designed
secondary graduation, in facilities previously
to create lasting economic benefits, build stronger
unavailable in the region. Barrick is also helping
communities, motivate our employees, and protect
local residents develop occupational skills.
the environment.
Equally, our new Bulyanhulu Mine, which begins
In each country where we operate, our
production this spring, is already having a signif-
business is only as strong as the ties we forge
icant impact on the people and economies of
with our hosts, through common goals, shared
Tanzania and of the region. In the past two years,
knowledge, and the lasting prosperity that we
Barrick has:
are sure to create.
• Built a 47-km water pipeline from Lake Victoria
to the mine that is also meeting the water needs
22
C O R P O R A T E R E S P O N S I B I L I T Y
B A R R I C K A N N U A L R E P O R T 2 0 0 0
of 30,000 villagers along the route,
Excellence in Mine Reclamation Award from the
• Built a new medical center to serve miners,
Nevada Division of Minerals in recognition of an
as well as the local population as a whole,
innovative reclamation design.
• Provided education and training for aspiring
We’re taking the high environmental standards
entrepreneurs in the area, and
of our North American operations worldwide.
• Created a Social Development Plan that will
From day one, environmental protection has
construct 600 houses for employees and pro-
been integral to all aspects of the Pierina operation.
vide interest-free loans to purchase them.
And at Bulyanhulu, our Tanzanian mine, we are
taking a similar rigorous approach. Under our
C A R I N G F O R E M P L O Y E E S
comprehensive Environmental Management
Barrick is only as strong as the talents and the
System, we are already providing environmental
commitment of its employees. Our policy is to
awareness training for our employees. We have
attract and keep the best people in the industry. We
established a nursery on site to propagate native
offer attractive wages, benefits and incentive plans.
Their families are equally important. Under the
Robert M. Smith Scholarship Program, all children
of Barrick employees are entitled to receive
funding for post-secondary education. During 2000
alone, Barrick awarded $1.4 million in scholarships
to 600 students under the program. Over 4,000
scholarships worth about $8.4 million have been
awarded since the program began in 1986.
High grades:
We apply our high
environmental
standards wherever
we operate.
O U R E N V I R O N M E N TA L P H I L O S O P H Y
trees for landscaping and revegetation purposes.
Barrick applies stringent environmental standards
And we have created a vegetated area within
wherever it operates, through every stage of the
the mine boundaries as a wildlife refuge for
mining life cycle. The Company’s goal is to meet
monkeys, mongooses, Nile monitor lizards
or surpass all environmental regulations and
and small antelopes.
guidelines, minimize the impact of development,
and restore natural ecosystems to their original
For Barrick, excellence in corporate responsibility
condition, or better.
is not an afterthought – it’s a guiding principle.
Our track record on the environmental front
Wherever we operate, efforts to strengthen the
goes hand in hand with a commitment never to
fabric of communities, create lasting economic
rest on our laurels. In the past four years, Barrick
benefits and protect the environment come with
has won eight major environmental awards. In
the territory of building a business to last.
2000, for example, Goldstrike received an
B A R R I C K A N N U A L R E P O R T 2 0 0 0
C O R P O R A T E R E S P O N S I B I L I T Y
23
OPERATING CASH FLOW VS. SPOT GOLD PRICE
(dollars per ounce)
(millions of dollars)
400
350
300
250
200
1991
800
600
400
200
100
Spot Price
Cash Flow
2000
Over the past 10 years, the gold price has dropped by more
than 25%. During that same period, Barrick’s annual operating
cash flow has increased by more than 400%.
B U I L T
T O L A S T
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S
O F F I N A N C I A L A N D O P E R A T I N G R E S U LT S
O V E R V I E W O F 2 0 0 0
mineral reserves. Based on this review, the Company
Barrick’s operating earnings in 2000 increased to
adjusted the book value of certain assets with a
$334 million, or 84 cents per share (before a non-cash
$1.1 billion (after tax) non-cash provision to reflect the
provision of $1.1 billion), from $331 million, or 83 cents
lower gold price environment (see table on page 26).
per share, in 1999. Operating cash flow increased
Of this total, 75% relates to non-operating assets. The
to $705 million, or $1.78 per share, compared to
provision largely represents the premium over book
$702 million, or $1.80 per share recorded in 1999.
value recorded on acquisitions in 1994 and 1996. This
The Company’s operating assets generated $530 million
provision has no impact on cash flows, mineral reserves,
in free cash flow compared to $380 million in 1999. The
production profiles or employees. As a result of the
year 2000 marks the fourth consecutive year the
provision, the Company recorded a loss of $766 million
Company has increased operating earnings and operating
or $1.93 per share for the year.
cash flow in an environment of declining gold prices.
In 2000, Barrick’s low-cost production, combined
Over the past four years, the price of gold has
with the $81 premium over spot gold prices earned
declined by more than $100 per ounce and 2000 was
through the Company’s Premium Gold Sales Program,
the third consecutive year that gold prices averaged
resulted in cash margins of $215 per ounce. This gives
less than $300 per ounce. As a result, management
Barrick 13 consecutive years of cash margins in the
undertook a comprehensive review of both the asset
$200 per ounce range. The combination of high cash
values carried on its books – primarily those assets
margins and record production led to the Company’s
acquired prior to 1997 with higher-valued shares when
highest operating earnings, operating cash flow and
gold prices averaged nearly $400 per ounce – and gold
free cash flow from operating assets. The Company
OPERATING EARNINGS (BEFORE
PROV ISION) AND CASH FLOW
(millions of dollars)
702
705
539
OPERATING E ARNIN GS (BEFORE
PROVISION ) AND CASH F LOW PER SH ARE
(dollars per share)
1.43
1.80
1.78
301
331
334*
0.79
0.83
0.84*
98
99
00
98
99
00
Operating Cash Flow
Operating Earnings
*before non-cash provision
Operating Cash Flow
Operating Earnings
*before non-cash provision
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
25
C O M P O N E N T S O F N O N - C A S H P R O V I S I O N A N D A D J U S T E D C A R R Y I N G V A L U E S
(millions of dollars)
Asset
Pascua-Lama
Pierina
Goldstrike
Other
Total
Remaining Carrying Value
Provision (After Tax)
Explanation
$
350
$
790
• Premium over book value recorded on Lac acquisition in 1994
753
1,673
82
for Pascua-Lama and the El Indio Belt, when gold price was $390/oz.
132
• Premium over book value assigned to the property in the 1996
Arequipa acquisition, when gold was $375/oz.
107
• Adjusted carrying value of low-grade stockpiles and royalty
acquired in the 1994 Lac acquisition.
71
• Consists of the amount allocated to Bousquet, acquired in 1994
when gold was $390/oz, and certain exploration properties.
$ 1,100
expects to continue to generate strong earnings,
are expected to make more significant contributions
operating cash flow and free cash flow in 2001.
to production, earnings and cash flow in the future as
However, they will be lower than in 2000 because of
they ramp up to full production over the next few years.
the re-designation of certain 2001 hedging contracts,
As well, the Company will continue to focus on lowering
reducing the Company’s realized price by $20 per
unit costs at all its operations while exploring around
ounce. Barrick’s financial performance in 2001 will
these operations for additional mineral reserves.
benefit from the addition of the Bulyanhulu Mine
(Tanzania) and the Rodeo deposit on the Goldstrike
Gold Sales
Property (Nevada), both of which are scheduled to
Barrick’s Premium Gold Sales Program is a management
come into production in 2001. Both of these assets
tool designed to maximize revenue and minimize
2000 CASH MARGIN S
(dollars per ounce)
317
215
190
160
Pierina Property
Other Properties
Goldstrike
Property
Barrick Total
gold price risk over time in order to provide more
predictable earnings and cash flow.
For 2000, this program contributed $300 million
($391 million in 1999) in additional revenue with a real-
ized gold price of $360 per ounce, a premium of $81
GOLD SALES BY
GEOGRAPH IC AR EA
(millions of dollars)
78
92
296
United States
Peru
Canada
Chile
864
Total = $1,330 million
26
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
CONTR IBUTION TO PRODUCTION
BY MINE – 2000
(%)
22
13
21
44
Betze-Post
Meikle
Pierina
Other
PRE MIUM G OLD
SALES VS. SPOT
(dollars per ounce)
400
106
294
385
106
360
81
279
279
over the $279 average spot price of gold for 2000.
Over the past three years, Barrick has realized an
average premium of $97 per ounce above the average
spot price, generating an additional $1.0 billion in rev-
98
99
00
Premium Gold
Sales Revenue
Spot Gold
Price
enue. To the end of 2000, Barrick recorded 13 years of
2000, the Company increased its position by 10% to
earning a premium to the spot gold price. The Company
14.9 million ounces of gold in its Premium Gold Sales
earned an average premium of $66 per ounce over
Program, representing 25% of its mineral reserves.
that time period, for a total of $1.8 billion. At the close of
The Company re-designated certain 2001 spot
O P E R A T I N G P R O P E R T I E S F I N A N C I A L S
99
00
01E
deferred contracts in the program to future years.
With these adjustments, Barrick expects to receive a
minimum realized gold price of $340 per ounce for
100% of its expected production in 2001 and 2002,
Gold production – ounces (thousands)
3,660
3,744
3,831
and an average of $360 per ounce for the remaining
Gold sales per ounce
$ 385
$ 360 $ 340
7.3 million ounces in the program designated beyond
Production costs per ounce
2002. The $20 per ounce reduction in the 2001 real-
Direct mining costs
$ 153
$ 124 $ 148
ized price does not represent a loss of value, but a
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Royalties
Production taxes
Total cash costs per ounce
Amortization
Reclamation
Total production costs per ounce
Amortization – acquisition costs
(18)
(11)
124
7
3
134
104
6
244
(39)
22
(10)
136
8
1
13
(13)
148
7
1
145
156
88
4
237
(33)
81
5
242
(29)
Total production costs – net
$ 205
$ 204 $ 213
Cash margin per ounce
$ 251
$ 215 $ 184
deferral to future years of benefits that were expected
to be derived in 2001.
If gold prices increase above the Company’s minimum
floor price, the Company would have the option to sell
all of its gold at the higher spot price and defer delivery
against the contracts. (Barrick’s Premium Gold Sales
Program is described on page 20.)
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
27
R E V I E W O F O P E R A T I O N S
The Company has operating mines and develop-
Tanzania, Canada, Chile and Argentina. The
ment projects in the United States, Peru,
Bulyanhulu Mine (Tanzania) is scheduled to begin
Production and Operating Costs
Operating costs were $550 million in 2000 compared
to $516 million for 1999. On a per ounce basis, cash
costs for 2000 were in line with plan at $145 per ounce
production in the second quarter of 2001, followed
compared to $134 in 1999. Cash costs increased primarily
in the fourth quarter by start-up at Rodeo on the
because of higher costs at the Goldstrike Property.
Goldstrike Property (Nevada).
TOTAL CASH COSTS
(dollars per ounce)
180
145
134
98
99
00
TOTAL CASH COSTS BY PROPE RTY
(dollars per ounce)
170
154
200
180
42
43
99
00
99
00
99
00
Goldstrike
Pierina
Other
G o l d s t r i k e P r o p e r t y
In 2000, Goldstrike generated $300 million
pit mine and the Meikle underground mine. In 2000,
in free cash flow – net of capital and explo-
the Goldstrike Property generated its best financial
results with free cash flow of $300 million from pro-
ration expenditures and taxes.
duction of 2.45 million ounces of gold, at a cash cost
With mineral reserves of 24.5 million ounces
(42% of the Company’s total mineral
reserves) and production of two million plus
ounces per year expected for at least the next seven
of $170 per ounce. This is compared to production of
2.1 million ounces in 1999, at a cash cost of $154 per
ounce. The 10% increase in cash costs was due to a
20% reduction in the ore grades processed, which was
partially offset by lower processing costs with the addi-
years under the current mine plan, Goldstrike is
tion of the new roaster.
Barrick’s most significant generator of free cash flow.
Goldstrike is expected to produce 2.3 million ounces of
The Goldstrike Property contains the Betze-Post open
gold in 2001 – its seventh consecutive year of production
28
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
over two million ounces – at a cash cost of $195 per
ounce. The higher cash cost is due to ore grades moving
closer to reserve grade at both Betze-Post and Meikle,
Goldstrike’s new roaster, commissioned in the
second quarter, expanded throughput by 70%.
the impact of higher power costs, and start-up costs at
Rodeo. These are partially compensated for by lower pro-
cessing costs with a full year’s operation of the roaster.
Cash costs reflect a power cost increase of $4 per
ounce based on an agreed price increase last fall. The
Company was notified in February 2001 that a further
power cost increase is being contemplated, which would
add an additional $5 per ounce to Goldstrike cash costs.
Goldstrike Property
Dee
L
T
Banshee
Banshee
Siphon
Fault
SOB
Hill
East
North Block
Meikle
East of
Post Fault
Roaster
Process
Rodeo
North
Screamer
Golden
April
North
Post
Siphon
Fault
West
Screamer
End
of
the
World
Fault
Betze-Post
Skarn
Hill
Autoclave
Process
1 mile
OREBODY
EXPLORATION TARGETS
The Goldstrike Property in Nevada includes the Betze-Post open pit mine
and Meikle underground mine, with mineral reserves of 24.5 million
ounces and annual production of over two million ounces per year.
The roaster, the new Rodeo deposit at the Meikle
three key factors in the continuing strength of the
Mine, and the underground exploration potential are
property. The roaster, commissioned in 2000 on time
G O L D S T R I K E F I N A N C I A L S
and on budget, has exceeded planned throughput at
lower than expected operating costs of $12.46 per
99
00
01E
ton – 40% lower than the autoclave cost per ton. The
Gold production – ounces (thousands)
2,108
2,452
2,281
Gold sales per ounce
$ 385
$ 360
$ 340
Production costs per ounce
Direct mining costs
$ 168
$ 114
$ 155
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Royalties
Production taxes
Total cash costs per ounce
Amortization
Reclamation
Total production costs per ounce
Amortization – acquisition costs
(29)
(1)
138
11
5
154
60
2
216
(4)
42
(1)
155
13
2
170
48
2
220
(6)
28
(1)
182
11
2
195
49
3
247
(6)
Rodeo deposit is expected to enter production in the
fourth quarter of 2001. Development work to date
indicates better than expected ground conditions, which
could result in lower mining costs.
An extensive underground and surface drilling
program carried out in 2000 on the Goldstrike Property
focused on high-grade underground targets. A total of
$10 million was spent on exploration during the year.
The program replaced underground production at Meikle
for the fourth consecutive year and identified several
new follow-up targets. Betze-Post mineral reserves
declined at year end as the mine did not replace 2000
Total production costs – net
$ 212
$ 214
$ 241
production and the lower gold price used to calculate
Cash margin per ounce
$ 231
$ 190
$ 145
mineral reserves reduced mineral reserves by approxi-
Capital expenditures (millions)
$ 337
$ 176
$ 120
mately 800,000 ounces. Barrick will continue its explo-
Deferred stripping/stockpile (millions)
$
60
$ (50)
$ (24)
ration program on the Property in 2001 with a planned
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
29
expenditure of $7 million, beginning with a property-
expenditures in 2001 are estimated at $96 million
wide geophysical survey early in the year. Based on the
(net of applied stripping costs of $24 million) for the
results of this survey, additional drilling could augment
purchase of six 330-ton haul-trucks for the Betze-Post
the drilling program already planned for 2001.
Mine (completing the fleet replacement that began
In 2000, capital expenditures for the Goldstrike
three years ago), final construction and development
Property were $126 million (net of applied stripping
work at Rodeo, and mill expansion to increase process-
costs of $50 million) including the purchase of ten
ing capacity of the autoclaves. Sustaining capital going
330-ton haul-trucks at the Betze-Post Mine, construction
forward for the Goldstrike Property is estimated at
of Rodeo, and completion of the roaster. Capital
$18 million per year.
G O L D S T R I K E O P E R A T I N G S T A T I S T I C S
Tons mined (millions)
Tons milled (thousands)
99
156
00
144
01E
150
Outlook for 2001
• Higher mining rate reflects higher density of ore in open pit
5,798
8,677
10,266
• 19% increase in processing capacity with a full year’s benefit
Grade processed (ounces per ton)
Recovery rate (%)
0.40
90.8
0.32
89.2
0.25
88.4
from the roaster
• Lower ore grades mined at Betze-Post and Meikle
Gold production (thousands of ounces)
2,108
2,452
2,281
• Lower production reflects lower grades, partially offset
Mineral reserves (thousands of ounces)
27,251
24,451
Mineral resources (including inferred)
(thousands of ounces)
7,306
7,248
—
—
by higher throughput
B e t z e - P o s t M i n e
Betze-Post is a conventional open pit mine with
of 2000. Production increased 46% to 1.65 mil-
mineral reserves of 18 million ounces at the end
lion ounces of gold at cash costs of $195 per ounce
Betze-Post Mine
Meikle
Roaster
Rodeo
compared to 1.13 million ounces in 1999 at cash costs of
orebody
$203 per ounce, generating $200 million in free cash
flow. The increase in production is attributable to the
mid-year start-up of the roaster facility. Cash costs for
2000 were $10 per ounce lower than planned with
lower processing costs at the roaster and higher than
expected grades, which were partially offset by higher
fuel and power costs.
Autoclave
The Betze-Post Mine, a conventional open pit operation located in the
southern portion of the Goldstrike Property, is expected to produce
1.61 million ounces of gold in 2001.
30
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
(53)
–
190
9
4
203
60
3
266
(6)
62
–
184
10
1
195
48
3
246
(8)
39
–
207
10
1
218
49
3
270
(7)
Production increased 46% to 1.65 million
B E T Z E - P O S T F I N A N C I A L S
ounces of gold at cash costs of $195 per
ounce . . . generating $200 million in free
Gold production – ounces (thousands)
1,130
1,646
1,612
Gold sales per ounce
$ 385
$ 360
$ 340
99
00
01E
cash flow.
Production costs per ounce
Direct mining costs
$ 243
$ 122
$ 168
For 2001, the mine is expected to maintain free
cash flow at close to $200 million, with production
of 1.61 million ounces of gold at cash costs of $218 per
ounce and capital expenditures of $23 million. The
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Royalties
Production taxes
higher cash costs reflect the impact of a full year of
Total cash costs per ounce
higher power costs, amortization of deferred mining
costs of $15 per ounce, and the processing of ore
that is moving toward the average mineral reserve
grade of 0.155 ounces per ton. The effect of lower
ore grades in the future is expected to be partially
offset by lower roaster processing costs and lower
Amortization
Reclamation
Total production costs per ounce
Amortization – acquisition costs
Total production costs – net
$ 260
$ 238
$ 263
Cash margin per ounce
$ 182
$ 165
$ 122
Capital expenditures (millions)
$ 291
$
96
$
47
mining costs because of the mine truck fleet replace-
Deferred stripping/stockpile (millions)
$
60
$ (50)
$ (24)
ment. As well, planned backfilling of the eastern
portion of the pit beginning in 2003 is expected to
lower mining costs because of the shorter haulage
distance for waste material.
B E T Z E - P O S T O P E R A T I N G S T A T I S T I C S
Tons mined (millions)
Tons milled (thousands)
99
155
00
143
01E
149
Outlook for 2001
• The mining rate is expected to rise due to the increase in hauling
4,763
7,438
9,046
capacity of the new 330-ton haul-trucks purchased in the past
Grade processed (ounces per ton)
Recovery rate (%)
0.27
88.2
0.25
87.5
0.21
86.9
15 months and increased ore density
• Unit mining costs are expected to decline 5% because of the new
Gold production (thousands of ounces)
1,130
1,646
1,612
larger haul-trucks
Mineral reserves (thousands of ounces)
20,709
18,000
Mineral resources (including inferred)
(thousands of ounces)
2,293
3,509
—
—
• Tons processed is expected to increase 22% with a full year’s operation
of the roaster and the new ball mill in the autoclaves
• The average grade is expected to decline as lower-grade areas of the
pit are mined
• The lower production reflects the lower grades processed partially
offset by higher throughput
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
31
M e i k l e M i n e
The Meikle Mine, located one mile north of the
Betze-Post Mine, is a high-grade underground
operation incorporating the Rodeo deposit
scheduled for production in the fourth quarter of 2001.
At the close of 2000, mineral reserves at Meikle stood
at 6.5 million ounces. The mine replaced production
for the fourth consecutive year in 2000.
Production was 36,000 ounces less than plan at
Meikle Mine
Betze-Post Pit
Roaster
Rodeo
805,718 ounces of gold and cash costs were higher
Meikle
than plan by $11 at $119 per ounce. The lower produc-
tion and higher costs reflect the mining of more
lower-grade development ore than expected and
Meikle is an underground mine, north of Betze-Post on the Goldstrike
Property. The Rodeo deposit of the Meikle Mine is scheduled for a
fourth quarter 2001 start-up.
M E I K L E F I N A N C I A L S
lower recoveries in the autoclaves. Despite the short-
Gold production – ounces (thousands)
99
978
00
806
01E
669
Gold sales per ounce
$ 385
$ 360
$ 340
Production costs per ounce
fall, the mine generated $100 million in free cash
flow after $80 million in capital expenditures for
the development of Rodeo. For 2001, Meikle is
expected to produce 669,000 ounces of gold at cash
Direct mining costs
$
76
$
99
$ 121
costs of $137 per ounce. The lower production and
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Royalties
Production taxes
Total cash costs per ounce
Amortization
Reclamation
Total production costs per ounce
Amortization – acquisition costs
–
(1)
75
13
8
96
59
2
157
(1)
–
(1)
98
17
4
119
47
2
168
(2)
–
(1)
120
13
4
137
49
2
188
(2)
higher costs reflect mining grades moving to the aver-
age mineral reserve grade of 0.458 ounces per ton,
an increase in development ore from new ore zones,
and start-up costs at Rodeo.
In 2001, exploration will focus on the Banshee area
(located 1,500 feet north of Meikle). A 1,500-foot explo-
ration drift scheduled to begin in the second half of
2001 will follow up on high-grade intercepts from the
2000 surface exploration program. In addition, drilling
Total production costs – net
$ 156
$ 166
$ 186
will continue at Meikle and Rodeo (see diagram above).
Cash margin per ounce
$ 289
$ 241
$ 203
Capital expenditures (millions)
$
46
$
80
$
73
32
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M E I K L E O P E R A T I N G S T A T I S T I C S
Tons mined (thousands)
Tons milled (thousands)
Grade processed (ounces per ton)
Recovery rate (%)
Gold production (thousands of ounces)
99
998
1,035
1.00
94.0
978
00
1,257
1,239
0.70
92.9
806
Mineral reserves (thousands of ounces)
6,542
6,451
Mineral resources (including inferred)
(thousands of ounces)
5,013
3,739
01E
1,218
1,220
0.59
92.7
669
—
—
Outlook for 2001
• The lower mining rate reflects a higher percentage of mining activity in
areas requiring lower-volume mining methods, which offset the increase
in tons from Rodeo
• The lower grade mined reflects an increase in development ore mined from
new ore zones and mining activity in lower-grade areas of Main Meikle
• Unit mining costs are expected to increase 7% due to start-up costs at Rodeo
• The lower production estimate is due to a 16% reduction in ore grades mined
and the lower mining rate
P i e r i n a P r o p e r t y
Located north of Lima, Peru, the Pierina Mine
of 5.7 million ounces at the end of 2000. The
is an open pit operation with mineral reserves
Pierina Mine was Barrick’s lowest cash cost operation
and second-largest generator of free cash flow during
2000. Pierina produced 821,614 ounces of gold at a
cash cost of $43 per ounce, generating $206 million in
free cash flow (equal to $250 per ounce). The mine
replaced half of the mineral reserves depleted by
2000 production through the combination of a suc-
Royalties
cessful exploration program and a reworking of the
Production taxes
mineral reserve model. This represents a significant
Total cash costs per ounce
addition due to the low-cost nature of the mineral
reserves. A reworking of the mine plan based on
detailed drilling increased production estimates for
the next three years, and lowered estimated costs
to $90 per ounce from the original life-of-mine
estimate of $100 per ounce.
P I E R I N A F I N A N C I A L S
Gold production – ounces (thousands)
99
837
00
822
01E
870
Gold sales per ounce
$ 385
$ 360
$ 340
Production costs per ounce
Direct mining costs
$
63
$
78
$
68
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Amortization
Reclamation
Total production costs per ounce
(6)
(15)
42
–
–
42
205
5
252
(22)
(13)
43
–
–
43
202
7
252
(16)
(12)
40
–
–
40
190
10
240
Amortization – acquisition costs
(121)
(115)
(112)
Total production costs – net
$ 131
$ 137
$ 128
Cash margin per ounce
Capital expenditures (millions)
Deferred stripping (millions)
$ 343
$ 317
$ 300
$
$
26
6
$
$
31
18
$
$
11
14
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
33
The Pierina Mine is expected to have its best year
to date in 2001 with production of 870,000 ounces
of gold at a cash cost of $40 per ounce. It is again
Pierina Mine
Valley Fill
Heap Leach
expected to generate free cash flow in the $200 mil-
Processing
lion range.
In 2000, the first exploration program was carried
out at Pierina since mine construction began in 1997.
This program identified an area of mineralization at
the north end of the pit. In 2001, exploration drilling
will focus on this area, as well as on targets at depth
and areas to the south of the pit.
Conveyor
Crushing
ultimate pit limit
The Pierina Mine, a conventional open pit operation located in Peru,
In 2000, capital expenditures at Pierina were
is expected to have its best year to date in 2001 with production of
$49 million, including deferred stripping, additional
870,000 ounces of gold at a cash cost of $40 per ounce.
mine equipment, expansion of the leach dam and
the waste dump, and continuing the expansion of the
construction of housing and community facilities for
leach pad dam. The processing rate is expected to
employees and their families. In 2001, $25 million
increase due to improvements in the crushing and
is planned mainly for deferred stripping, expansion of
grinding circuit and better control of ore feed.
P I E R I N A O P E R A T I N G S T A T I S T I C S
99
00
01E
Outlook for 2001
Tons mined (thousands)
21,591
30,712
30,356
• Mining rate should remain at current levels for the next several years
Tons placed on pad (thousands)
8,140
9,654
10,017
• The 4% increase in tons placed on the pad is due to improvements in
Grade processed (ounces per ton)
Gold production (thousands of ounces)
0.12
837
0.10
822
Mineral reserves (thousands of ounces)
6,146
5,655
Mineral resources (including inferred)
(thousands of ounces)
782
586
0.11
870
—
—
the crushing plant and improved quality control of ore feed blends
• Lower unit operating costs are expected from operating improvements
made in 2000
• The higher production reflects the combination of more tons placed
on the pad and better grade
34
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
O t h e r P r o p e r t i e s
Other Properties consist of the Bousquet Mine
in northwestern Quebec, Holt-McDermott
Mine in northeastern Ontario, and the
El Indio and Tambo Mines in Chile. Together, these
In 2001, Other Properties are expected to produce
417,000 ounces of gold at an average cash cost of
$187 per ounce. The decline in production from 2000
is due to the closure of the Tambo Mine as well as the
properties contributed 469,621 ounces of gold in
decline in ore grades at Bousquet as it approaches
2000 at an average cash cost of $200 per ounce. The
the end of its mine life, scheduled for 2003.
Tambo Mine ceased operations in the second quarter
of 2000. At the end of 2000, mineral reserves for
Other Properties stood at 907,000 ounces of gold.
O T H E R P R O P E R T I E S F I N A N C I A L S
O T H E R P R O P E R T I E S O P E R AT I N G S TAT I S T I C S
Gold production – ounces (thousands)
99
715
00
470
01E
417
Tons milled (thousands)
6,709
2,991
2,671
99
00
01E
Gold sales per ounce
Production costs per ounce
Direct mining costs
Applied (deferred stripping)
By-product credits
Cash operating costs per ounce
Royalties
Production taxes
Total cash costs per ounce
Amortization
Reclamation
Total production costs per ounce
Amortization – acquisition costs
$ 385
$ 360
$ 340
Grade processed (ounces per ton)
Recovery rate (%)
$ 215
$ 248
$ 267
Gold production (thousands of ounces)
0.12
92.8
715
Mineral reserves (thousands of ounces)
1,266
Mineral resources (including inferred)
(thousands of ounces)
4,380
5,768
0.17
91.6
470
907
0.17
92.3
417
—
—
–
(39)
176
4
–
180
119
16
315
(49)
–
(52)
196
4
–
200
93
2
295
(27)
–
(84)
183
4
–
187
25
6
218
–
Total production costs – net
$ 266
$ 268
$ 218
Cash margin per ounce
$ 205
$ 160
$ 153
Capital expenditures (millions)
$
13
$
9
$
10
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
35
B u l y a n h u l u P r o p e r t y
The Bulyanhulu Property is located south of
in Tanzania, East Africa. Bulyanhulu mineral
Lake Victoria on the Victorian Greenstone Belt
reserves have increased to 10 million ounces from
On the development front, construction is proceed-
ing smoothly for a planned second quarter 2001 start-
up. Capital expenditures were $177 million in 2000,
including construction of surface facilities, underground
3.6 million ounces at the time of acquisition in March
development, and related infrastructure. In 2001,
of 1999. Bulyanhulu is the focus of Barrick’s most
$114 million is planned for mine completion prior
significant exploration program. The 2000 program
to start-up, as well as to continue shaft sinking and
was expanded from the original $6 million budget to
underground development.
$26 million because of the exploration success. The ore
body has excellent continuity of mineralization, which
Bulyanhulu mineral reserves expanded 33%
has doubled the Company’s initial estimate of its size.
to 10 million ounces. The Company is looking
To date at Bulyanhulu, nearly 100% of mineral resources
have been converted to mineral reserves. The average
to translate the expanding mineral reserve
grade is 0.43 ounces per ton and, in today’s gold price
base into increased production.
environment, grade is an important factor in determining
the profitability of mineral reserves. A further $10 million
Bulyanhulu is expected to contribute 263,000
is planned for the 2001 exploration program. The
ounces of gold at a cash cost of $166 per ounce in
Company is targeting further increases to mineral
2001, ramping up to approximately 400,000 ounces in
reserves, which have the potential to translate into
2002. The Company is working to increase the life-of-
a higher rate of production.
mine annual production rate from 400,000 to
Bulyanhulu Mine – Longitudinal Section
500,000 ounces of gold. In 2001, the mining rate is
expected to average 1,800 tons per day and increase
to design capacity of 2,750 tons per day in 2003 with
Main Zone
West Zone
0
1 kilometer
400
600
200
800
Upper East Zone
the completion of the shaft sinking. During 2001 and
Lower East
Zone
1000
2002, mill feed will be supplemented by 385,000 tons
of stockpiled ore. Cash costs are expected to decline
meters
to $130 per ounce with the completion of the shaft
MINERAL RESOURCES
DEVELOPMENT COMPLETED
DEVELOPMENT PLANNED
because hauling ore up the shaft is more efficient than
the current method of trucking to surface.
The Bulyanhulu orebody has more than doubled in size since acquisi-
tion (March 1999), extending 2 km at depth and 5 km along strike.
36
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
The Company has established a significant land
Plans include the expenditure of $11 million in 2001
position in one of the most prospective gold regions
at Tulawaka in an effort to increase both mineral
in the world with the July 2000 acquisition of Pangea
reserves and mineral resources. As well, the Company
Goldfields for $115 million.
has acquired or entered into joint ventures on several
As a part of that acquisition, the Company acquired
other properties within trucking distance of the
a 70% interest in the Tulawaka property, located 200
Bulyanhulu processing facility. Any discoveries made on
road kilometers from Bulyanhulu. Tulawaka contains
these other properties would benefit from the existing
1 million ounces of high-grade inferred mineral
infrastructure at Bulyanhulu.
resources and a portfolio of exploration properties.
P a s c u a - L a m a P r o p e r t y
The Pascua-Lama Property is located at the
Chile/Argentina border in South America. At
northern end of the El Indio Belt, straddling the
the end of 2000, total mineral reserves increased to
17.5 million ounces of gold and 594 million ounces
of silver, the largest silver reserve in the world.
Construction on this mine project, scheduled to begin
in December 2000, was deferred due to the less-than-
favorable gold and silver price environment. The
Company continues to review the construction
cost estimate, the development plan and permitting.
Recent construction cost estimates are approximately
25-30% higher than the original estimate of $950 mil-
lion. Pascua-Lama has the potential to be a long-life,
low-cost, quality producer and, in the right gold and
silver price environment, an important contributor
to Barrick’s production, earnings and cash flow.
Pascua-Lama
Property
Pascua-Lama
Morro
Norte
Porfiada
Porfiada
2 kilometers
Tunnels
Lama
Central
Pascua
Extension
Proposed
Process Plant
Lama Central
speranza Sur
MINERAL RESERVES
MINERAL RESOURCES
PLANNED OPEN PIT
EXPLORATION TARGETS
Penelope
Penelope Sur
405000
406000
407000
408000
409000
410000
6753000
6752000
Pan de Azucar
Filo Federico
Filo Federico
Norte
Veladero (40% JV)
6751000
C H I L E
A R G E N T I N A
6750000
The Pascua-Lama Property contains 17.5 million ounces of gold mineral
reserves and 594 million ounces of silver mineral reserves. As well, the
adjacent Veladero project has an expanding mineral resource base.
405000
406000
407000
408000
409000
410000
6753000
6752000
6751000
6750000
Capital expenditures for Pascua-Lama in 2000
Adjacent to Pascua-Lama, Barrick holds a 40% joint
were $107 million, largely for the development plan,
venture interest in the Veladero project. During 2000,
road construction and capitalized interest. In 2001,
an exploration program expanded Veladero’s measured
$67 million is planned for continued work on the
and indicated mineral resources and continued
development plan, continuation of permitting, road
metallurgical test work and technical studies toward
construction, and capitalized interest.
optimizing the scope and economics of the project.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
37
E X P E N S E S
AMORTI ZATION BY PROPERTY
(dollars per ounce)
205
202
119
93
60
48
(Pascua-Lama, Bulyanhulu, Rodeo). For the year, the
Company drew down $151 million of the $200 million
limited recourse project financing for the Bulyanhulu
Mine project. This is repayable in 14 semi-annual
installments beginning in 2002.
For 2001, the Company estimates interest costs
to be $60 million, with $17 million expected to be
expensed and $43 million capitalized to Bulyanhulu,
Pascua-Lama and Rodeo. The higher interest costs
99
00
99
00
99
00
relate to the complete draw down of the $200 million
Goldstrike
Pierina
Other
Bulyanhulu project financing. With respect to Pascua-
Lama, if the gold and silver markets do not recover
A M O R T I Z AT I O N
sufficiently for construction to begin, interest
As planned, amortization declined to $339 million,
expensed would be higher than plan.
or $88 per ounce, in 2000 from $385 million in 1999
primarily due to the 1999 closure of the Bullfrog Mine
C O R P O R AT E
and 2000 closure of the Tambo Mine. As well, the 1999
In 2000, administration costs were $35 million,
sale of the El Coco property lowered the amortization
unchanged from 1999. For 2001, administration costs
basis for the Bousquet Mine. Amortization is expected
are expected to increase to $36 million due to an
to decline slightly in 2001 to $321 million, or $81 per
increase in membership fees for the World Gold
ounce, due primarily to the impact of the 2000 provision
Council. Barrick has been able to maintain low adminis-
as it applied to Bousquet. Amortization includes an
trative costs over the past five years despite the
additional charge for the application of the new
increasing size and geographic scope of its operations.
accounting Standard for Future Income Taxes, which
Reference is drawn to note 12 to the consolidated
amounted to $14 million in 2000 and an estimated
financial statements for a discussion of the impact of
$9 million in 2001 (See Income Taxes section).
I N T E R E S T E X P E N S E
In 2000, the Company incurred $50 million in interest
costs, related primarily to the Company’s $500 million
debentures and the Bulyanhulu project financing. Of
this amount, $6 million was expensed and the remaining
$44 million was capitalized to projects in development
200 0 INTEREST COST
(millions of dollars)
6
Capitalized
Expensed
44
Total = $50 million
38
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
recently issued accounting pronouncements and the
in 2000, before production. At Bulyanhulu, exploration
difference in accounting for the provision for mining
work resulted in 2.5 million ounces being added to
assets under United States accounting principles.
mineral reserves. In addition, work continued on targets
not yet classified as mineral resources. At Meikle, explo-
I N C O M E TA X E S
ration replaced underground production for the fourth
The Company’s effective tax rate for 2000 was 13%.
year in a row. Exploration and reworking of the mine
The decline from 25% in 1999 was primarily due to a
reserve model added 500,000 ounces to mineral
higher portion of earnings being earned in a lower tax
reserves at Pierina. At Pascua-Lama, in-pit drilling
jurisdiction and the implementation of the new accounting
increased the Company’s understanding of the geology
Standard for Future Income Taxes in the first quarter of
and structural controls and facilitated the refinement of
2000. The application of the Standard, which changes
the mine plan. In addition, drilling began on exploration
the method of reporting for Future Income Taxes, did
targets at Filo Federico Norte, Lama Central, Porfiada
not have an effect on net income since the decrease in
and Penelope. At Veladero, located adjacent to Pascua-
income taxes of $14 million was offset by a corresponding
Lama, the 2000 exploration program expanded Barrick’s
increase in amortization as required by the Standard.
share of measured and indicated mineral resources
In 2001, the tax rate is expected to decline to 11% with
to 3.9 million ounces.
a higher percentage of earnings being earned in a lower
tax jurisdiction.
E X P L O R AT I O N
200 0 EXPLORATION E XPE NSE
Barrick’s District Development Programs focus explo-
(millions of dollars)
ration around its existing properties which together
had 58.5 million ounces of mineral reserves at the
end of 2000. (For a detailed breakdown of mineral
reserves and mineral resources by category, see pages
67-70.) Barrick believes there is a higher probability of
finding mineral reserves around existing mines, where
they can be developed more quickly and profitably
due to existing infrastructure.
16
8
17
North America
South America
Business
development
and other
Total = $41 million
200 0 MINERAL RESERV E DEVE LOPMEN T
BY DISTRICT
Total exploration expenditures were $123 million in
(millions of dollars)
2000 (of which $41 million was expensed), $32 million
above plan, primarily due to additional development
drilling at Bulyanhulu, Pascua-Lama and Veladero,
compared to $112 million in 1999. The exploration
programs added 3.4 million ounces to mineral reserves
10
30
Goldstrike
Pascua-Lama
Bulyanhulu
42
Total = $82 million
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
39
2001 EXPLORATION EXPE NSE
(millions of dollars)
12
5
10
North America
South America
Business
development
and other
on a development plan for Pascua-Lama, to purchase
Pangea Goldfields, to augment the Company’s land
position in Tanzania, and to distribute higher dividends.
At the close of 2000, the Company’s cash position had
increased by $123 million to $623 million.
Operating cash flow and free cash flow for 2001 are
expected to remain strong with production of 3.8 million
Total = $27 million
ounces of gold and continued low cash costs of
2001 MI NERAL RESERVE DE VELOPMEN T
BY DIST RICT
(millions of dollars)
21
7
17
Goldstrike
Pascua-Lama
Bulyanhulu
$156 per ounce and lower capital and exploration
expenditures of $357 million. The Company expects
to benefit from its Premium Gold Sales Program,
receiving a minimum realized gold price of $340 per
ounce for 100% of its expected production in 2001.
(Barrick’s Premium Gold Sales Program is described
on page 20.)
Total = $45 million
D I V I D E N D S
During 2000, the Company paid dividends of $0.22
In 2001, exploration expenditures are expected to
per share compared to $0.20 per share in 1999 and
be $72 million (of which $27 million is expected to be
$0.18 per share in 1998. Barrick has increased divi-
expensed) with $25 million allocated to programs at
dends for 13 consecutive years. The Company’s payout
the Bulyanhulu Property and other areas in Tanzania.
ratio of 26% is in line with the average payout ratio
An additional $27 million will be directed to programs
of S&P 500 companies.
in South America and the remainder will be spent in
North America and on corporate development activity.
R I S K M A N A G E M E N T
The level of expenditure in any given year is a function
Financial Risk
of programs on existing properties and new opportunities
Barrick actively manages its risks with respect to
or initiatives that present themselves during the year.
gold prices, currencies, interest rates and by-product
C A S H F L O W
commodity prices. The Company uses a variety of
products to mitigate these risks. These products are
In 2000, operating cash flow was $705 million,
used only for hedging purposes related to the Company’s
compared with $702 million in 1999 ($539 million
specific risk exposures and not for trading purposes.
in 1998). The Company’s operating mines generated
Reference is drawn to note 11(A) to the consolidated
$530 million in free cash flow in 2000. The free cash
financial statements for a discussion of the Company’s
flow was used to develop Bulyanhulu (with additional
use of financial instruments, outstanding commodity
funds from the Bulyanhulu project financing), to work
contracts and credit and market risks.
40
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
Operational Risk
Competitive Environment
Barrick continually assesses the mining risks at each
Barrick competes with other mining companies for
of its operations. The Company works to reduce both
exploration properties, for joint-venture agreements
the likelihood and the potential severity of such risks
and for the acquisition of attractive gold companies.
through its high operational standards, emphasis on
There is a risk that this competition could increase the
employee training, and the risk management and loss-
difficulty of concluding a negotiation on terms that the
control programs in place at each mine site. To the
Company considers acceptable. However, there are a
extent practical, the Company also maintains adequate
number of factors that strengthen Barrick’s competi-
insurance at all times to cover normal business risks.
tive position – it is an entrepreneurial company, with
As well, operational risk is minimized through both
the financial and operational strength required to
asset and mineral reserve diversification. At the close
move quickly and effectively.
of 2000, approximately 47% of the Company’s assets
Barrick also operates from a position of strength
and 43% of its mineral reserves were in North America
through the quality of its people. The Company looks
with the balance in South America and Tanzania. At
for the best people from around the world, and keeps
Goldstrike, increasing processing efficiency reduces
them through high corporate standards of operation,
the risk of rising power and fuel costs, prevalent in
the professional opportunities that it provides, and
this region of the United States.
excellent compensation.
The political risks of operating in various countries
have been assessed and, where appropriate, political
risk insurance has been acquired.
In each country where it has operations, Barrick
is subject to various levels of government controls,
taxation and regulation. This exposes Barrick to the risk
of potentially adverse changes. The Company attempts
to ensure that it complies with current laws at all times
and, through direct and industry-wide contact with
appropriate regulatory bodies, it attempts to
maintain a climate of open communications. Barrick
draws on the expertise of its management team,
Board of Directors and International Advisory Board,
along with a broad range of financial advisors to
help assess risks before making an investment in a
particular country.
200 0 CAPITAL E XPE NDITURES
BY DISTRICT
(millions of dollars)
82
9
126
177
49
107
Goldstrike
Pierina
Pascua-Lama
Bulyanhulu
Other
Reserve
development
Total = $550 million
2001 CAPITAL EXPENDITURES
BY DISTR ICT
(millions of dollars)
10
45
114
96
25
67
Goldstrike
Pierina
Pascua-Lama
Bulyanhulu
Other
Reserve
development
Total = $357 million
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
41
O U T L O O K H I G H L I G H T S
Gold production (millions of ounces)
Realized gold price
Total cash costs per ounce
Amortization per ounce
Total production costs per ounce
Exploration expense (millions)
Income tax rate
2000
3.74
$ 360
$ 145
$ 88
$ 237
$ 41
13%
2001E
Change
Comment on 2001
3.83
$ 340
$ 156
$
81
$ 242
+2%
-6%
+8%
-8%
+2%
• The April start-up of Bulyanhulu and higher production at Pierina
• Re-designation of contracts in 2001 to future years
• Lower grades and higher fuel and power costs primarily at Goldstrike
• Lower amortization primarily at Bousquet
• Lower grades and higher power costs offset by lower amortization
$
27
-34%
• Lower planned exploration in North and South America
11%
-2%
• A higher portion of earnings expected to be generated in a lower
tax jurisdiction
O U T L O O K
In 2001, Barrick expects to continue to perform
While the gold industry has experienced a prolonged
strongly, although several metrics will not match the
period of low prices, Barrick is working to protect
levels achieved in 2000. The Company expects modest
its shareholders from current adversity and to build
increases in production to 3.8 million ounces and in
economic value for the future.
cash costs to $156 per ounce. Operating cash flow,
In pursuing these objectives, Barrick relies on
while lower than in 2000, is expected to be more than
clearly defined operating and financial strategies, and
$600 million, translating into more than $400 million
its established financial strength. The Company has
in free cash flow from existing operations.
an ‘A’-rated balance sheet, the largest cash position
The Company expects earnings of 70 cents to
in the industry and strong free cash flow. As a result,
75 cents per share, a reduction from 2000 (before
Barrick has the flexibility to assess opportunities that
provision). This reflects Barrick’s decision to extend
arise in the gold industry, applying the disciplined
the benefits of the Premium Gold Sales Program
approach that characterizes its financial management.
into the future, resulting in a $20 per ounce reduction
In 2000, Barrick had a strong year, with higher
in the realized gold price for 2001.
production at low costs, and benefited from high real-
Going forward, Barrick will remain focused on build-
ized prices achieved under its Premium Gold Sales
ing economic value for shareholders.
Program. While the Company set new levels for operat-
Barrick is driven by three key financial objectives:
ing earnings and cash flow during the year, its decision
• To increase earnings and cash flow per share,
to adjust the carrying values of certain assets to
• To improve return on equity, and
reflect low gold prices resulted in a loss of $766 million
• To maintain a strong balance sheet.
after a non-cash provision of $1.1 billion (after tax).
42
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
To achieve these financial objectives, Barrick will
Finally, Barrick will continue its Premium Gold Sales
continue to be guided by four operating strategies –
Program with a view to maximizing revenue and mini-
to increase profitable production, lower costs, expand
mizing gold price risk. This program, in combination
high quality mineral reserves, and continue the
with continued high production and low costs, is
Premium Gold Sales Program.
intended to allow the Company to plan its future with
In 2001, Barrick expects to increase profitable pro-
a higher degree of certainty by establishing a minimum
duction to 3.8 million ounces, reflecting another strong
price it can expect to receive for its production.
year from Pierina in particular, and production start-
Barrick has 100% of 2001 and 2002 production
ups at Bulyanhulu and Rodeo. Bulyanhulu is on track to
protected at a minimum price of $340 per ounce
begin production during the second quarter, in the first
and a portion of the production thereafter covered
phase of what could be a multiple-phase development.
at an average price of $360 per ounce.
The Company will assess anticipated increases in the
In this period of low gold prices and possible indus-
mineral resource base at Bulyanhulu with a view to
try consolidation, Barrick has the flexibility to take
increasing production at a rate that optimizes the
advantage of opportunities as they present them-
value of the asset. Production at the Rodeo deposit
selves. If gold prices increase, Barrick is in a position
of the Meikle Mine is expected to add to Meikle’s pro-
to expand production organically with the potential
duction beginning in the fourth quarter of 2001.
offered by Pascua-Lama and the further development
While Barrick’s estimated cash costs are expected
of Bulyanhulu. Should gold prices decline, Barrick has
to increase this year to $156 per ounce, the Company
the financial strength to add to its asset base through
will continue its efforts to reduce costs and improve
disciplined acquisitions, which are both accretive to
productivity, which have already reduced unit costs at
earnings and cash flow and offer an attractive rate of
the Company’s operations for four consecutive years.
return. Each acquisition opportunity will be assessed
In 2001 and beyond, Barrick will endeavor to expand
using a realistic gold price assumption, which, at the
its mineral reserves. At Pierina, the exploration
end of 2000, was $275 per ounce.
program will follow up on 2000 exploration results.
All of the activities of Barrick are designed to
At Goldstrike, the Company plans to drive an explo-
build economic value for shareholders. While the
ration drift through to Banshee to follow up on promis-
results achieved may vary from year to year, the
ing targets. At Pascua-Lama, exploration is scheduled
goal remains constant.
to focus on three satellite targets in an effort to
expand the district mineral reserves and work is sched-
uled to continue on the adjacent Veladero project.
At Bulyanhulu, Barrick plans to continue to concen-
trate efforts on expanding mineral resources as well
as on converting existing mineral resources to
mineral reserves.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
43
C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E
Barrick Gold Corporation
for the years ended December 31, 2000, 1999 and 1998
(in millions of United States dollars except per share data)
Revenues
Gold sales
Interest and other income
Costs and expenses
Operating
Amortization
Administration
Exploration
Interest on long-term debt (note 4)
Provision for (gain on sale of) mining assets (notes 3 and 9)
Income (loss) before income taxes
Income taxes (note 7)
Net income (loss) for the year
Net income (loss) per share (note 6)
Basic
Fully diluted
2000
1999
1998
$ 1,330
$
1,421
$ 1,287
27
1,357
550
339
35
41
6
1,330
2,301
(944)
178
(766)
(1.93)
(1.93)
$
$
$
11
1,432
516
385
35
44
11
–
991
441
(110)
331
0.85
0.83
$
$
$
11
1,298
595
216
36
50
–
(42)
855
443
(142)
301
0.80
0.79
$
$
$
C O N S O L I D A T E D S T A T E M E N T S O F R E T A I N E D E A R N I N G S
Barrick Gold Corporation
for the years ended December 31, 2000, 1999 and 1998
(in millions of United States dollars)
Retained earnings at beginning of year
Change in accounting for income taxes (note 1K)
Net income (loss)
Dividends (note 6)
2000
$ 1,445
(284)
(766)
(87)
1999
$
1,193
–
331
(79)
1998
$
960
–
301
(68)
Retained earnings at end of year
$
308
$
1,445
$ 1,193
See accompanying notes to consolidated financial statements.
44
F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W
Barrick Gold Corporation
for the years ended December 31, 2000, 1999 and 1998
(in millions of United States dollars)
Cash provided by operating activities (note 10)
Cash provided by (used in) development activities
Property, plant and equipment
Purchase and sale of mining properties (notes 8 and 9)
Other
Cash (used in) development activities
Cash provided by (used in) financing activities
Capital stock (note 6)
Long-term obligations
Proceeds
Repayments
Dividends
Cash provided by (used in) financing activities
Increase in cash and equivalents
Cash and equivalents at beginning of year
Cash and equivalents at end of year
Cash and equivalents comprise:
Cash
Short-term deposits
See accompanying notes to consolidated financial statements.
2000
$
705
1999
$
702
1998
$
539
(550)
(115)
28
(637)
6
151
(15)
(87)
55
123
500
623
24
599
$
$
$
623
(620)
30
(8)
(598)
29
25
5
(79)
(20)
84
416
$
500
$
12
488
$
500
$
$
$
(507)
170
(25)
(362)
35
–
(20)
(68)
(53)
124
292
416
21
395
416
B A R R I C K A N N U A L R E P O R T 2 0 0 0
F I N A N C I A L S T A T E M E N T S
45
C O N S O L I D A T E D B A L A N C E S H E E T S
Barrick Gold Corporation
As at December 31, 2000 and 1999
(in millions of United States dollars)
Assets
Current assets
Cash and equivalents
Bullion settlements and other receivables
Inventories and deferred expenses (note 2)
Property, plant and equipment (note 3)
Other assets
Liabilities
Accounts payable and accrued liabilities – current
Long-term debt (note 4)
Reclamation and closure liabilities (note 5)
Future income taxes (note 7)
Shareholders’ equity
Capital stock (note 6)
Retained earnings
Commitments and contingencies (note 11)
See accompanying notes to consolidated financial statements.
Signed on behalf of the Board
Randall Oliphant
Director
C. William D. Birchall
Director
2000
1999
$
623
70
172
865
3,565
105
$
500
133
111
744
4,488
121
$ 4,535
$ 5,353
$
354
676
147
335
1,512
2,715
308
3,023
$
304
525
133
237
1,199
2,709
1,445
4,154
$ 4,535
$ 5,353
46
F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Barrick Gold Corporation (tabular dollar amounts in millions of United States dollars)
1 ACCOUNTING POLICIES
These consolidated financial statements are prepared in accordance with generally accepted accounting principles
(“GAAP”) in Canada. As described in note 12, these principles differ in certain respects from principles and practices
generally accepted in the United States. Summarized below are those policies considered particularly significant for
the Company. References to the Company included herein mean the Company and its consolidated subsidiaries.
The United States dollar is the principal currency of the Company’s business; accordingly, these consolidated
financial statements are expressed in United States dollars.
A Nature of operations
The Company is engaged in the production of gold and related activities including exploration, development,
mining and processing. The activities are conducted principally in the United States, Peru, Chile, Argentina,
Canada and Tanzania.
B Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions. These estimates affect the reported amounts of assets and
liabilities and disclosures of contingent assets 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.
C Basis of consolidation
These consolidated financial statements include the accounts of the Company and its subsidiaries.
D Translation of foreign currencies
The United States dollar is the functional currency of all of the Company’s operations which are classified as
integrated for foreign currency translation purposes.
Under the temporal method, translation gains or losses are included in the determination of net income.
E Cash and equivalents
Cash and equivalents comprise cash, term deposits and treasury bills, with original maturity dates of less than 90 days.
F Inventories
Gold in process and mine operating supplies are valued at the lower of average cost and net realizable value.
G Property, plant and equipment
(i) Property acquisition and mine development costs
Property acquisition and mine development costs are recorded at cost and amortized by the units of production
method based on estimated recoverable ounces of gold. Estimated recoverable ounces include proven and probable
mineral reserves and a component of mineral resources.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
47
(ii) Buildings and equipment
Buildings and equipment are recorded at cost and amortized, net of residual value, using the straight-line method
based on the estimated useful lives of the assets. The maximum estimated useful life of buildings and mill equipment
is 25 years and of mine equipment is 15 years. Repairs and maintenance expenditures are charged to operations;
major improvements and replacements which increase productive capacity or extend the useful life of an asset are
capitalized and amortized over the remaining estimated useful life of that asset.
(iii) Deferred stripping costs
Mining costs associated with waste rock removal are initially deferred and subsequently charged to operating costs
over the estimated life of the mine based on estimated recoverable ounces of gold.
(iv) Properties in development
Costs incurred on properties in development and major capital projects are capitalized until the assets are put
in service, at which time the capitalized costs are amortized in accordance with the policies described above.
Financing costs, including interest, are capitalized on the basis of expenditures incurred for the acquisition
and development of projects, without restriction to specific borrowings for these projects, while the projects are
actively being prepared for production. Capitalization is discontinued when the asset is ready for its intended use.
(v) Exploration properties
Mineral exploration expenditures are expensed as incurred. Property acquisition costs relating to exploration
properties and expenditures incurred on properties identified as having development potential are capitalized on
a project basis. Costs associated with economically viable projects are amortized in accordance with the policies
described above upon commencement of production.
(vi) Property evaluations
The Company reviews and evaluates the recoverability of the carrying amounts of all its mineral properties and
related buildings and equipment when events or changes in circumstances indicate that the carrying amount may
not be recoverable. Estimated future net cash flows, on an undiscounted basis, are calculated using estimated
recoverable ounces of gold (considering current proven and probable mineral reserves and mineral resources
expected to be converted into mineral reserves); estimated future commodity price realization (considering
historical and current prices, price trends and related factors); and operating costs, future capital expenditures,
project financing costs, reclamation costs and income taxes. Reductions in the carrying amount of property, plant
and equipment, with a corresponding charge to earnings, are recorded to the extent that the estimated future net
cash flows are less than the carrying amount.
Estimates of future net cash flows are subject to risks and uncertainties. It is reasonably possible that changes
in circumstances may occur which could affect those future net cash flows and consequently the recoverability of
the Company’s property, plant and equipment.
H Commodity contracts
The Company enters into commodity contracts in the normal course of its business to establish future sales prices
and manage the future cash flow risk associated with price volatility of the commodities produced at its operating
mines. The contracts used are described in note 11 and include spot deferred contracts and commodity options.
Commodity contracts may be designated as hedges of financial risk exposures of anticipated transactions if, both at
the inception of the hedge and throughout the hedge period, the changes in fair value of the contract substantially
offset the effect of commodity price changes on the anticipated transactions and if it is probable that the
48
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
transactions will occur. The Company regularly monitors its commodity exposures and ensures that contracted
amounts do not exceed the amounts of underlying exposures.
Realized prices under spot deferred contracts are recognized in gold sales and by-product credits as the
designated production is delivered to meet commitments.
Purchased call options that are matched with spot deferred contracts, which combined mimic the terms, cash
flows, risks and rewards of real put options, are accounted for in the same manner as the real instruments. The option
premium paid is deferred and recognized in gold sales, together with any realized gains, at expiry of the options.
On October 24, 2000 the Canadian Institute of Chartered Accountants (CICA) Emerging Issues Committee issued
EIC-113, “Accounting By Commodity Producers For Written Call Options”. Accordingly, written call options entered into
on or after that date are recognized on the balance sheet as a liability measured at fair value with changes in the fair
value of the liability recognized in earnings in the period of the change. Written call options entered into prior to
October 24, 2000 are treated as possible future sales commitments. Providing that uncommitted production exists to
meet these commitments, no mark-to-market gain or loss is accrued prior to their expiry date and premiums received
are recognized in earnings at their expiry date.
In the event of early settlement or redesignation of hedging transactions, gains or losses are deferred and
brought into income at the delivery dates originally designated. Where the anticipated transactions are no longer
expected to occur, with the effect that the risk that was hedged no longer exists, unrealized gains or losses are
recognized in income at the time such a determination is made.
Cash flows arising in respect of these contracts are recognized under cash flow from operating activities.
I Derivative financial instruments
The Company enters into derivative financial instruments to manage the interest return component of its Premium
Gold Sales Program. The instruments, which primarily comprise a portfolio of total return swaps, are accounted for
in a manner similar to long-term portfolio investments, and accordingly, are carried at cost less any provisions for
other than temporary impairment. Gains and losses are recognized in the income statement upon realization or at
the maturity of the instrument.
J Revenue recognition
Gold in circuit, poured, in transit and at refineries is recorded at net realizable value and included in bullion
settlements and other receivables and gold sales. Revenue from the sale of by-products such as silver and copper is
credited against operating costs.
K Income taxes
During the year, the Company adopted the provisions of CICA Handbook Section 3465, “Income Taxes”. The
provisions require the use of the liability approach for accounting for future income taxes based on differences
between the carrying amounts of assets and liabilities for tax and accounting purposes. Among other things, the
new standard requires that acquisitions be accounted for gross of underlying tax effects of treating non-deductible
acquisition costs as temporary differences, with an offsetting credit to future income taxes. In accordance with
CICA Emerging Issues Committee Abstract No. 108, the Company has chosen not to restate prior period comparative
carrying amounts of assets acquired whose tax bases, at acquisition date, differed from the assigned values for
accounting purposes. Initial implementation of the new provisions had the effect of: increasing property, plant
and equipment by $69 million; increasing future income taxes by $353 million; and reducing retained earnings
by $284 million. The adoption of the new standard had no effect on net income for the year.
Provisions are made for withholding taxes payable on anticipated repatriation of unremitted earnings of the
Company’s foreign subsidiaries. No provision is made for unremitted earnings which have been indefinitely reinvested.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
49
L Reclamation and closure costs
Estimated reclamation and closure costs are accrued and charged to income over the estimated life of a mine by
the units of production method based on estimated recoverable ounces of gold.
M Stock-based compensation plan
The Company has a stock-based compensation plan, which is described in note 6. No compensation expense is
recognized for this plan when stock or stock options are issued to employees. Any consideration paid by employees
on exercise of stock options or purchase of stock is credited to capital stock. If stock or stock options are repurchased
from employees, the excess of the consideration paid over the carrying amount of the stock or stock option
cancelled is charged to retained earnings.
N Employee benefit plans
The Company accrues its obligations and related costs under defined contribution employee benefit plans as the
benefits are earned by the employees. The Company does not have any defined benefit plans.
2 INVENTORIES AND DEFERRED EXPENSES
Gold in process
Mine operating supplies
Purchased call options premium (notes 1H and 11A(i))
$
2000
85
43
44
$
172
Gold in process excludes $138 million (1999 – $172 million) of stockpiled ore which is not expected to be
processed in the following 12 months. This amount is included in property, plant and equipment.
3 PROPERTY, PLANT AND EQUIPMENT
Property acquisition and
mine development costs
Buildings and equipment
Properties in development
Deferred stripping costs
and ore in stockpiles
Exploration properties
Accumulated
Amortization
Cost
2000
Net
Accumulated
Amortization
Cost
$ 2,213
$
1,572
985
202
141
986
562
–
–
–
$ 1,227
$ 2,413
$
1,010
985
202
141
1,351
1,237
346
241
650
450
–
–
–
$
1999
56
32
23
$
111
1999
Net
$ 1,763
901
1,237
346
241
$ 5,113
$ 1,548
$ 3,565
$
5,588
$ 1,100
$ 4,488
50
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
In 2000, the Company performed a comprehensive evaluation of its property, plant and equipment, on the basis
set out in note 1G(vi). This evaluation resulted in the reduction of carrying values of certain assets, which was
triggered by a number of events. These events include: the continued weakness in the spot gold price and the
downward reassessment of the long-term realized price of gold; and a re-evaluation of certain exploration properties
to reflect the current gold price environment. The Company took a $1.1 billion non-cash provision to earnings, net of
income taxes of $230 million, to cover the writedown of the carrying amounts of various assets. These assets
include: the Pascua-Lama Project in Chile and Argentina; the Pierina Property in Peru and exploration properties;
various assets including low-grade stockpile inventories at the Betze-Post Mine in the United States; and the Bousquet
Mine in Canada.
4 LONG-TERM DEBT
71⁄2% debentures
Project financing – Bulyanhulu
Variable rate bonds
A 71⁄2% debentures
$
2000
500
151
25
$
676
1999
$
500
–
25
$
525
On April 22, 1997, the Company issued $500 million of redeemable, non-convertible debentures. The debentures
bear interest at 71⁄2% per annum, payable semi-annually, and mature on May 1, 2007.
B Project financing – Bulyanhulu
On May 8, 2000, a wholly-owned subsidiary of the Company commenced the drawdown of a limited recourse
amortizing loan of up to $200 million, provided by a syndication of international banks, to partially finance the
construction, development, start-up and ongoing operation of the Bulyanhulu underground gold mining project in
Tanzania. The Company expects to draw on the remainder of the facility in 2001. Repayment will consist of 14 equal
consecutive semi-annual installments falling due on June 15 and December 15 of each year, with the first due no
later than December 15, 2002 and as early as the first repayment date following completion. Completion is defined
under the terms of the agreement as the satisfaction of certain physical, operational, financial, marketing, legal
and environmental tests. The Company expects completion to occur in 2002. The Company has guaranteed the
loan, except in the case of a political risk event occurring, until the completion date, at which point the loan will
become non-recourse to the Company. This facility is insured for political risks equally by branches of the Canadian
government and World Bank. The average interest rate, inclusive of political risk insurance premiums, is LIBOR plus
2.60% pre-completion, and increases following completion, rising in a number of steps to average approximately
LIBOR plus 3.40%. The effective interest rate for 2000 was 9.2%.
C Variable rate bonds
On June 9, 1999, a wholly-owned subsidiary of the Company issued $25 million of variable rate, tax-exempt bonds
which mature June 1, 2029. During 2000, the rate of interest on the bonds, payable weekly, varied from 3.36% to
5.12% with a weighted average rate of 4.25%. The Company has the option to convert the bonds to a fixed rate
and to redeem them early.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
51
D Revolving credit facility
The Company has a credit and guarantee agreement (the “Credit Agreement”) with a group of international banks
(the “Lenders”). The Credit Agreement provides for the Lenders to make available to the Company and subsidiaries
designated by it from time to time a credit facility in the maximum amount of $1 billion or the equivalent amount in
Canadian currency. The Credit Agreement, which is unsecured, has a remaining term of two years. The facility has
an interest rate of LIBOR plus 0.15% when utilized, and an annual fee of 0.075%. As at December 31, 2000 and
December 31, 1999, no amounts were drawn under the Credit Agreement.
E Interest
Interest of $50 million was incurred during the year (1999 – $41 million, 1998 – $43 million). Of this amount $44 million
was capitalized to properties in development and construction projects (1999 – $30 million, 1998 – $43 million).
5 RECLAMATION AND CLOSURE LIABILITIES
The Company has estimated future site reclamation obligations, which it believes will meet current regulatory
requirements, to be $262 million, $144 million of which has been accrued to December 31, 2000 (1999 – $143 million).
Closure costs are estimated at $42 million, $23 million of which has been accrued to December 31, 2000 (1999 –
$20 million). A total of $20 million of these accrued amounts is included in accounts payable and accrued liabilities
at December 31, 2000 (1999 – $30 million).
The Company expects to spend $20 million in 2001, and approximately $15 million in each of the following four
years on these activities. Future changes, if any, in regulations and cost estimates may be significant and will be
recognized when applicable.
6 CAPITAL STOCK
A Issued and outstanding shares
Details of issued and outstanding shares are as follows:
Common Shares (millions)
Outstanding at December 31, 1997
Issued during 1998
For cash
Outstanding at December 31, 1998
Issued during 1999
In full consideration for all the outstanding shares of Sutton Resources Ltd. (note 8)
For cash
Outstanding at December 31, 1999
Issued during 2000
For cash
Outstanding at December 31, 2000
Issued
373
4
377
17
2
396
–
396
Amount
$ 2,364
35
2,399
281
29
2,709
6
$ 2,715
52
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
B Authorized capital
Authorized capital stock of the Company is comprised of an unlimited number of common shares, 9,764,929
First preferred shares, Series A and 9,047,619 Series B, and 14,726,854 Second preferred shares, Series A.
C Shareholder rights plan
In 1998, the Company adopted a Shareholder Rights Plan (the “Plan”) which will be in effect until the 2001
shareholders’ meeting.
The rights issued under the Plan become exercisable only when a person, including any party related to them,
acquires, or announces their intention to acquire, 20% or more of Barrick’s outstanding common shares without
complying with the “Permitted Bid” provisions or without approval of the Board of Directors. Should such an
acquisition occur, each right would entitle a holder, other than the acquiring person and persons related to them,
to purchase common shares of Barrick at a 50% discount to the market price.
A Permitted Bid is a bid made to all shareholders that is open for at least 60 days. If at the end of 60 days, at
least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been
tendered, the offeror may take up and pay for the shares, but must extend the bid for a further 10 days to allow
other shareholders to tender.
D Common share purchase options
There are common share purchase options outstanding, expiring at various dates to December 4, 2010. The options
have an exercise price of the Company’s market closing share price on the day prior to the date of grant. They vest
over the first four years at a rate of one quarter each year, beginning in the year subsequent to granting, and are
exercisable over 7 to 10 years.
As at December 31, 2000, 6 million (1999 – 7 million, 1998 – 9 million) common shares, beyond those
outstanding at year end, were available for granting of options.
The following is a summary of common share purchase option activity:
Outstanding as at December 31, 1997
1998 activity
Granted
Exercised
Cancelled or expired
Outstanding as at December 31, 1998
1999 activity
Granted
Exercised
Cancelled or expired
Outstanding as at December 31, 1999
2000 activity
Granted
Exercised
Cancelled or expired
Outstanding as at December 31, 2000
Common
Shares
(millions)
Range of
Exercise
Prices
Weighted
Average
Price
20
5
(4)
(1)
20
3
(1)
(1)
21
5
-
(4)
22
C$27.35 – C$32.35
C$11.88 – C$28.75
C$18.19 – C$44.25
C$25.95 – C$30.70
C$18.19 – C$30.13
C$22.55 – C$43.20
C$23.60 – C$27.30
C$22.55 – C$27.88
C$22.55 – C$43.20
C$29.34
C$13.98
C$34.58
C$26.32
C$25.71
C$31.72
C$24.24
C$22.95
C$32.77
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
53
The following is a summary of common share purchase options outstanding as at December 31, 2000:
Range of exercise prices
C$22.55 – C$33.88
C$34.00 – C$44.25
Options Outstanding
Options Exercisable
Common
Shares
(millions)
Average
Remaining Life
(years)
18
4
22
7
5
7
Weighted
Average
Price
C$26.49
C$38.92
C$28.73
Common
Shares
(millions)
8
4
12
Weighted
Average
Price
C$27.68
C$39.00
C$31.29
In addition to the above common share purchase options, the Company is obligated to issue approximately
0.7 million shares (1999 – 1.1 million shares) of its common stock in connection with outstanding Sutton stock options
that were assumed by the Company as part of the acquisition. The options have an average exercise price of
C$19.12 (1999 – C$19.57) and an average remaining term of 5 years (1999 – 6 years).
E Net income (loss) per share
Net income (loss) per share was calculated on the basis of the weighted average number of common shares outstanding
for the year, which amounted to 396 million shares (1999 – 390 million shares, 1998 – 376 million shares).
For prior years, fully diluted net income per share reflects the dilutive effect of the exercise of the common
share purchase options outstanding as at year end. The effect of common share purchase options on the net loss in
2000 is not reflected, as to do so would be anti-dilutive. The number of shares for the fully diluted net income per
share calculation for 1999 and 1998 were 410 million shares and 390 million shares, respectively.
In December 2000, the CICA issued a revised CICA Handbook Section 3500, “Earnings Per Share”. The revised
statement, which is effective for the Company’s 2001 fiscal year, is not expected to have a significant impact on
previously reported earnings per share amounts. The standard, among other things, formalizes concepts such as
anti-dilution sequencing, requires enhanced earnings per share disclosures and is similar in many respects to the
equivalent U.S. pronouncements.
F Dividends
In 2000, the Company declared and paid dividends in United States dollars totaling $0.22 per share
(1999 – $0.20 per share, 1998 – $0.18 per share).
54
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
7 INCOME TAXES
As the Company operates in a specialized industry and in several tax jurisdictions, its income is subject to varying
rates of taxation. Major items causing the Company’s income tax rate to differ from the Canadian federal income tax
rate of 38% are set out below:
At the Canadian federal income tax rate
Increase (decrease) resulting from:
Resource and depletion allowances
Tax rates of other jurisdictions
Provision and sale of mining assets
Operating losses and exploration expenditures not tax effected
Non-deductible costs arising from acquisitions
Miscellaneous
Income tax (credit) expense
The principal timing differences and their tax effect are:
Deferred mining and exploration costs
Amortization
Reclamation
Net operating loss
Provision for mining assets
Details of income tax (credit) expense by jurisdiction are:
Current
United States
Canada
Peru
Other
Future
United States
Canada
Peru
Chile
Other
2000
$
(358)
1999
$
168
1998
$
168
(28)
(76)
276
4
–
4
(178)
(3)
(1)
1
(2)
$
$
(230)
$
(235)
$
42
3
7
5
57
(31)
(49)
(52)
(93)
(10)
(235)
$
(178)
$
$
$
$
(47)
(35)
–
10
13
1
110
33
4
(1)
(1)
–
35
72
2
–
1
75
36
6
(6)
–
(1)
35
$
110
$
$
$
$
(54)
(47)
30
38
9
(2)
142
33
33
7
(16)
–
57
78
6
–
1
85
8
54
(9)
–
4
57
142
$
The amount of unrecognized future tax liability for temporary differences related to the Company’s investment in the
United States, which is essentially permanent in duration, is $81 million (1999 – $84 million). Tax assets include operating
loss carryforwards and temporary timing differences that relate to property, plant and equipment and reclamation
and closure liabilities. Net future tax assets include $79 million relating to operating loss carryforwards, the recognition
of which is based on the Company’s judgment regarding its ability to utilize the related tax losses against future income.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
55
Operating loss carryforwards amount to $728 million, of which $487 million do not expire and $241 million
expire at various times over the next 20 years.
Following are the components of the Company’s future tax liability at December 31, 2000 and 1999. The 1999
comparative amounts have been presented after reflecting the $353 million effect of the implementation
adjustments described in note 1K.
Tax assets
United States
Canada
Chile
Peru and other
Total
Valuation allowances
Canada
Chile
Peru and other
Total
Property, plant and equipment
United States
Canada
Chile
Peru and other
Total
$
$
2000
79
72
70
10
231
(49)
(62)
(3)
(114)
(206)
(115)
(5)
(126)
(452)
Total future income tax liability
$
(335)
$
1999
75
43
66
22
206
(28)
(58)
(3)
(89)
(278)
(171)
(97)
(161)
(707)
(590)
8 PROPERTY ACQUISITIONS
A Pangea Goldfields Inc.
On July 27, 2000, the Company acquired Pangea Goldfields Inc. (“Pangea”), an exploration company, at a cost
of $131 million. Each outstanding common share of Pangea was purchased for C$7.00. The acquisition has been
accounted for as a purchase. The assigned values of total assets and liabilities acquired, including $16 million in
cash, amounted to $140 million and $9 million, respectively.
B Sutton Resources Ltd.
On March 26, 1999, the Company acquired Sutton Resources Ltd. (“Sutton”), an exploration company, at a cost of
$281 million. Each outstanding common share of Sutton was exchanged for 0.463 of a common share of the Company,
resulting in 17 million common shares being issued. The Company has assigned a value of $281 million to the common
shares issued as required by generally accepted accounting principles, based upon the quoted market price for the
shares less a 5% discount which represents the issue costs that would otherwise have been incurred. The acquisition
has been accounted for as a purchase. The assigned values of total assets and liabilities acquired, including $30 million
in cash, amounted to $307 million and $26 million, respectively.
56
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
9 SEGMENT INFORMATION
The Company operates in the gold mining industry. The operations are evaluated and managed on a district basis.
The Goldstrike District includes the Betze-Post and Meikle Mines in the United States. Other includes the Bousquet
and Holt-McDermott Mines in Canada, the El Indio Mine in Chile and operations which have been closed or sold.
The Company’s interest in the Doyon Mine was sold in January 1998. The pre-tax gain of $42 million was offset
by a future tax provision, resulting in no gain or loss after tax.
Revenues
Gold sales
Goldstrike
Pierina
Other
Operating costs
Goldstrike
Pierina
Other
Amortization
Goldstrike
Pierina
Other
Segment income before income taxes
Goldstrike
Pierina
Other
Provision for and gain on sale of mining assets
Chile
United States
Peru
Other assets
Exploration
Interest
Corporate expenses, net
Income taxes
Net income (loss)
2000
1999
1998
$
864
296
170
1,330
$
822
322
277
1,421
$
941
23
323
1,287
413
41
96
550
117
173
49
339
334
82
25
441
(883)
(170)
(184)
(93)
(1,330)
(41)
(6)
(8)
178
335
40
141
516
127
172
86
385
360
110
50
520
–
–
–
–
–
(44)
(11)
(24)
(110)
399
3
193
595
117
11
88
216
425
9
84
518
–
–
–
42
42
(50)
–
(25)
(142)
$
(766)
$
331
$
301
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
57
Gold sales by geographic area
United States
Peru
Canada
Chile
Segment capital expenditures
Goldstrike
Pierina
Pascua-Lama
Bulyanhulu
Other
Identifiable assets by geographic area
United States
Peru
Chile/Argentina
Tanzania
Canada
Other countries
Segment assets
Goldstrike
Pierina
Pascua-Lama
Bulyanhulu
Other
Total assets for reportable segments
Cash and equivalents
Other
$
2000
864
296
92
78
$ 1,330
$
$
136
49
149
203
13
550
$ 1,985
805
416
729
149
451
$ 4,535
$ 1,804
800
394
726
53
3,777
623
135
$
$
$
$
$
$
$
1999
852
322
120
127
1,421
405
32
85
77
21
620
2,282
1,093
1,169
366
236
290
5,353
1,937
1,089
1,113
363
151
4,653
500
200
1998
$
1,032
$
$
$
$
$
$
23
124
108
1,287
158
248
79
–
22
507
2,013
1,217
1,085
–
270
70
4,655
1,615
1,215
1,030
–
285
4,145
416
94
$ 4,535
$
5,353
$
4,655
58
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
10 SUPPLEMENTAL CASH FLOW INFORMATION
Cash provided by operating activities includes the following cash payments:
Interest, net of amounts capitalized
Income taxes
A reconciliation of net income (loss) to cash provided by operating
2000
$
4
30
1999
1998
$
11
95
$
–
62
activities is as follows:
Net income (loss)
Non-cash items:
Amortization
Future income taxes
Provision for (gain on sale of) mining assets
Other
Cash provided by (reinvested in) working capital
Bullion settlements and other receivables
Inventories and deferred expenses
Accounts payable and accrued liabilities
Cash provided by operating activities
$
(766)
$
331
$
301
339
(235)
1,330
4
672
(20)
(10)
63
705
$
385
35
–
5
756
(30)
(54)
30
702
$
216
57
(42)
5
537
(10)
(14)
26
539
$
11 COMMITMENTS AND CONTINGENCIES
A Derivative financial instruments
The Company utilizes privately negotiated over-the-counter (“OTC”) contracts. OTC contracts are executed between
two counterparties who negotiate specific agreement terms, including the underlying instrument, notional amount,
exercise price, maturity and premium to be paid. In this context, the underlying instrument may include commodities,
interest rates, foreign exchange rates or bond indices with diversified credit exposure. The Company does not enter
into derivatives which it would consider to be leveraged. The principal types of contracts used by the Company are
described below.
(i) Commodity and foreign exchange contracts
Gold
As part of its Premium Gold Sales Program, the Company has entered into forward sales commitments collectively
referred to as “spot deferred contracts” with several major financial institutions, under which it has commitments to
deliver 14.9 million ounces of gold. A spot deferred contract represents a forward sale based on the spot gold price at
inception plus a return “contango” that accrues until the future delivery date under the contract. The rate at which
contango accrues is determined by reference to a LIBOR-based interest return less the gold lease rate. The extent to
which the LIBOR-based return and gold lease rates are at fixed or floating rates varies by contract, at the discretion
of the Company. The Company has fixed the gold lease rates for all of the contracts scheduled for delivery in 2001
and 2002 and a portion thereafter. The weighted average lease rate on the total spot deferred position was 1.68%
at December 31, 2000. The spot deferred contracts had an average accumulated value of $304 per ounce at
December 31, 2000.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
59
In 1999 the Company purchased a series of gold call options for $67 million, under which it had the right, but not
the obligation, to buy 3.1 million ounces of gold in 2000 and 3.7 million ounces in 2001. The 2000 options expired
unexercised. The 2001 options have an average strike price of $335 per ounce. The options are matched with spot
deferred contracts designated for 2001, such that the combination of the two instruments creates a synthetic put option
that closely mimics the terms, cash flows, risks and rewards of a real purchased put option. In addition to the minimum
prices to be realized through the delivery against the spot deferred contracts, these options provide the Company with
the ability to fully participate in gold prices above $335 per ounce for 97% of 2001 anticipated production.
Written call options are contracts in which the writer, for a fee (premium), sells the purchaser the right, but not
the obligation, to buy on a specified future date a stipulated quantity of gold at a stated price. The Company had
written long-term gold call options in respect of 2.7 million ounces at December 31, 2000. The options, which have
an average strike price of $354 per ounce, expire on various dates over the period from 2003 to 2010. In addition,
short-term written call options in respect of 475,000 ounces of gold were outstanding at December 31, 2000 with
an average strike price of $285 and expiring in 2001. In the event that they are exercised at their expiry dates, the
Company has the ability to deliver production to meet the commitment and has the intent and ability to convert
them into spot deferred contracts at the strike price.
Silver
The Company has entered into spot deferred contracts to deliver 20 million ounces of silver over the next five years,
which had an average value of $4.92 per ounce at December 31, 2000.
Copper
As at December 31, 2000, the Company had purchased put options on 42 million pounds of copper at an average
strike price of $0.77 per pound with various expiry dates in 2001. To partially pay for the cost of these put options,
the Company has written call options on 12 million pounds of copper with various expiry dates in 2001 at an average
strike price of $0.87 per pound.
Canadian Dollars
The Company has purchased Canadian dollar call options at an average price of $0.68 and has sold an equal number
of Canadian dollar put options at an average strike price of $0.64. The options, which expire over the next two years,
give the Company the ability to purchase C$161 million at a maximum price of $0.64 for each C$1 and a minimum
price of $0.68 for each C$1. These contracts are used to manage currency exposures, as a portion of the Company’s
operating costs and development expenditures are denominated in Canadian dollars.
(ii) Other derivative financial instruments
In connection with the management of the interest return component of its gold spot deferred contracts, the
Company has entered into total return swaps with a total notional amount of $900 million or approximately 20% of
the value of the notional amount of the spot deferred contract position of $4.5 billion. Total return swaps represent
the contractual exchange of LIBOR-based interest payments for a return equivalent to the future performance
of a specified investment instrument calculated on a fixed notional amount and for a predetermined period. The
underlying investments are bond indices with diversified credit exposure. The Company has an investment-grade
weighted average rating on its total return swaps of A-.
60
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
(iii) Fair value of derivative financial instruments
Fair values of financial instruments and OTC contracts are determined based on estimates using net present value,
Black-Scholes and other valuation techniques. The estimates are significantly affected by the assumptions used,
including current market and contractual prices of the underlying instruments, as well as time value, and by yield
curve and volatility factors underlying the positions.
The carrying amounts for cash, bullion settlements and other receivables, accounts payable and accrued
liabilities and long-term debt on the balance sheets approximate fair value.
The aggregate favourable fair value of the Company’s commodity and foreign exchange contracts as at
December 31, 2000 at a spot gold price of $272 per ounce amounted to approximately $386 million (1999 –
$165 million). The fair value of the Company’s portfolio of total return swaps was $13 million (unfavourable) at
December 31, 2000 (1999 – $10 million).
(iv) Credit and market risks
The Company is not subject to margin requirements on its Premium Gold Sales Program.
While notional principal is the most commonly used volume measure in the derivative financial instrument
markets, it is not a useful measure of credit or market risk. The notional principal typically does not change
hands, but is simply a quantity upon which interest and other payments are calculated. The possible credit and
market loss associated with the Company’s derivative financial instruments is significantly less than the notional
principal amounts.
Credit risk represents the maximum potential loss due to non-performance by obligors and counterparties
under the terms of their contracts. Derivative financial instruments expose the Company to credit loss if changes in
market rates affect a counterparty’s position unfavourably and the counterparty defaults on payment. Accordingly,
credit risk of derivative financial instruments is represented by the positive fair value of the instruments. The
Company manages credit risk by dealing only with financial institutions that meet its credit rating standards; by
limiting arrangements with individual counterparties; and by entering into master netting arrangements which
incorporate the right of set-off and provide for the simultaneous close-out and net settlement of contracts with the
same counterparty in the event of default or other cancellation under the agreement.
Under these master netting arrangements, the credit risk associated with favourable contracts is eliminated to
the extent that unfavourable contracts with the same counterparty are not settled before favourable contracts. The
Company’s overall exposure to credit risk on derivative financial instruments subject to a master netting
arrangement can change substantially within a short period since it is affected by each transaction subject to the
arrangement. The aggregate credit risk amounted to $390 million at December 31, 2000.
The weighted average rating of the counterparties, based on the total notional value of the spot deferred
contracts and total return swap position, equates to AA-.
Concentrations of credit risk exist if a number of counterparties are engaged in similar activities, are
located in the same geographic region or have comparable economic characteristics such that their ability to
meet contractual obligations would be similarly affected by changes in economic, political or other conditions.
Concentrations of credit risk indicate the relative sensitivity of the Company’s performance to developments
affecting a particular industry or geographic region. Based on the location of the ultimate counterparty, 83%
of this credit risk amount relates to the United States and 17% to Europe. Management believes that the
concentrations described are appropriate for the Company.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
61
Derivative financial instruments, in the absence of any compensating upfront payments, generally have no market
value at inception. They obtain value, positive or negative, as relevant commodity prices, interest rates, bond indices
or exchange rates change such that the previously contracted transactions have become more or less favourable than
what can be negotiated under current market conditions for contracts with the same remaining period to maturity or
expiry. The potential for derivatives to increase or decrease in value as a result of the foregoing factors is generally
referred to as market risk. Market risk associated with the Company’s derivative financial instruments principally arises
in connection with fluctuations in gold and silver spot prices, LIBOR-based interest rates, gold lease rates, bond indices
values and the exchange rate existing between the United States and Canadian dollars.
B Royalties
The Goldstrike, Pascua-Lama and Bulyanhulu Properties are subject to royalty obligations based on the valuable
minerals produced from the properties and various methods of calculation.
C Environmental
The Company’s mining and exploration activities are subject to various federal, provincial and state laws
and regulations governing the protection of the environment. These laws and regulations are continually changing
and generally becoming more restrictive. The Company conducts its operations so as to protect public health and
the environment and believes its operations are materially in compliance with all applicable laws and regulations.
The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
D Claims
On April 30, 1998, the Company was added as a defendant in a class action lawsuit 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, Texarkana Division. The class action alleges, among other things, that
statements made by the Company in connection with its efforts to secure the right to develop and operate the
Busang gold deposit in East Kalimantan, Indonesia were materially false and misleading and omitted to state material
facts relating to the preliminary due diligence investigation undertaken by the Company in late 1996. The Company
believes that the claims are without merit. On July 13, 1999, the Court dismissed the claims against the Company
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 restating their claims against the
Company and certain other defendants and on June 14, 2000 filed a further amended complaint. The Company has
filed motions to dismiss the amended complaints on the basis that the plaintiffs have once again failed to state
a claim. The motions to dismiss are pending before the Court. The amount of potential loss, if any, from these
claims is not currently determinable.
The Company is from time to time involved in various claims, legal proceedings and complaints arising in the
ordinary course of business. The Company is also subject to reassessment for income and mining taxes for certain
years. It does not believe that adverse decisions in any pending or threatened proceedings related to any potential
tax assessments or other matters, or any amount which it may be required to pay by reason thereof, will have a
material adverse effect on the financial condition or future results of operations of the Company.
62
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
12 DIFFERENCES FROM UNITED STATES ACCOUNTING PRINCIPLES
These consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in Canada. The Company monitors differences between Canadian and US GAAP, none of which have a
material effect on the financial statements except as noted below.
A Acquisitions
In determining the value of the shares exchanged in acquisitions, for accounting purposes under US GAAP the
Company used the unadjusted quoted market price of its shares.
The Sutton acquisition in 1999 (see note 8), which was accounted for as a purchase under Canadian GAAP,
represents a pooling of interests for US GAAP purposes. Accordingly, the assets and liabilities and shareholders’
equity of Sutton were combined with the Company’s US GAAP recorded values. Comparative figures were restated
for all periods presented prior to the acquisition to include the combined statements of income and balance
sheets of the merged entities, adjusted to conform with the Company’s accounting policies.
B Stock-based compensation
US GAAP 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, at the date the award is granted. The fair value of the Company’s options
that were granted in 2000 was $30 million (1999 – $16 million). This fair value was estimated using the Black-Scholes
model with assumptions of a 41⁄2- to 6-year expected term, 30% volatility, interest rates ranging from 4.8% to 7.4%
and an expected dividend yield ranging from 0.44% to 1.4%. Under US GAAP the cost of stock compensation for the
year ended December 31, 2000 would be $26 million (1999 – $26 million). The resulting pro forma net loss and loss
per share for the year ended December 31, 2000 is $1,152 million and $2.91 respectively (1999 – net income and
income per share of $300 million and $0.76 per share, respectively).
C Written call options
In accordance with Canadian GAAP, for options written before October 24, 2000, providing that uncommitted
production exists to meet these commitments, no mark-to-market gain or loss is accrued prior to their expiry.
For US GAAP purposes, the Company includes in the income statement the change in the fair value of its written
call option position. The fair value is included in other assets on the balance sheet.
D Income taxes
In accordance with Canadian GAAP, the Company implemented CICA Handbook Section 3465 in 2000 (see note 1K).
Under US GAAP, acquisitions would have been accounted for gross of underlying tax effects of treating non-
deductible acquisition costs as temporary differences, as required by SFAS No. 109, with an offsetting credit to
deferred income taxes.
E Provision for mining assets
In accordance with Financial Accounting Standards Board (“FASB”) SFAS No. 121, project financing costs are excluded
from the evaluation of property, plant and equipment for impairment purposes. In addition, under US GAAP, if assets
are determined to be impaired, a reduction in the carrying amount to estimated fair value is required in accordance
with SFAS No. 121. Fair value has been estimated using discounted expected future cash flows. The resulting impact
was an increase in the provision for mining assets by $343 million, net of income tax effects of $37 million.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
63
F Comprehensive income
There are no significant differences between the Company’s US GAAP net income as reported and its
comprehensive income; accordingly, a separate statement of comprehensive income has not been presented.
G Recent accounting pronouncements
In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,”
which will be effective for the Company’s 2001 fiscal year. SFAS No. 133 requires the recognition of the fair value of
all derivative instruments on the balance sheet. Subsequent to the issuance of SFAS No. 133, the FASB received many
requests to clarify certain issues causing difficulties in implementation. In June 2000, the FASB issued SFAS No. 138,
which responds to those requests by amending certain provisions of SFAS No. 133. The Company is adopting SFAS
No. 133 and the corresponding amendments under SFAS No. 138 effective January 1, 2001.
The Company has determined that its gold and silver forward contracts represent normal sales contracts, as
defined by the criteria in SFAS No. 138, and therefore are excluded from the scope of SFAS No. 133. All transition
adjustments resulting from the adoption of SFAS No. 133 will be reported in net income as the effect of a change
in accounting principle. The Company estimates that on January 1, 2001 it will record, for US GAAP purposes, an
adjustment of $6 million to recognize at fair value all derivative instruments in its statement of financial position
as a liability and measure them at fair value. A corresponding $6 million cumulative-effect type adjustment will be
recorded in the statement of income. A number of SFAS No. 133 and SFAS No. 138 implementation issues are being
considered by the Derivatives Implementation Group (“DIG”). It is reasonably possible that future conclusions
reached by the DIG on implementation issues could affect the method of accounting for the Company’s derivative
financial instruments for US GAAP purposes.
For US GAAP purposes, effective October 1, 2000, the Company implemented Staff Accounting Bulletin (“SAB”)
Note 101, Revenue Recognition. In accordance with SAB No. 101, revenue is recognized at the time of delivery of gold
bullion to customers. This represents a change from the previous accounting policy whereby revenue was recognized
at the time gold was in doré form, in accordance with long-standing industry practice. The impact of this change in the
year ended December 31, 2000 was an increase in net loss by $25 million, as well as an increase in basic net loss per
share by $0.06 including a cumulative amount of $23 million.
The proforma effects of retroactive application of SAB No. 101 were an increase in net loss of $2 million in 2000,
an increase in net income in 1999 of $11 million and a decrease of $3 million in 1998.
H Balance sheets
The following summarizes the balance sheet amounts in accordance with US GAAP where different from the
amounts reported under Canadian GAAP:
2000
Canadian
GAAP
United States
GAAP
1999
Canadian
GAAP
United States
GAAP
Bullion settlements and other receivables
$
Inventories and deferred expenses
Property, plant and equipment
Other assets
Accounts payable and accrued liabilities
Future income taxes
Shareholders’ equity
70
172
3,565
105
354
335
3,023
$
20
244
3,076
112
406
148
2,698
$
133
111
4,488
121
304
237
4,154
$
133
111
4,447
120
304
444
3,905
64
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
I
Income statements
The following summary sets out the adjustment to the Company’s reported net income (loss) in order to conform to
accounting principles generally accepted in the United States:
1999
$
331
1998
$
301
Net income (loss) for the year – Canadian GAAP
Provision for mining assets
Revenue recognition policy
Sutton pre-acquisition costs and expenses
Change in fair value of written calls
Net income (loss) based on US GAAP before accounting change
Cumulative effect of change in revenue recognition policy
Net income (loss) for the year – US GAAP
Net income (loss) per share for the year before accounting change (dollars)
Basic
Fully diluted
Net income (loss) per share for the year (dollars)
Basic
Fully diluted
J Cash flow statements
2000
$
(766)
(343)
(2)
–
8
(1,103)
(23)
$ (1,126)
$
$
$
$
(2.79)
(2.79)
(2.84)
(2.84)
–
–
(4)
(1)
326
–
326
0.83
0.82
0.83
0.82
$
$
$
$
$
The following summarizes the cash flow amounts in accordance with US GAAP where different from
the amounts reported under Canadian GAAP:
Operating activities
Development activities
Financing activities
Opening cash
Closing cash
2000
$
705
(637)
55
500
623
1999
$
699
(637)
(20)
458
500
–
–
(8)
–
293
–
293
0.75
0.74
0.75
0.74
$
$
$
$
$
1998
$
534
(399)
(10)
333
458
B A R R I C K A N N U A L R E P O R T 2 0 0 0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
65
MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
The accompanying consolidated financial statements and all of the data included in this annual report have been
prepared by and are the responsibility of the Board of Directors and Management of the Company. The consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in Canada and
reflect Management’s best estimates and judgments based on currently available information. The Company has
developed and maintains a system of internal accounting controls in order to ensure, on a reasonable and cost
effective basis, the reliability of its financial information.
The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered Accountants.
Their report outlines the scope of their examination and opinion on the consolidated financial statements.
Jamie C. Sokalsky
Senior Vice President and Chief Financial Officer
Toronto, Canada
March 9, 2001
AU D I TO R S ’ R E P O RT TO T H E S H A R E H O L D E R S
O F B A R R I C K G O L D C O R P O R AT I O N
We have audited the consolidated balance sheets of Barrick Gold Corporation as at December 31, 2000 and 1999 and
the consolidated statements of income, retained earnings and cash flow for each of the three years in the period ended
December 31, 2000. These financial statements are the responsibility of the Company’s Management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards in Canada. Those standards
require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of
the Company as at December 31, 2000 and 1999 and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2000 in accordance with accounting principles generally accepted in Canada.
Chartered Accountants
Toronto, Canada
January 26, 2001
66
M A N A G E M E N T R E S P O N S I B I L I T Y / A U D I T O R S ’ R E P O R T
B A R R I C K A N N U A L R E P O R T 2 0 0 0
G O L D M I N E R A L R E S E R V E S A N D M I N E R A L R E S O U R C E S
The table on the next page sets forth Barrick’s
interest in the total proven and probable gold
mineral reserves at each property, based on a
gold price of $300 per ounce (1999 – $325 per ounce).
verified by mining experience. These figures are
estimates, however, and no assurance can be given that
the indicated quantities of gold will be produced. Gold
price fluctuations may render mineral reserves containing
For further details of proven and probable mineral
relatively lower grades of gold mineralization uneconomic.
reserves and measured, indicated and inferred mineral
Moreover, short-term operating factors relating to the
resources by category, see pages 69 and 70.
mineral reserves, such as the need for orderly
The Company has carefully prepared and verified the
development of ore bodies or the processing of new or
mineral reserve and mineral resource figures and believes
different ore grades, could affect the Company’s profit-
that its method of estimating mineral reserves has been
ability in any particular accounting period.
D E F I N I T I O N S
A MINERAL RESOURCE is a concentration or occurrence of natural, solid,
allow the appropriate application of technical and economic parameters, to
inorganic or fossilized organic material in or on the Earth’s crust in such form
support production planning and evaluation of the economic viability of the
and quantity and of such a grade or quality that it has reasonable prospects for
deposit. The estimate is based on detailed and reliable exploration, sampling
economic extraction. The location, quantity, grade, geological characteristics
and testing information gathered through appropriate techniques from
and continuity of a mineral resource are known, estimated or interpreted from
locations such as outcrops, trenches, pits, workings and drill holes that are
specific geological evidence and knowledge. Mineral resources are sub-divided,
spaced closely enough to confirm both geological and grade continuity.
in order of increasing geological confidence, into inferred, indicated and
measured categories:
A MINERAL RESERVE is the economically mineable part of a measured or
indicated mineral resource demonstrated by at least a preliminary feasibility
An inferred mineral resource is that part of a mineral resource for which
study. This study must include adequate information on mining, processing,
quantity and grade or quality can be estimated on the basis of geological
metallurgical, economic and other relevant factors that demonstrate, at the
evidence and limited sampling and reasonably assumed, but not verified,
time of reporting, that economic extraction can be justified. A mineral reserve
geological and grade continuity. The estimate is based on limited
includes diluting materials and allowances for losses that may occur when the
information and sampling gathered through appropriate techniques from
material is mined. Mineral reserves are sub-divided in order of increasing
locations such as outcrops, trenches, pits, workings and drill holes.
confidence into probable mineral reserves and proven mineral reserves:
An indicated mineral resource is that part of a mineral resource for which
A probable mineral reserve is the economically mineable part of an
quantity, grade or quality, densities, shape and physical characteristics can
indicated, and in some circumstances, a measured mineral resource
be estimated with a level of confidence sufficient to allow the appropriate
demonstrated by at least a preliminary feasibility study. This study
application of technical and economic parameters, to support mine planning
must include adequate information on mining, processing, metallurgical,
and evaluation of the economic viability of the deposit. The estimate is
economic and other relevant factors that demonstrate, at the time of
based on detailed and reliable exploration and testing information gathered
reporting, that economic extraction can be justified.
through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely enough for geological
and grade continuity to be reasonably assumed.
A proven mineral reserve is the economically mineable part of a measured
mineral resource demonstrated by at least a preliminary feasibility study.
This study must include adequate information on mining, processing,
A measured mineral resource is that part of a mineral resource for which
metallurgical, economic and other relevant factors that demonstrate,
quantity, grade or quality, densities, shape and physical characteristics are
at the time of reporting, that economic extraction can be justified.
so well established that they can be estimated with confidence sufficient to
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M I N E R A L R E S E R V E S
67
M I N E R A L R E S E R V E S A N D M I N E R A L R E S O U R C E S S U M M A R Y – G O L D
December 31, 2000(1)
December 31, 1999(1)
Contained
Contained
Tons
(000s)
Grade(2)
Ounces(3)
(oz/ton)
(000s)
Tons
(000s)
Grade(2)
Ounces(3)
(oz/ton)
(000s)
116,449
55,892
14,100
10,234
92,925
17,753
0.155
0.063
0.458
0.365
0.061
0.033
18,000
3,509
6,451
3,739
5,655
586
314,274
309,089
0.056
0.026
17,482
7,914
23,373
7,383
0.428
0.618
10,015
4,566
5,261
98,963
0.172
0.058
907
5,768
58,510
26,082
135,619
23,279
11,745
16,313
104,926
61,020
289,456
195,478
17,049
3,261
6,627
83,064
0.153
0.099
0.557
0.307
0.059
0.013
0.059
0.034
0.439
0.885
0.191
0.053
20,709
2,293
6,542
5,013
6,146
782
17,136
6,606
7,484
2,885
1,266
4,380
59,283
21,959
GOLDSTRIKE PROPERTY
Betze-Post Mine
Proven and probable
Mineral resource
Meikle Mine
Proven and probable
Mineral resource
PIERINA PROPERTY
Proven and probable
Mineral resource
PASCUA-LAMA PROPERTY
Proven and probable
Mineral resource
BULYANHULU PROPERTY
Proven and probable
Mineral resource
OTHER PROPERTIES
Proven and probable
Mineral resource
TOTAL
Proven and probable mineral reserves
Mineral resources (including inferred)
1. Mineral reserves are based on a gold price of $300 per ounce (1999 — $325 per ounce). Mineral resources, which are not mineral reserves, do not have demonstrated
economic viability.
2. Grade represents an average, weighted by reference to tons of ore type where several recovery processes apply. Varying “cut-off grades” are reflected in the above table
depending on the mine and type of ore contained in reserves.
3. Ounces estimated to be present in the tons of ore which would be mined and processed. Mill recovery rates have not been applied in calculating the contained ounces.
68
M I N E R A L R E S E R V E S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M I N E R A L R E S E R V E S – G O L D
As at December 31, 2000
PROVEN
Contained
PROBABLE
Contained
TOTAL
Contained
Tons
(000s)
Grade
Ounces
Tons
Grade
Ounces
Ton
Grade
Ounces
(oz/ton)
(000s)
(000s)
(oz/ton)
(000s)
(000s)
(oz/ton)
(000s)
GOLDSTRIKE PROPERTY
Betze-Post Mine
Meikle Mine
107,511
2,709
0.153
0.646
16,500
1,751
8,938
11,391
0.168
0.413
1,500
4,700
116,449
14,100
0.155
0.458
18,000
6,451
PIERINA PROPERTY
55,755
0.062
3,443
37,170
0.059
2,212
92,925
0.061
5,655
PASCUA-LAMA PROPERTY
41,092
0.060
2,469
273,182
0.055
15,013
314,274
0.056
17,482
BULYANHULU PROPERTY
1,037
0.452
469
22,336
0.427
9,546
23,373
0.428
10,015
OTHER PROPERTIES
Bousquet Mine
Holt-McDermott Mine
El Indio Mine
364
361
1,105
0.175
0.184
0.094
Sub-total other properties
1,830
0.128
64
66
104
234
1,455
1,727
249
0.175
0.197
0.318
3,431
0.196
254
340
79
673
1,819
2,088
1,354
0.175
0.194
0.135
5,261
0.172
TOTAL
24,866
33,644
318
406
183
907
58,510
B A R R I C K A N N U A L R E P O R T 2 0 0 0
M I N E R A L R E S E R V E S
69
M I N E R A L R E S O U R C E S – G O L D
As at December 31, 2000
MEASURED (M)
INDICATED (I) M & I TOTAL
Contained
Contained
Contained
INFERRED
Contained
TOTAL
Contained
Tons
Grade Ounces
Tons
Grade Ounces
Ounces
Tons
Grade Ounces
Tons
Grade Ounces
(000s)
(oz/ton)
(000s)
(000s)
(oz/ton)
(000s)
(000s)
(000s) (oz/ton)
(000s)
(000s) (oz/ton)
(000s)
GOLDSTRIKE PROPERTY
Betze-Post Mine
11,531
0.065
754
40,551
0.063
2,556
Meikle Mine
-
-
PIERINA PROPERTY
254
0.025
-
6
4,077
0.374
1,526
3,310
1,526
3,810
0.052
199
55,892 0.063 3,509
6,157
0.359 2,213
10,234 0.365 3,739
11,600
0.025
295
301
5,899
0.048
285
17,753 0.033
586
PASCUA-LAMA PROPERTY
5,300
0.042
225 136,132
0.027
3,683
3,908
167,657
0.024 4,006
309,089 0.026 7,914
1,824
0.470
857
857
5,559
0.067 3,709
7,383 0.618 4,566
BULYANHULU PROPERTY
OTHER PROPERTIES
Bousquet Mine
Holt-McDermott Mine
Tulawaka Project (70%)
Veladero Project (40%)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
251
996
-
0.187
0.209
-
47
208
-
89,772
0.044
3,920
47
208
-
3,920
110
1,917
0.142
1,833
0.125
1,509
0.467
-
-
271
230
705
-
2,168 0.147
2,829 0.155
1,509 0.467
318
438
705
89,772 0.044 3,920
1,134
0.244
277
2,685 0.144
387
El Indio Mine
919
0.084
77
632
0.052
33
Sub-total other properties
919
0.084
77
91,651
0.046
4,208
4,285
6,393
0.232 1,483
98,963 0.058 5,768
TOTAL
1,062
13,125
14,187
11,895
26,082
Mineral Reserves and Mineral Resources – Notes
1. Mineral reserves (‘’reserves’’) and mineral resources (‘’resources’’) have been calculated as at December 31, 2000 in accordance with definitions adopted by the Canadian Institute
of Mining, Metallurgy and Petroleum on August 20, 2000. Except as otherwise noted, calculations have been prepared by employees of Barrick under the supervision of Alan R. Hill,
P. Eng., Executive Vice President, Development of Barrick and/or Alexander J. Davidson, P. Geol., Senior Vice President, Exploration of Barrick. Such calculations use an assumed long-
term average gold price of $300 per ounce and a silver price of $5.00 per ounce and incorporate current and/or expected mine plans and cost levels at each property. Barrick’s
normal data verification procedures have been employed in connection with the calculations. Reserves at the Betze-Post, Meikle, Pierina, Pascua-Lama and Bulyanhulu Mines have
been calculated using average cut-off grades of 0.065 oz/ton, 0.228 oz/ton, 0.010 oz/ton, 0.031 oz/ton and 0.204 oz/ton, respectively. Reserves at the Goldstrike Property, which represent
42% of Barrick’s estimated total proven and probable mineral reserves, have undergone an independent audit. Total proven and probable mineral reserves at the Pascua-Lama Property,
as at December 31, 1999, and at Pierina, as at December 31, 1998, were independently audited by the same firm in 2000 and 1999, respectively. In each case an assumed average
long-term gold price of $325 per ounce and a silver price of $5.00 per ounce was used. In addition, in connection with Barrick’s project financing arrangements, 7.4 million ounces
of proven and probable mineral reserves at Bulyanhulu, as at December 31, 1999, were independently audited by the same firm during 2000, based on a gold price of $325 per ounce.
2. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
3. The estimates of mineral resources at the Veladero Property have been made based on information provided by Barrick’s joint venture partner, Minera Argentina Gold S.A., a
subsidiary of Homestake Mining Company.
70
M I N E R A L R E S E R V E S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
P R E M I U M G O L D S A L E S P R O G R A M S C H E D U L E S
As at December 31, 2000 is made up as follows:
Spot Deferred Contracts
Ounces (000s)
Average Price ($/oz.)
Min-Max Contracts
Ounces (000s)
Average Floor Price ($/oz.)
Average Cap Price ($/oz.)
Call Options (Purchased)
Ounces (000s)
Average Strike ($/oz.)
Long-Term Call Options Sold
Ounces (000s)
Average Strike ($/oz.)
Short-Term Call Options Sold
Ounces (000s)
Average Strike ($/oz.)
Total Net Committed Ounces (000s)
2001
2002
2003
2004
2005
2006
2007+
Totals
3,800
340
3,800
340
2,100
362
1,600
364
700
355
600
357
2,300
360
14,900
350
500
270
290
(3,700)
335
475
285
500
270
290
(3,700)
335
475
340
450
344
400
349
250
362
1,125
364
2,700
354
475
285
14,875
In 2000, the Premium Gold Sales Program generated
At December 31, 2000, the mark-to-market gain on
$300 million of additional revenue, or $81 per ounce over
Barrick’s Premium Gold Sales Program was $381 million
the average spot price.
calculated at a spot price of $272 per ounce, prevailing
As at December 31, 2000, Barrick’s spot deferred
market interest rates and volatilities.
position stood at 14.9 million ounces. The purchased call
option position declined to 3.7 million ounces with the
S P O T D E F E R R E D I N V E S T M E N T S
expiry of 3.1 million ounces during the year. The average
Barrick’s total spot deferred position has an asset value
price of the spot deferred contracts reflects the expected
of approximately $4.5 billion on which it earns a return.
future value incorporating an average lease rate assump-
The Company achieves a return on this asset based on
tion of 1.75%. Lease rates are fixed on 100% of the
LIBOR and the credit rating associated with this return
position in 2001 and 2002, and on a portion beyond 2002.
is that of its hedging counterparties (average ‘AA’). The
The weighted average lease rate on the total spot
Company has conservatively diversified this investment
deferred position is 1.68%.
by exchanging a portion of its LIBOR return for a return
B A R R I C K A N N U A L R E P O R T 2 0 0 0
P R E M I U M G O L D S A L E S P R O G R A M S C H E D U L E S
71
based on a professionally managed diversified basket of
C A L L O P T I O N S S O L D
bond funds/indices.
The sold options can only be exercised by the
At December 31, 2000, 80% of the position was
counterparties on the expiry date and can be converted,
invested with ‘AA’ hedging counterparties and the balance
at Barrick’s option, into spot deferred contracts and rolled
of 20% was invested in a basket of bond funds/indices
forward for up to 15 years. There is no requirement for
with an average credit rating of ‘A-’. This basket is
Barrick to cash settle these transactions. The premiums
managed to ensure that there is minimal interest rate
generated from the sales of the contracts that expire
exposure. The credit quality on the entire hedge position
unexercised are recognized at the expiry date.
asset of $4.5 billion is ‘AA-’.
T R A D I N G C R E D I T L I N E S
C A L L O P T I O N S P U R C H A S E D
Barrick’s Premium Gold Sales Program is not subject
At December 31, 2000, Barrick’s purchased call option
to margin requirements at any gold price.
position was 3.7 million ounces. These calls provide Barrick
with the right but not the obligation to purchase gold,
S E N S I T I V I T Y A N A LY S I S
resulting in increased leverage to higher gold prices, while
The following tables show the cash flow sensitivity of the
still enabling the Company to maintain the security of a
Company’s forecasted realized gold price over the next ten
floor price. Barrick can therefore sell its production at a
years to 1) changes in gold spot prices, 2) changes in gold
minimum floor price of $340 per ounce through its spot
lease rates, and 3) changes in US$ interest rates assuming a
deferred program, but can now also realize further gains
constant hedge position. The tables incorporate the impact
on any rise in the spot price above $335 per ounce in 2001.
of the call options purchased and sold.
In addition, these call options mitigate the impact of higher
gold prices on Barrick’s mark-to-market position.
Realized Prices(1)
Gold Spot
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
250
300
350
400
450
500
340
340
355
405
455
505
340
340
360
415
467
517
332
354
364
429
505
535
326
359
384
435
515
561
317
359
392
452
519
578
307
358
402
461
522
578
307
359
411
466
522
578
307
359
411
466
522
578
307
359
411
466
522
578
307
359
411
466
522
578
1. At 1.75% lease and 6.0% interest rates ($ per ounce)
Realized Prices(2)
Lease Rate
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1%
2%
3%
4%
340
340
340
340
340
340
340
340
359
353
346
340
367
356
345
335
371
357
343
330
366
352
338
324
367
353
339
325
367
353
339
325
367
353
339
325
367
353
339
325
2. At $300 spot and 6.0% interest rates ($ per ounce)
72
P R E M I U M G O L D S A L E S P R O G R A M S C H E D U L E S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
Realized Prices (3)
Interest Rate
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
6.0%
7.0%
8.0%
9.0%
340
340
340
340
340
340
340
340
354
358
362
366
359
366
374
382
359
370
382
394
358
367
379
391
359
368
379
391
359
368
379
391
359
368
379
391
359
368
379
391
3. At $300 spot and 1.75% lease rates ($ per ounce)
O T H E R H E D G E D I T E M S
The Company hedges silver, copper, and Canadian dollars
to cover operating and development expenditures.
SILVER
Spot Deferred Contracts
Ounces (000s)
Average Price ($/oz)
COPPER
Min-Max Contracts
Pounds (millions)
Average Floor Price ($/lb)
Average Cap Price ($/lb)
Purchased Put Options
Pounds (millions)
Average Floor Price ($/lb)
CANADIAN DOLLAR
Min-Max Contracts
C$ (millions)
Average Floor Price (US$/C$)
Average Cap Price (US$/C$)
2001
2002
2003
2004+
Totals
3,000
5.25
3,000
5.30
3,000
5.30
11,000
20,000
5.35
5.32
12
0.79
0.87
30
0.76
141
0.64
0.68
20
0.65
0.68
12
0.79
0.87
30
0.76
161
0.64
0.68
B A R R I C K A N N U A L R E P O R T 2 0 0 0
P R E M I U M G O L D S A L E S P R O G R A M S C H E D U L E S
73
S U P P L E M E N T A L I N F O R M A T I O N
1 1 - Y E A R H I S T O R I C A L R E V I E W *
2000
1999
1998
1997
Operating results (in millions)
Revenues
Net income (loss)
Operating cash flow
Capital expenditures
Per share data
Net income (loss)
Cash dividends
Operating cash flow
Financial position (in millions)
Cash and equivalents
Total assets
Working capital
Long-term debt
Shareholders’ equity
Operational statistics (unaudited)
Gold production (thousands of ounces)
Total cash costs per ounce
Average price realized per ounce of gold sold
Average spot price of gold per ounce
Mineral reserves (proven and probable) (thousands of ounces)
Other
Net debt to total capitalization
Shares outstanding (millions)
$ 1,357
(766)
705
550
$ (1.93)
0.22
1.78
$
623
4,535
511
676
3,023
3,744
$
$
$
145
360
279
58,510
2%
396
$ 1,432
$ 1,298
$ 1,294
331
702
620
$ 0.83
0.20
1.80
$ 500
5,353
440
525
4,154
3,660
$ 134
$ 385
$ 279
59,283
1%
396
301
539
507
$ 0.79
0.18
1.43
$ 416
4,655
378
500
3,592
3,205
$ 180
$ 400
$ 294
51,456
2%
377
(123)
470
372
$ (0.33)
0.16
1.26
$ 292
4,306
253
500
3,324
3,048
$ 206
$ 420
$ 332
50,318
6%
373
*Information has been derived from audited financial statements, except as indicated.
74
S U P P L E M E N T A L I N F O R M A T I O N
B A R R I C K A N N U A L R E P O R T 2 0 0 0
1996
1995
1994
1993
1992
1991
1990
$ 1,318
$ 1,307
$ 954
$ 681
$ 554
$ 369
$ 283
218
463
374
$ 0.60
0.14
1.28
$ 245
4,515
291
500
3,501
3,149
$ 217
$ 415
$ 388
51,117
7%
373
292
502
385
$ 0.82
0.12
1.42
$ 284
3,556
285
100
2,948
3,141
$ 198
$ 406
$ 384
36,539
(7)%
357
251
376
272
$ 0.80
0.10
1.22
$ 387
3,472
367
283
2,617
2,326
$ 194
$ 402
$ 384
37,589
(4)%
353
213
317
165
$ 0.74
0.08
1.11
$ 281
1,635
270
211
1,191
1,632
$ 186
$ 409
$ 360
28,439
(6)%
286
175
283
256
$ 0.61
0.065
1.00
$ 226
1,499
210
260
984
1,325
$ 179
$ 422
$ 345
25,719
3%
284
92
160
246
$ 0.34
0.055
0.59
$ 197
1,301
211
263
832
790
$ 216
$ 438
$ 362
24,377
7%
282
58
94
174
$ 0.23
0.04
0.36
$ 312
1,143
274
331
636
596
$ 229
$ 437
$ 384
19,510
3%
268
B A R R I C K A N N U A L R E P O R T 2 0 0 0
S U P P L E M E N T A L I N F O R M A T I O N
75
S U P P L E M E N T A L I N F O R M A T I O N
Q U A R T E R LY D A T A
Unaudited (in millions except per share data)
March
2000
1999
2000
June
1999
September
December
2000
1999
2000
1999
Revenues
Gold sales
Interest and other income
Costs and expenses
Operating
Amortization
Administration
Exploration
Interest
Provision for mining assets
Income (loss) before income taxes
Income taxes
$ 318
$ 390
$ 323
$ 373
$ 312
$ 326
$ 377
$ 332
5
323
120
98
8
11
2
–
239
84
(12)
2
392
133
117
8
14
3
–
275
117
(30)
7
330
133
93
10
9
2
–
247
83
(11)
3
376
139
104
9
10
3
–
265
111
(27)
9
321
131
75
7
8
1
–
222
99
(13)
5
331
120
88
8
6
3
–
225
106
(27)
6
383
166
73
10
13
1
1,330
1,593
(1,210)
214
1
333
124
76
10
14
2
–
226
107
(26)
Net income (loss) for the period
$ 72
$ 87
$
72
Net income (loss) per share
$ 0.18
$ 0.23
$ 0.18
$
84
$ 0.20
$
86
$ 0.22
$
79
$ (996)
$
81
$ 0.20
$ (2.51)
$ 0.20
Operating activities
Net income (loss)
Amortization and other non-cash items
Working capital changes
Development activities
Property, plant and equipment
Purchase and sale of mining properties
Other
Financing activities
Capital stock
Long-term obligations
Dividends
Increase (decrease) in cash
Cash beginning of period
$ 72
$ 87
$
127
(4)
210
72
96
–
168
(103)
(151)
30
(1)
(74)
1
1
–
2
138
416
–
–
(151)
2
89
(44)
47
64
526
$
84
$
113
(23)
174
(142)
–
(17)
(159)
7
28
(39)
(4)
11
554
86
77
10
173
(111)
(115)
(2)
(228)
1
26
–
27
(28)
590
$
79
96
25
200
$ (996)
$
1,167
16
187
(166)
(153)
–
23
–
44
(143)
(109)
20
(2)
–
18
75
565
2
24
(43)
(17)
61
562
81
89
(52)
118
(209)
–
(13)
(222)
1
3
(40)
(36)
(140)
640
98
7
177
(135)
–
(14)
(149)
1
(3)
–
(2)
26
500
Cash at end of period
$ 526
$ 554
$ 590
$ 565
$ 562
$ 640
$ 623
$ 500
76
S U P P L E M E N T A L I N F O R M A T I O N
B A R R I C K A N N U A L R E P O R T 2 0 0 0
C O R P O R A T E G O V E R N A N C E
The Company, the Board of Directors
business, are subject to approval by the
Environmental, Occupational Health and
and management of Barrick emphasize
Board of Directors.
Safety Committees are comprised of a
effective corporate governance. Accordingly,
majority of unrelated directors.
they have developed systems and
B O A R D C O N S T I T U T I O N
The Board of Directors believes that
procedures that are appropriate to the
Barrick’s Board of Directors is currently
it is desirable for the majority of the
Company and its business. The Board
comprised of 12 directors, five of whom
Executive Committee to be related to
of Directors is continuing to monitor
are unrelated to the Company. The
the Company since its mandate requires
its governance practices to ensure they
composition of the Board reflects a
members to be available on very short
remain appropriate and responsive to
breadth of background and experience
notice to deal with significant issues.
changing circumstances.
that is important for effective governance
All actions approved by the Executive
of a company in the mining industry.
Committee are subsequently brought
B O A R D M A N D AT E
to the attention of the full Board of
Barrick’s management is responsible
B O A R D O P E R AT I O N S
Directors. The fact that a majority of
for the Company’s day-to-day operations,
The Board of Directors has established
the members of the Finance Committee
for proposing its strategic direction and
five committees, comprised of the Audit,
are related to the Company is balanced
presenting budget and business plans
Executive, Compensation and Corporate
by the fact that the recommendations
to the Board of Directors for approval.
Governance, Environmental, Occupational
of the Committee are considered by the
All major acquisitions, dispositions and
Health and Safety and Finance Committees.
full Board of Directors.
investments, as well as significant
The mandates of these Committees are
A detailed Statement of Corporate
financings and other significant matters
described below. The Audit, Compensation
Governance Practices appears in the
outside the ordinary course of Barrick’s
and Corporate Governance and
Company’s Information Circular.
C O M M I T T E E S O F T H E B O A R D
A U D I T C O M M I T T E E
C O M P E N S AT I O N A N D C O R P O R AT E
E N V I R O N M E N TA L , O C C U PAT I O N A L
(H.L. Beck, C.W.D. Birchall, P.A. Crossgrove)
G O V E R N A N C E C O M M I T T E E
H E A LT H A N D S A F E T Y C O M M I T T E E
Responsible for reviewing the Company’s
(A.A. MacNaughton, P.A. Crossgrove,
(P.A. Crossgrove, J.K. Carrington,
financial statements with management
J.L. Rotman)
M.A. Cohen)
and the external auditors. The Committee
Reviews and approves compensation
Reviews the Company’s environmental
also reviews the external audit plan, the
policies and practices and reviews
and occupational health and safety
adequacy of internal control systems and
and recommends to the Board the
policies and programs, oversees its
meets with the external auditors to discuss
remuneration for directors and senior
environmental and occupational health
financial issues relevant to the Company.
management of the Company. The
and safety performance, and monitors
Committee also administers the
current and future regulatory issues.
E X E C U T I V E C O M M I T T E E
Company’s stock option plan.
(P. Munk, A.A. MacNaughton,
In addition, the Committee reviews
F I N A N C E C O M M I T T E E
B. Mulroney, R. Oliphant, G.C. Wilkins)
corporate governance policies and
(C.W.D. Birchall, A.A. MacNaughton,
Exercises all the powers of the Board of
practices. It also considers candidates for
A. Munk, R. Oliphant, G.C. Wilkins)
Directors (except those powers specifically
election as directors, annually recommends
Reviews the Company’s investment
reserved by law to the Board of Directors)
to the Board the slate of nominees for
strategies, Premium Gold Sales Program
in the management and direction of
election to the Board by the shareholders
and debt and equity structure.
business during intervals between
and recommends to the Board nominees
Board meetings.
to fill vacancies on the Board.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
C O R P O R A T E G O V E R N A N C E & C O M M I T T E E S
77
JOSEPH L. ROTMAN, O.C.
Toronto, Ontario
Executive Chairman,
Clairvest Group Inc.
Mr. Rotman is also chairman
of several private companies
including Roy-L Capital
Corporation. He has been
a director of Barrick since
its inception.
GREGORY C. WILKINS
Toronto, Ontario
Vice Chairman,
TrizecHahn Corporation
Mr. Wilkins was Executive
Vice President and Chief
Financial Officer of Barrick
until his appointment at
Horsham (now TrizecHahn
Corporation) in September
1993. He has been a member
of the Board since 1991.
HOWARD L. BECK, Q.C.
Toronto, Ontario
Chairman, Wescam Inc.
Mr. Beck was a founding
Partner of the law firm
Davies, Ward & Beck.
He has been on the
Barrick Board since 1984.
C. WILLIAM D.
BIRCHALL
Nassau, Bahamas
Vice Chairman,
TrizecHahn Corporation
Mr. Birchall has had a long
association with Barrick,
being one of the original
Board members of the
Company.
JOHN K. CARRINGTON
Thornhill, Ontario
Vice Chairman and
Chief Operating Officer,
Barrick Gold Corporation
Mr. Carrington was appointed
a Vice Chairman of the
Company in March 1999 in
addition to his role as Chief
Operating Officer, which he
assumed at the end of 1996.
He has been a member of
the Barrick Board since 1996.
B O A R D O F D I R E C T O R S
ANTHONY MUNK
Toronto, Ontario
Vice President,
Onex Corporation
Mr. Munk became a member
of the Board of Directors
in 1996. He is a Partner
of Onex Corporation, a
diversified manufacturing
and service company.
PETER MUNK, O.C.
Toronto, Ontario
Chairman,
Barrick Gold Corporation
Mr. Munk is the founder
and Chairman of the Board
of Barrick Gold Corporation.
He is also the founder and
Chairman of TrizecHahn
Corporation.
RANDALL OLIPHANT
Unionville, Ontario
President and
Chief Executive Officer,
Barrick Gold Corporation
Mr. Oliphant was appointed
President and Chief Executive
Officer of Barrick in March
1999. Previously he was
Executive Vice President
and Chief Financial Officer.
He has been on the Board
since 1997. Mr. Oliphant
joined Barrick in 1987.
MARSHALL A. COHEN, O.C.
Toronto, Ontario
Counsel, Cassels
Brock & Blackwell
Mr. Cohen served the
Government of Canada
for 15 years in a number of
senior positions including
Deputy Minister of Finance.
He has been a Director of
Barrick since 1988.
PETER A. CROSSGROVE
Toronto, Ontario
Chairman, Premdor Inc.
Mr. Crossgrove has been
and is currently involved
in a number of mining
companies. He has been
a director of Barrick
since 1993.
ANGUS A.
MACNAUGHTON
Danville, California
President,
Genstar Investment
Corporation
Mr. MacNaughton is a
Vice Chairman of Barrick.
He has been a member of
the Board since 1986.
THE RIGHT
HONOURABLE BRIAN
MULRONEY, P.C., LL.D.
Montreal, Quebec
Senior Partner,
Ogilvy Renault
Mr. Mulroney was Prime
Minister of Canada from
1984 to 1993. He joined
the Barrick Board in 1993
and is Chairman of the
Company’s International
Advisory Board.
78
B O A R D O F D I R E C T O R S
B A R R I C K A N N U A L R E P O R T 2 0 0 0
O F F I C E R S
PETER MUNK
Chairman
ANGUS A.
MACNAUGHTON
Vice Chairman
RANDALL OLIPHANT
President and
Chief Executive Officer
JOHN K. CARRINGTON
Vice Chairman and
Chief Operating Officer
PATRICK J. GARVER
Executive Vice President
and General Counsel
ALAN R. HILL
Executive Vice President,
Development
JAMIE C. SOKALSKY
Senior Vice President and
Chief Financial Officer
JAMES FLEMING
Vice President,
Communications
JOHN BUTLER
Senior Vice President,
Corporate Development
AMMAR AL-JOUNDI
Vice President
and Treasurer
JOHN T. MCDONOUGH
Vice President, Environment
ALEXANDER J.
DAVIDSON
Senior Vice President,
Exploration
LOUIS DIONNE
Senior Vice President,
Underground Operations
GREGORY P. FAUQUIER
Senior Vice President,
United States Operations
M. VINCENT BORG
Vice President,
Corporate Communications
MICHAEL J. BROWN
Vice President,
United States Public Affairs
ANDRÉ R. FALZON
Vice President
and Controller
DAVID W. WELLES
Vice President
and Tax Counsel
RICHARD S. YOUNG
Vice President,
Investor Relations
SYBIL E. VEENMAN
Associate General Counsel
and Secretary
I N T E R N A T I O N A L A D V I S O R Y B O A R D
The International Advisory
Board was established to
provide advice to Barrick’s
Board of Directors and
management as the Company
expands internationally.
CHAIRMAN
THE RIGHT
HONOURABLE
BRIAN MULRONEY
Former Prime Minister
of Canada
MEMBERS
THE HONORABLE
HOWARD H. BAKER, JR.
United States
Partner, Baker, Donelson,
Bearman & Caldwell
HONOURABLE PAUL G.
DESMARAIS, SR.
Canada
Director and Chairman
of Executive Committee,
Power Corporation
of Canada
VERNON E. JORDAN, JR.
United States
Senior Managing Director,
Lazard Freres & Co., LLC
and Of Counsel to Akin,
Gump, Strauss, Hauer &
Feld, LLP
PETER MUNK
Canada
Chairman
Barrick Gold Corporation
and Chairman
TrizecHahn Corporation
LORD POWELL OF
BAYSWATER KCMG
United Kingdom
Chairman, Sagitta Asset
Management Limited
KARL OTTO PÖHL
Germany
Senior Partner,
Sal. Oppenheim Jr. & Cie.
JOSÉ E. ROHM
Argentina
Managing Director,
Banco General de Negocios
THE HONORABLE
ANDREW YOUNG
United States
Chairman,
GoodWorks International
B A R R I C K A N N U A L R E P O R T 2 0 0 0
O F F I C E R S & I N T E R N A T I O N A L A D V I S O R Y B O A R D
79
S H A R E H O L D E R I N F O R M A T I O N
S H A R E S T R A D E D O N F I V E
M A J O R I N T E R N A T I O N A L
I N D E X L I S T I N G S
S&P 500 Index
VO LU M E O F S H A R E S
T R A D E D
S T O C K E X C H A N G E S
New York
Toronto
London
Paris
Swiss
S&P/TSE 60
S&P Global 1200
TSE 100
TSE 300
TSE Gold & Precious Minerals Index
FT of London Gold Index
(millions)
2000
1999
NYSE
TSE
318
282
381
413
Philadelphia Gold/Silver Index
C L O S I N G P R I C E O F S H A R E S
T I C K E R S Y M B O L
ABX
N U M B E R O F S H A R E H O L D E R S
13,615
2 0 0 0 D I V I D E N D P E R S H A R E
US$0.22
C O M M O N S H A R E S (millions)
Outstanding at
December 31, 2000
Weighted average – 2000
396
396
The Company’s shares were split
on a two-for-one basis in 1987, 1989
and 1993.
December 31, 2000
NYSE
TSE
US$16.38
C$24.61
S H A R E T R A D I N G I N F O R M A T I O N
TORONTO STOCK EXCHANGE
Quarter
First
Second
Third
Fourth
NEW YORK STOCK EXCHANGE
Quarter
First
Second
Third
Fourth
Share Volume (millions)
2000
1999
2000
High
1999
Low
1999
2000
C$25.25
C$32.85
C$23.17
C$24.80
124
98
89
102
81
72
50
79
282
28.10
25.95
24.12
Share Volume (millions)
2000
1999
2000
34.20
38.20
35.90
High
1999
24.18
23.00
20.53
2000
24.00
25.00
24.90
Low
1999
79
102
93
107
US$19.75
US$21.81
US$15.63
US$19.25
20.00
18.38
17.26
23.44
25.81
24.44
15.50
14.81
12.31
17.19
16.75
16.94
88
89
59
82
318
80
S H A R E H O L D E R I N F O R M A T I O N
B A R R I C K A N N U A L R E P O R T 2 0 0 0
D I V I D E N D P AY M E N T S
In 2000, the Company paid a cash
O T H E R L A N G U A G E R E P O R T S
French and Spanish versions
dividend of $0.22 per share – $0.11
of this annual report are available
T R A N S F E R A G E N T S
A N D R E G I S T R A R S
Mellon Investor Services
on June 15 and $0.11 on December 15.
from Investor Relations at the
P.O. Box 7010
A cash dividend of $0.20 per share
Corporate Office.
was paid in 1999 – $0.10 on June 15
Adelaide Street Postal Station
Toronto, Ontario M5C 2W9
and $0.10 on December 15.
D I V I D E N D R E I N V E S T M E N T
Telephone: (416) 643-5500
D I V I D E N D P O L I C Y
The Company has increased cash
P R O G R A M
The Canadian Shareowners
Toll-free throughout North America:
1-800-387-0825
Association, a non-profit educational
Fax: (416) 643-5501
dividends as earnings and cash flow
organization of retail investors, has
Email: inquiries@cibcmellon.ca
have risen over the past 13 years.
selected Barrick to be a part of its
Web site: www.cibcmellon.ca
The Board of Directors reviews
dividend reinvestment program for
the dividend policy semi-annually
Canadian investors. Barrick
Mellon Investor Services, L.L.C.
based on the cash requirements
shareholders interested in this
85 Challenger Road
of the Company’s operating assets,
program should contact the
Overpeck Center
exploration and development
Association at:
Ridgefield Park, New Jersey 07660
activities, as well as potential
Telephone: (416) 595-9600
Telephone: (201) 329-8660
acquisitions, combined with the
Fax: (416) 595-0400
Toll-free within the United States:
current and projected financial
Email: questions@shareowner.ca
1-800-589-9836
position of the Company.
Web site: www.shareowner.ca
Web site: www.chasemellon.com
F O R M 4 0 - F
Annual Report on Form 40-F is filed
S H A R E H O L D E R C O N T A C T S
Shareholders are welcome to contact
A N N U A L M E E T I N G
The Annual General Meeting of
with the United States Securities and
the Company for information or
Shareholders will be held on Tuesday,
Exchange Commission. This report
questions concerning their shares.
May 8, 2001 at 10:00 a.m. in the
will be made available to shareholders,
For general information on the
Canadian Room, Fairmont Royal York
without charge, upon written request
Company, contact the Investor
Hotel, Toronto, Ontario.
to the Secretary of the Company at
Relations Department. See page 82
the Corporate Office.
for contact information.
For information on such matters
as share transfers, dividend cheques
and change of address, inquiries
should be directed to the Secretary
of Barrick or the Transfer Agents.
Addresses and telephone numbers
of the Transfer Agents follow.
B A R R I C K A N N U A L R E P O R T 2 0 0 0
S H A R E H O L D E R I N F O R M A T I O N
81
C O R P O R A T E I N F O R M A T I O N
CORPORATE OFFICE
Barrick Gold Corporation
Royal Bank Plaza,
South Tower
200 Bay Street, Suite 2700
P.O. Box 119
Toronto, Canada M5J 2J3
Telephone: (416) 861-9911
Fax: (416) 861-2492
MINING OPERATIONS
North America
Goldstrike Property:
Betze-Post Mine and
Meikle Mine
P.O. Box 29
Elko, Nevada 89803
Donald R. Prahl
Vice President and
General Manager
Telephone: (775) 738-8043
Fax: (775) 738-7685
Holt-McDermott Mine
P.O. Box 278
Kirkland Lake, Ontario
P2N 3H7
Brian Grebenc
Mine Manager
Bousquet Mine
2 Bousquet Road
Route 395
Preissac, Quebec J0Y 2E0
Christian Pichette
Mine Manager
Telephone: (819) 759-3681
Fax: (819) 759-3663
South America
Chilean Operations
Av. Pedro de Valdivia 100
Piso II, Providencia
Santiago, Chile
Sergio Jarpa
Vice President, Operations
CORPORATE DATA
Auditors
PricewaterhouseCoopers LLP
Toronto, Canada
Investor Relations
Contact:
Richard S. Young
Vice President, Investor Relations
Telephone: (416) 307-7431
Fax: (416) 861-0727
Email: ryoung@barrick.com
Kathy Sipos
Manager, Investor Relations
Telephone: (56-2) 340-2022
Telephone: (416) 307-7441
Fax: (56-2) 233-0188
Pierina Mine
Pasaje Los Delfines, 159
3er Piso
Urb. Las Gardenias
Lima 33, Peru
Igor Gonzales
Vice President and General Manager
Telephone: (51-1) 275-0600
Fax: (51-1) 275-3733
East Africa
Bulyanhulu Mine
International House, Level 2
Fax: (416) 861-0727
Email: ksipos@barrick.com
Sandra Grabell
Investor Relations Officer
Telephone: (416) 307-7440
Fax: (416) 861-0727
Email: sgrabell@barrick.com
Toll-free number within
Canada and United States:
1-800-720-7415
Email: investor@barrick.com
Web site: www.barrick.com
Telephone: (705) 567-9251
Shaaban Robert Street/
Fax: (705) 567-6867
Garden Avenue
P.O. Box 108
Dar es Salaam, Tanzania
Roy Meade
Vice President and General Manager
Telephone: (255-51) 123-181
Fax: (255-51) 123-180
82
C O R P O R A T E I N F O R M A T I O N
B A R R I C K A N N U A L R E P O R T 2 0 0 0
•BARR cover 3/28/01 12:42 PM Page 2 (2,1)
UILT TO LAST.
In the ebb and flow of the capital markets, it’s the innovative companies that
stand the test of time.
Anchored in rock solid values, these companies are driven to change and
improve everything except their guiding principles.
Looking out to the horizon, innovative companies anticipate change, and act
decisively – prospering over longer periods of time than their contemporaries.
Furthermore, while not impervious to market turbulence, innovative
companies possess the determination to address economic realities head on –
creating value, even in times of adversity.
Finally, more than being just enduring or successful, innovative companies
are the leaders across industries and have been so – seamlessly – through
multiple generations.
From the beginning, Barrick set out to be such a company. And, if financial
strength, management, discipline and superior long-term business performance
are any indication, we are right on target.
l
y
a
e
S
n
y
e
c
o
J
l
,
a
r
d
n
a
x
e
O
a
i
s
e
L
l
:
I
N
O
T
C
U
D
O
R
P
l
r
o
y
a
T
e
s
i
u
o
L
:
I
N
O
T
C
E
R
D
T
R
A
I
n
g
i
s
e
D
g
g
E
:
I
N
G
S
E
D
.
c
n
I
l
s
n
o
i
t
a
e
R
r
o
t
s
e
v
n
I
d
e
t
a
r
g
e
t
n
I
y
g
o
l
i
r
T
:
T
N
E
M
E
G
A
N
A
M
T
C
E
J
O
R
P
D
N
A
E
V
T
A
E
R
C
I
FORWARD LOOKING STATEMENTS
Certain statements herein, including those regarding production, realized gold prices, costs and margins, constitute “forward looking statements”
within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Barrick or of the gold mining
industry to be materially different from future results, performance or achievements expressed or implied by those forward looking statements.
These risks, uncertainties and other factors include, but are not limited to, changes in the worldwide price of gold or certain other commodities
and currencies and the risks involved in the exploration, development and mining business. These factors are discussed in greater detail in the
“Management’s Discussion and Analysis of Financial and Operating Results” section as well as in Barrick’s Annual Information Form filed with the
U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.
Printed in Canada on recycled paper.
•BARR cover 3/28/01 12:42 PM Page 1 (1,1)
You can contact us toll-free within
Canada and the United States at
1-800-720-7415
E-mail us at investor@barrick.com
Visit our investor relations
Web site at www.barrick.com
Barrick
S&P 500
1991
2000
OPERATING CASH FLOW
B
A
R
R
I
C
K
A
N
N
U
A
L
R
E
P
O
R
T
2
0
0
0
B A R R I C K A N N U A L R E P O R T 2 0 0 0