Abacus Global Management, Inc. Annual Report 2002

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FY2002 Annual Report · Abacus Global Management, Inc.

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G O L D

B A

2 0 0 2

Financial Highlights

Chairman’s Letter

President’s Letter

Management’s Discussion and Analysis

Financial Statements

Notes to Financial Statements

Reserves

102

Board of Directors and Officers

104

Shareholder Information

106

Corporate Information

ANNUAL MEETING

The Annual General Meeting of Shareholders

will be held on Wednesday, May 7, 2003

at 10:00 a.m. in the Canadian Room

Fairmont Royal York Hotel, Toronto, Ontario.

Barrick Gold Corporation is among the world’s largest gold

producers in terms of market capitalization, production and

reserves. The Company has a portfolio of long-life, low-cost

mines and development projects in the United States, Canada,

Australia, Peru, Chile, Argentina and Tanzania. These operating

properties and development projects on four continents,

combined with the gold industry’s only A-rated balance sheet,

position Barrick to prosper in the years ahead.

In 2002, Barrick produced 5.7 million ounces of gold at an average

cash cost of $177 per ounce. The Company has a $2-billion

development plan which is expected to add four new mines

between 2005 and 2008. These new mines are estimated to

produce approximately 2 million ounces of gold annually at

an average cash cost of $125 per ounce over their first decade

of operation, augmenting the quality and profitability of our

operating portfolio of mines.

Barrick’s shares trade under the ticker symbol ABX on the

Toronto, New York, London and Swiss stock exchanges and

the Paris Bourse.

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2002 YEAR IN REVIEW Barrick’s operating and financial performance

declined in 2002 because of lower production and higher costs as existing

operations move into the mature stage of their life cycle. With the aim of

enhancing future performance, the Company announced its four-mine

development plan, projected to begin contributing in 2005.

> Financial Highlights

(US GAAP basis)

2002

2001

2000

Financial Highlights (in millions of dollars except per share data)

Gold sales

Net income (loss) for the year

Operating cash flow

Cash and short-term investments

Shareholders’ equity

Net income (loss) per share (diluted)

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

1,967

1,989

1,936

193

589

1,074

3,334

0.36

1.09

0.22

5,695

177

268

588

779

3,192

0.18

1.10

0.22

6,124

162

247

(1,189)

842

822

3,190

(2.22)

1.57

0.22

5,950

155

239

Reserves: proven and probable (thousands of ounces)

86,927

82,272

79,300

% change

2001-2002

-1

101

100

-1

-7

> FINANCIAL REVIEW

expenditures in 14 years — free cash flow reached

In 2002, gold revenue was similar to the year earlier,

$361 million, the highest in Company history. As a

as rising spot gold prices offset lower production due

result, cash balances increased to over $1 billion.

to the planned closure of five mines.

Overall, earnings doubled in 2002 from 2001, when

Company realized $60 million in synergies. 2002 also

results reflected two one-time charges associated with

saw the smooth integration of Homestake’s people

the Homestake merger ($117 million) and a litigation

into a single company and shared culture.

As a result of the 2001 Homestake merger, the

charge ($59 million).

The Company generated solid cash flows from

Alto Chicama in Peru, doubling exploration expendi-

its operating mines and — with the lowest capital

tures for 2002 over the initial plan.

A successful exploration effort led to the discovery of

B A R R I C K A N N U A L R E P O R T 2 0 0 2

> REMOTE CONTROLLED SCOOP
AT MIEKLE MINE, NEVADA

> ALTO CHICAMA, PERU

> OPERATIONAL REVIEW

$125 per ounce for the first 10 years

For the year, Barrick produced 5.7 million

of operations. The Company announced

ounces of gold at total cash costs of

production and cost estimates and

$177 per ounce, compared to 6.1 million

scheduled start-up dates for each of

ounces of gold at $162 per ounce in

the four projects:

2001. The lower production related to

The Company plans

the closure of five mines, as planned,

> Alto Chicama in Peru, scheduled to

during the year as reserves were

begin operations in 2005, is projected

to use the strong free

depleted. The higher costs in 2002

to produce 500,000 ounces a year at

reflect the maturing of the Company’s

an average cash cost of $130 per ounce.

cash flows from its

mines, as they processed more ore

(5% higher) at lower grades (5% lower)

> Cowal in Australia is projected for a

operating mines to

and unit costs increased marginally

2005 start, at an estimated 270,000

(1% higher).

ounces per year at average cash

fund its exploration

costs of $170 per ounce.

The highlight for 2002 came from

program and advance

exploration, with the discovery of

> Veladero in Argentina is projected to

a major new deposit at Alto Chicama

produce 530,000 ounces per year at

the four new devel-

that contributed 6.5 million ounces

average cash costs of $155 per ounce,

to reserves (for Canadian reporting

with start-up expected in 2006.

opment projects

purposes). Overall, the Company added

7.5 million ounces to reserves from

> Pascua-Lama, on the Chile/Argentina

scheduled to com-

its development projects and replaced

border, is expected to commence

60% of the ounces it produced at its

production in 2008, at an annual rate

mence production

operating mines. As a result, reserves

of 800,000 ounces and average cash

increased to 86.9 million ounces of

costs of $85 per ounce.

beginning in 2005.

gold, up from 82.3 million ounces

in 2001.

As these projects begin entering pro-

duction in 2005, the Company anticipates

During the year, Barrick advanced its

that they will make significant contribu-

development plan, announcing a five-

tions to earnings and cash flow.

year, four mine, $2-billion program.

The program is projected to produce

2 million new ounces a year at

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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Barrick was built with a clear purpose in mind. We saw

that investors were looking for a gold equity run as a

business, with a focus on profitability. Acting on that

understanding, within a decade Barrick became not

only one of the world’s largest and most profitable gold

producers, but the only one to earn an “A” credit rating.

bove all, successful companies have this in common: a commitment to build
lasting value and excellence, and a commitment to setting high goals and
achieving the highest standards. These commitments make up the foundation

of our Company — and they go a long way toward explaining how, in the 20 years
since it was founded, Barrick has become one of the most prominent companies
in its field. Above all, our success reflects the dedication and passion of the men
and women who together have built this Company.

Barrick quickly established itself as a leader in the gold mining business. We
accomplished this feat by running the Company in accordance with clear and concise
business principles. Rather than hitch our cart to volatile gold prices, we focused
on running a business that could flourish under any conditions. We established
a track record of consistently setting and then surpassing the highest standards, both
operational and financial. Before long, Barrick was known as the most profitable
company in its industry, always using its balance sheet and hedge book in ways
that minimized risk and maximized opportunity.

We are immensely proud of what we’ve accomplished. Still, there’s no ignoring the
facts: in 2002, Barrick did not meet our high standards. As performance slipped
and investor confidence eroded, our Board of Directors decided that a change in
management was necessary. With that, Greg Wilkins was named President and Chief
Executive Officer of Barrick. Backed by the full support and confidence of the
Board, and building on the many contributions of his predecessor, Randall Oliphant,
Greg is already making great strides at reenergizing our Company.

Our Board has been busy in other areas as well. Corporate governance has
become a major focus, not only to regulators and investors, but also to our Board.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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The Securities and Exchange Commission and the New York Stock Exchange have
enacted tough new rules for boards of directors. Officially, as a non-US company,
Barrick is not legally bound by some of these new regulations, yet as a global company
we are committed to maintaining the highest standards of corporate governance.
Recently, our Board created a separate corporate governance committee that
is charged with proposing and implementing the new standards set out by Wall
Street and Washington, to assure that our Company’s corporate stewardship
best serves our shareholders.

Regulations intended to improve corporate governance can only do so much.
For a company to perform to the best of its abilities, a board must be personally
committed to maintaining the integrity of a company and ensuring fiduciary
responsibility to its shareholders. I’m proud of our Board’s record in this area.
Over and over, our Board has demonstrated a determination to do what it takes
to maximize shareholder value while remaining true to the ethos of this company.
Underperformance has never been acceptable to our Board. Building a great and
lasting company that creates true shareholder value is the overriding goal.

This is a great time to be in our industry. In a period of political and economic
uncertainty, gold is more important than ever. Better still, Barrick is perfectly
positioned to take advantage of the opportunities. Whether you look at our managers
and employees, our assets, our operations, our track record in exploration and
development, or our financial strengths, Barrick has all the components required
to forge ahead. Our task now is to get all those parts moving together as one,
restoring investor confidence along the way. Few people are better suited for
this task than Greg Wilkins, one of the finest executives I have ever worked with.

In the 20 years since I founded Barrick, much has changed. Our commitment
to building lasting value, however, has never wavered. On behalf of everyone
at Barrick, I’m pleased to report that we are determined to chart the path of
excellence that sustained us in the past, and will support us in the future.

Peter Munk
Chairman
March 8, 2003

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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Our fundamentals are strong. The key now is execution:

Delivering at our existing mines, advancing our development

projects, and making new exploration discoveries. If we do

those things, we should see the kind of financial performance

our shareholders have come to expect.

arrick was created and

pleased to be back leading the

built with a clear purpose

Company in an exciting period

in mind. Twenty years ago,

for gold — and what I believe will

Peter Munk recognized that gold

be an exciting period for Barrick.

and gold shares represented a

unique asset class, fulfilling a

As the 1990’s experienced a

special role in the financial mar-

period of sustained economic

kets. Investors used gold-related

growth and rising financial asset

investments to diversify their

values, gold remained in an

portfolio risks, in line with the

extended bear market. The new

general wisdom that gold would

millennium spurred the recent

rise in times of uncertainty while

break out in gold as it brought

other financial asset values would

with it heightened geopolitical

fall. Fundamental to this thesis

risk and a weaker economic cli-

was that the gold investment

mate. Gold, as expected, fulfilled

be financially sound and its

its role, rising in value while

underlying operations well-

virtually every other financial

managed. Accordingly, Barrick

investment class declined. So

was built on proven business

far so good — except that the

principles. Today, 20 years

patient Barrick shareholders did

later, the philosophy that

not enjoy the benefits that they

gave birth to Barrick serves

reasonably expected when the

us equally well in the current

gold price rose.

environment of political and

economic uncertainty.

In this letter, I want to share

Having been associated with

happened and why — and how

Barrick since the beginning, I am

Barrick will again become the

with you my sense of what

B A R R I C K A N N U A L R E P O R T 2 0 0 2

gold investment of choice and

to $177 per ounce compared with

regain its leadership position

$162 a year earlier. The lower

in the gold industry.

operating performance offset

the gains from higher gold prices,

Since rejoining Barrick, I have

which had increased from a

been visiting our operating

22-year low of $271 per ounce

mines and development projects

in 2001 to an average of $310

to understand better both the

per ounce in 2002. Barrick’s

challenges and opportunities

lower production level in 2002

facing the Company today. The

was anticipated, resulting from

issue, as I see it, is execution:

the shutdown of operations with

We must manage this company

depleted ore bodies. The higher

effectively to take advantage of

cash costs, however, were a

our assets and opportunities. At

disappointment. Costs were

the same time, we need to align

expected to increase from $162

our forward sales program to a

per ounce in 2001 to $167 per

The issue, as I see it,

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is execution: We must

manage this company

effectively to take

advantage of our assets

and opportunities.

changing market, and optimize

ounce in 2002. Instead, difficul-

our capital structure. To achieve

ties accessing higher-grade ore

each of these goals, we must

and a lack of production flexibility

make certain we have the right

at several of our underground

people in the right places at all

operations pushed costs to $177

levels of the Company.

per ounce1.

Barrick built itself on strong,

The Company was slow in

predictable financial performance,

reacting to these operational

priding itself on consistently

issues and compounded the

achieving or surpassing market

problem by failing to communicate

expectations. Looking back

effectively with the Company’s

more recently, it is evident

stakeholders. Unfortunately,

that Barrick failed to meet the

the negative sentiment that

standards — operational or

developed towards the Company

financial — that our investors

overshadowed the successes

have grown to expect.

we enjoyed during 2002.

Earnings before non-hedge

Even the good news in 2002 had

derivative adjustments and one-

a negative impact on earnings.

time charges declined from $221

We discovered the Alto Chicama

million in 2001 to $199 million in

deposit in Peru, brought 6.5

20021. Production was 5.7 million

million ounces into reserves and

ounces compared to 6.l million

we moved ahead on the Veladero

in 2001, while cash costs rose

project in Argentina. As a result,

1 See page 60 regarding non-GAAP measures.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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exploration spending doubled

Our forward sales program will

from a planned $52 million to

continue to be a tool to manage

$104 million, directly impacting

our financial risk. It gives us the

our earnings. In addition to

critical ability to make major

factors that should have been

capital investments for the

within our reach, we faced sev-

development of new mines —

eral market issues beyond our

the source of future earnings,

control. As a case in point, the

cash flow and growth. And

S&P’s policy shift to include only

because of this program, we can

Our forward sales

US-based companies in their

undertake these long-term capi-

index, resulted in Barrick being

tal commitments without expos-

program will continue

removed from the S&P 500

ing our balance sheet. It is the

causing significant disinvestment

only prudent way for a corpora-

to be a tool to manage

by index related investors.

tion dependent entirely on a

single volatile commodity price

our financial risk.

Yet the issue that dominated

to make capital investments to

It gives us the critical

forward sales program. It is hard

taining financial strength.

the agenda last year was our

grow its business while main-

to imagine how a tool that has

ability to make major

capital investments

for the development

worked so successfully for 15

The simple fact is that our pro-

years — earning over $2 billion

gram is designed to work when

for the Company — has managed

gold prices rise — as it has in

to generate so much negative

early 2003. As the spot price

publicity. The program has long

moved above our forward price,

of new mines —

been vilified by a small group of

we elected to sell all our produc-

critics who have led a vocal and

tion at the higher spot price. The

the source of future

earnings, cash flow

misleading crusade denigrating

extended deferral feature, the

our forward sales program. Last

right to defer delivery for 10 to 15

year, this crusade took the form

years, provides the Company the

of a lawsuit filed against the

complete flexibility to sell at spot

and growth.

Company, advancing the conspir-

gold prices or deliver into our

acy theory that Barrick was

forward sales contracts — which-

actively and deliberately sup-

ever is higher. No other company

pressing the price of gold. Our

has this degree of flexibility,

shareholders should know that

which is one of the many reasons

we’re fighting back: Barrick has

why Barrick’s program differs

petitioned the court to have

from its peers.

the case dismissed — and has

filed its own lawsuit to stop the

As interest rates have declined,

spread of malicious and false

forward premiums have also

information about our program.

declined, making forward selling

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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less attractive. Our existing

quality, financial strength and

program is larger than I’d like,

people capable of managing

as it represents almost 35% of

our operations effectively to

our reserves at operating mines.

deliver sustainable earnings

The size of the position will

and cash flow. As I said at

always be a function of business

the outset, it boils down

and market conditions, so any

to execution.

working guideline is bound to

change. That said, my personal

From all that I’ve seen, the

view is that roughly two years

Company’s fundamentals are

production is a more optimal

strong. Our existing operations

limit to work towards. Gold is

are among the longest-life,

volatile — and this volatility will

lowest-cost mines in the world.

Our objective is

clear: to be the

provide us with the opportunity

Our portfolio is in politically

acknowledged leader

over time to effectively re-align

stable regions and we’ve got

our forward sales program. But

great talent in the field — oper-

in the gold industry

do take note that even before any

ating management teams that

realignment occurs, we have

are motivated, capable and

in terms of asset

almost 70 million ounces of gold

experienced.

unhedged and linked to the gold

price. That provides one of the

Nevertheless, our producing

largest exposures to higher gold

assets are reaching maturity and

prices in the entire gold industry.

are now in the phase when we

can reap the rewards of years

quality, financial

strength and people

capable of managing

Yet for all our strengths, the

of investment and development.

bottom line for 2002 is that

2002 was a perfect example of

our operations

we didn’t measure up in terms

that, as we generated the highest

of our share performance as

free cash flow1 in the Company’s

investors shifted to gold. Our

history — $361 million — and

difficulties in 2002 tarnished the

increased our cash balance by

effectively to deliver

sustainable earnings

Company’s credibility and shook

year end to over $1 billion. Our

and cash flow.

investor confidence. We lost the

goal in the years to come is to

premium in the market that we

harvest those free cash flows

had long enjoyed. Our task now

for reinvestment in the business

is to recapture that premium,

to grow earnings and cash flow

by regaining investor confidence.

per share.

Our objective is clear: to be the

Reserve replacement is a huge

acknowledged leader in the

challenge in the gold industry.

gold industry in terms of asset

With the potential at some of

1 See page 60 regarding non-GAAP measures.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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our existing mines and our

the past few years. As the juniors

development projects, Barrick

historically active in exploration

is well positioned to meet that

stepped back, Barrick stepped

challenge — as we did last year,

up — strengthening its explo-

when we increased reserves

ration team and spending risk

by about 5 million ounces

capital more effectively. That

to 86.9 million ounces.

effort paid off in the form of the

Alto Chicama discovery last year.

Longer term, reserve replace-

While no company can be certain

ment and growth go beyond

that its exploration work will

the existing pipeline of projects.

continue to produce economic

Our acquisition and

Acquisitions and exploration are

discoveries, we are optimistic

the two principal means of adding

that if we work smartly, we will

exploration successes

reserves and production. Both

have further successes.

coupled with our

approached with great discipline.

Of course once you discover a

have risks, and both need to be

balance sheet strength

allowed us to announce

a $2-billion development

program designed to

deposit, you need to get it into

The Homestake merger has

production. Our acquisition and

worked well for us, as we suc-

exploration successes coupled

cessfully integrated the two

with our balance sheet strength

companies, realizing the human

allowed us to announce a

and financial synergies identi-

$2-billion development program

fied in the acquisition analysis.

designed to bring 2 million

However, acquisitions generally

low-cost ounces per annum into

bring 2 million low-cost

do not have a history of deliver-

production. That gives Barrick

ing value, and it is even more

the biggest portfolio of undevel-

ounces annually into

elusive to find value in gold

oped assets in the industry —

mining transactions. Blockbuster

and when you consider that

production.

deals deliver size, but not neces-

we’re developing these projects

sarily quality and rarely create

in a favorable gold price envi-

wealth for the acquirer. We will

ronment, you see why I am so

continue to look for opportuni-

excited to be back at Barrick.

ties in the gold industry, and

will move only when we see

We are focused on getting these

the opportunity to enhance

projects into production as soon

our financial performance.

as possible. This is an enormous

task that only experienced and

Barrick is one of the few compa-

well-financed companies can

nies to have made a sizeable

even consider. Barrick has

commitment to exploration over

successfully built more than

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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10 mines on four continents.

holders not just our strengths

We have both the development

but our challenges, we believe

experience and the balance

open, honest, two-way dialogue

sheet to get the job done.

is the best way to share our

sense of who we are — and where

As 2003 unfolds, we’ll also be

we’re going.

focusing on the question of cap-

ital structure, weighing our cash

I want to close by coming back to

needs against our debt levels,

a point Peter Munk often makes.

and assessing our existing oper-

You won’t find a line item on the

ations’ ability to generate free

balance sheet labeled “Passion to

cash flows versus the cash needs

succeed,” or a metric that meas-

for our development projects.

ures a company’s heart. But the

best companies have both, and

As I have said, Barrick has all

so does Barrick. That is why I can

the tools it needs to be success-

say with confidence that by con-

ful: A strong commitment to

sistently making good decisions

gold, quality assets, internation-

and delivering results — this

al diversification, a strong bal-

Company will thrive.

ance sheet, and a solid forward

sales program. Most importantly,

as I have discovered through my

recent site visits, it has highly

skilled, highly motivated people,

Gregory C. Wilkins

a social conscience and a special

President and

culture that is unique to Barrick.

Chief Executive Officer

With a renewed commitment to

March 8, 2003

better communicate to all stake-

B A R R I C K A N N U A L R E P O R T 2 0 0 2

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL AND OPERATING RESULTS

Strategic Perspectives

Highlights

Outlook

Income Statement

Gold Sales

Operations Review by Geographic Area

North America

South America

Africa

Australia

Costs and Expenses

Liquidity and Capital Resources

Financial Risk Management

Critical Accounting Estimates

Off-Balance Sheet Arrangements

Gold Sales Contracts

Contractual Obligations and Commitments

Non GAAP Measures

’

STRATEGIC PERSPECTIVES

> VELADERO, ARGENTINA

arrick Gold Corporation is

In addition to our operating mines, we

among the world’s largest gold

have the largest portfolio of develop-

producers in terms of market

ment projects in the industry, and the

capitalization, production and reserves,

financial and development strengths

with operating properties and develop-

to build them. For the last five years,

ment projects on four continents. With

as the lower gold price environment

2003 marking Barrick’s 20th year in

reduced exploration spending across

the gold business, we believe that we

the industry, we invested extensively

are positioned to benefit from the

in our exploration program. This invest-

opportunities presented by a favorable

ment paid dividends in 2002 with a

gold price environment.

major gold discovery – Alto Chicama in

Peru. By early 2003, our work at Alto

Our exploration

team discovered

Since its founding, Barrick has been

Chicama allowed us to add 6.5 million

a major gold deposit

at Alto Chicama,

adding 6.5 million

ounces to reserves.

run in accordance with clear and con-

ounces to reserves (for Canadian report-

cise business principles, focusing on

profitability and financial performance

rather than sheer size. We know that

the key drivers of performance in our

ing purposes), bringing our total reserves
to 86.9 million ounces1, one of the largest
gold asset bases in the industry.

business are spot gold prices, produc-

Coupled with the development projects

tion, reserves and costs per ounce.

obtained through our Homestake merger

In 2002, our financial results were

in 2001, we now have a four mine,

below our expectations, primarily due

$2-billion development program that

to higher costs at our operations. As

we expect to contribute to production,

we move into 2003, we intend to focus

earnings and cash flows beginning in

on optimizing our operating mines and

2005. At full production, we expect

setting achievable targets based on

this group of projects to add 2 million

each mine’s stage of operation. Overall,

ounces of low-cost gold production

we have a solid portfolio of operating –

annually to our portfolio. With such

albeit mature – properties. Even as the

a sizeable development program

average ore grade mined at each of

underway, our strategic focus for the

our operations declines toward reserve

immediate future will be to continue

grade, these mines remain long-life,

our exploration efforts in ways that

low-cost operations compared to the

further enhance our operating mines

industry. The key feature of these

and development projects. While our

properties is their ability to generate

strategy does not make us dependent

significant free cash flow, which we

on acquisitions, we will consider trans-

plan to use in part to fund our explo-

actions that we believe are capable of

ration and development programs.

increasing earnings and cash flows.

1. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934) as interpreted by
the Staff of the U.S. Securities and Exchange Commission applies different standards in order to classify mineralization
as a reserve. Accordingly, Alto Chicama and Veladero are classified for U.S. reporting purposes as mineralized material.
Total reserves for U.S reporting purposes are 71.0 million ounces.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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We have the financial resources to move

sheet, strong free cash flows from our

ahead with our exploration and develop-

existing operations and the support of

ment programs without diluting our

our forward sales program.

shareholders because of our solid balance

HIGHLIGHTS

Our Pierina mine

in Peru is the

Company’s second

For 2002, our net income was $193

– double what we originally planned

million ($0.36 per share) compared to

to spend. Activity at our Alto Chicama

$96 million ($0.18 per share) in 2001,

discovery increased our exploration

while operating cash flow was $589 mil-

expense by $24 million. At the same

lion ($1.09 per share) for 2002 versus

time, we also expensed all of the feasi-

largest producer and

$588 million ($1.10 per share) for 2001.

bility work at Veladero ($15 million) over

cash flow generator.

the course of 2002. While the impact

For the year, we produced 5.7 million

on our 2002 earnings was negative,

ounces of gold at total cash costs of
$177 per ounce1 compared to 6.1 million

both Alto Chicama and Veladero

represent key assets that we expect

ounces of gold at $162 per ounce in

to contribute to our operating and

2001. Lower 2002 production was

financial performance beginning in

largely due to the planned phase-out

2005 and 2006, respectively.

of five mines over the course of the

year as reserves were depleted.

We generated solid cash flows from our

operating mines and as a result of our

Overall, we met our production target

for the year as solid contributions from

lowest capital expenditures in 14 years,
our free cash flows reached $361 million1,

our Pierina mine in Peru and two of our

the highest in Company history. Our

North American operations offset lower

forward sales program also contributed,

production from four of our seven

generating $168 million in additional

underground mines. The lower produc-

revenue in 2002. As a result, we ended

tion and the resulting higher cash costs

the year with more than $1 billion in

at the four underground mines were due

cash, and no net debt.

largely to difficulties in accessing higher-

grade ores. The four mines spent 2002

Our forward sales program provides us

improving mine planning and increasing

the flexibility to deliver at our forward

development to provide better produc-

price or the spot gold price – whichever

tion flexibility in 2003 and beyond.

is higher. For the first time in 15 years,

in the first quarter of 2003 spot gold

The $15 per ounce increase in total

prices increased above our current year

cash costs in 2002 over 2001 was due

forward price, allowing us to defer

to our ongoing operations processing

delivery of our forward contracts and

more ore (5% higher) at lower grades

sell at the higher spot gold price. Our

(5% lower) at marginally higher unit

forward sales program has performed

costs (up 1%).

as it was designed, providing a higher

floor price during periods of low gold

Our 2002 earnings were also affected

prices and the flexibility to sell all of our

by a sharp increase in our exploration

mine production at higher spot prices.

and development expense to $104 million

1. See non-GAAP measures page 60.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

> Global – Results
For the year ended December 31,

(US GAAP basis)

Gold production – ounces (thousands)

Revenue per ounce

Cash operating costs per ounce

Royalties

Production taxes

Total cash costs per ounce

Amortization and reclamation

Total production costs per ounce

Capital expenditures (millions)

Mineral reserves (millions of ounces)

1. See non-GAAP measures page 60.

2002

5,695

339

170

1
1771

268

228

86.9

2001

6,124

317

155

162

247

474

82.3

% Change

-7

–

-52

A gold pour at our

Bulyanhulu mine in

Tanzania, East Africa.

We believe that our forward sales

While the program has worked well

program’s flexibility is one of the

for us in the past and remains an

significant strengths of this Company.

important asset, changing circum-

At a time when spot gold prices rose

stances make adjustments necessary.

by more than $100 per ounce and our

Given the present environment of low

unrealized mark-to-market loss increased,

interest rates and concerns over com-

our program remained solid. What

plex financial transactions, we intend

makes gold hedging unique – in sharp

to make our foward selling program

contrast to derivative instruments in

both smaller and simpler. Accordingly,

general – is the fact that our program is

over the course of 2002 we reduced

supported by gold in the ground which

the size of our program and focused

can be delivered in the normal course

on “plain vanilla” spot deferred

of our business. Every ounce hedged

forward sales contracts.

represents a product we own – and

we only have one in five ounces sold

forward under our program.

OUTLOOK

While no company can predict future

For 2003, we expect to produce

performance with certainty, we have

between 5.4 and 5.5 million ounces at

a solid portfolio of assets capable of

a cash cost of $180 to $190 per ounce.

generating significant free cash flows.

Including amortization, total production

Our pipeline of development projects

costs for the year are expected to be

gives us the flexibility to add to our

between $275 and $285 per ounce.

production profile without the necessity

Our forward sales program provides us

of acquisitions. While we believe that

with the ability to sell our production

consolidation and rationalization of

at a minimum selling price of $340 per

the gold industry will continue, our

ounce for 2003; however, as our objec-

primary focus is on optimizing our

tive is to maximize the value of every

existing mines and the development

ounce we produce, we plan to sell our

of our new mines.

production at the higher of the spot

price or our forward price.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

We expect administration costs to

be approximately $70 million, with

exploration and business development

in the $100 to $110 million range. Our

projections assume the expensing of

all of Alto Chicama’s and a portion of

The forward looking statements included

in this discussion and analysis involve

risks and uncertainties and are based

upon assumptions, which we believe

are reasonable, but which could prove

incorrect. Factors which could cause

Veladero’s development costs. Interest

actual results to differ from those

expense is expected to be about $70 mil-

implied in the forward looking state-

lion (including accretion expense). Based

ments include: changes in the price of

on $350 per ounce gold, our tax rate is

gold and certain other commodities;

An underground

exploration crew at

expected to be between 15% and 20%;

currency fluctuations; regulatory, polit-

work at our Meikle

mine in Nevada

at $400 per ounce gold, our tax rate

ical or economic developments in the

would increase to 25% to 30%.

We plan to begin implementing our

development program in 2003,

increasing capital expenditures to

approximately $380 to $390 million

from a sustaining capital level of

areas in which we carry on business;

and changes in mining or processing

rates. With a large proportion of our

reserve base undeveloped, the timing

of commencement of production, as

well as capital cost, production and

cash costs of our development projects

$228 million last year, with the increase

will have a significant impact on future

aimed at starting construction at the

Veladero and Cowal projects. In addi-

tion to the steady stream of free

cash flow generated by our existing

operations, we bring the strength of

our balance sheet – with $1-billion in

financial performance in 2005 and

beyond. For a more detailed discussion

of risks relevant to Barrick, see our Form

40-F/Annual Information Form on file

with securities regulatory authorities.

cash and low levels of debt – to provide

The consolidated financial statements

the financial base to proceed with

these projects.

have been prepared based on United

States reserves standards. Our

reserves for United States reporting

The accompanying consolidated finan-

purposes are the same as our reserves

cial statements and related notes are

presented in accordance with United

States generally accepted accounting

principles (“US GAAP”) and are

for Canadian reporting purposes with

the exception of two projects (Veladero

and Alto Chicama), which we expect

to qualify as reserves for United States

expressed in US dollars. These state-

reporting purposes within the next

ments, together with the following

twelve months.

discussion and analysis, are intended

to provide investors with a reasonable

basis for assessing our operational

and financial performance as well as

certain forward looking information

relating to potential future performance.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

INCOME STATEMENT

GOLD SALES
Revenue for 2002 totaled $1,967 million

price of $317 per ounce in 2001. The

forward sales program generated

on gold sales of 5.8 million ounces,

$168 million in additional revenue in

compared with $1,989 million on gold

2002 and $289 million in additional

sales of 6.3 million ounces in 2001.

revenue in 2001. The decline in addi-

2002 gold sales were approximately

tional revenue generated through our

100,000 ounces higher than 2002

forward sales program in 2002 was

production, reflecting the impact of

due to higher gold prices, reducing

ounces produced at the end of 2001

the amount of the premium over the

but not sold until 2002. The marginally

spot price from $76 per ounce in 2001

Barrick’s forward sales

program provides the

flexibility to sell mine

lower 2002 revenue compared to

to $42 per ounce in 2002.

production at spot gold

the prior year resulted from an 8%

decrease in gold sales, partially offset

As we saw in 2002 when spot gold

by a $22 per ounce, or 7%, increase

prices rise toward our higher forward

in the average realized price. The

sale price, the additional revenue

prices or deliver into

our forward sales

lower gold sales in 2002 relate to the

earned through the program decreases.

contracts – whichever

planned closure of five mines during

When spot gold prices rise above our

the year due to the depletion of their

forward sale price, as occurred in early

is higher.

economic reserves. With the exception

2003, we can sell all of our gold produc-

of one further mine closure in 2004,

tion at the higher spot price and defer

our existing operations should continue

delivery of our forward sales contracts

to produce at similar levels for the next

to a future date. While the value of our

several years.

reserves and cash flows increase as

spot gold prices rise, the unrealized

In 2002, gold prices rose to their high-

mark-to-market loss on our program

est level since 1997, averaging $310 per

also rises. The mark-to-market value

ounce, compared to 2001, when gold

declined from an unrealized gain of

averaged $271 per ounce. Higher spot

$356 million at the end of 2001 to an

gold prices, combined with deliveries into

unrealized loss of $639 million at the

our forward sales program, allowed us

end of 2002. The decline in the mark-

to realize an average price of $339 per

to-market value is primarily due to

ounce compared to an average realized

increasing spot gold prices (year end

’

Gold Sales by Country
(US$ thousands)

1,200
1,200

1,000
1,000

800800

600600

400400

200200

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

spot gold prices, 2002 – $347 compared

price, leading us to defer scheduled

to 2001 – $279) and the realization

deliveries under those contracts and sell

of $168 million of additional contract

our production at the higher spot price.

revenue during 2002, partially offset by

unrealized gains on changes in forward

Gold deliveries into these forward sales

gold price differentials (or contango),

contracts can be deferred for up to

which are influenced principally by

10 to 15 years; as they are deferred,

changes in interest and gold lease

the delivery price under these contracts

rates and premiums (US interest rates

increases over time. The increase in

less gold lease rates) earned during

the delivery price of these deferred

the year. For additional detail see

contracts is based on the present spot-

Off-Balance Sheet Arrangements –

forward gold price differential, primarily

Significance of mark-to-market gains

influenced by US dollar interest rates.

and losses page 57.

In a high US dollar interest rate

environment, the delivery price

Future gold production committed under

rises quickly, while in the present

our forward sales program totaled 18.1

low interest rate environment, the

So far in early 2003,

we have extended the

delivery dates on

our forward sales

contracts, and we

have sold all of our

million ounces at December 31, 2002.

delivery price rises at a slower rate.

production at the

higher spot price.

This represents approximately 21%

of proven and probable reserves (for

In an effort to make our program smaller

Canadian reporting purposes), deliver-

and simpler, we delivered production

able over the next 10 to 15 years at

against forward sales contracts without

an average estimated future price of

replacing those contracts, and we

$341 per ounce at the scheduled delivery

reduced our variable price sales com-

dates. For 2003, we have the ability

mitments by approximately two-thirds.

to sell our production into the forward

These steps allowed us to close the

sales program at an average price of

year at 18.1 million ounces committed

$340 per ounce. In early 2003, the

under our forward sales program, leaving

delivery dates on those contracts have

approximately 80% of our reserves

been extended pursuant to their terms,

unhedged. With our positive outlook for

as we elected to sell our production at

the gold price, interest rates at 40-year

the higher spot price of approximately

lows (leading to lower forward sales

$360 per ounce. This is the first time

premiums), and our strong financial

in 15 years that gold prices have risen

position, we intend to continue to

above our current year forward sales

manage the program down to a

lower portion of overall reserves.

Gross Operating Costs
(US$ millions)

2001
2001

2002

4040

3030

2020

1010

B A R R I C K A N N U A L R E P O R T 2 0 0 2

OPERATIONS REVIEW BY GEOGRAPHIC AREA

As noted in the Highlights, 2002

higher costs per ounce, overshadowing

production decreased to 5.7 million

strong contributions from Round

ounces from 6.1 million ounces in 2001,

Mountain, Pierina, and Eskay Creek.

with lower production in 2002 due

We responded to the operational issues

largely to the planned phase-out of five

by enhancing mine planning, scheduling

mines over the course of the year as

and budgeting to ensure better informa-

economic reserves were depleted. Total

tion and providing greater production

operating costs, including reclamation,

flexibility, giving us greater ability to

were similar over the two years, at

optimize the value of our underground

$1,071 million in 2002 and $1,080 mil-

mines. In addition, we have reviewed

lion in 2001. However, on a per ounce

our operating systems and procedures

basis, total cash costs for the year

to improve controls to facilitate timely

increased to $177, from $162 in 2001.

updating of forecast information at

Higher cash costs were attributable to

our mines. Our efforts centered on

three main factors:

improving the accuracy of periodic

> Mining and processing more lower-

forecasting by the General Managers

grade tons during the year;

and putting a stronger emphasis on

Increased amortization of deferred

achievability through the corporate

mining costs; and

office review process.

Increased royalty and mining tax

payments due to higher gold prices.

In addition, planned increases in

One of the operational facts inherent

Betze-Post and Pierina resulted in higher

in our industry is that as operations

cash costs at those operations as mining

mature, grades decline and it becomes

moved into lower-grade areas of the

expensing of deferred mining costs at

North
America

South
America

Africa

more difficult to add reserves at these

open pits.

operations. The lower grades lead to

Australia

’

less production flexibility as the opera-

With the closure of six mines over the

tions have fewer choices of which areas

past 15 months and our new projects

to mine. Most of our operations have

not expected to begin to contribute to

reduced controllable unit mining,

production until 2005, we anticipate

processing and administrative costs

lower production in 2003 and 2004.

through productivity improvements,

Production for 2003 is expected to

resulting in higher mining and process-

be between 5.4 and 5.5 million ounces,

ing rates. However, comparatively small

at a cash cost of between $180 and

changes in tons and grades processed

$190 per ounce. Following is a summary

and recovery rates have a more pro-

of each of our mines and development

nounced impact on production, cash

projects. For a more detailed discussion

costs and earnings than before.

of our operations and development

projects see the most current Annual

A variety of unrelated operating diffi-

Information Form (AIF – on file with

culties accessing higher-grade ores in

the securities regulatory authorities

2002 at Bulyanhulu, Hemlo, Plutonic

in Canada and the US).

and Meikle led to lower production and

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

NORTH AMERICA

NORTH AMERICAN PROPERTIES

> Largest producing region, accounting for 62% of the Company’s total production.

> Goldstrike, Nevada

Betze-Post

Meikle

> Region represents 50% of our developed reserve base at 26.2 million ounces.

> Long-life asset base.

> Round Mountain, Nevada

> Fully developed operations generating the majority of the Company’s free cash flow,

> Eskay Creek, British Columbia

> Hemlo, Ontario

> Holt-McDermott, Ontario

which will be used to fund exploration and to build our new generation of mines.

GOLDSTRIKE PROPERTY (NEVADA)

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

144,533

11,960

0.20

2,050

19,939

155,606

10,562

0.25

2,263

20,379

209

183

218

296

193

253

122

-7

-20

-9

-2

-10

-62

The Goldstrike Property remains the

to over 7 cents per kwh). We are looking

Company’s single largest producer and

at alternative power suppliers to lower

has just completed its eighth straight

our power costs.

year producing more than 2 million

ounces. Cash costs have increased

While the Property has matured, it

over the past five years as the Property

replaced 80% of production in 2002

has moved from mining and processing

through reserve expansion in both

high-grade material to near reserve

the open pit (1.3 million ounces) and

grade material in both the open pit and

the underground (642,000 ounces), its

underground. As well, electric power

best showing since 1999. Overall, the

and fuel cost increases have pressured

Property is expected to continue to

costs higher. Power costs increased in

produce at the 2 million ounce level

the Western United States in 2001,

for at least the next four years. Cash

causing our supplier to increase our

costs are expected to remain relatively

rates substantially (4.3 cents per kwh

constant. With the large capital program

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Surveyors at work

at Betze-Post, where

we have made great

strides in improving

the mine’s productivity

over the past five years.

’

completed, the Property contributes the

at lower grade (down 20%). In addition,

majority of the free cash flow from our

higher power costs (up $6 per ounce)

existing operations – free cash flow that

and expensing of deferred stripping

will play a key role in funding our explo-

costs at Betze-Post (up $14 per ounce)

ration program and developing our new

led to higher costs.

generation of mines.

In 2003, the Property is expected

In 2002, production declined 9% com-

to produce 2,115,000 ounces of gold

pared to 2001, while total cash costs

(3% higher than 2002) at cash costs

increased to $218 per ounce, up from

of $225 per ounce. The increase in

$193 a year earlier. The lower produc-

cash costs is largely due to higher

tion and higher cash costs were largely

royalties and production taxes

due to processing more tons (up 13%)

resulting from higher gold prices.

BETZE-POST MINE

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

142,898

10,322

0.16

1,410

16,051

154,233

9,187

0.20

1,550

16,433

221

207

228

286

215

267

-7

-20

-9

-2

-14

-63

Betze-Post production declined 9%

the cost of power increased by $19 per

from the previous year. The lower

ounce. Despite the lower grade, cash

production was due to lower grades

costs increased by only $6 per ounce

processed (down 20%), partially offset

or 3% (excluding power cost increases)

by higher throughput (up 12%). To max-

over the four-year period because of

imize investment returns, the mine plan

the mine’s productivity improvements

was designed to process higher-grade

and cost-reduction initiatives.

ore first and stockpile the lower-grade

material in the earlier years of its life.

Proven and probable gold reserves

Over the past four years (1999-2002),

at Betze-Post decreased to 16.1 million

the average grade processed declined

ounces from 16.4 million ounces in

by 41%, while in the past two years

2001. The partial reserve replacement

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

in 2002 was due to lower unit mining

(up 5%). Lower unit mining costs,

and processing costs, which allowed

combined with higher recovery rates

the conversion of a small underground

and throughput, are expected to more

reserve into a larger open pit reserve,

than offset another power cost increase,

as well as the discovery of lower-grade

resulting in a 4% reduction in cash

material at the pit bottom last year.

operating costs per ounce before royal-

ties and production taxes. However,

For 2003, production is expected

higher spot gold prices are expected to

to increase to 1,495,000 ounces due

result in higher royalties and production

to better grades mined and processed

taxes, resulting in total cash costs

(up 6%) and increased tons processed

similar to 2002 at $228 per ounce.

A remote-controlled

scooptram at work

underground at Meikle.

MEIKLE MINE

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

1,635

1,638

0.43

640

3,888

184

198

121

319

2001

% Change

1,372

1,375

0.56

713

3,946

133

147

221

-23

-10

-1

–

-62

Meikle production declined 10% from

In recent years, Meikle has been transi-

2001, as total cash costs increased to

tioning from a compact high-grade

$198 per ounce from $147 per ounce

mining operation to a lower-grade

in 2001. The lower production relates

operation spread over a much larger

to lower grades processed (down 23%),

area. Between 1999 and 2002, the

partially offset by higher mining and

average grade mined and processed

processing rates (up 19%), as the

declined (by 57%) while cash costs

Rodeo deposit ramps up to full produc-

per ounce doubled. As the mine has

tion. The higher cash costs were due to

matured, mining in Main Meikle is now

lower grades mined and processed and

focused on secondary stopes where

higher unit mining costs, particularly

ground conditions are not as competent,

in the remnant material of the Main

leading to production difficulties and

Meikle zone.

higher unit mining costs in 2002.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Drilling at Banshee,

north of Meikle, holds

the best potential

for reserve additions

at Goldstrike.

’

As a result, the mine focused on

to be completed in first quarter 2003;

improving planning and scheduling

based on the assessment of economic

during the year to ensure a more

potential, a decision on a Meikle-to-

stable production plan going forward.

Banshee access drift is expected by

Proven and probable reserves at year end

mid-2003.

2002 declined marginally to 3.89 mil-

Production for 2003 is expected

lion ounces from 3.95 million in 2001,

to decline to 620,000 ounces, while

as the mine replaced about 85% of

total cash costs are expected to rise to

2002 production. Most of the material

$219 per ounce. The lower production

added in 2002 had been removed from

is largely due to expected lower recov-

reserves a year earlier when manage-

ery rates (down 2%), as lower grades

ment determined that more drilling

processed (down 7%) are offset by

was required to classify the material as

higher mining rates (up 7%). Beginning

reserves. While exploration drilling will

in 2003, Meikle is mining and processing

continue at depth below Main Meikle

at the average grade of its remaining

and in the Rodeo area, the best poten-

reserves; as a result, production and

tial for reserve additions is likely north

costs should be stable around current

of Main Meikle, in an area known as

levels for the remainder of its mine life.

Banshee. Surface drilling is expected

ROUND MOUNTAIN MINE (NEVADA)

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Gold Production (Barrick’s share)

(000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

63,146

62,222

0.019

755

378

1,875

172

187

256

70,243

58,660

0.017

747

373

2,245

176

187

249

-10

-16

-2

–

-47

B A R R I C K A N N U A L R E P O R T 2 0 0 2

The large tonnage,

low-grade Round

Mountain mine

remains a consistent

performer.

’

The Round Mountain joint venture

current deposit resides in an exploration

had another strong year, contributing

program at the Gold Hill property

377,747 ounces of gold to our 50 per-

(located 5 miles from Round Mountain),

cent account in 2002. Total cash costs

where follow-up drilling continues to

were $187 per ounce, in line with the

yield encouraging results. The work

previous year. The results were better

planned for 2003 will further test the

than plan for both production and

potential economics of this pit and con-

costs, as a result of better than antici-

tinue to delineate the mineralized zone.

pated grades processed through the

mill as well as to the leach pad.

For 2003, the mine is expected to

have another solid year. The marginally

Proven and probable reserves decreased

lower production of 363,000 ounces

from 2.2 million to 1.9 million ounces,

and higher costs of $198 per ounce,

as only a small portion of production

are primarily due to lower production

was replaced during the year. This is

from the leach pad, as longer haulage

a solid but mature operation with an

cycles result in fewer tons being placed

expected remaining mine life of four

on the pad.

years. Future potential beyond the

ESKAY CREEK MINE (BRITISH COLUMBIA)

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Grade – Silver (ounces per ton)

Gold Production (000’s of ounces)

Silver Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

254

256

1.50

72.18

359

17,763

1,430

134

174

2001

% Change

230

229

1.55

71.07

321

15,454

1,775

127

176

-3

-19

-22

-18

-1

-20

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Eskay Creek had its best year for

Proven and probable gold reserves at

production despite lower grades

Eskay decreased to 1.4 million from 1.8

and a strike at one of the mine’s

million ounces due to production during

key third-party smelters. Production

the year. A development ramp was com-

increased 12% in 2002 as cash costs

pleted during the year to follow up on

decreased by 18%. The increase in

encouraging exploration results. Future

production and lower cash costs were

reserve expansion is most likely to come

primarily the result of a 10% increase

from this program. In addition, the sur-

in tons mined and an increase in silver

face program generated positive results,

by-product credits.

with follow-up scheduled in 2003.

To mitigate the impact of the third-

For 2003, production is expected to

party smelter strike which began in

increase marginally to 363,000 ounces,

July 2002, the mine optimized its

as higher mining and processing rates

milling capacity, increasing throughput

(up 11%) are expected to more than off-

(by 12%), re-sequenced the mining

set the lower grades processed. Cash

efforts to source higher grade ore, and

costs are expected to rise to $64 per

arranged for increased sales to its other

ounce, primarily due to lower silver

main smelter. Though the labor strike

grades significantly reducing by-product

continues, shipments of ore and con-

credits. Longer term, based on current

centrate in late 2002 and early 2003

reserves, production is expected to

were close to pre-strike levels, and we

decline and cash costs are expected to

anticipate being able to sustain these

rise as the mining and processing move

rates through the balance of this year,

to the average grade of the reserve.

even without a labor strike settlement.

Eskay Creek

contributed excellent

results due to

productivity

improvements

in both mining

and processing.

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

HEMLO PROPERTY (ONTARIO)

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (100%)

(000’s of ounces)

A drill pattern

underground at our

Gold Production (Barrick’s share)

Hemlo mine accesses

Mineral Reserves (000’s of ounces)

(000’s of ounces)

2002

3,785

3,812

0.149

538

269

2,118

a new working area

for production.

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

216

189

224

264

196

232

2001

% Change

3,893

3,849

0.167

632

307

2,517

-3

-1

-11

-15

-12

-16

–

Hemlo, of which we own a 50 percent

Hemlo’s proven and probable reserves

interest, is a joint venture comprised

at year end 2002 stood at 2.1 million

of the David Bell and Williams under-

ounces compared to 2.5 million ounces

ground mines and the Williams open

one year earlier. In addition to not

pit. In 2002, production declined (by

replacing 2002 production, mining

12%) while cash costs increased (by

recovery rates used for reserve

14%) to $224 per ounce. The lower pro-

estimation purposes were adjusted

duction and higher costs were primarily

in those areas affected by the ground

due to ground control problems that

control problems, resulting in an addi-

began early in 2002 and resulted in

tional 115,000 ounces being removed

restricted access to some high-grade

from reserves.

areas and increased dilution levels. A

revised mine sequence, new backfill

For 2003, production for our account

methods and improved planning should

is expected to be 253,000 ounces,

provide the foundation for more secure

resulting in marginally higher cash

and predictable results from the under-

costs of $231 per ounce. The lower

ground operation in the future.

production and higher cash costs are

primarily due to lower grades, only

partially offset by an increase in mill

throughput. Longer term production

and costs are expected to be similar

to 2003.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

HOLT-MCDERMOTT MINE (ONTARIO)

For the year ended December 31,

OPERATIONAL STATISTICS

Mine

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

520

0.17

154

489

497

0.18

293

173

163

–

173

269

165

258

-4

–

-47

-100

–

While Holt-McDermott’s 2002 production

For 2003, production is expected

was the same as the prior year, cash

to rise 16% to 97,000 ounces as

costs were higher (up 5%). Higher

cash costs rise to $218 per ounce.

costs were a result of an increase in

Production will be up as a result of

tons mined and processed combined

accessing higher-grade ore, while

with a 4% decline in grade.

costs will rise primarily due to the

expensing of mining costs relating

Proven and probable reserves at year

to ongoing development.

end 2002 stood at 154,000 ounces.

Based on mining experience, anticipated

reserve grades were adjusted down,

resulting in a loss of 51,000 ounces

net of 2002 production.

Overview of the head

frame and processing

facilities at our

Holt-McDermott mine.

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

SOUTH AMERICA

SOUTH AMERICAN PROPERTIES

> Home of Barrick’s second-largest cash flow generator, the Pierina mine.

> Pierina, Peru

> Alto Chicama, Peru

> Pascua-Lama, Chile and Argentina

> Three development projects that make up the majority of our current pipeline:

> Our recently discovered Alto Chicama Property in Peru.

> Our largest development project, the Pascua-Lama and Veladero district,

> Veladero, Argentina

straddling the Chilean and Argentinean border.

> Large grass roots exploration programs in Peru and Argentina.

PIERINA MINE (PERU)

For the year ended December 31,

OPERATIONAL STATISTICS

Mine

Tons Mined (000’s)

Leach – Tons to pad (000’s)

Grade Processed (ounces per ton)

A haul truck arrives at

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

the ore bin for loading

at our Pierina mine.

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

32,311

13,414

0.080

898

3,602

–

191

271

30,742

10,968

0.097

911

4,748

–

195

235

-18

-1

-24

100

–

100

-2

-58

Pierina production declined marginally

able to increase mining and processing

(down 1%) compared to the prior year,

rates and lower unit costs to offset

at cash costs of $80 per ounce com-

declining grades.

pared to $40 per ounce in 2001. Cash

costs included an unbudgeted increase

At year end 2002, proven and probable

of $6 per ounce related to higher oper-

reserves declined to 3.6 million ounces

ating costs caused by a tax assessment

of gold, as the mine did not replace

received late in the year. Cash costs

2002 production. The 2002 exploration

doubled over the prior year, largely as

program identified a resource south and

a result of deferred mining costs being

southeast of the pit, targets located

charged as mining activity moves to

near surface at the north end of the pit,

lower-grade areas of the pit. Similar

as well as one adjacent to the final wall

to the Goldstrike Property, Pierina’s

of the south end of the pit, all of which

higher-grade material was mined and

are scheduled for follow-up in 2003. Any

processed early in the mine’s life to

positive exploration results would likely

maximize cash flows and investment

only extend the mine life marginally

returns. To date, the mine has been

past its remaining mine life of five years.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

In 2003, production and total cash

by a 22% increase in tons mined.

costs are expected to rise marginally

Beginning in 2004, the mine is expected

to 908,000 ounces at $86 per ounce.

to move to lower grades in the open

Grades mined are expected to decline

pit, resulting in lower production and

by 5%, but should be more than offset

marginally higher cash costs.

ALTO CHICAMA PROJECT (PERU)

In April 2002, we announced a signifi-

The preliminary feasibility study

cant discovery at our Alto Chicama

estimates Alto Chicama will produce

Property. The initial inferred resource

500,000 ounces per year beginning in

Geologists log

core samples from

at the time of the announcement was

2005, at an average cash cost over the

exploration drills

at our Alto Chicama

property.

estimated at 3.5 million ounces of gold.

first decade of $130 per ounce. Capital

As a result of drilling during the course

costs are projected at $300 to $350

of the year, 6.5 million ounces were

million. As 2002 ended, work focused

brought into probable reserves for
Canadian reporting purposes1. In addi-

on infill drilling, mine planning and con-

demnation drilling. Metallurgical tests

tion, we have 2 million ounces in the

indicate the oxide ore is amenable to

measured and indicated resource

heap leaching with recoveries in the

category and 1 million ounces of

range of 80%.

inferred resource for a total reserve

and resource of 9.5 million ounces

For 2003, the focus at Alto Chicama

of gold (as of January 31, 2003).

will be to complete the Environmental

Impact Statement and a final feasibility

We began exploring the Alto Chicama

study. Subject to Board approval and

area in the first quarter of 2001, when

final permitting, construction is expect-

we acquired the option to explore the

ed to start in late 2003 or early 2004.

Property from the Peruvian state mining

The timing of construction and produc-

company (Centromin). In November

tion is most dependent on when we

2002, we exercised our rights under

receive our permits. Based on the

the option agreement to acquire the

work to date, the construction, geologic,

Property by completing a technical eval-

mining and processing risks appear

uation and paying a $2 million advance

low, as the project is very similar in

royalty. We now have a 100% interest

many respects to our Pierina mine.

in the Property subject to a 2.51% net

smelter return royalty to Centromin.

PASCUA-LAMA AND VELADERO PROJECTS (CHILE/ARGENTINA)

Veladero

construction cost of $425 million.

The Veladero feasibility study was

Veladero is expected to commence

completed during third quarter 2002.

production in early 2006, producing

It defines an operation mining ore from

530,000 ounces of gold at a cash cost

two open pits (Filo Federico and Amable),

of $155 per ounce over the first decade

a two-stage crushing circuit and a valley

of the mine’s operation. The Property’s

fill heap leach, very similar to our Pierina

Environmental Impact Statement was

mine in Peru, at an estimated initial

submitted in January 2003.

1. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934) as interpreted by
the Staff of the U.S. Securities and Exchange Commission applies different standards in order to classify mineralization
as a reserve. Accordingly, Alto Chicama is classified as mineralized material for U.S. reporting purposes.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Definition drilling during the year

The mine is planned as an open pit, cen-

expanded the reserves (for Canadian

tered at an elevation of 4,600 meters.

reporting purposes) for the two pits
to 9.4 million ounces1, compared

The majority of the gold is expected to

come from oxide ores in the first several

to 8.4 million in 2001. Between these

years of operation. As deeper sulfide

two pits is a third mineralized zone,

ores are encountered, a flotation circuit

Cuatro Esquinas, which provides

is expected to be added to maintain

future exploration potential.

recovery rates. On the processing front,

Construction of the

Veladero’s 2003 field program will

ing, but based on the extensive work

Pascua-Lama’s metallurgy is challeng-

access road at

focus on the construction of the access

we have done to date, we believe we can

Veladero, one of the

Company’s four new

development projects.

road and camp infrastructure. Full

successfully process the various ores

construction is expected to commence

Pascua-Lama presents. While the prop-

September 2003, subject to receiving

erty is located very high in the Andes,

all permits and arranging any project

the altitude is not dissimilar to our

financing. However, this schedule is

former El Indio/Tambo operations in

dependent on our ability to gain com-

Chile or several large copper mines.

fort with the political and economic

uncertainty in Argentina. Based on the

Proven and probable reserves at year

work to date, the geologic, mining and

end 2002 were unchanged at 16.9 mil-

processing risks appear manageable,

lion ounces of gold and 594 million

as the project is very similar to our

ounces of silver, as the project did not

Pierina mine.

Pascua-Lama

have any further reserve development

activity during the year.

In late 2000, a decision was made

The optimized feasibility study is

to postpone construction start-up at

expected to be completed in 2004,

Pascua-Lama, based on the then low

with construction start-up potentially

gold and silver price environment.

occurring in late 2005. Production is

Now, with the inclusion of nearby

targeted at 800,000 ounces of gold

Veladero in the portfolio (as a result of

annually at cash costs of $85 per

our Homestake merger) and the higher

ounce for the first decade. The

gold price environment, Pascua-Lama

initial construction cost is currently

is expected to commence production

estimated at $1,175 million.

in 2008, subject to final permitting,

completing optimization of the feasibility

study and arranging any project

financing. Over the past year, work on

Pascua-Lama has been directed at

further optimization of the development

plan to reduce the capital and operating

cost structure. With the completion of

the Veladero feasibility study, we are

now in a position to evaluate synergies

in terms of infrastructure, administrative

support and construction activities.

1. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934) as interpreted by
the Staff of the U.S. Securities and Exchange Commission applies different standards in order to classify mineralization
as a reserve. Accordingly, Veladero is classified as mineralized material for U.S. reporting purposes.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

AFRICA

> Tanzania (East Africa) represents Barrick’s African expansion.

> Bulyanhulu completed its first full year of production in 2002.

> A significant land position in the Lake Victoria goldfields of northern Tanzania

with a large and active exploration program.

> Geology in the Lake Victoria area is similar to the gold belts in Northern Ontario

and Quebec and Western Australia, two of the most successful gold producing

regions of the world.

AFRICAN PROPERTIES

> Bulyanhulu

> Tulawaka

> Kabanga

BULYANHULU MINE (TANZANIA)

For the year ended December 31,

OPERATIONAL STATISTICS

Mine

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

944

1,075

0.39

356

11,653

190

198

102

300

455

778

0.38

242

12,009

186

197

295

153

107

-3

-27

-63

In its first full year of operation,

Grades were lower as a result of delays

Bulyanhulu produced 356,319 ounces of

in accessing higher-grade stopes and

gold at a cash cost of $198 per ounce.

higher than planned dilution. Second,

Production was marginally lower than

higher concentrate transportation and

plan (by 2%), while cash costs exceed-

treatment costs and royalties also

ed our 2002 estimates by $25 per

pushed costs up. While full-year costs

ounce. The slightly lower production

were above plan, the trend within the

and higher costs were due to two main

year shows improvement, as cash costs

factors. First, we mined and processed

in fourth quarter 2002 decreased to

more tons at lower than planned grade

$185 per ounce as grades increased.

to produce total ounces similar to plan.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

While Bulyanhulu has experienced

For 2003, production is expected to

teething pains ramping up to full pro-

increase to 415,000 ounces (up 16%)

duction, we see positive signs moving

as total cash costs decline to $175 per

forward. Mining and processing rates

ounce, reflecting a full year of expected

are now exceeding feasibility study

better grades and recovery rates.

levels and grades mined continue to

The mining and processing rates

improve as the mining team gains expe-

are expected to rise with both the

rience. The $194 million outstanding

September 2002 completion of the

under the project loan has become

mine-shaft, allowing ore and waste to

non-recourse to Barrick as the mine

be transported faster than the current

met the physical and technical require-

ramp system and the installation of a

ments of completion during the first

second tailings pipeline.

At Bulyanhulu, mining

rates are improving as

our largely Tanzanian

quarter of 2003.

work force gains

experience mining the

TANZANIAN EXPLORATION UPDATE

underground deposit.

2003 will mark the beginning of our

Impact Statement is progressing on

fourth year of exploration in Tanzania,

schedule, and a development decision

one of the more prospective areas

is expected in the first half of 2003

in the world. The strategy of land acqui-

for the operation. Exploration drilling

sition and cost-effective grass roots

is scheduled for second quarter 2003

exploration that succeeded in evaluating

on the West Zone as well as on other

a large ground position and generating

targets outlined in 2002.

drill targets, is now nearly complete.

Our focus in 2003 will be on fewer prop-

The Kabanga nickel property was

erties with higher exploration potential.

part of a 1999 acquisition, which also

gave us Bulyanhulu. We have been

During 2002, engineering studies were

evaluating the potential of the project

carried out at Tulawaka. A feasibility

over the course of 2002, expanding

study for a small open pit, milling

the resource and completing a scoping

operation is nearing completion.

study to ascertain the value of the asset.

Preparation of an Environmental

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

AUSTRALIA

> Second-largest-producing region for the Company.

> Two key assets:

> Yilgarn District, comprised of three mines (Plutonic, Darlot and Lawlers)

> Kalgoorlie Super Pit, Australia’s largest gold mine – 50 percent interest

> A portfolio of exploration properties, plus the Cowal development project

with 2.8 million ounces of proven and probable reserves.

AUSTRALIAN PROPERTIES

> Yilgarn District

Plutonic

Darlot

Lawlers

> Kalgoorlie

> Cowal

Plutonic geologists

increased reserves

net of production

by 945,000 ounces –

a 60% increase.

PLUTONIC MINE (WESTERN AUSTRALIA)

For the year ended December 31,

OPERATIONAL STATISTICS

Open Pit Tons Mined (000’s)

U/G Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

13,233

11,328

1,056

3,532

0.097

307

2,533

806

3,496

0.091

288

1,588

175

159

184

222

166

211

-16

Plutonic, the largest of the three

Proven and probable reserves increased

Yilgarn District mines, consists of both

net of production by 945,000 ounces

open pit and underground operations.

(adding three years of production to

2002 production increased (by 7%)

the mine life) to 2.5 million ounces.

over 2001, while total cash costs

This made 2002 the fourth consecutive

increased (by 11%) to $184 per ounce.

year the mine more than replaced pro-

Production was lower and costs higher

duction – and, more importantly, at

due to delays in meeting the timetable

better grade than the existing reserves.

for mining the new higher-grade under-

We view the exploration potential of

ground Timor zone. To substitute for

this mine favorably and will continue

the lower underground production,

with a significant exploration program

the mine accelerated production

in the area in 2003.

of higher-cost open pit ore and

low-grade stockpiles.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

For 2003, production is expected to

higher cost are primarily due to lower

decline to 295,000 ounces due to lower

throughput, resulting from lower

throughput and recovery rates, resulting

open pit mining rates and depletion

in marginally higher cash costs of $194

of low-grade stockpiles.

per ounce. The lower production and

DARLOT MINE (WESTERN AUSTRALIA)

At Darlot, higher

grades and processing

rates through the mill

increased production

For the year ended December 31,

OPERATIONAL STATISTICS

Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

and lowered costs.

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

2002

840

849

0.176

145

1,269

2001

% Change

794

806

0.161

125

1,341

-5

-4

-3

-2

-36

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

160

167

168

215

173

219

DARLOT

LAWLERS

2002 production at Darlot increased

Production at Lawlers increased (by

(by 16%) over 2001, while total cash

9%) over 2001, at a cash cost of $179

costs declined (by 3%) to $168 per

per ounce, 6% lower than the prior

ounce, primarily due to higher through-

year mainly due to an increase in

put and higher grades. The mine replaced

grades processed (15%). The mine

half of its production in 2002, finishing

replaced production in 2002, finishing

the year with approximately 1.3 million

the year with about 500,000 ounces

ounces of proven and probable reserves.

of proven and probable reserves. Based

Based on its current reserve base,

on its current reserve base, Lawlers

the mine has a remaining mine life of

has about five years remaining

about 10 years.

in its mine life. An extensive 2003

exploration program will test deeper

For 2003, Darlot expects to have a

extensions to the ore body.

similar year in terms of both production

at 143,000 ounces and cash costs of

Lawlers expects production similar to

$176 per ounce.

2002 at 111,000 ounces, but at higher

costs of $213 per ounce, due to lower

grades, recovery rates and higher-cost

open pit production.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

LAWLERS MINE (WESTERN AUSTRALIA)

2001

% Change

For the year ended December 31,

OPERATIONAL STATISTICS

Open Pit Tons Mined (000’s)

U/G Tons Mined (000’s)

Tons Processed (000’s)

Grade Processed (ounces per ton)

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

4,030

716

718

0.162

113

509

–

628

775

0.141

104

505

171

184

179

221

191

243

Lawlers’ exploration

team had a successful

year, replacing

reserves net of

2002 production.

100

-7

-6

-19

-9

KALGOORLIE MINE (WESTERN AUSTRALIA)

For the year ended December 31,

OPERATIONAL STATISTICS

Open Pit Tons Mined (000’s)

U/G Tons Mined (000’s)

Tons Processed (000’s) (100%)

Grade Processed (ounces per ton)

Gold Production (100%)

(000’s of ounces)

Gold Production (Barrick’s share)

(000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2002

2001

% Change

91,843

805

14,101

0.061

720

360

5,551

91,248

1,353

13,192

0.066

769

385

5,724

215

196

222

279

203

252

-40

-8

-6

-3

–

-26

B A R R I C K A N N U A L R E P O R T 2 0 0 2

At Kalgoorlie, a joint

venture committee is

exploring ways to

improve production

and reduce costs.

’

2002 production at the Kalgoorlie joint

centrate on testing deep structurally

venture (50%) was 6% lower than in the

controlled targets under the Super Pit

prior year, while total cash costs were

and to the east of Mt. Charlotte. While

9% higher, due primarily to lower grades

Kalgoorlie remains one of the longest-

(down 8%) and recovery rates (off 2%).

life assets, the asset is maturing, and

The Mt. Charlotte underground deposit

future reserve additions are less likely

was originally scheduled for closure at

to be identified.

the end of 2001, but remained open,

contributing 63,200 ounces (Barrick’s

For 2003, our share of production is

share) to total production in 2002. Mt.

expected to be lower at 344,000 ounces

Charlotte is not budgeted for production

(down 4%) and cash costs higher at

in 2003, but is still mining residual ore

$237 per ounce (up 7%), with lower

that may prolong its life by a few months.

throughput after the winding down of

the higher-grade underground operation

Barrick’s share of proven and probable

in 2002, partially offset by an increase

reserves at year end declined to 5.6 mil-

in open pit tons mined. A technical

lion ounces compared to 5.7 million in

committee made up of the two joint

the prior year. Extensive inpit drilling

venture partners was formed last year

during the year and remodeling of

to explore ways to improve the produc-

proven and probable reserves resulted in

tion and cost profiles at Kalgoorlie. The

a reduction of the mineral resource base.

committee’s recommendations are

The 2003 exploration program will con-

expected by mid-year.

COWAL PROJECT (NEW SOUTH WALES)

The Cowal project, acquired in early

the grade declined (by 25%) due to

2001, came to us with a completed

additional drilling and more conservative

Environmental Impact Statement and

reserve modeling. However, cash costs

feasibility study. In the latter part of

are expected to be similar because

2001, we began a technical program,

of the optimization work completed

including drilling and engineering stud-

during the year.

ies, to optimize the feasibility study,

which we anticipate will be completed

Construction is expected to commence

in 2003.

in 2003, with production expected mid-

2005, subject to final permitting and

Cowal’s mine plan and process facilities

an optimized feasibility study. In 2003,

have been designed to produce approx-

we will continue metallurgical test work

imately 270,000 ounces of gold per year

aimed at further optimizing the scope

at an average cash cost of $170 per

and economics of the project. The

ounce. The main deposit contains proven

timing of construction and production

and probable reserves of 2.8 million

is most dependent on the timing of

ounces. While the total contained ounces

receiving our final permits.

remained the same as the year earlier,

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Our Australian asset base represents

hedge contracts for most of our

solid long-term production. The princi-

Australian dollar costs through 2005.

pal risk to that production is the impact

For additional detail regarding foreign

of a stronger Australian dollar that

currency contracts, see note 23 (D) “Other

would push cash costs up. To mitigate

deriviative instruments outstanding” to

that risk, we have entered into currency

our consolidated financial statements.

OTHER PROPERTIES

Other Properties include five mines

of $189 per ounce, compared to 721,771

(El Indio, Bousquet, McLaughlin, Ruby Hill

ounces at total cash costs of $198 per

and Agua de la Falda) that were closed

ounce in the prior year.

during the year due to the depletion of

reserves, as well as the Marigold mine

For 2003, Marigold is expected to pro-

At Cowal, one of

Barrick’s four new

development projects,

work is underway

in Nevada, in which we have a 33%

duce 45,000 ounces at a cash cost of

interest and which remains in operation.

$170 per ounce. The decline in overall

In 2002, our Other Properties produced

production for the Company in 2003,

to optimize the

feasibility study.

374,774 ounces of gold, 7% of our pro-

relates to the closure of the five mines

duction, at an average total cash cost

over the course of 2002.

For the year ended December 31,

OPERATIONAL STATISTICS

Gold Production (000’s of ounces)

Mineral Reserves (000’s of ounces)

FINANCIAL STATISTICS

Production cost per ounce

Cash operating costs

Royalties and production taxes

Total cash costs

Amortization and reclamation

Total production costs

Capital Expenditures (millions)

2001

% Change

2002

375

678

722

1,100

180

195

189

239

198

282

-48

-38

-8

200

-5

-40

-15

650

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Mineral Reserves
– Gold
(millions of ounces)

78.078.0

79.379.3

86.986.9

82.382.3

’

COSTS AND EXPENSES

EXPLORATION AND BUSINESS DEVELOPMENT
Our exploration strategy is to maintain

focuses on four major areas where

a geographic mix of projects at different

we possess significant infrastructure:

stages in the exploration process.

Peru, Tanzania, Australia and

Our early stage exploration effort

Chile/Argentina.

> Exploration and Business Development Expense

North America

Australia

South America

Veladero

Alto Chicama district

Other

Africa

Other/Business Development

2003E

110

2002

104

2001

103

In 2002, our most significant

Following our exploration success

expenditures were incurred at our

at Alto Chicama in 2002, we increased

Veladero and Alto Chicama projects.

our initial exploration budget from

At the beginning of 2002, our plan

$5 million, with actual expenditures

assumed that Veladero would achieve

for the year reaching $29 million. For

reserve status during the year. During

2003, we expect to spend $31 million

2002, we concluded that greater

to advance the project, which will

certainty was required in connection

be expensed as the resource does

with certain matters to warrant

not yet qualify as a reserve for U.S.

presentation as a reserve under SEC

reporting purposes.

rules. As a result, we expensed costs

incurred throughout 2002. We expect

Veladero to achieve reserve status

under SEC rules during 2003. Until the

AMORTIZATION
Amortization totaled $519 million

project achieves this status, we will

($85 per ounce) in 2002, compared to

expense costs incurred, totaling about

$501 million or $76 per ounce in 2001.

$10 million.

The overall increase in amortization

expense was caused by a rise in

amortization charges per ounce at

some mines, offset by an 8% decrease

in the number of ounces sold.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

The overall increase in amortization

capital additions. Beyond 2003, we

per ounce in 2002 reflects two main

expect amortization to be in the $80

factors: a change in the mix of gold

to $90 per ounce range, depending on

sales at our mines, with a greater

the extent of exploration success at our

proportion of sales coming from mines

operating mines. Our new development

with higher amortization rates, and

projects are expected to have amor-

higher amortization of $17 million at

tization rates of between $50 and

Meikle. The completion of construction

$75 per ounce, which could bring our

of Rodeo in 2001 and the reduction

overall per ounce amortization charge

of proven and probable reserves at

down over time.

the beginning of 2002 raised Meikle’s

amortization expense per ounce from

We are presently reviewing recent

$72 to $119 in 2002.

regulatory and accounting developments

in the preferred practice for amortizing

For 2003, amortization is expected

underground development costs. Once

to increase to $533 million, or $95 per

we finalize our review, we may modify

ounce. A large part of this increase is

our amortization policy, which will result

due to the low amortization rates at

in changes to amortization charges

mines that closed in 2002, with the

for 2003 and beyond. At this point, we

remainder being mainly a function of

have yet to estimate the impact of any

the changing mix of production and

potential changes.

Amortization by Property
(US$ thousands)

200

150

100

ADMINISTRATION
In 2002, administration costs

In 2002, we recorded a pension benefit

expense of $2 million (2001 – $6 million

decreased by $22 million to $64 million.

credit, excluding benefit enhancement

We achieved administrative savings

charges of $39 million related to

of about $27 million, reflecting the

the Homestake merger). We do not

synergies of integrating Barrick and

expect that our future earnings will

Homestake, but this was partially offset

be significantly affected by our existing

by a $3 million compensation expense

defined benefit pension plans due to

for our restricted share unit plan, and

the relatively small size of the plans.

a $3 million increase in World Gold

Also, most members in these plans are

Council fees. World Gold Council fees

no longer actively employed by us, and

totaled $13 million in 2002. For 2003,

have therefore ceased earning benefits

administration costs are expected

under the plans.

to be about $70 million.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Interest Charges
(US$ millions)

Through 2002, a significant portion

interest expense is expected to decline

of our defined benefit pension plan

to about $49 million after capitalizing

assets were invested in fixed income

about $10 million at Cowal and Veladero.

securities, with the remainder invested

in equity securities. Because of this

mix of investments, the return on plan

assets and funding status of our plans

MERGER AND RELATED COSTS
The cost of completing the 2001 merger

was not as adversely affected by the

with Homestake of $117 million was

general decline in equity markets

recorded in 2001 earnings. In 2002, cash

compared to plans operated by some

payments of merger and related costs

other companies. At the end of 2002,

totaled $50 million. Other amounts

we had an unfunded liability of $27 mil-

totaling $10 million were settled through

lion. As a result, based on current

pension plan enhancements. We also

markets, we may be required to make

recorded a small adjustment to the

a contribution to more fully fund the

accrual of $2 million in 2002 earnings

plans in the future.

that reflects the difference between

actual and estimated costs.

INTEREST EXPENSE
We incurred $59 million in interest

costs and financing charges in 2002,

LITIGATION COSTS
On January 15, 2002 the Supreme

related mainly to our debentures and

Court of British Columbia ruled in favor

our Bulyanhulu project financing.

of Inmet Mining Corporation and

Overall, our effective interest rate

against Homestake Canada Inc. (“HCI”)

declined slightly in 2002 to 7.2%, from

in connection with litigation relating

7.3% in 2001. In 2002, we expensed

to the proposed sale of the Troilus gold

interest of $57 million and capitalized

mine to HCI in 1997. The judgement,

$2 million to mine development activities

which we have appealed, was for

at Cowal. In 2001, we expensed $25

$59 million, and we recorded a provision

million and capitalized $42 million to

for this amount in 2001. We expect

development and construction activities

a judgement to be rendered on our

at Pascua-Lama, Bulyanhulu and Rodeo.

appeal in 2004.

We use interest rate swaps to manage

the effective rates of interest we pay on

our long-term debt. On $250 million of

INTEREST AND OTHER INCOME
Interest and other income decreased

our $500 million debentures, we have

slightly to $29 million in 2002 from

converted the fixed 7.5% interest rate

$32 million in 2001. The decrease

to a floating rate through 2007, taking

primarily reflects $8 million lower

advantage of low market interest rates.

interest income on cash balances,

Through this strategy, we managed to

mainly due to declining interest rates,

reduce the effective rate on this portion

partially offset by foreign currency

of the debentures to 5.7% in 2002. On

translation losses which totaled

our Bulyanhulu financing, we have taken

$10 million in 2001.

advantage of the present low interest

rates to fix the interest rate for the term

In 2002, we earned an effective

of the debt at a rate of about 7%.

interest rate on our cash of 3.4%

For 2003, we expect to incur a similar

compared to 5.3% in 2001. The

amount of interest as in 2002, but

decrease in the effective rate in 2002

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

reflects a general decline in market

For 2003, we expect interest and other

interest rates from 3.8% to 1.8% over

income to decrease further to about

the last two years. Through interest

$23 million, reflecting a full year’s

rate swaps we earned a fixed rate of

effect of lower market interest rates.

4.1% for 2002 on $500 million of our

Through the use of interest rate swaps

cash balances, with the additional cash

we have locked in a fixed rate of 3.8%

earning interest at lower market

on $650 million of our cash balances,

interest rates.

with the excess cash earning interest

at market interest rates.

> Non-Hedge Derivative Gains (Losses)
(millions)

Commodity contracts

Currency contracts

Interest and lease rate contracts

2002

(2)

(12)

(6)

2001

(15)

(9)

Non-hedge derivative gains and losses

treatment. The contracts act as an

arise on derivative instruments used

economic hedge, but do not meet

in our risk management strategy that

the strict FAS 133 criteria for hedge

do not qualify for hedge accounting

accounting treatment, due to a

treatment. These gains and losses

mismatch in the timing of contract

do not include any gains or losses

maturities and the forecasted

on our gold sales contracts. The gains

expenditures. These contracts are being

and losses occur because of changes

marked-to-market through earnings.

in commodity prices, currency

exchange rates and interest rates.

Interest and Lease Rate Contracts

Commodity Contracts

Losses on interest and lease rate swaps

in 2002 were $12 million (2001 – $9 mil-

In 2001, gains of $57 million on written

lion loss). The losses were primarily

call options outstanding at that time

related to our total return swaps and

were mainly due to changes in spot

were largely the result of the widening

gold prices. In 2002, we did not have

of credit spreads over yields on govern-

a significant call option position

ment securities. During 2002, we closed

outstanding and incurred net losses

out substantially all of the total return

of $2 million.

Currency Contracts

swaps, so our future results will not be

significantly affected by these contracts.

At the end of 2002, we held pay-fixed

Gains on currency contracts in 2002

US dollar interest rate swaps with

were mainly caused by the impact

notional amounts of $150 million (2001

of a strengthening Australian dollar

– $275 million) and receive-fixed gold

on non-hedge contracts. Losses in

lease rate swaps with notional amounts

2001 were due to changes in both the

of 6.4 million ounces or about $2 billion

Canadian and Australian dollar. At the

(2001 – 6.2 million ounces). Both are

end of 2002, we held foreign currency

being marked-to-market through

contracts with notional amounts of

earnings. These gold lease rate swaps

A$83 million and C$26 million, which

represent all of our current gold lease

do not qualify for hedge accounting

rate exposure.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

INCOME TAXES
In 2002, we recorded a tax credit of

$16 million compared to a credit of

STATEMENT OF
COMPREHENSIVE INCOME
Comprehensive income consists of net

$14 million in 2001. In fourth quarter

income or loss, together with certain

2002, we recorded a tax credit of $22

other economic gains and losses that

million, mainly reflecting the resolution

are collectively described as “other

of certain tax uncertainties. Excluding

comprehensive income” and are

the credit recorded in fourth quarter

excluded from the income statement.

2002, our relatively low effective tax

rate is mainly because a significant

In 2002, other comprehensive income

portion of our earnings are generated

included: losses of $21 million arising on

in a low tax-rate jurisdiction. We have

translation of the financial statements of

also begun to realize the benefit of tax

our Argentinean subsidiaries due to the

synergies from the Homestake merger

devaluation of the Argentinean Peso;

through the integration of our North

unrealized gains of $28 million arising

American operations.

on interest rate swaps and foreign

currency contracts that are accounted

Should gold prices remain in the

for as cash flow hedges; and the transfer

$350 per ounce range, we expect our

of $21 million of gains on these cash

underlying effective tax rate to rise

flow hedges to earnings in the year.

to about 15 to 20%, because a larger

portion of our earnings would come

In 2001, other comprehensive income

from tax jurisdictions with higher tax

included losses of $26 million arising on

rates. At spot gold prices in excess

translation of the financial statements

of $400, we estimate that our effective

of our Australian subsidiaries due to the

tax rate would be about 30%.

devaluation of the Australian dollar; and

the transfer of losses of $25 million on

Our income tax expense is also affected

cash flow hedges to earnings in 2001.

by changes in the level of valuation

After the merger with Homestake in

allowances recorded against deferred

2001, changes in circumstances

tax assets. Valuation allowances are

indicated that the functional currency

recorded where there is substantial

of our Australian subsidiaries is the

uncertainty over the realization of a tax

United States dollar, which means that,

asset. Among other things, a sustained

for 2002 and beyond, the financial

upward trend in gold prices may result

statements of our Australian

in a decrease in valuation allowances

subsidiaries are translated at historic

with corresponding tax credits

exchange rates rather than current

recorded in earnings.

market rates. Therefore, translation of

these subsidiaries’ financial statements

no longer results in the recognition of

unrealized gains and losses in other

comprehensive income.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

1,074

882

779

’

LIQUIDITY & CAPITAL RESOURCES

LIQUIDITY
Liquidity can be described as the

our cash generating ability, including

cash generated by operating activities

ability of an enterprise to generate

and expected capital expenditure

adequate amounts of cash to meet

requirements; the quantity of our gold

its needs. In recent history, the main

reserves; and our relatively low geo-

sources of liquidity for us have been

political risk profile due to the location

our net cash inflow from operating

of our mines.

activities, our large cash position, and

our various debt-financing facilities.

Like most financial contracts, our

Currently, our debt facilities include

revolving credit facility and our gold

our publicly traded debentures, our

sales contracts require us to comply

Bulyanhulu project financing, and

with certain financial covenants.

our $1 billion revolving credit facility

These covenants include:

with a syndicate of global banks.

(a) Maintaining a minimum consolidated

tangible net worth of over $2.0 billion

In the last three years we have generated

(our consolidated net worth as at

substantial levels of operating cash flow,

December 31, 2002 was over $3.3

and we believe this to be one of our

billion); and

fundamental financial strengths. We

(b) Maintaining a maximum long-term

expect capital needs of about $2 billion

debt to consolidated net worth ratio

over the next five years to build our

below 1.5:1 (the ratio as at December 31,

four development projects, as well as

2002 was under 0.25:1). The calculation

between $100 and $200 million per year

of net worth excludes the unrealized

for sustaining capital at our existing

mark-to-market gain or loss on our

operations. Our alternatives for sourcing

derivative instruments and gold

this capital include our $1 billion cash

sales contracts.

position, our future operating cash

flows and project financings. We

In the unlikely event that we breach

are evaluating these alternatives to

these covenants, we would be in default

determine the optimal mix of capital

of our gold sales contracts, which could

resources for the projects. We expect

result in the counterparties requiring

that present levels of liquidity in these

settlement of these contracts; and

sources of financing will be adequate

also the syndicate of banks in our credit

to meet our expected capital needs.

facility could require repayment of

amounts outstanding at that time.

While a deterioration in our credit rating

would not adversely affect our existing

In this discussion of financial

debt obligations or gold sales contracts,

resources and liquidity, we address

it could impact the cost of borrowing

our Consolidated Statements of

for any new financings. There are a

Cash Flows, our Consolidated Balance

number of factors that are important

Sheets and our Consolidated

to our “A” credit rating, including: our

Statements of Shareholders’ Equity.

market capitalization; the strength of

our balance sheet, including the amount

of net debt and our debt-to-equity ratio;

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Capital Expenditures
by Continent
(US$ millions)

474

386

228

South America

Australia

Africa

North America

’

STATEMENTS OF CASH FLOWS
Our consolidated cash and equivalents

INVESTING ACTIVITIES
Our most significant ongoing investing

totaled $1,044 million at the end

activities are for capital expenditures

of 2002, up from $574 million at the

at our mines. Annually, we invest in

end of 2001. The main reasons for the

sustaining capital at our mines, including

increase in 2002 were the maturity

expenditures relating to underground

of term deposits totaling $159 million,

development activities. We also incur

and free cash flow generated in the
year of $361 million1 (2001 – $114 mil-

significant capital expenditures in the

development and construction phases

lion; 2000 – $230 million). The increase

of new mines, although the yearly level

in free cash flow is mainly due to lower

varies depending on the status of our

capital expenditures in 2002 compared

development projects.

with prior years. Our free cash flow will

be reduced by capital expenditures

Capital expenditures decreased by

relating to our development plan over

$246 million in 2002 to $228 million.

the next few years.

In 2002, expenditures were mainly for

OPERATING ACTIVITIES
Our operating cash flow is significantly

sustaining capital and underground

development. Higher expenditures

in the previous two years were mainly

due to: underground development at

affected by the volume of gold sales,

Meikle and Rodeo (2001 – $90 million;

as well as realized gold prices and cash

2000 – $80 million); construction

operating costs. In 2002, our average

of the Bulyanhulu Mine (2001 – $153

realized gold price per ounce sold

million; 2000 – $203 million); and

increased by $22, although this was

higher levels of development activity

offset by a $15 per ounce increase

at Pascua-Lama (2001 – $69 million;

in total cash operating costs. Overall,

2000 – $107 million).

our operating cash flow remained

similar to 2001, due to the combined

For 2003, we expect to spend a total

effect of a variety of factors, including:

of $386 million, including $218 million

increased cash margins in 2002 (defined

for sustaining capital, which is similar

as gold sales less cash operating costs),

to 2002, and $168 million on our

which generated extra operating cash

development plan ($123 million at

flow of about $40 million, combined

Veladero, $34 million at Cowal,

with a $34 million inflow due to

$11 million at Alto Chicama).

reduced inventory levels offset by lower

sales volumes that reduced operating

We sometimes invest excess cash

cash flow by about $25 million; and

in term deposits with initial maturities

an increase in cash payments for

greater than 90 days, which are

reclamation and closure costs by

excluded from cash and equivalents

$35 million, mainly at inactive mines.

and included in short-term invest-

ments. At the end of 2001, we held

For 2003, we expect our operating cash

cash of $159 million in the form of

flow to remain at similar levels to 2002,

term deposits that were included

assuming an average realized gold price

under short-term investments. As

of $350, as higher gold prices are offset

the term deposits matured in 2002,

by higher cash operating costs and

the cash received was reflected as

lower gold sales volumes.

an inflow under investing activities

and is included in cash and equivalents.

1. Defined as operating cash flow less capital expenditures – see Reconciliation of Free Cash Flow page 61.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

FINANCING ACTIVITIES
Our most significant ongoing financing

activities are repayments/drawdowns

of debt obligations, dividend payments,

and proceeds from issuing capital stock.

The most significant financing cash

flows in 2002 were $83 million received

on the exercise of employee stock

options and dividend payments totaling

$119 million, which were $26 million

higher than in 2001. We also made

scheduled payments under our

long-term debt obligations totaling

$25 million in 2002.

For 2003, we will be required to make

scheduled long-term debt repayments

of $20 million. The amount of any

dividends will be determined by the

Board of Directors.

CONSOLIDATED
BALANCE SHEET
Working Capital

Our non-cash working capital position

was largely unchanged from 2001.

Inventories declined by $34 million

as gold sales exceeded production

in 2002, which was offset by an increase

in derivative assets included in current

assets reflecting higher unrealized

gains on cash flow hedge contracts,

and an increase in accounts receivable

by $12 million.

Capitalized Mining Costs

Amounts decreased in 2002 primarily

due to mining in areas of the Betze-Post

pit where the actual ounces to total ore

and waste ratio was lower than the life-

of-mine ratio. As a result, amortization

exceeded incurred cash expenditures.

Other Assets

The increase resulted from the

inclusion of deferred tax assets totaling

$45 million in 2002, and an increase

in derivative assets reflecting higher

unrealized gains on cash flow

hedge contracts.

STATEMENT OF
SHAREHOLDERS’ EQUITY
Shareholders’ equity increased by

$142 million in 2002. The increase is

mainly attributable to net income of

$193 million and an increase in capital

stock by $86 million (from the exercise

of employee stock options), offset by

dividends totaling $119 million.

FINANCIAL RISK MANAGEMENT

In the normal course of business,

secure trading lines and terms that we

the main financial risks that affect

believe are the most favorable offered

us arise from changes in commodity

to companies in our industry.

prices, interest rates, foreign currency

exchange rates and energy prices.

These contracts are valued using pricing

We use privately negotiated contracts

inputs that are readily available from

(rather than exchange-traded contracts)

independent sources. Changes in the

with a group of 19 leading international

value of the contracts are mainly

counterparties to manage our risk

affected by, among other things,

exposures. Because of the long-life, low-

changes in commodity prices, interest

cost nature of our mines, as well as our

rates, gold lease rates and currency

financial strength, we have been able to

exchange rates.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Our use of these contracts is based on

established practices and parameters,

which are subject to the oversight of

the Finance Committee of the Board of

Directors. We also maintain a separate

compliance function to independently

monitor our hedging and financial risk

management activities and segregate

the duties of personnel responsible for

entering into transactions from those

responsible for recording transactions.

GOLD AND SILVER PRICE RISK
We manage our exposure to volatility

in gold prices through our forward

sales contracts. A detailed discussion

of the nature of these contracts, how

we use them in our business, and the

historic benefits we have derived from

them is included on page 54.

Certain of our mines, and in particular

Eskay Creek, produce significant

quantities of silver as a by-product. The

quantities of silver present in the ore

processed, as well as prices realized for

silver production, significantly impact

our cash operating costs per ounce

at these mines because by-product

revenue is deducted from operating

costs. We use spot deferred silver

contracts as a means to sell silver

production and to act as an economic

hedge of our exposure to changes

in silver prices. Substantially all of our

silver production in 2003 is protected

by these contracts, at an average price

of about $4.95 per ounce.

INTEREST RATE RISK
Our interest rate risk exposure mainly

relates to future contango returns in our

spot deferred contracts, the fair value

and ongoing payments under lease rate

and US dollar interest-rate swaps, and

interest receipts on our cash balances.

We are more adversely affected by lower

interest rates than higher rates, because

the net amount of assets less liabilities

affected by interest rates is an asset

and also because the forward price of

gold is significantly affected by US dollar

interest rates. In higher interest rate

environments, we realize higher prices

under our spot deferred sales contracts

because the premium on the forward

gold price over spot prices is greater,

and we receive higher interest income

on our cash balances.

Most of our $774 million of outstanding

long-term debt obligations are at fixed

interest rates. The exceptions are

$250 million of our debentures where

we have converted the interest rate

from fixed to floating rates, and our

$80 million of variable-rate bonds.

For $650 million of our cash balances,

we have fixed the interest return we

are earning through 2006 – 2007, with

the excess generating interest income

at variable US dollar interest rates.

The excess of interest-bearing assets

over liabilities recognized on our

balance sheet, which are subject to

variable interest rates, was $64 million

at December 31, 2002 (representing

cash of $394 million, less the floating-

rate portion of debentures of

$250 million, and our $80 million

of variable-rate bonds).

Like all fixed price sales contracts

with future fixed cash flows, the mark-

to-market value of our existing gold sales

contracts is affected by changes in the

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

forward price of gold, which in turn

Our main foreign currency exposures

is affected by market US dollar interest

relate to cash expenditures at our

rates and gold lease rates. As we

Canadian and Australian mines that

explain on page 57, the mark-to-market

are denominated in local currencies.

value is not recorded on our balance

We use foreign currency contracts

sheet, and it does not affect the level

to economically hedge our exposure

of our future earnings or cash flows.

to changes in the Canadian and

Australian dollar against the US dollar.

For new gold sales contracts, the level

With the recent strengthening of the

of market US dollar interest rates

Canadian dollar and Australian dollar

and gold lease rates at that time will

against the US dollar, unhedged

influence forward gold prices and

producers with operations in these

will therefore affect the realized gold

countries could be facing significantly

prices under these contracts.

higher US dollar operating costs.

As disclosed in note 23 to our financial

In 2002, substantially all of our

statements, we enter into gold lease

Canadian dollar expenditures were

rate swaps as part of our overall gold

hedged at $0.65 and substantially all

price optimization strategy. Because

of our Australian dollar expenditures

these gold lease rate swaps include

were hedged at $0.54. For 2003,

fixed US dollar cash flows, changes

we have hedged about 90% of our

in the fair value of these swaps (which

Canadian dollar expenditures at $0.65

flow through earnings each period)

and substantially all of our Australian

are affected by changes in US dollar

dollar expenditures at $0.53. Beyond

interest rates. Changes in US dollar

2003, we have contracts in place

interest rates affect only the mark-

to reduce our currency risk exposure

to-market value of these gold lease

on about 60 – 70% of our Australian

rate swaps, and do not impact the

and Canadian dollar exposures through

actual cash flows arising on the swaps.

2005. Consequently, we do not expect

FOREIGN CURRENCY
EXCHANGE RISK
Although we operate on four continents,

we do not view currency fluctuations

as a significant risk in the next few years

fluctuations in these currencies to

significantly affect our near term

earnings or operating cash flows.

ENERGY PRICE RISK
Our operating costs reflect the

at most of our operations because all

quantities of electricity and diesel fuel

our revenues and most of our cash

consumed, at prices that are mainly

expenditures are denominated in US

based on the market prices of these

dollars, and we have hedged most of our

commodities. These costs represent

non-US dollar operating costs. Nearly

approximately 16% of our total cash

half of our production comes from

costs per ounce for 2002.

our United States mines, while most of

our Peruvian and Tanzanian operating

and capital expenditures – such as diesel

fuel, reagents and equipment – are

denominated in United States dollars.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Quantity consumed in 2002

Cost (dollars)

Impact on total cash costs per ounce (dollars)

Includes transportation and refining charges

Electricity

Diesel

1.9 billion kilowatt hours

$0.06 per kilowatt hour

1.3 million barrels
$38 per barrel 1

$ 20

$ 9

The table above illustrates our actual

by using master netting arrangements

consumption of these commodities, the

such that our credit risk exposure is

average purchase cost and the impact on

limited to the net positive fair value of

our average total cash costs per ounce.

contracts with individual counterparties.

Substantially all of our costs arising

Market liquidity risk is the risk that a

from consumption of these items is

derivative position cannot be eliminated

subject to variations in market prices,

quickly, by either liquidating derivative

except that we have hedged about

instruments or by establishing an

20% of diesel fuel requirements for

offsetting position. Under the terms of

2003. We are evaluating ways in which

our trading agreements with counter-

to mitigate these risk exposures, and

parties, the counterparties cannot

we may take steps to hedge these

require us to immediately settle

costs in the future or utilize alternative

outstanding contracts, unless we breach

sources of supply to lower costs.

any financial covenants (see page 55).

DERIVATIVES RISK
The derivative contracts we enter into

We mitigate market liquidity risk by

spreading out the maturity of our

derivative instruments over time.

This ensures that the size of positions

are an integral part of our financial risk

maturing is such that for commodity

management strategy. The contracts act

contracts we are able to physically

as economic hedges of our underlying

deliver gold and silver against the

exposures that arise in the normal

contracts, and for other contracts the

course of our business and are not held

relevant markets for currencies and

for speculative purposes. Because we

interest rates will be able to absorb

produce gold and silver, incur costs in

the contracts.

foreign currencies and invest and

borrow in US dollars and are therefore

Mark-to-market risk is the risk that

subject to US interest rates, all of our

an adverse change in market prices for

derivative contracts cover natural

commodities, currencies or interest

underlying asset or liability positions.

rates will affect our financial condition.

By using derivative instruments, we

We have mitigated this risk by

have various financial risks, which we

establishing trading agreements with

manage in the following manner.

counterparties under which we are not

required to post any collateral or make

Credit risk is the risk that one or more

any margin calls on our derivative

counterparties will fail to perform on an

instruments. Also, the counterparties

obligation to us. We mitigate credit risk

cannot require settlement of a derivative

by dealing with high quality counter-

solely because of an adverse change

parties, by spreading our credit risk

in the mark-to-market value. We enter

exposure over a number of counter-

into derivative instruments to act

parties, by limiting our exposure

as economic hedges of underlying

to individual counterparties, and

exposure to commodity prices, foreign

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

currency exchange rates and interest

the derivative instruments we use,

rates that arise in the normal course of

changes in the mark-to-market value

our business. Consequently, for most of

do not affect earnings.

CRITICAL ACCOUNTING ESTIMATES

What follows is a discussion of our

application of critical accounting policies

that require us to make assumptions

about matters that are highly uncertain

at the time the accounting estimate is

made, and where different estimates

that we reasonably could have used in

the current period – or changes in the

accounting estimate that are reasonably

likely to occur from period to period –

would have a material impact on our

financial statements. We have identified

the following accounting estimates

as critical:

> amortization of property, plant and

equipment;

> impairment assessments of long-lived

assets;

> mine reclamation and closure costs;

> the measurement and recognition of

valuation allowances against deferred

income tax assets; and

> contingencies.

We also have certain accounting policies

that we consider to be important – such

as our policies for revenue recognition,

exploration costs and derivative

instruments – that do not meet the

definition of critical accounting

estimates as they do not require us

to make estimates or judgements that

are subjective or highly uncertain.

Management has discussed the

development and selection of our

critical accounting estimates with the

Audit Committee of the Board of

PROPERTY, PLANT
AND EQUIPMENT
Property, plant and equipment and

capitalized mining costs, which totaled

$3.6 billion at December 31, 2002,

represent a significant portion of our

assets (68%). Due to the large size

of these assets, the application

of our accounting policies for these

assets has a material impact on our

reported earnings.

AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT
We capitalize mine development and

construction costs incurred at a

property after we have identified proven

and probable reserves. Upon commence-

ment of gold production, we amortize

these costs over the expected life

of the property, based on proven and

probable reserves and other factors.

The process of estimating quantities

of gold reserves is complex, requiring

significant decisions in the evaluation

of all available geological, geophysical,

engineering and economic data. The

data for a given ore body may also

change substantially over time as

a result of numerous factors, including,

but not limited to, additional develop-

ment activity, evolving production

history and the continual reassessment

of the viability of production under

various economic conditions.

Directors, and the Audit Committee

A material revision (upward or down-

has reviewed the disclosure relating

ward) to existing reserve estimates

to such estimates in this Management’s

could occur because of, among other

Discussion and Analysis.

things: revisions to geological data

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

or assumptions; a change in the

$20 million and decrease net income

assumed gold prices; and the results

by about $15 million ($0.03 per share).

of drilling and exploration activities.

Conversely, a $25 per ounce increase

We make every effort to ensure that

in gold price would increase our

reported reserve estimates represent

reserves by about 2 million contained

the most accurate assessment possible.

ounces (3%), relating primarily

However, because of the subjective

to Kalgoorlie, Goldstrike and Pascua-

decisions we have to make, as well

Lama. Such an increase in reserves

as variances in available data for

would decrease annual amortization

each ore body, these estimates are

by about $15 million and increase net

generally uncertain.

income by about $10 million ($0.02

per share).

Changes in reserve quantities, including

changes resulting from gold and silver

In addition to changes in gold prices,

price assumptions, would cause

reserve quantities can also change for

corresponding changes in amortization

other reasons, including but not limited

expense in periods subsequent to the

to, new drilling results, changes

revision, and could result in impairment

in production costs and changes

of the carrying amount of property,

in geological assumptions. The mines

plant and equipment and capitalized

where amortization charges would

mining costs.

be most significantly affected

by changes in reserve estimates are

For the past three years, we estimated

Pierina, Meikle, Eskay Creek and

reserves assuming a $300 per ounce

Bulyanhulu. These mines generally

gold price. At December 31, 2002 a $25

have the largest amounts of property,

per ounce reduction (8%) in gold price

plant and equipment subject

would reduce our reserves by about

to amortization using the units

4 million contained ounces (6%),

of production method and the highest

relating primarily to our Kalgoorlie and

per ounce amortization charges. The

Bulyanhulu operating mines and the

effect of a 10% change in reserves

Pascua-Lama development project.

at these mines on amortization would

Such a decrease in reserves would

be as follows:

increase annual amortization by about

Pierina

Meikle

Eskay Creek

Bulyanhulu

Impact of a 10% change in gold
reserves on amortization (per ounce)

Impact on earnings, based on
ounces sold in 2002 (millions)

IMPAIRMENT ASSESSMENTS
OF LONG-LIVED ASSETS
We believe that our estimates are

critical for these assets because they

are susceptible to change from period

to period and the potentially material

effect that recognizing an impairment

could have on the assets reported

on our balance sheet and on our

reported earnings.

They are based on estimates of future

cash flows, which include estimates of:

> the quantity of gold reserves

at our mines;

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

> future gold and silver prices; and

existing accounting policy, the

> future operating and capital costs

remaining $159 million for our

to mine and process our reserves

operating mines will be accrued over

over extended periods of time

their estimated lives, based on the

(5 to 25 years).

units of production method as gold

is produced and sold. Changes in

In 2000 we recorded a $1.6 billion

estimated costs are recognized

provision to reduce the carrying values

prospectively as a revision to future

of various assets. With the recent rise

cost accruals. On adoption of FAS 143

in spot gold prices, the current

in 2003, we will recognize these

likelihood of a significant impairment

liabilities at fair value on our balance

at our operating mines has diminished.

sheet, with a corresponding adjustment

Based on a long-term gold price of

to the carrying amount of the related

$300 per ounce and our gold mineral

assets that give rise to these obliga-

reserves at December 31, 2002, we

tions. Our financial statements will

have completed a sensitivity analysis

continue to be materially affected by

that indicates that a 10% decrease

in net cash flows resulting from

a combination of a lower spot gold

our estimates of reclamation and

closure costs.

price and an increase in operating and

Our operating mines and approxi-

capital costs at each of our properties

would not result in the recognition of

a provision for impairment.

RECLAMATION
AND CLOSURE COSTS
Our mining, exploration and develop-

ment activities are subject to various

levels of federal, provincial and state

mately 50 closed mines are located

in the United States, Canada, Australia,

Chile, Peru and Tanzania. We expect

to spend about $135 to $160 million

over the next five years on reclamation

and closure activities, with about 85%

of these amounts at our closed mines.

Our current operating mines have

estimated productive lives, based

on reserves at December 31, 2002,

laws and regulations relating to the

ranging from 2 to 25 years.

protection of the environment,

including requirements for closure and

Significant management judgments and

reclamation of mining properties.

estimates are made when estimating

In general, these laws and regulations

reclamation and closure costs, which

are continually changing and, over

will be incurred, in some cases, many

time, becoming more restrictive.

years from the date of estimate. A 10%

change in the current overall estimate

We estimate that future site

of reclamation and closure costs for our

reclamation and closure obligations will

closed mines would increase or

be $169 million at our closed mines

decrease net income by about $12

and $292 million at our operating

million or $0.02 per share. A 10%

mines. At December 31, 2002, we had

change at each of our operating mines

fully accrued for the future costs

may not have a significant effect on net

at our closed mines ($169 million), and

income in a period because the effect of

we had accrued $133 million for our

the change would be accrued over the

current operating mines. Based on our

estimated remaining life of each mine.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

As described in note 2 to our financial

statements, effective January 1, 2003,

we will adopt FAS 143, Accounting for

Asset Retirement Obligations, which

addresses financial accounting and

reporting for obligations associated

with the retirement of tangible long-

lived assets and the associated asset

retirement costs. In summary, FAS 143

requires us to record the fair value

(millions)

United States

Chile/Argentina

Tanzania

Canada

Australia

Other

Valuation allowance

$ 173

120

$ 476

Our most significant valuation allowances,

of legal liabilities for asset retirement

and the related tax jurisdictions are:

obligations in the period in which they

are incurred. When a liability is initially

recorded, we will capitalize the cost

by increasing the carrying amount

of the related long-lived asset. Over

time, the liability will be increased each

period to reflect the interest element

(accretion) reflected in its initial

measurement at fair value, and the

capitalized cost is amortized over the

useful life of the related asset. While

FAS 143 will not change the amounts

spent on these activities, it will affect

the timing of recognition of amounts

on our balance sheet and in our

income statement.

VALUATION ALLOWANCES
AGAINST DEFERRED
TAX ASSETS
For each deferred tax asset, we evaluate

the likelihood of whether some portion

or all of the asset will not be realized.

This evaluation is based on, among

other things, expected levels of future

taxable income. If, based on the weight

> In the United States, Chile and

Argentina, valuation allowances relate

to tax assets in subsidiaries that

do not have any present sources of

income against which to utilize the

assets. In the event these subsidiaries

have sources of income in the future,

we may be able to reduce the level

of valuation allowances recorded.

> In Canada, substantially all of the

valuation allowances relate to capital

losses that will only be utilized if we

realize any capital gains in the future.

> In Australia, the valuation allowances

relate to operating losses in

subsidiaries that have had a history

of losses over the last three years.

In the event there is a sustained

upward movement in the price of gold

or other factors occur that increase

the profitability of these subsidiaries

over the next few years, we may

reduce the level of valuation

allowances against these assets.

of available evidence, we determine that

> In Tanzania, the tax legislation

it is more likely than not (a likelihood

of more than 50 percent) that all

or some portion of a deferred tax asset

will not be realized, then we record

a valuation allowance against it. As of

December 31, 2002, we have recorded

a valuation allowance of $476 million

on a portion of our net deferred tax

assets totaling $497 million.

provides for a compounding of unused

tax depreciation which results in an

additional deduction for tax purposes

for amounts spent on property, plant

and equipment. After considering the

effect of this compounding, and the

expected levels of future taxable

income at the Bulyanhulu Mine, we

recorded a valuation allowance against

the portion of the deferred tax assets

that we believe will more than likely

not be realized. In the event that levels

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

of future taxable income at

be materially different from the

Bulyanhulu are higher than we

liabilities we have recorded, due to the

presently expect, which could be

complex nature of the tax legislation

because of a number of factors,

that affects us.

including a sustained upward

movement in gold prices, operating

As described in note 22 to our financial

efficiencies or the discovery of

statements, we have recorded current

additional reserves, we may reduce

and deferred income tax liabilities

the level of valuation allowances

of $141 million for the cost arising

against these assets.

from the denial by the Peruvian tax

authorities (SUNAT) of our right to

In future years, levels of taxable income

revalue the Pierina mining concession.

will be affected by, among other things,

This reduction on the Pierina cost base

changes in gold prices, cash operating

for tax purposes results in a temporary

costs, proven and probable gold

timing difference between income for

reserves, interest rates and foreign

tax and accounting purposes, and the

currency exchange rates. Significant

recognition of liabilities for income

changes in these and other factors

taxes under our accounting policy for

could have a material impact on the

income taxes. We have appealed this

amount of valuation allowances

decision, a process that we expect to

recorded and on income tax expense.

take several years. Until the appeal is

CONTINGENCIES
We account for contingencies in accor-

resolved, we will not be required to

make any payments of this incremental

tax liability. However, if at the end of

the appeal process we are unsuccessful,

dance with FAS 5, “Accounting for

we will be required to pay SUNAT the

Contingencies.” FAS 5 requires

additional taxes owing at that time.

us to record an estimated loss for a loss

Through the end of 2002, the impact on

contingency when information available

current income taxes payable amounts

indicates that it is probable that an asset

to $41 million, and this current part will

has been impaired or a liability has been

continue to increase each year up to

incurred, and the amount of the loss can

the full $141 million over the remaining

be reasonably estimated. By their nature,

life of the mine.

contingencies will only be resolved

when one or more future events occur

We have not recorded any potential

or fail to occur – and typically those

interest and penalties, currently

events will occur a number of years

estimated at $51 million based on the

in the future. We assess such contingent

SUNAT assessment, because we believe

liabilities, which inherently involves the

that it is not probable that these

exercise of significant management

amounts are payable to SUNAT. A liability

judgment and estimates of the outcome

for interest and penalties will only be

of future events.

recorded should it become probable

that SUNAT’s position on interest and

Income tax contingencies

penalties will be upheld or settled.

We record liabilities for known tax

In the event that we are unsuccessful in

contingencies when, in our judgment,

our appeal of the assessment of interest

it is probable that a liability has been

and penalties in Peru, based on the

incurred. It is reasonably possible

amounts potentially payable at the end

that actual amounts payable resulting

of 2002, we would recognize a charge

from audits by tax authorities could

of about $51 million ($0.09 per share).

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Legal contingencies

Inmet Litigation

As described in note 22 to our financial

As disclosed in note 22 to our financial

statements, we are involved in claims

statements, we have accrued the

and legal proceedings, the resolution

amount of judgement awarded to

of which could have a material effect

Inmet, and in August 2002 we posted

on our financial condition or future

a letter of credit for C$95 million

results of operations. In assessing

pending a decision on our appeal.

these contingencies, we evaluated

We expect to receive a decision on

the perceived merits of the legal

our appeal in 2004, at which time,

proceedings or unasserted claims,

if we are unsuccessful, we will be

as well as the perceived merits of

required to satisfy the judgement.

the amount of relief sought or that

we expect to seek.

In the event that the income tax and

Inmet contingencies described above

and that we have recorded in our

financial statements are resolved

in our favor, we would recognize

in income gains of about $182 million

($0.34 per share), net of tax,

in aggregate.

OFF-BALANCE SHEET ARRANGEMENTS

We do not enter into off-balance sheet

purpose entities whose sole business

arrangements with special purpose

purpose is to enter into derivative

entities in the normal course of our

transactions with us.

business, nor do we have any uncon-

solidated affiliates. In the case of joint

We use gold sales contracts to protect

ventures, our proportionate interest

our earnings and cash flow from

for consolidation purpose is equivalent

declining gold prices, while permitting

to the economic returns to which

us to sell our gold production in the

we are entitled as a joint venture

gold spot market in a rising gold price

partner. Our only significant off-bal-

environment, as we have done in early

ance sheet arrangements are our

2003. At the end of 2002, our gold

gold sales contracts.

sales commitments under these

contracts totaled 18.1 million ounces.

GOLD SALES CONTRACTS
Overview

These contracts meet the US GAAP

definition of a derivative, but because

We have entered into gold sales

they qualify for the normal sales

contracts with high quality banking

exception under FAS 133, they are not

counterparties. The banking counter-

recorded on our balance sheet at fair

parties with whom we enter into

value. Instead, we account for these

these contracts engage in derivative

agreements as sales contracts with the

transactions with numerous third

proceeds under the contract recorded

parties in addition to us. We do not

as revenue at the date we physically

have any relationships with special

deliver gold to the counterparties.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

Under these contracts:

> We carefully manage credit exposure

> We can deliver gold to meet our

to our counterparties under these

commitments at any time we choose

contracts. Generally, the counter-

over periods of up to 10 or 15 years.

parties have credit ratings of “AA”,

We have the flexibility over this

and any credit exposure is spread

period to sell our production in either

over the 19 counterparties.

the spot gold market or through these

contracts. Generally, our strategy is

to sell our gold production in the spot

market if the market price exceeds

the price under our sales agreements.

> We are not subject to any margin

> We regularly review our gold sales

commitments to ensure that we have

the gold mineral reserves and future

gold production that substantially

exceed our contract commitments.

calls, regardless of the price of gold.

Through the use of these contracts

> There are no credit downgrade

provisions in these contracts.

over the last three years, we have

realized higher revenues than if we had

sold our gold production in the spot

gold market at average spot gold

prices. The benefits of using these

contracts can be illustrated as follows:

> Revenues from Forward Sales Contracts

Total revenues from contract sales (millions)

Average contract selling price ($/oz)

Average spot price ($/oz)

Incremental revenues from contracts in

excess of average spot gold prices (millions)

2002

1,401

352

310

168

2001

1,307

347

271

289

2000

1,341

365

279

315

The terms of our gold sales contracts

and our high quality, long-life, low-cost

provide flexibility and benefits that we

asset base. We believe that the benefits

believe are unique to us and unavailable

we derive from these contracts give

to any other gold producer. We are able

us a substantial economic and financial

to realize benefits from the contracts

advantage over other companies in the

mainly because we are able to choose a

gold mining industry.

suitable delivery date at any time over

the 10 to 15 year term of the contract.

The main factors that affect our future

Over this period, we can sell our gold at

ability to derive benefits from these

the spot price, but if the spot price is

agreements are two financial covenants:

lower than the contract price, our

maintain a consolidated net worth of

production is protected because we are

at least $2 billion (2002 – $3.3 billion)

able to sell at the contract price. These

and our debt to equity ratio must not

advantageous terms reflect, among

exceed 1.5:1 (2002 – less than 0.25:1).

other things, our strong credit rating

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

greater the amount of the forward

premium or contango and – so long

as US dollar interest rates are higher

than gold lease rates – the greater the

contract price compared to the spot

price at the start of the contract.

Over the past five years, three-month

US dollar interest rates have averaged

4.6% and gold lease rates have

averaged 1.2%, resulting in an average

contango rate of 3.4%. With the recent

decline in interest rates, three-month

US dollar interest rates have been

about 1.8% and gold lease rates have

been about 0.4%, resulting in a

contango rate of 1.4%. The level of

contango rates is one of the most

significant factors that affect the price

we realize from these contracts. At

the end of 2002, the average rate

of contango implied in our gold spot

deferred contracts was 3.2%. The

selling prices under our spot deferred

contracts are fixed over an average

future period of two years.

Beyond the dates that contango

is presently fixed, future premiums

earned under the spot deferred

contracts will be based on market

contango rates at that time, for those

future periods until the actual delivery

date. In the event gold lease rates are

higher than US dollar interest rates, the

KEY CONTRACT TERMS
AND CONDITIONS
Spot deferred sales contracts

A spot deferred sales contract

is an agreement that we will sell a

fixed number of ounces of gold to the

contract counterparty on a delivery

date in the future at an agreed price.

We have the flexibility to choose

the delivery date at any time over

a 10 to 15 year period from the start

of the contract. Our rights and

obligations under these contracts are

defined by Master Trading Agreements

(“MTA’s”) that we have executed with

our counterparties.

The selling price under the contract

is based on the forward price of gold

at the future delivery date, which

is essentially a function of the spot

gold price on the date the contract

is entered into plus a premium

(commonly referred to as “contango”)

through the future delivery date. The

amount of contango is often quoted

as a percentage return that reflects the

spread between market LIBOR interest

rates (i.e., US dollar interest rates) and

gold lease rates. Generally, US dollar

interest rates are higher than the gold

lease rate, which means that the

future price is higher than the current

price under the contract. The longer

the period of time until delivery, the

Historical 3-Month Gold Lease Rates
(%)

1010

1990

1992

1994

1996

1998

2000

2002

B A R R I C K A N N U A L R E P O R T 2 0 0 2

“premium” becomes negative (known

Variable price sales contracts

as “backwardation”). Over the past five

A variable price sales contract

years, backwardation has occurred only

is a version of our spot deferred sales

once, and only for a period of two days.

contract, the difference being that the

price of gold is variable within certain

Since we have the flexibility to deliver

limits. While most of our spot deferred

gold under our sales contracts at any

contracts are to sell gold at a fixed price

time over the next 10 to 15 years, we

in the future, the “variable price” sales

can sell our gold at the higher of the

contracts have a variable price for gold,

spot price or the contract price well

typically either i) within a range, or ii)

into the future. In the event spot

capped to a maximum level based on

prices consistently exceed the contract

the spot price at an agreed future date.

price for the next 10 to 15 years, and

assuming that we choose to deliver our

The variable price sales contracts enjoy

gold at spot prices over this period, we

all the same benefits and flexibility as

would eventually deliver gold at a price

our spot deferred sales contracts: we

of about $500 per ounce under our

can deliver gold against our variable

existing contracts (assuming typical

price sales contracts at any time up

historical long-term contango rates of

to 10 to 15 years in the future; most

4%); however, if today’s low interest

contracts have the “evergreen” clause;

rate environment persists, the forward

and they are not subject to margin calls.

price of the contract would rise to

about $400 per ounce. By choosing

Significance of mark-to-market

to deliver gold at higher spot gold

gains and losses

prices, we are able to take advantage

Mark-to-market gains and losses

of those higher prices, but it remains

represent unrealized changes in the fair

probable that we will physically deliver

value of our gold sales contracts. For

gold over the term of the contract, and

example, if we had a contract to sell

we will not be required to cash settle

gold currently at $340 an ounce and

the contracts. In most cases, under

the spot price of gold was $375 an

the terms of our MTA’s, the period

ounce, then the mark-to-market value

over which we are required to deliver

of the contract is about negative $35

gold is extended annually by one year,

per ounce. This has no impact on the

or kept “evergreen,” regardless of

selling price under the contract, which

our intended delivery dates, unless

remains intact at $340 per ounce.

otherwise notified by the counterparty.

This means that, with each year that

passes, the Termination Date is

extended into the future by one year.

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

The mark-to-market value represents

the contract. However, because of

a calculation of the fair value of the

the large amount of Central Bank

contracts at a point in time, based

gold available for lending relative

on market conditions at that time.

to demand, gold lease rates tend to

Because we intend to physically deliver

be low and any spikes short-lived.

future production against our sales

contracts, we do not expect to ever have

The estimated fair value of the gold

to financially settle this gain or loss and

contracts at December 31, 2002 was

record it in our income statement. On

approximately negative $639 million,

delivery of gold under the contract, we

and the fair value of silver contracts

receive cash equivalent to the selling

was $7 million positive. The most

price in the contract and we record this

significant factors affecting this mark-

amount under gold sales in our income

to-market value are spot gold prices

statement. Therefore, we do not expect

and market contango rates. The

a significant increase in the price of gold

mark-to-market value of our gold

and an adverse change in the mark-to-

sales contracts would approach zero

market value of these contracts to result

(breakeven) at a spot gold price of

in the mark-to-market value being

approximately $310 per ounce, assum-

recorded in our earnings and cash flow.

ing all other variables are constant.

The fair value of our foreign currency

A short-term spike in gold lease rates

contracts at December 31, 2002

would not have a material negative

was $25 million positive. The value

impact on us because we are not

of gold contracts is based on the

exposed under our gold sales contracts

net present value of cash flows under

to short-term gold lease rate variations.

the contracts, based on a gold spot

A prolonged rise in gold lease rates

price of $347 per ounce and market

could result in lower contango (or

rates for LIBOR and gold lease rates.

negative contango i.e. “backwardation”)

The year-to-date change in the fair

and therefore a smaller forward

value of our gold contracts is detailed

premium (or backwardation) under

as follows:

> Continuity Schedule of the Change in the Mark-to-Market
Value of our Gold Sales Contract Position (millions)
Fair value as at December 31, 2001 – Gain

Impact of realized gains in the year

Impact of change in spot price (from $279 per ounce to $347 per ounce)

Contango earned in the year

Impact of change in valuation inputs other than spot metal prices

(e.g., interest rates, lease rates, and volatility)

Fair value as at December 31, 2002 – Loss

356

(168)

(1,353)

182

344

(639)

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

(millions)

Contractual obligations

Long-term debt

Reclamation and closure costs

Capital leases

Operating leases

Purchase obligations:

Supplies inventory and

consumables

Power contracts

Capital expenditures

Other

Total

Payments due in

2003

2004 – 2005

2006 – 2007

2008+

Total

568

114

357

774

503

114

216

198

689

500

1,603

Long-term debt

cost estimates are recorded in earnings

Our debt obligations do not include any

as they occur. The liability recorded

subjective acceleration clauses or other

on our balance sheet under this account-

clauses that enable the holder of the

ing policy represents the difference

debt to call for early repayment, except

between costs accrued to date and

in the event that we breach any of the

actual payments made. On January 1,

terms and conditions of the debt. We are

2003, we will adopt FASB Statement

not required to post any collateral under

No. 143, Asset Retirement Obligations.

any debt obligations, and the terms of

Under FAS 143, we will record our legal

the obligations would not be affected

obligations for reclamation and closure

by a deterioration in our credit rating.

costs at each balance sheet date

Reclamation and closure costs

resulting in an increase in the obligations

at their fair value on January 1, 2003,

The amounts included in the table

by $32 million.

for reclamation and closure costs

represent our present legal obligations

The most significant contingent liability

for costs at all our existing operating

relating to reclamation and closure

mines and mines in various stages of

activities, which is not recorded on our

closure. For those mining operations

balance sheet, relates to potential

where our interest is in a joint venture

obligations to monitor water quality and

arrangement, the table reflects our

treat ground water on an ongoing basis.

proportionate share of the liability for

We record a liability for these activities

reclamation and closure costs.

if environmental laws and regulations

require us to conduct these activities.

Under our present accounting policy,

we accrue these costs on an undis-

Power Purchase Agreements

counted basis, using the units of

We enter into contracts to purchase

production method over the life of each

power at each of our operating mines.

mine. After closure, changes to future

The contracts provide for fixed prices,

B A R R I C K A N N U A L R E P O R T 2 0 0 2

’

which in certain circumstances are

no obligation to the royalty holders.

adjusted for inflation. Some agreements

The amounts that we expect to pay

obligate us to purchase fixed quantities

in the future are: 2003 - $37 million;

per hour, seven days a week, while

2004 to 2005 – $92 million; 2006

others are based on a percentage

to 2007 – $89 million; and 2008 and

of actual consumption. These contracts

beyond – $297 million. These amounts

extend through various dates in 2004

are estimated based on our expected

to 2007.

gold production from proven and

probable reserves (under Canadian

In addition to the purchase obligations

reporting standards) for the periods

set out in the table, we purchase about

indicated, assuming a $300 gold price.

0.9 billion kilowatt-hours annually

The most significant royalty arrange-

at market rates that were about 7 cents

ments are disclosed in note 4 to our

per kilowatt-hour in 2002. Under the

financial statements.

terms of one contract, we purchase

power based on actual consumption,

Payments to maintain land tenure

which has an exit fee of $12 million

and mineral property rights

should we decide to switch

In the normal course of business,

to an alternate power supplier.

we are committed to make annual

COMMITMENTS
Royalties

payments to maintain title to certain

of our properties and to maintain our

rights to mine gold at certain of our

properties. In the event we choose

Virtually all of our royalty commit-

to abandon a property or discontinue

ments only give rise to obligations

mining operations, the payments

at the time we produce gold. In the

relating to that property can be

event that we do not produce gold

suspended, resulting in our rights

at our mining properties, we have

to the property lapsing.

NON GAAP MEASURES

We have included cash costs per ounce

business or to return to shareholders,

data because we understand that certain

either through dividends or share

investors use this information to assess

repurchases. Because we operate in a

our performance and also determine

capital-intensive industry, the illustration

our ability to generate cash flow for use

of free cash flow enables investors to

in investing and other activities.

appreciate the year-on-year performance

The inclusion of cash costs per ounce

of our mines in generating cash for other

statistics enables investors to better

purposes. This data is intended to provide

understand year-on-year changes in

additional information and should not be

production costs, which in turn affect our

considered in isolation or as a substitute

profitability and cash flow. We also make

for measures of performance prepared

reference to the term “free cash flow,”

in accordance with GAAP. The measures

which we define as cash flow from

are not necessarily indicative of operating

operations less cash used in the purchase

costs or cash flow measures presented

of property, plant and equipment. This

under GAAP.

cash is available to reinvest in our

B A R R I C K A N N U A L R E P O R T 2 0 0 2

RECONCILIATION OF CASH COSTS PER OUNCE

(in millions of US dollars except per ounce amounts)

Operating costs per financial statements
Reclamation, closure and other costs1

Operating costs for per ounce calculation

Ounces sold (thousands)

Total cash costs per ounce

2002

1,071

(43)

1,028

5,805

177

2001

1,080

(60)

1,020

6,278

162

2000

950

(50)

900

5,794

155

In 2002, includes costs totaling $15 million in connection with the Peruvian tax assessment.
Total cash costs per ounce data is calculated in accordance with The Gold Institute Production Cost Standard (the
“Standard”). Adoption of the Standard is voluntary, and the data presented may not be comparable to data presented
by other gold producers. Cash costs per ounce are derived from amounts included in the Statements of Income and
include mine site operating costs such as mining, processing, administration, royalties and production taxes, but
exclude amortization, reclamation costs, financing costs, and capital, development and exploration.

RECONCILIATION OF FREE CASH FLOW

(in millions of US dollars except per ounce amounts)

Free cash flow

Capital expenditures and mine development costs

Operating cash flow

2002

361

228

589

2001

114

474

588

2000

230

612

842

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL STATEMENTS

he accompanying consolidated

effective basis, the reliability of its

financial statements have been

financial information.

prepared by and are the respon-

sibility of the Board of Directors and

The consolidated financial

Management of the Company.

statements have been audited by

PricewaterhouseCoopers LLP, Chartered

The consolidated financial statements

Accountants. Their report outlines

have been prepared in accordance

the scope of their examination

with United States generally accepted

and opinion on the consolidated

accounting principles and reflect

financial statements.

Management’s best estimates and

judgements based on currently avail-

able information. The Company has

developed and maintains a system

of internal accounting controls in order

Jamie C. Sokalsky

to ensure, on a reasonable and cost

Senior Vice President

and Chief Financial Officer

Toronto, Canada

February 5, 2003

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

AUDITORS’ REPORT TO THE SHAREHOLDERS
OF BARRICK GOLD CORPORATION

e have audited the consoli-

In our opinion, these consolidated

dated balance sheets of

financial statements present fairly, in all

Barrick Gold Corporation as

material respects, the financial position

at December 31, 2002 and 2001 and the

of the Company as at December 31,

consolidated statements of income,

2002 and 2001 and the results of its

cash flow and changes in shareholders’

operations and its cash flows for each

equity for each of the three years in

of the three years in the period ended

the period ended December 31, 2002.

December 31, 2002 in accordance with

These financial statements are the

United States generally accepted

responsibility of the Company’s

accounting principles.

Management. Our responsibility is to

express an opinion on these financial

As discussed in Note 2 to the consoli-

statements based on our audits.

dated financial statements, during

2002 the Company changed its policy

We conducted our audits in accordance

on accounting for deferred stripping

with generally accepted auditing

costs, during 2001 the Company changed

standards in both Canada and the

its policy on accounting for derivative

United States. Those standards require

instruments, and during 2000 the

that we plan and perform an audit to

Company changed the policy on revenue

obtain reasonable assurance whether

recognition for gold sales.

the financial statements are free of

material misstatement. An audit includes

On February 5, 2003, we reported

examining, on a test basis, evidence

separately to the shareholders of

supporting the amounts and disclosures

Barrick Gold Corporation on the finan-

in the financial statements. An audit

cial statements for the same periods,

also includes assessing the accounting

prepared in accordance with Canadian

principles used and significant estimates

generally accepted accounting principles.

made by Management, as well as evalu-

ating the overall financial statement

presentation.

Chartered Accountants

Toronto, Canada

February 5, 2003

’

B A R R I C K A N N U A L R E P O R T 2 0 0 2

CONSOLIDATED STATEMENTS OF INCOME (US GAAP BASIS)

Barrick Gold Corporation
For the years ended December 31, 2002, 2001 and 2000

(in millions of United States dollars, except per share data)

Gold sales (note 25)

Costs and expenses

Operating (notes 4 and 25)

Amortization (note 25)

Administration

Exploration and business development

Merger and related costs (notes 3 and 15)

Provision for mining assets and other unusual charges (note 5)

Interest and other income (note 6)

Interest expense (note 16)

Non-hedge derivative gains (losses) (note 23)

Income (loss) before income taxes and other items

Income taxes (note 7)

Income (loss) before cumulative effect of changes in accounting principles

Cumulative effect of changes in accounting principles (note 2)

Net income (loss) for the year

Earnings per share data (note 8):

Net income (loss) before changes in accounting principles

Basic and diluted

Net income (loss)

Basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.

2002

2001

2000

1,967

1,989

1,936

1,071

519

104

(2)

–

1,756

(57)

(6)

177

193

–

193

0.36

1,080

501

103

117

1,946

(25)

(1)

0.18

950

493

149

–

1,627

3,294

(26)

(5)

(1,375)

209

(1,166)

(23)

(1,189)

(2.18)

(2.22)

B A R R I C K A N N U A L R E P O R T 2 0 0 2

CONSOLIDATED STATEMENTS OF CASH FLOWS (US GAAP BASIS)

Barrick Gold Corporation
For the years ended December 31, 2002, 2001 and 2000

(in millions of United States dollars)

OPERATING ACTIVITIES

Net income (loss) for the year

Amortization

Changes in capitalized mining costs

Provision for mining assets and other unusual charges (note 5)

Deferred income taxes (note 7)

Other items (note 28)

Net cash provided by operating activities

INVESTING ACTIVITIES

Property, plant and equipment

Short-term investments

(Increase) decrease in restricted cash

Purchase of mining properties (note 3)

Other

Net cash used in investing activities

FINANCING ACTIVITIES

Proceeds from stock options exercised

Long-term debt

Proceeds

Repayments

Dividends

Net cash used in financing activities

Effect of exchange rate changes on cash and equivalents

Net increase (decrease) in cash and equivalents

Cash and equivalents at beginning of year (note 27)

Cash and equivalents at end of year (note 27)

1,044

The accompanying notes are an integral part of these consolidated financial statements.

2002

2001
(note 2B)

2000
(note 2B)

193

519

–

(75)

(77)

589

(228)

159

–

(58)

–

(25)

(119)

(61)

–

470

574

501

–

(50)

588

(474)

(153)

(24)

–

(646)

(152)

(93)

(183)

(1)

(242)

816

574

(1,189)

493

1,627

(287)

159

842

(612)

130

(141)

(611)

236

(187)

(94)

(39)

(6)

186

630

816

B A R R I C K A N N U A L R E P O R T 2 0 0 2

CONSOLIDATED BALANCE SHEETS (US GAAP BASIS)

Barrick Gold Corporation
At December 31, 2002 and 2001

(in millions of United States dollars)

ASSETS

Current assets

Cash and equivalents

Short-term investments (note 10)

Accounts receivable (note 11)

Inventories and other current assets (note 12)

Property, plant and equipment (note 13)

Capitalized mining costs

Other assets (note 14)

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable

Other current liabilities (note 15)

Long-term debt (note 16)

Other long-term obligations (note 17)

Net deferred income tax liabilities (note 18)

Total liabilities

Shareholders’ equity

Capital stock (note 19)

Deficit

Accumulated other comprehensive loss (note 9)

Total shareholders’ equity

Commitments and contingencies (note 22)

Total liabilities and shareholders’ equity

2002

2001

1,044

206

1,352

3,322

272

315

574

205

223

1,062

3,621

301

218

5,261

5,202

164

319

483

761

422

261

1,927

4,148

(689)

(125)

3,334

175

308

483

793

443

291

2,010

4,062

(763)

(107)

3,192

5,261

5,202

The accompanying notes are an integral part of these consolidated financial statements.

Signed on behalf of the Board

Gregory C. Wilkins

Director

C. William D. Birchall

Director

B A R R I C K A N N U A L R E P O R T 2 0 0 2

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME (LOSS) (US GAAP BASIS)

Barrick Gold Corporation
For the years ended December 31, 2002, 2001 and 2000

(in millions of United States dollars)

STATEMENT OF SHAREHOLDERS’ EQUITY

Common shares (number in millions)

At January 1

Issued for cash/on exercise of stock options

Issued on purchase of mining property

At December 31

Common shares (amount in millions)

At January 1

Issued for cash/on exercise of stock options

Issued on purchase of mining property

At December 31

Retained earnings (deficit)

At January 1

Net income (loss)

Dividends

At December 31

Accumulated other comprehensive loss (note 9)

Total shareholders’ equity at December 31

STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Net income (loss)

Foreign currency translation adjustments

Transfers of realized (gains) losses on derivative instruments to earnings

Change in fair value of cash flow hedges

Additional minimum pension liability

Transfers of realized (gains) losses on available-for-sale securities to earnings

Unrealized losses on available for sale securities

2002

2001

2000

536

–

542

536

–

536

534

536

4,062

4,051

4,025

4,148

(763)

193

(119)

(689)

(125)

3,334

2002

193

(21)

(2)

(6)

4,062

(766)

(93)

(763)

(107)

3,192

4,051

517

(1,189)

(94)

(766)

(95)

3,190

2001

2000

(26)

–

(5)

(2)

(4)

(1,189)

(60)

–

(7)

–

(1,256)

Comprehensive income (loss)

175

The accompanying notes are an integral part of these consolidated financial statements.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Barrick Gold Corporation
Tabular dollar amounts in millions of United States dollars, unless otherwise shown.
References to C$ and A$ are to Canadian and Australian dollars, respectively.

1 > NATURE OF OPERATIONS
Barrick Gold Corporation (“Barrick” or the “Company”)

particularly significant to us. References to the

Company in these financial statements relate to Barrick

engages in the production and sale of gold, including

and its consolidated subsidiaries. We have reclassified

related mining activities such as exploration, development,

certain prior-year amounts to conform with the current

mining and processing. We also use derivative instruments

year presentation.

in a risk management program that seeks to mitigate the

effect of volatility in commodity prices, interest rates and

The preparation of financial statements under

foreign currency exchange rates on our business (refer

US GAAP requires us to make estimates and

to note 23). Our operations are mainly located in the

assumptions that affect:

United States, Canada, Australia, Peru, Tanzania, Chile

> the reported amounts of assets and liabilities;

and Argentina. They require specialized facilities and

> disclosures of contingent assets and liabilities; and

technology, and we rely on those facilities to support our

> revenues and expenses recorded in each

production levels. The market price of gold, quantities of

reporting period.

gold mineral reserves and gold production levels, cash

operating costs, interest rates and the level of exploration

The most significant estimates and assumptions that

expenditures are some of the things that affect our

affect our financial position and results of operations

operating cash flow and profitability. Due to the global

are those that use estimates of proven and probable

nature of our operations, we are also affected by such

gold reserves, and/or assumptions of future gold prices.

things as fluctuations in foreign currency exchange rates,

Such estimates and assumptions affect:

political risk and varying levels of taxation. We seek to

> the value of inventories (which are stated at the lower

mitigate the risks associated with our business, but many

of average cost and net realizable value);

of the factors affecting these risks are beyond our control.

> decisions as to when exploration and mine development

2 > SIGNIFICANT ACCOUNTING POLICIES
A Basis of presentation

costs should be capitalized or expensed;

> whether property, plant and equipment and capitalized

mining costs may be impaired;

The United States dollar is the principal currency

> our ability to realize income tax benefits recorded

of our operations. We prepare and file our primary

as deferred income tax assets; and

consolidated financial statements in United States

> the rate at which we charge amortization to earnings.

dollars and under United States generally accepted

accounting principles (“US GAAP”). We include

We also estimate:

consolidated financial statements prepared under

> costs associated with reclamation and closure

Canadian GAAP (in United States dollars) in our

of mining properties;

Proxy Statement that we file with various Canadian

> remediation costs for inactive properties;

regulatory authorities. Summarized below are the

> the fair values of derivative instruments; and

accounting policies under US GAAP that we consider

> the likelihood and amounts associated with contingencies.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

We regularly review the estimates and assumptions

Revenue recognition

that affect our financial statements; however, what

In 2000 we implemented Staff Accounting Bulletin

actually happens could differ from those estimates

No. 101 (“SAB 101”), Revenue Recognition. Under SAB 101,

and assumptions.

B Accounting changes

Deferred stripping costs

we recognize revenue when we deliver gold bullion

to counterparties. Previously, we recognized revenue

when gold was in doré form, under long-standing

industry practice. The effect of this change was

Historically, we classified deferred stripping costs as part

to increase our net loss by $25 million in 2000,

of Property, plant and equipment on our consolidated

including the cumulative effect of $23 million, and

balance sheet. In 2002 we began classifying these costs

basic net loss per share by $0.04.

as a separate line item, Capitalized mining costs. Total

capitalized mining costs at December 31, 2002 were

C Basis of consolidation

$272 million. The comparative amount at December 31,

These consolidated financial statements include the

2001, of $301 million has also been reclassified.

accounts of Barrick and its subsidiaries. Intercompany

transactions and balances are eliminated upon

Also, we historically classified expenditures for stripping

consolidation. We control our subsidiaries through

costs as part of purchases of property, plant and

existing majority voting interests. Under long-standing

equipment in Investing activities in our consolidated

practice for extractive industries, we present our

statement of cash flows. In 2002, we began classifying

proportionate interest in the assets, liabilities, revenues,

these expenditures as part of changes in Capitalized mining

expenses and cash flows of unincorporated joint

costs in Operating activities. Expenditures for stripping

ventures in our financial statements.

costs for the year ended December 31, 2002 were

$121 million. We also reclassified the comparative amounts

D Foreign currency translation

for 2001 of $133 million and 2000 of $98 million. We made

The functional currency of all our operations, except for

these changes to reflect the operating nature of stripping

our Argentinean operations where it is the Argentinean

activities. These changes had no effect on earnings.

peso, is the United States dollar (“the US dollar”).

Except for our Argentinean operations, we remeasure

Accounting for derivative instruments

balances into US dollars as follows:

We adopted Statement of Financial Accounting Standards

> non-monetary assets and liabilities using historical

No. 133, Accounting for Derivative Instruments and

rates;

Hedging Activities, and Statement of Financial Accounting

> monetary assets and liabilities using period-end

Standards No. 138, Accounting for Certain Derivative

exchange rates; and

Instruments and Certain Hedging Activities, (collectively

> income and expenses using average exchange rates,

FAS 133), on January 1, 2001. On adoption, we recorded

except for expenses related to assets and liabilities

the fair value of derivative instruments as follows:

remeasured at historical exchange rates.

At January 1, 2001

Hedge derivatives

Carrying
amount

Fair value

Adjustment

Asset (liability)

Loss

Gains and losses arising from remeasurement of foreign

currency financial statements into US dollars, and from

foreign currency transactions, are included in earnings.

Purchased gold call options

$ 44

$ (39)1

Non-hedge derivatives

Written gold call options

and total return swaps

$ (42)

Other derivatives

–

$ (42)

(3)

–
(3)2

1. Recorded in Other Comprehensive Income (OCI), net of tax benefits of

$4 million. We also reclassified into OCI deferred gains on hedge contracts
that had been closed out in previous years that totaled $35 million.

2. Recorded as a cumulative effect accounting change in earnings, net of tax

benefits of $2 million.

For our Argentinean operations, we translate assets

and liabilities into US dollars using period-end

exchange rates; and revenues and expenses using

average rates. We record the resulting translation

adjustments in a cumulative translation adjustments

account in Other Comprehensive Income (OCI),

a part of shareholders’ equity.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

After the merger with Homestake in 2001, various

F Recently issued accounting pronouncements

changes in economic facts and circumstances led

FAS 143, Accounting for asset retirement obligations

us to conclude that the functional currency of certain

In June 2001, the FASB issued Statement No. 143,

of its operations is the United States dollar and not

Accounting for Asset Retirement Obligations (FAS 143),

the local currency. These changes included the

which addresses financial accounting and reporting for

denomination of selling prices for gold production,

obligations associated with the retirement of tangible

and more use of United States dollar financing.

long-lived assets and the associated asset retirement

costs. It applies to legal obligations associated with the

For periods before January 1, 2002, the financial

retirement of long-lived assets that result from the

statements of those operations were translated as

acquisition, construction, development and/or the

follows: assets and liabilities using period-end exchange

normal operation of a long-lived asset. FAS 143 requires

rates; and revenues and expenses at average rates.

entities to record the fair value of a liability for an asset

Translation adjustments were included in OCI.

retirement obligation in the period in which it is

E Other significant accounting policies

capitalizes the cost by increasing the carrying amount

Other aspects of our financial statements including our

of the related long-lived asset. Over time, a liability

other significant accounting policies, and the note and

is increased each period to reflect an interest element

page where they can be found are:

considered in its initial measurement at fair value, and

incurred. When a liability is initially recorded, an entity

the capitalized cost is amortized over the useful life of

Note

Page

the related asset. Upon settlement of the liability,

Business combinations and property acquisitions . . . . . . . . .3 . . . . .71

we will record any gain or loss that occurs. FAS 143 is

Operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 . . . . .72

effective for financial statements issued for fiscal years

Provision for mining assets and other unusual charges . . . . .5 . . . . .72

beginning after June 15, 2002. On adoption of FAS 143

Interest and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 . . . . .72

in our balance sheet we will record an increase in pro-

Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 . . . . .73

perty, plant and equipment by $39 million; an increase

Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 . . . . .73

in other long-term obligations by $32 million; and an

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 . . . . .74

increase in deferred income tax liabilities by $3 million.

Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 . . . . .74

A $4 million credit for the cumulative effect of this

Accounts receivable and revenue recognition . . . . . . . . . . . .11 . . . . .75

change will be recorded in the income statement.

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 . . . . .75

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .13 . . . . .76

FAS 146, Accounting for costs associated

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 . . . . .76

with exit or disposal activities

Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 . . . . .77

In June 2002, the FASB issued Statement No. 146,

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 . . . . .77

Accounting for Costs Associated with Exit or Disposal

Reclamation and closure costs . . . . . . . . . . . . . . . . . . . . . . . . .17 . . . . .78

Activities (FAS 146). FAS 146 addresses issues relating

Other post-retirement benefits . . . . . . . . . . . . . . . . . . . . . . . .17 . . . . .78

to the recognition, measurement, and reporting of costs

Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 . . . . .79

associated with exit and disposal activities, including

Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 . . . .80

restructuring activities.

Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 . . . .80

Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 . . . . .82

FAS 146 requires that the initial liability for costs

Pension plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 . . . . .82

associated with exit and disposal activities be measured

Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 . . . .83

at fair value. It prohibits the recognition of a liability

Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 . . . .86

based solely on an entity’s commitment to a plan, and

Fair value of financial instruments . . . . . . . . . . . . . . . . . . . . .24 . . . . .92

requires that the liability for costs associated with exit

Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 . . . . .93

and disposal activities be re-evaluated each subsequent

Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 . . . .95

reporting period. FAS 146 requires costs for which

Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 . . . .95

a liability is not recorded expensed as incurred, even

B A R R I C K A N N U A L R E P O R T 2 0 0 2

if those costs are incremental to other operating

costs and will be incurred as a direct result of the plan.

3 > BUSINESS COMBINATIONS
AND PROPERTY ACQUISITIONS

FAS 146 is effective for exit or disposal activities

A Homestake Mining Company

initiated after December 31, 2002. Retroactive

On December 14, 2001, a wholly-owned subsidiary

application of FAS 146 is prohibited, so liabilities

of Barrick merged with Homestake Mining Company

recognized prior to the initial application of FAS 146 will

(“Homestake”). Under the terms of the merger

continue to be accounted for under existing guidance.

agreement, we issued 139.5 million Barrick common

shares in exchange for all the outstanding common

FAS 148, Accounting for stock-based

shares of Homestake, using an exchange ratio of 0.53:1.

compensation – transition and disclosure

The merger was accounted for as a pooling-of-interests.

In December 2002, the FASB issued Statement No. 148,

The consolidated financial statements give retroactive

Accounting for Stock-Based Compensation – Transition

effect to the merger, with all periods presented as

and Disclosure – an amendment of FAS 123 (FAS 148).

if Barrick and Homestake had always been combined.

FAS 148 provides additional transition guidance for

companies that elect to voluntarily adopt the fair value

In 2001, we recorded charges for merger-related costs

accounting provisions of FAS 123. FAS 148 does not

totaling $117 million ($107 million after tax). These costs

change the provisions of FAS 123 that permit companies

included transaction costs of $32 million for investment

to continue to apply the intrinsic value method under

banking, legal, accounting and other costs directly

APB 25, the method which we use.

related to the merger. They also include integration and

restructuring costs of $85 million, mainly for employee

FAS 148 requires certain new disclosures that are

termination costs.

incremental to those under FAS 123. Those disclosures

are intended to overcome concerns about the potential

B Pangea Goldfields Inc.

lack of comparability arising from the FASB’s decision

On July 27, 2000, we acquired Pangea Goldfields Inc.,

to permit multiple transition methods. We adopted the

an exploration company, for cash of $131 million.

annual disclosure provisions of FAS 148 in these

We accounted for the acquisition as a purchase, and

financial statements.

assigned values of $140 million to total assets

acquired, including $16 million in cash and $9 million

FIN 45, Guarantor’s accounting and disclosure

to liabilities acquired.

requirements for guarantees

In November 2002, the FASB issued Interpretation

C Round Mountain Mine

No. 45, Guarantor’s Accounting and Disclosure

On July 1, 2000, we acquired a further 25% interest

Requirements for Guarantees (FIN 45). FIN 45 clarifies

in the Round Mountain Mine for $43 million, increasing

the requirements of Statement No. 5, Accounting for

our ownership interest from 25% to 50%. The purchase

Contingencies, relating to a guarantor’s accounting

consideration consisted of 1.4 million newly issued

for, and disclosure of, the issuance of certain types

common shares and cash of $26 million. We accounted

of guarantees. FIN 45 requires that upon issuance

for the transaction as a purchase, and allocated

of a guarantee, the guarantor must recognize a liability

$3 million to working capital, $45 million to property,

for the fair value of the obligation it assumes under

plant and equipment and $5 million to reclamation

that guarantee. The disclosure provisions of FIN 45

obligations.

are effective for these financial statements, but

the provisions for recognition and measurement are

effective only for guarantees that are issued or

modified after December 31, 2002.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

4 > OPERATING COSTS

For the years ended December 31

Cost of goods sold

Amortization of capitalized

mining costs

By-product revenues

Royalty expenses

Production taxes

Reclamation and closure costs

2002

$ 964

2001

$ 944

2000

$ 841

150

(119)

150

(112)

137

(111)

$ 1,071

$ 1,080

$ 950

A Amortization of capitalized mining costs

We charge most mine operating costs to inventory

as incurred. However, we defer and amortize certain

mining costs associated with open-pit deposits that

have diverse ore grades and waste-to-ore ton ratios

over the mine life. These mining costs arise from the

removal of waste rock at our open-pit mines, and we

commonly refer to them as “deferred stripping costs.”

We record amortization of amounts deferred based

on a “stripping ratio” using the units-of-production

method. This accounting method results in the

smoothing of these costs over the life of mine, rather

than expensing them as incurred. Some mining

companies expense these costs as incurred, which may

result in the reporting of greater volatility in period

to period results of operations. The application of our

deferred stripping accounting policy in 2002 resulted

in an increase in operating costs of $29 million

compared to actual costs incurred (2001 – $17 million

increase, 2000 – $39 million increase). Capitalized

mining costs represent the excess of costs capitalized

over amortization recorded, although it is possible that

a liability could arise if cumulative amortization exceeds

costs capitalized. The carrying amount of Capitalized

mining costs is included with related mining property,

plant and equipment for impairment testing purposes.

Average stripping ratios1

For the years ended December 31

Betze-Post (Goldstrike)

Pierina

2002

112:1

48:1

2001

98:1

21:1

2000

98:1

19:1

1. The stripping ratio is calculated as the ratio of total tons (ore and waste)

of material to be moved compared to total recoverable proven and probable
gold reserves.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

The average remaining life of the above-mentioned

open-pit mine operations for which we capitalize mining

costs is 9 years. The full amount of stripping costs

incurred will be expensed by the end of the mine lives.

B Royalties

Most of our properties are subject to royalty obligations

based on minerals production at the properties, under

various methods of calculation. The most significant

royalties are at Goldstrike, Bulyanhulu and Pascua-

Lama. Most Goldstrike production is subject to a net

smelter return (NSR) or net profits interest (NPI) royalty

payable on the value of mineral production. The highest

Goldstrike royalties are a 5% NSR and a 6% NPI.

Bulyanhulu is subject to an NSR-type royalty of 3%.

A part of Pascua-Lama gold production will be subject

to a gross proceeds sliding scale royalty, ranging from

1.5% to 10%, and a 2% NSR royalty on copper

production. Another part of Pascua-Lama is subject

to a 3% NSR royalty on extraction of all gold, silver, and

other ores.

5 > PROVISION FOR MINING ASSETS
AND OTHER UNUSUAL CHARGES

For the years ended December 31

2002

2001

Provision for mining assets

Inmet litigation (note 22)

Other

–

2000
$ 1,6001

–

$ 59

$ 1,627

In 2000, we completed a review of our property, plant and equipment that
was mainly triggered by the level of gold prices at the time, using the policy
described in note 13C. As a result, we reduced the carrying values of various
assets to their estimated fair values. The review was triggered by a number
of events, including our long-term view of the price of gold at the time of the
review. We recorded a $1.6 billion non-cash provision to write down various
assets, including the Pascua-Lama Project in Chile and Argentina; the Pierina
property in Peru and certain exploration properties; low-grade stockpile
inventories and the carrying amount of our SJ royalty claims at the Betze-
Post Mine in the United States; and the Bousquet Mine in Canada.

6 > INTEREST AND OTHER INCOME

For the years ended December 31

Interest income

Foreign currency translation

gains (losses)

Other

2002

2001

(1)

(10)

2000

(18)

(17)

7 > INCOME TAXES

For the years ended December 31

2002

2001

2000

8 > EARNINGS PER SHARE
We compute basic earnings per share by dividing net

income or loss (the numerator) by the weighted-average

$ (14)

$ (23)

number of outstanding common shares for the period

(the denominator). In computing diluted earnings per

share, an adjustment is made for the dilutive effect

of the exercise of stock options. In periods where a net

loss is reported, such as in 2000, basic and diluted

loss per share are the same because the effect of the

exercise of stock options would be anti-dilutive.

The weighted-average number of common shares

outstanding for the year was 541 million shares (2001 –

536 million shares, 2000 – 535 million shares). The

number of shares for the diluted net income per share

calculation was 541 million shares (2001 – 538 million

shares, 2000 – 535 million shares).

Current

Canada

Foreign

Deferred (note 18)

Canada

Foreign

Income taxes

(44)

(15)

(59)

(22)

(36)

(24)

(55)

(78)

219

287

$ 209

Because we operate in a specialized industry and

in several tax jurisdictions, our income is subject

to varying rates of taxation. Major items causing our

income tax rate to differ from the Canadian federal

statutory rate of 38% are:

For the years ended December 31

2002

2001

2000

Income tax (expense) credit

based on statutory rate

$ (67)

$ (32)

$ 523

(Increase) decrease resulting from:

Resource and depletion allowances

Earnings in foreign jurisdictions

at different tax rates

Provision for mining assets

Non-deductible expenses

Changes in valuation allowance

Outcome of income tax

uncertainties

Other

Income tax credit

The main temporary differences

and their tax effects are:

–

(9)

(43)

–

(56)

(45)

–

(331)

(35)

–

(80)

$ 209

Amortization

Reclamation costs

Net operating losses

Provision for mining assets

Other

(4)

–

(8)

–

267

(15)

$ 287

B A R R I C K A N N U A L R E P O R T 2 0 0 2

9 > COMPREHENSIVE INCOME (LOSS)
Comprehensive income consists of net income or

accounted for as cash flow hedges; unrealized gains

loss and other gains and losses that are excluded from

and losses on investments; and foreign currency

net income or loss. Other gains and losses consist

translation adjustments.

mainly of gains and losses on derivative instruments

Parts of comprehensive income (loss)

For the years ended December 31

2002

2001

2000

Pre-tax
amount

Tax expense
(credit)

Pre-tax
amount

Tax expense
(credit)

–

(60)

Pre-tax
amount

$ (26)

–

(4)

(5)

(2)

(4)

–

(21)

–

$ (17)

$ (12)

(4)

–

(7)

–

(67)

–

2002

Tax
credit

–

(17)

–

Total

$ (144)

(7)

(6)

Pre-tax
amount

$ (123)

(5)

(4)

2001

Tax
credit

–

(4)

–

Total

$ (123)

(5)

(4)

$ (108)

$ (17)

$ (125)

$ (103)

(4)

$ (107)

Foreign currency translation adjustments

$ (21)

Transfers of realized (gains) losses on derivative

instruments to earnings

Change in fair value of cash flow hedges

FAS 133 transition adjustment (note 2)

Additional minimum pension liability

Transfers of realized (gains) losses on

available-for-sale securities to earnings

Unrealized losses on available-for-sale securities

Accumulated other comprehensive loss (OCI)

At December 31

Foreign currency translation adjustments

Derivative instruments

Additional minimum pension liability

Unrealized losses on available-for-sale securities

10 > SHORT-TERM INVESTMENTS

Available-for-sale securities

(25)

–

(2)

(6)

(1)

Pre-tax
amount

$ (144)

(7)

(6)

At December 31

2002

2001

Commercial paper and term deposits1
Fixed-income securities 2

Total debt securities
Equity securities 2

Fair
value

Losses
in OCI

–

Fair
value

$ 159

173

$ 205

Losses
in OCI

–

1. As part of our cash management program, we invest in commercial paper and term deposits with initial maturities in excess

of three months, but less than one year.

2. Under a deferred compensation plan for certain former Homestake executives we hold a portfolio of marketable fixed-income

and equity securities. Short-term investments, which are all classified as available-for-sale, are carried at fair value with unrealized
gains and losses, net of tax effects recorded in OCI, a part of shareholders’ equity. The fair value of investments is determined
by quoted market prices. We recognize in earnings all declines in fair value judged to be other than temporary. During the three
years ended December 31, total proceeds from the sale of short-term investments were: 2002 – $223 million; 2001 – $24 million; and
2000 – $26 million. For purposes of calculating realized gains and losses, we use the average cost of securities sold.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Realized gains and losses on investments

The fair value of the embedded derivatives at

For the years ended December 31

Gains

Losses

2002

–

11 > ACCOUNTS RECEIVABLE

At December 31

Amounts due from customers

Taxes recoverable

Other

2001

–

2002

$ 30

2000

–

2001

$ 38

Amounts due from customers

We recognize revenue from the sale of gold and

by-products when the following conditions are met:

> persuasive evidence of an arrangement exists;

> delivery has occurred under the terms of the

arrangement;

> the price is fixed or determinable; and

> collectibility is reasonably assured.

For gold bullion sold under forward sales contracts

December 31, 2002, was $1 million (positive), and is

recorded on the balance sheet in other derivative assets.

Revenue from the sale of by-products such as silver and

copper is credited against operating costs.

$ 72

$ 60

Gold in process and ore in stockpiles

12 > INVENTORIES AND
OTHER CURRENT ASSETS

At December 31

Mine operating supplies

Derivative assets (note 23)

Prepaid expenses

2002

$ 100

2001

$ 134

$ 206

$ 223

Gold in process and ore in stockpiles

We record gold in process, ore in stockpiles and

mine operating supplies at the lower of average cost

and net realizable value. For gold in process and ore in

stockpiles, cost includes materials and labor as well

as an allocation of amortization of property, plant

or in the spot market, we recognize revenue on transfer

and equipment.

of title to the gold to counterparties.

Our Eskay Creek and Bulyanhulu mines produce ore

and concentrate containing both gold and silver. Our

concentrate sales contracts with third-party smelters

provide for final gold and silver pricing in a specified

Gold in process and ore in stockpiles excludes

$61 million (2001 – $46 million) of stockpiled ore that

we do not expect to process in the next 12 months.

This amount is included in other assets. We process

ore in stockpiles under a life of mine plan that is

future period based on spot market metals prices. We

intended to optimize use of our known mineral reserves,

record revenues under these contracts based on the

present plant capacity and pit design. Historically,

forward gold and silver prices at the time of shipment,

the market price of gold has not significantly affected

which is when transfer of legal title to concentrate

the timing of processing of ore in stockpiles.

passes to the third-party smelters. The terms of the

contracts result in embedded derivatives, because of

Our Goldstrike property is the only one that has

the difference between the recorded one-month forward

significant stockpiled ore. The stockpiles consist of two

price and the final settlement price. These embedded

ore types: ore that will require autoclaving, and ore

derivatives are adjusted to fair value through non-hedge

that will require roasting. Processing of roaster ore

derivative gains and losses in earnings each period until

commenced on start-up of the roaster facility in 2000.

the date of final gold and silver pricing.

We are now processing ore from both the autoclave and

roaster stockpiles. We expect to fully process the

At December 31, 2002, we had outstanding concentrate

autoclave stockpile by 2009 and the roaster stockpile

sales contracts for 865,000 ounces of silver recorded

by 2016.

at an average price of $4.52 per ounce and 35,000 ounces

of gold recorded at an average price of $323 per ounce.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

13 > PROPERTY, PLANT AND EQUIPMENT

We expense repairs and maintenance expenditures

2002

2001

as incurred. We capitalize major improvements and

At December 31

Property acquisition and

mine development costs

Buildings, plant and equipment

Accumulated amortization

$ 4,233

$ 4,448

2,812

7,045

2,824

7,272

(3,723)

(3,651)

$ 3,322

$ 3,621

A Property acquisition and

mine development costs

We capitalize payments for the acquisition of land and

mineral rights. After acquisition, a number of things

affect the recoverability of the cost of land and mineral

rights, and in particular the results of exploration

drilling. The length of time between the acquisition

of land and mineral rights and when we undertake

exploration work varies based on the prioritization

of our exploration projects and the size of our

exploration budget.

We capitalize mine development costs on our

properties after proven and probable reserves have

been found. Before finding proven and probable

reserves, costs are considered exploration costs,

which are expensed as incurred.

We start amortizing capitalized costs when production

begins. Amortization is calculated using the units-of-

production method based on the estimated recoverable

ounces of gold in proven and probable reserves.

replacements that increase productive capacity or

extend the useful life of an asset, and amortize

them over the remaining estimated useful life of the

related asset.

C Property evaluations

We review and test the carrying amounts of our mineral

properties and related buildings, plant and equipment

when events or changes in circumstances suggest that

the carrying amount may not be recoverable. If we have

reason to suspect an impairment may exist, we prepare

estimates of future net cash flows that we expect to

generate for the related asset or group of assets. The

cash flow estimates are based on:

> estimated recoverable ounces of gold (considering

proven and probable mineral reserves);

> estimated future commodity prices (considering

historical and current prices, price trends and

related factors); and

> expected future operating costs, capital expenditures

and reclamation expenditures.

We record a reduction of the assets or group of assets

to their estimated fair value as a charge to earnings, if

the estimated future net cash flows are less than the

carrying amount. We calculate fair value by discounting

the estimated future net cash flows using a discount

factor. The discount factor is our estimate of the risk-

adjusted rate used to determine the fair value of our

mining properties in a transaction between willing

We capitalize financing costs, including interest, relating

buyers and sellers.

to mine development costs while development or

construction activities at the properties are in progress.

14 > OTHER ASSETS

Capitalization occurs without restriction to specific

At December 31

2002

2001

borrowings. We stop capitalizing financing costs when

Ore in stockpiles (note 12)

the asset or mine is substantially complete and ready

Taxes recoverable

for its intended use.

Derivative assets (note 23)

Deferred income tax assets (note 18)

B Buildings, plant and equipment

We record buildings, plant and equipment at cost

and amortize them net of their residual value, using the

Note receivable

Restricted cash

Debt issue costs

straight-line method over their estimated useful lives.

Deferred stock compensation (note 20B)

The longest estimated useful life for buildings and

Prepaid pension asset (note 21)

mill equipment is 25 years and for mine equipment

Other

–

15 years.

$ 315

$ 218

B A R R I C K A N N U A L R E P O R T 2 0 0 2

15 > OTHER CURRENT LIABILITIES

B Project financing – Bulyanhulu

At December 31

Current part of reclamation and

closure obligations (note 17)

Merger and related costs 1

Litigation (note 22)

Derivative liabilities (note 23)

Income taxes payable

Pension benefits (notes 17 and 21)

Current part of long-term debt (note 16)
Deferred revenue 2

Other

2002

2001

One of our wholly-owned subsidiaries, Kahama Mining

Corporation Ltd. in Tanzania, has a limited recourse

amortizing loan for $194 million. We guaranteed the

loan until completion, which occurred in March 2003.

After completion, the loan became non-recourse.

The loan is insured for political risks equally by

branches of the Canadian government and the World

Bank. The interest rate, inclusive of political risk

insurance premiums, is LIBOR plus 2.6% before

completion, and increases after completion to about

LIBOR plus 3.6%. The effective interest rate for 2002,

$ 319

$ 308

including amortization of debt-issue costs and political

In 2002, cash payments of merger and related costs totaled $50 million.
Other amounts totaling $10 million were settled through pension plan
benefit enhancements. Excess accruals totaling $2 million have been
recorded in 2002 earnings.

2. Deferred revenue will be recorded in earnings in: 2003 – $17 million;

2004 – $7 million; 2005 – $4 million; 2010 – $7 million.

risk insurance, was 7.2% (2001 – 7.3%, 2000 – 9.2%).

The effective interest rate includes payments made

under a receive-floating, pay-fixed interest-rate swap

which matches the loan principal over the term to

repayment and through this we have fixed the rate for

the term of the debt at 7%.

16 > LONG-TERM DEBT

At December 31

Debentures

Project financing – Bulyanhulu

Variable rate bonds

Capital leases

Current part

Interest expense

2002

$ 504

2001

$ 500

194

781

(20)

200

802

(9)

Scheduled repayments for each of the next five years

are: 2003 – $20 million, 2004 – $24 million, 2005 –

$31 million, 2006 – $34 million, 2007 – $34 million,

2008 and thereafter – $51 million.

C Variable rate bonds

Certain of our wholly-owned subsidiaries have issued

$ 761

$ 793

variable rate, tax-exempt bonds of $17 million (due

2004), $25 million (due 2029) and $38 million (due

2032) for a total of $80 million. We pay interest monthly

For the years ended December 31

2002

2001

2000

on the bonds based on variable short-term, tax-exempt

Interest incurred

Less: capitalized

Interest expense

A Debentures

(2)

(42)

(44)

obligation rates. The average interest rate for 2002 was

1.4% (2001 – 1.9%). No principal repayments are due

until cancellation, redemption or maturity.

D Credit facilities

On April 22, 1997, we issued $500 million of redeemable,

We have a credit and guarantee agreement with a group

non-convertible debentures. The debentures bear interest

of banks (the “Lenders”), which requires the Lenders to

at 7.5% per annum, payable semi-annually, and mature

make available to us a credit facility of up to $1 billion or

on May 1, 2007. In 2002, we entered into interest-rate

the equivalent amount in Canadian currency. We

swap contracts as a fair value hedge of our interest

renewed the Credit Agreement on April 29, 2002 for

rate risk exposure on $250 million of the debentures,

another five-year term. The Credit Agreement, which

effectively converting them to floating-rate debt

is unsecured, matures in April 2007 and has an interest

instruments (note 23). Under the swaps, we receive fixed-

rate of LIBOR plus 0.27% to 0.35% when used, and an

rate interest receipts at 7.5% in exchange for floating-rate

annual fee of 0.08%. We have not drawn any amounts

interest payments of LIBOR plus a credit spread of 4.0%,

under the Credit Agreement.

which resulted in an effective rate of 5.7%.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

17 > OTHER LONG-TERM OBLIGATIONS

At December 31

Reclamation and closure costs

Pension benefits (note 21)

Other post-retirement benefits

Derivative liabilities (note 23)

Restricted stock units (note 20)

Other

2002

$ 249

2001

$ 267

We estimate that future reclamation and closure

costs under present environmental regulations are

$461 million. The major parts of this $461 million

estimate are for: tailing and heap leach pad closure/

rehabilitation – $83 million; demolition of buildings/

mine facilities – $121 million; ongoing water treatment –

$67 million; ongoing monitoring and care and main-

tenance – $129 million; and other costs – $61 million.

$ 422

$ 443

At December 31, 2002, we had accrued a total

of $302 million (2001 – $347 million), including the

A Reclamation and closure costs

current part of $53 million.

We accrue estimates of future reclamation and closure

costs at active mines over the life of the mines as

revenue is recognized. Each period we expense an

B Other post-retirement benefits

We provide post-retirement medical, dental, and life

amount calculated using the units-of-production method

insurance benefits to certain employees. We use the

based on the latest estimates of future reclamation and

corridor approach in the accounting for post-retirement

closure costs and recoverable ounces of gold contained

benefits, under which all actuarial gains and losses

in proven and probable reserves. After closure we

resulting from variances between actual results and

record changes in estimates of reclamation and closure

economic estimates or actuarial assumptions are

costs in earnings at the time of revision. Our accounting

deferred. We amortize the deferred amounts when the

policy for reclamation and closure costs will change

net gains or losses exceed 10% of the accumulated

on adoption of FAS 143 in 2003 (refer to note 2).

post-retirement benefit obligation at the beginning

At December 31, 2002, accrued costs at inactive mines

of the year. The amortization period is the average

totaled $169 million (2001 – $250 million).

remaining life expectancy of participants. For 2002,

we recorded a benefit expense of $nil (2001 – $2 million

Estimates of reclamation and closure costs reflect:

credit, 2000 – $1 million expense).

> work that is required under applicable laws and

regulations;

We have assumed a health care cost trend of 7% in

> obligations under existing permits; and

2002, 7.5% in 2001 and 8% in 2000, decreasing

> where applicable, government mandated

ratability to 5% in 2006 and thereafter. The assumed

assumptions and methodologies.

health care cost trend had a minimal effect on the

amounts reported. A one percentage point change in

the assumed health care cost trend rate at December 31,

2002 would have increased or decreased the post-

retirement benefit obligation by $2 million and would

have had no significant effect on the benefit expense

for 2002.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

18 > DEFERRED INCOME TAXES
Net deferred income tax liabilities

to about $1,251 million at December 31, 2002, and

$1,499 million at December 31, 2001. If the undistributed

2002

2001

earnings of those foreign subsidiaries were not

At December 31

Assets

Operating loss carryforwards

389

$ 312

Reclamation and closure costs

Property, plant and equipment

Post-retirement benefit plan obligations

Alternative minimum tax

credit carryforwards

Other

Gross deferred tax assets

Valuation allowances

Net assets

Liabilities

Property, plant and equipment

Other

110

763

(476)

287

(487)

(16)

111

645

(433)

212

(444)

(59)

indefinitely invested, a deferred income tax liability of

$63 million at December 31, 2002, and $75 million at

December 31, 2001, would be recorded.

Operating loss carryforwards amount to $1,456 million,

of which $1,032 million do not expire and $424 million

expire at various times over the next 20 years.

Alternative minimum tax credit carryforwards amount

to $110 million and do not expire.

Our income tax returns for the major jurisdictions where

we operate have been fully examined through the follow-

ing years: Canada – 1997, United States – 1998 and Peru

– 2000. Other than the matter described in note 22C

(216)

$ (291)

relating to interest and penalties associated with

Net deferred income tax liabilities consist of:

a Peruvian tax assessment, we are not aware of any

Non-current assets (note 14)

Non-current liabilities

(261)

–

tax matters outstanding in any country in which we

(291)

operate that could potentially have a material adverse

(216)

$ (291)

effect on our financial position or results of operations.

A Recognition and Measurement

B Valuation allowances

We recognize deferred income tax assets and liabilities

Because we operate in multiple tax jurisdictions, we

for the future tax consequences of temporary

consider the need for a valuation allowance on a

differences between the carrying amounts of assets and

country-by-country basis, taking into account the effects

liabilities in our balance sheet and their tax bases. We

of local tax law. When a valuation allowance is not

measure deferred income tax assets and liabilities using

recorded, we believe that there is sufficient positive

enacted rates that apply to the years when we expect to

evidence to support this conclusion.

recover or settle the temporary differences. Our income

tax expense or recovery includes the effects of changes

When facts or circumstances change, we record an

in our deferred income tax assets and liabilities.

adjustment to a valuation allowance to reflect the

We reduce deferred income tax assets by a valuation

economic effects of the change. The main factors that

allowance if we decide it is more likely than not that

affect the amount of a valuation allowance are:

some or all of the assets will not be realized.

> expected levels of future taxable income;

> opportunities to implement tax plans that affect

We measure and recognize deferred income tax assets

whether tax assets can be realized; and

and liabilities based on: our interpretation of relevant

> the nature and amount of taxable temporary

tax legislation; our tax planning strategies; estimates of

differences.

the tax bases of individual assets and liabilities; and the

deductibility of expenditures for income tax purposes.

Levels of taxable income are affected by, among other

We will recognize the effects of changes in our assess-

things, prevailing gold prices; cash operating costs;

ment of these estimates and factors when they occur.

changes in proven and probable gold reserves;

and changes in interest rates and foreign currency

We have not recorded deferred income taxes relating to

exchange rates. It is reasonably possible that

undistributed earnings of foreign subsidiaries that are

circumstances could occur resulting in a material

indefinitely invested. Undistributed earnings amounted

change in the valuation allowances.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

19 > CAPITAL STOCK
A Authorized capital

Our authorized capital stock includes an unlimited

number of common shares, 9,764,929 First preferred

shares, Series A (issued nil); 9,047,619 Series B (issued

Summarized financial information for HCI

For the years ended December 31

2002

2001

Total revenues and other income

$ 203

$ 175

Less: costs and expenses

Income (loss) before taxes

191

(1)

281

$ (106)

(84)

2000

$ 203

233

(30)

nil); 1 Series C special voting share (issued 1); and

Net loss

14,726,854 Second preferred shares Series A (issued nil).

B Homestake Canada Inc. (“HCI”)

Exchangeable Shares

In connection with a 1998 acquisition, HCI issued

11.1 million HCI exchangeable shares. Each HCI

At December 31

Assets

Current assets

Non-current assets

Total assets

exchangeable share is exchangeable for 0.53 of a

Liabilities and shareholders’ equity

Barrick common share at any time at the option of the

Other current liabilities

holder and has essentially the same voting, dividend

Notes payable

(payable in Canadian dollars), and other rights as

0.53 of a Barrick common share. At December 31, 2002,

1.6 million (2001 – 3 million) HCI exchangeable shares

were outstanding, which are equivalent to 0.8 million

Barrick common shares (2001 – 1.6 million common

Other long-term liabilities

Deferred income taxes

Shareholders’ equity

2002

2001

236

345

$ 327

$ 388

407

122

416

121

(295)

(237)

$ 327

$ 388

shares). The equivalent common share amounts are

C Dividends

reflected in the number of common shares outstanding.

In 2002, we declared and paid dividends in US dollars

totaling $0.22 per share (2001 – $0.22 per share,

At any time on or after December 31, 2008, or when

2000 – $0.22 per share).

fewer than 1.4 million HCI exchangeable shares are

outstanding, we have the right to require the exchange

of each outstanding HCI exchangeable share for 0.53

20 > EMPLOYEE STOCK-BASED COMPENSATION
A Common stock options

of a Barrick common share.

At December 31, 2002, 22 million common stock options

were outstanding, expiring at various dates to

December 2, 2012. The exercise price of the options

is set at our closing share price on the day before the

grant date. They vest over four years at a rate of one

quarter each year, beginning in the year after granting,

and are exercisable over 10 years. At December 31,

2002, 5 million (2001 – 9 million, 2000 – 6 million)

common shares, in addition to those currently

outstanding, were available for granting options.

Besides the common stock options in the table on page 81,

we are obliged to issue about 0.5 million common shares

(2001 – 0.7 million common shares) in connection with

outstanding stock options assumed as part of the Sutton

acquisition. The options have an average exercise price

of C$19.68 (2001 – C$19.34) and an average remaining

term of three years (2001 – four years).

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Stock option activity (shares in millions)

2002

2001

2000

Shares (number)

Average price

Shares (number)

Average price

Shares (number)

Average price

C$ options

At January 1

Granted

Exercised

Cancelled or expired

At December 31

US$ options

At January 1

Granted

Exercised

Cancelled or expired

At December 31

(4)

(2)

–

(2)

(1)

$ 24.71

$ 24.79

$ 33.99

–

$ 11.99

$ 25.10

–

(4)

–

$ 24.32

$ 22.77

$ 29.66

$ 9.03

$ 13.44

$ 26.10

–

(4)

–

$ 24.24

$ 22.95

$ 32.77

$ 13.72

–

$ 29.45

Stock options outstanding (shares in millions)

Range of exercise prices

Shares (number)

Average price

Average life (years)

Shares (number)

Average price

Outstanding

Exercisable

C$ options

$ 22.55 - $ 31.05
$ 31.25 - $ 44.25

US$ options

$ 8.96 - $17.68
$ 17.75 - $ 40.66

17
2
19

2
1
3

$ 25.43
$ 39.46

$ 12.24
$ 25.22

8
4
8

5
2
4

7
2
9

1
1
2

$ 26.73
$ 39.84

$ 13.62
$ 25.47

Under APB 25, we recognize compensation cost for stock

Option value information

options in earnings based on the excess, if any, of the

quoted market price of the stock at the grant date of the

For the years ended December 31
(per share and option amounts in dollars)

award over the option exercise price. Generally, the

exercise price for stock options granted to employees

equals the fair market value of our common stock at the

date of grant, resulting in no compensation cost.

FASB Statement No. 123 (Accounting for Stock-Based

Compensation) (FAS 123) encourages, but does not

Fair value per option

Valuation assumptions:

2002

$ 6.40

2001

$ 5.10

2000

$ 5.90

Expected option term (years)

Expected volatility

Expected dividend yield

Risk-free interest rate

40%

1.4%

5.0%

30%

1.4%

5.5%

30%

1.4%

6.0%

require, companies to record compensation cost for stock-

Pro forma effects

based employee compensation plans based on the fair

Net income (loss), as reported

$ 193

$ 96

$(1,189)

value of options granted. We have elected to continue to

Stock-option expense

(21)

(31)

(30)

account for stock-based compensation using the intrinsic

Pro forma net income (loss)

$ 172

$ 65

$(1,219)

value method prescribed in Accounting Principles Board

Net income (loss) per share:

Opinion No. 25 (Accounting for Stock Issued to

Employees) (APB 25) and its related interpretations, and

to provide disclosures of the pro forma effects of

adoption had we recorded compensation expense under

the fair value method.

As reported 1
Pro forma 1

1. Basic and diluted.

$ 0.36

$ 0.32

$ 0.18

$ 0.12

$ (2.22)

$ (2.28)

B A R R I C K A N N U A L R E P O R T 2 0 0 2

B Restricted stock units

In 2001, we put in place a restricted stock unit incentive

21 > PENSION PLANS
A Defined benefit pension plans

plan (RSU Plan). Under the RSU Plan, a participant is

We have various qualified defined benefit pension plans

granted a number of RSUs, where each unit has a value

that cover certain of our United States employees and

equal to one Barrick common share at the time of

provide benefits based on employees’ years of service.

grant. Each RSU, which vests and will be paid out on

Our policy for these plans is to fund, at a minimum, the

the third anniversary of the date of grant, has a value

amounts necessary on an actuarial basis to provide

equivalent to the market price of a Barrick common

enough assets to meet the benefits payable to plan

share. RSUs are recorded at their fair value on the grant

members under the Employee Retirement Income

date, with a corresponding amount recorded as deferred

Security Act of 1974. Independent trustees administer

compensation that is amortized on a straight-line basis

assets of the plans, which are invested mainly in fixed-

over the vesting period. Changes in the fair market

income securities and equity securities.

value of the units during the vesting period

are recorded, with a corresponding adjustment to the

As well as the qualified plans, we have nonqualified

carrying amount of deferred compensation. Compen-

defined benefit pension plans covering certain

sation expense for the year ended December 31, 2002

employees and a director of the Company. An irrevocable

was $3 million (2001 – $nil). At December 31, 2002,

trust (“rabbi trust”) was set up to fund these plans. The

the weighted average contractual life was two years.

diversified assets held in this trust, which include cash

At December 31, 2002, the fair value of outstanding

of $1 million and short-term investments of $30 million

RSUs was $7 million and is included in other long-

are recorded in our consolidated balance sheet and

term obligations.

RSU activity

Balance at December 31, 2000

Granted

Balance at December 31, 2001

Cancelled

Balance at December 31, 2002

RSUs
(in thousands)

Fair value per
unit (in dollars)

–

495

(30)

465

–

15.49

15.95

19.74

$ 15.41

accounted for under our accounting policies for such

assets. At December 31, 2002, the fair value of assets

held in the trust was $31 million (2001 – $47 million).

Our pension expense includes the cost of employee

benefits earned in the year, interest expense on the

accrued benefit obligation, the expected return on the

market value of plan assets, and amortization of

deferred actuarial gains and losses.

Actuarial gains and losses arise when the actual return

on plan assets for a period differs from the expected

return on plan assets for that period, and when actual

experience causes the expected and actuarial accrued

benefit obligations to differ at the end of the year. We

amortize actuarial gains and losses over the average

remaining life expectancy of participants.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Pension expense

Pension plans where ABO exceeds the fair

For the years ended December 31

2002

2001

2000

value of plan assets

Expected return on plan assets

(17)

$ (21)

At December 31

Service cost for benefits earned

Interest cost on benefit obligation

Prior service cost

Actuarial gains
Special termination charges 1

Effect of curtailments/settlements

–

(1)

–

(2)

(4)

(1)

In 2001, the planned closure of certain mine sites caused some terminated
employees at the sites to receive extra pension entitlements. As well, certain
employees with change of control clauses in their employment agreements
became entitled to enhanced pension benefits on the closing of the merger.
We recorded a charge of $39 million included in merger and related costs
to reflect the impact of these events. In 2000, we recorded a charge of
$10 million for special termination benefits arising due to the closure of the
Homestake mine in provisions for mining assets and other unusual charges.

B Defined contribution pension plans

Certain employees take part in defined contribution

employee benefit plans. We also have a retirement

plan for certain officers of the Company, under which we

contribute 15% of the officer’s annual salary and bonus.

Our share of contributions to these plans was $12 million

in 2002, $12 million in 2001 and $11 million in 2000.

C Defined benefit pension plan

actuarial information

Projected benefit obligation

ABO

Fair value of plan assets

Benefit asset (liability)

At December 31

Prepaid pension asset

Accrued benefit plan liability – current

Accrued benefit plan liability – non-current

Additional minimum liability (note 9)

2002

$ 193

$ 132

2001

$ 238

$ 236

$ 184

2002

2001

(7)

(48)

(7)

(1)

(57)

(5)

(55)

(58)

Actuarial assumptions

For the years ended December 31

Discount rate

Expected return on plan assets

Compensation increases

2002

6.50%

8.50%

5.00%

2001

6.75%

8.50%

5.00%

2000

7.25%

8.50%

5.00%

Sensitivity analysis of actuarial assumptions1

Effect on ABO

Effect on earnings

Expected return on plan assets

Discount rate

1. Effect of a one-percent change

–

$ 18

$ 1

$ 3

Accumulated benefit obligation (ABO)

2002

2001

22 > COMMITMENTS AND CONTINGENCIES
A Contingencies

Balance at January 1

$ 279

$ 238

Certain conditions may exist as of the date the financial

Service cost for benefits earned

Interest cost on benefit obligation

Plan amendments and special terminations

Actuarial (gains) losses

Benefits paid

Curtailments

Balance at December 31

Fair value of plan assets

Balance at January 1

Actual return on plan assets

Company contributions

Benefits paid

Balance at December 31

Funded status

Unrecognized net actuarial (gains) losses

Net liability recognized

–

(1)

(70)

–

(24)

(11)

statements are issued, which may result in a loss to the

Company but which will only be resolved when one or

more future events occur or fail to occur. Management

and, where appropriate, legal counsel, assess such

contingent liabilities, which inherently involves an

exercise of judgement.

$ 227

$ 279

$ 235

$ 255

proceedings that are pending against us or unasserted

In assessing loss contingencies related to legal

(2)

(70)

$ 170

(57)

(48)

(24)

$ 235

(44)

(9)

(53)

claims that may result in such proceedings, the

Company and its legal counsel evaluate the perceived

merits of any legal proceedings or unasserted claims as

well as the perceived merits of the amount of relief

sought or expected to be sought.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

If the assessment of a contingency suggests that it is

On February 23, 1998, Inmet filed suit against HCI in

probable that a material loss has been incurred and the

the British Columbia Supreme Court, disputing the

amount of the liability can be estimated, then the

termination of the agreement and alleging that HCI

estimated liability is accrued in the financial statements.

had breached the agreement. On January 15, 2002,

If the assessment suggests that a potentially material

the Supreme Court of British Columbia released its

loss contingency is not probable but is reasonably

decision in the matter and found in favor of Inmet and

possible, or is probable but cannot be estimated, then

against HCI. Specifically, the Court held that Inmet

the nature of the contingent loss, together with an

should be awarded equitable damages in the amount

estimate of the range of possible loss, if determinable,

of C$88.2 (US$59) million, which was accrued at

are disclosed. Loss contingencies considered remote are

December 31, 2001. The Court did not award Inmet

generally not disclosed unless they involve guarantees,

pre-judgement interest. Inmet requested the Court

in which case we disclose the nature of the guarantee.

to re-open the trial to let Inmet make submissions on

B Environmental

its claim for pre-judgement interest from the date of

the breach by HCI. The request to re-open was denied

Our mining and exploration activities are subject to

by the Court on May 17, 2002.

various federal, provincial and state laws and regulations

governing the protection of the environment. These

On February 7, 2002, HCI filed a Notice of Appeal of

laws and regulations are continually changing and

the decision with the British Columbia Court of Appeal.

generally becoming more restrictive. We conduct our

Inmet filed a Cross-Appeal of the decision regarding

operations so as to protect public health and the

pre-judgement interest. A letter of credit of about

environment, and we believe that our operations are

C$95 million was posted on August 20, 2002 by HCI

materially in compliance with all applicable laws and

with the British Columbia Court of Appeal, pending a

regulations. We have made, and expect to make in the

decision on the appeal.

future, expenditures to meet such laws and regulations.

Bre-X Minerals

The Comprehensive Environmental Response,

On April 30, 1998, we were added as a defendant in a

Compensation and Liability Act imposes heavy liabilities

class action lawsuit initiated against Bre-X Minerals Ltd.,

on persons who discharge hazardous substances.

certain of its directors and officers or former directors

The Environmental Protection Agency publishes a

and officers and others in the United States District

National Priorities List (“NPL”) of known or threatened

Court for the Eastern District of Texas, Texarkana

releases of such substances. Homestake’s former

Division. The class action alleges, among other things,

uranium millsite near Grants, New Mexico is listed on

that statements made by us in connection with our

the NPL.

C Litigation and claims

Inmet litigation

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

In October 1997, Homestake Canada Inc. (“HCI”), a

investigation undertaken by us in late 1996.

wholly-owned subsidiary of Barrick, entered into an

agreement with Inmet Mining Corporation (“Inmet”) to

On July 13, 1999, the Court dismissed the claims against

purchase the Troilus mine in Quebec for $110 million

us and several other defendants on the grounds that

plus working capital. In December 1997, HCI terminated

the plaintiffs had failed to state a claim under United

the agreement after deciding that, on the basis of due

States securities laws. On August 19, 1999, the plaintiffs

diligence studies, conditions to closing the arrangement

filed an amended complaint restating their claims

would not be satisfied.

against us and certain other defendants and on June 14,

2000, filed a further amended complaint, the Fourth

Amended Complaint.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

On March 31, 2001, the Court granted in part and denied

from what we have previously assumed with a resulting

in part our Motion to Dismiss the Fourth Amended

increase in current and deferred income taxes. While we

Complaint. As a result, we remain a defendant in the

believe the tax assessment is incorrect and we will

case. We believe that the remaining claims against us

appeal the decision, the full life of mine effect on our

are without merit. We filed our formal answer to the

current and deferred income tax liabilities of

Fourth Amended Complaint on April 27, 2001, denying

$141 million is recorded at December 31, 2002, as well

all relevant allegations of the plaintiffs against us.

as other payments of about $21 million due for

Discovery in the case has been stayed by the Court

periods through 2002.

pending the Court’s decision on whether or not

to certify the case as a class action. The amount of

We intend to pursue all available administrative and

potential loss, if any, which we may incur arising out

judicial appeals. If we are successful on appeal and our

of the plaintiffs’ claims is not presently determinable.

original asset valuation is confirmed as the appropriate

Blanchard complaint

tax basis of assets, we would benefit from a $141 million

reduction in tax liabilities recorded at December 31,

On January 7, 2003, we were served with a Complaint

2002. The effect of this contingent gain, if any, will be

for Injunctive Relief by Blanchard and Company, Inc.

recorded in the period the contingency is resolved.

(“Blanchard”), and Herbert Davies (“Davies”). The

complaint, which is pending in the US District Court

Under Peruvian law, we are not required to make

for the Eastern District of Louisiana, also names

payment pending the outcome of the appeal process,

J.P. Morgan Chase & Company (“J.P. Morgan”) as the

which routinely takes several years.

defendant, along with an unspecified number of

additional defendants to be named later. The complaint

We have not provided for $51 million of potential

alleges that we and bullion banks with which we entered

interest and penalties assessed in the audit. Even if the

into spot deferred contracts have manipulated the

tax assessment is upheld, we believe that we will prevail

price of gold, in violation of US antitrust laws and the

on the interest and penalties part, because the

Louisiana Unfair Trade Practices and Consumer

assessment runs counter to applicable law and previous

Protection Law. Blanchard alleges that it has been

Peruvian tax audits. The potential amount of interest

injured as a seller of gold due to reduced interest in gold

and penalties will increase over time while we contest

as an investment. Davies, a customer of Blanchard,

the tax assessment. A liability for interest and penalties

alleges injury due to the reduced value of his gold

will only be recorded should it become probable

investments. The complaint does not seek damages, but

that SUNAT’s position on interest and penalties will be

seeks an injunction terminating certain of our trading

upheld, or if we exhaust our appeals.

agreements with J.P. Morgan and other bullion banks.

We intend to defend the action vigorously.

Other

Peruvian tax assessment

From time to time, we are involved in various claims,

legal proceedings and complaints arising in the ordinary

On December 27, 2002, one of our Peruvian subsidiaries

course of business. We are also subject to reassessment

received an income tax assessment of $41 million,

for income and mining taxes for certain years. We do

excluding interest and penalties, from the Peruvian tax

not believe that adverse decisions in any pending or

authority SUNAT. The tax assessment relates to a

threatened proceedings related to any potential tax

recently completed tax audit of our Pierina Mine for the

assessments or other matters, or any amount which

1999-2000 fiscal years. The assessment mainly relates

we may be required to pay by reason thereof, will have

to the revaluation of the Pierina mining concession and

a material adverse effect on our financial condition or

associated tax basis. Under the valuation proposed by

future results of operations.

SUNAT, the tax basis of Pierina assets would change

B A R R I C K A N N U A L R E P O R T 2 0 0 2

D Commitments

In the most significant of these programs – the spot

We have entered into various commitments in the

deferred and variable-price sales contracts – the

ordinary course of business, including commitments

contracts set a price for future gold and silver sales

to perform assessment work and other obligations

with significant flexibility to capture gold price upside

necessary to maintain or protect our interests

in periods of higher prices. This effect is achieved

in mining properties, financing and other obligations

as a result of our strong balance sheet, large reserves

to joint ventures and partners under venture and

and diversified operations.

partnership agreements, and commitments under

federal and state/provincial environmental, health

We mainly use over-the-counter (“OTC”) derivative

and safety permits.

23 > DERIVATIVE INSTRUMENTS
A Use of derivative instruments

contracts. These privately negotiated agreements, which

provide superior terms compared to exchange-traded

contracts, allow us to obtain favorable credit, tenor

and flexibility terms. We do not enter into derivative

We use derivative financial instruments to reduce

instruments which we would consider leveraged.

or eliminate the inherent risks of certain identifiable

transactions and balances that occur in the normal

B Accounting for derivative instruments

course of our business. The inherent risks in these

and hedging activities

transactions and balances arise from changes in

Under US GAAP rules, companies are required

commodity prices (gold and silver), interest rates and

to include on their balance sheet the fair value of

foreign currency exchange rates. The purpose of our

derivative instruments, which are defined under FAS 133.

derivative program is to ensure that disadvantageous

This definition excludes certain derivative instruments

changes in the values of cash flows from these

from its scope, including instruments that meet the

transactions and balances are offset by changes in the

definition of “normal sales contracts”, and whose

values of the derivatives. We do not hold derivatives for

obligations are met by physical delivery of gold or silver,

the purpose of speculation; our derivative program is

as set out in paragraph 10(b). Our spot deferred and

designed to enable us to plan our operations on the

variable price sales contracts meet the terms of this

basis of secure assumptions that will not be jeopardized

paragraph, so FAS 133 does not apply to them.

by future movements of gold and silver prices, interest

We apply our normal revenue recognition principles

rates and currency exchange rates.

to our normal sales contracts, which results in

recognition of proceeds from the contracts as revenue

In the normal course of our business, the main types of

at the date of physical delivery.

derivatives we hold and/or issue are:

Spot deferred and variable-price sales contracts: These

contracts provide for the sale of future gold production

in fixed quantities with delivery dates at our discretion

over a period of up to 15 years.

Interest rate swaps: These instruments are used to

counteract the volatility of variable short-term interest

rates by substituting fixed interest rates over longer

terms on cash and short-term investments.

Foreign currency contracts: These instruments are used

for the cash flows at our operating mines from

forecasted expenditures denominated in Canadian and

Australian dollars to insulate them from currency

fluctuations.

Gold lease rate swap contracts: These contracts are

used to manage gold lease rate exposure.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

All other derivatives are recognized on our balance

We formally document all relationships between

sheet at their fair value as either an asset or a liability.

derivative instruments and the items they are hedging,

On the date we enter into a derivative contract,

as well as the risk-management goals and strategy for

we designate the derivative as either:

entering into hedge transactions. This documentation

> a fair value hedge of a recognized asset or liability;

includes linking all derivatives designated as fair-value,

> a cash flow hedge of either a forecasted transaction

cash flow, or foreign-currency hedges to either specific

or the variability of cash flows associated with a

assets and liabilities in the balance sheet, specific firm

recognized asset or liability;

commitments or specific forecasted transactions.

> a foreign currency cash flow hedge of forecasted

transactions; or

For these documented relationships, we formally assess

> an instrument that is held for non-hedging purposes.

(both at the start of the hedge and on an ongoing basis)

whether the derivatives used in hedging transactions

Fair-value hedges of recognized assets or liabilities:

are highly effective in offsetting changes in the fair

we record in earnings any changes in the fair value

value or cash flows of hedged items, and whether those

of the derivatives as they occur, along with changes

derivatives are expected to remain highly effective in

in the fair value of the hedged asset or liability.

the future. If it is clear that a derivative is not highly

Derivatives that qualify as cash flow hedges: we record

effective as a hedge, we stop hedge accounting

changes in the fair value of the derivative in Other

prospectively.

Comprehensive Income (OCI) until earnings are affected

by the forecasted transaction.

Other circumstances under which we stop hedge

Interest-rate swaps designated as hedges of future

accounting prospectively include:

interest receipts arising on our cash and short-term

> a derivative expires or is sold, terminated, or

investments: gains and losses on the derivatives are

exercised;

recorded in OCI until the related interest receipts are

> it is no longer probable that the forecasted transaction

recorded in earnings, at which time the gains and losses

will occur; or

are transferred to interest income.

> if we decide to remove the designation as a hedge

Foreign-currency contracts for Canadian or Australian

from a derivative.

capital and operating expenditures at our operating

mines: gains and losses on the derivatives are recorded

If it is clear that a forecasted transaction will not occur

in OCI until these costs are recorded in earnings,

by the originally specified time, or within a further

at which time the gains and losses are transferred

two-month period, gains and losses accumulated in OCI

to amortization or operating costs.

are recognized at once in earnings.

Non-hedge derivatives: Changes in the fair value are

recorded in earnings as they occur.

In all situations in which hedge accounting stops and

a derivative remains outstanding, future changes in its

All cash flows relating to derivative instruments are

fair value are recognized in earnings as they occur.

included under operating cash flows.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

C Gold and silver contracts outstanding as at December 31, 2002

Maturity/Scheduled for delivery in

2003

2004

2005

2006

2007

2008+

Total

Gold contracts

Spot deferred contracts

Ounces (thousands)

Average price per ounce

Variable price gold sales and

option contracts

With “caps”

Ounces (thousands)

Average price per ounce

at cap expiry date

With “caps” and “floors”

Ounces (thousands)

Cap price per ounce

Floor price per ounce

Total gold ounces (thousands)

Average price per ounce

Silver contracts

Spot deferred contracts

Ounces (thousands)

Average price per ounce

Written silver call options

Ounces (thousands)

Average exercise price per ounce

Total silver ounces (thousands)

Average price per ounce

2,800

$ 340

1,350

$ 345

1,550

$ 335

1,540

$ 338

1,500

$ 340

7,200

$ 343

15,940

$ 341

–

250

300

250

$ 344

$ 310

$ 317

$ 332

900

2,000

$ 369

$ 345

150

$ 310

$ 280

3,200

$ 339

11,000

$ 4.95

3,750

$ 5.27

14,750

$ 5.03

–

1,650

$ 339

1,850

$ 332

1,790

$ 337

1,500

$ 340

8,100

$ 346

9,000

$ 5.14

5,000

$ 5.28

14,000

$ 5.19

9,000

$ 5.14

2,000

$ 5.00

11,000

$ 5.11

3,300

$ 5.19

3,000

$ 5.19

–

3,300

$ 5.19

3,000

$ 5.19

–

150

$ 310

$ 280

18,090

$ 341

35,300

$ 5.09

10,750

$ 5.22

46,050

$ 5.12

We also have off-take contracts which allow (but do

The largest single counterparty as of December 31,

not commit) us to sell 1.7 million ounces of gold spread

2002 made up 13% of outstanding gold sales

over 10 years, at then prevailing spot prices.

commitments.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Spot deferred gold sales contracts

Variable-price gold sales contracts

We have entered into spot deferred gold sales contracts,

Variable price gold sales contracts are contracts to

with various counterparties, that fix selling prices at

deliver a specified quantity of gold on a future date

interim delivery dates for future gold production, and

determined by us. The contracts have a final delivery

which act as an economic hedge against possible price

date of up to 15 years from the start date, but we have

fluctuations in gold. The contracts have a final delivery

the right to set a delivery date at any time during this

date of up to 15 years from the start date, but we have

15-year period. All of the variable-price gold sales

the right to set a delivery date for any time during

contracts have expected delivery dates beyond 2007.

this period. At the time an interim delivery date is

The contract price equals the gold spot price on the

rescheduled, the contract price is adjusted based on the

interim delivery date subject to a specified maximum

difference between the prevailing forward gold market

(“cap”) based on market conditions in the years shown

price and the original contract price.

in the table on page 88, plus a fixed premium payable

to us. The contract price will be adjusted in the same

The average price of the spot deferred gold sales

manner as price adjustments to spot deferred contracts

contracts in the table on page 88 reflects fixed prices

for the period from these interim delivery dates to the

at interim delivery dates and expected future price

expected delivery date beyond 2007. Certain of these

assumptions for periods where expected delivery dates

contracts also have a specified minimum (“floor”) price.

differ from interim delivery dates. The large majority

of contracts are fixed through 2006. The expected

Spot deferred silver sales contracts and written

prices incorporate an average gold lease rate

silver call options

assumption of 1.5% and assumptions of US dollar

Spot deferred silver sales contracts have the same

interest rates consistent with market quotations for

delivery terms and pricing mechanism as spot deferred

such rates. Variations between the gold lease rate and

gold sales contracts. A group of these contracts totaling

interest rate assumptions and the actual gold lease

14.3 million ounces of silver are accounted for as normal

rates and interest rates will affect the final realized

sales contracts, as we physically deliver silver production

selling prices. Gold lease rate exposure is accounted for

into the contracts. For a separate group of contracts

separately from our spot deferred gold sales contracts,

totaling 21 million ounces, we have elected hedge

and the economic impact flows through our earnings

accounting treatment, and we designated these contracts

each quarter as part of non-hedge derivative gains

as cash flow hedges beginning on November 8, 2002.

(losses). This gold lease rate exposure is 6.4 million

ounces spread from 2004 to 2012, mainly for contracts

Changes in fair value of our written silver call options

with expected delivery dates beyond 2006.

are recorded in earnings as they occur.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

D Other derivative instruments outstanding as at December 31, 2002

2003

2004

2005

2006

2007

2008+

Total

Maturity

Interest rate contracts

Receive fixed – swaps and swaptions

Notional amount (millions)

Fixed rate (%)

Pay fixed – swaps and swaptions

Notional amount (millions)

Fixed rate (%)

Net notional position

Total return swaps

Notional amount (millions)

Foreign currency contracts

Canadian dollar forwards

C$ (millions)

Average price (US¢)

Canadian dollar min-max contracts

C$ (millions)

Average cap price (US¢)

Average floor price (US¢)

Australian dollar forwards

A$ (millions)

Average price (US¢)

Australian dollar min-max contracts

A$ (millions)

Average cap price (US¢)

Average floor price (US¢)

Fuel contracts

Barrels WTI (thousands)

Cap

Floor

$ 250

3.5%

2.7%

$ 100

3.0%

$ 475

5.6%

–

$ 100

$ 475

–

$ 250

–

$ 118

0.64

0.63

–

$ 101

0.65

$ 173

0.65

0.63

$ 175

0.51

$ 311

0.51

$ 283

0.51

0.52

$ 339

0.55

0.52

240

0.52

0.51

–

0.52

0.51

–

0.52

0.51

–

$ 344

5.6%

$ (344)

–

$ 900

4.5%

$ 344

5.6%

$ 556

$ 310

0.64

$ 173

0.65

0.63

$ 779

0.51

$ 369

0.55

0.52

240

–

Our interest rate and foreign currency contracts are

> we have elected receive fixed interest rate swaps

recorded at fair value on our balance sheet, with

with a total notional amount of $650 million to be

changes in fair value recorded in earnings as they

accounted for as cash flow hedges of expected future

occur, with the following exceptions:

interest receipts arising on our cash and short-term

> we have elected cash flow hedge accounting

investments (note 28); and we have elected receive

treatment for Canadian dollar foreign currency

fixed interest rate swaps with a total notional amount

contracts with a total notional amount of

of $250 million to be accounted for as a fair value

C$457 million, and Australian dollar foreign

hedge of fixed-rate debentures (refer to note 16A).

currency contracts with a total notional amount

> we have elected an amortizing pay fixed interest rate

of A$1,065 million;

swap with a total notional amount of $194 million

as at December 31, 2002 to be accounted for as

a cash flow hedge of future interest payments relat-

ing to the project financing for Bulyanhulu (refer to

note 16B).

B A R R I C K A N N U A L R E P O R T 2 0 0 2

E Unrealized fair value of derivative instruments

In the next twelve months, we expect to transfer gains

(excluding normal sales contracts)

of $27 million from OCI to earnings. For the year ended

2002

2001

(16)

(42)

At January 1

Derivative instruments entered into or settled

Change in fair value of derivative instruments:

Non-hedge derivative gains (losses)

Cash flow hedges

Fair value hedges

At December 31

(2)

(6)

(7)

–

December 31, 2002, the amount of hedge ineffectiveness

recorded and recognized in non-hedge derivative gains

(losses) was a loss of $1 million.

G Non-hedge derivative gains (losses)

For the years ended December 31

Commodity contracts

(16)

Currency contracts

Interest and lease rate contracts

2002

(2)

(12)

(6)

2001

(15)

(9)

The fair values of recorded derivative related assets

and liabilities reflect the netting of the fair values

of individual derivative instruments, and amounts due

H Credit and market risks

By using derivative instruments, we expose ourselves

to credit and market risk. Market risk is the risk that

the value of a financial instrument might be adversely

affected by a change in commodity prices, interest

rates, gold lease rates, or currency exchange rates.

We manage the market risk associated with commodity

prices, interest rate, gold lease rate, and foreign

currency contracts by establishing and monitoring

parameters that limit the types and degree of market

risk that may be undertaken.

to/from counterparties that arise from derivative

instruments, when the conditions of FIN No. 39,

Offsetting of Amounts Related to Certain Contracts,

have been met. Amounts receivable from counterparties

that have been offset against derivative liabilities

totaled $16 million at December 31, 2002.

F Change in fair value of cash flow

hedge contracts

Commodity
contracts

Foreign
currency
contracts

Interest
rate
contracts

At January 1, 2001

(4)

Losses transferred

to earnings

29)1

At December 31, 2001

$ 25

–

Change in fair value

(4)

Gains transferred

Total

(4)

to earnings

(12)1

(7)2

(6)3

(25)

At December 31, 2002

1.
2.
3.

Included under revenues and by-product credits
Included under operating expenses
Included under interest income

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Credit risk is the risk that a counterparty might fail to

fulfill its performance obligations under the terms of a

24 > FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is defined as the value at which positions

derivative contract, or in the case of total return swaps,

could be closed out or sold in a transaction with a

the risk that a deterioration in credit quality of the

willing and knowledgeable counterparty over a period

underlying reference asset, or a credit default event, will

of time consistent with our risk management or

give rise to a loss under the derivative instrument. If

investment strategy.

a counterparty fails to fulfill its performance obligations

under a derivative contract, our credit risk will equal

The accounting for an asset or liability may differ based

the fair value gain in a derivative. For our total return

on the type of instrument and/or its use in a risk

swaps, the maximum amount of credit risk is limited

management or investing strategy. The measurement

to the notional amount of the contract, plus or minus

approaches used in financial statements include

unrealized gains or losses. When the fair value of a

the following:

derivative contract is positive, this indicates that the

> recorded at fair value on the balance sheet with

counterparty owes us, thus creating a repayment risk

changes in fair value recorded each period in

for us. When the fair value of a derivative contract

the earnings;

is negative, we owe the counterparty and, therefore,

> recorded at fair value on the balance sheet with

we assume no repayment risk. We minimize our credit

changes in fair value recorded each period in a

(or repayment) risk in derivative instruments by:

separate component of shareholders’ equity and

> entering into transactions with high-quality

as part of other comprehensive income;

counterparties whose credit ratings are generally

> recorded at cost (less other-than-temporary

“AA” or higher;

impairments) with changes in fair value not recorded

> limiting the amount of exposure to each counterparty;

in the financial statements but disclosed in the

> monitoring the financial condition of counterparties;

notes thereto; or

and

> recorded at the lower of cost or market.

> ensuring that the reference assets in total return

swaps are highly diversified so that concentrations

Fair value is based on quoted market prices, where

of credit risk do not arise.

available. If listed prices or quotes are not available, fair

value is based on internally developed models that

When we have more than one outstanding derivative

primarily use market-based or independent information

transaction with the same counterparty and we also

as inputs. These methods may produce a fair value

have a legally enforceable master netting agreement

calculation that may not be indicative of net realizable

with that counterparty, the net credit exposure

value or reflective of future fair values.

represents the net of the positive and negative

exposures with that counterparty. When there is a net

negative exposure, we regard our credit exposure

to the counterparty as being zero. The net mark-to-

market position with a particular counterparty

represents a reasonable measure of credit risk when

there is a legally enforceable master netting agreement

(i.e., a legal right to a setoff of receivable and payable

derivative contracts) between ourselves and that

counterparty. Our policy is to use master netting

agreements with all counterparties.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Fair value information
At December 31

Financial assets

Cash and equivalents 1
Accounts receivable 1
Available-for-sale securities 2
Derivative assets 3

Financial liabilities

Accounts payable 1
Long-term debt 4
Derivative liabilities 3

2002

2001

Carrying
amount

Estimated
fair value

Carrying
amount

Estimated
fair value

$ 1,044

574

115

$ 1,261

164

781

164

858

737

175

802

737

175

853

$ 1,031

$ 1,108

$ 1,050

$ 1,101

1. Fair values of cash and deposits with banks, accounts receivable and accounts payable approximate their carrying amounts due to their short-term nature

and generally negligible credit losses.

2. Our investment in debt and equity securities are recorded at their estimated fair value. Quoted market prices, when available, are used to determine

fair value. If quoted market prices are not available, then fair values are estimated by using quoted prices of instruments with similar characteristics or
discounted cash flows.

3. The fair value for derivative instruments is determined based on liquid market pricing as evidenced by exchange traded prices, broker-dealer quotations

or related input factors which assume all counterparties have the same credit rating.

4. The fair value of long-term debt is based on current market interest rates, adjusted for our credit quality.

25 > SEGMENT INFORMATION
We operate in the gold mining industry and our

Mines in the United States. Our “other” segment

operations are managed on a district basis. The

includes mainly operations which have been or are

Goldstrike District includes the Betze-Post and Meikle

being closed.

Income statement information

For the years ended December 31

2002

2001

2000

2002

2001

2000

2002

2001

2000

Gold sales

Operating costs

Segment income
before income taxes

Goldstrike

Pierina

Bulyanhulu

Kalgoorlie

Eskay Creek

Hemlo

Plutonic

Round Mountain

Other

676

303

134

124

121

105

132

275

767

297

117

116

356

784

272

–

128

101

404

440

473

$ 401

–

155

244

265

$ 156

$ 255

–

$ 1,967

$ 1,989

$ 1,936

$ 1,071

$ 1,080

$ 950

$ 377

$ 408

$ 493

B A R R I C K A N N U A L R E P O R T 2 0 0 2

Asset information

Segment assets

Amortization

Segment capital expenditures

For the years ended December 31

2002

2001

Goldstrike

Pierina

Bulyanhulu

Pascua-Lama

Kalgoorlie

Eskay Creek

Hemlo

Plutonic

Round Mountain

Other

$ 1,496

$ 1,617

546

644

192

232

258

234

726

659

218

247

313

147

2002

147

161

2001

138

175

2000

128

176

–

2002

2001

2000

$ 122

$ 176

153

203

107

$ 3,800

$ 4,142

519

501

493

$ 228

$ 474

$ 612

Cash and short-term investments

1,074

Other

387

779

281

Enterprise total

$ 5,261

$ 5,202

Geographic information

For the years ended December 31

2002

2001

2002

2001

2000

Assets

Gold sales

United States

$ 1,834

$ 1,873

Peru

Australia

Canada

Tanzania

Chile/Argentina

Other

733

472

533

678

245

766

731

470

525

666

257

680

905

303

316

299

134

$ 1,041

$ 1,007

297

288

269

–

272

291

283

–

$ 5,261

$ 5,202

$ 1,967

$ 1,989

$ 1,936

Segment income before income taxes

For the years ended December 31

2002

Segment total

377

2001

408

2000

493

Provision for mining assets

and other unusual charges:

Pascua-Lama

Goldstrike

Pierina

Other

–

Exploration and business

development

Merger and related costs

Corporate expenses, net

Income taxes

Net income (loss)

(104)

(98)

193

–

(59)

(103)

(117)

(47)

(1,036)

(300)

(184)

(107)

(149)

–

(115)

209

(1,189)

B A R R I C K A N N U A L R E P O R T 2 0 0 2

26 > JOINT VENTURES
Our major interests in joint ventures are our 50% interest

in the Kalgoorlie Mine in Australia; our 50% interest in

the Round Mountain Mine in the United States; and our

50% interest in the Hemlo Mine in Canada.

Summary financial information for joint ventures (100%)

Income statement and cash flow information

Balance sheet information

At December 31

Assets

Inventories

Property, plant and equipment

Other assets

Liabilities

Current liabilities

For the years ended December 31

2002

2001

2000

Long-term obligations

2002

2001

553

678

116

183

658

794

124

202

Revenues

Costs and expenses

Net income

Operating activities 1
Investing activities 1
Financing activities 1

1. Net cash inflow (outflow)

650

582

175

(54)

–

578

522

163

(78)

–

494

426

(68)

–

28 > SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31

Components of other net operating activities

Merger and related costs

Reclamation costs

Non-cash charges (credits):

Foreign currency translation adjustments (note 6)

(Gains) losses on short-term investments (note 10)

Gains on sale of property, plant and equipment

Amortization of deferred stock compensation (note 20)

Cumulative effect of changes in recognition policies (note 2)

Changes in operating assets and liabilities:

Accounts receivable

Inventories and other current assets

Accounts payable and other current liabilities

Payments of merger and related costs

Derivative instruments

Payments of reclamation and closure costs

Other items

Other net operating activities

Cash payments included in operating activities:

Interest, net of amounts capitalized

Income taxes

27 > CASH AND EQUIVALENTS
Cash and equivalents include cash, term deposits and

treasury bills with original maturities of less than

90 days. We anticipate holding these cash balances for

an extended period of time. We have entered into

receive fixed interest rate swaps with a total notional

amount of $650 million that have been designated, and

are effective, as cash flow hedges of expected future

floating rate interest receipts. These swaps mature at

various times from 2004 to 2007 (refer to note 23).

2002

2001

2000

(2)

(4)

–

(12)

(50)

(22)

(70)

(38)

(77)

117

(1)

(9)

–

(2)

(135)

(13)

(35)

(47)

–

(7)

(8)

–

(33)

–

(39)

159

B A R R I C K A N N U A L R E P O R T 2 0 0 2

GOLD MINERAL RESERVES
AND MINERAL RESOURCES

he table on the next page sets

experience. These figures are estimates,

forth Barrick’s interest in the

however, and no assurance can be

total proven and probable gold

given that the indicated quantities of

mineral reserves at each property. For

gold will be produced. Gold price ﬂuctua-

further details of proven and probable

tions may render mineral reserves

mineral reserves and measured, indica-

containing relatively lower grades of

ted and inferred mineral resources by

gold mineralization uneconomic.

category, see pages 97 to 99.

Moreover, short-term operating factors

relating to the mineral reserves, such

The Company has carefully prepared

as the need for orderly development

and verified the mineral reserve and

of ore bodies or the processing of new

mineral resource figures and believes

or different ore grades, could affect the

that its method of estimating mineral

Company’s proﬁtability in any particular

reserves has been verified by mining

accounting period.

DEFINITIONS

A MINERAL RESOURCE is a concen-
tration or occurrence of natural,
solid, inorganic or fossilized organic
material in or on the Earth’s crust
in such form and quantity and of
such a grade or quality that it has
reasonable prospects for economic
extraction. The location, quantity,
grade, geological characteristics
and continuity of a mineral
resource are known, estimated or
interpreted from specific geologi-
cal evidence and knowledge.
Mineral resources are sub-divided,
in order of increasing geological
confidence, into inferred, indicated
and measured categories:

An inferred mineral resource is
that part of a mineral resource for
which quantity and grade or qual-
ity can be estimated on the basis
of geological evidence and limited
sampling and reasonably assumed,
but not verified, geological and
grade continuity. The estimate is
based on limited information and
sampling gathered through appro-
priate techniques from locations
such as outcrops, trenches, pits,
workings and drill holes.

An indicated mineral resource
is that part of a mineral resource
for which quantity, grade or qual-
ity, densities, shape and physical
characteristics can be estimated
with a level of confidence suffi-
cient to allow the appropriate
application of technical and
economic parameters, to support
mine planning and evaluation
of the economic viability of the
deposit. The estimate is based
on detailed and reliable explo-
ration and testing information
gathered through appropriate
techniques from locations such
as outcrops, trenches, pits, work-
ings and drill holes that are
spaced closely enough for geo-
logical and grade continuity to
be reasonably assumed.

A measured mineral resource
is that part of a mineral resource
for which quantity, grade or
quality, densities, shape and
physical characteristics are so
well established that they can be
estimated with confidence suffi-
cient to allow the appropriate
application of technical and

economic parameters, to
support production planning
and evaluation of the economic
viability of the deposit. The
estimate is based on detailed and
reliable exploration, sampling
and testing information gathered
through appropriate techniques
from locations such as outcrops,
trenches, pits, workings and drill
holes that are spaced closely
enough to confirm both geologi-
cal and grade continuity.

A MINERAL RESERVE is the
economically mineable part of
a measured or indicated mineral
resource demonstrated by at least
a preliminary feasibility study.
This study must include adequate
information on mining, processing,
metallurgical, economic and other
relevant factors that demonstrate,
at the time of reporting, that eco-
nomic extraction can be justified.
A mineral reserve includes diluting
materials and allowances for losses
that may occur when the material
is mined. Mineral reserves are
subdivided in order of increasing

confidence into probable
mineral reserves and proven min-
eral reserves:

A probable mineral reserve is
the economically mineable part
of an indicated, and in some
circumstances, a measured min-
eral resource demonstrated by
at least a preliminary feasibility
study. This study must include
adequate information on mining,
processing, metallurgical, eco-
nomic and other relevant factors
that demonstrate, at the time
of reporting, that economic
extraction can be justified.

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, metallurgical,
economic and other relevant
factors that demonstrate, at
the time of reporting, that eco-
nomic extraction can be justified.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

> Summary Gold Mineral Reserves and Mineral Resources1
2002

Tons
(000s)

Grade
(oz/ton)

Ounces
(000s)

Based on attributable ounces

UNITED STATES

Betze-Post

Meikle

Goldstrike Property Total

Round Mountain (50%)

Marigold (33%)

CANADA

Eskay Creek

Hemlo (50%)

Holt-McDermott

SOUTH AMERICA
Pascua-Lama

Veladero

Pierina

Alto Chicama

AUSTRALIA

Plutonic

Lawlers

Darlot

Yilgarn District Total

Kalgoorlie (50%)

Cowal

AFRICA

Bulyanhulu

OTHER

TOTAL

(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)

(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)

(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)
(proven and probable)
(mineral resource)

(proven and probable)
(mineral resource)

107,130
47,617
9,770
12,926
116,900
60,543
96,057
27,282
26,351
43,248

1,433
480
19,726
6,678
847
755

296,411
242,686
254,311
213,971
70,343
41,072
120,948
81,172

13,976
26,682
3,407
10,705
8,202
4,225
25,585
41,612
96,898
48,690
75,922
64,673

27,420
9,018

-
1,816
1,229,152
883,696

0.150
0.070
0.398
0.396
0.171
0.139
0.020
0.012
0.026
0.014

0.998
0.442
0.107
0.119
0.182
0.254

0.057
0.029
0.037
0.024
0.051
0.016
0.054
0.037

0.181
0.130
0.149
0.131
0.155
0.131
0.168
0.130
0.057
0.054
0.037
0.034

0.425
0.465

-
0.389
0.071
0.047

2001

Grade
(oz/ton)

0.151
0.069
0.439
0.433
0.173
0.147
0.019
0.015
0.027
0.014

1.245
0.504
0.116
0.067
0.214
0.237

0.057
0.030
0.043
0.030
0.053
0.015
-
-

0.186
0.134
0.143
0.195
0.166
0.118
0.171
0.141
0.061
0.079
0.049
0.031

0.428
0.465

0.111
0.141
0.077
0.054

Ounces
(000s)

16,433
3,450
3,946
5,847
20,379
9,297
2,245
493
680
632

1,775
290
2,517
1,203
293
518

16,862
7,166
8,416
3,954
4,748
1,332
-
-

1,588
2,686
505
854
1,341
549
3,434
4,089
5,724
9,303
2,770
2,133

12,009
4,308

420
1,773
82,272
46,491

Tons
(000s)

108,854
49,861
8,992
13,512
117,846
63,373
118,489
32,857
25,177
44,115

1,426
575
21,788
17,823
1,371
2,188

296,411
242,686
196,573
133,003
89,233
89,056
-
-

8,526
19,991
3,539
4,386
8,062
4,654
20,127
29,031
93,641
118,443
56,395
68,413

16,051
3,321
3,888
5,119
19,939
8,440
1,875
333
678
621

1,430
212
2,118
798
154
192

16,862
6,962
9,384
5,154
3,602
649
6,535
3,043

2,533
3,470
509
1,401
1,269
552
4,311
5,423
5,551
2,621
2,835
2,222

11,653
4,195

-
706
86,927
41,571

28,026
9,255

3,795
12,555
1,070,298
863,373

1. As at December 31, 2002, except for Alto Chicama which is as at January 31, 2003.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

> Gold Mineral Reserves1

Based on attributable ounces

(000s)

(oz/ton)

(000s)

(oz/ton)

(000s)

(oz/ton)

(000s)

PROVEN

PROBABLE

TOTAL

Tons

Grade

Ounces

Tons

Grade

Ounces

Ton

Grade

Ounces

UNITED STATES

Betze-Post

Meikle

Goldstrike Property Total

Round Mountain (50%)

Marigold (33%)

CANADA

Eskay Creek

Hemlo (50%)

Holt-McDermott

SOUTH AMERICA

Pascua-Lama

Veladero

Pierina

Alto Chicama

AUSTRALIA

Plutonic

Lawlers

Darlot

Yilgarn District Total

Kalgoorlie (50%)

Cowal

AFRICA

60,229

2,641

62,870

47,282

3,700

575

11,708

37,738

19,123

29,232

2,983

1,456

3,776

8,215

34,580

6,197

0.132

0.512

0.148

0.017

0.032

1.483

0.116

0.174

0.062

0.046

0.068

0.146

0.134

0.133

0.138

0.052

0.044

7,924

1,352

9,276

815

120

853

1,359

2,355

877

1,994

46,901

7,129

54,030

48,775

22,651

0.173

0.356

8,127

2,536

107,130

9,770

0.197

10,663

116,900

0.022

0.025

1,060

558

858

8,018

824

0.672

0.095

0.182

577

759

150

258,673

0.056

14,507

96,057

26,351

1,433

19,726

847

296,411

254,311

70,343

120,948

235,188

41,111

120,948

436

195

501

1,132

1,788

271

10,993

1,951

4,426

17,370

62,318

69,725

0.036

0.039

0.054

0.191

0.161

0.174

0.183

0.060

0.037

8,507

1,608

6,535

2,097

13,976

314

768

3,179

3,763

2,564

3,407

8,202

25,585

96,898

75,922

0.150

0.398

0.171

0.020

0.026

0.998

0.107

0.182

0.057

0.037

0.051

0.054

0.181

0.149

0.155

0.168

0.057

0.037

16,051

3,888

19,939

1,875

678

1,430

2,118

154

16,862

9,384

3,602

6,535

2,533

509

1,269

4,311

5,551

2,835

Bulyanhulu

1,846

0.397

733

25,574

0.427

10,920

27,420

0.425

11,653

TOTAL

263,089

0.082 21,577

966,063

0.068 65,350

1,229,152

0.071

86,927

1. Mineral reserves (“reserves”) have been calculated as at December 31, 2002 (except for Alto Chicama, which was calculated as at January 31, 2003)

in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry
Guide 7 (under the Securities Exchange Act of 1934) as interpreted by the Staff of the U.S. Securities and Exchange Commission applies different standards
in order to classify mineralization as a reserve. Accordingly, Alto Chicama and Veladero are classified for U.S. reporting purposes as mineralized material.
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. Except with respect to the Australian properties, reserves have been
calculated using an assumed long-term average gold price of US$300 and a silver price of US$4.75. Reserves at Kalgoorlie assumed a gold price of US$297
(A$550 and an exchange rate of $0.54 $US/$A). Such calculations incorporate current and/or expected mine plans and cost levels at each property.
Varying cut-off grades have been used depending on the mine and type of ore contained in the reserves. Barrick’s normal data verification procedures
have been employed in connection with the calculations.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

> Gold Mineral Resources1

MEASURED (M)

INDICATED (I)

Tons

Grade

Ounces

Tons

Grade

Ounces

Based on attributable ounces

(000s)

(oz/ton)

(000s)

(oz/ton)

(000s)

(M) + (I)

Ounces

(000s)

INFERRED

Tons

Grade Ounces

(000s)

(oz/ton)

(000s)

UNITED STATES

Betze-Post

Meikle

Goldstrike Property Total

Round Mountain (50%)

Marigold (33%)

CANADA

Eskay Creek

Hemlo (50%)

Holt-McDermott

SOUTH AMERICA

Pascua-Lama

Veladero

Pierina

Alto Chicama

AUSTRALIA

Plutonic

Lawlers

Darlot

Yilgarn District Total

Kalgoorlie (50%)

Cowal

AFRICA

Bulyanhulu

OTHER

TOTAL

16,445

1,932

18,377

13,545

0.069

0.584

0.123

0.008

888

0.128

3,962

9,000

8,599

4,523

2,178

1,157

7,858

14,558

1,588

0.055

0.023

0.016

0.073

0.154

0.175

0.111

0.054

0.041

1,139

1,129

2,268

104

114

216

209

137

331

336

202

869

791

29,955

3,175

33,130

3,910

13,665

382

1,789

246

111,883

126,760

31,339

56,352

14,826

6,201

3,012

24,039

27,353

33,623

0.070

0.393

0.101

0.018

0.016

0.401

0.075

0.248

0.029

0.024

0.016

0.035

0.132

0.126

0.112

0.128

0.054

0.035

2,092

1,249

3,341

219

153

134

3,271

3,051

489

1,998

1,956

779

338

3,073

1,488

1,190

4,765

1,085

0.352

0.335

1,678

364

3,231

2,378

5,609

176

219

153

248

1,217

7,819

9,036

9,827

29,583

4,001

509

3,487

3,260

626

126,841

78,211

1,134

1,998

24,820

7,333

2,326

9,715

6,779

29,462

2,287

1,115

540

3,942

2,279

1,255

1,678

364

0.074

0.351

0.313

0.016

0.014

0.615

0.137

0.257

0.027

0.024

0.020

0.042

0.161

0.123

0.214

0.152

0.050

0.033

2,741

2,831

157

402

550

131

3,475

1,894

1,045

1,183

286

1,481

342

967

4,253

0.592

2,517

731

0.468

342

78,375

0.061

4,773

470,321

0.044 20,582

25,355

334,998

0.048 16,216

1. As at December 31, 2002, except for Alto Chicama which is as at January 31, 2003. Resources which are not reserves do not have demonstrated economic viability.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

SUPPLEMENTAL INFORMATION

> 4-Year Historical Review1
(US GAAP basis, unless otherwise indicated)

Operating results (in millions)

Gold sales

Net income (loss)

Operating cash flow

Capital expenditures

Per share data

Net income (loss)

Cash dividends

Operating cash flow

Book value

Financial position (in millions)

Cash and short-term investments

Total assets

Working capital
Long-term debt 2

Shareholders’ equity

Operational statistics (unaudited)

Gold production (thousands of ounces)

Total cash operating costs per ounce

Average price realized per ounce

of gold sold

Average spot price of gold per ounce

Gold reserves (proven and probable)

2002

2001

2000

1999

1,967

1,989

1,936

2,057

193

589

228

0.36

0.22

1.09

6.15

1,074

5,261

869

761

3,334

5,695

177

339

310

588

474

0.18

0.22

1.10

5.96

(1,189)

842

612

(2.22)

0.22

1.57

5.95

244

676

643

0.45

0.20

1.28

8.45

779

822

766

5,202

579

793

3,192

6,124

162

317

271

5,393

576

901

3,190

5,950

155

334

279

6,791

646

803

4,514

5,801

152

351

279

(thousands of ounces)3

86,927

82,272

79,300

78,049

Other
Net debt to total capitalization 4

Shares outstanding (millions)

(7%)

542

536

534

1. All amounts prior to 2001 have been restated to reflect the merger with Homestake as a pooling-of-interests

(see note 3 to notes to consolidated financial statements). Information for all years has been derived from audited
financial statements, except as indicated.

2. Long-term debt excludes current portion of $20 million in 2002, $9 million in 2001, $3 million in 2000 and

$37 million in 1999.

3. Reserves calculated in accordance with National Instrument 43-101, as required by Canadian securities regulatory

authorities.

4. Net debt to total capitalization is the ratio of debt less cash and short-term investments to debt plus

shareholders’ equity.

100

B A R R I C K A N N U A L R E P O R T 2 0 0 2

CORPORATE GOVERNANCE

2002 saw a sharpened focus on corpo-
rate governance in the United States
and Canada, with the New York Stock
Exchange proposing new corporate gov-
ernance standards, including standards
aimed at expanding the independent/
unrelated element on boards and board
committees. Barrick is undertaking
its own review of Company corporate
governance practices in light of the
recent regulatory initiatives. Although
as a regulatory matter, the new NYSE
standards would not be directly applica-
ble to Barrick as a Canadian company,
allowing for an appropriate transition
period, the Board intends to adopt
corporate governance practices
consistent with such standards to
the extent practical for our Company.

The Board established a separate
Corporate Governance and Nominating
Committee in December 2002. Prior
to that time, the corporate governance
and nominating functions had been
performed by the Compensation
Committee. Currently, the Corporate
Governance and Nominating Committee
is developing a set of corporate gover-
nance principles for Barrick and also
intends to develop a code of business
conduct and ethics.

COMPOSITION OF THE BOARD
Barrick’s Board is currently comprised
of 13 directors, with the size and
composition of the Board reflecting a
breadth of backgrounds and experience
deemed important for effective gover-
nance of an international corporation in

the mining industry. With the assistance
of the Corporate Governance and
Nominating Committee, the Board of
Directors has considered the relation-
ship to Barrick of each of the current
directors and has determined that five
of the 13 directors are “unrelated.”

Allowing for an appropriate transition
period, the Board will move toward a
composition that puts unrelated/inde-
pendent directors in the majority. The
Company has an experienced Board
that has made a significant contribution
to Barrick’s success, acting without
constraint in its access to information,
in its deliberations and in its ability to
satisfy the mandate established by law
to supervise the business and affairs
of Barrick.

COMMITTEES OF THE BOARD

CORPORATE GOVERNANCE
AND NOMINATING COMMITTEE
(M.A. Cohen, A.A. MacNaughton,
G.C. Wilkins)
Assists the Board in establishing Barrick’s
corporate governance policies and
practices. The Committee also identifies
individuals qualified to become members
of the Board, and reviews the composi-
tion and functioning of the Board and
its Committees.

AUDIT COMMITTEE
(H.L. Beck, C.W.D. Birchall,
P.A. Crossgrove)
Reviews the Company’s financial state-
ments and management’s discussion
and analysis of financial and operating
results, and assists the Board in its over-
sight of the integrity of Barrick’s financial
statements and other relevant public
disclosures, the Company’s compliance
with legal and regulatory requirements

relating to financial reporting, the
external auditors’ qualifications and
independence, and the performance
of the internal and external auditors.

COMPENSATION COMMITTEE
(A.A. MacNaughton, M.A. Cohen,
P.A. Crossgrove, J.L. Rotman)
Assists the Board in monitoring, reviewing
and approving Barrick’s compensation
policies and practices, and administering
Barrick’s share compensation plans.
The Committee is responsible for
reviewing and recommending director
and senior management compensation
and for succession planning with
respect to senior executives.

EXECUTIVE COMMITTEE
(G.C. Wilkins, A.A. MacNaughton,
B. Mulroney, P. Munk)
Exercises all the powers of the Board
(except those powers specifically

reserved by law to the Board of
Directors) in the management and
direction of business during intervals
between meetings of the Board
of Directors.

ENVIRONMENTAL, OCCUPATIONAL,
HEALTH AND SAFETY COMMITTEE
(P.A. Crossgrove, J.K. Carrington,
M.A. Cohen, J.E. Thompson)
Reviews environmental and occupational
health and safety policies and programs,
oversees the Company’s environmental
and occupational health and safety
performance, and monitors current
and future regulatory issues.

FINANCE COMMITTEE
(C.W.D. Birchall, A.A. MacNaughton,
A. Munk, G.C. Wilkins)
Reviews the Company’s investment
strategies, hedging program and general
debt and equity structure.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

101

BOARD OF DIRECTORS

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
Corporate Director
Mr. Birchall has had a long
association with Barrick as
one of the original Board
members of the Company.

TYE W. BURT
Toronto, Ontario
Executive Director,
Corporate Development
Barrick Gold Corporation
Mr. Burt was appointed
Executive Director, Corporate
Development of Barrick in
December 2002. Previously
he has served as Chairman
of Deutsche Bank Canada
and Managing Director of
Deutsche Bank’s Global
Metals and Mining Group.

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.

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, Masonite
International Corporation
Mr. Crossgrove has been
involved in a number of
mining companies. He has
been a Director of Barrick
since 1993.

JOSEPH L. ROTMAN, O.C.
Toronto, Ontario
Chairman and Chief
Executive Officer,
Roy-L Capital Corporation
Mr. Rotman has been a
Director of Barrick since
its inception.

JACK E. THOMPSON
Alamo, California
Vice Chairman,
Barrick Gold Corporation
Mr. Thompson was
appointed to the Board in
December 2001 upon the
completion of the merger
with Homestake Mining
Company. Prior to that time,
Mr. Thompson was Chairman
and Chief Executive Officer
of Homestake.

GREGORY C. WILKINS
Toronto, Ontario
President and Chief
Executive Officer,
Barrick Gold Corporation
Mr. Wilkins was Executive
Vice President and Chief
Financial Officer of Barrick
until his appointment
at Horsham (subsequently
TrizecHahn Corporation)
in September 1993. He has
been a member of the Board
since 1991.

ANGUS A. MACNAUGHTON
Danville, California
President, Genstar
Investment Corporation
Mr. MacNaughton 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.

ANTHONY MUNK
Toronto, Ontario
Managing Director,
Onex Investment Corp.
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 Trizec
Properties, Inc.

102

B A R R I C K A N N U A L R E P O R T 2 0 0 2

OFFICERS

PETER MUNK
Chairman

JACK E. THOMPSON
Vice Chairman

GREGORY C. WILKINS
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

TYE W. BURT
Executive Director,
Corporate Development

MICHAEL J. BROWN
Vice President,
United States Public Affairs

ALEXANDER J.
DAVIDSON
Senior Vice President,
Exploration

JAMIE C. SOKALSKY
Senior Vice President and
Chief Financial Officer

AMMAR AL-JOUNDI
Vice President and
Treasurer

M. VINCENT BORG
Vice President,
Corporate Communications

ANDRÉ R. FALZON
Vice President and
Controller

GORDON F. FIFE
Vice President,
Organizational Effectiveness

JAMES FLEMING
Vice President,
Communications

GREGORY A. LANG
Vice President,
Australian Operations

JOHN T. MCDONOUGH
Vice President, Environment

STEPHEN A. ORR
Vice President,
North American Operations

RAYMOND W. THRELKELD
Vice President,
Project Development

DAVID W. WELLES
Vice President and
Tax Counsel

RICHARD S. YOUNG
Vice President,
Investor Relations

SYBIL E. VEENMAN
Associate General Counsel
and Secretary

INTERNATIONAL ADVISORY BOARD

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

SECRETARY WILLIAM
S. COHEN
United States
Chairman and
Chief Executive Officer,
The Cohen Group

HONOURABLE PAUL
G. DESMARAIS, SR.
Canada
Director and Chairman
of Executive Committee,
Power Corporation
of Canada

KARL OTTO PÖHL
Germany
Senior Partner,
Sal. Oppenheim Jr. & Cie.

THE HONORABLE
ANDREW YOUNG
United States
Chairman,
GoodWorks International

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,
Trizec Properties, Inc.

LORD CHARLES POWELL
OF BAYSWATER KCMG
United Kingdom
Chairman, Sagitta Asset
Management Limited

B A R R I C K A N N U A L R E P O R T 2 0 0 2

103

SHAREHOLDER INFORMATION

Shares traded on five major

Common Shares (millions)

international stock exchanges

Outstanding at

> New York

> Toronto

> London

> Paris

> Swiss

Ticker Symbol

ABX

Number of Registered Shareholders

27,755

Index Listings

> S&P Global 1200 Index

> S&P/TSX 60 Index

> S&P/TSX Composite Index

> S&P/TSX Canadian Materials Index

> S&P/TSX Canadian Gold Index

> FT of London Gold Index

> Philadelphia Gold/Silver Index

2002 Dividend Per Share

US$0.22

> Share Trading Information

Toronto Stock Exchange

Quarter

First

Second

Third

Fourth

New York Stock Exchange

Quarter

First

Second

Third

Fourth

Share Volume
(millions)

2002

2001

148

188

199

163

698

109

100

105

388

Share Volume
(millions)

2002

2001

155

190

273

144

762

118

108

112

428

December 31, 2002

542*

Weighted average – 2002

Basic and fully diluted

541*

The Company’s shares were split

on a two-for-one basis in 1987, 1989

and 1993.

* Includes shares issuable upon conversion of HCI
(Homestake Canada Inc.) convertible shares.

> Volume of Shares Traded

(millions)

TSE

NYSE

2002

698

762

2001

388

428

> Closing Price of Shares

December 31, 2002

TSE

NYSE

C$24.35

US$15.41

High

Low

2002

2001

2002

2001

C$31.20

C$27.48

C$25.35

C$21.10

36.05

28.92

26.09

29.65

28.59

28.25

27.30

22.52

21.85

21.65

21.95

22.15

High

Low

2002

2001

2002

2001

US$19.50 US$17.59

US$15.90 US$13.70

23.49

19.61

16.74

19.37

17.98

17.95

17.18

13.46

13.82

13.72

14.20

13.96

104

B A R R I C K A N N U A L R E P O R T 2 0 0 2

DIVIDEND PAYMENTS

For information on such matters as

In 2002, the Company paid a cash

share transfers, dividend cheques and

dividend of $0.22 per share - $0.11

change of address, inquiries should

on June 14 and $0.11 on December 20.

be directed to the Secretary of Barrick

A cash dividend of $0.22 per share

or the Transfer Agents.

was paid in 2001 - $0.11 on June 15

and $0.11 on December 14.

TRANSFER AGENTS

AND REGISTRARS

DIVIDEND POLICY

CIBC Mellon Trust Company

The Board of Directors reviews the

P.O. Box 7010

dividend policy semi-annually based

Adelaide Street Postal Station

on the cash requirements of the

Toronto, Ontario M5C 2W9

Company’s operating assets, exploration

Telephone: (416) 643-5500

and development activities, as well

Toll-free throughout North America:

as potential acquisitions, combined with

1-800-387-0825

the current and projected financial

Fax: (416) 643-5501

position of the Company.

FORM 40-F

Email: inquiries@cibcmellon.com

Web site: www.cibcmellon.com

Annual Report on Form 40-F is filed

Mellon Investor Services, L.L.C.

with the United States Securities and

85 Challenger Road

Exchange Commission. This report will

Overpeck Center

be made available to shareholders,

Ridgefield Park, New Jersey 07660

without charge, upon written request to

Telephone: (201) 329-8660

the Secretary of the Company at the

Toll-free within the United States

Corporate Office.

and Canada:

1-888-835-2788

OTHER LANGUAGE REPORTS

Web site: www.melloninvestor.com

French and Spanish versions of this

annual report are available from Investor

ANNUAL MEETING

Relations at the Corporate Office.

The Annual General Meeting of

Shareholders will be held on

SHAREHOLDER CONTACTS

Wednesday, May 7, 2003 at 10:00 a.m.

Shareholders are welcome to contact

in the Canadian Room, Fairmont Royal

the Company for information

York Hotel, Toronto, Ontario.

or questions concerning their shares.

For general information on

the Company, contact the Investor

Relations Department.

B A R R I C K A N N U A L R E P O R T 2 0 0 2

105

CORPORATE INFORMATION

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: (416) 307-7441
Fax: (416) 861-0727
Email: ksipos@barrick.com

Sandra Grabell
Investor Relations Specialist
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

CORPORATE OFFICE

Barrick Gold Corporation
BCE Place
Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Canada M5J 2S1
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 U.S.A. 89803
Stephen Lang
Vice President and
General Manager
Telephone: (775) 738-8043
Fax: (775) 738-7685

Round Mountain Gold
P.O. Box 480
Round Mountain
Nevada U.S.A. 89045
Mike Doyle
General Manager
Telephone: (775) 377-2366
Fax: (775) 377-3240

Eskay Creek
No. 1 Airport Way
P.O. Box 3908
Smithers, B.C.
Canada V0J 2N0
Steve Job
General Manager
Telephone: (604) 515-5227
Fax: (604) 515-5241

Hemlo Operations
P.O. Bag 500
Marathon, Ontario
Canada P0T 2E0
Vern Baker
General Manager
Telephone: (807) 238-1100
Fax: (807) 238-1050

Holt-McDermott Mine
P.O. Box 278
Kirkland Lake, Ontario
Canada P2N 3H7
Brian Grebenc
General Manager
Telephone: (705) 567-9251
Fax: (705) 567-6867

South America
Chilean Operations
Av. Ricardo Lyon 222
Piso II. Providencia
Santiago, Chile
Raymond Threlkeld
Vice President,
Project Development
Telephone: (56-2) 340-2022
Fax: (56-2) 233-0188

Pierina Mine
Pasaje Los Delfines, 159
2do Piso
Urb. Las Gardenias
Lima 33, Peru
Igor Gonzales
Vice President and
General Manager
Telephone: (51-1) 275-0600
Fax: (51-1) 275-0249

East Africa
Bulyanhulu Mine
International House, Level 2
Shaaban Robert Street/
Garden Avenue
P.O. Box 1081
Dar es Salaam, Tanzania
Roy Meade
Senior Vice President and
General Manager
Telephone: (255-22) 123-181
Fax: (255-22) 123-245

Australia
Australian Operations
2 Mill Street
10th Floor
Perth, WA 6000 Australia
Gregory Lang
Vice President,
Australian Operations
Telephone: (61-8) 9212-5777
Fax: (61-8) 9322-5700

106

B A R R I C K A N N U A L R E P O R T 2 0 0 2

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F O R W A R D - L O O K I N G S T A T E M E N T S

Certain statements included herein, including those regarding production and costs and other statements that express management’s
expectations or estimates of our future performance, constitute “forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”,
“plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, and similar expressions identify forward-looking
statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered
reasonable by management are inherently subject to significant business, economic and competitive uncertainties and contingencies.
In particular, our Management’s Discussion and Analysis includes many such forward-looking statements and we caution you that
such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual
financial results, performance or achievements of Barrick to be materially different from our estimated future results, performance
or achievements expressed or implied by those forward-looking statements and our forward-looking statements are not guarantees of
future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price
of gold or certain other commodities (such as silver, copper, diesel fuel and electricity) and currencies; changes in interest rates or
gold lease rates that could impact realized prices under our forward sales program; legislative, political or economic developments
in the jurisdictions in which Barrick carries on business; operating or technical difficulties in connection with mining or development
activities; the speculative nature of gold exploration and development, including the risks of diminishing quantities or grades of
reserves; and the risks involved in the exploration, development and mining business. These factors are discussed in greater detail
in Barrick’s most recent Form 40-F/Annual Information on file with the U.S. Securities and Exchange Commission and Canadian
provincial securities regulatory authorities.

Barrick expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of
new information, events or otherwise.

Printed in Canada.

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