Barrick Gold Corp.
Annual Report 2016

Plain-text annual report

Barrick Gold Corporation Annual Report 2016 A Company of Owners B a r r i c k G o l d C o r p o r a t i o n A n n u a l R e p o r t 2 0 1 6 Our Vision is the generation of wealth through responsible mining – wealth for our owners, our people, and the countries and communities with which we partner. We aim to be the leading mining company focused on gold, growing our cash flow per share by developing and operating high-quality assets through disciplined allocation of human and financial capital and operational excellence. In 2016, we further strengthened our “ balance sheet and generated record free cash flow through a disciplined and rigorous approach to capital allocation. Going forward, digital technology and innovation will play an increasingly important role across our business as we seek to grow the long-term value of our portfolio with a focus on growing margins and returns over production volume.”Kelvin Dushnisky, President Our Assets are located in geopolitically stable regions with an increasing focus on our five core mines in the Americas. Proven and Probable Mineral Reserves6 As at December 31, 2016 Production (000s ozs) Cost of Sales ($/oz) AISC 1† ($/oz) Tonnes (000s ozs) Grade (gm/t) Contained (000s ozs) Goldstrike 1,096 852 714 70,685 3.55 8,077 Cortez 1,059 901 518 151,002 2.11 10,220 Pueblo Viejo (60%) 700 564 490 85,821 2.93 8,087 Lagunas Norte 435 651 529 70,670 1.86 4,218 Veladero 544 872 769 252,125 0.83 6,749 Core mines sub-total 3,834 793 606 631,283 1.85 37,473 Total Barrick 5,517 798 730 2,006,898 1.33 85,950 †Please see page 84 of the 2016 Financial Report for corresponding endnotes. Golden Sunlight Hemlo Turquoise Ridge JV Goldstrike Cortez 20% 19% 13% 8% Pueblo Viejo Lagunas Norte Zaldívar Copper JV Veladero 10% ~70% of 2016 production from core mines at Cost of Sales(cid:31)$793/oz and AISC $606/oz1 Other Gold Mines: Porgera JV, Papua New Guinea Kalgoorlie JV, Australia Acacia, Tanzania Other Copper Mines: Jabal Sayid JV, Saudi Arabia Lumwana, Zambia Our Priorities executed in 2016 Focus on Free Cash Flow Strengthen the Balance Sheet Operational Excellence Disciplined Capital Allocation As at December 31, 2016 Production (000s ozs) Cost of Sales ($/oz) AISC 1† ($/oz) Tonnes (000s ozs) Grade (gm/t) Contained (000s ozs) Goldstrike 1,096 852 714 70,685 3.55 8,077 Golden Sunlight Hemlo Turquoise Ridge JV Goldstrike Cortez Proven and Probable Mineral Reserves6 Pueblo Viejo Lagunas Norte 20% 19% 13% 8% Zaldívar Copper JV Veladero 10% Cortez 1,059 901 518 151,002 2.11 10,220 Pueblo Viejo (60%) 700 564 490 85,821 2.93 8,087 Lagunas Norte 435 651 529 70,670 1.86 4,218 Veladero 544 872 769 252,125 0.83 6,749 Core mines sub-total 3,834 793 606 631,283 1.85 37,473 Total Barrick 5,517 798 730 2,006,898 1.33 85,950 ~70% of 2016 production from core mines at Cost of Sales(cid:31)$793/oz and AISC $606/oz1 Other Gold Mines: Porgera JV, Papua New Guinea Kalgoorlie JV, Australia Acacia, Tanzania Other Copper Mines: Jabal Sayid JV, Saudi Arabia Lumwana, Zambia Barrick Gold Corporation | Annual Report 2016 1 See more on page 7See more on page 4See more on page 8See more on page 7Financial Highlights Gold Production (million ounces) Cost of Sales ($/oz) AISC1 ($/oz) 7.2 6.2 6.1 5.5 843 842 859 798 915 864 831 730 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 Total Debt ($ billions) 13.1 13.1 Net Earnings ($ billions) Adjusted EBITDA1 ($ billions) 0.7 5.0 10.0 7.9 -2.9 -2.8 3.8 3.8 3.2 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 -10.4 Attributed Capital Expenditures ($ billions) Operating Cash Flow ($ billions) Free Cash Flow1 ($ billions) 5.0 4.2 2.2 1.5 1.1 2.82 2.6 2.3 1.5 1.12 -0.1 -1.1 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 2 Barrick Gold Corporation | Annual Report 2016 (In millions of US dollars, except per share data) 2016 2015 2014 (Based on IFRS) Revenues Net earnings (loss) per share Adjusted net earnings1 per share1 Operating cash flow Free cash flow1 EBITDA1 Adjusted EBITDA1 Cash and equivalents3 Dividends paid per share Annualized dividend per share4 Gold production (000s oz) Average spot gold price per ounce Average realized gold price per ounce1 Cost of sales per ounce All-in sustaining costs per ounce1 Copper production (Mlbs) Average spot copper price per pound Average realized copper price per pound1 Cost of sales per pound All-in sustaining costs per pound1 $ $ $ $ $ $ $ $ $ 8,558 655 0.56 818 0.70 2,640 1,514 4,077 3,827 2,389 0.08 0.08 5,517 1,251 1,248 798 730 415 2.21 2.29 1.43 2.05 $ $ $ $ $ $ $ $ $ 2 9,029 (2,838) (2.44) 344 0.30 2,794 1,081 (710) 3,187 2,455 0.14 0.08 2 6,117 1,160 1,157 859 831 511 2.49 2.37 1.65 2.33 $ 10,239 (2,907) (2.50) 793 0.68 2,296 (136) (295) 3,811 2,699 0.20 0.20 6,249 1,266 1,265 842 864 436 3.11 3.03 2.19 2.79 $ $ $ $ $ $ $ $ 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS. For further information please see pages 69–83 of the 2016 Financial Report. 2. 2015 Operating Cash Flow and Free Cash Flow includes $610 million in proceeds related to the Pueblo Viejo streaming transaction. 3. Includes $943 million cash primarily held at Acacia and Pueblo Viejo, which may not be readily deployed outside of Acacia and/or Pueblo Viejo. 4. Calculation based on annualizing the last dividend paid in the respective year. Contents Message from the Executive Chairman 4 | Message from the President 7 | Board of Directors 14 | Corporate Governance and Committees of the Board 15 | Executive Officers and Advisory Boards 16 | Partners 17 | Management’s Discussion and Analysis 18 | Mineral Reserves and Resources 86 | Financial Statements 98 | Notes to Financial Statements 103 | Shareholder Information 168 Barrick Gold Corporation | Annual Report 2016 3 MESSAGE FROM THE EXECUTIVE CHAIRMAN In the months since last year’s Annual Meeting, events around the world have only reinforced our assertion that “gold is here to stay.” While the future of the global economy is always uncertain, it is clear that economic and geopolitical instability are currently on the rise, with growing risks of protectionism, trade wars, and international conflict. Deeper secular trends, particularly changes in the structure of labor markets and slowing economic growth, have gone unattended. There are even economic historians such as Robert Gordon, who believe that the high growth rates seen from 1870 to 1970 were anomalous and cannot be reproduced, which, if correct, would likely inflame populist anger, as expectations of ever-increasing prosperity are disappointed. Meanwhile, we are seeing the return of the East Asian savings glut that created some of the conditions for the financial crisis. Regardless of whether these trends persist over time or evolve in unforeseen ways, global volatility and uncertainty remind us of gold’s essential function as a store and unit of value— but they also add greater complexity and risk to our business. In the face of these challenges, we believe we will succeed by being true to ourselves. It is the things that make Barrick distinctive that will allow us to create long-term value per share for you, our fellow owners, no matter the global environment. First, our partnership culture gives us an authentic, distinctive, and sustainable competitive advantage. The decentralized operating model that goes along with it ensures continual improvements in efficiency and productivity. We trust our mine leaders to run their businesses safely and efficiently to maximize free cash flow and long-term value; problems are solved locally and quickly. Meanwhile, our head office leaders focus on allocating capital, both human and financial, and on setting strategy. Externally, our dedication to partnership should make us the partner of choice for host governments and communities, NGOs and indigenous groups, as well as other mining companies. Partnership also means being a company of owners. Last year, we created a program to make all our people owners, with shares in the Company. As far as we know, the program is the first of its kind, and it is producing a true culture of owners. Owners take responsibility, hold each other accountable, work with a sense of urgency, and always seek to improve. They are all in. Second, we have instituted an approach to capital allocation that is robust, transparent, and reliable. Our overarching goal is to grow free cash flow per share no matter the price of gold. All prospective investments—whether external acquisitions or internal allocations for exploration, expansion, or other projects—compete for capital. They must meet our stated target of a 10–15 percent return on invested capital through the metal price cycle, align with our strategic goals, undergo rigorous risk assessments, and be able to grow our free cash flow per share, now and over the long term. 4 Barrick Gold Corporation | Annual Report 2016 John L. Thornton Executive Chairman Our leaders at our head office devote the greater part of their time to the allocation of capital and people. We created a new role that is a first in our industry: a Chief Investment Officer, who ensures that the same standards, scrutiny, and rigor are applied consistently to every potential investment. We appointed Mark Hill to the position. Mark previously led the Evaluations group at Waterton Global Resource Management, a private investment firm with an outstanding track record of capital allocation—expertise he combines with earlier experience at Barrick. Third, we are becoming a talent-obsessed firm, as all high-performance organizations are. When I became Executive Chairman, the first appointment we made was to elevate Darian Rich to the position of Executive Vice President, Talent Management. Talent is the first topic at our weekly Executive Committee meetings. Over the past year and a half, nearly every one of our mine general managers has rotated into a new role. We are tapping into all sources of talent—we recruit highly skilled military veterans, frequently with a special forces background, young minds with a Silicon Valley background, top talent from across the mining industry, and the best students from leading universities around the world. Finally, we mean to be a leading twenty-first- century company, in any industry or region. We are embracing innovation across our business. We created the position of Chief Innovation Officer—another novel position for the mining business—and filled it with Michelle Ash. Michelle has a passion for challenging the status quo, with more than 20 years of international experience at leading companies in the mining and manufacturing sectors. She and her team are exploring approaches that will be fundamentally disruptive to the mining industry. A current example is our digital transformation in partnership with Cisco. The initiative is being led by Ed Humphries, whose background in military special forces ensures a focus on rapid implementation and high-level execution. The world has been changing much faster than the world of mining, and we intend not merely to catch up but to lead it. We will embed digital technology into every fiber of our business, which will allow us to be even more transparent with, and accountable to, our host government and community partners. We will be able to identify and mitigate problems the moment they arise. We will use data and artificial intelligence to make better predictions, on everything from weather conditions to the timing of equipment maintenance. We will continuously lower costs through greater speed, efficiency, and productivity. We will improve worker safety and comfort, which among other things will mean we will continue to attract the best miners and Barrick Gold Corporation | Annual Report 2016 5 MESSAGE FROM THE EXECUTIVE CHAIRMAN managers in the world. And we will unlock value in places and ways that no other mining company will be capable of doing. While we remain vigilant in the face of risks and disciplined in our digital investments, we are also optimistic about digital technology’s potential to transform every dimension of our business and to enable us to redefine the nature of mining. In the twenty-first-century mining we envision, almost no one ventures below ground, a host of performance metrics are available in real time to everyone at the Company and to all our external partners, and we use artificial intelligence for the continual improvement of our operations and management. Just as importantly, our people will have opportunities for ongoing learning and growth, as they adapt to the latest technologies and devise ever more ingenious ways of using them productively. Digital technology will not replace our workers— it will empower them. As we evolve and embrace the new, we will always hold fast to the core principles that make us who we are: operational excellence; a robust balance sheet; disciplined financial management in accordance with strict hurdle rates; an obsession with talent; deep emotional and financial ownership on the part of all our people; and a relentless commitment to execution at the highest level. The world is changing faster than ever. We will change with it—adapting to it, mitigating its risks, and seizing its opportunities. Throughout it all, we will remain true to who we are, and we will always work tirelessly to create long-term value per share for you, our fellow owners. John L. Thornton Executive Chairman The world is changing faster than ever. We will change with it–adapting to it, mitigating its risks, and seizing its opportunities. 6 Barrick Gold Corporation | Annual Report 2016 MESSAGE FROM THE PRESIDENT More than two years ago, we began laying the foundation to return Barrick to a high-performance, partnership culture, characterized by disciplined capital allocation, operational excellence, and continual self-improvement. We are driving to become a leading twenty-first- century company, continuously infusing Best-in- Class practices across the business, using data to drive innovation, and scouring the globe for the best and brightest talent. While the journey is ongoing, we are beginning to see positive results. In 2016, our total shareholder return was 117 percent. We outperformed key gold benchmarks, including the Philadelphia Stock Exchange Gold and Silver Index, and the NYSE Arca Exchange Gold BUGS Index. Our overriding objective is to grow free cash flow per share—and that is exactly what we did in 2016. Our goal last year was to generate free cash flow at a gold price of $1,000 per ounce. Not only did we achieve this objective, we reported the highest annual free cash flow1 in our history. In 2016, our mines generated operating cash flow of $2.64 billion and free cash flow1 of $1.51 billion. To put that in perspective, in a year that saw an eight percent increase in the gold price, we grew our free cash flow by 221 percent. Our focus on operational excellence helped drive this performance. We continued to implement our Best-in-Class approach across the portfolio, reducing our cost of sales to $798 per ounce and our all-in sustaining costs1 by 12 percent to $730 per ounce in 2016. We will continue our push to reduce costs even further as we incorporate new technology and innovation. Since the start of 2015, we have reduced our total debt by 39 percent. This includes $2.04 billion in 2016, in line with our target for Kelvin Dushnisky President the year. We ended the year with approximately $2.4 billion in cash3, and an additional $4.0 billion available on our fully undrawn credit facility. At the end of 2016, our total debt was $7.9 billion, with a modest repayment schedule of less than $200 million2 due before 2019, and about $5 billion maturing after 2032. Strengthening our balance sheet will remain a priority. We intend to reduce our debt by an additional $2.9 billion, to $5 billion, by the end of 2018—half of which we are targeting in 2017. We will achieve this by using cash flow from operations, potential asset sales, and creating new joint ventures and partnerships. As our balance sheet improves, so too does our capacity to take advantage of opportunities to grow our free cash flow per share. As always, we will adhere to our strict capital allocation requirements by pursuing new investments that meet our 15 percent hurdle rate at a gold price of $1,200 per ounce. Barrick Gold Corporation | Annual Report 2016 7 MESSAGE FROM THE PRESIDENT Our portfolio is comprised primarily of long-life, high-quality assets in the Americas, underpinned by our five core mines—Cortez, Goldstrike, Lagunas Norte, Pueblo Viejo, and Veladero. We have begun a process to unify Goldstrike and Cortez into a single operating business known as Barrick Nevada. The integration will be conducted in phases, and will eventually include the Turquoise Ridge mine. This will allow us to fast-track efficiency improvements, accelerate our digital transformation, and optimize capital spending. We produced 5.52 million ounces of gold last year, and anticipate production will increase to 5.60–5.90 million ounces* in 2017. Our five core mines, which are expected to account for approximately 70 percent of 2017 production*, have an average reserve grade of 1.84 grams per tonne6—more than double our peer group average. In addition to our gold portfolio, we produced 415 million pounds of copper in 2016. In 2017, we are forecasting copper production of 400–450 million pounds*. At the end of 2016, we had proven and probable gold reserves of 85.9 million ounces6 compared to 91.9 million ounces6 at the end of 2015. This is the largest reserve base in the gold mining industry, comprising a deep project pipeline that offers significant development optionality, gold price leverage and value. Our exploration work continues to unearth high-grade ounces at our existing operations. At Turquoise Ridge, for example, recent drilling revealed mineralization that exceeds the already exceptionally high-grade mineralization in the site’s existing reserves. We also believe there is strong potential to further expand resources at Goldstrike, and at our Hemlo operation in northern Ontario. In the medium term, we have a series of projects with the potential to contribute free cash flow through new, high-quality production. These include the expansion of the Cortez underground, a project known as Deep South, the expansion of Turquoise Ridge, the Lagunas Norte Mine Life Extension project in Peru, and our Goldrush project in Nevada. Using road header technology at the new Cortez Range Front twin decline reduces blasting overbreak. The resulting tunnels are more geotechnically stable and will provide access to the deeper extensions of the Cortez Hills deposit. *Please see “Outlook Assumptions and Economic Sensitivity Analysis” on page 34 of the 2016 Financial Report for 2017 guidance assumptions. 8 Barrick Gold Corporation | Annual Report 2016 Operational Excellence Disciplined Capital Allocation ■ 5.52 million ounces of gold produced at a Cost of Sales of $798/oz and AISC1 of $730/oz ■ Initiated digital transformation ■ Total Capex of $1.1B–below initial guidance Pamela Moyo Senior Metallurgist Cortez, Nevada Innovation has been a part of Barrick’s DNA since the earliest days of pioneering pressure oxidation in the gold sector. The new TCM circuit at Goldstrike is now operating in line with expectations. This process does not require the use of cyanide, and is the only commercial use of this technology in the world. Goldrush continues to advance according to schedule. Located just four miles from Cortez, it contains 9.6 million ounces of measured and indicated gold resources, and 1.9 million ounces of inferred resources6. The deposit, which has the potential to begin first production as early as 2021, is not yet fully defined, and we believe it will continue to grow. At Lagunas Norte, we are evaluating a sequenced approach to extend the life of the mine by about 10 years by first optimizing the recovery of carbonaceous oxide ore from existing stockpiles, followed by extraction and processing of refractory ores. We have initiated a prefeasibility study to evaluate an underground mine at Lama on the Argentinean side of the bi-national Pascua-Lama project. The evaluation is being led by George Bee, Senior Vice President, Frontera District. George has more than 30 years of mining experience, including eight years with Barrick in Latin America. He also played a lead role on the team that oversaw the phased development of the Goldstrike mine. We believe that a phased approach, which over time would incorporate ore from the Chilean side of the project, may be the best option to realize the potential of this world- class deposit. Efforts in Chile this year will focus on advancing project concepts in parallel with the Lama study, with the intention of moving to a prefeasibility study in 2018. 10 Barrick Gold Corporation | Annual Report 2016 Barrick Gold Corporation | Annual Report 2016 Beyond Pascua-Lama, we are evaluating an integrated development strategy for the highly prospective Frontera District, which includes our most recent discovery, Alturas. We added 1.1 million ounces of inferred gold resources6 to the Alturas project last year, bringing the total inferred resource to 6.8 million ounces6. We expect to complete a scoping study for the project in 2017. Our portfolio also includes 50 percent of the Donlin Gold project in Alaska, one of the largest undeveloped gold deposits in the world. Donlin is now advancing through the permitting process, and we are working with our joint venture partner on strategies The recent greenfields discovery of Alturas on the prolific El Indio belt is now in the scoping stage. Digitization opportunities such as autonomous vehicles, controlled from a remote operations center, are being considered, with the aim of developing an optimal plan for development. MESSAGE FROM THE PRESIDENT Digital transformation is underway at Veladero in Argentina, where UAV drones are deployed for improved environmental monitoring. to further optimize the project. This includes evaluating alternative development scenarios with the potential to lower capital intensity, as well as incorporating innovation, automation, and other Best-in-Class initiatives to improve overall economics. At the heart of Barrick’s ongoing evolution is the renewal of the partnership culture that drove our early success. The values of partnership—trust, transparency, shared responsibility and accountability, and mutual respect—are taking deep root. This cultural shift has allowed us to restore our decentralized operating model, which is functioning just as we hoped it would. It has improved collaboration and communication between head office and our mines, and between the mines themselves, helping us to identify and resolve problems faster, and make better decisions. We also continue to strengthen our relationships with external partners such as Zijin Mining, Antofagasta Plc, and Ma’aden—our joint venture partners at the Porgera, Zaldívar and Jabal Sayid mines. And we are working to develop new partnerships with the potential to unlock value across the Company. Last year, we announced a seminal partnership with Cisco to drive the digital transformation of our business. Through this collaboration, we are harnessing digital technology to unlock value, reduce costs, and identify new ways to grow free cash flow per share. This multi-year initiative is being rolled out initially at our Cortez mine in Nevada, and will ultimately encompass all of our operations, as well as our head office. The first wave of digital projects is well underway. At the Cortez processing plant, for example, we have implemented an advanced process control system to optimize crushing, grinding, and carbon leaching, which will increase gold recoveries and lower operating costs. We are also implementing short-interval control systems in the mine’s underground, deploying sensors and software and improving Internet connectivity to obtain real-time feedback. Integrating digital technology will also improve our environmental performance. At our Pascua-Lama project, we now publicly share real-time water monitoring data from Chile’s Estrecho River, making us even more transparent and accountable to our host community and Barrick Gold Corporation | Annual Report 2016 11 Focus on Free Cash Flow ■ Operating cash flow of $2,640M ■ Record free cash flow1 of $1,514M ■ Free cash flow break-even of less than $1,000/oz in 2016 Strengthen the Balance Sheet ■ Repaid $2.1B of debt in 2016 ■ Liquidity improved–less than $200M2 of debt due before 2019 ■ Reduce total debt to $5B by end of 2018 Cristiana Moraes Chief Financial Officer Barrick Argentina An environmental technician gathers data from a water monitoring station near the Las Taguas River, close to Barrick’s Veladero mine in Argentina. government partners. We also recently installed a series of high-definition cameras at our Veladero mine in Argentina to monitor the mine’s heap leach pad and other areas of the operation. These cameras provide a live feed for the general public on a continual basis. The next step in this process is to integrate additional digital environmental monitoring and sensing technology at Veladero. These steps come following a challenging period at the mine, including a 2015 release of processing solution from the leach pad, and a two-week suspension in 2016 during which the Company carried out additional remedial work at the leach pad. While we believe we are again beginning to show leadership in this important area, we also recognize that we can and must continue to improve. Everyone at the Company, from the Board and the Executive Committee to our operations, is committed to responsible environmental stewardship. In this regard, we are making progress. Over the past three years, we have reduced reportable environmental incidents by more than 75 percent. In 2017, our operations will be focused on adapting the International Council on Mining and Metals Critical Control Management guidance to our environmental operations. By doing so, we expect to further reduce the environmental impact of our operations. Nothing is more important than the safety, health and well-being of our employees and their families. In 2016, we met our target for a total recordable injury frequency rate (TRIFR)5 of 0.4 at our mines—the lowest TRIFR in our history. However, this was overshadowed by the death of Meckson Kakompe, a haul truck driver at our Lumwana mine in Zambia. Meckson was killed in a truck fire. He was just 32 and is survived by a wife and five children. Our goal is to send all of our people home safe and healthy every day. That is an expectation, not a target. That we did not meet this goal in 2016 is unacceptable. Our people are our greatest and most valued asset. They work tirelessly to execute our strategy and realize our vision to generate wealth through responsible mining for the countries and communities where we operate, and for you, our fellow owners. Indeed, last year we created a program to make every Barrick employee— from the millwright to the mine clerk—a Barrick shareholder, with an initial allocation of 25 common shares per person. We expect this to grow over time, in line with the Company’s performance. Hence, our interests are not only aligned with your interests, they are one and the same. On behalf of the Executive Committee, we would like to express our sincere thanks to our people around the globe for their unflagging commitment and dedication. Finally, we would like to thank you, our investors and fellow owners, for your support, confidence, and invaluable feedback. Kelvin Dushnisky President Barrick Gold Corporation | Annual Report 2016 13 BOARD OF DIRECTORS Board of Directors Gustavo A. Cisneros Independent Santo Domingo, Dominican Republic Chairman, Cisneros Group of Companies Graham G. Clow Independent Toronto, Ontario Chairman, Roscoe Postle Associates Inc. Gary A. Doer Independent Winnipeg, Manitoba Corporate Director and former Canadian Ambassador to the United States Kelvin P.M. Dushnisky Non-Independent Toronto, Ontario President, Barrick Gold Corporation J. Michael Evans Independent New York, New York President, Alibaba Group Holding Ltd. Brian L. Greenspun Independent Henderson, Nevada Publisher and Editor, Las Vegas Sun J. Brett Harvey Independent Canonsburg, Pennsylvania Chairman Emeritus, CONSOL Energy Inc. Nancy H.O. Lockhart Independent Toronto, Ontario Corporate Director and Retired Chief Administrative Officer, Frum Development Group Pablo Marcet Independent Buenos Aires, Argentina Corporate Director Dambisa Moyo Independent New York, New York International Economist and Author Anthony Munk Non-Independent* Toronto, Ontario Senior Managing Director, Onex Corporation J. Robert S. Prichard Independent Toronto, Ontario Chairman, Torys LLP, BMO Financial Group and Metrolinx Steven J. Shapiro Independent Silverthorne, Colorado Corporate Director and Retired Executive Vice President, Finance and Corporate Development, Burlington Resources Inc. John L. Thornton Non-Independent Palm Beach, Florida Executive Chairman, Barrick Gold Corporation Ernie L. Thrasher Independent Latrobe, Pennsylvania Founder, Chief Executive Officer and Chief Marketing Officer, Xcoal Energy & Resources Pablo Marcet (left), Nancy Lockhart and Michael Evans John L. Thornton (left), Graham Clow Board of Directors Meeting Toronto February 15, 2017 Robert Prichard Kelvin Dushnisky Brett Harvey (left), Steven Shapiro and Ernie Thrasher * Consistent with the Canadian Securities Administrators’ National Instrument 58–101 – Disclosure of Corporate Governance Practices and the New York Stock Exchange Standards, Anthony Munk is deemed not to be independent for a period of three years from the date that his father, Peter Munk, ceased to be Chairman of Barrick (i.e. April 30, 2017). 14 Barrick Gold Corporation | Annual Report 2016 CORPORATE GOVERNANCE AND COMMITTEES OF THE BOARD Corporate Governance Our Board is committed to acting in the best interests of the Company and its shareholders. Sound corporate governance practices contribute to achieving our strategic and operational plans, goals, and objectives. The Board of Directors has approved a set of Corporate Governance Guidelines to promote the effective functioning of the Board of Directors and its Committees, and to set forth a common set of expectations as to how the Board should manage its affairs and perform its responsibilities. Barrick has also adopted a Code of Business Conduct and Ethics that is applicable to all directors, officers, and employees of Barrick. In conjunction with the adoption of the Code, Barrick established a compliance hotline to allow for anonymous reporting by telephone or Internet portal of any suspected Code violations, including concerns regarding accounting, internal accounting controls, Committees of the Board Audit Committee (S.J. Shapiro, D. Moyo, E.L. Thrasher) Supports the Board in its oversight of Barrick’s financial reporting process and the quality, transparency, and integrity of Barrick’s financial statements and other related public disclosures, the Company’s internal controls over financial reporting, the Company’s compliance with legal and regulatory requirements relevant to the financial statements and financial reporting, the external auditor’s qualifications and independence, and the performance of the internal audit function and the external auditor. Compensation Committee (J.B. Harvey, G.A. Cisneros, J.R.S. Prichard, S.J. Shapiro, E.L. Thrasher) Supports 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 executive compensation. or other auditing matters. The Board of Directors has adopted a formal Shareholder Engagement Policy designed to facilitate an open dialogue and exchange of ideas between our Board and our shareholders. A copy of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics, the Shareholder Engagement Policy, and the mandates of the Board of Directors and each of the Committees of the Board is posted on Barrick’s website at www.barrick.com/company/governance, and is available in print from the Company to any shareholder upon request. Mr. J.B. Harvey is Barrick’s Lead Director. The Lead Director facilitates the functioning of the Board independently from management, serves as an independent leadership contact for directors and executive officers, and assists in maintaining and enhancing the quality of the Company’s corporate governance. Corporate Governance & Nominating Committee (G.A. Cisneros, B.L. Greenspun, N.H.O. Lockhart, D. Moyo) Supports the Board in establishing Barrick’s corporate governance policies and practices, identifying individuals qualified to become directors, reviewing the composition and functioning of the Board and its Committees, and succession planning for senior executives. Corporate Responsibility Committee (N.H.O. Lockhart, G.A. Doer, B.L. Greenspun, E.L. Thrasher) Supports the Board in overseeing Barrick’s programs and performance relating to environmental, health and safety, corporate social responsibility, and human rights matters. Risk Committee (J.M. Evans, G.G. Clow, D. Moyo, A. Munk, J.R.S. Prichard) Supports the Board in overseeing the Company’s management of enterprise risks, implementing policies and standards for mitigating such risks, monitoring and reviewing the Company’s financial structure, and investment and financial risk management programs. Barrick Gold Corporation | Annual Report 2016 15 15 EXECUTIVE OFFICERS AND ADVISORY BOARDS Executive Officers John L. Thornton Executive Chairman of the Board Kelvin P.M. Dushnisky President Kevin J. Thomson Senior Executive Vice President, Strategic Matters Catherine Raw Executive Vice President and Chief Financial Officer Darian K. Rich Executive Vice President, Talent Management Rob L. Krcmarov Executive Vice President, Exploration and Growth Richard J.E. Williams Chief Operating Officer Mark F. Hill Chief Investment Officer Kathy Sipos Chief of Staff International Advisory Board The International Advisory Board was established to provide advice to Barrick’s Board of Directors and management on geo-political and other strategic issues affecting the Company. Chairman The Right Honourable Brian Mulroney Canada Prime Minister 1984 –1993 Members His Excellency José María Aznar Spain Prime Minister 1996 –2004 The Honourable John R. Baird Canada Minister of Foreign Affairs 2011–2015 Gustavo A. Cisneros Dominican Republic Chairman, Cisneros Group of Companies Secretary William S. Cohen United States Senator 1979 –1997 and Secretary of Defense 1997–2001 The Honorable Newt Gingrich United States Speaker of the House of Representatives 1995 –1999 The Honourable Karl-Theodor zu Guttenberg Germany Federal Minister of Defense 2009 –2011 Vernon E. Jordan, Jr. United States Senior Counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P. Andrónico Luksic Chile Vice Chairman, Banco de Chile Peter Munk Canada Founder and Chairman Emeritus, Barrick Gold Corporation Lord Charles Powell of Bayswater KCMG United Kingdom Foreign Policy Advisor to Prime Minister Margaret Thatcher 1983 –1991 John L. Thornton United States Executive Chairman, Barrick Gold Corporation Corporate Social Responsibility Advisory Board Barrick’s Corporate Social Responsibility Advisory Board was formed in 2012, and acts as an external sounding board on a range of corporate responsibility issues, including community relations, sustainable development, water, energy, climate change, security, and human rights. Members Aron Cramer San Francisco, California President and Chief Executive Officer, BSR Gare A. Smith Washington, DC Partner, Foley Hoag, LLP Chair, Corporate Social Responsibility and Federal Affairs Practice Robert Fowler Ottawa, Ontario Former Deputy Minister of National Defence (1989–1995), Ambassador and Permanent Representative to the United Nations (1995–2000), Ambassador to Italy (2000 –2006) Special Consultant John G. Ruggie Cambridge, Massachusetts Berthold Beitz Professor in Human Rights and International Affairs, Kennedy School of Government Affiliated Professor in International Legal Studies, Harvard Law School 16 Barrick Gold Corporation | Annual Report 2016 Partners In Barrick’s early years, the Company’s founder, Peter Munk, led a small group of exceptional people who worked together as a team. They knew each other well, and they trusted each other completely. They shared responsibility and accountability for the Company’s success, and for its setbacks. Their personal wealth was tied to the Company’s fortunes, which gave them every incentive to work together as efficiently and effectively as possible. To accelerate emotional and financial ownership among our people today, we have created a Barrick partnership comprised of the most committed and passionate leaders across the Company: Miguel Amable Mejico Angeles Michelle Ash Sam Ash Nigel Bain Juana Barcelo Andrew Baumen Michael Brown Curtis Cadwell Nathan Chishimba Gordon Chiu Andy Cole Kevin Creel Jonathan Drimmer Kelvin Dushnisky Mike Estes Dave Forestell Sergio Fuentes Manuel Fumagalli John Giakoumakis Matt Gili Henri Gonin Brian Grebenc Rich Haddock Andrew Hastings Mark Hill George Joannou Naomi Johnson Rob Krcmarov Woo Lee Andy Lloyd Bill MacNevin Faby Manzano Basie Maree Melanie Miller Marian Moroney Giovanna Moscoso Deni Nicoski Calvin Pon Catherine Raw Darian Rich François Robert Julie Robertson Manuel Rocha Rick Sims Peter Sinclair Kathy Sipos Ettiene Smuts Kevin Thomson Andy Thompson Greg Walker Mark Wall Cody Whipperman James Whittaker Richard Williams Alex Wilson Financial Report Management’s Discussion and Analysis 18 | Mineral Reserves and Resources 86 | Financial Statements 98 | Notes to Financial Statements 103 | Shareholder Information 168 Barrick Gold Corporation | Financial Report 2016 17 Management’s Discussion and Analysis (“MD&A”) Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Barrick Gold Corporation (“Barrick”, “we”, “our” or the “Company”), our operations, financial performance and the present and future business environment. This MD&A, which has been prepared as of February 15, 2017, should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2016. Unless otherwise indicated, all amounts are presented in U.S. dollars. For the purposes of preparing our MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances, including potential market sensitivity. Continuous disclosure materials, including our most recent Form 40-F/Annual Information Form, annual MD&A, audited consolidated financial statements, and Notice of Annual Meeting of Shareholders and Proxy Circular will be available on our website at www.barrick.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. For an explanation of terminology unique to the mining industry, readers should refer to the glossary on page 85. Cautionary Statement on Forward-Looking Information Certain information contained or incorporated by reference in this MD&A, including any information as to our strategy, projects, plans or future financial or operating performance constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “objective”, “aim”, “intend”, “project”, “goal”, “continue”, “budget”, “estimate”, “potential”, “may”, “will”, “can”, “could” and similar expressions identify forward-looking statements. In particular, this MD&A contains forward-looking statements including, without limitation, with respect to: (i) Barrick’s forward- looking production guidance; (ii) estimates of future cost of sales per ounce for gold and per pound for copper, all-in-sustaining costs per ounce/pound, cash costs per ounce and C1 cash costs per pound; (iii) cash flow forecasts; (iv) projected capital, operating and exploration expenditures; (v) targeted debt and cost reductions; (vi) targeted investments by the Company; (vii) mine life and production rates; (viii) potential mineralization and metal or mineral recoveries; (ix) Barrick’s Best-in-Class program (including potential improvements to financial and operating performance that may result from certain Best-in-Class initiatives); (x) the Lama starter project and the potential for phased in development of the Pascua Lama project; (xi) timing and completion of acquisitions; (xii) asset sales or joint ventures; and (xiii) expectations regarding future price assumptions, financial performance and other outlook or guidance. 18 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISForward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this MD&A in light of Management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel, natural gas and electricity); the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation and exploration successes; risks associated with the fact that certain Best-in-Class initiatives are still in the early stages of evaluation and additional engineering and other analysis is required to fully assess their impact; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges and disruptions in the maintenance or provision of required infrastructure and information technology systems; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; uncertainty whether some or all of the Best-in-Class initiatives and investments targeted by the Company will meet the Company’s capital allocation objectives; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit ratings; the impact of inflation; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States and other jurisdictions in which the Company does or may carry on business in the future; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; litigation; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the Company; our ability to successfully integrate acquisitions or complete divestitures; risks associated with working with partners in jointly controlled assets; employee relations including loss of key employees; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed company. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/ Annual Information Form on file with the SEC and 19 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISCanadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this MD&A. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Changes in Presentation of Non-GAAP Financial Performance Measures We use the following non-GAAP financial performance measures in our MD&A: n “adjusted net earnings” n “free cash flow” n “EBITDA” n “adjusted EBITDA” n “cash costs per ounce” n “C1 cash costs per pound” n “all-in sustaining costs per ounce/pound” n “all-in costs per ounce” and n “realized price” For a detailed description of each of the non-GAAP measures used in this MD&A and a detailed reconciliation, please refer to the Non-GAAP Financial Performance Measures section of this MD&A on pages 69 to 83. Each non-GAAP financial performance measure has been annotated with a reference to an endnote on page 84. The non-GAAP financial performance measures set out in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under International Financial Reporting Standards (“IFRS”), and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. In 2016, we made changes to the following non-GAAP performance measures: EBITDA Starting with the third quarter 2016 MD&A, we are presenting a reconciliation of net earnings to EBITDA and adjusted EBITDA for each of our reportable operating segments. We believe this additional information will assist analysts, investors and other stakeholders of Barrick in understanding the details of this non-GAAP metric on a segment-by-segment basis. Adjusted Net Earnings In the third quarter 2016 MD&A, we amended the reconciliation of net earnings to adjusted net earnings to present the adjusting items on a pre-tax and fully consolidated basis, and including the tax effect and non-controlling interest as a separate line. We believe that this change will assist analysts, investors and other stakeholders of Barrick to better understand how we calculate this non-GAAP performance measure and simplify how it reconciles to our financial statements. This change to the presentation of our reconciliation does not result in any change to the final calculation of adjusted net earnings. Cash Costs per ounce, All-in Sustaining Cash Costs per ounce and All-in Costs per ounce Starting with the third quarter 2016 MD&A, we have presented this reconciliation for each of our reportable operating segments. We believe this additional information will assist analysts, investors and other stakeholders of Barrick in understanding the details of these non-GAAP metrics on a segment-by-segment basis. Starting with the second quarter 2016 MD&A, we condensed and simplified the reconciliation from cost of sales to “cash costs”, “all-in sustaining costs” and “all-in costs”, including on a per ounce basis for gold and per pound basis for copper, to present items on a fully consolidated basis and include non-controlling interest as a separate line. As part of this simplification, we have grouped several minor items into one line labeled “Other”, with further detail in the footnote to the reconciliation. We believe that these changes will assist analysts, investors and other stakeholders of Barrick to better understand how we calculate these non-GAAP performance measures and simplify how they reconcile to our financial statements. This change to the 20 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISpresentation of our reconciliation does not result in any change to the figures calculated, except as noted below for “all-in costs”. Also starting with the second quarter 2016 MD&A, we adjusted the amount included as “project exploration and evaluation costs and project costs” as part of our “all-in costs” measure to include all exploration and evaluation costs related to our advanced mining and business improvement projects and corporate development activities, where previously it did not. The impact of this adjustment for the three and twelve month periods ended December 31, 2016 was $22/oz and $17/oz, respectively (2015: $27/oz and $30/oz, respectively; 2014: $25/oz). We believe this change will assist analysts, investors and other stakeholders of Barrick in understanding all of the expenditures related to growing our business. The tables on pages 69 to 83 reconcile these non- GAAP measures to the most directly comparable IFRS measures and previous period reconciliations have been modified to be presented in a manner consistent with our current format. Index 22 Overview 22 Our Business 22 Our Vision 22 Our Strategy 23 30 Outlook for 2017 34 Risks and Risk Management 36 Market Overview Full Year Financial and Operating Highlights 41 Review of Annual Financial Results 41 Revenue 41 Production Costs 42 Capital Expenditures 43 General and Administrative Expenses 43 44 Exploration, Evaluation and Project Costs Finance Costs, Net 44 Additional Significant Statement of Income Items 45 Income Tax Expense 46 Financial Condition Review 47 Balance Sheet Review 47 Shareholders’ Equity Financial Position and Liquidity Summary of Cash Inflow (Outflow) Summary of Financial Instruments 47 48 49 49 Operating Segments Performance 50 Cortez 52 Goldstrike 54 Pueblo Viejo Lagunas Norte 56 58 Veladero 61 63 Acacia Mining plc Pascua-Lama 65 Turquoise Ridge 66 Commitments and Contingencies 67 Review of Quarterly Results 68 Internal Control over Financial Reporting and Disclosure Controls and Procedures 69 IFRS Critical Accounting Policies and Accounting Estimates 69 Non-GAAP Financial Performance Measures 84 Technical Information 84 Endnotes 85 Glossary of Technical Terms 21 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Our Vision Our vision is the generation of wealth through responsible mining; wealth for our owners, our people, and the countries and communities with which we partner. In support of this vision, our overarching objective is to grow our free cash flow per share. Our Strategy Our strategy is to grow our free cash flow per share over the long term. We expect to achieve this through three areas of focus: Growing Free Cash Flow per Share through Industry- leading Margins Through our Best-in-Class approach, we pursue industry-leading margins by continuously improving the productivity and efficiency of existing systems and operations. Equally, we pursue step changes in performance by re-designing those systems and introducing new technologies; and we innovate to redefine what is possible. Our digital transformation partnership with Cisco will be another Best-in-Class priority for 2017. Growing Free Cash Flow per Share through Superior Portfolio Management As part of our revamped capital allocation system, all proposals go through a rigorous, independent peer review process led by our Evaluations team, before they go to the Investment Committee. They are then ranked, prioritized and sequenced to optimize capital spending over time on a strategic basis, allowing us to anticipate and plan for funding requirements. Over time, assets that are unable to meet our return expectations will be divested. We are continuously evaluating external opportunities to increase the long-term value of our portfolio through acquisitions, joint ventures, and other partnerships. Overview Our Business Barrick is one of the world’s leading gold mining companies with annual gold production and gold reserves that are the largest in the industry. We are principally engaged in the production and sale of gold and copper, as well as related activities such as exploration and mine development. We have 9 producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia, the Dominican Republic and a 47.5% interest in a producing mine in Papua New Guinea. We also hold a 63.9% equity interest in Acacia Mining plc (“Acacia”), a company listed on the London Stock Exchange (“LSE”) that owns gold mines and exploration properties in Africa. More than 75% of our gold production comes from the Americas region. Our copper business contains a wholly-owned copper mine in Zambia and 50% interests in copper mines in Chile and Saudi Arabia. We also have projects located throughout the Americas. We sell our production in the world market through the following distribution channels: gold bullion is sold in the gold spot market; and gold and copper concentrate is sold to independent smelting companies. Barrick’s shares trade on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange under the symbol ABX. 2016 REVENUE ($ millions) Gold $7,908 Copper $466 Other 2016 GOLD PRODUCTION (thousands of ounces) Americas 4,377 Other 1,140 22 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISGrowing Free Cash Flow per Share through Partnerships We believe an authentic partnership culture is our most distinctive and sustainable competitive advantage. For Barrick, partnership means a trust-based culture, and the currency of trust is transparency. It is a culture of peers. Those who are part of Barrick recognize that in general, the collective is stronger than the aggregation of individuals. By embracing these values, we aim to be the preferred partner of host governments and communities, the most sought-after employer among the world’s best talent, and the natural choice for long-term investors. We also created a new partnership with Cisco to drive Barrick’s digital transformation and have also continued to strengthen our relationships with other external partners, including Zijin Mining, Ma’aden, and Antofagasta Plc – our joint venture partners at the Porgera mine, the Jabal Sayid mine, and the Zaldívar mine. And we are working to develop new partnerships with the potential to unlock value across our business, and grow free cash flow per share over the long term. Last year, we created the Global Employee Share Plan, a program to make every Barrick employee – from the rock face to the head office – an owner of the Company, with an initial allocation of 25 common shares per person. We expect this to grow over time, in line with Barrick’s performance. Our goal is not simply to be aligned with our owners, we want our people to be owners. Implementation of the program began in late 2016 and we expect to complete the initial roll out in the first half of 2017. Full Year Financial and Operating Highlights OPERATING CASH FLOW AND FREE CASH FLOW1 GOLD PRODUCTION (000s ounces) $1,266 2,296 $1,160 2,794 $1,251 2,640 720 to 770 1,514 1,081 546 6,249 6,117 5,517 5,600 to 5,900 (136) 2014 2015 2016 2014 2015 2016 2017 (est) Operating Cash Flow ($ millions) Divested Sites Free Cash Flow ($ millions) Gold Market Price ($/oz) COST OF SALES, CASH COSTS1 AND ALL-IN SUSTAINING COSTS1 ($ per ounce) DEBT ($ millions) 13,081 842 864 859 831 798 730 598 596 546 780 to 820 720 to 770 510 to 535 9,968 3,113 7,931 2,037 5,000 2014 2015 2016 2017 (est) December 2014 2015 Repayments December 2015 2016 Repayments December 2016 December 2018 (target) Cash costs AISC Cost of sales 5000 4000 3000 2000 1000 0 5000 4000 3000 2000 1000 0 23 5000 4000 3000 2000 1000 0 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISFor the years ended December 31 For the three months ended December 31 ($ millions, except per share amounts in dollars) 2016 2015 2014 2016 2015 Net earnings (loss) attributable to equity holders of the Company Per share (dollars)1 Adjusted net earnings2 Per share (dollars)1,2 Operating cash flow Free cash flow2 $ 655 0.56 818 0.70 2,640 $ 1,514 $ (2,838) (2.44) 344 0.30 2,794 $ 1,081 $ (2,907) (2.50) 793 0.68 2,296 (136) $ $ 425 0.36 255 0.22 711 $ 385 $ (2,622) (2.25) 91 0.08 698 387 $ 1. Calculated using weighted average number of shares outstanding under the basic method of earnings per share of 1,165 million shares in 2016 (2015: 1,165 million shares; 2014: 1,165 million shares). 2. Adjusted net earnings and free cash flow are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. In 2016, we exceeded all of our key targets for the year. Our mines generated net cash flow provided by operating activities (“operating cash flow”) of $2.6 billion in 2016 and free cash flow1 of $1.5 billion for the year, a record level of annual free cash flow for Barrick. We reduced our cost of sales applicable to gold by seven percent to $798 per ounce, and our all-in sustaining costs1 fell by 12% to $730 per ounce, driven by Best-in- Class improvements in efficiency and productivity across our portfolio. At the same time, we continued to strengthen our balance sheet, and we further strengthened our capital allocation process with the appointment of the Company’s first ever Chief Investment Officer. Balance Sheet and Liquidity In 2016, we reduced our total debt by $2.04 billion, or 20%, from $9.97 billion to $7.93 billion, exceeding our original target of $2 billion. Approximately $5 billion of our $7.9 billion in outstanding debt matures after 2032. In 2015 and 2016 we have reduced our debt by a total of $5.15 billion, which will reduce pre-tax interest payments by approximately $235 million on an annualized basis. Over the same period, the average tenor on our outstanding public debt has increased from approximately 14 years to approximately 17 years. Our liquidity position is strong and continues to improve, with robust cash flow generation, modest near-term debt repayment obligations, a $4 billion undrawn credit facility and a consolidated cash balance of approximately $2.4 billion3. We intend to reduce our total debt by $2.9 billion to $5 billion by the end of 2018, half of which we are targeting in 2017. We will achieve this by using cash flow from operations, selling additional non-core assets, and creating new joint ventures and partnerships. Cost Performance In 2016, we continued our focus on capital discipline, identifying productivity and efficiency savings opportunities through our Best-in-Class program and maintaining reductions in corporate overhead. Cost of sales per ounce4 in 2016 decreased 7% to $798 per ounce and minesite sustaining capital expenditures decreased 31% compared to the prior year. Combined with an overall decrease in direct mining costs, a positive change in our sales mix with higher production at our lower cost mines and as a result of the divestment of some of our higher cost mine sites, reduced our all-in sustaining costs1 for 2016 by 12% to $730 per ounce, compared to the prior year. 24 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Net Earnings (Loss), Adjusted Net Earnings, Operating Cash Flow and Free Cash Flow FACTORS AFFECTING NET EARNINGS (LOSS) AND ADJUSTED NET EARNINGS1 ($ millions) Controllable Costs Uncontrollable Costs Gold and copper cash costs4 Gold and copper sales volume Exploration and evaluation costs Depreciation Other1 Gold and copper prices Foreign exchange2 123 459 Income tax expense Impact of divested sites3 2016 Adjusted net earnings4 2016 Adjusting items 100 128 (69) (25) (259) 818 (189) 2016 Net earnings 655 (163) 206 Gold 531 Copper 11 2015 Adjusted net earnings4 2015 Adjusting items 3,182 344 2015 Net earnings (2,838) 1. Primarily consists of finance costs, closure costs and general & administrative costs. 2. Estimated impact of foreign exchange. 3. Includes Bald Mountain, Round Mountain, Cowal, Ruby Hill, 47.5% of Porgera and 50% of Zaldívar. 4. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Net earnings attributable to equity holders of Barrick (“net earnings”) for 2016 was $655 million compared with a net loss of $2,838 in the prior year. This significant improvement in earnings was largely due to $3,897 million of impairment charges recorded in 2015 compared to net impairment reversals of $250 million recorded in 2016, partially offset by an income tax expense in 2016 compared to an income tax recovery in the prior year. The higher earnings were also caused by higher gold and copper prices combined with higher sales volumes (excluding the impact of divested sites), decreased operating costs and lower exploration, evaluation and project expenses. These were partially offset by an increase in costs relating to closed mine rehabilitation combined with losses on currency translation primarily related to the realization of deferred currency translation losses in Australia of $91 million during the first quarter of 2016. After adjusting for items that are not indicative 3000 5000 4000 2000 1000 0 of future operating earnings, adjusted net earnings1 of $818 million in 2016 were 138% higher than the prior year primarily due to the impact of higher gold and copper prices combined with higher gold and copper sales volumes (excluding the impact of divested sites) and lower operating costs. These were partially offset by higher income tax expense and the impact of divested sites. For a breakdown of asset impairment charges/ reversals recognized in 2016, see page 44 of this MD&A. Significant adjusting items to net earnings (pre-tax and non-controlling interest effects) in 2016 include: n $199 million in foreign currency translation losses, including deferred currency translation losses released as a result of the disposal and reorganization of certain Australian entities in the first quarter of 2016 and unrealized foreign currency translation losses related to the devaluation of the Argentinean peso on VAT receivables; 25 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISFACTORS AFFECTING OPERATING CASH FLOW AND FREE CASH FLOW1 ($ millions) Controllable Costs Uncontrollable Costs 2015 Operating cash flow 2,794 2015 Capex Change in Capex 2015 Free cash flow1 Gold and copper sales volume Interest paid Gold and copper cash costs1 Deposit on streaming agreement 164 206 Change in working capital2 Other3 Impact of divested sites4 2016 Capex 2016 Operating cash flow 2,640 Gold and copper price 2016 Free cash flow1 1,081 1,713 251 327 Gold 531 Copper 11 (610) (223) 214 459 1,514 1,126 (355) 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 2. Change in working capital excludes amounts related to divested sites. 3. Consists of cash flows related primarily to global exploration and project costs and non-minesite general & administrative costs. 4. Includes Bald Mountain, 50% of Round Mountain, Cowal, Ruby Hill, 47.5% of Porgera and 50% of Zaldívar. n $114 million in other expense adjustments primarily relating to losses on debt extinguishment, partly offset by insurance proceeds relating to the 2015 oxygen plant motor failure at Pueblo Viejo; n $43 million in significant tax adjustments primarily relating to a tax provision in Acacia in the first quarter of 2016; n $42 million in disposition losses primarily relating to the divestment of 50% of Zaldívar; n The above are partially offset by $250 million in net impairment reversals at Veladero and Lagunas Norte in the fourth quarter of 2016, net of an impairment 5000 charge relating to the write-down of our retained equity method investment in Zaldívar. 4000 1000 3000 2000 In 2016, we generated $2,640 million in operating cash flow, compared to $2,794 million of operating cash flow in the prior year. 2015 operating cash flow included a $610 million deposit relating to the gold and silver streaming arrangement with Royal Gold. Excluding this transaction, operating cash flow for 2016 was $456 million higher than the prior year despite the $355 million reduction in operating cash flow associated with the divestment of some non-core assets. We benefited from higher market gold prices and lower 0 direct mining costs as a result of lower energy and fuel costs (despite being hedged on a significant portion of our fuel consumption) combined with the continued realization of lower labor and consumable costs and improved operating efficiencies resulting from our Best-in-Class initiatives and also lower cash interest paid. These improvements were largely offset by the impact of lower gold and copper volumes sold, primarily as a result of the aforementioned divestitures, combined with the impact of unfavorable working capital movements compared to the prior year, mainly as a result of inventory balances, and higher income taxes paid. Free cash flow1 for 2016 was $1,514 million, compared to $1,081 million in the prior year. Excluding the $610 million streaming deposit transaction recorded in 2015, we generated $1,043 million additional free cash flow in the current year. The increase primarily reflects the higher operating cash flows combined with lower capital expenditures. In 2016, capital expenditures on a cash basis were $1,126 million compared to $1,713 million in 2015. The decrease of $327 million, excluding the impact of $260 million in capital expenditures associated with divested sites, is primarily due to lower capitalized stripping costs at our Veladero mine, a decrease in leach pad expansion costs at our 26 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISVeladero mine and our Lagunas Norte mine and our continued focus on capital discipline across the Company. This was combined with a decrease in project costs mainly relating to the completion of the thiosulfate circuit at Goldstrike in the prior year and decreased capital expenditures on a cash basis at Pascua-Lama. Safety Nothing is more important to Barrick than the safety, health and well-being of workers and their families. In 2016, we continued our trend of improving our total reportable injury frequency rate5 (“TRIFR”) and since 2009, there has been a 67% improvement in the TRIFR (from 1.20 to 0.40). The foundation underpinning this improvement continues to be our Courageous Leadership program, which was updated in 2015 with a new program called “Courage to Care”. Courage to Care is designed to help Barrick make the next step in safety performance through a team approach. In addition we continue to focus on compliance with elements of the Barrick “Safety and Health Management System”. Although we are pleased with these trends, this performance was overshadowed by the tragic occurrence of an incident in 2016 when a truck operator at Lumwana suffered fatal injuries resulting from a fire on the truck he was operating. Unfortunately, another tragic event occurred early in 2017 as a contract employee was involved in a fatal accident while performing scheduled maintenance work at Pascua-Lama. Barrick’s goal is zero fatalities with the implementation of Critical Control Management based upon the guidance published by the International Council on Mining and Metals (“ICMM”) in 2015. In addition, following a successful trial of mobile equipment collision avoidance technology in 2015, a full-scale deployment of the technology was implemented at the Cortez mine in 2016. Environment The unfortunate 2015 cyanide release at our Veladero site in Argentina and the consequent loss of confidence from regulators and investors was, in many ways, a wake-up call for the Company. Since that time, the Board and Executive leadership of Barrick have been absolutely clear that our obligation to be a responsible steward of the environment is second only to our commitment to protecting the health and safety of our workers and their families. Over the past three years, we have reduced the number of reportable environmental incidents by more than 75%. This reduction has been accomplished by relentlessly scrutinizing our operations for sources of environmental risk. In 2016, we had a TOTAL REPORTABLE INJURY FREQUENCY5 AND REPORTABLE ENVIRONMENTAL INCIDENTS 53 29 546 720 to 770 13 0.58 0.46 0.40 2014 2015 2016 Total Reportable Injury Frequency Reportable Environmental Incidents second incident at Veladero although no solution reached surface water or escaped the site, and extensive sampling confirmed that the incident did not result in any environmental impact. Nonetheless, due to heightened regulatory sensitivity surrounding the site, production was temporarily suspended while the site completed upgrades to the berms surrounding the leach pad. In 2017, our operations will be focused on adapting the ICMM Critical Control Management guidance to our environmental operations. By doing so, we expect to be able to further reduce the number of environmental incidents and continue to rebuild Barrick’s reputation for environmental excellence and become the preferred partner of host governments and communities. Climate Change Climate change, including temperature and precipitation shifts as well as more frequent and severe extreme 5000 weather events, will have complex impacts on the mining industry. Volatile climatic conditions can affect the 4000 stability and effectiveness of infrastructure and equipment; potentially impact environmental protection and site 3000 closure practices; lead to changes in the regulatory environment, including increased financial exposure to 2000 carbon tax regimes; and potentially impact the stability and cost of water and energy supplies. Mining is an 1000 energy-intensive business and we understand the important link between energy use and climate change. Barrick considers climate change to be a company, community, and global concern. By effectively managing our energy use, we are able to reduce our greenhouse gas (“GHG”) emissions, achieve more efficient production, reduce our draw from local energy grids, and save a significant proportion of our direct mining costs. 0 27 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISThrough 2017, we will continue to align with the ICMM Position Statement on Climate Change and support placing a market price on GHG emissions. We will also be participating in multi-stakeholder forums, such as the Carbon Pricing Leadership Coalition, to advance our understanding and share knowledge on climate change solutions. In addition we have established an internal Climate Change Committee to build on our existing energy management plan and develop a comprehensive climate change strategy. By the end of 2017 we plan to conduct a climate change risk assessment and establish targets to reduce our GHG emissions. Reserves and Resources To calculate our 2016 reserves, we have applied a short-term gold price assumption of $1,000 per ounce for the next four years, and a long-term gold price of $1,200 per ounce from 2021 onwards, consistent with our approach in 2015. As of December 31, 2016, Barrick’s proven and probable gold reserves were 85.9 million ounces6, compared to 91.9 million ounces at the end of 2015. Approximately 1.9 million ounces were divested last year, and 6.8 million ounces were depleted through mining and processing. We replaced approximately 60 percent of the ounces we depleted through drilling and cost improvements at our operating mines. Significant additions included 1.1 million ounces at Lagunas Norte, 920,000 ounces at Hemlo, and 640,000 ounces at the Goldstrike underground mine. Reserves at Pascua-Lama declined by 1.3 million ounces as a result of design modifications to enhance safety and environmental mitigation at the project. Reserves at Acacia’s Bulyanhulu mine also declined by 430,000 ounces. In 2016, measured, indicated, and inferred resources were calculated using a gold price assumption of $1,500 per ounce. This compares to $1,300 per ounce in 2015. Measured and indicated gold resources decreased to 75.2 million ounces6 at the end of 2016, compared to 79.1 million ounces at the end of 2015. Approximately 4.3 million ounces of measured and indicated gold resources were divested in 2016, and 2.7 million ounces were upgraded to proven and probable gold reserves. Approximately 5.3 million ounces were added to measured and indicated resources as a result of using a $1,500 per ounce gold price assumption. Inferred gold resources increased to 30.7 million ounces at the end of 2016, compared to 27.4 million ounces6 at the end of 2015. Approximately 3.2 million ounces were upgraded to measured and indicated resources. Approximately 5.3 million ounces were added through drilling, including 2.0 million ounces at Veladero, 1.3 million ounces at Hemlo, and 1.1 million ounces at RESERVES AND RESOURCES (millions of ounces) 29.3 94.3 93.0 2014 27.4 79.1 91.9 2015 596 30.7 75.2 85.9 2016 P&P Reserves M&I Resources Inferred Resources Alturas. Approximately 1.7 million ounces were added to inferred resources as a result of using a $1,500 per ounce gold price assumption. The addition of 5.3 million ounces of inferred gold resources through drilling underscores the value of our investments in near-mine exploration and sets the stage for replenishing and upgrading our reserve and resource portfolio in future years. Proven and probable copper reserves were calculated using a short-term copper price of $2.25 per pound and a long-term price of $2.75 per pound. This compares to a short-term copper price of $2.75 and a long-term price of $3.00 per pound in 2015. Copper reserves, including copper within gold reserves, were 11.1 billion pounds6 at the end of 2016, compared to 11.7 billion pounds, at the end of 2015. Measured and indicated copper resources, including copper within measured and indicated gold resources, increased slightly to 9.7 billion pounds4, compared to 9.6 billion pounds, at the end of 2016. 5000 Exploration and Projects 4000 After several years of exploration focused primarily on existing core districts and projects, we are increasing 3000 our budget and broadening our focus to include new greenfield opportunities. In the short term, every one of 2000 28 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISour operating mines has the potential to identify new reserves and resources through near-mine exploration. In many cases, these ounces can be quickly incorporated into mine plans, driving improvements in production, cash flow, and earnings. Over the medium term, we are advancing a pipeline of high-confidence projects at or near our existing operations. These projects remain on track and are expected to begin contributing new production to our portfolio beginning in 2021. This includes three significant projects in Nevada: the Cortez Deep South underground expansion; the potential development of an underground mine at Goldrush; and a significant expansion of throughput at the Turquoise Ridge mine. At the Lagunas Norte mine in Peru, we are advancing a project to extend the life of the mine by approximately nine years by mining the refractory material below the oxide ore body in the current open pit. At the Alturas project in Chile, we have added an additional 1.1 million ounces of inferred gold resources, bringing the total inferred resource to 6.8 million ounces6. We expect to complete a scoping study for Alturas in 2017. We have also initiated a prefeasibility study to evaluate the construction of an underground mine at Lama, on the Argentinean side of the Pascua-Lama project. Highlights of our greenfield exploration program for 2017 include the Fourmile target, adjacent to our Goldrush discovery in Nevada, and the Frontera District on the border of Argentina and Chile. We have also formed new partnerships with Alicanto Minerals in Guyana and Osisko Mining in the Labrador Trough of Northern Quebec, where we see the potential to develop new core mineral districts for Barrick. Our portfolio also contains a number of the world’s largest undeveloped gold deposits, including Donlin Gold, Cerro Casale, and Pascua-Lama. These projects contain 31.5 million ounces of gold in proven and probable reserves (Barrick’s share), and 29.3 million ounces in measured and indicated resources (Barrick’s share). Management Structure Refinements In December 2016, Michelle Ash, formerly Senior Vice President, Business Transformation & Innovation, was elevated to the position of Chief Innovation Officer and Matt Gili, formerly Executive General Manager for the Cortez District in Nevada, was elevated to Chief Technical Officer. In August 2016, we announced the appointment of Mark Hill as Chief Investment Officer and a member of Barrick’s Executive Committee, a group of the Company’s most senior partners. In this newly-created position, Mr. Hill will chair Barrick’s Investment Committee and apply a high degree of consistency and rigor to all capital allocation decisions at the company – whether at existing operations, development projects, exploration (both near-mine and greenfields), or potential acquisitions and divestments. In March 2016, Shaun Usmar, then Barrick’s Senior Executive Vice President and Chief Financial Officer, announced his resignation from Barrick. Catherine Raw, formerly Executive Vice President, Business Performance, succeeded Mr. Usmar as Chief Financial Officer on April 27, 2016, subsequent to the Company’s 2016 Annual General Meeting. In March 2016, we also announced that Rob Krcmarov, formerly Senior Vice President, Global Exploration, had been elevated to the position of Executive Vice President, Exploration and Growth, and had become a member of Barrick’s Executive Committee. Board Renewal & Appointments In 2016, the Board of Directors appointed Kelvin Dushnisky, President of Barrick, as a director. Graham G. Clow, Chairman of Roscoe Postle Associates Inc., and Gary Doer, former Canadian Ambassador to the United States, were elected as new directors at Barrick’s Annual General Meeting on April 26, 2016. William Birchall retired from the Board at the conclusion of the Company’s 2016 Annual General Meeting. On December 6, 2016, the Company appointed Pablo Marcet to its Board of Directors. Mr. Marcet is a seasoned mining professional with nearly 30 years of experience in the exploration, development, and operation of mines across Latin America and East Africa. He has held senior management positions in geology, mining operations, and business development, including 15 years at BHP Billiton. Barrick continues to renew the talent on its Board, with nine of the 14 directors (excluding the Executive Chairman) being new to the Company since April 2014. 29 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISOutlook for 2017 Operating Unit Guidance Our 2016 gold and copper production, cost of sales, cash costs, all-in sustaining costs and 2017 forecast gold and copper production, cost of sales, cash costs and all-in sustaining costs ranges by operating unit are as follows: 2016 production (000s ozs) 2016 cost of sales ($/oz) 2016 2016 cash all-in costs1 sustaining ($/oz) costs1 ($/oz) 2017 forecast production (000s ozs) 2017 forecast cost of sales ($/oz) 2017 forecast cash costs1 ($/oz) 2017 forecast all-in sustaining costs1 ($/oz) 1,059 1,096 700 435 544 $ 901 852 564 651 872 $ 430 572 395 383 582 $ 518 1,250 – 1,290 910 – 950 625 – 650 380 – 420 770 – 830 714 490 529 769 $ 730 – $ 760 950 – 990 650 – 680 710 – 780 750 – 800 $ 360 – $ 380 650 – 680 400 – 420 430 – 470 500 – 540 $ 430 – $ 470 910 – 980 530 – 560 560 – 620 840 – 940 Operating unit Gold Cortez Goldstrike Pueblo Viejo (60%) Lagunas Norte Veladero Total Core Mines 3,834 $ 793 $ 480 $ 606 3,900 – 4,100 $ 770 – $ 810 $ 470 – $ 500 $ 650 – $ 710 Turquoise Ridge (75%) Porgera (47.5%) Kalgoorlie (50%) Acacia (63.9%) Hemlo Golden Sunlight 266 234 376 530 235 34 603 836 762 880 795 1,512 498 689 627 640 679 1,376 625 858 706 958 839 1,493 260 – 280 250 – 270 390 – 410 545 – 575 205 – 220 35 – 50 575 – 625 780 – 840 750 – 790 860 – 910 800 – 860 900 – 1,200 460 – 500 650 – 700 600 – 630 580 – 620 640 – 690 900 – 950 650 – 730 900 – 970 670 – 710 880 – 920 880 – 980 950 – 1,040 Total Continuing Operations 5,509 $ 844 $ 523 $ 659 5,600 – 5,900 $ 780 – $ 820 $ 510 – $ 535 $ 700 – $ 750 Round Mountain (50%)2 Bald Mountain2 Pierina 5 3 92 701 1,112 911 608 723 662 601 1,692 1,301 Total Divested/Closed Sites 100 $ 897 $ 658 $ 1,250 – – – – – – – – – – – – – – – – Total Gold3 5,609 $ 798 $ 518 $ 668 5,600 – 5,900 $ 780 – $ 820 $ 510 – $ 535 $ 700 – $ 750 Total Consolidated Barrick4,5 5,609 $ 798 $ 546 $ 730 5,600 – 5,900 $ 780 – $ 820 $ 510 – $ 535 $ 720 – $ 770 2016 production (millions lbs) 2016 2016 2016 all-in cost of C1 cash costs1 sustaining ($/lb) costs1 ($/lb) sales ($/lb) 2017 forecast production (millions lbs) 2017 forecast cost of sales ($/lb) 2017 forecast C1 cash costs1 ($/lb) 2017 forecast all-in sustaining costs1 ($/lb) Copper Zaldívar (50%) Lumwana Jabal Sayid (50%) 114 271 30 $ 1.93 1.16 2.33 $ 1.55 1.44 1.97 $ 2.05 1.97 2.98 120 – 135 250 – 275 30 – 40 $ 2.00 – $2.20 1.20 – 1.40 2.10 – 2.80 ~$ 1.50 1.40 – 1.60 1.50 – 1.90 $ 1.90 – $ 2.10 2.10 – 2.30 2.30 – 2.80 Total Copper 415 $ 1.43 $ 1.49 $ 2.05 400 – 450 $ 1.50 – $1.70 $ 1.40 – $1.60 $ 2.10 – $ 2.40 1. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 2. Includes results from Bald Mountain and Round Mountain up to January 11, 2016, the effective date of sale of these assets. 3. Total gold cash costs and all-in sustaining costs per ounce exclude the impact of hedges and/or costs allocated to non-operating sites. 4. Operating unit guidance ranges reflect expectations at each individual operating unit, and may not add up to the company-wide guidance range total. The company-wide guidance ranges exclude Pierina which is mining incidental ounces as it enters closure and Bald Mountain and Round Mountain which were disposed of in January 2016. 5. Total Consolidated Barrick all-in sustaining costs include corporate administration costs and expected savings from an improved capital management program that have not been reflected in the individual site guidance ranges at this time. 30 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Operating Unit, Consolidated Expense and Capital Guidance Our 2016 gold and copper production, cost of sales, cash costs1, all-in sustaining costs1, consolidated expenses and capital expenditures and forecast gold and copper production, cost of sales, cash costs1, all-in sustaining costs1, consolidated expenses and capital expenditures for 2017 are as follows: ($ millions, except per ounce/pound data) Gold production and costs Production (millions of ounces) Gold unit production costs Cost of sales – gold ($ per oz) All-in sustaining costs ($ per oz)1 Cash costs ($ per oz)1 Depreciation ($ per oz) Copper production and costs Production (millions of pounds) Copper unit production costs Cost of sales – copper ($ per lb) C1 cash costs ($ per lb)1 Depreciation ($ per lb) Copper all-in sustaining costs ($ per lb)1 Exploration and project expenses Exploration and evaluation Project expenses General and administrative expenses Corporate administration Stock-based compensation2 Acacia3 Other expense4 Finance costs Attributable capital expenditures: Attributable minesite sustaining Attributable project Total attributable capital expenditures5 2016 Original guidance Q3 2016 Guidance 2016 Actual 2017 Guidance 5.00 – 5.50 5.25 – 5.55 5.52 5.60 – 5.90 – 775 – 825 550 – 590 240 – 260 800 – 850 740 – 775 540 – 565 240 – 260 370 – 410 380 – 430 – 1.45 – 1.75 0.20 – 0.30 2.05 – 2.35 1.35 – 1.55 1.40 – 1.60 0.20 – 0.30 2.00 – 2.20 225 – 275 125 – 155 100 – 120 ~215 ~145 ~45 ~25 20 – 40 690 – 730 195 – 245 115 – 145 80 – 100 ~260 ~160 ~40 ~60 20 – 40 710 – 750 798 730 546 249 415 1.43 1.49 0.23 2.05 237 132 105 256 163 38 55 60 788 780 – 820 720 – 770 510 – 535 245 – 265 400 – 450 1.50 – 1.70 1.40 – 1.60 0.30 – 0.40 2.10 – 2.40 415 – 495 185 – 225 230 – 270 ~285 ~200 ~40 ~45 25 – 45 600 – 650 1,200 – 1,400 1,050 – 1,100 150 – 200 1,200 –1,300 150 – 250 1,350 – 1,650 977 145 1,122 1,050 – 1,200 250 – 300 1,300 – 1,500 1. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 2. 2016 actual based on US$15.98 and 2017 guidance based on a three month trailing average ending December 31, 2016 of US$16.92 per share and excludes Acacia. 3. 2016 actual includes $32 million in stock-based compensation. 2017 guidance includes ~$20 million in stock-based compensation. 4. 2016 actual includes a net loss on debt extinguishment of $129 million. 5. 2016 actual attributable capital expenditures are presented on the same basis as 2016 guidance, which include our 60% share of Pueblo Viejo and Arturo and our 50% share of Zaldívar and Jabal Sayid. 2017 guidance includes our 60% share of Pueblo Viejo and Arturo, our 63.9% share of Acacia and our 50% share of Zaldívar and Jabal Sayid. 2017 Guidance Analysis Estimates of future production, cost of sales, and cash costs presented in this MD&A are based on mine plans that reflect the expected method by which we will mine reserves at each site. Actual gold and copper production and associated costs may vary from these estimates due to a number of operational and non-operational risk factors (see the “Cautionary Statement on Forward- Looking Information” on page 18 of this MD&A for a description of certain risk factors that could cause actual results to differ materially from these estimates). In 2017 we expect improvements to our mine site AISC and capital expenditures guidance as we identify further savings from our continued focus on capital discipline, currently reflected in the overall company guidance. Production We expect 2017 gold production to be in the range of 5.6 to 5.9 million ounces. 2017 gold production is expected to be higher than 2016, primarily as a result of increases at Cortez and Veladero, partially offset by Goldstrike and Pueblo Viejo. Production at Cortez in 2017 is expected to be 18% to 22% higher than the prior year due to an increase in open pit production, primarily from higher grade oxide ore as well as increased throughput at the mill processed on site and larger volumes of refractory ore being processed at Goldstrike. This is partially offset by an expected decline in underground ore grade as the mine transitions to lower grade ore zones deeper in the deposit. 31 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Significantly higher production is expected at Veladero We expect significantly lower cash costs at Cortez in 2017 compared to the prior year. The expected increase in production at Veladero is due to higher grade ore being processed and faster recovery from the leach pad, as a result of better operational management. In addition, our 2017 production guidance for Veladero anticipates higher ore tonnes mined and processed in 2017, given the suspension, environmental and bad weather incidents experienced in 2016. At Goldstrike, we expect 2017 production to be in the range of 910 to 950 thousand ounces, 13% to 17% lower than the prior year. Our emphasis at the underground in 2017 will be on development deeper in the mine and ore mined will also be impacted by a slightly higher percentage of cut and fill tonnage. Production from the open pit is expected to be lower as we transition from ore mining at the Arturo pit to stripping the 3rd and 4th northwest laybacks at the Betze Post pit. Production at Pueblo Viejo is expected to be lower than the prior year due to reduced gold grades, partially offset by increased gold recovery from ore blending and Best-in-Class initiatives improving availability and utilization of autoclaves. Cost of Sales On a per ounce basis, cost of sales attributable to gold, after removing the portion related to non-controlling interests, is expected to be in the range of $780 to $820 per ounce, in line with the prior year. In our 2017 guidance, we do not anticipate inventory impairment charges (2016: $68 million) or hedge losses from our currency and fuel hedging programs (2016: $89 million loss). We are currently projecting higher energy and consumables costs in 2017, increasing direct mining costs from the prior year. We plan to offset those rising costs with a continued focus on lowering our other direct mining costs through Best-in-Class initiatives, which should improve operating efficiencies and lower labor and contractor costs. Cash Costs per ounce Cash costs1 are expected to be in the range of $510 to $535 per ounce, in line with the prior year, after excluding hedge losses of $13 per ounce from 2016. Expected improvements in cash costs at Cortez and Veladero are partially offset by increases at Goldstrike and Lagunas Norte. in 2017 compared to the prior year, as productivity improvements generated by digitization and Best-in- Class start contributing to additional mining and processing volumes which more than offset increases in energy and consumable cost assumptions. Lower expected cash costs at Veladero in 2017 compared to the prior year, are the result of higher production on unit costs which more than offsets our higher energy and consumable cost assumptions. These cash cost decreases are expected to be partially offset by increases in cash costs at Goldstrike and Lagunas Norte due to lower expected production and higher expected energy and consumables costs, partially offset by improvements to direct mining costs as a result of Best-in-Class initiatives. All-In Sustaining Costs per ounce All-in sustaining costs1 are expected to be in the range of $720 to $770 per ounce for gold, which is comparable to the $730 per ounce in 2016. In 2017, we will continue to focus on Best-in-Class initiatives to reduce mining and labor costs, partially offsetting higher expected energy and consumable costs, digitization costs at our mine sites ($14 per ounce) and an increase in corporate administration expense ($7 per ounce), as we seek to optimize our process and systems through business improvement initiatives, including digitization. The expected increase in minesite sustaining capital in 2017 compared to the prior year is expected to be offset by the impact of higher expected production on unit costs and targeted capital savings from our continued focus on capital discipline process. Exploration and Project Expenses We expect to incur approximately $185 to $225 million of exploration and evaluation (“E&E”) expenditures in 2017 with approximately 80 percent of that spend allocated to the Americas. The majority of the remaining budget is allocated to Acacia. Our exploration programs balance high-quality brownfield projects, greenfield exploration, and emerging discoveries that have the potential to become profitable mines. We continue to take advantage of existing infrastructure and advance key growth projects, including three significant projects in Nevada: the Cortez Deep South underground expansion, the potential development of an underground mine at Goldrush and a significant expansion of throughput at the Turquoise Ridge mine. At the Lagunas 32 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISNorte mine in Peru, we are advancing a project to extend the life of the mine by approximately nine years by mining the refractory material below the oxide ore body in the current open pit. Highlights of our greenfield exploration program for 2017 include the Fourmile target, adjacent to our Goldrush discovery in Nevada, and the Frontera District on the border of Argentina and Chile. We expect to incur approximately $230 to $270 million of project expenses in 2017, compared to $105 million in 2016. The increase in project expenses primarily reflects the cost to complete a prefeasibility study we have initiated to evaluate the construction of an underground mine at Lama, the Argentinean side of the Pascua-Lama project. If successful, it could support a staged development of the Pascua-Lama deposit. Project expenses also includes the cost of Pascua-Lama water management and monitoring activities and other holding costs as part of the temporary closure plan; and the costs associated with our Alturas, Donlin Gold and Cerro Casale projects. General and Administrative Expenses In 2017 we expect corporate administration costs to be in the range of $175 to $200 million, an increase from the prior year, as we seek to optimize our process and systems through business improvement initiatives, including digitization. Finance Costs Finance costs of $600 to $650 million primarily represent interest expense on long-term debt. We expect finance costs in 2017 to be lower than 2016 levels primarily due to lower interest expense in 2017 following $2.04 billion of debt repayments in 2016. The impact of any further debt reductions accomplished in 2017 has not been reflected in our guidance on interest expense. 2016 finance costs included a $129 million net loss on the extinguishment of debt and further debt repurchases could lead to additional losses on extinguishment that could cause an increase to forecasted finance costs. Capital Expenditures Total attributable capital expenditures for 2017 are expected to be in the range of $1.3 to $1.5 billion, compared to $1.1 billion in 2016, which reflects an increase in both sustaining and project capital. Minesite sustaining capital expenditures reflect the capital spending required to support current planned production levels and those which do not meet our definition of project capital. This includes capitalized production phase stripping costs at our open pit mines, underground mine development and minesite E&E expenditures that meet our criteria for capitalization. Attributable minesite sustaining capital expenditures are expected to increase from 2016 expenditure levels of $977 million to a range of $1,050 to $1,200 million, mainly due to our digitization project, planned tailings expansions and increased stripping at Goldstrike and Veladero, equipment rebuilds and other process facility upgrades at Hemlo, Lumwana and Pueblo Viejo. These increases in sustaining capital are partially offset by expected savings from our continued focus on capital discipline process. These savings are not reflected in the minesite guidance ranges at this time and are expected to be included in updates through the year. At Goldstrike in 2017, sustaining capital expenditures are expected to increase primarily due to planned tailings expansions, process improvements, and underground sustaining projects to enable mining at greater depth. Capitalized waste stripping is expected to increase compared to the prior year as we shift from mining ore at Arturo to stripping the 3rd and 4th northwest laybacks in the Betze Post pit, partially offset by reduced operating spend driven by savings initiatives to optimize planned production at the lowest cost. At Veladero, a significant increase in capital is expected in 2017, mainly related to expansion of the leach pad, digitization, equipment purchases and increased capitalized waste stripping due to phases 5 and 6 of the Federico pit. At Pueblo Viejo, the increase in sustaining capital in 2017 is related to initiatives to improve the plant and mine operational efficiency, process facility upgrades and construction of a substation. At Lumwana, the 2017 increases in sustaining capital are related to Chimi South 2 Embankment for water diversion and equipment rebuilds. At Hemlo, sustaining capital increases are primarily related to a tailings dam expansion and replacement of the semi-autogenous grinding mill shell in 2017. Project capital expenditures reflect capital expenditures at new projects and existing operations that are related to discrete projects intended to increase production and will not benefit production for at least 12 months. Project capital expenditures also include capital expenditures related to the initial construction of a project and include all of the expenditures required to bring the project into operation and achieve commercial production levels. 33 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISAttributable project capital expenditures are expected to increase to a range of $250 to $300 million in 2017. The increase in project capital expenditures in 2017 compared to the prior year is primarily due to the Cortez Lower Zone expansion project, and an increase in pre-production waste stripping at Crossroads phase 1 at Cortez compared to 2016, the finalization of the Robertson acquisition and a slight increase in spend at Pascua-Lama. This is partially offset by the completion of pre-production waste stripping at Arturo in 2016. Effective Income Tax Rate At current spot gold prices, our expected effective tax rate for 2017 is approximately 45%. Outlook Assumptions and Economic Sensitivity Analysis Gold revenue, net of royalties3 Copper revenue, net of royalties2 Copper revenue, net of royalties2 Gold all-in sustaining costs WTI crude oil price3 Australian dollar exchange rate Canadian dollar exchange rate Copper all-in sustaining costs WTI crude oil price3 Chilean peso exchange rate 2017 Guidance Hypothetical assumption change $ 1,050/oz $ 2.25/lb $ 2.25/lb +/- $ 100/oz + $ 0.50/lb - $ 0.50/lb $ 55/bbl 0.75 : 1 1.32 : 1 +/- $ 10/bbl +/- 10% +/- 10% $ 55/bbl 675 : 1 +/- $ 10/bbl +/- 10% Impact on revenue (millions) +/- $ 571 + $ 213 - $ 171 n/a n/a n/a n/a n/a Impact on cost of sales (millions) n/a n/a n/a +/- $ 17 +/- $ 29 +/- $ 32 Impact on AISC1 +/- $ 3/oz + $ 0.03/lb - $ 0.03/lb +/- $ 3/oz +/- $ 5/oz +/- $ 6/oz +/- $ 5 +/- $ 6 +/- $ 0.01/lb +/- $ 0.01/lb 1. All-in sustaining costs is a non-GAAP financial performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation, please see pages 69 to 83 of this MD&A. 2. Utilizing option collar strategies, the company has protected the downside of a portion of its expected 2017 copper production at an average floor price of $2.20 per pound and can participate on the same amount up to an average price of $2.82 per pound. Our remaining copper production is subject to market prices. 3. Due to our hedging activities, which are reflected in these sensitivities, we are partially protected against changes in these factors. Risks and Risk Management Overview The ability to deliver on our vision, strategic objectives and operating guidance depends on our ability to understand and appropriately respond to the uncertainties or “risks” we face that may prevent us from achieving our objectives. In order to achieve this we: n Maintain a framework that ensures we manage risk effectively and in a manner that creates the greatest value; n Integrate a process for managing risk into all our important decision-making processes so that we reduce the effect of uncertainty on achieving our objectives; n Ensure that the key controls we rely on to achieve the Company’s objectives are actively monitored so that they remain in place and are effective at all times; and n Provide assurance to the Executives and relevant Committees of the Board of Directors on the effectiveness of key control activities. Board and Committee Oversight We maintain strong risk oversight practices, with responsibilities outlined in the Board’s and related committees’ mandates. The Board’s mandate makes clear the responsibility for reviewing and discussing with management the processes used to assess and manage risk, including the identification by management of the principal risks of the business, and the implementation of appropriate systems to deal with such risks. The Risk Committee of the Board of Directors assists the Board in overseeing the Company’s management of principal risks as well as the implementation of policies and standards for monitoring and modifying such risks, and monitoring and reviewing the Company’s financial position and financial risk management programs generally. The Audit Committee and Corporate Responsibility Committee also provide oversight focusing on financial and operational (e.g. Safety & Health, Environmental, Community, Security, etc.) risk exposures, respectively. 34 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Management Oversight On a weekly basis, the global leadership team, including the Executive Committee and representatives from each of Barrick’s country offices, mine sites and corporate functions, participate in a Business Plan Review (“BPR”) meeting. This forum allows for the timely identification of key risks that may prevent the Company from achieving its objectives. It also fosters a culture of transparent, real-time risk management as a collective and enables a learning organization. Principal Risks The following subsections describe some of our key sources of uncertainty and most important risk modification activities. The risks described below are not the only ones facing Barrick. Our business is subject to inherent risks in financial, regulatory, strategic and operational areas. For a more comprehensive discussion of those inherent risks, see “Risk Factors” in our most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities. Also see the “Cautionary Statement on Forward-Looking Information” on page 18. Financial position and liquidity Our liquidity profile, level of indebtedness and credit ratings are all factors in our ability to meet short- and long-term financial demands. Barrick’s outstanding debt balances impact liquidity through scheduled interest and principal repayments and the results of leverage ratio calculations, which could influence our investment grade credit ratings and ability to access capital markets. In addition, the Company’s ability to draw on our credit facility is subject to meeting its covenants. Our primary source of liquidity is our operating cash flow, which is dependent on the ability of our operations to deliver projected future cash flows. The ability of our operations to deliver projected future cash flows, as well as future changes in gold and copper market prices, either favorable or unfavorable, will continue to have a material impact on our cash flow and liquidity. Key Risk Modification Activities: n Reduced notional and lengthened average tenor of our outstanding debt through liability management activities; n Continued focus on generating positive free cash flow by improving the underlying cost structures of our operations in a sustainable manner; n Disciplined capital allocation criteria for all investments; n Preparation of budgets and forecasts to understand the impact of different price scenarios on liquidity, and formulate appropriate strategies; and n Other options to enhance liquidity include drawing on our $4.0 billion undrawn credit facility, asset sales, joint ventures, or issuance of debt or equity securities. Improving free cash flow and AISC Our ability to improve productivity, drive down operating costs and reduce working capital remains a focus in 2017 and is subject to several sources of uncertainty. This includes our ability to achieve and maintain industry- leading margins by improving the productivity and efficiency of our operations through our Best-in-Class program which includes the digital transformation of Barrick. Key Risk Modification Activities: n Formal project management protocols are established around these business transformation programs. The status of these projects is reviewed on a weekly basis during the BPR meetings to ensure the timely identification of key risk exposures that may affect their successful delivery; n Ongoing implementation of a Best-in-Class program to unleash the full potential of our mines and encompassing: n A standardized, performance-oriented, measurement scorecard linking top operational and economic measures; n Monthly optimization forums as a way to communicate and review the Best-in-Class projects and performance to targets; and n Innovation and digitization program focused on driving value across the business. Social license to operate At Barrick, we are committed to building, operating, and closing our mines in a safe and responsible manner. To do this, we develop long-term and mutually-beneficial relationships with host governments and communities 35 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISwhile working to minimize the social and environmental impacts of our activities. Incidents of corruption in the extractive industry are indicative of the risks related to interaction with government officials and the potential consequences to our partnerships in the locations where we operate. Environmental incidents in the extractive industry emphasize the hazards (e.g. water management, tailings storage facilities, etc.) and the potential consequences to both the environment and community health and safety. Our ability to maintain compliance with environmental, regulatory and community obligations remains one of our top priorities. Key Risk Modification Activities: n Our external Corporate Social Responsibility Advisory Board was formed in 2012 and provides expert advice to the Company on a range of corporate responsibility matters, including community relations, sustainable development, water, energy, climate change, security and human rights; n Our obligations, expectations and intentions are Resources and Reserves and Production Outlook Like any mining company, we face the risk that we are unable to discover or acquire new resources or that we do not convert resources into production. As we move into 2017 and beyond, our overriding objective of growing free cash flow per share is underpinned by a strong pipeline of organic projects and minesite expansion opportunities in our core regions as discussed on page 28. Uncertainty related to these and other opportunities exists (potentially both favorable and unfavorable) due to the speculative nature of mineral exploration and development as well as the potential for increased costs, delays, suspensions and technical challenges associated with the construction of capital projects. Key Risk Modification Activities: n Focus on responsible Mineral Resource Management and continuously improved orebody knowledge, adding to and upgrading reserves and resources (organically and inorganically); codified in our Vision and Values and the Code of Business Conduct and Ethics, and they are reinforced regularly at all levels of the Company; n Develop and advance a balanced pipeline of high- return projects and seek to exit those that do not meet expectations; n Barrick’s community relations, environment, safety and health, security and compliance management systems set expectations, define performance standards and provide the necessary tools to modify the related risks; n We take a partnership approach with our home and host governments. This means we work to balance our own interests and priorities with those of our government partners, working to ensure that everyone derives real value from our operations; n We participate in the annual CDP Climate Change and Water Disclosure process, providing investors and other interested partners with detailed information on our water and energy use and emissions data; and n We open our social and environmental performance to third-party scrutiny, including through the ISO 14001 re-certification process, International Cyanide Management Code audits, annual human rights impact assessments, and an annual assurance against the International Council on Mining and Metal’s Sustainable Development Framework. n Pursue high-return growth options with a mindset of innovation, cost control, and risk mitigation; n Enhance project design to stagger capital outlay and optimize timing of cash flows; and n Exploration activities including minesite exploration and global programs. Market Overview The market prices of gold, and, to a lesser extent, copper are the primary drivers of our profitability and our ability to generate free cash flow for our shareholders. Gold The price of gold is subject to volatile price movements over short periods of time and is affected by numerous industry and macroeconomic factors. During the year, the gold price ranged from $1,061 per ounce to $1,375 per ounce. The average market price for the year of $1,251 per ounce represented an increase of 8% versus 2015. 36 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISUSD 90 85 80 75 70 65 60 55 50 AVERAGE MONTHLY SPOT GOLD PRICES AVERAGE MONTHLY SPOT GOLD PRICES $/oz 2,000 1,750 1,300 1,200 1,100 1,000 900 800 700 2009 2010 2011 Average Spot Price USD Index AVERAGE MONTHLY SPOT GOLD PRICES (dollars per ounce) 2,000 1,750 1,500 1,250 1,000 750 The price of copper traded in a subdued range in 2016, before achieving significant price upside in the fourth quarter due to positive economic and copper usage data from China, expectations of increased infrastructure spending in the U.S., an increase in the price of other non-precious mined commodities, and an increase in investor sentiment. Challenging near-term fundamentals currently limit the potential copper price upside, but a dearth of new projects scheduled to enter production later in the decade could begin to positively impact prices in the coming years should physical demand continue to grow. 2012 2013 2014 2015 2016 AVERAGE MONTHLY SPOT COPPER PRICES (dollars per pound) The price of gold in 2016 generally rose over the first half of the year, reaching its high for the year in early July, and generally declined over the second half of the year. In the first half of 2016, the gold price was positively influenced by declining expectations regarding increases in the benchmark U.S. interest rate, low and negative interest rates on sovereign debt issued by many of the world’s largest economies, global economic and political uncertainty highlighted by the British referendum in favor of leaving the European Union, and investor interest in gold as a safe haven asset. In the second half 80 of 2016, the gold price was negatively influenced by a stronger U.S. dollar, rising U.S. and global interest rates, 75 expectations of fiscal stimulus measures in the U.S. 70 to be put in place by the newly elected administration, 65 subdued physical demand in key consuming countries 60 of China and India due to government measures to maintain currency valuations, and a decline in investor sentiment. 90 55 85 50 90 85 80 75 70 65 60 55 50 Copper During 2016, London Metal Exchange (“LME”) copper prices traded in a range of $1.96 to $2.74 per pound, averaged $2.21 per pound, and closed the year at $2.50 per pound. Copper prices are significantly influenced by physical demand from emerging markets, especially China. 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 2012 2013 2014 2015 2016 Utilizing option collar strategies, and excluding co-product copper hedges put in place by Acacia, we have protected the downside on approximately 65 million pounds of expected 2017 copper production at an average floor price of $2.20 per pound and can participate up to an average price of $2.82 per pound. These positions expire evenly over the first six months of the year. In addition, Acacia has co-product copper collar hedges in place on approximately 13 million pounds of expected 2017 AVERAGE MONTHLY SPOT copper production at an average floor price of $2.30 per COPPER PRICES (dollars per pound) pound and can participate up to an average price of $2.78 per pound. Our remaining copper production is 2,000 subject to market prices. 1,750 1,500 1,250 1,000 750 500 2007 2008 2009 2010 2011 37 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISWe have provisionally priced copper sales for which final price determination versus the relevant copper index is outstanding at the balance sheet date. As at December 31, 2016, we recorded 44 million pounds of copper sales subject to final settlement at an average provisional price of $2.51 per pound. The impact to net income before taxation of a 10% movement in the market price of copper would be approximately $11 million, holding all other variables constant. Silver Silver traded in a range of $13.75 to $21.14 per ounce in 2016, averaged $17.14 per ounce and closed the year at $16.24 per ounce. The silver price is driven by factors similar to those influencing investment demand for gold. Silver prices do not significantly impact our current operating earnings, cash flows, or gold cash costs. Silver prices, however, will have a significant impact on the overall economics for our Pascua-Lama project. AVERAGE MONTHLY SPOT SILVER PRICES (dollars per ounce) 40 35 30 25 20 15 10 5 exposure to the Argentinean peso through operating costs at our Veladero mine, peso denominated VAT receivable balances and expected future capital and operating costs at our Pascua-Lama project. In addition, we have exposure to the Papua New Guinea kina, Peruvian sol, Zambian kwacha, Tanzanian shilling and Dominican peso through mine operating and capital costs. Fluctuations in the US dollar increase the volatility of our costs reported in US dollars, subject to positions put in place through our currency hedging program. In 2016, the Australian dollar traded in a range of $0.68 to $0.78 against the US dollar, while the US dollar against the Canadian dollar, Chilean peso and Argentinean peso ranged from $1.25 to $1.47, CLP642 to CLP733 and ARS 12.90 to ARS 16.17, respectively. Due to expectations of a strengthened US dollar, in recent years we have reduced our overall foreign currency derivative positions, whether by closing out positions before maturity or limiting the addition of new positions. As a result, at the end of 2016, we did not have any foreign currency hedge positions. During the year, we recorded losses in earnings of approximately $28 million from our foreign currency derivatives, primarily impacting our operating and corporate administration costs (2015: $87 million loss; 2014: $97 million gain). A strengthening US dollar versus our key currency exposures is beneficial to our cost structure in 2017, as we are unhedged against such exposures as at December 31, 2016. 2012 2013 2014 2015 2016 AVERAGE MONTHLY ARS SPOT RATES Currency Exchange Rates The results of our mining operations outside of the United States are affected by US dollar exchange rates with non-US denominated currencies comprising approximately 25% of our operating and capital cost exposures. Although we have made dispositions, we continue to have exposure to the Australian and Canadian dollars through a combination of mine operating and corporate administration costs, as well as exposure to the Chilean peso through expected future capital and operating costs at our Pascua-Lama project and mine operating costs at Zaldívar. We also have 16 14 12 10 8 6 4 AVERAGE MONTHLY SPOT SILVER PRICES (dollars per ounces) 2012 2013 2014 2015 2016 38 675 625 575 525 475 425 2009 2010 2011 AVERAGE MONTHLY SPOT SILVER PRICES (dollars per ounces) 675 625 575 525 475 425 2009 2010 2011 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISAVERAGE MONTHLY AUD SPOT AND HEDGE RATES AVERAGE MONTHLY AUD SPOT AND HEDGE RATES AVERAGE MONTHLY CLP SPOT AND HEDGE RATES1 1.2 1.2 1.10 1.10 1.00 1.00 0.90 0.90 0.80 0.80 0.70 0.70 0.60 0.60 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 Average Spot Rate Average Spot Rate Average Hedge Rate Average Hedge Rate 1.1 1.1 750 1.0 1.0 700 0.9 0.9 650 0.8 0.8 600 0.7 0.7 550 0.6 0.6 500 450 2012 2013 2014 2015 2016 Average Spot Rate Average Hedge Rate AVERAGE MONTHLY CAD SPOT AND HEDGE RATES1 AVERAGE MONTHLY CAD SPOT AND HEDGE RATES1 1. There were no CLP hedge positions in 2016. 1.2 1.2 1.1 1.1 1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.6 0.6 750 700 650 600 550 500 450 750 700 650 600 550 500 450 1.50 1.50 1.40 1.40 1.30 1.30 1.20 1.20 1.10 1.10 1.00 1.00 0.90 0.90 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 Average Spot Rate Average Spot Rate Average Hedge Rate Average Hedge Rate 1. There were no CAD hedge positions in 2016. Fuel For 2016, the price of West Texas Intermediate (“WTI”) crude oil traded in a wide range between $26 and 1.4 1.4 $55 per barrel, averaged $43 per barrel and closed the year at $54 per barrel. During 2016, the price of crude 1.3 1.3 oil generally rose after reaching multi-year lows in the middle of the first quarter. Reduced supply and 1.2 1.2 increasing demand have helped towards balancing the physical market, and a recent agreement by major 1.1 1.1 producing nations to cap production has improved overall market sentiment towards crude oil. 1.0 1.0 0.9 0.9 AVERAGE MONTHLY SPOT CRUDE OIL PRICE (WTI) (dollars per barrel) 1.4 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1.0 1.0 0.9 0.9 2012 2013 2014 2015 2016 39 $120 $100 $80 $60 $40 $20 120 100 80 60 40 20 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS In 2016, we recorded hedge losses in earnings of $47 million on our fuel hedge positions (2015: $19 million loss and 2014: $4 million loss). Assuming December 31, 2016 market forward curves and year-end spot prices, we expect to realize fuel hedge losses of approximately $47 million in 2017. A significant portion of these losses has already been recorded in the consolidated statements of income as an unrealized loss on non-hedge derivatives. Beginning in January 2015, upon early adoption of IFRS 9, Barrick’s fuel hedges qualified for hedge accounting and unrealized gains and losses began being recorded in Other Comprehensive Income. Financial Fuel Hedge Summary Barrels (thousands) % of total expected exposure Average price Impact of $10 change on pre- tax earnings (USD millions)1 2017 2018 2,214 1,207 80 78 50% 28% 22 31 1. Includes the impact of hedges currently in place. US Dollar Interest Rates Beginning in 2008, in response to the contraction of global credit markets and in an effort to spur economic activity and avoid potential deflation, the US Federal Reserve reduced the range for its benchmark rate to between 0% and 0.25%. The benchmark was kept at this level until December 2015, when the range was increased by 25 basis points. The range was raised by an additional 25 basis points in December 2016. As economic conditions in the US continue to normalize, we expect incremental increases to short-term rates to continue in 2017. At present, our interest rate exposure mainly relates to interest receipts on our cash balances ($2.4 billion at December 31, 2016); the mark-to-market value of derivative instruments; the fair value of and ongoing payments under US dollar interest-rate swaps; the carrying value of certain long lived assets and liabilities; and to the interest payments on our variable-rate debt ($0.4 billion at December 31, 2016). Currently, the amount of interest expense recorded in our consolidated statement of income is not materially impacted by changes in interest rates, because the majority of debt was issued at fixed interest rates. The relative amounts of variable- rate financial assets and liabilities may change in the future, depending on the amount of operating cash flow we generate, as well as the level of capital expenditures and our ability to borrow on favorable terms using fixed rate debt instruments. Changes in interest rates affect the accretion expense recorded on our provision for environmental rehabilitation and therefore would affect our net earnings. 40 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Review of Annual Financial Results Revenue ($ millions, except per ounce/pound data in dollars) For the years ended December 31 Gold 000s oz sold1 000s oz produced1 Revenue Market price2 Realized price2,3 Copper millions lbs sold1 millions lbs produced1 Revenue Market price2 Realized price2,3 Other sales Total revenue 2016 2015 2014 6,284 5,503 6,083 5,517 6,249 6,117 $ 7,908 $ 7,813 $ 8,744 1,251 1,160 1,266 $ 1,248 $ 1,157 $ 1,265 510 511 405 415 435 436 $ 466 $ 1,002 $ 1,224 3.11 3.03 $ 184 $ 214 $ 271 $ 8,558 $ 9,029 $ 10,239 2.21 2.29 2.49 2.37 1. Includes our equity share of gold ounces from Acacia and Pueblo Viejo and copper pounds from Zaldívar and Jabal Sayid. 2. Per ounce/pound weighted average. 3. Realized price is a non-GAAP financial performance measure with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. In 2016, gold revenues were up 1% compared to the prior year primarily due to a higher realized gold price1, partially offset by a decrease in gold sales volume. Excluding the impact of divested sites, gold revenues were up 14% compared to the prior year due to an increase in gold sales volume combined with higher realized gold prices. Realized gold prices1 for 2016 were up $91 per ounce compared to the prior year reflecting the higher market gold prices in 2016, which were up 8% compared to 2015. In 2016, gold production was 600 thousand ounces or 10% lower than the prior year primarily as a result of the divestment of non-core assets. Excluding the impact of these divested sites, production increased by 2% or 114 thousand ounces due to higher grade and throughput at Pueblo Viejo, Cortez, Turquoise Ridge, Goldstrike and Acacia, partially offset by lower production at Lagunas Norte and Veladero. Copper revenues for 2016 were down 53% compared to the prior year primarily due to the divestment of 50% of our ownership in Zaldívar which was completed on December 1, 2015, combined with a lower realized copper price1. In 2016, the realized copper price1 was down $0.08 per pound compared to 2015, due to the 11% decline in market copper prices over the prior year and the negative provisional pricing adjustments recognized in 2016. Copper production for 2016 decreased by 96 million pounds or 19% compared to the prior year due to lower production contribution from Zaldívar following the divestment of 50% of our ownership. Excluding the impact of the divestiture, copper production increased by 7 million pounds primarily related to the achievement of commercial production at Jabal Sayid in July 2016, partially offset by lower production at Lumwana due to lower tonnes mined due to equipment availability and lower grades. Production Costs ($ millions, except per ounce/pound data in dollars) For the years ended December 31 Gold Direct mining costs Depreciation Royalty expense Community relations Cost of sales – gold Cost of sales – gold (per oz)1 Cash costs2,3 All-in sustaining costs – gold2,3 Copper Cost of sales – copper Cost of sales – copper (per lb)1 C1 cash costs2,3 All-in sustaining costs – copper2,3 2016 2015 2014 $ 3,215 $ 4,006 $ 4,155 1,414 1,613 1,503 263 235 224 61 50 37 $ 4,979 $ 5,904 $ 5,893 842 598 864 798 546 730 859 596 831 319 1.43 1.49 954 2.19 1.92 $ 2.05 $ 2.33 $ 2.79 814 1.65 1.73 1. Cost of sales related to gold per ounce is calculated using cost of sales related to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces. Cost of sales related to copper per pound is calculated using cost of sales related to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments). 2. Per ounce/pound weighted average. 3. Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 41 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS efficiencies combined with lower royalty expense at Lumwana resulting from a decreased royalty rate (as noted below) combined with lower depreciation expense. These were partially offset by the cost of sales associated with Jabal Sayid; our 50% owned copper mine in Saudi Arabia, which entered commercial production on July 1, 2016 combined with lower sales volumes at Lumwana and Zaldívar. In June 2016, the Zambian government passed legislation to amend the royalty tax for mining operations to a variable rate based on the prevailing copper price effective June 1, 2016. These rates are 4% at copper prices below $2.04 per pound; 5% at copper prices between $2.04 per pound and $2.72 per pound; and 6% at copper prices of $2.72 per pound and above. Legislation was also passed to remove the 15% variable profit tax on income from mining companies. Copper all-in sustaining costs1, which have been adjusted to include our proportionate share of equity method investments, were 12% lower than the prior year primarily reflecting lower direct mining costs as a result of improved cost controls at Lumwana and lower fuel and acid costs at Zaldívar, combined with lower royalty expense at Lumwana. These were partly offset by lower sales volumes. Capital Expenditures1 ($ millions) For the years ended December 31 Minesite sustaining2 Project capital expenditures3,4 Capitalized interest Total consolidated capital expenditures Attributable consolidated capital expenditures5 2016 2015 2014 $ 944 $ 1,359 $ 1,638 596 30 133 17 175 – $ 1,119 $ 1,509 $ 2,264 $ 1,122 $ 1,477 $ 2,204 1. These amounts are presented on a 100% accrued basis, except for attributable consolidated capital expenditures. 2. Includes both minesite sustaining and mine development. 3. Project capital expenditures are included in our calculation of all-in costs, but not included in our calculation of all-in sustaining costs. 4. Includes both minesite expansion and projects. 5. These amounts are presented on the same basis as our guidance. For 2016, these amounts include our 60% share of Pueblo Viejo and Arturo and our 50% share of Zaldívar and Jabal Sayid. For 2015, these amounts include our 60% share of Pueblo Viejo and Arturo and our 50% share of Jabal Sayid. In 2016, cost of sales applicable to gold was 16% lower than the prior year primarily due to lower ounces sold, as discussed above. On a per ounce basis, cost of sales applicable to gold4 after removing the portion related to non-controlling interests, was 7% lower than the prior year primarily due to a decrease in direct mining costs combined with a positive change in our sales mix as a result of the divestment of some of our higher cost mine sites. Direct mining costs have decreased as a result of lower fuel and energy prices, despite a significant proportion of our oil exposure being hedged, as well as the impact of Best-in-Class initiatives, including lower labor and consumable costs and improved operating efficiencies. Lower cost of sales was also attributable to lower inventory impairment charges combined with lower depreciation expense as a result of divested sites, lower depreciation at Pueblo Viejo as a result of the impairment recorded in the fourth quarter of 2015 and a life of mine extension at Lagunas Norte; partially offset by higher depreciation expense at Cortez due to increased sales volume attributed to the Cortez Hills open pit and Arturo as it entered commercial production on August 1, 2016. In 2016, gold all-in sustaining costs1 were down $101 per ounce or 12% compared to the prior year primarily due to a reduction in minesite sustaining capital expenditures, as a result of lower capitalized stripping costs and our continued capital discipline, combined with lower direct mining costs as described above. In addition, 2016 all-in sustaining costs were favorably impacted by a higher proportion of our sales coming from lower cost operations such as Pueblo Viejo and Cortez. In 2016, cost of sales applicable to copper was 61% lower than the prior year following the divestment of 50% of our ownership in the Zaldívar mine. Our remaining 50% interest in Zaldívar is equity accounted for and therefore we do not include Zaldívar’s cost of sales in our consolidated copper cost of sales. On a per pound basis, cost of sales applicable to copper4, after including our proportionate share of cost of sales at our equity method investees, decreased 13% compared to the prior year primarily due to lower direct mining costs as part of initiatives to reduce costs and increase 42 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS In 2016, total consolidated capital expenditures decreased 26% compared to the prior year or 10% excluding the impact of divested sites. The decrease is primarily due to a decrease in minesite sustaining capital expenditures combined with lower capitalized interest, partially offset by increased project capital expenditures. The 31% decrease in minesite sustaining capital expenditures is primarily due to the impact of divested sites. Excluding this impact, minesite sustaining capital expenditures decreased 14% primarily due to lower capitalized stripping costs, primarily at Veladero, and our continued focus on capital discipline across the Company and in particular at Veladero and at Lagunas Norte. Capitalized interest decreased by $17 million compared to the prior year as a result of the completion of the thiosulfate circuit at Goldstrike, which entered commercial production in the third quarter of 2015. Project capital expenditures increased by $42 million as a result of $81 million in reversals of accruals for contract claims and other project costs at Pascua-Lama in the prior year, partially offset by a $33 million decrease in project expenditures on the thiosulfate circuit at Goldstrike. Significant project capital expenditures in 2016 were Arturo, progressing with feasibility studies at Cortez Lower Zone and Lagunas Norte Refractory Ore Project. General and Administrative Expenses ($ millions) For the years ended December 31 Corporate administration1 Stock-based compensation2 Acacia 2016 2015 2014 $ 163 $ 176 $ 332 9 44 15 42 38 55 General & administrative expenses $ 256 $ 233 $ 385 1. For the year ended December 31, 2016, corporate administration costs include approximately $9 million of severance costs (2015: $29 million). Starting in 2015, operating segment administration costs have been allocated to our operating sites and are now included in cost of sales. In 2014, this amount was $120 million. 2. Based on US$15.98 share price as at December 31, 2016 (2015: US$7.38; 2014: US$10.75) and excludes Acacia. General and administrative expenses were $23 million higher than the prior year, primarily related to higher stock-based compensation expense combined with higher expenses at Acacia (also primarily relating to their stock-based compensation), partially offset by a reduction in overhead costs and severance costs as a result of actions taken to restructure our business in the prior year. Higher stock-based compensation expense resulted from the 117% year-to-date increase in Barrick’s NYSE share price and the 108% year-to-date increase in Acacia’s LSE share price as at December 31, 2016. We exceeded our targeted reduction of $90 million in annualized minesite and corporate overhead costs (excluding severance, stock-based compensation and Acacia corporate administration), which is recorded within general and administrative expense and cost of sales. Exploration, Evaluation and Project Costs ($ millions) For the years ended December 31 Minesite exploration and evaluation Global exploration and evaluation Advanced project costs: Pascua-Lama Cerro Casale Jabal Sayid Other Corporate development Business improvement 2016 2015 2014 $ 44 $ 88 59 6 – 11 14 15 47 $ 116 119 8 – 4 42 19 38 146 113 14 30 16 35 – Global exploration and evaluation and project expense $ 193 $ 308 $ 354 Total exploration, evaluation and project expenses $ 237 $ 355 $ 392 Exploration, evaluation and project costs for 2016 decreased $118 million compared to the prior year. The decrease is primarily due to a reduction in project costs at Pascua-Lama ($60 million) combined with a decrease in corporate development costs ($28 million). In addition, the decrease in global exploration costs primarily related to Goldrush as the project has progressed to the study phase, and is now being capitalized. 43 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 2016 2015 2014 Impairment Charges (Reversals) For the years ended December 31 2016 2015 2014 Finance Costs, Net ($ millions) For the years ended December 31 Interest expense1 Accretion Loss (gain) on debt extinguishment Other finance costs Finance income $ 591 $ 737 $ 733 75 – (12) (11) 50 129 18 (13) 63 (68) 7 (13) Finance costs, net $ 775 $ 726 $ 785 1. For the year ended December 31, 2016, interest expense includes approximately $100 million of non-cash interest expense relating to the gold and silver streaming agreements with Silver Wheaton Corp. and Royal Gold, Inc. (2015: $61 million). In 2016, net finance costs were $49 million higher than the prior year primarily due to the recognition of $129 million of extinguishment costs arising from the debt repurchases made through the year compared to the recognition of a $68 million net gain in the prior year. This was combined with an increase of $39 million of non-cash interest expense on our gold and silver streaming agreements. These increases more than offset a $185 million reduction in interest expense as a result of debt reductions made over the past two years. These debt reductions will reduce interest payments by approximately $235 million on an annualized basis. Additional Significant Statement of Income Items ($ millions) For the years ended December 31 2016 2015 2014 Impairment charges (reversals) Loss (income) on currency translation Other expense/(income) $ (250) $ 3,897 $ 4,106 132 $ 199 $ 120 $ (14) (113) $ $ 60 $ 44 ($ millions) Asset impairments (reversals) Veladero Equity method investments Lagunas Norte Pascua-Lama Pueblo Viejo Buzwagi Round Mountain/Bald Mountain Lumwana Cerro Casale Jabal Sayid Porgera Cortez Kalgoorlie Exploration sites AFS investments Other Post-tax Post-tax Post-tax (our share) (our share) (our share) $ (179) $ 49 (20) 1 – – – – – – – – – – – 3 – $ – 26 399 386 30 53 – – – – – – – – 53 – – – 382 – – – 720 778 198 (160) 29 9 7 18 4 Total asset impairment charges (reversals) $ (146) $ 947 $ 1,985 Goodwill Goldstrike Zaldívar Pueblo Viejo Cortez Lagunas Norte Jabal Sayid Lumwana Bald Mountain Round Mountain $ – $ 730 $ – – – – – – – – 427 412 355 247 – – – – – 712 – – – 316 214 131 36 Total goodwill impairment charges $ – $ 2,171 $ 1,409 Tax effects and NCI (104) 779 712 Total impairment charges (reversals) (100%) $ (250) $ 3,897 $ 4,106 In 2016, primarily as a result of improvements in the cost structure at Veladero and Lagunas Norte, we recognized $146 million (net of tax and non-controlling interests) of net impairment reversals for non-current assets. This compares to goodwill and non-current asset impairment losses of $2.2 billion and $947 million (net of tax and non-controlling interests), respectively, in the prior year. Refer to note 21 to the Financial Statements for a full description of impairment charges, including pre-tax amounts and sensitivity analysis. Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Loss (Income) on Currency Translation Loss on currency translation for 2016 increased $79 million compared to the prior year. The increased loss is primarily due to the release of $91 million of currency translation losses as a result of the disposal and reorganization of certain Australian entities during the first quarter of 2016. This was combined with increased unrealized foreign currency translation losses relating to the Zambian kwacha, partly offset by lower unrealized foreign currency translation losses relating to the Argentinean peso, Australian dollar and Tanzanian shilling. Other Expense (Income) Other expense was $60 million in 2016 compared to income of $113 million in the prior year. The expense in the current year was primarily due to a $39 million additional loss on disposition relating to Zaldívar as a result of the final purchase price adjustments recorded in the third quarter of 2016. The income in the prior year was primarily a result of the realization of gains on the sale of our Cowal mine and 50% of our interest in the Porgera mine, which closed in the third quarter of 2015; and partly offset by $30 million in office closure costs primarily relating to the exiting of leases at our Toronto and Salt Lake City offices. For a further breakdown of other expense (income), refer to note 9 to the Financial Statements. Income Tax Expense Income tax expense was $917 million in 2016. The underlying effective tax rate for ordinary income in 2016 was 44% after adjusting for the net impact of currency translation losses on deferred tax balances; the impact of the increase in income tax related contingent liabilities in Tanzania; the impact of tax rate changes; the impact of impairment (reversals) charges; the impact of asset sales and non-hedge derivatives; and the impact of non-deductible foreign exchange losses. The unadjusted tax rate for income in 2016 was 52% of the income before income taxes. We record deferred tax charges or credits if changes in facts or circumstances affect the estimated tax basis of assets and therefore the amount of deferred tax assets or liabilities to reflect changing expectations in our ability to realize deferred tax assets. The interpretation of tax regulations and legislation and their application to our business is complex and subject to change. We have significant amounts of deferred tax assets, including tax loss carry forwards, and also deferred tax liabilities. Potential changes of any of these amounts, as well as our ability to realize deferred tax assets, could significantly affect net income or cash flow in future periods. Reconciliation to Canadian Statutory Rate ($ millions) For the years ended December 31 At 26.5% statutory rate Increase (decrease) due to: Allowances and special tax deductions1 Impact of foreign tax rates2 Expenses not tax deductible Goodwill impairment charges not tax deductible Impairment charges not recognized in deferred tax assets Net currency translation losses on deferred tax balances Tax impact of profits from equity accounted investments Current year tax losses not recognized in deferred tax assets Internal restructures De-recognition of a deferred tax asset Non-recognition of US AMT credits Adjustments in respect of prior years Increase to income tax related contingent liabilities Impact of tax rate changes Other withholding taxes Mining taxes Other items 2016 2015 $ 471 $ (833) (134) 113 54 – (103) (110) 55 736 – 246 23 (5) 35 – – 13 (4) 70 (13) 11 267 16 62 – 56 (116) 20 19 44 13 – 12 (125) (7) Income tax expense (recovery) $ 917 $ (31) 1. We are able to claim certain allowances and tax deductions unique to extractive industries that result in a lower effective tax rate. 2. We operate in multiple foreign tax jurisdictions that have tax rates different than the Canadian statutory rate. The more significant items impacting income tax expense in 2016 and 2015 include the following: Currency Translation Deferred tax balances are subject to remeasurement for changes in currency exchange rates each period. The most significant balances are Argentinean deferred tax liabilities. In 2016 and 2015, tax expense of $23 million and $62 million, respectively, primarily arose from translation losses due to the weakening of the Argentinean peso against the US dollar. These losses are included within deferred tax expense/recovery. 45 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Non-Recognition of US Alternative Minimum Tax (AMT) Credits In the fourth quarter of 2016 and 2015, we recorded a deferred tax expense of $13 million and $19 million, respectively, related to US AMT credits which are not probable to be realized based on our current life of mine plans. Increase in Income Tax Related Contingent Liabilities in Tanzania In the first quarter of 2016, Acacia received a judgement from the Tanzania Court of Appeal regarding a long- standing dispute over tax calculations at Bulyanhulu from 2000–2006. The Court of Appeal was reviewing seven issues initially raised by the Tanzania Revenue Authority (TRA) in 2012 regarding certain historic tax loss carry forwards and ruled in favor of Bulyanhulu by the Tax Appeals Board in 2013. The TRA appealed against this ruling and in 2014 the Tax Tribunal reversed the decision for all seven issues. The legal route in Tanzania has now been exhausted; however Acacia is considering its options for the next steps. Acacia is yet to receive a revised tax assessment following the judgement, but has raised further tax provisions of US$70 million in Q1 2016 in order to address the direct impact of the ruling on Bulyanhulu’s tax loss carry forwards and the potential impact this may have on the applicability of certain capital deductions for other years and our other mines in Tanzania. Tax Rate Changes In the fourth quarter of 2016, a tax rate change was enacted in Peru, increasing corporate income tax rates. This resulted in a deferred tax recovery of $13 million due to recording the deferred tax asset in Peru at the higher rates. Internal Restructures In the fourth quarter of 2015, a deferred tax recovery of $116 million arose from a loss that was realized on internal restructuring of subsidiary corporations. This resulted in a net increase in deferred tax assets. De-recognition of a Deferred Tax Asset In the second quarter of 2015, we recorded a deferred tax expense of $20 million related to de-recognition of a deferred tax asset in Pueblo Viejo. Financial Condition Review Summary Balance Sheet and Key Financial Ratios ($ millions, except ratios and share amounts) As at December 31 Total cash and equivalents Current assets Non-current assets Total Assets Current liabilities excluding short-term debt Non-current liabilities excluding long-term debt1 Debt (current and long-term) Total Liabilities Total shareholders’ equity Non-controlling interests Total Equity 2016 2015 2014 $ 2,389 2,485 20,390 $ 2,455 3,013 20,840 $ 2,699 3,451 27,729 $ 25,264 $ 26,308 $ 33,879 $ 1,676 5,344 7,931 $ 1,644 5,241 9,968 $ 2,154 5,782 13,081 $ 14,951 $ 16,853 $ 21,017 7,935 2,378 7,178 2,277 10,247 2,615 $ 10,313 $ 9,455 $ 12,862 Total common shares outstanding (millions of shares)2 1,166 1,165 1,165 Key Financial Ratios: Current ratio3 Debt-to-equity4 2.68:1 0.77:1 2.77:1 1.05:1 2.47:1 1.02:1 1. Non-current financial liabilities as at December 31, 2016 were $8,002 million (2015: $10,068 million; 2014: $13,108 million). 2. Total common shares outstanding do not include 2.1 million stock options. 3. Represents current assets (excluding assets held-for-sale) divided by current liabilities (including short-term debt and excluding liabilities held-for-sale) as at December 31, 2016 and December 31, 2015. 4. Represents debt divided by total shareholders’ equity (including minority interest) as at December 31, 2016 and December 31, 2015. 46 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Balance Sheet Review Total assets were $25.3 billion at December 31, 2016, approximately $1.0 billion lower than at December 31, 2015, primarily reflecting the sale of Bald Mountain and our 50% interest in Round Mountain, which were presented as held-for-sale and included in current assets at December 31, 2015 and of which the cash proceeds were used to reduce our debt balance. Our asset base is primarily comprised of non-current assets such as property, plant and equipment and goodwill, reflecting the capital-intensive nature of the mining business and our history of growing through acquisitions. Other significant assets include production inventories, indirect taxes recoverable and receivable, concentrate sales receivable and other government transaction and joint venture related receivables, and cash and equivalents. Total liabilities at December 31, 2016 totaled $15.0 billion; approximately $1.9 billion lower than at December 31, 2015, reflecting $2.0 billion of debt repayments made during the year. Shareholders’ Equity As at February 7, 2017 Common shares Stock options Number of shares 1,165,574,071 2,074,210 Financial Position and Liquidity Total cash and cash equivalents as at December 31, 2016 was $2.4 billion3. Our capital structure comprises a mix of debt and shareholders’ equity. As at December 31, 2016, our total debt was $7.9 billion (debt net of cash and equivalents was $5.5 billion) and our debt-to-equity ratio was 0.77:1. This compares to debt as at December 31, 2015 of $10.0 billion (debt net of cash and equivalents was $7.5 billion), and a debt-to-equity ratio of 1.05:1. At the beginning of 2016, we set a debt reduction target of $2 billion. We have exceeded this target by reducing debt by $2.04 billion in 2016. We currently have less than $200 million2 in debt due before 2019, and approximately $5 billion of our outstanding debt matures after 2032. In 2017, we have capital commitments of $52 million and expect to incur attributable sustaining and project capital expenditures of approximately $1,300 to $1,500 million in 2017 based on our guidance range on page 30. In 2017, we have contractual obligations and commitments of $402 million in purchase obligations for supplies and consumables and $51 million in derivative liabilities which will form part of operating costs. In addition, we have $434 million in interest payments and other amounts as detailed in the table on page 66. We expect to fund these commitments through operating cash flow, which is our primary source of liquidity, as well as existing cash balances. Our operating cash flow is dependent on the ability of our operations to deliver projected future cash flows. The market prices of gold, and to a lesser extent copper, are the primary drivers of our operating cash flow. Other options to enhance liquidity include further non-core asset sales or joint venture opportunities; issuance of debt or equity securities in the public markets or to private investors, which could be undertaken for liquidity enhancement and/or in connection with establishing a strategic partnership; and drawing the $4.0 billion available under our fully undrawn credit facility (subject to compliance with covenants and the making of certain representations and warranties, this facility is available for drawdown as a source of financing). Many factors, including but not limited to general market conditions and then prevailing metals prices, could impact our ability to issue securities on acceptable terms, as could our credit ratings. Moody’s and S&P currently rate our long-term debt as investment grade, with ratings of Baa3 and BBB-, respectively. In August 2016, Moody’s affirmed the Company’s Baa3 rating and revised its outlook to stable from negative. Also in August 2016, S&P affirmed the Company’s BBB- rating and raised its outlook to positive from stable. Further changes in our ratings could affect the trading prices of our securities and our cost of capital. If we were to borrow under our credit facility, the applicable interest rate on the amounts borrowed would be based, in part, on our credit ratings at the time. The key financial covenant in our fully undrawn credit facility requires Barrick to maintain a net debt to total capitalization ratio of less than 0.60:1. Barrick’s net debt to total capitalization ratio was 0.35:1 as at December 31, 2016 (0.44:1 as at December 31, 2015). 47 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Summary of Cash Inflow (Outflow) ($ millions) For the years ended December 31 2016 2015 Net cash provided by operating activities $ 2,640 $ 2,794 Investing activities Capital expenditures1 Divestitures Other $ (1,126) 588 126 $ (1,713) 1,904 59 Total investing inflows/(outflows) $ (412) $ 250 Financing activities Net change in debt Dividends2 Other $ (2,057) (86) (154) $ (3,133) (160) 18 Total financing inflows/(outflows) $ (2,297) $ (3,275) Effect of exchange rate 3 (13) Increase/(decrease) in cash and equivalents $ (66) $ (244) 1. The amounts include capitalized interest of $nil for the year ended December 31, 2016 (2015: $17 million). 2. In 2016, we declared and paid dividends in US dollars totaling $0.08 per share (2015: $0.14 per share; 2014: $0.20 per share). In 2016, we generated $2,640 million in operating cash flow, compared to $2,794 million of operating cash flow in the prior year. 2015 operating cash flow included a $610 million deposit relating to the gold and silver streaming arrangement with Royal Gold. Excluding this transaction, operating cash flow for 2016 was $456 million higher than the prior year despite the reduction in operating cash flow associated with the divestment of some non-core assets. We benefited from higher market gold prices and lower operating costs, as a result of lower energy and fuel costs (despite being hedged on a significant portion of our fuel consumption) combined with the continued realization of lower labor and consumable costs and improved operating efficiencies resulting from our Best-in-Class initiatives and also lower cash interest paid. These were largely offset by lower gold and copper volumes sold, primarily as a result of the aforementioned divestitures, combined with the impact of unfavorable working capital movements, mainly as a result of higher inventory balances and income taxes paid compared to the prior year. The ability of our operations to deliver projected future cash flows within the parameters of a reduced production profile, as well as future changes in gold and copper market prices, either favorable or unfavorable, will continue to have a material impact on our cash flow and liquidity. Cash outflows from investing activities in 2016 amounted to $412 million compared to $250 million of cash inflows in the prior year. The decrease of $662 million compared to 2015 is primarily due to $1,316 million of additional proceeds from the divestitures in the prior year. In 2016, we received proceeds from the sale of Bald Mountain and our 50% interest in Round Mountain. In 2015, we received proceeds from the divestitures of Cowal, Spring Valley, Ruby Hill and partial divestitures of Zaldívar and Porgera. This was partially offset by a decrease in capital expenditures as 2016 capital expenditures on a cash basis were $1,126 million compared to $1,713 million in 2015. The decrease of $587 million is primarily due to the impact of divested sites combined with lower capitalized stripping costs at Veladero and a decrease in leach pad expansion costs at Veladero and Lagunas Norte. This was combined with a decrease in project costs mainly relating to the completion of the thiosulfate circuit at Goldstrike in the prior year and decreased spending at Pascua-Lama. Net financing cash outflows for 2016 amounted to $2,297 million, compared to $3,275 million of cash outflows in the prior year. The net financing cash outflows in 2016 and 2015 primarily consist of net debt repayments of $2,057 million and $3,133 million, respectively, as we achieved our debt reduction goals. This was combined with debt extinguishment costs of $129 million (2015: $68 million gains) and $86 million (2015: $160 million) of dividend payments. 48 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Summary of Financial Instruments As at December 31, 2016 Financial Instrument Cash and equivalents Accounts receivable Other investments Accounts payable Debt Restricted share units Deferred share units Derivative instruments – currency contracts Derivative instruments – gold contracts Derivative instruments – copper contracts Principal/ Notional Amount Associated Risks1 n Interest rate $ 2,389 million n Credit n Credit $ 249 million n Market n Market $ 18 million n Liquidity $ 1,084 million n Liquidity $ 7,989 million n Interest rate $ 62 million n Market $ 9 million n Market AUD PGK 23 million 21 million 43 million oz 78 million lbs n Market/liquidity n Market/liquidity n Credit n Interest rate Derivative instruments – energy contracts Diesel 3 million bbls n Market/liquidity n Credit n Interest rate Derivative instruments – interest rate contracts Receive float interest rate swaps $ 99 million n Market/liquidity 1. Refer to note 28 to the Financial Statements for more information regarding risks associated with financial instruments. Operating Segments Performance Review of Operating Segments Performance Barrick’s business is organized into thirteen individual mine sites, one publicly traded company and one project. Barrick’s Chief Operating Decision Maker (“CODM”), the President, reviews the operating results, assesses performance and makes capital allocation decisions at the minesite, Company and/or project level. Therefore, each individual minesite, Acacia and the Pascua-Lama project are operating segments for financial reporting purposes. Following the divestitures that were completed in 2015 and early 2016, we re-evaluated our reportable operating segments and no longer report on our interests in the following non-core properties: Porgera, Kalgoorlie, Zaldívar and Lumwana. Our updated presentation of our reportable operating segments will now be limited to six individual gold mines, Acacia and our Pascua-Lama project. The remaining operating segments, including the non-core properties referred to above and our remaining gold and copper mines, have been grouped into an “other” category and will not be reported on individually. The prior periods have been restated to reflect the change in presentation. Segment performance is evaluated based on a number of measures including operating income before tax, production levels and unit production costs. Certain costs are managed on a consolidated basis and are therefore not reflected in segment income. 49 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Cortez, Nevada USA Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)1 Capital expenditures ($ millions)2 Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)1 All-in sustaining costs (per oz)1 All-in costs (per oz)1 2016 2015 % Change 2014 124,919 25,112 1.73 1,059 1,059 $ 1,314 955 340 839 142 75 67 901 430 518 581 $ 151,357 22,406 1.73 999 982 $ 1,129 826 287 630 148 101 47 841 486 603 650 $ (17%) 12% – 6% 8% 16% 16% 18% 33% (4%) (26%) 43% 7% (12%) (14%) (11%) 152,146 25,957 1.34 902 865 $ 1,093 687 393 648 189 170 19 794 498 706 $ 728 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 2. Amounts presented exclude capitalized interest. Financial Results Cortez’s segment income for 2016 was 18% higher than the prior year primarily due to a higher gold sales volume combined with a higher gold price, partly offset by higher depreciation due to an increase in ounces mined at the Cortez Hills pit, which have a higher depreciation charge per ounce than other areas at Cortez. SEGMENT INCOME AND SEGMENT EBITDA1 1,266 1,160 1,251 839 648 630 393 287 546 340 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) In 2016, gold production was 6% higher than the prior year primarily due to higher grades mined in the Cortez Hills open pit (“CHOP”) for both mill feed and leach placement. While less total open pit tonnes were mined in the current year, ore tonnes were higher due to a focus on mining higher grade ore from CHOP compared to more waste mining in the prior year. This was combined with Best-in-Class underground initiatives increasing mining time per shift and process improvements resulting in increased tonnes mined and throughput, respectively, and partly offset by lower grades than the prior year in the underground as mining is advancing from the high grade Breccia zone to the lower grade Middle zone. PRODUCTION (000s ounces) 1,500 750 0 999 1,059 1,250 to 1,290 2015 2016 2017 (est) Cost of sales per ounce4 for 2016 was $60 per ounce higher than the prior year primarily due to the impact of higher depreciation from an increase in ounces mined at the CHOP combined with lower waste stripping activity associated with lower stripping at the Cortez Hills open pit in 2016 compared to 2015. The increases in cost of 50 5000 4000 3000 2000 1000 0 600 400 200 0 -200 -400 -600 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS sales were partially offset by lower open pit consumable costs, including lower fuel prices in 2016, and lower inventory write-downs compared to the prior year. Further offsetting higher depreciation in 2016, royalty payments were lower compared to the prior year, as more ore was produced from the Cortez Hills open pit, which has lower associated royalties. For 2016, cost of sales per ounce4 was also positively impacted by higher sales volume. All-in sustaining costs1 decreased by $85 per ounce from the prior year primarily due to the impact of higher sales volume combined with lower sustaining capital spend and lower inventory write-downs. COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 841 901 603 486 518 430 546 730 to 760 430 to 470 360 to 380 2015 2016 2017 (est) Cash Costs AISC Cost of Sales In 2016, capital expenditures decreased by 4% from the prior year as lower minesite sustaining capital expenditures were almost offset by higher project expenditures. Lower sustaining capital is attributed to the completion of leach and tailings expansions in 2015, as well as continued efforts to reduce costs and optimize capital allocation in 2016. This was combined with higher capitalized stripping at the Cortez Hills pit in the prior year compared to the current year. Project capital expenditures in 2016 are higher as a result of increased expenditures for the underground development at Cortez Hills Lower Zone and stripping at Crossroads during the fourth quarter of 2016. 5000 4000 3000 2000 1000 0 Outlook At Cortez we expect 2017 gold production to be in the range of 1,250 to 1,290 thousand ounces, an increase from 2016 production levels. This is due to a significant increase in open pit production, primarily from higher grade oxide ore and increased throughput at the mill processed on site and larger volumes of refractory ore, at grades similar to 2016, being processed at Goldstrike. This is somewhat offset by an expected decline in underground ore grade as the mine transitions to lower grade ore zones deeper in the deposit. In 2017, we expect cost of sales per ounce4 to be in the range of $730 to $760 per ounce, which is a material decrease from 2016 due to increased sales volume. Cost of sales show only a slight increase from 2016 to 2017. We expect cash costs1 to be in the range of $360 to $380 per ounce, a decrease from 2016. Operating costs are in line with 2016, while productivity improvements generated by digitization and Best-in-Class initiatives are expected to start contributing to additional mining and processing volumes. All-in sustaining costs1 are expected to be in the range of $430 to $470 per ounce, again a decrease from 2016, primarily due to higher sold ounces mentioned above. 51 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Goldstrike, Nevada USA Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s)1 Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)2 Capital expenditures ($ millions)3 Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)2 All-in sustaining costs (per oz)2 All-in costs (per oz)2 2016 2015 % Change 2014 67,834 7,361 5.65 1,096 1,103 $ 1,389 940 442 749 186 142 44 852 572 714 754 $ 72,304 6,752 6.01 1,053 999 $ 1,143 722 408 600 191 110 81 723 522 658 738 $ (6%) 9% (6%) 4% 10% 22% 30% 8% 25% (3%) 29% (46%) 18% 10% 9% 2% 81,410 5,307 6.28 902 908 $ 1,154 651 496 628 540 245 295 718 571 854 $ 1,179 1. Includes tonnes mined relating to Arturo. 2. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 3. Includes our share of capital expenditures related to Arturo. Financial Results Segment income for 2016 was 8% higher than the prior year primarily due to an increase in sales volume and higher gold prices, partially offset by increased processing and depreciation expense associated with full year operation of the autoclave combined with higher depreciation from the Arturo pit, which entered commercial production August 1, 2016 and has a high depreciation charge per ounce due to the short mine life. In 2016, gold production was 4% higher than the prior year primarily as a result of higher autoclave production, slightly offset by processing ore from the 60% owned Arturo pit in the second half of 2016, compared to full ownership production in the prior year. The increase in production at similar grades and recoveries was further helped by an increase in roaster throughput due to blend optimization and Arturo’s ore chemistry, as well as further improvements at the autoclave facility. SEGMENT INCOME AND SEGMENT EBITDA1 PRODUCTION (000s ounces) 1,266 628 496 1,160 600 408 1,251 749 442 546 1,500 750 0 1,053 1,096 910 to 950 2015 2016 2017 (est) 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) Cost of sales per ounce4 in 2016 was $129 per ounce higher than the prior year primarily due to higher operating costs and depreciation expense from the operation of the autoclave combined with higher depreciation from the Arturo pit, which has a high depreciation charge per ounce. The autoclave thiosulfate circuit was commissioned in the third quarter of 2015 and operates at a higher cost than the roaster. The 600 400 200 0 -200 -400 -600 52 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS higher operating costs are also due in part to increases in stock-based compensation as a result of movements in Barrick’s share price and consulting costs related to our Best-in-Class program. These increases are partially offset by favorable fuel prices, energy prices, and Best-in-Class initiatives aimed at better utilizing open pit equipment, improving underground mining efficiency, and lowering contractor costs, which are reflected in lower direct mining costs. In 2016, this was partially offset by the impact of an increase in sales volume. All-in sustaining costs1 increased by $56 per ounce compared to the prior year primarily due to higher operating costs combined with higher sustaining capital, partly offset by an increase in sales volume. COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 723 658 522 852 714 572 950 to 990 910 to 980 650 to 680 546 2015 2016 2017 (est) Cash Costs AISC Cost of Sales In 2016, capital expenditures decreased by 3%, compared to the prior year which was mainly due to lower project expenditures associated with the autoclave thiosulfate circuit, which entered commercial production in the third quarter of 2015. This was partly offset by higher minesite sustaining capital expenditures in 2016 due to major projects such as the roaster CIL tank expansion, dewatering well projects and stage 3 of the tailings storage facility compared to process equipment replacements and phase 2 construction of the tailings storage facility which were completed in the prior year. Lower sustaining capital in the current year is also attributed to efforts to reduce costs and optimize capital allocation. Outlook At Goldstrike we expect 2017 production to be in the range of 910 to 950 thousand ounces, which is lower than 2016 production levels. Lower ounce production is expected from both the underground and open pit operations. At the underground, emphasis in 2017 will be on development deeper in the mine and ore mined will also be impacted by a slightly higher percentage of cut and fill tonnage. Contribution from open pit production is expected to be lower as we transition from ore mining at the Arturo pit to stripping the 3rd and 4th NW laybacks in the Betze Post pit. For 2017, we expect cost of sales per ounce4 to be in the range of $950 to $990 per ounce for 2017, higher than 2016 due to sold ounces decreasing over 2016 primarily, offset slightly by lower operating spend driven by Best-in-Class initiatives. We expect cash costs1 to be in the range of $650 to $680 per ounce, higher than 2016 due to lower ounce production, primarily offset by slightly lower operating spend driven by operational excellence. All-in sustaining costs1 are expected to be $910 to $980 per ounce, an increase from 2016 due to lower ounce production and higher sustaining capital expenditures for tailings expansions, process improvements, and underground sustaining projects to enable mining deeper in the mine. 5000 4000 3000 2000 1000 0 53 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Pueblo Viejo (60% basis)1, Dominican Republic Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)2 Capital expenditures ($ millions) Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)2 All-in sustaining costs (per oz)2 All-in costs (per oz)2 2016 2015 % Change 2014 23,278 4,527 5.29 700 700 $ 925 395 528 621 61 61 – 564 395 490 $ 490 22,736 4,150 4.94 572 597 $ 757 525 230 390 61 61 – 881 467 597 $ 597 2% 9% 7% 22% 17% 22% (25%) 130% 59% – – – (36%) (15%) (18%) (18%) 21,055 4,027 5.53 665 667 $ 940 524 417 555 80 80 – 786 446 588 $ 588 1. Pueblo Viejo is accounted for as a subsidiary with a 40% non-controlling interest. The results in the table and the discussion that follows are based on our 60% share only. 2. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Financial Results Pueblo Viejo’s segment income for 2016 was 130% higher than the prior year primarily due to an increase in sales volumes combined with higher gold prices and lower cost of sales. SEGMENT INCOME AND SEGMENT EBITDA1 1,266 555 417 1,251 621 528 1,160 390 230 546 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) In 2016, gold production was 22% higher than the prior year primarily due to higher ore grades and recoveries compared to the prior year due to a lower amount of carbonaceous ore processed in 2016. This was combined with lower throughput in 2015, as a result of the mechanical failure at the oxygen plant in the fourth quarter of 2015. PRODUCTION (000s ounces) 800 400 0 572 700 625 to 650 2015 2016 2017 (est) COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 881 597 467 852 564 490 395 650 to 680 530 to 560 400 to 420 600 2015 400 Cash Costs 2016 2017 (est) AISC Cost of Sales 54 5000 4000 3000 2000 1000 0 200 0 -200 -400 -600 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Cost of sales per ounce4 in 2016 was $317 per ounce lower than the prior year primarily due to lower depreciation as a result of the impairment recorded in the fourth quarter of 2015 and an increase in the life of mine, combined with insurance proceeds recorded in the third quarter of 2016 relating to the 2015 oxygen plant motor failure. Cost of sales per ounce4 was further impacted by lower maintenance costs due to the timing of maintenance activities and lower costs attributed to shutdowns as a result of Best-in-Class initiatives combined with lower energy and fuel prices and the impact of higher sales volume on unit production costs. In 2016, all-in sustaining costs1 decreased by $107 per ounce compared to the prior year due to lower direct mining costs combined with the impact of higher sales volume on unit production costs. All-in sustaining costs1 did not benefit from the aforementioned insurance proceeds as they were excluded from our calculation. In 2016, capital expenditures were in line with the prior year as an increase in capitalized stripping costs was offset by the deferral and cancellation of non-critical sustaining capital expenditures. Outlook At Pueblo Viejo, we expect our equity share of 2017 gold production to be in the range of 625 to 650 thousand ounces, below 2016 production levels, driven by reduced gold head grade offset by increased gold recovery related to improved availability and utilization achieved through the optimization of maintenance strategies and ore blending. In 2017, we expect cost of sales per ounce4 to be in the range of $650 to $680 per ounce, cash costs1 to be $400 to $420 per ounce and all-in-sustaining costs1 to be $530 to $560 per ounce. All three indicators will be higher than 2016 primarily due to a reduction in total ounces sold affected by head grades, cost increases related to corporate allocations, higher maintenance costs, and higher sustaining costs owing to the deferral of projects from 2016 into 2017 which also affects depreciation. By-product credits are expected to be higher than 2016, impacted both by prices and recoveries for silver and copper, while power sales will benefit from the proceeds from frequency and capacity fees that Quisqueya I Power Plant will start to receive in 2017. 55 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISLagunas Norte, Peru Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)1 Capital expenditures ($ millions) Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)1 All-in sustaining costs (per oz)1 All-in costs (per oz)1 2016 2015 % Change 2014 40,847 17,253 1.12 435 425 $ 548 276 260 356 56 51 5 651 383 529 $ 540 49,126 21,880 1.02 560 565 $ 673 378 285 454 67 67 – 669 329 509 $ 509 (17%) (21%) 10% (22%) (25%) (19%) (27%) (9%) (22%) (16%) (24%) 100% (3%) 16% 4% 6% 50,030 22,110 0.99 582 604 $ 775 335 439 531 81 81 – 555 379 543 $ 543 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Financial Results Lagunas Norte’s segment income for 2016 was 9% lower than the prior year primarily due to lower sales volumes, partially offset by lower depreciation expense, higher gold prices and lower operating costs mostly driven by lower tonnage mined due to ore depletion of the oxide deposit and lower fuel prices. In 2016, gold production was 22% lower than the prior year primarily due to fewer ounces placed on the leach pad as a result of lower equipment availability, combined with processing harder material and a higher percentage of older stock material, in line with expectations as the mine matures. The decrease in gold production was partially offset by higher ore grades. SEGMENT INCOME AND SEGMENT EBITDA1 PRODUCTION (000s ounces) 1,266 531 439 1,160 1,251 454 285 528 260 356 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) 600 300 0 560 435 380 to 420 2015 2016 2017 (est) Cost of sales per ounce4 for 2016 was $18 per ounce lower than the prior year mainly due to a decrease in depreciation expense and lower direct mining costs resulting from lower tonnage mined and processed, lower fuel prices and lower royalties derived from lower sales. These were combined with realized cost savings 600 400 200 0 -200 -400 -600 56 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Outlook At Lagunas Norte we expect 2017 production to be in the range of 380 to 420 thousand ounces, lower than 2016 production levels, as a result of the progressive depletion of oxide ores, which are being replaced with sulfide ores with lower kinetics and recoveries. We expect cost of sales per ounce4 to be in the range of $710 to $780 per ounce. This increase, in comparison with 2016, is mainly driven by higher cost of sales attributed to an expected increase in depreciation expense, higher direct operating costs and CSR expenses, partially offset by Best-in-Class initiatives. We expect cash costs1 to be in the range of $430 to $470 per ounce and all-in sustaining costs1 to be in the range of $560 to $620 per ounce. The increase in all-in sustaining costs1 in comparison with 2016 is driven mainly by the decrease in production; sustaining capital expenditures are decreasing in 2017. Operational cost increases are expected to be partially offset by Best-in-Class operational initiatives including service and material contract renegotiation, increased component life, improvements in preventative maintenance, and energy optimization programs. Structural cost reduction in mine stripping and employee profit sharing are expected to occur due to the reduced mine production plan. from the Best-in-Class program such as the initiatives to improve efficiencies in the carbon in column circuit, implementation of short interval control, improvements in planned maintenance and renegotiation of certain service contracts. In 2016, all-in sustaining costs1 increased by $20 per ounce compared to the prior year primarily due to lower sales volume, partially offset by the lower direct mining costs and royalty costs combined with a decrease in minesite sustaining capital expenditures. COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 669 651 509 329 529 383 546 710 to 780 560 to 620 430 to 470 2015 2016 2017 (est) Cash Costs AISC Cost of Sales In 2016, capital expenditures decreased by 16% compared to the prior year due to lower minesite sustaining capital relating to the end of construction of phase 6 of the leach pad in 2015, partially offset by higher capitalized stripping in 2016. Project expenditures in 2016 relate to the Refractory Ore Project. 57 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Veladero, Argentina Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)1 Capital expenditures ($ millions) Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)1 All-in sustaining costs (per oz)1 All-in costs (per oz)1 2016 2015 % Change 2014 62,227 28,028 0.82 544 532 $ 685 464 220 338 95 95 – 872 582 769 $ 769 83,409 28,385 0.82 602 629 $ 720 499 216 324 242 242 – 792 552 946 $ 946 (25%) (1%) – (10%) (15%) (5%) (7%) 2% 4% (61%) (61%) – 10% 5% (19%) (19%) 67,686 29,500 1.00 722 724 $ 894 554 330 446 173 173 – 764 566 815 $ 815 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Financial Results Veladero’s segment income for 2016 was 2% higher than the prior year primarily due to lower operating costs combined with higher gold prices, partially offset by a decrease in sales volume. SEGMENT INCOME AND SEGMENT EBITDA1 In 2016, gold production was 10% lower compared to the prior year mainly reflecting lower grade tonnes placed on the leach pad in efforts to manage water balances in the leach pad. This was further impacted by the temporary suspension of operations late in the third quarter of 2016 combined with unexpected severe winter weather conditions in the second quarter of 2016. 1,266 1,160 1,251 PRODUCTION (000s ounces) 446 330 324 216 528 220 338 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) 602 544 770 to 830 900 450 0 2015 2016 2017 (est) Cost of sales per ounce4 in 2016 was $80 per ounce higher than the prior year primarily due to the impact of lower sales volume on unit production costs relating to the severe weather conditions and temporary suspension of operations during 2016 combined with lower waste stripping activity and higher depreciation 600 400 200 0 -200 -400 -600 58 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS expense. This was partially offset by lower direct mining costs as a result of lower tonnes mined due to severe weather conditions and the temporary suspension of operations, combined with Best-in-Class savings initiatives such as optimizing consumables usage, improving efficiencies in mine operations and the impact of lower contractor costs. In 2016, all-in sustaining costs1 decreased by $177 per ounce compared to the prior year primarily due to a decrease in minesite sustaining capital expenditures combined with lower direct mining costs, partly offset by the impact of lower sales volume on unit production costs. COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 792 946 552 872 769 582 750 to 800 840 to 940 500 to 540 546 2015 2016 2017 (est) Cash Costs AISC Cost of Sales In 2016, capital expenditures decreased by 61% compared to the prior year primarily due to a decrease in minesite sustaining expenditures mainly related to lower capitalized stripping costs and the construction of the phase 4B leach pad combined with higher capitalized infrastructure improvement costs in the prior year as a result of the cyanide incident that occurred in the third quarter of 2015. On October 9, 2015, the San Juan mining authority initiated an administrative sanction process against Minera Argentina Gold SRL (“MAG”), Barrick’s Argentine subsidiary that operates the Veladero mine, for alleged violations of the mining code relating to a valve failure and release of cyanide-bearing process solution in September 2015. On March 11, 2016, the San Juan Provincial mining authority announced its intention to impose an administrative fine against MAG in connection with the solution release. MAG was formally notified of this decision on March 15, 2016. On April 6, 2016, MAG sought reconsideration of certain aspects of the decision but did not challenge the amount of the administrative fine. On April 14, 2016, in accordance with local requirements, MAG paid the administrative fine of approximately $10 million (at the then-applicable Argentine peso/$ exchange rate) while the request for reconsideration is pending. MAG is implementing a remedial action plan at Veladero in response to the incident as required by the San Juan mining authority. Certain construction-related activities in the Valley Fill Leach Facility (“VLF”) are still pending. Refer to note 36 to the Financial Statements for more information regarding this matter. On September 8, 2016, ice rolling down the slope of the leach pad at the Veladero mine damaged a pipe carrying process solution, causing some material to leave the leach pad. This material, primarily crushed ore saturated with process solution, was contained on the mine site and returned to the leach pad. Extensive water monitoring in the area conducted by MAG has confirmed that the incident did not result in any environmental impact. A temporary suspension of operations at the Veladero mine was ordered by the San Juan Provincial mining authority and a San Juan Provincial court on September 15, 2016 and September 22, 2016, respectively, as a result of this incident. On October 4, 2016, following, among other matters, the completion of certain urgent works required by the San Juan Provincial mining authority and a judicial inspection of the mine, the San Juan Provincial court lifted the suspension of operations and ordered that mining activities be resumed. On September 14, 2016, the San Juan Provincial mining authority commenced an administrative proceeding in connection with this incident that included, in addition to the issue of the suspension order, an infringement proceeding against MAG. On December 2, 2016, the San Juan Provincial mining authority notified MAG of two charges under the infringement proceeding for alleged violations of the Mining Code. Refer to note 36 to the Financial Statements for more information regarding this matter. On December 15, 2016, MAG was served notice of a lawsuit by certain persons who claim to be living in Jachal, Argentina and to be affected by the Veladero mine and, in particular, the VLF. In the lawsuit, which was filed in the San Juan Provincial court, the plaintiffs have requested a court order that MAG cease leaching metals with cyanide solutions, mercury and other similar substances at the Veladero mine and replace that process with one that is free of hazardous substances, that MAG 59 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS implement a closure and remediation plan for the VLF and surrounding areas, and create a committee to monitor this process. The lawsuit is proceeding as an ordinary civil action. The Company expects to reply to the lawsuit in mid-February 2017, and the case will then proceed to the evidentiary stage. Refer to note 36 to the Financial Statements for more information regarding this matter. On December 30, 2016, the San Juan Mining Authority approved the fifth update to the Veladero mine’s environmental impact study (“EIS”), which as submitted by the Company had included a request for approval of the leach pad expansion for Phases 6 to 9. The fifth EIA update did not include an approval of Phases 6 to 9. Rather, the San Juan Mining Authority required additional technical information. Veladero submitted an initial response to the San Juan Mining Authority on January 12, 2017, and expects to provide additional information in late February 2017 as requested by the San Juan Mining Authority. Future production at Veladero after 2017 could be impacted if the leach pad expansion is not timely approved. Outlook At Veladero we expect 2017 production to be in the range of 770 to 830 thousand ounces, higher than 2016 production levels. The increase is mainly a result of a higher head grade in ore processed due to mine sequence phases at Federico pit. This is combined with higher ore tonnes mined and processed given the suspension, environmental and bad weather incidents in 2016 all leading to improved mining productivity, higher operating hours, and fewer days lost. In addition, a higher inventory draw-down, due to better operational management of the leach pad, will contribute to higher production. Cost of sales per ounce4 is expected to be decreasing from $872 to an expected range of $750 to $800, mainly due to the impact of higher sales compared to 2016 and higher mining costs capitalized as stripping. These positive variances are expected to be partly offset by higher direct operating costs and the impact of higher charges from the production inventory movements stemming from the expected drawdown of leach pad inventories. Higher gross direct operating costs are expected in 2017 as a consequence of higher operating hours and higher tonnage to be moved combined with higher costs in process area in order to improve the management of leach facilities. We expect cash costs1 in 2017 to be in the range of $500 to $540 per ounce, lower than 2016 levels mainly due to the increase in gold production driving higher sales combined with higher credits from capitalized stripping. All-in sustaining costs1 are expected to be between $840 and $940 per ounce, higher than 2016 levels mainly due to the increase in capital expenditures requirements combined with higher direct operating costs. At Veladero, a number of initiatives are underway to reduce operating costs, mainly in the areas of supply chain and inventory management, maintenance practices, mining productivity and energy costs. Higher gross direct operating costs are expected in 2017 as a consequence of higher operating hours and higher tonnage to be moved combined with higher costs in process area in order to improve the management of leach facilities. Operating costs at Veladero are also highly sensitive to local inflation and fluctuations in foreign exchange rates. We have assumed an average ARS:USD exchange rate of $16.5 and a local inflation rate of 20% for the purposes of preparing our cash cost and all-in sustaining cost guidance for 2017. 60 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISTurquoise Ridge (75% basis), Nevada USA Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)1 Capital expenditures ($ millions) Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)1 All-in sustaining costs (per oz)1 All-in costs (per oz)1 2016 598 523 17.04 266 257 $ 322 155 166 193 32 32 – 603 498 625 $ 625 2015 % Change 349 390 18.82 217 202 $ 235 141 92 115 32 32 – 697 581 742 $ 742 71% 34% (9%) 23% 27% 37% 10% 80% 68% – – – (13%) (14%) (16%) (16%) 2014 312 335 19.62 195 200 $ 252 111 139 156 30 30 – 559 473 628 $ 628 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Financial Results Turquoise Ridge’s segment income for 2016 was 80% higher than the prior year primarily due to an increase in sales volume due to increased mining productivity combined with higher gold prices. SEGMENT INCOME AND SEGMENT EBITDA1 1,266 156 139 1,160 115 92 1,251 193 166 In 2016, gold production was 23% higher than the prior year primarily due to an increase in tonnes mined and processed resulting from increasing labor to support production growth combined with improved equipment availability and improved mine engineering to take advantage of the larger ore geometry. In the first quarter of 2015, the mine transitioned to fully mechanized topcuts, larger excavations and other Best-in-Class activities, which resulted in increased productivity and the processing of more ore tonnes in subsequent quarters. The aim of the productivity improvements is to have a more consistent ore flow from the mine from month to month. PRODUCTION (000s ounces) 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) 5000 4000 3000 2000 1000 0 217 266 260 to 280 2015 2016 2017 (est) 61 300 150 0 600 400 200 0 -200 -400 -600 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS In 2016, capital expenditures were in line with the prior year as higher capitalized development costs were offset by lower minesite sustaining capital. Outlook At Turquoise Ridge we expect 2017 production to be in the range of 260 to 280 thousand ounces (Barrick’s share), in line with 2016 production levels, as mine productivity improves slightly, offset by slightly lower grades. Turquoise Ridge has completely transitioned to standardized equipment allowing for greater mining flexibility with higher reliability and less equipment. Capital and waste development requirements are in line with 2016 mining rates. The cost of sales per ounce4 is expected to be in the range of $575 to $625 per ounce which is in line with 2016. We expect cash costs1 in 2016 to be in the range of $460 to $500 per ounce, consistent with 2016, and all-in sustaining costs1 to be in the range of $650 to $730 per ounce. All-in sustaining costs1 in 2017 are expected to be higher than 2016 due to increased spend on sustaining capital for the initial construction and final engineering of a third shaft. Cost of sales per ounce4 in 2016 was $94 per ounce lower than the prior year mainly reflecting the impact of higher sales volume on unit production costs combined with an increase in capitalized underground development costs. Although operating costs have increased due to the increased productivity rates in 2016, they have decreased on a per unit basis compared to the prior year. The increased productivity and unit cost reductions are due to the investment in equipment and facilities made in 2015 as well as a focus on equipment utilization, equipment maintenance and consumables consumption as part of our Best-in-Class program. In 2016, all-in sustaining costs1 decreased by $117 per ounce compared to the prior year primarily reflecting the impact of lower cost of sales per ounce4. COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 697 742 581 603 625 498 575 to 625 650 to 730 460 to 500 2015 2016 2017 (est) Cash Costs AISC Cost of Sales 62 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Acacia Mining plc (100% basis), Africa Summary of Operating and Financial Data For the years ended December 31 Total tonnes mined (000s) Ore tonnes processed (000s) Average grade (grams/tonne) Gold produced (000s/oz) Gold sold (000s/oz) Segment revenue ($ millions) Cost of sales ($ millions) Segment income ($ millions) Segment EBITDA ($ millions)1 Capital expenditures ($ millions) Minesite sustaining Project Cost of sales (per oz) Cash costs (per oz)1 All-in sustaining costs (per oz)1 All-in costs (per oz)1 2016 2015 % Change 2014 38,491 9,818 3.00 830 817 $ 1,045 719 299 465 191 190 1 880 640 958 960 $ $ 41,390 9,268 2.80 732 721 860 837 (1) 142 177 178 (1) 1,161 772 1,112 $ 1,111 (7%) 6% 7% 13% 13% 22% (14%) 30,000% 227% 8% 7% 200% (24%) (17%) (14%) (14%) 41,684 8,413 $ 3.00 719 704 923 693 191 320 251 195 56 985 732 1,105 $ 1,190 1. These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. Financial Results Acacia’s segment income for 2016 was $300 million higher than the prior year primarily due to lower cost of sales combined with a higher gold price and an increase in sales volume. In 2016, gold production was 13% higher than the prior year primarily due to an increase in production at North Mara as a result of higher grade ore from the underground Gokona mine combined with higher recovery rates. SEGMENT INCOME AND SEGMENT EBITDA1 PRODUCTION (000s ounces) 1,251 465 299 1,000 500 0 732 830 850 to 900 2015 2016 2017 (est) Cost of sales per ounce4 in 2016 was 24% lower than the prior year primarily reflecting the impact of $109 million of impairments at Buzwagi relating to supplies inventory and the long-term stockpile in 2015 combined with higher sales volume on unit production costs. This was partly offset by higher capitalized operating costs at North Mara relating to capitalized stripping combined with lower labor costs as a result of headcount reductions. All-in sustaining costs1 were 14% lower than the prior year as the lower cost of sales per ounce4 was partially offset by an increase in minesite sustaining capital expenditures. 600 400 200 0 -200 -400 -600 63 1,266 1,160 320 191 142 92 (1) 2014 2015 2016 Segment Income ($ millions) Segment EBITDA ($ millions) Market Price ($/oz) 5000 4000 3000 2000 1000 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS COST OF SALES, CASH COSTS1 AND AISC1 ($ per ounce) 1,112 1,161 772 880 958 640 860 to 910 880 to 920 580 to 620 2015 2016 2017 (est) Cash Costs AISC Cost of Sales In 2016, capital expenditures increased by 8% compared to the prior year primarily due to an increase in capitalized stripping costs at North Mara primarily related to higher waste stripping at Nyabirama Stage 4, partially offset by a reduction in minesite sustaining capital expenditures primarily relating to capitalized development, equipment and infrastructure expenditures. Outlook We expect Acacia’s 2017 gold production to be in the range of 545 to 575 thousand ounces (Barrick’s share), which is higher than 2016 production levels. Acacia’s production is expected to be higher than 2016 mainly due to a revision to the mine plan at Buzwagi, where mining has been extended by approximately six months. Production at Bulyanhulu is expected to be in line with 2016 and North Mara is expected to be lower in 2017 as an increased proportion of underground ore is sourced from the lower grade West Zone which will offset the impact of the increase in underground tonnes mined. We expect cost of sales per ounce4 to be in the range of $860 to $910 per ounce. We expect cash costs1 to be in the range of $580 to $620 per ounce and all-in sustaining costs1 to be in the range of $880 to $920 per ounce. The decrease in all-in sustaining costs in comparison with 2016 is driven mainly by the increased production at Buzwagi. 5000 4000 3000 2000 1000 64 0 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Pascua-Lama, Argentina/Chile The Pascua-Lama project, located on the border between Chile and Argentina, is one of the world’s largest undeveloped gold and silver deposits, with the potential to generate significant free cash flow over a long mine life. In the third quarter of 2016, we announced the appointment of George Bee as Senior Vice President for Lama and Frontera District Development. Mr. Bee and his team have initiated a prefeasibility study for an underground mine at Lama in Argentina, which represents an opportunity to unlock the value of this deposit, and the wider district, through a phased approach that reduces execution risks and upfront capital requirements. Concurrently, the team in Chile remains focused on optimizing the Chilean components of the project, while addressing outstanding legal, regulatory, and permitting matters. Our Investment Committee will continue to scrutinize the project as it advances, applying a high degree of consistency and rigor – as we do for all capital allocation decisions at the company – before further review by the Executive Committee and the Board at each stage of advancement. U.S. Shareholder Class Action On May 31, 2016, the Company confirmed that it had reached a $140 million settlement in this matter. The settlement was approved by the Court on December 2, 2016. The amount of the settlement is insured. The Company continues to believe that the allegations by the lead plaintiffs in this matter are unfounded, and under the terms of the settlement agreement, the Company has not accepted any allegations of wrongdoing or liability. Refer to note 36 to the Financial Statements for more information regarding this matter. SMA Regulatory Sanctions On June 8, 2016, Chile’s environmental regulator (the Superintendencia del Medio Ambiente, or “SMA”) consolidated the two administrative proceedings against Compañía Minera Nevada (“CMN”), Barrick’s Chilean subsidiary that holds the Chilean portion of the Pascua- Lama project, into a single proceeding encompassing both the reconsideration of the 2013 Resolution in accordance with the decision of the Environmental Court and the alleged deviations from the Project’s environmental approval notified by the SMA in April 2015. A final resolution from the SMA with respect to these matters is pending and could result in additional sanctions including new administrative fines and/or the revocation of the Project’s environmental permit. Refer to note 36 to the Financial Statements for more information regarding this matter. Constitutional Protection Action On August 12, 2016, the court ruled in favor of CMN and the Chilean mining authority (Sernageomin), rejecting the plaintiffs’ challenges to the Temporary and Partial Closure Plan for the Pascua-Lama project. On August 19, 2016, the plaintiffs appealed the court’s decision to the Chilean Supreme Court. A decision from the Supreme Court on this matter is pending. Refer to note 36 to the Financial Statements for more information regarding this matter. Water Quality Review CMN initiated a review of the baseline water quality of the Rio Estrecho in August 2013 as required by a July 15, 2013 decision of the Court of Appeals of Copiapo, Chile. The purpose of the review was to establish whether the water quality baseline has changed since the Pascua-Lama project received its environmental approval in February 2006 and, if so, to require CMN to adopt the appropriate corrective measures. As a result of that study, CMN requested certain modifications to its environmental permit water quality requirements. On June 6, 2016, the responsible agency approved a partial amendment of the environmental permit to better reflect the water quality baseline from 2009. That approval was appealed by certain water users and indigenous residents of the Huasco Valley. On October 19, 2016, the Chilean Committee of Ministers for the Environment, which has jurisdiction over claims of this nature, voted to uphold the permit amendments. On January 27, 2017, the Environmental Court agreed to consider an appeal of the Committee’s decision brought by CMN and the water users and indigenous residents. Refer to note 36 to the Financial Statements for more information regarding this matter. Water Treatment Plant The water treatment plant on the Chilean side of the Pascua-Lama project was damaged during the second quarter of 2016 as a result of heavy snowfall. The water treatment plant consists of two main components, the high density sludge unit followed by the reverse osmosis unit. The damage to the reverse osmosis plant is still under repair. On August 10, operation of the high density sludge unit and discharges were reestablished. Exceptional snowfall during the winter and an early melt has increased inflows to the plant to an extent that it is difficult to keep discharges within permit limits. CMN has reviewed its contingency plan with Chilean regulatory authorities. 65 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISCommitments and Contingencies Litigation and Claims We are currently subject to various litigation proceedings as disclosed in note 36 to the Financial Statements, and we may be involved in disputes with other parties in the future that may result in litigation. If we are unable to resolve these disputes favorably, it may have a material adverse impact on our financial condition, cash flow and results of operations. Contractual Obligations and Commitments In the normal course of business, we enter into contracts that give rise to commitments for future minimum payments. The following table summarizes the remaining contractual maturities of our financial liabilities and operating and capital commitments shown on an undiscounted basis: Payments due as at December 31, 2016 ($ millions) Debt1 Repayment of principal Capital leases Interest Provisions for environmental rehabilitation2 Operating leases Restricted share units Pension benefits and other post-retirement benefits Derivative liabilities3 Purchase obligations for supplies and consumables4 Capital commitments5 Social development costs6 2017 2018 2019 2020 2021 2022 and thereafter Total $ 105 38 434 75 17 46 20 51 402 52 13 $ 105 31 430 78 18 14 20 25 254 16 3 $ 381 16 415 84 12 2 20 2 144 4 4 $ 304 9 398 110 11 – 20 – 100 4 2 $ 678 6 371 102 7 – 20 – 68 4 1 $ 6,302 14 5,410 1,804 8 – 408 – 2 23 146 $ 7,875 114 7,458 2,253 73 62 508 78 970 103 169 Total $ 1,253 $ 994 $ 1,084 $ 958 $ 1,257 $ 14,117 $ 19,663 1. Debt and Interest – Our debt obligations do not include any subjective acceleration clauses or other clauses that enable the holder of the debt to call for early repayment, except in the event that we breach any of the terms and conditions of the debt or for other customary events of default. The debt and interest amounts include 100% of the Pueblo Viejo financing, even though our attributable share is 60% of this total, consistent with our ownership interest in the mine. We are not required to post any collateral under any debt obligations. Projected interest payments on variable rate debt were based on interest rates in effect at December 31, 2016. Interest is calculated on our long-term debt obligations using both fixed and variable rates. 2. Provisions for Environmental Rehabilitation – Amounts presented in the table represent the undiscounted uninflated future payments for the expected cost of provisions for environmental rehabilitation. 3. Derivative Liabilities – Amounts presented in the table relate to derivative contracts disclosed under note 25C to the Financial Statements. Payments related to derivative contracts may be subject to change given variable market conditions. 4. Purchase Obligations for Supplies and Consumables – Includes commitments related to new purchase obligations to secure a supply of acid, tires and cyanide for our production process. 5. Capital Commitments – Purchase obligations for capital expenditures include only those items where binding commitments have been entered into. 6. Social Development Costs – Includes Pascua-Lama’s commitment of $146 million related to the potential funding of a power transmission line in Argentina, which is not expected to be paid prior to 2022. 66 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Review of Quarterly Results Quarterly Information1 ($ millions, except where indicated) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2016 2015 Revenues Realized price per ounce – gold2 Realized price per pound – copper2 Cost of sales Net earnings (loss) Per share (dollars)3 Adjusted net earnings2 Per share (dollars)2,3 Operating cash flow4 Cash capital expenditures Free cash flow2,4 1,333 2.18 1,291 1,259 2.14 1,336 $ 2,319 $ 2,297 $ 2,012 $ 1,930 1,181 1,217 2.18 2.62 1,324 1,454 (83) (0.07) 127 0.11 451 270 $ 385 $ 674 $ 274 $ 181 425 0.36 255 0.22 711 326 138 0.12 158 0.14 527 253 175 0.15 278 0.24 951 277 $ 2,238 $ 2,315 $ 2,231 $ 2,245 1,219 1,105 2.55 2.16 1,708 1,768 57 (2,622) 0.05 (2.25) 62 91 0.05 0.08 316 698 514 311 (198) 1,190 2.66 1,689 (9) (0.01) 60 0.05 525 499 1,125 2.18 1,742 (264) (0.23) 131 0.11 1,255 389 $ 387 $ 866 $ 26 $ 1. Sum of all the quarters may not add up to the annual total due to rounding. 2. Realized price, adjusted net earnings, adjusted net earnings per share and free cash flow are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 3. Calculated using weighted average number of shares outstanding under the basic method of earnings per share. 4. Q3 2015 includes $610 million of proceeds from the gold and silver streaming transaction with Royal Gold, Inc. Our recent financial results reflect our emphasis on cost control and growing operating cash flow and free cash flow. While gold prices have fluctuated around $1,200 per ounce, we have been able to record positive free cash flow1 in seven consecutive quarters. In the fourth quarter of 2016, we recorded a net asset impairment reversal of $146 million (net of tax effects and non-controlling interests) primarily relating to impairment reversals at Veladero and Lagunas Norte. In the fourth quarter of 2015, we recorded asset and goodwill impairments of $2.6 billion (net of tax effects and non-controlling interests), primarily related to our Pueblo Viejo and Goldstrike mines and Pascua-Lama project. In the third quarter of 2015, we recorded a goodwill impairment charge of $476 million relating to our Zaldívar mine upon reclassification of the mine’s net assets as held-for-sale as the agreed selling price is lower than previously recognized carrying values. Fourth Quarter Results In the fourth quarter of 2016, we reported net earnings of $425 million and adjusted net earnings1 of $255 million, compared to a net loss of $2.6 billion and adjusted net earnings1 of $91 million in the fourth quarter of 2015. The net earnings in the fourth quarter of 2016 reflect the recording of $146 million (net of tax effects and non- controlling interests) in net impairment reversals compared to impairment charges of $2.6 billion (net of tax effects and non-controlling interests) recorded in the fourth quarter of 2015. The higher net earnings in the fourth quarter of 2016 reflect an increase in realized gold and copper prices and lower cost of sales combined with the recognition of impairment reversals rather than impairment charges, partly offset by lower sales volumes due to divested sites compared to the same prior year period. The increase in adjusted net earnings primarily reflects the higher realized gold and copper prices, partly offset by a decrease in gold and copper sales volumes compared to the fourth quarter of 2015. In the fourth quarter of 2016, gold and copper sales were 1.52 million ounces and 107 million pounds, respectively, compared to 1.64 million ounces (1.48 million ounces excluding the impact of divested sites) and 132 million pounds (114 million pounds excluding the impact of divested sites), respectively, in the fourth quarter of 2015. Revenues in the fourth quarter of 2016 were higher than the same prior year period, reflecting higher market prices for gold and copper, partially offset by lower gold and copper sales volumes. In the fourth quarter of 2016, cost of sales was $1.5 billion, a decrease of $314 million compared to the same prior year period, reflecting lower direct mining costs and depreciation expense attributed mainly to divested sites, combined with lower consumable prices and Best-in-Class initiatives. Cost of sales per ounce4 was $784 per ounce, a decrease of $64 per ounce, primarily due to a positive change in our sales mix as a result of the divestment of some of our higher cost mine sites combined with lower consumable 67 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS costs, inventory impairment charges and lower depreciation expense. Cost of sales per pound4 was $1.45 per pound, an increase of $0.36 per pound from the same prior year period due to lower sales volume at Lumwana and Zaldívar, partially offset by higher cost of sales at Jabal Sayid combined with lower royalty expense at Lumwana. In the fourth quarter of 2016, operating cash flow was $711 million, up 2% from the same prior year period. The increase in operating cash flow primarily reflects higher realized gold and copper prices, partially offset by lower gold and copper sales volume combined with an increase in income tax payments. In the fourth quarter of 2016, free cash flow1 was $385 million, in line with the $387 million in the same prior year period. The higher operating cash flow generated in the fourth quarter of 2016 compared to the same prior year period was offset by higher cash capital expenditures of $326 million, compared to $311 million in the fourth quarter of 2015. The higher cash capital expenditures were a result of greater spending at Cortez, Veladero and Goldstrike, partially offset by the impact of divested sites. Internal Control Over Financial Reporting and Disclosure Controls and Procedures Management is responsible for establishing and maintaining adequate internal control over financial reporting and disclosure controls and procedures. Internal control over financial reporting is a framework designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Company’s internal control over financial reporting framework includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements. Disclosure controls and procedures form a broader framework designed to provide reasonable assurance that other financial information disclosed publicly fairly presents in all material respects the financial condition, results of operations and cash flows of the Company for the periods presented in this MD&A and Barrick’s Annual Report. The Company’s disclosure controls and procedures framework includes processes designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to management by others within those entities to allow timely decisions regarding required disclosure. Together, the internal control over financial reporting and disclosure controls and procedures frameworks provide internal control over financial reporting and disclosure. Due to its inherent limitations, internal control over financial reporting and disclosure may not prevent or detect all misstatements. Further, the effectiveness of internal control is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may change. The management of Barrick, at the direction of our President and Chief Financial Officer, evaluated the effectiveness of the design and operation of internal control over financial reporting as of the end of the period covered by this report based on the framework and criteria established in Internal Control – Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, Management concluded that the Company’s internal control over financial reporting was effective as at December 31, 2016. Barrick’s annual management report on internal control over financial reporting and the integrated audit report of Barrick’s auditors for the year ended December 31, 2016 are included in Barrick’s 2016 Annual Report and its 2016 Form 40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities. 68 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISIFRS Critical Accounting Policies and Accounting Estimates Management has discussed the development and selection of our critical accounting estimates with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the disclosure relating to such estimates in conjunction with its review of this MD&A. The accounting policies and methods we utilize determine how we report our financial condition and results of operations, and they may require management to make estimates or rely on assumptions about matters that are inherently uncertain. The consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”) under the historical cost convention, as modified by revaluation of certain financial assets, derivative contracts and post-retirement assets. Our significant accounting policies are disclosed in note 2 of the consolidated financial statements, including a summary of current and future changes in accounting policies. Critical Accounting Estimates and Judgments Certain accounting estimates have been identified as being “critical” to the presentation of our financial condition and results of operations because they require us to make subjective and/or complex judgments about matters that are inherently uncertain; or there is a reasonable likelihood that materially different amounts could be reported under different conditions or using different assumptions and estimates. Our significant accounting judgments, estimates and assumptions are disclosed in note 3 of the accompanying financial statements. Non-GAAP Financial Performance Measures Adjusted Net Earnings and Adjusted Net Earnings per Share Adjusted net earnings is a non-GAAP financial measure which excludes the following from net earnings: n Impairment charges (reversals) related to intangibles, goodwill, property, plant and equipment, and investments; n Acquisition/disposition gains/losses; n Foreign currency translation gains/losses; n Significant tax adjustments; n Unrealized gains/losses on non-hedge derivative instruments; and n Tax effect and non-controlling interest of the above items. Management uses this measure internally to evaluate our underlying operating performance for the reporting periods presented and to assist with the planning and forecasting of future operating results. Management believes that adjusted net earnings is a useful measure of our performance because impairment charges, acquisition/disposition gains/losses and significant tax adjustments do not reflect the underlying operating performance of our core mining business and are not necessarily indicative of future operating results. Furthermore, foreign currency translation gains/losses and unrealized gains/losses from non-hedge derivatives are not necessarily reflective of the underlying operating results for the reporting periods presented. The tax effect and non-controlling interest of the adjusting items are also excluded to reconcile the amounts to Barrick’s share on a post-tax basis, consistent with net earnings. As noted, we use this measure for internal purposes. Management’s internal budgets and forecasts and public guidance do not reflect the types of items we adjust for. Consequently, the presentation of adjusted net earnings enables investors and analysts to better understand the underlying operating performance of our core mining business through the eyes of Management. Management periodically evaluates the components of adjusted net earnings based on an internal assessment of performance measures that are useful for evaluating the operating performance of our business segments and a review of the non-GAAP measures used by mining industry analysts and other mining companies. Adjusted net earnings is intended to provide additional information only and does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently. The following table reconciles these non-GAAP measures to the most directly comparable IFRS measure. 69 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISStarting with the second quarter 2016 MD&A, we have amended the reconciliation from net earnings to adjusted net earnings to present the adjusting items on a pre-tax and fully consolidated basis and including the tax effect and non-controlling interest as a separate line. We believe that this change will assist analysts, investors and other stakeholders of Barrick to better understand how we calculate this non-GAAP performance measure and simplify how it reconciles to our financial statements. This change to the presentation of our reconciliation does not result in any change to the final calculation of adjusted net earnings. Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share For the years ended Dec. 31 For the three months ended Dec. 31 ($ millions, except per share amounts in dollars) 2016 2015 2014 2016 2015 Net earnings (loss) attributable to equity holders of the Company Impairment charges related to intangibles, goodwill, property, plant and equipment, and investments Acquisition/disposition (gains)/losses Foreign currency translation (gains)/losses Significant tax adjustments1 Other expense adjustments2 Unrealized gains on non-hedge derivative instruments Tax effect and non-controlling interest $ 655 $ (2,838) $ (2,907) $ 425 $ (2,622) (250) 42 199 43 114 (32) 47 3,897 (187) 120 134 135 11 (928) 4,106 (50) 132 (3) 119 181 (785) (304) 7 18 (16) 39 (9) 95 3,405 (107) 132 95 40 4 (856) Adjusted net earnings $ 818 $ 344 $ 793 $ 255 $ 91 Net earnings (loss) per share3 Adjusted net earnings per share3 0.56 0.70 (2.44) 0.30 (2.50) 0.68 0.36 0.22 (2.25) 0.08 1. Significant tax adjustments for the current year primarily relate to a tax provision booked by Acacia in Q1 2016. 2. Other expense adjustments for the current year relate to losses on debt extinguishment, the impact of the decrease in the discount rate used to calculate the provision for environmental remediation at our closed mines and a reduction in cost of sales attributed to insurance proceeds recorded in the third quarter of 2016 relating to the 2015 oxygen plant motor failure at Pueblo Viejo. 3. Calculated using weighted average number of shares outstanding under the basic method of earnings per share. Free Cash Flow Free cash flow is a measure that excludes capital expenditures from net cash provided by operating activities. Management believes this to be a useful indicator of our ability to operate without reliance on additional borrowing or usage of existing cash. Free cash flow is intended to provide additional information only and does not have any standardized definition under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate this measure differently. The following table reconciles this non-GAAP measure to the most directly comparable IFRS measure. Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow ($ millions) Net cash provided by operating activities Capital expenditures Free cash flow For the years ended Dec. 31 2016 2015 2014 $ 2,640 (1,126) $ 2,794 (1,713) $ 2,296 (2,432) $ 1,514 $ 1,081 $ (136) For the three months ended Dec. 31 2016 $ 711 (326) $ 385 2015 $ 698 (311) $ 387 70 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Cash costs per ounce, All-in sustaining costs per ounce, All-in costs per ounce, C1 cash costs per pound and All-in sustaining costs per pound Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce are non-GAAP financial measures which are calculated based on the definition published by the World Gold Council (“WGC”) (a market development organization for the gold industry comprised of and funded by 18 gold mining companies from around the world, including Barrick). The WGC is not a regulatory organization. Management uses these measures to monitor the performance of our gold mining operations and its ability to generate positive cash flow, both on an individual site basis and an overall company basis. Cash costs start with our cost of sales related to gold production and removes depreciation, the non- controlling interest of cost of sales and includes by-product credits. All-in sustaining costs start with cash costs and include sustaining capital expenditures, general & administrative costs, minesite exploration and evaluation costs and reclamation cost accretion and amortization. These additional costs reflect the expenditures made to maintain current production levels. All-in costs start with all-in sustaining costs and adds additional costs that reflect the varying costs of producing gold over the life-cycle of a mine, including: non-sustaining capital expenditures (capital expenditures at new projects and discrete projects at existing operations intended to increase production capacity and will not benefit production for at least 12 months) and other non-sustaining costs (primarily exploration and evaluation costs, community relations costs and general and administrative costs that are not associated with current operations). These definitions recognize that there are different costs associated with the life-cycle of a mine, and that it is therefore appropriate to distinguish between sustaining and non-sustaining costs. We believe that our use of cash costs, all-in sustaining costs and all-in costs will assist analysts, investors and other stakeholders of Barrick in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall company basis. Due to the capital-intensive nature of the industry and the long useful lives over which these items are depreciated, there can be a significant timing difference between net earnings calculated in accordance with IFRS and the amount of free cash flow that is being generated by a mine and therefore we believe these measures are useful non-GAAP operating metrics and supplement our IFRS disclosures. These measures are not representative of all of our cash expenditures as they do not include income tax payments, interest costs or dividend payments. These measures do not include depreciation or amortization. Cash costs per ounce, all-in sustaining costs and all-in costs are intended to provide additional information only and do not have standardized definitions under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not equivalent to net income or cash flow from operations as determined under IFRS. Although the WGC has published a standardized definition, other companies may calculate these measures differently. In addition to presenting these metrics on a by-product basis, we have calculated these metrics on a co-product basis. Our co-product metrics remove the impact of other metal sales that are produced as a by-product of our gold production from cost per ounce calculations, but does not reflect a reduction in costs for costs associated with other metal sales. C1 cash costs per pound and All-in sustaining costs per pound are non-GAAP financial measures related to our copper mine operations. We believe that C1 cash costs per pound enables investors to better understand the performance of our copper operations in comparison to other copper producers who present results on a similar basis. C1 cash costs per pound excludes royalties and non-routine charges as they are not direct production costs. All-in sustaining costs per pound is similar to the gold all-in sustaining costs metric and Management uses this to better evaluate the costs of copper production. We believe this change will enable investors to better understand the operating performance of our copper mines as this measure reflects all of the sustaining expenditures incurred in order to produce copper. All-in sustaining costs per pound includes C1 cash costs, corporate general and 71 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISadministrative costs, minesite exploration and evaluation costs, royalties, environmental rehabilitation costs and write-downs taken on inventory to net realizable value. Starting with the third quarter 2016 MD&A, we have presented this reconciliation for each of our reportable operating segments. We believe this additional information will assist analysts, investors and other stakeholders of Barrick in understanding the details of these non-GAAP metrics on a segment-by-segment basis. Starting with the second quarter 2016 MD&A, we have condensed and simplified the reconciliation from cost of sales to “cash costs”, “all-in sustaining costs” and “all-in costs”, including on a per ounce basis for gold and per pound basis for copper, to present items on a fully consolidated basis and include non-controlling interest as a separate line. As part of this simplification, we have grouped several minor items into one line labeled “Other”, with further detail in the footnote to the reconciliation. We believe that these changes will assist analysts, investors and other stakeholders of Barrick to better understand how we calculate these non-GAAP performance measures and simplify how they reconcile to our financial statements. This change to the presentation of our reconciliation does not result in any change to the figures calculated, except as noted below for “all-in costs”. Also starting with the second quarter 2016 MD&A, we have adjusted the amount included as “project exploration and evaluation costs and project costs” as part of our “all-in costs” measure to include all exploration and evaluation costs related to our advanced mining and business improvement projects and corporate development activities, where previously it did not. The impact of this adjustment for the three and twelve month periods ended December 31, 2016, was $22/oz and $17/oz, respectively (2015: $27/oz and $30/oz, respectively; 2014: $25/oz). We believe this change will assist analysts, investors and other stakeholders of Barrick in understanding all of the expenditures related to growing our business. 72 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISReconciliation of Gold Cost of Sales to Cash costs, All-in Sustaining Costs and All-in Costs, including on a per ounce basis For the years ended Dec. 31 For the three months ended Dec. 31 ($ millions, except per ounce information in dollars) Footnote 2016 2015 2014 2016 2015 Cost of sales related to gold production Depreciation By-product credits Realized (gains)/losses on hedge and non-hedge derivatives Non-recurring items Other Non-controlling interests (Pueblo Viejo and Acacia) Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interest, copper operations and other All-in sustaining costs Project exploration and evaluation and project costs Community relations costs not related to current operations Project capital expenditures Rehabilitation – accretion and amortization (non-operating sites) Non-controlling interest and copper operations 1 2 3 4 5 6 7 8 9 6 7 8 9 $ 4,979 (1,503) (184) 89 24 (44) (358) $ 5,904 (1,613) (214) 128 (210) 25 (394) $ 5,893 (1,414) (271) (94) – 26 (379) $ 1,347 (396) (41) 18 – (20) (91) $ 1,575 (462) (48) 50 (149) 7 (78) $ 3,003 $ 3,626 $ 3,761 $ 817 $ 895 256 44 944 59 (287) 233 47 1,359 145 (362) 385 38 1,638 135 (532) 39 18 298 18 (78) 52 11 303 26 (86) $ 4,019 $ 5,048 $ 5,425 $ 1,112 $ 1,201 193 8 175 11 (42) 308 12 133 12 (43) 354 29 596 11 (74) 64 2 51 4 (4) 75 – (48) 3 (20) All-in costs $ 4,364 $ 5,470 $ 6,341 $ 1,229 $ 1,211 Ounces sold – equity basis (000s ounces) 10 5,503 6,083 6,284 1,519 1,636 Cost of sales per ounce Cash costs per ounce Cash costs per ounce (on a co-product basis) All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) All-in costs per ounce All-in costs per ounce (on a co-product basis) 1 By-product credits 11,12 12 12,13 12 12,13 12 12,13 $ $ $ $ $ $ $ 798 546 569 730 753 792 815 $ $ $ $ $ $ $ 859 596 619 831 854 900 923 $ $ $ $ $ 842 598 618 864 884 $ 1,010 $ 1,030 $ 784 $ 848 $ 540 $ 557 $ 732 $ 749 $ 809 $ 826 $ 547 $ 566 $ 733 $ 752 $ 741 $ 760 Revenues include the sale of by-products for our gold and copper mines for the three months ended December 31, 2016 of $41 million (2015: $34 million) and the year ended December 31, 2016 of $151 million (2015: $140 million; 2014: $183 million) and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2016 of $nil (2015: $14 million) and the year ended December 31, 2016, of $33 million (2015: $74 million; 2014: $88 million) up until its disposition on August 18, 2016. 2 Realized (gains)/losses on hedge and non-hedge derivatives Includes realized hedge losses of $14 million and $73 million for the three months and year ended December 31, 2016, respectively (2015: $40 million and $106 million, respectively; 2014: $86 million gains), and realized non-hedge losses of $4 million and $16 million for the three months and year ended December 31, 2016, respectively (2015: $10 million and $22 million, respectively; 2014: $8 million gains). Refer to Note 5 of the Financial Statements for further information. 3 Non-recurring items Non-recurring items in 2016 consist of $34 million in a reduction in cost of sales attributed to insurance proceeds recorded in the third quarter of 2016 relating to the 2015 oxygen plant motor failure at Pueblo Viejo and $10 million in abnormal costs at Veladero relating to the administrative fine in connection with the cyanide incident that occurred in 2015. These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs. 73 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 4 Other Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $5 million, respectively (2015: $2 million and $12 million, respectively; 2014: $16 million) and adding the cost of treatment and refining charges of $4 million and $16 million, respectively (2015: $4 million and $14 million, respectively; 2014: $11 million). 2016 includes the removal of cash costs associated with our Pierina mine, which is mining incidental ounces as it enters closure, of $24 million and $66 million, respectively. 5 Non-controlling interests (Pueblo Viejo and Acacia) Non-controlling interests include non-controlling interests related to gold production of $127 million and $508 million, respectively, for the three months and year ended December 31, 2016 (2015: $188 million and $681 million, respectively; 2014: $602 million). Refer to Note 5 of the Financial Statements for further information. 6 Exploration and evaluation costs Exploration, evaluation and project expenses are presented as minesite sustaining if it supports current mine operations and project if it relates to future projects. Refer to page 43 of this MD&A. 7 Capital expenditures Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are Arturo, Cortez Lower Zone and Lagunas Norte Refractory Ore Project. Refer to page 42 of this MD&A. 8 Rehabilitation – accretion and amortization Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provision of our gold operations, split between operating and non-operating sites. 9 Non-controlling interest and copper operations Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue. Also removes exploration, evaluation and project costs, rehabilitation costs and capital expenditures incurred by our copper sites and the non- controlling interest of our Acacia and Pueblo Viejo operating segment and Arturo. In 2016, figures remove the impact of Pierina. The impact is summarized as the following: ($ millions) For the years ended Dec. 31 For the three months ended Dec. 31 Non-controlling interest, copper operations and other 2016 2015 2014 2016 2015 General & administrative costs Minesite exploration and evaluation costs Rehabilitation – accretion and amortization (operating sites) Minesite sustaining capital expenditures $ (36) (9) (9) (233) $ (53) (8) (13) (288) $ (86) (18) (12) (416) $ (5) (3) (4) (66) $ (5) (3) (4) (74) All-in sustaining costs total $ (287) $ (362) $ (532) $ (78) $ (86) Project exploration and evaluation and project costs Project capital expenditures (12) (30) (11) (32) (43) (31) All-in costs total 10 Ounces sold – equity basis $ (42) $ (43) $ (74) $ (4) – (4) (9) (11) $ (20) In 2016, figures remove the impact of Pierina as the mine is currently going through closure. 11 Cost of sales per ounce In 2016, figures remove the cost of sales impact of Pierina of $30 million and $82 million, respectively, for the three months and year ended December 31, 2016, as the mine is currently going through closure. Cost of sales per ounce excludes non-controlling interest related to gold production. Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces. 12 Per ounce figures Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding. 74 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 13 Co-product costs per ounce Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of by-product credits of our gold production (net of non-controlling interest) calculated as: ($ millions) By-product credits Non-controlling interest For the years ended Dec. 31 For the three months ended Dec. 31 2016 2015 2014 2016 2015 $ 184 (53) $ 214 (62) $ 271 (80) $ 41 (13) $ 48 (14) By-product credits (net of non-controlling interest) $ 131 $ 152 $ 191 $ 28 $ 34 Reconciliation of Gold Cost of Sales to Cash Costs, All-in Sustaining Costs and All-in Costs, including on a per ounce basis, by operating segment ($ millions, except per ounce information in dollars) Footnote Cortez Goldstrike Pueblo Viejo Lagunas Turquoise Norte Veladero Ridge Acacia For the three months ended Dec. 31, 2016 Cost of sales related to gold production Depreciation By-product credits Non-recurring items Other Non-controlling interests Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interests All-in sustaining costs Project capital expenditures Non-controlling interests All-in costs 1 2 3 4 5 6 5 $ 235 (119) – – – – $ 269 $ 144 (21) (17) – 1 (39) (105) – – – – $ 60 (19) (4) – – – $ 173 (42) (7) – – – $ 41 (8) – – – – $ 195 (44) (10) – 1 (52) $ 116 $ 164 $ 68 $ 37 $ 124 $ 33 $ 90 – 6 19 3 – – 1 55 6 (4) – – 32 2 (13) – – 3 2 – – 1 49 1 – – – 9 – – (1) 1 56 2 (21) $ 144 $ 222 $ 89 $ 42 $ 175 $ 42 $ 127 33 – – – – – 1 – – – – – – – $ 177 $ 222 $ 89 $ 43 $ 175 $ 42 $ 127 Ounces sold – equity basis (000s ounces) 277 305 198 98 194 69 134 Cost of sales per ounce 7, 8 $ 846 $ 880 $ 450 $ 612 $ 892 $ 595 $ 935 Cash costs per ounce Cash costs per ounce (on a co-product basis) 8 8, 9 $ 418 $ 418 $ 534 $ 341 $ 536 $ 471 $ 379 $ 418 $ 642 $ 716 $ 484 $ 484 $ 679 $ 713 All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) 8 $ 517 $ 734 $ 443 $ 436 $ 905 $ 610 $ 952 8, 9 $ 517 $ 736 $ 573 $ 475 $ 979 $ 610 $ 986 All-in costs per ounce All-in costs per ounce (on a co-product basis) 8 8, 9 $ 637 $ 637 $ 734 $ 443 $ 736 $ 573 $ 447 $ 486 $ 905 $ 979 $ 610 $ 610 $ 953 $ 987 75 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS ($ millions, except per ounce information in dollars) Footnote Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge Acacia For the three months ended Dec. 31, 2015 Cost of sales related to gold production Depreciation By-product credits Non-recurring items Other Non-controlling interests Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interests All-in sustaining costs Project capital expenditures Non-controlling interests All-in costs 1 2 3 4 5 6 5 $ 242 (122) (1) – – – $ 251 $ 197 (55) (26) (38) 3 (27) (73) – – – – $ 81 (37) (4) – – – $ 123 (29) (4) (2) – – $ 35 $ (6) – – – – 303 (44) (9) (109) 4 (51) $ 119 $ 178 $ 54 $ 40 $ 88 $ 29 $ 94 – 1 15 4 – – 2 16 3 – – 1 19 7 (11) – 1 17 2 – – – 55 1 – – – 9 – – 9 – 43 2 (20) $ 139 $ 199 $ 70 $ 60 $ 144 $ 38 $ 128 5 – 24 (9) – – – – – – – – – – $ 144 $ 214 $ 70 $ 60 $ 144 $ 38 $ 128 Ounces sold – equity basis (000s ounces) 344 345 141 118 156 51 127 Cost of sales per ounce Cash costs per ounce Cash costs per ounce (on a co-product basis) 7, 8 8 8, 9 $ 703 $ 727 $ 849 $ 690 $ 785 $ 685 $ 1,526 $ 348 $ 348 $ 514 $ 383 $ 516 $ 505 $ 337 $ 370 $ 556 $ 594 $ 571 $ $ 571 $ 728 756 All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) 8 $ 406 $ 581 $ 496 $ 506 $ 915 $ 735 $ 1,004 8, 9 $ 406 $ 583 $ 618 $ 539 $ 953 $ 735 $ 1,032 All-in costs per ounce All-in costs per ounce (on a co-product basis) 8 8, 9 $ 419 $ 419 $ 623 $ 496 $ 625 $ 618 $ 506 $ 539 $ 915 $ 953 $ 735 $ 1,005 $ 735 $ 1,033 76 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS ($ millions, except per ounce information in dollars) Footnote Cortez Goldstrike Pueblo Viejo Lagunas Turquoise Norte Veladero Ridge Acacia For the year ended Dec. 31, 2016 Cost of sales related to gold production Depreciation By-product credits Non-recurring items Other Non-controlling interests Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interests All-in sustaining costs Project capital expenditures Non-controlling interests All-in costs 1 2 3 4 5 6 5 $ 955 (499) – – – – $ 940 $ 644 (147) (90) 34 5 (170) (307) (1) – – – $ 276 (96) (17) – – – $ 464 (118) (27) (10) – – $ 155 (27) – – – – $ 719 (166) (39) – 8 (188) $ 456 $ 632 $ 276 $ 163 $ 309 $ 128 $ 334 – 6 75 12 – – 4 142 14 (4) – – 101 10 (44) – 2 51 8 – – 1 95 4 – – – 32 1 – 55 3 190 6 (88) $ 549 $ 788 $ 343 $ 224 $ 409 $ 161 $ 500 67 – 74 (30) – – 5 – – – – – 1 – $ 616 $ 832 $ 343 $ 229 $ 409 $ 161 $ 501 Ounces sold – equity basis (000s ounces) 1,059 1,103 700 425 532 257 522 Cost of sales per ounce 7, 8 $ 901 $ 852 $ 564 $ 651 $ 872 $ 603 $ 880 Cash costs per ounce Cash costs per ounce (on a co-product basis) 8 8, 9 $ 430 $ 430 $ 572 $ 395 473 $ 573 $ 383 $ 423 $ 582 $ 632 $ 498 $ 498 $ 640 $ 677 All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) 8 $ 518 $ 714 $ 490 $ 529 $ 769 $ 625 $ 958 8, 9 $ 518 $ 715 $ 568 $ 569 $ 819 $ 625 $ 995 All-in costs per ounce All-in costs per ounce (on a co-product basis) 8 8, 9 $ 581 $ 581 $ 754 $ 490 $ 755 $ 568 $ 540 $ 580 $ 769 $ 819 $ 625 $ 625 $ 960 $ 997 77 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS ($ millions, except per ounce information in dollars) Footnote Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge Acacia For the year ended Dec. 31, 2015 Cost of sales related to gold production Depreciation By-product credits Non-recurring items Other Non-controlling interests Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interests All-in sustaining costs Project capital expenditures Non-controlling interests All-in costs 1 2 3 4 5 6 5 $ 826 (343) (1) (5) – – $ 722 $ 904 (277) (120) (47) 13 (194) (192) (1) (7) – – $ 378 (169) (18) (5) – – $ 499 (108) (22) (21) – – $ 141 $ (23) – (1) – – 837 (143) (36) (109) 8 (200) $ 477 $ 522 $ 279 $ 186 $ 348 $ 117 $ 357 – 2 101 12 – – 10 110 15 – – 1 102 25 (51) – 3 67 32 – – 2 242 4 – – – 32 1 – 42 2 178 9 (75) $ 592 $ 657 $ 356 $ 288 $ 596 $ 150 $ 513 47 – 112 (31) – – – – – – – – (1) – $ 639 $ 738 $ 356 $ 288 $ 596 $ 150 $ 512 Ounces sold – equity basis (000s ounces) 982 999 597 565 629 202 461 Cost of sales per ounce Cash costs per ounce Cash costs per ounce (on a co-product basis) 7, 8 8 8, 9 $ 841 $ 723 $ 881 $ 669 $ 792 $ 697 $ 1,161 $ 486 $ 487 $ 522 $ 467 $ 523 $ 595 $ 329 $ 361 $ 552 $ 587 $ 581 $ $ 581 $ 772 810 All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) 8 $ 603 $ 658 $ 597 $ 509 $ 946 $ 742 $ 1,112 8, 9 $ 604 $ 659 $ 725 $ 541 $ 981 $ 742 $ 1,150 All-in costs per ounce All-in costs per ounce (on a co-product basis) 8 8, 9 $ 650 $ 651 $ 738 $ 597 $ 739 $ 725 $ 509 $ 541 $ 946 $ 981 $ 742 $ 1,111 $ 742 $ 1,149 78 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS ($ millions, except per ounce information in dollars) Footnote Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge Acacia For the year ended Dec. 31, 2014 Cost of sales related to gold production Depreciation By-product credits Non-recurring items Other Non-controlling interests Cash costs General & administrative costs Minesite exploration and evaluation costs Minesite sustaining capital expenditures Rehabilitation – accretion and amortization (operating sites) Non-controlling interests All-in sustaining costs Project capital expenditures Non-controlling interests All-in costs 1 2 3 4 5 6 5 $ 687 (255) (1) – – – $ 651 $ 885 (243) (132) (163) (1) – – 16 – (197) – $ 335 (92) (14) – – – $ 554 (116) (28) – – – $ 111 $ (17) – – – – 693 (129) (45) – (8) (182) $ 431 $ 518 $ 298 $ 229 $ 410 $ 94 $ 329 – 1 170 9 – – 2 245 10 – – – 134 23 (62) – 1 81 17 – – 3 173 4 – – – 30 1 – 44 1 195 8 (80) $ 611 $ 775 $ 393 $ 328 $ 590 $ 125 $ 497 19 – 300 (5) – – – – – – – – 56 (17) $ 630 $ 1,070 $ 393 $ 328 $ 590 $ 125 $ 536 Ounces sold – equity basis (000s ounces) 865 908 667 604 724 200 450 Cost of sales per ounce Cash costs per ounce Cash costs per ounce (on a co-product basis) All-in sustaining costs per ounce All-in sustaining costs per ounce (on a co-product basis) 7, 8 8 8, 9 $ 794 $ 498 $ 499 8 $ 706 $ $ $ $ 718 $ 786 $ 555 $ 764 $ 559 $ 985 571 $ 446 572 $ 521 $ 379 $ 403 $ 566 $ 604 $ 473 $ $ 473 $ 732 786 854 $ 588 $ 543 $ 815 $ 628 $ 1,105 8, 9 $ 707 $ 855 $ 663 $ 567 $ 853 $ 628 $ 1,159 All-in costs per ounce All-in costs per ounce (on a co-product basis) 8 8, 9 $ 728 $ 729 $ 1,179 $ 588 $ 1,180 $ 663 $ 543 $ 567 $ 815 $ 853 $ 628 $ 1,190 $ 628 $ 1,244 1 By-product credits Revenues include the sale of by-products for our gold mines and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for the three months and year ended December 31, 2016, of $nil and $33 million, respectively (2015: $14 million and $74 million, respectively; 2014: $88 million). 2 Non-recurring items Non-recurring items in 2016 consist of $34 million in a reduction in cost of sales attributed to insurance proceeds recorded in the third quarter of 2016 relating to the 2015 oxygen plant motor failure at Pueblo Viejo and $10 million in abnormal costs at Veladero relating to the admin- istrative fine in connection with the cyanide incident that occurred in 2015. These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs. 3 Other Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $5 million, respectively (2015: $2 million and $12 million, respectively; 2014: $16 million) and adding the cost of treatment and refining charges of $2 million and $9 million, respectively (2015: $3 million and $8 million, respectively; 2014: $7 million). 4 Exploration and evaluation costs Exploration, evaluation and project expenses are presented as minesite sustaining if it supports current mine operations and project if it relates to future projects. Refer to page 43 of this MD&A. 5 Capital expenditures Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are Arturo, Cortez Lower Zone and Lagunas Norte Refractory Ore Project. Refer to page 42 of this MD&A. 79 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS 6 Rehabilitation – accretion and amortization Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provision of our gold operations, split between operating and non-operating sites. 7 Cost of sales per ounce Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces. 8 Per ounce figures Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding. 9 Co-product costs per ounce Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of by-product credits of our gold production (net of non-controlling interest) calculated as: For the three months ended Dec. 31, 2016 Cortez Goldstrike Pueblo Viejo Lagunas Turquoise Norte Veladero Ridge Acacia $ $ – – – $ – $ – 17 (9) $ $ – $ 8 $ 4 – 4 $ $ 7 – 7 $ $ – – – $ 10 (4) $ 6 For the three months ended Dec. 31, 2015 Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge $ $ 1 – 1 $ – $ – 26 (10) $ $ – $ 16 $ 4 – 4 $ $ 4 – 4 $ $ – – – Acacia $ 9 (3) $ 6 For the year ended Dec. 31, 2016 Cortez Goldstrike Pueblo Viejo Lagunas Turquoise Norte Veladero Ridge Acacia $ $ – – – $ 1 $ – 90 (39) $ 17 – $ 27 – $ 1 $ 51 $ 17 $ 27 $ $ – – – $ 39 (14) $ 25 For the year ended Dec. 31, 2015 Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge $ $ 1 – 1 $ 1 $ 120 (49) – $ 18 – $ 22 – $ 1 $ 71 $ 18 $ 22 $ $ – – – Acacia $ 36 (13) $ 23 For the year ended Dec. 31, 2014 Cortez Goldstrike Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge $ $ 1 – 1 $ 1 $ 163 (64) – $ 14 – $ 28 – $ 1 $ 99 $ 14 $ 28 $ $ – – – Acacia $ 45 (16) $ 29 ($ millions) By-product credits Non-controlling interest By-product credits (net of non-controlling interest) ($ millions) By-product credits Non-controlling interest By-product credits (net of non-controlling interest) ($ millions) By-product credits Non-controlling interest By-product credits (net of non-controlling interest) ($ millions) By-product credits Non-controlling interest By-product credits (net of non-controlling interest) ($ millions) By-product credits Non-controlling interest By-product credits (net of non-controlling interest) 80 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Reconciliation of Copper Cost of Sales to C1 Cash Costs and All-in Sustaining Costs, including on a per pound basis ($ millions, except per pound information in dollars) 2016 2015 2014 2016 2015 For the years ended Dec. 31 For the three months ended Dec. 31 Cost of sales Depreciation/amortization1 Treatment and refinement charges Cash cost of sales applicable to equity method investments2 Less: royalties Non-routine charges Other metal sales Other C1 cash cost of sales General & administrative costs Rehabilitation – accretion and amortization Royalties Minesite exploration and evaluation costs Minesite sustaining capital expenditures Inventory write-downs All-in sustaining costs $ 319 (45) 161 209 (41) – – – $ 814 (104) 178 23 (101) – (1) 72 $ 954 (171) 120 – (39) (1) (1) (27) $ 84 (15) 41 55 (9) – – – $ 116 (23) 49 23 (16) – – 72 $ 603 $ 881 $ 835 $ 156 $ 221 14 7 41 – 169 – 21 6 101 – 177 – 40 8 39 1 294 1 3 2 9 – 48 – 4 – 16 – 44 – $ 834 $ 1,186 $ 1,218 $ 218 $ 285 Pounds sold – consolidated basis (millions pounds) 405 510 435 107 132 Cost of sales per pound3,4 C1 cash cost per pound3 $ 1.43 $ 1.65 $ 2.19 $ 1.45 $ 1.09 $ 1.49 $ 1.73 $ 1.92 $ 1.47 $ 1.66 All-in sustaining costs per pound3 $ 2.05 $ 2.33 $ 2.79 $ 2.04 $ 2.15 1. For the year ended December 31, 2016, depreciation excludes $50 million (2015: $6 million; 2014: $nil) of depreciation applicable to equity method investments. 2. For the year ended December 31, 2016, figures include $177 million (2015: $23 million; 2014: $nil) of cash costs related to our 50% share of Zaldívar due to the divestment of 50% of our interest in the mine on December 1, 2015, as well as $32 million (2015: $nil; 2014: $nil) of cash costs related to our 50% share of Jabal Sayid due to the divestment of 50% of our interest in the mine on December 4, 2014 and subsequent accounting as equity method investments. 3. Cost of sales per pound, C1 cash costs per pound and all-in sustaining costs per pound may not calculate based on amounts presented in this table due to rounding. 4. Cost of sales related to copper per pound is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments). EBITDA and Adjusted EBITDA EBITDA is a non-GAAP financial measure, which excludes the following from net earnings: n Income tax expense; n Finance costs; n Finance income; and n Depreciation. Adjusted EBITDA removes the effect of “impairment charges”. These charges are not reflective of our ability to generate liquidity by producing operating cash flow, and therefore this adjustment will result in a more meaningful valuation measure for investors and analysts to evaluate our performance in the period and assess our future ability to generate liquidity. EBITDA and adjusted EBITDA are intended to provide Management believes that EBITDA is a valuable indicator of our ability to generate liquidity by producing operating cash flow to: fund working capital needs, service debt obligations, and fund capital expenditures. Management uses EBITDA for this purpose. EBITDA is also frequently used by investors and analysts for valuation purposes whereby EBITDA is multiplied by a factor or “EBITDA multiple” that is based on an observed or inferred relationship between EBITDA and market values to determine the approximate total enterprise value of a company. additional information to investors and analysts and do not have any standardized definition under IFRS, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA and adjusted EBITDA exclude the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA and adjusted EBITDA differently. 81 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Starting with the third quarter 2016 MD&A, we have presented this reconciliation for each of our reportable operating segments. We believe this additional information will assist analysts, investors and other stakeholders of Barrick in understanding the details of these non-GAAP metrics on a segment-by-segment basis. Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA ($ millions) Net earnings (loss) Income tax expense Finance costs, net1 Depreciation EBITDA Impairment charges Adjusted EBITDA 1. Finance costs exclude accretion. Reconciliation of Segment Income to Segment EBITDA ($ millions) Segment Income Depreciation Segment EBITDA ($ millions) Segment Income Depreciation Segment EBITDA ($ millions) Segment Income Depreciation Segment EBITDA For the years ended Dec. 31 For the three months ended Dec. 31 2016 2015 2014 2016 2015 $ 861 917 725 1,574 $ (3,113) (31) 663 1,771 $ (2,959) 306 710 1,648 $ 512 223 200 418 $ (2,941) (361) 120 499 $ 4,077 (250) $ (710) 3,897 $ (295) 4,106 $ 1,353 (304) $ (2,683) 3,405 $ 3,827 $ 3,187 $ 3,811 $ 1,049 $ 722 For the year ended Dec. 31, 2016 Cortez Goldstrike Pueblo Viejo (60%) Lagunas Turquoise Norte Veladero Ridge Acacia $ 340 499 $ 442 $ 528 93 307 $ 260 96 $ 220 118 $ 166 27 $ 299 166 $ 839 $ 749 $ 621 $ 356 $ 338 $ 193 $ 465 For the year ended Dec. 31, 2015 Cortez Goldstrike Pueblo Viejo (60%) Lagunas Norte Veladero Turquoise Ridge Acacia $ 287 343 $ 408 $ 230 160 192 $ 285 169 $ 216 108 $ 92 23 (1) $ 143 $ 630 $ 600 $ 390 $ 454 $ 324 $ 115 $ 142 For the year ended Dec. 31, 2014 Cortez Goldstrike Pueblo Viejo (60%) Lagunas Norte Veladero Turquoise Ridge Acacia $ 393 255 $ 496 $ 417 138 132 $ 439 92 $ 330 116 $ 139 17 $ 191 129 $ 648 $ 628 $ 555 $ 531 $ 446 $ 156 $ 320 Realized Price Realized price is a non-GAAP financial measure which excludes from sales: n Unrealized gains and losses on non-hedge derivative contracts; n Unrealized mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; n Sales attributable to ore purchase arrangements; n Treatment and refining charges; and n Export duties. This measure is intended to enable Management to better understand the price realized in each reporting period for gold and copper sales because unrealized mark-to-market values of non-hedge gold and copper derivatives are subject to change each period due to 82 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS changes in market factors such as market and forward gold and copper prices so that prices ultimately realized may differ from those recorded. The exclusion of such unrealized mark-to-market gains and losses from the presentation of this performance measure enables investors to understand performance based on the realized proceeds of selling gold and copper production. The gains and losses on non-hedge derivatives and receivable balances relate to instruments/balances that mature in future periods, at which time the gains and losses will become realized. The amounts of these gains and losses reflect fair values based on market valuation assumptions at the end of each period and do not necessarily represent the amounts that will become realized on maturity. We also exclude export duties that are paid upon sale and netted against revenues as well as treatment and refining charges that are paid to the refiner on gold and copper concentrate sales that Reconciliation of Sales to Realized Price per ounce/pound are netted against revenues. We believe this provides investors and analysts with a more accurate measure with which to compare to market gold prices and to assess our gold sales performance. For those reasons, management believes that this measure provides a more accurate reflection of our past performance and is a better indicator of its expected performance in future periods. The realized price measure is intended to provide additional information, and does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of sales as determined under IFRS. Other companies may calculate this measure differently. The following table reconciles realized prices to the most directly comparable IFRS measure. ($ millions, except per ounce/pound information in dollars) For the years ended December 31 Sales Sales applicable to non-controlling interests Sales applicable to equity method investments1 Realized non-hedge gold/copper derivative (losses) gains Sales applicable to Pierina2 Treatment and refinement charges Export duties Other3 Gold Copper 2016 2015 2014 2016 2015 2014 $ 7,908 (948) – (2) (112) 16 2 – $ 7,813 (826) – – – 14 34 – $ 8,744 (851) – 1 – 11 48 – $ 466 – 299 – – 161 – – $ 1,002 – 26 – – 178 – – $ 1,224 – – (11) – 120 – (17) Revenues – as adjusted $ 6,864 $ 7,035 $ 7,953 $ 926 $ 1,206 $ 1,316 Ounces/pounds sold (000s ounces/millions pounds)2 5,503 6,083 6,284 405 510 435 Realized gold/copper price per ounce/pound4 $ 1,248 $ 1,157 $ 1,265 $ 2.29 $ 2.37 $ 3.03 1. Represents sales of $259 million for the year ended December 31, 2016 (2015: $26 million; 2014: $nil) applicable to our 50% equity method investment in Zaldívar effective December 1, 2015 as well as $40 million (2015: $nil; 2014: $nil) applicable to our 50% equity method investment in Jabal Sayid effective December 3, 2014 and subsequent accounting as equity method investments. 2. 2016 figures exclude Pierina from the calculation of realized price per ounce as the mine is currently going through closure. 3. Revenue related to copper cathode purchases made in the second quarter of 2014. 4. Realized price per ounce/pound may not calculate based on amounts presented in this table due to rounding. 83 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSIS Technical Information The scientific and technical information contained in this MD&A has been reviewed and approved by Steven Haggarty, P. Eng., Senior Director, Metallurgy of Barrick; Rick Sims, Registered Member SME, Senior Director, Resources and Reserves of Barrick; and Patrick Garretson, Registered Member SME, Senior Director, Life of Mine Planning of Barrick who are each a “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Endnotes 1 These are non-GAAP financial performance measures 6 Estimated in accordance with National Instrument with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 69 to 83 of this MD&A. 2 Amount excludes capital leases and includes project financing payments at Pueblo Viejo (60% basis) and Acacia (100% basis). 3 Includes $943 million cash primarily held at Acacia and Pueblo Viejo, which may not be readily deployed outside of Acacia and/or Pueblo Viejo. 4 Cost of sales related to gold per ounce is calculated using cost of sales related to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo and 36.1% Acacia from cost of sales), divided by attributable gold ounces. Cost of sales related to copper per pound is calculated using cost of sales related to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments). 5 Total reportable incident frequency rate (TRIFR) is a ratio calculated as follows: number of reportable injuries x 200,000 hours divided by the total number of hours worked. Reportable injuries include fatalities, lost time injuries, restricted duty injuries, and medically treated injuries. 43-101 as required by Canadian securities regulatory authorities. Estimates are as of December 31, 2016, unless otherwise noted. Proven reserves of 480.3 million tonnes grading 1.68 g/t, representing 25.9 million ounces of gold, and 173.3 million tonnes grading 0.533%, representing 2.035 billion pounds of copper. Probable reserves of 1.5 billion tonnes grading 1.22 g/t, representing 60.1 million ounces of gold, and 276 million tonnes grading 0.638%, representing 3.886 billion pounds of copper. Measured resources of 82.9 million tonnes grading 2.52 g/t, representing 6.7 million ounces of gold, and 83.2 million tonnes grading 0.410%, representing 753.4 million pounds of copper. Indicated resources of 1.2 billion tonnes grading 1.74 g/t, representing 68.5 million ounces of gold, and 650.3 million tonnes grading 0.526%, representing 7.545 billion pounds of copper. Inferred resources of 781 million tonnes grading 1.22 g/t, representing 30.7 million ounces of gold, and 114.1 million tonnes grading 0.501%, representing 1.259 billion pounds of copper. Complete mineral reserve and mineral resource data for all mines and projects referenced in this MD&A, including tonnes, grades, and ounces, can be found on pages 86 to 93 of Barrick’s Annual Report 2016. 84 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISGlossary of Technical Terms ALL-IN SUSTAINING COSTS: A measure of cost per ounce/pound for gold/copper. Refer to page 73 of this MD&A for further information and a reconciliation of the measure. AUTOCLAVE: Oxidation process in which high temperatures and pressures are applied to convert refractory sulfide mineralization into amenable oxide ore. BY-PRODUCT: A secondary metal or mineral product recovered in the milling process such as silver. C1 CASH COSTS: A measure of cost per pound for copper. Refer to page 81 of this MD&A for further information and a reconciliation of the measure. CASH COSTS: A measure of cost per ounce for gold. Refer to page 73 of this MD&A for further information and a reconciliation of the measure. CONCENTRATE: A very fine, powder-like product containing the valuable ore mineral from which most of the waste mineral has been eliminated. CONTAINED OUNCES: Represents ounces in the ground before reduction of ounces not able to be recovered by the applicable metallurgical process. DEVELOPMENT: Work carried out for the purpose of opening up a mineral deposit. In an underground mine this includes shaft sinking, crosscutting, drifting and raising. In an open pit mine, development includes the removal of overburden. DILUTION: The effect of waste or low-grade ore which is unavoidably included in the mined ore, lowering the recovered grade. DORÉ: Unrefined gold and silver bullion bars usually consisting of approximately 90 percent precious metals that will be further refined to almost pure metal. DRILLING: Core: drilling with a hollow bit with a diamond cutting rim to produce a cylindrical core that is used for geological study and assays. Used in mineral exploration. In-fill: any method of drilling intervals between existing holes, used to provide greater geological detail and to help establish reserve estimates. EXPLORATION: Prospecting, sampling, mapping, diamond-drilling and other work involved in searching for ore. FREE CASH FLOW: A measure that reflects our ability to generate cash flow. Refer to page 70 of this MD&A for a definition. GRADE: The amount of metal in each tonne of ore, expressed as troy ounces per ton or grams per tonne for precious metals and as a percentage for most other metals. Cut-off grade: the minimum metal grade at which an ore body can be economically mined (used in the calculation of ore reserves). Mill-head grade: metal content of mined ore going into a mill for processing. Recovered grade: actual metal content of ore determined after processing. Reserve grade: estimated metal content of an ore body, based on reserve calculations. HEAP LEACHING: A process whereby gold/copper is extracted by “heaping” broken ore on sloping impermeable pads and continually applying to the heaps a weak cyanide solution/ sulfuric acid which dissolves the contained gold/copper. The gold/copper-laden solution is then collected for gold/ copper recovery. HEAP LEACH PAD: A large impermeable foundation or pad used as a base for ore during heap leaching. MERRILL-CROWE PROCESS: A separation technique for removing gold from a cyanide solution. MILL: A processing facility where ore is finely ground and thereafter undergoes physical or chemical treatment to extract the valuable metals. MINERAL RESERVE: See pages 86 to 93 – Summary Gold/ Copper Mineral Reserves and Mineral Resources. MINERAL RESOURCE: See pages 86 to 93 – Summary Gold/ Copper Mineral Reserves and Mineral Resources. MINING RATE: Tonnes of ore mined per day or even specified time period. OPEN PIT: A mine where the minerals are mined entirely from the surface. ORE: Rock, generally containing metallic or non-metallic minerals, which can be mined and processed at a profit. ORE BODY: A sufficiently large amount of ore that can be mined economically. OUNCES: Troy ounces of a fineness of 999.9 parts per 1,000 parts. RECLAMATION: The process by which lands disturbed as a result of mining activity are modified to support beneficial land use. Reclamation activity may include the removal of buildings, equipment, machinery and other physical remnants of mining, closure of tailings storage facilities, leach pads and other mine features, and contouring, covering and re-vegetation of waste rock and other disturbed areas. RECOVERY RATE: A term used in process metallurgy to indicate the proportion of valuable material physically recovered in the processing of ore. It is generally stated as a percentage of the material recovered compared to the total material originally present. REFINING: The final stage of metal production in which impurities are removed from the molten metal. STRIPPING: Removal of overburden or waste rock overlying an ore body in preparation for mining by open pit methods. Expressed as the total number of tonnes mined or to be mined for each ounce of gold or pound of copper. TAILINGS: The material that remains after all economically and technically recoverable precious metals have been removed from the ore during processing. 85 Barrick Gold Corporation | Financial Report 2016MANAGEMENT’S DISCUSSION AND ANALYSISMineral Reserves and Mineral Resources The tables on the next seven pages set forth Barrick’s interest in the total proven and probable gold and copper reserves and in the total measured, indicated and inferred gold, copper and nickel resources and certain related information at each property. For further details of proven and probable mineral reserves and measured, indicated and inferred mineral resources by category, metal and property, see pages 87 to 93. The Company has carefully prepared and verified the mineral reserve and mineral resource figures and believes that its method of estimating mineral reserves has been verified by mining experience. These figures are estimates, however, and no assurance can be given that the indicated quantities of metal will be produced. Metal price fluctuations may render mineral reserves containing relatively lower grades of mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves, such as the need for orderly development of ore bodies or the processing of new or different ore grades, could affect the Company’s profitability in any particular accounting period. Definitions A mineral resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals 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 geological 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 quality 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 appropriate 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 quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient 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 exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. A 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 86 sufficient 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 geological and grade continuity. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. 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 economic 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 sub-divided in order of increasing confidence into probable mineral reserves and proven mineral reserves. A probable mineral reserve is the economically mineable part of an indicated and, in some circumstances, 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 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 economic extraction is justified. Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCESGold Mineral Reserves1,2 As at December 31, 2016 Based on attributable ounces North America Goldstrike Open Pit Goldstrike Underground Goldstrike Property Total Pueblo Viejo (60.00%) Cortez Turquoise Ridge (75.00%) South Arturo (60.00%) Hemlo Golden Sunlight South America Cerro Casale (75.00%) Pascua-Lama Veladero Lagunas Norte Australia Pacific Porgera (47.50%) Kalgoorlie (50.00%) Africa Bulyanhulu (63.90%) North Mara (63.90%) Buzwagi (63.90%) Jabal Sayid (50.00%) Proven Probable Total Tonnes (000s) Contained ounces (000s) Grade (gm/t) Tonnes (000s) Contained ounces (000s) Grade (gm/t) Tonnes (000s) Contained ounces (000s) Grade (gm/t) 54,473 2,996 57,469 60,668 16,196 4,288 851 1,018 288 2.86 11.11 3.29 2.82 1.52 15.54 3.95 3.64 1.30 5,012 1,070 6,082 5,505 793 2,143 108 119 12 10,527 2,689 13,216 25,153 134,806 4,003 129 24,764 539 3.72 8.51 4.70 3.19 2.18 14.65 3.38 1.85 3.40 1,259 736 1,995 2,582 9,427 1,886 14 1,469 59 65,000 5,685 70,685 85,821 151,002 8,291 980 25,782 827 6,271 3.00 1,806 9.88 8,077 3.55 2.93 8,087 2.11 10,220 4,029 122 1,588 71 15.11 3.87 1.92 2.67 172,276 29,247 23,986 26,322 0.65 1.94 0.78 1.83 3,586 1,828 602 1,548 725,926 248,623 228,139 44,348 0.59 13,848 1.53 12,222 6,147 0.84 2,670 1.87 898,202 277,870 252,125 70,670 0.60 17,434 1.57 14,050 6,749 0.83 4,218 1.86 444 72,472 12.26 0.94 175 2,193 14,011 27,601 4.51 2.19 2,032 1,947 14,455 100,073 4.75 1.29 2,207 4,140 1,464 4,683 5,798 2,855 10.52 3.25 0.95 0.26 495 489 178 24 12,494 10,519 3,826 8,476 6.91 2.13 1.74 0.23 2,776 720 214 62 13,958 15,202 9,624 11,331 7.29 2.47 1.27 0.24 3,271 1,209 392 86 Total 480,325 1.68 25,880 1,526,573 1.22 60,070 2,006,898 1.33 85,950 Copper Mineral Reserves1,2 As at December 31, 2016 Proven Probable Total Based on attributable pounds Zaldívar (50.00%) Lumwana Jabal Sayid (50.00%) Tonnes (000s) Contained lbs (millions) Grade (%) Tonnes (000s) Contained lbs (millions) Grade (%) Tonnes (000s) Contained lbs (millions) Grade (%) 142,666 27,786 2,855 0.501 1,575.1 315.8 0.516 144.1 2.289 87,736 179,860 8,476 0.535 1,035.0 0.597 2,367.9 483.0 2.585 230,402 207,646 11,331 0.514 2,610.1 0.586 2,683.7 627.1 2.510 Total 173,307 0.533 2,035.0 276,072 0.638 3,885.9 449,379 0.598 5,920.9 1. See accompanying endnote #1. 2. See accompanying endnote #2. 87 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Gold Mineral Resources1,2 As at December 31, 2016 Measured (M) Indicated (I) (M) + (I) Inferred Based on attributable ounces North America Goldstrike Open Pit Goldstrike Underground Goldstrike Property Total Pueblo Viejo (60.00%) Cortez Goldrush Turquoise Ridge (75.00%) South Arturo (60.00%) Hemlo Golden Sunlight Donlin Gold (50.00%) South America Cerro Casale (75.00%) Pascua-Lama Veladero Lagunas Norte Alturas Australia Pacific Porgera (47.50%) Kalgoorlie (50.00%) Africa Bulyanhulu (63.90%) North Mara (63.90%) Buzwagi (63.90%) Nyanzaga (57.51%) Golden Ridge (63.90%) Tankoro (31.95%) Jabal Sayid (50.00%) Tonnes (000s) Contained ounces (000s) Grade (gm/t) Tonnes (000s) Contained ounces (000s) Grade (gm/t) Contained ounces (000s) Tonnes Grade (gm/t) (000s) Contained ounces (000s) 1,329 984 2,313 10,183 2,199 161 13,426 7 126 825 3,865 17,217 13,562 7,637 3,253 – 2.74 11.73 6.56 2.33 2.04 10.43 6.97 1.33 2.72 1.51 2.52 0.30 1.69 0.48 0.65 – 117 371 488 764 144 54 3,009 0.3 11 40 3,896 2,022 5,918 95,459 29,137 30,837 37,364 22 58,771 14,320 313 266,803 2.63 330 9.81 638 5.09 968 2.33 7,146 2.13 1,999 9.60 9,522 5.39 6,476 1.41 1 0.90 1,709 631 1.37 2.24 19,190 447 1,009 1,456 7,910 2,143 9,576 9,485 1.3 1,720 671 19,503 81 1.92 1,064 10.06 9.48 1,145 2.04 2,845 1.64 14,506 8.18 7,343 6.34 15,979 5.18 6 1.94 7,765 1.32 5,123 2.02 46,108 5 344 349 187 763 1,931 3,257 1 484 218 2,997 167 205,268 736 143,111 118 204,698 54,192 – 68 – 0.36 1.43 0.48 0.63 – 2,362 6,561 3,185 1,100 – 2,529 7,297 3,303 1,168 – 371,580 15,400 21,389 3,946 210,965 0.38 1.74 0.33 0.71 1.00 4,493 863 229 90 6,793 168 3,123 5.92 0.67 32 67 13,607 10,991 4.05 0.95 1,770 335 1,802 402 13,528 553 3.39 2.47 1,476 44 874 2,174 83 1,685 – – 57 11.53 2.66 1.50 3.78 – – – 324 186 4 205 – – – 8,011 10,714 16,449 12,520 5,076 – 3,125 8.62 2.30 1.23 3.45 2.78 – 0.60 2,220 793 650 1,389 454 – 60 2,544 979 654 1,594 454 – 60 15,469 6,703 1,315 2,933 904 13,739 1,765 9.75 2.51 1.37 3.49 2.27 1.52 0.42 4,848 540 58 329 66 671 24 Total 82,938 2.52 6,730 1,226,393 1.74 68,521 75,251 781,009 1.22 30,711 Copper Mineral Resources1,2 As at December 31, 2016 Measured (M) Indicated (I) (M) + (I) Inferred Based on attributable pounds Zaldívar (50.00%) Lumwana Jabal Sayid (50.00%) Tonnes (000s) Contained lbs (millions) Grade (%) Tonnes (000s) Contained lbs (millions) Grade (%) Contained lbs (millions) Tonnes Grade (%) (000s) Contained lbs (millions) 58,039 25,154 57 0.410 0.409 1.353 524.9 22,354 226.8 624,826 3,125 1.7 0.399 196.7 0.522 7,191.8 156.9 2.277 721.6 7,418.6 158.6 4,062 0.529 47.4 108,266 0.468 1,116.3 95.5 1,765 2.454 Total 83,250 0.410 753.4 650,305 0.526 7,545.4 8,299 114,093 0.501 1,259.2 1. Resources which are not reserves do not have demonstrated economic viability. 2. See accompanying endnote #1. 88 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Summary Gold Mineral Reserves and Mineral Resources1,2,3,4 For the years ended December 31 2016 2015 Based on attributable ounces North America Goldstrike Open Pit Goldstrike Underground Goldstrike Property Total Pueblo Viejo (60.00%) Cortez Goldrush Bald Mountain (0.00%)5 Turquoise Ridge (75.00%) Round Mountain (0.00%)5 South Arturo (60.00%) Hemlo Golden Sunlight Donlin Gold (50.00%) South America Cerro Casale (75.00%) Pascua-Lama Veladero Lagunas Norte (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) (proven and probable) (mineral resource) (proven and probable) (mineral resource) (proven and probable) (mineral resource) (proven and probable) (mineral resource) 1. Resources which are not reserves do not have demonstrated economic viability. 2. See accompanying endnote #1. 3. Measured plus indicated resources. 4. See accompanying endnote #2. 5. See accompanying endnote #3. Tonnes (000s) Grade Ounces (000s) (gm/t) Tonnes (000s) Grade (gm/t) Ounces (000s) 65,000 5,225 5,685 3,006 70,685 8,231 85,821 105,642 151,002 31,336 – 30,998 – – 8,291 50,790 – – 980 29 25,782 58,897 827 15,145 – 270,668 898,202 222,485 277,870 156,673 252,125 212,335 70,670 57,445 6,271 3.00 447 2.66 1,806 9.88 1,009 10.44 8,077 3.55 1,456 5.50 8,087 2.93 2.33 7,910 2.11 10,220 2,143 2.13 – – 9,576 9.61 – – – – 4,029 15.11 9,485 5.81 – – – – 122 3.87 1 1.07 1,588 1.92 1,720 0.91 71 2.67 671 1.38 – – 2.24 19,503 0.60 17,434 0.35 2,529 1.57 14,050 7,297 1.45 6,749 0.83 3,303 0.48 4,218 1.86 1,168 0.63 69,073 5,116 4,952 4,107 74,025 9,223 93,877 97,881 153,232 43,709 – 25,166 49,083 172,472 8,564 74,989 33,072 21,079 1,289 158 13,191 42,746 1,054 14,806 – 270,668 898,202 222,485 324,626 157,465 276,933 75,228 63,641 37,553 6,911 3.11 404 2.46 1,628 10.23 1,382 10.47 8,539 3.59 1,786 6.02 8,960 2.97 2.46 7,731 2.26 11,129 2,150 1.53 – – 8,557 10.58 1,142 0.72 3,698 0.67 4,214 15.30 4.74 11,426 736 0.69 342 0.50 233 5.62 7 1.38 917 2.16 1,451 1.06 74 2.18 691 1.45 – – 2.24 19,503 0.60 17,434 0.35 2,529 1.47 15,384 6,459 1.28 7,544 0.85 1,287 0.53 3,729 1.82 1,644 1.36 89 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Summary Gold Mineral Reserves and Mineral Resources1,2,3,4 For the years ended December 31 2016 2015 Based on attributable ounces Australia Pacific Porgera (47.50%)5 Kalgoorlie (50.00%) Africa Bulyanhulu (63.90%) North Mara (63.90%) Buzwagi (63.90%) Nyanzaga (57.51%) Golden Ridge (63.90%) 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) 1. Resources which are not reserves do not have demonstrated economic viability. 2. See accompanying endnote #1. 3. Measured plus indicated resources. 4. See accompanying endnote #2. 5. See accompanying endnote #4. Tonnes (000s) Grade Ounces (000s) (gm/t) Tonnes (000s) Grade (gm/t) Ounces (000s) 14,455 13,775 100,073 14,114 4.75 4.07 1.29 0.89 2,207 1,802 4,140 402 14,471 9,444 100,838 15,450 4.24 5.47 1.28 0.88 1,971 1,660 4,154 439 13,958 8,885 15,202 12,888 9,624 16,532 – 14,205 – 5,076 11,331 3,182 7.29 8.91 2.47 2.36 1.27 1.23 – 3.49 – 2.78 0.24 0.59 3,271 2,544 1,209 979 392 654 – 1,594 – 454 86 60 17,488 14,159 14,685 8,099 9,382 28,213 – 62,208 – – 12,496 19 6.99 7.03 2.67 2.66 1.32 1.35 – 1.31 – – 0.27 – 3,930 3,201 1,262 692 399 1,221 – 2,621 – – 107 – 2,006,898 1,309,331 1.33 85,950 1.79 75,251 2,160,149 1,403,220 1.32 91,858 1.75 79,095 90 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Contained Silver Within Reported Gold Reserves1 For the year ended December 31, 2016 In proven gold reserves In probable gold reserves Total Based on attributable ounces North America Pueblo Viejo (60.00%) South America Cerro Casale (75.00%) Pascua-Lama Lagunas Norte Veladero Africa Bulyanhulu (63.90%)2 Tonnes Grade (gm/t) (000s) Contained ounces (000s) Tonnes Grade (gm/t) (000s) Contained ounces (000s) Tonnes Grade (gm/t) (000s) Contained Process ounces recovery % (000s) 60,668 18.678 36,432 25,153 14.07 11,377 85,821 17.33 47,809 80.0% 172,276 1.907 29,247 70.342 26,322 3.686 23,986 7.714 10,565 66,143 3,119 5,949 725,926 33,451 1.43 248,623 67.64 540,657 8,180 5.74 228,139 14.81 108,602 44,348 1.52 898,202 44,016 69.0% 277,870 67.92 606,800 82.0% 11,299 31.5% 252,125 14.13 114,551 9.8% 70,670 4.97 1,464 6.05 285 8,544 8.46 2,325 10,008 8.11 2,610 65.0% Total 313,963 12.14 122,493 1,280,733 17.11 704,592 1,594,696 16.13 827,085 70.4% 1. Silver is accounted for as a by-product credit against reported or projected gold production costs. 2. See accompanying endnote #5. Contained Copper Within Reported Gold Reserves1 For the year ended December 31, 2016 In proven gold reserves In probable gold reserves Total Based on attributable pounds North America Pueblo Viejo (60.00%) South America Cerro Casale (75.00%) Pascua-Lama Africa Bulyanhulu (63.90%)2 Buzwagi (63.90%) Tonnes Grade (%) (000s) Contained lbs (millions) Tonnes Grade (%) (000s) Contained lbs (millions) Tonnes Grade (%) (000s) Contained Process lbs recovery % (millions) 60,668 0.093 124.9 25,153 0.100 55.3 85,821 0.095 180.2 47.6% 172,276 0.190 29,247 0.101 721.3 65.0 725,926 0.226 248,623 0.080 3,613.3 440.3 898,202 0.219 277,870 0.082 4,334.6 87.4% 505.3 29.9% 1,464 0.431 5,798 0.070 13.9 9.0 8,544 0.565 3,826 0.140 106.4 11.8 10,008 0.545 9,624 0.098 120.3 90.0% 20.8 64.9% Total 269,453 0.157 934.1 1,012,072 0.189 4,227.1 1,281,525 0.183 5,161.2 80.4% 1. Copper is accounted for as a by-product credit against reported or projected gold production costs. 2. See accompanying endnote #5. 91 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Contained Silver Within Reported Gold Resources1 For the year ended December 31, 2016 Measured (M) Indicated (I) (M) + (I) Inferred Based on attributable ounces North America Pueblo Viejo (60.00%) South America Cerro Casale (75.00%) Pascua-Lama Lagunas Norte Veladero Africa Bulyanhulu (63.90%) Tonnes (000s) Contained ounces (000s) Grade (gm/t) Tonnes (000s) Contained ounces (000s) Grade (gm/t) Ounces (000s) Tonnes (000s) Contained ounces (000s) Grade (gm/t) 10,183 14.53 4,758 95,459 11.22 34,449 39,207 2,845 9.76 893 17,217 13,562 3,253 7,637 1.19 661 205,268 28.91 12,604 143,111 54,192 304 2,304 204,698 2.91 9.38 1.06 6,985 25.44 117,060 5,250 12.38 81,459 3.01 7,646 371,580 129,664 15,400 3,946 83,763 21,389 5,554 1.04 12,379 8,830 529 6,966 17.83 4.17 10.13 874 7.15 201 8,011 6.58 1,696 1,897 15,469 6.96 3,461 Total 52,726 12.29 20,832 710,739 10.80 246,899 267,731 430,629 2.39 33,058 1. Resources which are not reserves do not have demonstrated economic viability. Contained Copper Within Reported Gold Resources1 For the year ended December 31, 2016 In measured (M) gold resources In indicated (I) gold resources (M) + (I) Inferred Based on attributable pounds North America Pueblo Viejo (60.00%) South America Cerro Casale (75.00%) Pascua-Lama Africa Bulyanhulu (63.90%) Buzwagi (63.90%) Tonnes (000s) Contained lbs (millions) Grade (%) Tonnes (000s) Contained lbs (millions) Grade (%) Contained lbs (millions) Tonnes (000s) Contained lbs (millions) Grade (%) 10,183 0.090 20.2 95,459 0.085 179.7 199.9 2,845 0.022 1.4 17,217 13,562 0.132 0.103 50.1 30.7 205,268 143,111 0.164 0.084 743.8 264.3 793.9 371,580 15,400 295.0 0.192 1,570.2 16.5 0.049 874 83 0.405 0.109 7.8 0.2 8,011 16,449 0.449 0.116 79.3 42.1 87.1 42.3 15,469 1,315 0.632 0.128 215.5 3.7 Total 41,919 0.118 109.0 468,298 0.127 1,309.2 1,418.2 406,609 0.202 1,807.3 1. Resources which are not reserves do not have demonstrated economic viability. Nickel Mineral Resources1 For the year ended December 31, 2016 Measured (M) Indicated (I) (M) + (I) Inferred Based on attributable pounds Africa Kabanga (50.00%) Tonnes (000s) Contained lbs (millions) Grade (%) Tonnes (000s) Contained lbs (millions) Grade (%) Contained lbs (millions) Tonnes (000s) Contained lbs (millions) Grade (%) – 0.0 – 0.0 0.0 – 0.0 1. Resources which are not reserves do not have demonstrated economic viability. 92 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCES Mineral Reserves and Resources Endnotes 1. Mineral reserves (“reserves”) and mineral resources (“resources”) have been estimated as at December 31, 2016 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 and Exchange Act of 1934 (as interpreted by Staff of the SEC), applies different standards in order to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes, approximately 1.9 million ounces of proven and probable gold reserves at Cortez are classified as mineralized material. In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the U.S. Securities and Exchange Commission does not recognize such terms. Canadian standards differ significantly from the requirements of the U.S. Securities and Exchange Commission, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the U.S. Securities and Exchange Commission. U.S. investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, U.S. investors are cautioned not to assume that any part or all of Barrick’s mineral resources constitute or will be converted into reserves. Calculations have been prepared by employees of Barrick, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of Rick Sims, Senior Director, Resources and Reserves, of Barrick, Steven Haggarty, Senior Director, Metallurgy, of Barrick and Patrick Garretson, Senior Director, Life of Mine Planning, of Barrick. Except as noted below, reserves have been estimated based on an assumed gold price of US$1,000 per ounce for 2017 through 2020 and US$1,200 per ounce from 2021 onwards, an assumed silver price of US$13.75 per ounce for 2017 through 2020 and US$16.50 from 2021 onwards, and an assumed copper price of US$2.25 per pound for 2017 through 2020 and US$2.75 per pound from 2021 onwards (for more information about Barrick’s two-tiered approach to estimating reserves, see page 28 of the Annual Report 2016) and long-term average exchange rates of 1.30 CAD/US$ and 0.75 US$/AUD. Reserves at Kalgoorlie assumed a gold price of AUD$1,600 and Bulyanhulu, North Mara and Buzwagi assumed a gold price of US$1,100. Reserve estimates 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. Verification procedures include industry-standard quality control practices. Resources as at December 31, 2016 have been estimated using varying cut-off grades, depending on both the type of mine or project, its maturity and ore types at each property. For a breakdown of reserves and resources by category and for a more detailed description of the key assumptions, parameters, and methods used in estimating Barrick’s reserves and resources, see Barrick’s most recent Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. 2. In confirming our annual reserves for each of our mineral properties, projects, and operations we conduct a reserve test on December 31 of each year to verify that the future undiscounted cash flow from reserves is positive. The cash flow ignores all sunk costs and only considers future operating and closure expenses as well as any future capital costs. 3. On January 11, 2016, the Company divested the Bald Mountain mine and its interest in the Round Mountain mine. For additional information regarding this matter, see page 120 of Barrick’s Annual Report 2016. 4. On August 31, 2015, the Company divested 50% of its interest in the Porgera mine. For additional information regarding this matter, see page 120 of Barrick’s Annual Report 2016. 5. Silver and copper probable reserve tonnage at the Bulyanhulu mine is less than the gold probable reserve tonnage because the gold reserve includes 3.95 million tonnes of tailings material which are being separately re-processed for recovery of gold only. 93 Barrick Gold Corporation | Financial Report 2016MINERAL RESERVES AND MINERAL RESOURCESMANAGEMENT’S RESPONSIBILITY Management’s Responsibility Management’s Responsibility for Financial Statements The accompanying consolidated financial statements have been prepared by and are the responsibility of the Board of Directors and Management of the Company. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and reflect Management’s best estimates and judgments based on currently available information. The Company has developed and maintains a system of internal controls in order to ensure, on a reasonable and cost effective basis, the reliability of its financial information. The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants. Their report outlines the scope of their examination and opinion on the consolidated financial statements. Catherine Raw Executive Vice President and Chief Financial Officer Toronto, Canada February 15, 2017 94 Barrick Gold Corporation | Financial Report 2016 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management’s Report on Internal Control Over Financial Reporting Barrick’s management is responsible for establishing and maintaining internal control over financial reporting. Barrick’s management assessed the effectiveness of the Company’s internal control over financial reporting as at December 31, 2016. Barrick’s Management used the Internal Control – Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to evaluate the effectiveness of Barrick’s internal control over financial reporting. Based on management’s assessment, Barrick’s internal control over financial reporting is effective as at December 31, 2016. The effectiveness of the Company’s internal control over financial reporting as at December 31, 2016 has been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants, as stated in their report which is located on pages 96 – 97 of Barrick’s 2016 Annual Financial Statements. Barrick Gold Corporation | Financial Report 2016 95 INDEPENDENT AUDITOR’S REPORT Independent Auditor’s Report Independent Auditor’s Report February 15, 2017 To the Shareholders of Barrick Gold Corporation We have completed integrated audits of Barrick Gold Corporation’s (the company) 2016 and 2015 consolidated financial statements and its internal control over financial reporting as at December 31, 2016. Our opinions, based on our audits are presented below. Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Barrick Gold Corporation, which comprise the consolidated balance sheets as at December 31, 2016 and December 31, 2015 and the consolidated statements of income, comprehensive income, cash flow and changes in equity for the years then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. Canadian generally accepted auditing standards also require that we comply with ethical requirements. An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles and policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Barrick Gold Corporation as at December 31, 2016 and December 31, 2015 and its financial performance and its cash flows for the years then ended in accordance with IFRS as issued by the IASB. 96 Barrick Gold Corporation | Financial Report 2016 Report on internal control over financial reporting We have also audited Barrick Gold Corporation’s internal control over financial reporting as at December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management’s responsibility for internal control over financial reporting Management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Auditor’s responsibility Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control, based on the assessed risk, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our audit opinion on the company’s internal control over financial reporting. Definition of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent limitations Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, Barrick Gold Corporation maintained, in all material respects, effective internal control over financial reporting as at December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO. Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada 97 INDEPENDENT AUDITOR’S REPORTBarrick Gold Corporation | Financial Report 2016Consolidated Statements of Income Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars, except per share data) Revenue (notes 5 and 6) Costs and expenses Cost of sales (notes 5 and 7) General and administrative expenses (note 11) Exploration, evaluation and project expenses (notes 5 and 8) Impairment (reversals) charges (note 10) Loss on currency translation (note 9b) Closed mine rehabilitation (note 27b) (Income) loss from equity investees (note 16) (Gain) loss on non-hedge derivatives (note 25e) Other expense (income) (note 9a) Income (loss) before finance items and income taxes Finance costs, net (note 14) Income (loss) before income taxes Income tax (expense) recovery (note 12) Net income (loss) Attributable to: Equity holders of Barrick Gold Corporation Non-controlling interests (note 32) 2016 2015 $ 8,558 $ 9,029 5,405 256 237 (250) 199 130 (20) (12) 60 2,553 (775) 1,778 (917) 6,907 233 355 3,897 120 3 7 38 (113) (2,418) (726) (3,144) 31 $ 861 $ (3,113) $ $ 655 206 $ $ (2,838) (275) Earnings per share data attributable to the equity holders of Barrick Gold Corporation (note 13) Net income (loss) Basic Diluted $ 0.56 $ 0.56 $ $ (2.44) (2.44) The accompanying notes are an integral part of these consolidated financial statements. 98 FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Consolidated Statements of Comprehensive Income Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars) Net income (loss) Other comprehensive income (loss), net of taxes Items that may be reclassified subsequently to profit or loss: Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax ($9) and $43 Realized (gains) losses on derivatives designated as cash flow hedges, net of tax ($8) and ($20) Currency translation adjustments, net of tax $nil and $nil Items that will not be reclassified to profit or loss: Actuarial gain (loss) on post-employment benefit obligations, net of tax ($4) and ($3) Net unrealized change on equity investments, net of tax $nil and $nil Net realized change on equity investments, net of tax $nil and $nil Total other comprehensive income (loss) Total comprehensive income (loss) Attributable to: Equity holders of Barrick Gold Corporation Non-controlling interests The accompanying notes are an integral part of these consolidated financial statements. 2016 2015 $ 861 $ (3,113) 16 64 95 7 6 – 188 (134) 111 (56) 5 (11) 18 (67) $ 1,049 $ (3,180) $ $ 843 206 $ (2,905) (275) $ 99 FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Consolidated Statements of Cash Flow Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars) Operating Activities Net income (loss) Adjustments for the following items: Depreciation Finance costs (note 14) Impairment (reversals) charges (note 10) Income tax expense (recovery) (note 12) Net currency translation losses (note 9b) Loss (gain) on sale of non-current assets/investments Deposit on gold and silver streaming agreement (note 29) Change in working capital (note 15a) Other operating activities (note 15a) Operating cash flows before interest and income taxes Interest paid Income taxes paid Net cash provided by operating activities Investing Activities Property, plant and equipment Capital expenditures (note 5) Sales proceeds Divestitures (note 4) Investment sales Other investing activities (note 15b) 2016 2015 $ 861 $ (3,113) 1,574 788 (250) 917 199 42 – (315) (176) 3,640 (513) (487) 2,640 (1,126) 135 588 – (9) 1,771 739 3,897 (31) 120 (187) 610 (39) (4) 3,763 (677) (292) 2,794 (1,713) 43 1,904 33 (17) Net cash provided by (used in) investing activities (412) 250 Financing Activities Debt (note 25b) Proceeds Repayments Dividends (note 31) Funding from non-controlling interests (note 32) Disbursements to non-controlling interests (note 32) Debt extinguishment costs Net cash used in financing activities Effect of exchange rate changes on cash and equivalents Net decrease in cash and equivalents Cash and equivalents at beginning of year (note 25a) Cash and equivalents at the end of year The accompanying notes are an integral part of these consolidated financial statements. 100 5 (2,062) (86) 70 (95) (129) 9 (3,142) (160) 40 (90) 68 (2,297) (3,275) 3 (66) 2,455 (13) (244) 2,699 $ 2,389 $ 2,455 FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Consolidated Balance Sheets Barrick Gold Corporation (in millions of United States dollars) Assets Current assets Cash and equivalents (note 25a) Accounts receivable (note 18) Inventories (note 17) Other current assets (note 18) Total current assets (excluding assets classified as held-for-sale) Assets classified as held-for-sale (note 4) Total current assets Non-current assets Non-current portion of inventory (note 17) Equity in investees (note 16) Property, plant and equipment (note 19) Intangible assets (note 20a) Goodwill (note 20b) Deferred income tax assets (note 30) Other assets (note 22) Total assets Liabilities and Equity Current liabilities Accounts payable (note 23) Debt (note 25b) Current income tax liabilities Other current liabilities (note 24) Total current liabilities (excluding liabilities classified as held-for-sale) Liabilities classified as held-for-sale (note 4) Total current liabilities Non-current liabilities Debt (note 25b) Provisions (note 27) Deferred income tax liabilities (note 30) Other liabilities (note 29) Total liabilities Equity Capital stock (note 31) Deficit Accumulated other comprehensive loss Other Total equity attributable to Barrick Gold Corporation shareholders Non-controlling interests (note 32) Total equity Contingencies and commitments (notes 2, 17, 19 and 36) Total liabilities and equity The accompanying notes are an integral part of these consolidated financial statements. Signed on behalf of the Board, John L. Thornton, Chairman Steven J. Shapiro, Director As at As at December 31, December 31, 2015 2016 $ 2,389 249 1,930 306 4,874 – 4,874 1,536 1,185 14,103 272 1,371 977 946 $ 2,455 275 1,717 263 4,710 758 5,468 1,502 1,199 14,434 271 1,371 1,040 1,023 $ 25,264 $ 26,308 $ 1,084 143 283 309 1,819 – 1,819 7,788 2,363 1,520 1,461 $ 1,158 203 – 337 1,698 149 1,847 9,765 2,102 1,553 1,586 14,951 16,853 20,877 (13,074) (189) 321 7,935 2,378 10,313 20,869 (13,642) (370) 321 7,178 2,277 9,455 $ 25,264 $ 26,308 101 FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Consolidated Statements of Changes in Equity Barrick Gold Corporation (in millions of United States dollars) Common Shares (in thousands) Capital stock Retained earnings (deficit) Accumulated other comprehensive income (loss)1 Other2 Total equity attributable to shareholders Non- controlling interests Total equity At January 1, 2016 1,165,081 $ 20,869 $ (13,642) $ (370) $ 321 $ 7,178 $ 2,277 $ 9,455 Attributable to equity holders of the Company Net income Total other comprehensive income Total comprehensive income Transactions with owners – – – – – 655 7 – 181 – – 655 188 206 – 861 188 $ – $ 662 $ 181 $ – $ 843 $ 206 $ 1,049 Dividends Dividend reinvestment plan Funding from non-controlling interests Other decrease in non-controlling interests – 493 – – – 8 – – (86) (8) – – – – – – – – – – (86) – – – – – 70 (175) (86) – 70 (175) Total transactions with owners 493 $ 8 $ (94) $ – $ – $ (86) $ (105) $ (191) At December 31, 2016 1,165,574 $ 20,877 $ (13,074) $ (189) $ 321 $ 7,935 $ 2,378 $ 10,313 At January 1, 2015 1,164,670 $ 20,864 $ (10,739) $ (199) $ 321 $ 10,247 $ 2,615 $ 12,862 Impact of adopting IFRS 9 on January 1, 2015 (note 25) – – 99 (99) – – – – At January 1, 2015 (restated) 1,164,670 $ 20,864 $ (10,640) $ (298) $ 321 $ 10,247 $ 2,615 $ 12,862 Net loss Total other comprehensive income (loss) Total comprehensive loss Transactions with owners – – – – – (2,838) 5 – (72) – – (2,838) (67) (275) – (3,113) (67) $ – $ (2,833) $ (72) $ – $ (2,905) $ (275) $ (3,180) Dividends Dividend reinvestment plan Recognition of stock option expense Funding from non-controlling interests Other decrease in non-controlling interests Other decreases – 411 – – – – – 3 2 – – – (160) (3) – – – (6) – – – – – – Total transactions with owners 411 $ 5 $ (169) $ – $ – – – – – – – (160) – 2 – – (6) – – – 41 (104) – (160) – 2 41 (104) (6) $ (164) $ (63) $ (227) At December 31, 2015 1,165,081 $ 20,869 $ (13,642) $ (370) $ 321 $ 7,178 $ 2,277 $ 9,455 1. Includes cumulative translation adjustments as at December 31, 2016: $95 million loss (2015: $178 million). 2. Includes additional paid-in capital as at December 31, 2016: $283 million (December 31, 2015: $283 million) and convertible borrowings – equity component as at December 31, 2016: $38 million (December 31, 2015: $38 million). The accompanying notes are an integral part of these consolidated financial statements. 102 FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Notes to Consolidated Financial Statements Barrick Gold Corporation. Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to A$, ARS, C$, CLP, DOP, EUR, GBP, PGK, SAR, TZS, ZAR, and ZMW are to Australian dollars, Argentinean pesos, Canadian dollars, Chilean pesos, Dominican pesos, Euros, British pound sterling, Papua New Guinea kina, Saudi riyal, Tanzanian shillings, South African rand, and Zambian kwacha, respectively. 1  Corporate Information Barrick Gold Corporation (“Barrick” or the “Company”) is a corporation governed by the Business Corporations Act (Ontario). The Company’s head and registered office is located at Brookfield Place, TD Canada Trust Tower, 161 Bay Street, Suite 3700, Toronto, Ontario, M5J 2S1. We are principally engaged in the production and sale of gold and copper, as well as related activities such as exploration and mine development. Our producing gold mines are located in Canada, the United States, Peru, Argentina and the Dominican Republic and our producing copper mine is in Zambia. We hold a 50% interest in KCGM, a gold mine located in Australia and hold a 50% equity interest in Barrick Niugini Limited (“BNL”), which owns a 95% interest in Porgera, a gold mine located in Papua New Guinea. We also hold a 63.9% equity interest in Acacia Mining plc (“Acacia”), a company listed on the London Stock Exchange that owns gold mines and exploration properties in Africa. We have a 50% interest in Zaldívar, a copper mine located in Chile and a 50% interest in Jabal Sayid, a copper mine located in Saudi Arabia. We also have various gold projects located in South America and North America. We sell our gold and copper production into the world market. 2  Significant Accounting Policies a) Statement of Compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) under the historical cost convention, as modified by revaluation of derivative contracts and certain financial assets. Accounting policies are consistently applied to all years presented, unless otherwise stated. These consolidated financial statements were approved for issuance by the Board of Directors on February 15, 2017. b) Basis of Preparation Subsidiaries These consolidated financial statements include the accounts of Barrick and its subsidiaries. All intercompany balances, transactions, income and expenses, and profits or losses have been eliminated on consolidation. We consolidate subsidiaries where we have the ability to exercise control. Control of an investee is defined to exist when we are exposed to variable returns from our involvement with the investee and have the ability to affect those returns through our power over the investee. Specifically, we control an investee if, and only if, we have all of the following: power over the investee (i.e., existing rights that give us the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from our involvement with the investee; and the ability to use our power over the investee to affect its returns. For non wholly-owned, controlled subsidiaries, the net assets attributable to outside equity shareholders are presented as “non- controlling interests” in the equity section of the consolidated balance sheet. Profit or loss for the period that is attributable to non-controlling interests is calculated based on the ownership of the minority shareholders in the subsidiary. Joint Arrangements A joint arrangement is defined as one over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. There are two types of joint arrangements, joint operations (“JO”) and joint ventures (“JV”). A JO is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to our interests in joint operations, we recognize our share of any assets, liabilities, revenues and expenses of the JO. 103 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016A JV is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Our investments in JVs are accounted for using the equity method. On acquisition, an equity method investment is initially recognized at cost. The carrying amount of equity method investments includes goodwill identified on acquisition, net of any accumulated impairment losses. The carrying amount is adjusted by our share of post-acquisition net income or loss; depreciation, amortization or impairment of the fair value adjustments made on the underlying balance sheet at the date of acquisition; dividends; cash contributions; and our share of post-acquisition movements in Other Comprehensive Income (“OCI”). Outlined below is information related to our joint arrangements and entities other than 100% owned Barrick subsidiaries at December 31, 2016: Place of business Entity type Economic interest1 Method2 Acacia Mining plc3 Cerro Casale Project3 Pueblo Viejo3 South Arturo3 Donlin Gold Project Kalgoorlie Mine Porgera Mine4 Turquoise Ridge Mine5 GNX6,7 Jabal Sayid6 Kabanga Project6,7 Zaldívar6,8 Tanzania Chile Dominican Republic United States United States Australia Papua New Guinea United States Chile Saudi Arabia Tanzania Chile Subsidiary, publicly traded Subsidiary Subsidiary Subsidiary JO JO JO JO JV JV JV JV 63.9% 75% 60% 60% 50% 50% 47.5% 75% 50% 50% 50% 50% Consolidation Consolidation Consolidation Consolidation Our share Our share Our share Our share Equity Method Equity Method Equity Method Equity Method 1. Unless otherwise noted, all of our joint arrangements are funded by contributions made by their partners in proportion to their economic interest. 2. For our JOs, we recognize our share of any assets, liabilities, revenues and expenses of the JO. 3. We consolidate our interests in Acacia, Cerro Casale, Pueblo Viejo and South Arturo and record a non-controlling interest for the 36.1%, 25%, 40% and 40%, respectively, that we do not own. 4. We divested 50% of our 95% interest in Porgera in 2015, bringing our interest down to 47.5%. 5. We have joint control given that decisions about relevant activities require unanimous consent of the parties to the joint operation. 6. Barrick has commitments of $188 million relating to its interest in the joint ventures. 7. These JVs are early stage exploration projects and, as such, do not have any significant assets, liabilities, income, contractual commitments or contingencies. Expenses are recognized through our equity pick-up (loss). Refer to note 16 for further details. 8. We divested 50% of our interest in 2015. c) Business Combinations On the acquisition of a business, the acquisition method of accounting is used, whereby the purchase consideration is allocated to the identifiable assets and liabilities on the basis of fair value at the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact of adjustments to those provisional fair values effective as at the acquisition date. Incremental costs related to acquisitions are expensed as incurred. When the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. If the fair value attributable to Barrick’s share of the identifiable net assets exceeds the cost of acquisition, the difference is recognized as a gain in the consolidated statement of income. Non-controlling interests represent the fair value of net assets in subsidiaries, as at the date of acquisition that are not held by Barrick and are presented in the equity section of the consolidated balance sheet. 104 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 d) Non-Current Assets and Disposal Groups  Other assets and liabilities using the closing exchange Held-for-Sale and Discontinued Operations Non-current assets and disposal groups are classified as assets held-for-sale (“HFS”) if it is highly probable that the value of these assets will be recovered primarily through sale rather than through continuing use. They are recorded at the lower of carrying amount and fair value less cost of disposal. Impairment losses on initial classification as HFS and subsequent gains and losses on remeasurement are recognized in the income statement. Once classified as HFS, property, plant and equipment are no longer amortized. The assets and liabilities are presented as HFS in the consolidated balance sheet when the sale is highly probable, the asset or disposal group is available for immediate sale in its present condition and management is committed to the sale, which should be expected to be completed within one year from the date of classification. A discontinued operation is a component of the Company that can be clearly distinguished from the rest of the Company and represents a major line of business or geographic area, and the value of this component is expected to be recovered primarily through sale rather than continuing use. Results of operations and any gain or loss from disposal are excluded from income before finance items and income taxes and are reported separately as income/ loss from discontinued operations. e) Foreign Currency Translation The functional currency of the Company, for each subsidiary of the Company, and for joint arrangements and associates, is the currency of the primary economic environment in which it operates. The functional currency of all of our operations is the US dollar. We translate non-US dollar balances for these operations into US dollars as follows:  Property, plant and equipment (“PP&E”), intangible assets and equity method investments using the rates at the time of acquisition;  Fair value through other comprehensive income (“FVOCI”) equity investments using the closing exchange rate as at the balance sheet date with translation gains and losses permanently recorded in Other Comprehensive Income (“OCI”);  Deferred tax assets and liabilities using the closing exchange rate as at the balance sheet date with translation gains and losses recorded in income tax expense; rate as at the balance sheet date with translation gains and losses recorded in other income/expense; and  Income and expenses using the average exchange rate for the period, except for expenses that relate to non-monetary assets and liabilities measured at historical rates, which are translated using the same historical rate as the associated non-monetary assets and liabilities. f) Revenue Recognition We record revenue when evidence exists that all of the following criteria are met:  The significant risks and rewards of ownership of the product have been transferred to the buyer;  Neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold, has been retained;  The amount of revenue can be reliably measured;  It is probable that the economic benefits associated with the sale will flow to us; and  The costs incurred or to be incurred in respect of the sale can be reliably measured. These conditions are generally satisfied when title passes to the customer. Gold Bullion Sales Gold bullion is sold primarily in the London spot market. The sales price is fixed on the date of sale based on the gold spot price. Generally, we record revenue from gold bullion sales at the time of physical delivery, which is also the date that title to the gold passes. Concentrate Sales Under the terms of concentrate sales contracts with independent smelting companies, gold and copper sales prices are provisionally set on a specified future date after shipment based on market prices. We record revenues under these contracts at the time of shipment, which is also when the risk and rewards of ownership pass to the smelting companies, using forward market gold and copper prices on the expected date that final sales prices will be determined. Variations between the price recorded at the shipment date and the actual final price set under the smelting contracts are caused by changes in market gold and copper prices, which result in the existence of an embedded derivative in accounts receivable. The embedded derivative is recorded at fair value each period until final settlement occurs, with 105 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016changes in fair value classified as provisional price adjustments and included in revenue in the consolidated statement of income. Copper Cathode Sales Under the terms of copper cathode sales contracts, copper sales prices are provisionally set on a specified future date based upon market commodity prices plus certain price adjustments. Revenue is recognized at the time of shipment, which is also when the risks and rewards of ownership pass to the customer. Revenue is provisionally measured using forward market prices on the expected date that final selling prices will be determined. Variations occur between the price recorded on the date of revenue recognition and the actual final price under the terms of the contracts due to changes in market copper prices, which result in the existence of an embedded derivative in accounts receivable. This embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as provisional price adjustments and included in revenue in the consolidated statement of income. g) Exploration and Evaluation (“E&E”) Exploration expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Evaluation expenditures are the costs incurred to establish the technical and commercial viability of developing mineral deposits identified through exploration activities or by acquisition. Evaluation expenditures include the cost of (i) establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities in an ore body that is classified as either a mineral resource or a proven and probable reserve; (ii) determining the optimal methods of extraction and metallurgical and treatment processes; (iii) studies related to surveying, transportation and infrastructure requirements; (iv) permitting activities; and (v) economic evaluations to determine whether development of the mineralized material is commercially justified, including scoping, prefeasibility and final feasibility studies. Exploration and evaluation expenditures are expensed as incurred unless management determines that probable future economic benefits will be generated 106 as a result of the expenditures. Once the technical feasibility and commercial viability of a program or project has been demonstrated with a prefeasibility study, and we have recognized reserves in accordance with the Canadian Securities Administrators’ National Instrument 43-101, we account for future expenditures incurred in the development of that program or project in accordance with our policy for Property, Plant and Equipment, as described in note 2n. h) Production Stage A mine that is under construction is determined to enter the production stage when the project is in the location and condition necessary for it to be capable of operating in the manner intended by management. We use the following factors to assess whether these criteria have been met: (1) the level of capital expenditures compared to construction cost estimates; (2) the completion of a reasonable period of testing of mine plant and equipment; (3) the ability to produce minerals in saleable form (within specifications); and (4) the ability to sustain ongoing production of minerals. When a mine construction project moves into the production stage, the capitalization of certain mine construction costs ceases and costs are either capitalized to inventory or expensed, except for capitalizable costs related to property, plant and equipment additions or improvements, open pit stripping activities that provide a future benefit, underground mine development or expenditures that meet the criteria for capitalization in accordance with IAS 16 Property, Plant and Equipment. i) Earnings per Share Earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if additional common shares are assumed to be issued under securities that entitle their holders to obtain common shares in the future. For stock options, the number of additional shares for inclusion in diluted earnings per share calculations is determined using the treasury stock method. Under this method, stock options, whose exercise price is less than the average market price of our common shares, are assumed to be exercised and the proceeds are used to repurchase common shares at the average market price for the period. The incremental number of common shares issued under stock options and repurchased from proceeds is included in the calculation of diluted earnings per share. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016j) Taxation Current tax for each taxable entity is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the balance sheet date and includes adjustments to tax payable or recoverable in respect of previous periods. Deferred tax is recognized using the balance sheet method in respect of all temporary differences between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes, except as indicated below. Deferred income tax liabilities are recognized for all taxable temporary differences, except:  Where the deferred income tax liability arises from the initial recognition of goodwill, or the initial recognition of an asset or liability in an acquisition that is not a business combination and, at the time of the acquisition, affects neither the accounting profit nor taxable profit or loss; and  In respect of taxable temporary differences associated with investments in subsidiaries and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognized for all deductible temporary differences and the carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax assets and unused tax losses can be utilized, except:  Where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in an acquisition that is not a business combination and, at the time of the acquisition, affects neither the accounting profit nor taxable profit or loss; and  In respect of deductible temporary differences associated with investments in subsidiaries and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. To the extent that an asset not previously recognized fulfills the criteria for recognition, a deferred income tax asset is recorded. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is realized or the liability is settled, based on tax rates and tax laws enacted or substantively enacted at the balance sheet date. Current and deferred tax relating to items recognized directly in equity are recognized in equity and not in the income statement. Royalties and Special Mining Taxes Income tax expense includes the cost of royalty and special mining taxes payable to governments that are calculated based on a percentage of taxable profit whereby taxable profit represents net income adjusted for certain items defined in the applicable legislation. Indirect Taxes Indirect tax recoverable is recorded at its undiscounted amount, and is disclosed as non-current if not expected to be recovered within twelve months. k) Other Investments Investments in publicly quoted equity securities that are neither subsidiaries nor associates are categorized as fair value through other comprehensive income (“FVOCI”) pursuant to the irrevocable election available in IFRS 9 for these instruments. FVOCI equity investments (referred to as “other investments”) are recorded at fair value with all realized and unrealized gains and losses recorded permanently in OCI. l) Inventory Material extracted from our mines is classified as either ore or waste. Ore represents material that, at the time of extraction, we expect to process into a saleable form and sell at a profit. Raw materials are comprised of both ore in stockpiles and ore on leach pads as processing is required to extract benefit from the ore. Ore is accumulated in stockpiles that are subsequently processed into gold/copper in a saleable form. The recovery of gold and copper from certain oxide ores is achieved through the heap leaching process. Work in process represents gold/copper in the processing circuit that has not completed the production process, and is not yet in a saleable form. Finished goods inventory represents gold/copper in saleable form. Metal Inventories are valued at the lower of cost and net realizable value. Cost is determined on a weighted average basis and includes all costs incurred, based on 107 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016a normal production capacity, in bringing each product to its present location and condition. Cost of inventories comprises direct labor, materials and contractor expenses, including non-capitalized stripping costs; depreciation on PP&E including capitalized stripping costs; and an allocation of general and administrative costs. As ore is removed for processing, costs are removed based on the average cost per ounce/pound in the stockpile. Net realizable value is determined with reference to relevant market prices less applicable variable selling expenses. Mine operating supplies represent commodity consumables and other raw materials used in the production process, as well as spare parts and other maintenance supplies that are not classified as capital items. Provisions are recorded to reduce mine operating supplies to net realizable value, which is generally calculated by reference to its salvage or scrap value, when it is determined that the supplies are obsolete. Provisions are reversed to reflect subsequent recoveries in net realizable value where the inventory is still on hand. m) Royalties Certain of our properties are subject to royalty arrangements based on mineral production at the properties. The primary type of royalty is a net smelter return (NSR) royalty. Under this type of royalty we pay the holder an amount calculated as the royalty percentage multiplied by the value of gold production at market gold prices less third-party smelting, refining and transportation costs. Royalty expense is recorded on completion of the production or sales process in cost of sales. Other types of royalties include:  Net profits interest (NPI) royalty to other than a government,  Modified net smelter return (NSR) royalty,  Net smelter return sliding scale (NSRSS) royalty,  Gross proceeds sliding scale (GPSS) royalty,  Gross smelter return (GSR) royalty,  Net value (NV) royalty,  Land tenement (LT) royalty, and a  Gold revenue royalty. n) Property, Plant and Equipment Estimated Useful Lives of Major Asset Categories Buildings, plant and equipment Underground mobile equipment Light vehicles and other mobile equipment Furniture, computer and office equipment 7 – 32 years 5 – 7 years 2 – 3 years 2 – 3 years Buildings, Plant and Equipment At acquisition, we record buildings, plant and equipment at cost, including all expenditures incurred to prepare an asset for its intended use. These expenditures consist of: the purchase price; brokers’ commissions; and installation costs including architectural, design and engineering fees, legal fees, survey costs, site preparation costs, freight charges, transportation insurance costs, duties, testing and preparation charges. We capitalize costs that meet the asset recognition criteria. Costs incurred that do not extend the productive capacity or useful economic life of an asset are considered repairs and maintenance expense and are accounted for as a cost of the inventory produced in the period. Buildings, plant and equipment are depreciated on a straight-line basis over their expected useful life, which commences when the assets are considered available for use. Once buildings, plant and equipment are considered available for use they are measured at cost less accumulated depreciation and applicable impairment losses. Depreciation on equipment utilized in the development of assets, including open pit and underground mine development, is recapitalized as development costs attributable to the related asset. Mineral Properties Mineral properties consist of: the fair value attributable to mineral reserves and resources acquired in a business combination or asset acquisition; underground mine development costs; open pit mine development costs; capitalized exploration and evaluation costs; and capitalized interest. In addition, we incur project costs which are generally capitalized when the expenditures result in a future benefit. i) Acquired Mining Properties On acquisition of a mining property, we prepare an estimate of the fair value attributable to the proven and probable mineral reserves, mineral resources and exploration potential attributable to the property. The estimated fair value attributable to the mineral reserves and the portion of mineral resources considered to be probable of economic extraction at the time of the acquisition is depreciated on a units of production (“UOP”) basis whereby the denominator is the proven and probable reserves and the portion of mineral resources considered to be probable of economic extraction. The estimated fair value attributable to mineral resources that are not considered to be probable 108 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016of economic extraction at the time of the acquisition is not subject to depreciation until the resources become probable of economic extraction in the future. The estimated fair value attributable to exploration licenses is recorded as an intangible asset and is not subject to depreciation until the property enters production. ii) Underground Mine Development Costs At our underground mines, we incur development costs to build new shafts, drifts and ramps that will enable us to physically access ore underground. The time over which we will continue to incur these costs depends on the mine life. These underground development costs are capitalized as incurred. Capitalized underground development costs are depreciated on a UOP basis, whereby the denominator is the estimated ounces/pounds of gold/copper in proven and probable reserves and the portion of resources considered probable of economic extraction based on the current LOM plan that benefit from the development and are considered probable of economic extraction. iii) Open Pit Stripping Costs In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. Stripping costs incurred in order to provide initial access to the ore body (referred to as pre-production stripping) are capitalized as open pit mine development costs. Pre-production stripping costs are capitalized until an “other than de minimis” level of mineral is extracted, after which time such costs are either capitalized to inventory or, if it qualifies as an open pit stripping activity that provides a future benefit, to PP&E. We consider various relevant criteria to assess when an “other than de minimis” level of mineral is produced. Some of the criteria considered would include, but are not limited to, the following: (1) the amount of minerals mined versus total ounces in life of mine (“LOM”) ore; (2) the amount of ore tons mined versus total LOM expected ore tons mined; (3) the current stripping ratio versus the LOM strip ratio; and (4) the ore grade versus the LOM grade. Stripping costs incurred during the production stage of a pit are accounted for as costs of the inventory produced during the period that the stripping costs are incurred, unless these costs are expected to provide a future economic benefit to an identifiable component of the ore body. Components of the ore body are based on the distinct development phases identified by the mine planning engineers when determining the optimal development plan for the open pit. Production phase stripping costs generate a future economic benefit when the related stripping activity: (i) improves access to a component of the ore body to be mined in the future; (ii) increases the fair value of the mine (or pit) as access to future mineral reserves becomes less costly; and (iii) increases the productive capacity or extends the productive life of the mine (or pit). Production phase stripping costs that are expected to generate a future economic benefit are capitalized as open pit mine development costs. Capitalized open pit mine development costs are depreciated on a UOP basis whereby the denominator is the estimated ounces/pounds of gold/copper in proven and probable reserves and the portion of resources considered probable of economic extraction based on the current LOM plan. Construction-in-Progress Assets under construction are capitalized as construction- in-progress until the asset is available for use. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Construction-in-progress amounts related to development projects are included in the carrying amount of the development project. Construction-in-progress amounts incurred at operating mines are presented as a separate asset within PP&E. Construction-in-progress also includes deposits on long lead items. Construction-in-progress is not depreciated. Depreciation commences once the asset is complete and available for use. Leasing Arrangements The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date, including whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or whether the arrangement conveys a right to use the asset. Leasing arrangements that transfer substantially all the risks and rewards of ownership of the asset to Barrick are classified as finance leases. Assets acquired via a finance lease are recorded as an asset with a corresponding liability at an amount equal to the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance costs using the effective interest method, whereby a constant rate of interest expense is recognized on the 109 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016balance of the liability outstanding. The interest element of the lease is charged to the consolidated statement of income as a finance cost. PP&E assets acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term. All other leases are classified as operating leases. Operating lease payments are recognized as an operating cost in the consolidated statements of income on a straight-line basis over the lease term. Capitalized Interest We capitalize interest costs for qualifying assets. Qualifying assets are assets that require a significant amount of time to prepare for their intended use, including projects that are in the exploration and evaluation, development or construction stages. Qualifying assets also include significant expansion projects at our operating mines. Capitalized interest costs are considered an element of the cost of the qualifying asset which is determined based on gross expenditures incurred on an asset. Capitalization ceases when the asset is substantially complete or if active development is suspended or ceases. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. Where funds borrowed are directly attributable to a qualifying asset, the amount capitalized represents the borrowing costs specific to those borrowings. Where surplus funds available out of money borrowed specifically to finance a project are temporarily invested, the total capitalized interest is reduced by income generated from short-term investments of such funds. Insurance We record losses relating to insurable events as they occur. Proceeds receivable from insurance coverage are recorded at such time as receipt is receivable or virtually certain and the amount receivable is fixed or determinable. For business interruption insurance the amount recoverable is only recognized when receipt is virtually certain, as supported by notification of a minimum or proposed settlement amount from the insurance adjuster. o) Impairment (and Reversals of Impairment) of Non-Current Assets We review and test the carrying amounts of PP&E and intangible assets with finite lives when an indicator of impairment is considered to exist. Impairment assessments 110 on PP&E and intangible assets are conducted at the level of the cash generating unit (“CGU”), which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and includes most liabilities specific to the CGU. For operating mines and projects, the individual mine/project represents a CGU for impairment testing. The recoverable amount of a CGU is the higher of Value in Use (“VIU”) and Fair Value Less Costs of Disposal (“FVLCD”). We have determined that the FVLCD is greater than the VIU amounts and therefore used as the recoverable amount for impairment testing purposes. An impairment loss is recognized for any excess of the carrying amount of a CGU over its recoverable amount where both the recoverable amount and carrying value include the associated other assets and liabilities, including taxes where applicable, of the CGU. Where it is not appropriate to allocate the loss to a separate asset, an impairment loss related to a CGU is allocated to the carrying amount of the assets of the CGU on a pro rata basis based on the carrying amount of its non-monetary assets. Impairment Reversal An assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the CGU’s recoverable amount since the last impairment loss was recognized. This reversal is recognized in the consolidated statements of income and is limited to the carrying value that would have been determined, net of any depreciation where applicable, had no impairment charge been recognized in prior years. When an impairment reversal is undertaken, the recoverable amount is assessed by reference to the higher of VIU and FVLCD. We have determined that the FVLCD is greater than the VIU amounts and therefore used as recoverable amount for impairment testing purposes. p) Intangible Assets Intangible assets acquired by way of an asset acquisition or business combination are recognized if the asset is separable or arises from contractual or legal rights and the fair value can be measured reliably on initial recognition. On acquisition of a mineral property in the exploration stage, we prepare an estimate of the fair value attributable to the exploration licenses acquired, including the fair NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016value attributable to mineral resources, if any, of that property. The fair value of the exploration license is recorded as an intangible asset (acquired exploration potential) as at the date of acquisition. When an exploration stage property moves into development, the acquired exploration potential attributable to that property is transferred to mining interests within PP&E. We also have water rights associated with our mineral properties. Upon acquisition, they are measured at initial cost and are depreciated when they are being used. They are also subject to impairment testing when an indicator of impairment is considered to exist. q) Goodwill Under the acquisition method of accounting, the costs of business combinations are allocated to the assets acquired and liabilities assumed based on the estimated fair value at the date of acquisition. The excess of the fair value of consideration paid over the fair value of the identifiable net assets acquired is recorded as goodwill. Goodwill is not amortized; instead it is tested for impairment in the fourth quarter and also when there is an indicator of impairment. At the date of acquisition, goodwill is assigned to the CGU or group of CGUs that is expected to benefit from the synergies of the business combination. For the purposes of impairment testing, goodwill is allocated to the Company’s operating segments, which are our individual mine sites and corresponds to the level at which goodwill is internally monitored by the Chief Operating Decision Maker (“CODM”), the President. The recoverable amount of an operating segment is the higher of VIU and FVLCD. A goodwill impairment is recognized for any excess of the carrying amount of the operating segment over its recoverable amount. Goodwill impairment charges are not reversible. r) Debt Debt is recognized initially at fair value, net of financing costs incurred, and subsequently measured at amortized cost. Any difference between the amounts originally received and the redemption value of the debt is recognized in the consolidated statements of income over the period to maturity using the effective interest method. hedges of the fair value of recognized assets or liabilities or of firm commitments (“fair value hedges”), hedges of highly probable forecasted transactions (“cash flow hedges”) or non-hedge derivatives. Derivatives designated as either a fair value or cash flow hedge that are expected to be highly effective in achieving offsetting changes in fair value or cash flows are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are shown separately in the balance sheet unless there is a legal right to offset and intent to settle on a net basis. Fair Value Hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statements of income, together with any changes in the fair value of the hedged asset or liability or firm commitment that is attributable to the hedged risk. Cash Flow Hedges The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity. The gain or loss relating to the ineffective portion is recognized in the consolidated statements of income. Amounts accumulated in equity are transferred to the consolidated statements of income in the period when the forecasted transaction impacts earnings. When the forecasted transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial carrying amount of the asset or liability. When a derivative designated as a cash flow hedge expires or is sold and the forecasted transaction is still expected to occur, any cumulative gain or loss relating to the derivative that is recorded in equity at that time remains in equity and is recognized in the consolidated statements of income when the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was recorded in equity is immediately transferred to the consolidated statements of income. s) Derivative Instruments and Hedge Accounting Derivative Instruments Derivative instruments are recorded at fair value on the consolidated balance sheet, classified based on contractual maturity. Derivative instruments are classified as either Non-Hedge Derivatives Derivative instruments that do not qualify as either fair value or cash flow hedges are recorded at their fair value at the balance sheet date, with changes in fair value recognized in the consolidated statements of income. 111 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016t) Embedded Derivatives Derivatives embedded in other financial instruments or executory contracts are accounted for as separate derivatives when their risks and characteristics are not closely related to their host financial instrument or contract. In some cases, the embedded derivatives may be designated as hedges and are accounted for as described above. u) Environmental Rehabilitation Provision Mining, extraction and processing activities normally give rise to obligations for environmental rehabilitation. Rehabilitation work can include facility decommissioning and dismantling; removal or treatment of waste materials; site and land rehabilitation, including compliance with and monitoring of environmental regulations; security and other site-related costs required to perform the rehabilitation work; and operation of equipment designed to reduce or eliminate environmental effects. The extent of work required and the associated costs are dependent on the requirements of relevant authorities and our environmental policies. Routine operating costs that may impact the ultimate closure and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognized as an expense and liability when the event that gives rise to an obligation occurs and reliable estimates of the required rehabilitation costs can be made. Provisions for the cost of each rehabilitation program are normally recognized at the time that an environmental disturbance occurs or a constructive obligation is determined. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. The major parts of the carrying amount of provisions relate to tailings pond closure/rehabilitation; demolition of buildings/mine facilities; ongoing water treatment; and ongoing care and maintenance and security of closed mines. Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation at the time of closure and post-closure in connection with disturbances as at the reporting date. Estimated costs included in the determination of the provision reflect the risks and probabilities of alternative estimates of cash flows required to settle the obligation at each particular operation. The expected rehabilitation costs are estimated based on the cost of external contractors 112 performing the work or the cost of performing the work internally depending on management’s intention. The timing of the actual rehabilitation expenditure is dependent upon a number of factors such as the life and nature of the asset, the operating license conditions and the environment in which the mine operates. Expenditures may occur before and after closure and can continue for an extended period of time depending on rehabilitation requirements. Rehabilitation provisions are measured at the expected value of future cash flows, which exclude the effect of inflation, discounted to their present value using a current US dollar real risk-free pre-tax discount rate. The unwinding of the discount, referred to as accretion expense, is included in finance costs and results in an increase in the amount of the provision. Provisions are updated each reporting period for changes to expected cash flows and for the effect of changes in the discount rate, and the change in estimate is added or deducted from the related asset and depreciated over the expected economic life of the operation to which it relates. Significant judgments and estimates are involved in forming expectations of future activities and the amount and timing of the associated cash flows. Those expectations are formed based on existing environmental and regulatory requirements or, if more stringent, our environmental policies which give rise to a constructive obligation. When provisions for closure and rehabilitation are initially recognized, the corresponding cost is capitalized as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and rehabilitation activities is recognized in PP&E and depreciated over the expected economic life of the operation to which it relates. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgments and estimates involved. The principal factors that can cause expected cash flows to change are: the construction of new processing facilities; changes in the quantities of material in reserves and resources with a corresponding change in the life of mine plan; changing ore characteristics that impact required environmental protection measures and related costs; changes in water quality that impact the extent of water treatment required; changes in discount rates; changes in foreign exchange rates; changes in Barrick’s closure policies; and changes in laws and regulations governing the protection of the environment. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Rehabilitation provisions are adjusted as a result of changes in estimates and assumptions. Those adjustments are accounted for as a change in the corresponding cost of the related assets, including the related mineral property, except where a reduction in the provision is greater than the remaining net book value of the related assets, in which case the value is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income. In the case of closed sites, changes in estimates and assumptions are recognized immediately in the consolidated statements of income. For an operating mine, the adjusted carrying amount of the related asset is depreciated prospectively. Adjustments also result in changes to future finance costs. v) Litigation and Other Provisions Provisions are recognized when a present obligation exists (legal or constructive), as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are discounted to their present value using a current US dollar real risk-free pre-tax discount rate and the accretion expense is included in finance costs. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, the Company with assistance from 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. If the assessment of a contingency suggests that a loss is probable, and the amount can be reliably estimated, then a loss is recorded. When a contingent loss is not probable but is reasonably possible, or is probable but the amount of loss cannot be reliably estimated, then details of the contingent loss are disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case we disclose the nature of the guarantee. Legal fees incurred in connection with pending legal proceedings are expensed as incurred. Contingent gains are only recognized when the inflow of economic benefits is virtually certain. w) Stock-Based Compensation We recognize the expense related to these plans over the vesting period, beginning once the grant has been approved and announced to the beneficiaries. Cash-settled awards are measured at fair value initially using the market value of the underlying shares on the day preceding the date of the grant of the award and are required to be remeasured to fair value at each reporting date until settlement. The cost is then recorded over the vesting period of the award. This expense, and any changes in the fair value of the award, is recorded to the same expense category as the award recipient’s payroll costs. The cost of a cash-settled award is recorded within liabilities until settled. Barrick offers cash-settled (Restricted Share Units (“RSU”), Deferred Share Units (“DSU”), Performance Restricted Share Units (“PRSU”)) awards to certain employees, officers and directors of the Company. Equity-settled awards are measured at fair value using the Lattice model with market related inputs as of the date of the grant. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs (i.e., cost of sales, general and administrative) and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. Barrick offers equity-settled (Employee Stock Option Plan (“ESOP”), Employee Share Purchase Plan (“ESPP”) Performance Granted Share Units (“PGSU”) and Global Employee Share Plan (“GESP”)), awards to certain employees, officers and directors of the Company. We use the accelerated method (also referred to as ‘graded’ vesting) for attributing stock option expense over the vesting period. Stock option expense incorporates an expected forfeiture rate. The expected forfeiture rate is estimated based on historical forfeiture rates and expectations of future forfeiture rates. We make adjustments if the actual forfeiture rate differs from the expected rate. Employee Stock Option Plan (“ESOP”) Under Barrick’s ESOP, certain officers and key employees of the Corporation may purchase common shares at an exercise price that is equal to the closing share price on the day before the grant of the option. The grant date is the date when the details of the award, including the number of options granted to the individual and the exercise price, are approved. Stock options vest equally 113 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016over four years, beginning in the year after granting. The ESOP arrangement has graded vesting terms, and therefore multiple vesting periods must be valued and accounted for separately over their respective vesting periods. The compensation expense of the instruments issued for each grant under the ESOP is calculated using the Lattice model. The compensation expense is adjusted by the estimated forfeiture rate which is estimated based on historical forfeiture rates and expectations of future forfeiture rates. We make adjustments if the actual forfeiture rate differs from the expected rate. Restricted Share Units (“RSU”) Under our RSU plan, selected employees are granted RSUs where each RSU has a value equal to one Barrick common share. RSUs generally vest within three years and primarily settle in cash upon vesting. Additional RSUs are credited to reflect dividends paid on Barrick common shares over the vesting period. A liability for RSUs is measured at fair value on the grant date and is subsequently adjusted for changes in fair value. The liability is recognized on a straight-line basis over the vesting period, with a corresponding charge to compensation expense, as a component of corporate administration and operating segment administration. Compensation expenses for RSUs incorporate an estimate for expected forfeiture rates based on which the fair value is adjusted. Deferred Share Units (“DSU”) Under our DSU plan, Directors must receive at least 75% of their basic annual retainer in the form of DSUs or cash to purchase common shares that cannot be sold, transferred or otherwise disposed of until the Director leaves the Board. Each DSU has the same value as one Barrick common share. DSUs must be retained until the Director leaves the Board, at which time the cash value of the DSUs is paid out. Additional DSUs are credited to reflect dividends paid on Barrick common shares. The initial fair value of the liability is calculated as of the grant date and is recognized immediately. Subsequently, at each reporting date and on settlement, the liability is remeasured, with any change in fair value recorded as compensation expense in the period. Officers may also elect to receive a portion or all of their incentive compensation in the form of DSUs. The plan also allows granting of DSUs to other officers and employees at the discretion of the Board Compensation Committee. Performance Restricted Share Units (“PRSU”) Under our PRSU plan, selected employees are granted PRSUs, where each PRSU has a value equal to one Barrick common share. PRSUs vest at the end of a three-year period and are settled in cash on the third anniversary of the grant date. Additional PRSUs are credited to reflect dividends paid on Barrick common shares over the vesting period. Vesting, and therefore the liability, is based on the achievement of performance goals and the target settlement ranges from 0% to 200% of the original grant of units. The value of a PRSU reflects the value of a Barrick common share and the number of shares issued is adjusted for its relative performance against certain competitors and other internal financial performance measures. Therefore, the fair value of the PRSUs is determined with reference to the closing stock price at each remeasurement date. The initial fair value of the liability is calculated as of the grant date and is recognized within compensation expense using the straight-line method over the vesting period. Subsequently, at each reporting date and on settlement, the liability is remeasured, with any changes in fair value recorded as compensation expense. The fair value is adjusted for the revised estimated forfeiture rate. Performance Granted Share Units (“PGSU”) Under our PGSU plan, selected employees are granted PGSUs, where each PGSU has a value equal to one Barrick common share. Annual PGSU awards are determined based on a multiple ranging from one to six times base salary (depending on position and level of responsibility) multiplied by a performance factor. The number of PGSUs granted to a plan participant is determined by dividing the dollar value of the award by the closing price of Barrick common shares on the day prior to the grant, or if the grant date occurs during a blackout period, by the greater of (i) the closing price of Barrick common shares on the day prior to the grant date and (ii) the closing price of Barrick common shares on the first day following the expiration of the blackout. Upon vesting, the after-tax value of the award is used to purchase common shares and these shares cannot be sold until the employee retires or leaves Barrick. PGSUs vest at the end of the third year from the date of the grant. The initial fair value of the liability is calculated as of the grant date and is recognized within compensation expense using the straight-line method over the vesting 114 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016period. Subsequently, at each reporting date and on settlement, the liability is remeasured, with any changes in fair value recorded as compensation expense. Employee Share Purchase Plan (“ESPP”) Under our ESPP plan, Barrick employees can purchase Company shares through payroll deduction. Each year, employees may contribute 1%-6% of their combined base salary and annual short-term incentive, and Barrick will match 50% of the contribution, up to a maximum of C$5,000 per year. Both Barrick and the employee make the contributions on a semi-monthly basis with the funds being transferred to a custodian who purchases Barrick Common Shares in the open market. Shares purchased with employee contributions have no vesting requirement; however, shares purchased with Barrick’s contributions vest approximately one year from contribution date. All dividend income is used to purchase additional Barrick shares. Barrick records an expense equal to its semi-monthly cash contribution. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to vesting, any accrual for contributions by Barrick during the year related to that employee is reversed. Global Employee Share Plan (“GESP”) Under our GESP plan, Barrick employees are awarded Company Common Shares. These shares vest immediately, but must be held until the employee ceases to be employed by the Company. Barrick recognizes the expense when the award is announced and has no ongoing liability. x) Post-Retirement Benefits Defined Contribution Pension Plans Certain employees take part in defined contribution employee benefit plans whereby we contribute up to 6% of the employee’s annual salary. We also have a retirement plan for certain officers of Barrick under which we contribute 15% of the officer’s annual salary and annual short-term incentive. The contributions are recognized as compensation expense as incurred. The Company has no further payment obligations once the contributions have been paid. Defined Benefit Pension Plans We have qualified defined benefit pension plans that cover certain former United States and Canadian employees and provide benefits based on employees’ years of service. Our policy is to fund the amounts necessary on an actuarial basis to provide enough assets to meet the benefits payable to plan members. Independent trustees administer assets of the plans, which are invested mainly in fixed-income and equity securities. As well as the qualified plans, we have non-qualified defined benefit pension plans covering certain employees and former directors of Barrick. No funding is done on these plans and contributions for future years are required to be equal to benefit payments. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in OCI in the period in which they arise. Our valuations are carried out using the projected unit credit method. We record the difference between the fair value of the plan assets and the present value of the plan obligations as an asset or liability on the consolidated balance sheets. Pension Plan Assets and Liabilities Pension plan assets, which consist primarily of fixed- income and equity securities, are valued using current market quotations. Plan obligations and the annual pension expense are determined on an actuarial basis and are affected by numerous assumptions and estimates including the market value of plan assets, estimates of the expected return on plan assets, discount rates, future wage increases and other assumptions. The discount rate and life expectancy are the assumptions that generally have the most significant impact on our pension cost and obligation. Other Post-Retirement Benefits We provide post-retirement medical, dental, and life insurance benefits to certain employees. Actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions are recorded in OCI. y) New Accounting Standards Adopted during the Year The Company has adopted IFRS 9 (2014) effective January 1, 2015. IFRS 9 (2014) We early adopted all of the requirements of IFRS 9 Financial Instruments 2014 (“IFRS 9”) as of January 1, 2015. IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments and the 115 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016contractual cash flow characteristics of the financial asset. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9. IFRS 9 introduced a single expected credit loss impairment model, which is based on changes in credit quality since initial recognition. The adoption of the expected credit loss impairment model did not have a significant impact on the Company’s financial statements. IFRS 9 changed the requirements for hedge effectiveness and consequently for the application of hedge accounting. The IAS 39 effectiveness test was replaced with a requirement for an economic relationship between the hedged item and hedging instrument, and for the ‘hedged ratio’ to be the same as that used by the entity for risk management purposes. Certain restrictions that prevented some hedging strategies and hedging instruments from qualifying for hedge accounting were removed under IFRS 9. Generally, the mechanics of hedge accounting remain unchanged. As a result of the early adoption of IFRS 9, we changed our accounting policy for financial instruments retrospectively, except as described below. The change did not result in a change in carrying value of any of our financial instruments on transition date. The two main areas of change are the accounting for a) equity securities previously classified as available for sale and b) derivative instruments, which includes the accounting for hedging relationships that now qualify for hedge accounting and the exclusion of the time value component of options from hedging instruments. i) Impact of Adoption on the Accounting for Equity Securities Previously Designated as Available for Sale The revised policy on the accounting for Other Investments, which represent equity securities previously designated as available for sale, is described in note 2k. The adjustment to opening retained earnings on January 1, 2015 for historical gains and losses on existing investments was $95 million with a corresponding adjustment to accumulated other comprehensive income. There was no impact on net loss for 2015. ii) Impact of Adoption on Accounting for Derivative Instruments We have reassessed all of our existing hedging relationships that qualified for hedge accounting under IAS 39 upon adoption of IFRS 9 and these have continued to qualify for hedge accounting under IFRS 9. We have also reassessed economic hedges that did not qualify for hedge accounting under IAS 39. IFRS 9 116 enabled us to apply hedge accounting for most of our fuel positions, thus reducing the volatility of reported net income. These positions previously did not qualify for hedge accounting since component hedging was not permitted under IAS 39. We have applied these changes prospectively from January 1, 2015. Under IFRS 9, we also began separating the intrinsic value and time value of option contracts and designating only the change in intrinsic value as the hedging instrument. IFRS 9 does not require restatement of comparatives. However, we have reflected the retrospective impact of the adoption of IFRS 9 relating to the change in accounting for time value of option contracts as an adjustment to opening retained earnings. The adjustment to opening retained earnings on January 1, 2015 was $4 million with a corresponding adjustment to accumulated other comprehensive income. There was no impact on net loss for 2015. We recognize a financial asset or a financial liability when we become a party to the contractual provisions of the instrument. Financial assets are initially measured at fair value and are derecognized either when we have transferred substantially all the risks and rewards of ownership of the financial asset or when cash flows expire. We classify and measure financial assets (excluding derivatives) on initial recognition as described below:  Cash and equivalents and restricted cash include cash, term deposits, treasury bills and money market investments with original maturities of less than 90 days. All of these are classified as financial assets at fair value through profit or loss and are measured at fair value. Unrealized gains or losses related to changes in fair value are reported in income;  Trade and other receivables are classified as and measured at amortized cost using the effective interest method, less impairment allowance, if any;  Equity instruments are designated as financial assets at fair value through other comprehensive income and are recorded at fair value on the settlement date, net of transaction costs. Future changes in fair value are recognized in other comprehensive income and are not recycled into income. Financial liabilities (excluding derivatives) are derecognized when the obligation specified in the contract is discharged, cancelled or expired. For financial liabilities, IFRS 9 retains most of the IAS 39 requirements and since we do not have any financial liabilities designated at fair value through profit or loss, the adoption of IFRS 9 did not impact our accounting policies for financial liabilities. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016z) New Accounting Standards Issued but not Yet Effective IFRS 15 Revenue from Contracts with Customers In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which covers principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. In September 2015, the IASB deferred the effective date of the standard to annual reporting periods beginning on or after January 1, 2018, with earlier application permitted. We will not be early adopting IFRS 15. We are currently assessing the impact on our consolidated financial statements. We have identified two potential areas of impact:  Bullion (gold and silver) sales – we do not anticipate these sales to be significantly affected by IFRS 15;  Concentrate (gold and copper) and cathode (copper) sales – we do not anticipate these sales or the associated provisional pricing adjustments to be significantly affected by IFRS 15. We will continue to assess and implement the new revenue recognition policy and any related impact on our internal controls throughout 2017. IFRS 16 Leases In January 2016, the IASB issued IFRS 16 Leases, which requires lessees to recognize assets and liabilities for most leases. Application of the standard is mandatory for annual reporting periods beginning on or after January 1, 2019, with earlier application permitted, provided the new revenue standard, IFRS 15 Revenue from Contracts with Customers, has been applied or is applied at the same date as IFRS 16. We are currently assessing the impact on our consolidated financial statements along with timing of our adoption of IFRS 16. We expect that IFRS 16 will result in an increase in assets and liabilities as fewer leases will be expensed as payments are made. We expect an increase in depreciation and accretion expenses and also an increase in cash flow from operating activities as these lease payments will be recorded as financing outflows in our cash flow statement. In 2017, we plan to develop a full implementation plan and will provide updates to our assessment in our quarterly interim financial statements. 3  Critical Judgments, Estimates, Assumptions and Risks Many of the amounts included in the consolidated balance sheet require management to make judgments and/or estimates. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the estimates. Information about such judgments and estimates is contained in the description of our accounting policies and/or other notes to the financial statements. The key areas where judgments, estimates and assumptions have been made are summarized below. Life of Mine (“LOM”) Plans and Reserves and Resources Estimates of the quantities of proven and probable mineral reserves and mineral resources form the basis for our LOM plans, which are used for a number of important business and accounting purposes, including: the calculation of depreciation expense; the capitalization of production phase stripping costs; and forecasting the timing of the payments related to the environmental rehabilitation provision. In addition, the underlying LOM plans are used in the impairment tests for goodwill and non-current assets. In certain cases, these LOM plans have made assumptions about our ability to obtain the necessary permits required to complete the planned activities. We estimate our ore reserves and mineral resources based on information compiled by qualified persons as defined in accordance with the Canadian Securities Administrators’ National Instrument 43-101 Standards of Disclosure for Mineral Projects requirements. As at December 31, 2016, we have used a per ounce gold price of $1,000 short-term and $1,200 long-term to calculate our gold reserves, consistent with what was used as at December 31, 2015. Refer to notes 19 and 21. Inventory The measurement of inventory including the determination of its net realizable value, especially as it relates to ore in stockpiles, involves the use of estimates. Estimation is required in determining the tonnage, recoverable gold and copper contained therein, and in determining the remaining costs of completion to bring inventory into its saleable form. Judgment also exists in determining whether to recognize a provision for obsolescence on 117 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016mine operating supplies, and estimates are required to determine salvage or scrap value of supplies. Estimates of recoverable gold or copper on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). Impairment and Reversal of Impairment for Non-current Assets and Impairment of Goodwill Goodwill and non-current assets are tested for impairment if there is an indicator of impairment or reversal of impairment, and in the case of goodwill, annually during the fourth quarter for all of our operating segments. We consider both external and internal sources of information for indications that non-current assets and/or goodwill are impaired. External sources of information we consider include changes in the market, economic and legal environment in which the CGU operates that are not within its control and affect the recoverable amount of mining interests and goodwill. Internal sources of information we consider include the manner in which mining properties and plant and equipment are being used or are expected to be used and indications of economic performance of the assets. Calculating the FVLCD of CGUs for non-current asset and goodwill impairment tests requires management to make estimates and assumptions with respect to future production levels, operating and capital costs in our LOM plans, future metal prices, foreign exchange rates, Net Asset Value (“NAV”) multiples, value of reserves outside LOM plans in relation to the assumptions related to comparable entities and the market values per ounce and per pound and discount rates. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis. Refer to notes 2o, 2q and 21 for further information. Provisions for Environmental Rehabilitation Management assesses its provision for environmental rehabilitation on an annual basis or when new information becomes available. This assessment includes the estimation of the future rehabilitation costs, the timing of these expenditures, and the impact of changes in discount rates and foreign exchange rates. The actual future expenditures may differ from the amounts currently provided if the estimates made are significantly different than actual results or if there are significant changes in environmental and/or regulatory requirements in the future. Refer to notes 2u and 27 for further information. Taxes Management is required to make estimations regarding the tax basis of assets and liabilities and related deferred income tax assets and liabilities, amounts recorded for uncertain tax positions, the measurement of income tax expense and indirect taxes, and estimates of the timing of repatriation of earnings, which would impact the recognition of withholding taxes and taxes related to the outside basis on subsidiaries/associates. A number of these estimates require management to make estimates of future taxable profit, as well as the recoverability of indirect taxes, and if actual results are significantly different than our estimates, the ability to realize the deferred tax assets and indirect tax receivables recorded on our balance sheet could be impacted. Refer to notes 2j, 12 and 30 for further information. Contingencies Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will only be resolved when one or more future events not wholly within our control occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings or regulatory or government actions that may negatively impact our business or operations, the Company with assistance from its legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims or actions as well as the perceived merits of the nature and amount of relief sought or expected to be sought, when determining the amount, if any, to recognize as a contingent liability or assessing the impact on the carrying value of assets. Contingent assets are not recognized in the consolidated financial statements. Refer to note 36 for more information. Pascua-Lama The Pascua-Lama project received $429 million as at December 31, 2016 ($382 million as at December 31, 2015) in value added tax (“VAT”) refunds in Chile relating to the development of the Chilean side of the project. Under the current arrangement this amount plus interest of $236 million (2015: $170 million) must be repaid if the project does not evidence exports for an amount of $3,538 million within a term that expires on June 30, 2018. On January 25, 2017, Barrick applied for an extension of the 2018 deadline. No amounts have 118 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Other Notes to the Financial Statements Note Page Acquisitions and Divestitures Segment information Revenue Cost of sales Exploration, evaluation and project expenses Other expense (income) Impairment (reversals) charges General and administrative expenses Income tax expense (recovery) Earnings (loss) per share Finance costs, net Cash flow – other items Investments Inventories Accounts receivable and other current assets Property, plant and equipment Goodwill and other intangible assets Impairment of goodwill and impairment and reversal of non-current assets Other assets Accounts payable Other current liabilities Financial instruments Fair value measurements Provisions Financial risk management Other non-current liabilities Deferred income taxes Capital stock Non-controlling interests Remuneration of key management personnel Stock-based compensation Post-retirement benefits Contingencies 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 120 121 124 124 125 125 125 125 125 127 127 127 128 129 130 130 132 133 137 137 137 137 146 149 149 152 153 155 155 157 157 159 160 been recorded for any potential liability related to VAT refunds in Chile. We have recorded $255 million in VAT recoverable in Argentina as of December 31, 2016 ($308 million, December 31, 2015) relating to the development of the Argentine side of the project. These amounts may not be recoverable if the project does not enter into production and are subject to devaluation risk as the amounts are recoverable in Argentinean pesos. Streaming Transactions The upfront cash deposit received from Royal Gold on the gold and silver streaming transaction has been accounted for as deferred revenue as we have determined that it is not a derivative as it will be satisfied through the delivery of non-financial items (i.e., gold and silver) rather than cash or financial assets. It is our intention to settle the obligations under the streaming arrangement through our own production and if we were to fail to settle the obligations with Royal Gold through our own production, this would lead to the streaming arrangement becoming a derivative. This would cause a change to the accounting treatment, resulting in the revaluation of the fair value of the agreement through profit and loss on a recurring basis. Refer to note 25 for further details. Our silver sale agreement with Silver Wheaton Corp. (“Silver Wheaton”) requires us to deliver 25% of the life of mine silver production from the Pascua-Lama project once it is constructed and 100% of silver from Lagunas Norte, Pierina and Veladero mines until March 31, 2018. The completion date for Pascua-Lama was originally December 31, 2015 but was subsequently extended to June 30, 2020. Per the terms of the amended silver purchase agreement, if the requirements of the completion guarantee have not been satisfied by June 30, 2020, the agreement may be terminated by Silver Wheaton, in which case, they will be entitled to the return of the upfront cash consideration paid less credit for silver delivered up to the date of that event. The cash liability at December 31, 2016 is $288 million. Refer to note 28 for a summary of our key financial risks. 119 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 4  Acquisitions and Divestitures For the years ended December 31 2016 2015 Gross cash proceeds on divestiture Bald Mountain Round Mountain Zaldívar Cowal Porgera Spring Valley Ruby Hill Other Less: cash divested $ 423 165 – – – – – – $ 588 – $ – – 950 550 298 58 52 2 $ 1,910 (6) $ 588 $ 1,904 a) Acquisition of Robertson Property in Nevada On June 21, 2016, we entered into an agreement to purchase the Robertson Property in Nevada from Coral Gold Resources (“Coral”). The transaction consists of a payment of $16 million of cash along with the return of 4.15 million shares (approximate value of $1 million) of Coral currently held by Barrick and a royalty on production. The transaction has been approved by Coral shareholders and, subject to satisfaction of the remaining closing conditions, is expected to close in 2017. b) Disposition of Bald Mountain and Round Mountain Mines On January 11, 2016, we closed the sale of our Bald Mountain mine and our 50% interest in the Round Mountain mine. We received net cash consideration of $588 million, which reflected working capital adjustments of $22 million in the second quarter of 2016. The transactions resulted in a loss of $17 million for the year ended December 31, 2016. As at December 31, 2015, all of the assets and liabilities of Bald Mountain and our 50% interest in Round Mountain were classified as held-for-sale. c) Disposition of 50 Percent Interest in Zaldívar Mine On December 1, 2015, we completed the sale of 50% of our Zaldívar copper mine in Chile to Antofagasta Plc for total consideration of $1.005 billion. We received $950 million upon closing of the transaction, net of $10 million for working capital items, $20 million being held in escrow pending finalization of working capital adjustment and the remaining $25 million was to be received over the next five years. As the agreed selling price was lower than the previously recorded book values of the Zaldívar cash generating unit, we recorded a goodwill impairment charge of $427 million for the full year 2015. The transaction resulted in a loss of $16 million for the year ended December 31, 2015 based on movements in working capital from the date of announcement until the date of completing the transaction. The transaction remained subject to a net working capital adjustment period to complete the review of the working capital which was finalized in August 2016. The finalization of consideration resulted in an additional loss on disposition of $39 million as we agreed to forfeit the amount remaining in escrow and the right to receive $25 million over five years. It also changed the fair value of the 50% of Zaldívar we retained, resulting in a write-down of our equity method investment of $49 million. We have determined that Zaldívar will be accounted for as a joint venture and upon completion we began accounting for our investment under the equity method. d) Divestments of Ruby Hill and Spring Valley On December 17, 2015, we closed the sale of our Ruby Hill mine and Spring Valley, a development stage project, for total cash consideration of $110 million. The transaction resulted in a gain of $110 million for the year ended December 31, 2015. e) Disposition of Cowal and 50 Percent Interest in Porgera Mines On July 23, 2015, we completed the sale of our Cowal mine in Australia for cash consideration of $550 million. The transaction resulted in a gain of $34 million for the year ended December 31, 2015. On August 31, 2015, we completed the sale of 50% of our interest in the Porgera mine in Papua New Guinea to Zijin Mining Group Company (“Zijin”) for cash consideration of $298 million. The transaction resulted in a gain of $39 million for the year ended December 31, 2015. Subsequent to completion of the transaction, we account for Porgera as a joint operation and include our share of Porgera’s assets, liabilities, revenues and expenses in our financial statements. 120 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 5  Segment Information Barrick’s business is organized into thirteen individual minesites, one publicly traded company and one project. Barrick’s Chief Operating Decision Maker (“CODM”), the President, reviews the operating results, assesses performance and makes capital allocation decisions at the minesite, Company and/or project level. Therefore, each individual minesite, Acacia and the Pascua-Lama project are operating segments for financial reporting purposes. Following the divestitures that were completed in 2015 and early 2016, we re-evaluated our reportable operating segments and no longer report on our interests in the following non-core properties: Porgera, Kalgoorlie, Zaldívar and Lumwana. Our updated presentation of our reportable operating segments is now limited to six individual gold mines, Acacia and our Pascua-Lama project. The remaining operating segments, including the non-core properties referred to above and our remaining gold and copper mines, have been grouped into an “other” category and will not be reported on individually. The prior periods have been restated to reflect the change in presentation. Segment performance is evaluated based on a number of measures including operating income before tax, production levels and unit production costs. Certain costs are managed on a consolidated basis and are therefore not reflected in segment income. Consolidated Statements of Income Information Cost of sales Direct mining, royalties and community For the year ended December 31, 2016 Goldstrike Cortez Pueblo Viejo3 Lagunas Norte Veladero Turquoise Ridge Acacia3 Pascua-Lama Other Mines4 Revenue $ 1,389 1,314 1,548 548 685 322 1,045 – 1,707 Exploration, evaluation and project expenses relations Depreciation $ 633 456 497 180 346 128 553 – 958 $ 307 499 147 96 118 27 166 7 188 $ 4 6 – 3 1 – 27 59 6 Other expenses (income)1 Segment income (loss) $ 3 13 3 9 – 1 – 1 52 $ 442 340 901 260 220 166 299 (67) 503 $ 8,558 $ 3,751 $ 1,555 $ 106 $ 82 $ 3,064 121 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Consolidated Statements of Income Information Cost of sales Direct mining, royalties and community For the year ended December 31, 2015 Goldstrike Cortez Pueblo Viejo3 Lagunas Norte Veladero Turquoise Ridge Acacia3 Pascua-Lama Other Mines2,4 Revenue $ 1,143 1,129 1,332 673 720 235 860 – 2,937 relations Depreciation $ 530 483 627 209 391 118 694 – 1,969 $ 192 343 277 169 108 23 143 22 463 $ 9,029 $ 5,021 $ 1,740 Exploration, evaluation and project expenses Other expenses (income)1 Segment income (loss) $ 4 14 1 8 3 2 (2) (9) 12 $ 408 287 425 285 216 92 (1) (131) 484 $ 33 $ 2,065 $ 9 2 2 2 2 – 26 118 9 $ 170 1. Includes accretion expense, which is included with finance costs in the consolidated statements of income. For the year ended December 31, 2016, accretion expense was $41 million (2015: $54 million). Refer to note 9a for details of other expenses (income). 2. Includes revenues and segment income (loss) for the year ended December 31, 2015, for Porgera ($506 million, $125 million), Kalgoorlie ($358 million, $45 million), Lumwana ($501 million, $53 million) and Zaldívar ($528 million, $104 million). These mines were individually disclosed as operating segments in the prior year. 3. Includes non-controlling interest portion of revenues, cost of sales and segment income for the year ended December 31, 2016, for Pueblo Viejo $623 million, $249 million, $373 million (2015: $575 million, $379 million, $195 million) and Acacia $377 million, $259 million, $108 million (2015: $310 million, $302 million, $nil million). 4. Includes cost of sales of Pierina for the year ended December 31, 2016 of $82 million (2015: $62 million). Reconciliation of Segment Income to Loss from Continuing Operations Before Income Taxes For the years ended December 31 2016 2015 Segment income Other cost of sales/amortization1 Exploration, evaluation and project expenses not attributable to segments General and administrative expenses Other (expense) income not attributable to segments Impairment reversals (charges) Loss on currency translation Closed mine rehabilitation Income (loss) from equity investees Finance costs, net (includes non-segment accretion)2 Gain (loss) on non-hedge derivatives3 $ 3,064 (99) (131) (256) (19) 250 (199) (130) 20 (734) 12 $ 2,065 (146) (185) (233) 92 (3,897) (120) (3) (7) (672) (38) Income (loss) before income taxes $ 1,778 $ (3,144) 1. Includes all realized hedge losses of $73 million (2015: $106 million). 2. Includes debt extinguishment losses of $129 million (2015: $68 million gains). 3. Includes unrealized non-hedge gains and losses of $32 million gains (2015: $5 million losses). 122 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Geographic Information Non-current assets Revenue1 United States Dominican Republic Argentina Chile Tanzania Peru Australia Zambia Papua New Guinea Saudi Arabia Canada Unallocated Total As at Dec. 31, As at Dec. 31, 2015 2016 2016 2015 $ 6,768 3,540 2,366 1,945 1,673 678 478 473 353 346 503 1,267 $ 7,375 3,576 2,177 2,020 1,648 627 518 422 342 344 470 1,321 $ 3,081 1,548 685 – 1,045 663 472 466 304 – 294 – $ 3,076 1,332 720 502 860 734 552 501 506 – 246 – $ 20,390 $ 20,840 $ 8,558 $ 9,029 1. Presented based on the location from which the product originated. Capital Expenditures Information Segment capital expenditures1 For the year For the year ended Dec. 31, ended Dec. 31, 2015 2016 Goldstrike Cortez Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge Acacia Pascua-Lama Other Mines2 Segment total Other items not allocated to segments Total $ 216 142 101 56 95 32 191 20 230 $ 1,083 36 $ 240 148 102 67 242 32 177 (81) 546 $ 1,473 36 $ 1,119 $ 1,509 1. Segment capital expenditures are presented for internal management reporting purposes on an accrual basis. Capital expenditures in the consolidated statements of cash flow are presented on a cash basis. In 2016, cash expenditures were $1,126 million (2015: $1,713 million) and the decrease in accrued expenditures was $7 million (2015: $204 million decrease). 2. For the year ended December 31, 2015, includes capital expenditures for Porgera ($93 million), Kalgoorlie ($34 million), Lumwana ($99 million) and Zaldívar ($85 million). These mines were individually disclosed as operating segments in the prior year. 123 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 6  Revenue For the years ended December 31 2016 2015 Gold bullion sales1 Spot market sales Concentrate sales Copper sales1 Copper cathode sales Concentrate sales Other sales2 Total $ 7,650 258 $ 7,559 254 $ 7,908 $ 7,813 $ $ $ – 466 $ 501 501 466 $ 1,002 184 $ 214 $ 8,558 $ 9,029 1. Revenues include amounts transferred from OCI to earnings for commodity cash flow hedges (see note 25d). Revenue is presented net of direct sales taxes of $2 million (2015: $34 million). accounting for it. Incidental revenues from the sale of by-products, primarily copper, silver and energy at our gold mines, are classified within other sales. Provisional Copper and Gold Sales We have provisionally priced sales for which price finalization, referenced to the relevant copper and gold index, is outstanding at the balance sheet date. Our exposure at December 31, 2016 to the impact of movements in market commodity prices for provisionally priced sales is set out in the following table: Volumes subject to final pricing Copper (millions) Gold (000s) Impact on net income before taxation of 10% movement in market price US$ As at December 31 2016 2015 2016 2015 2. Revenues include the sale of by-products from our gold and copper mines and energy sales to third parties from the Monte Rio power plant at our Pueblo Viejo mine up until its disposition on August 18, 2016. Copper pounds Gold ounces 44 13 55 16 $ 11 2 $ 11 2 Principal Products All of our gold mining operations produce gold in doré form, except Acacia’s gold mines of Bulyanhulu and Buzwagi, which produce both gold doré and gold concentrate. Gold doré is unrefined gold bullion bars usually consisting of 90% gold that is refined to pure gold bullion prior to sale to our customers. Concentrate is a processing product containing the valuable ore mineral from which most of the waste mineral has been eliminated. Our Lumwana and Jabal Sayid mines produce a concentrate that primarily contains copper. At our Zaldívar mine we produce copper cathode, which consists of 99.9% copper. In December 2015 we disposed of 50% of our Zaldívar mine and began equity For the year ended December 31, 2016, our provisionally priced copper sales included provisional pricing gains of $22 million (2015: $67 million loss) and our provisionally priced gold sales included provisional pricing adjustments of $nil million (2015: $3 million loss). At December 31, 2016, our provisionally priced copper and gold sales subject to final settlement were recorded at average prices of $2.51/lb (2015: $2.10/lb) and $1,152/oz (2015: $1,068/oz), respectively. The sensitivities in the above tables have been determined as the impact of a 10% change in commodity prices at each reporting date, while holding all other variables, including foreign currency exchange rates, constant. 7  Cost of Sales Gold Copper Other5 Total For the years ended December 31 2016 2015 2016 2015 2016 2015 2016 2015 Direct mining cost1,2,3,4 Depreciation Royalty expense Community relations $ 3,215 1,503 224 37 $ 4,006 1,613 235 50 $ 228 45 41 5 $ 603 104 101 6 $ 77 26 – 4 $ 129 54 – 6 $ 3,520 $ 1,574 $ 265 46 $ $ 4,738 $ 1,771 $ 336 62 $ Total $ 4,979 $ 5,904 $ 319 $ 814 $ 107 $ 189 $ 5,405 $ 6,907 1. Direct mining cost includes charges to reduce the cost of inventory to net realizable value of $68 million (2015: $285 million). 2. Direct mining cost includes the costs of extracting by-products. 3. Includes employee costs of $1,048 million (2015: $1,302 million). 4. Cost of sales also includes costs associated with power sales to third parties from our Monte Rio power plant in the Dominican Republic up until its disposition on August 18, 2016. 5. Other includes all realized hedge gains and losses and corporate amortization. 124 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 8  Exploration, Evaluation and Project Expenses 10  Impairment (Reversals) Charges For the years ended December 31 2016 2015 For the years ended December 31 2016 2015 Minesite exploration and evaluation Global exploration and evaluation Advanced project costs: Pascua-Lama Cerro Casale Other Corporate development Business improvement Total exploration, evaluation and project expenses1 1. Approximates the impact on operating cash flow. 9  Other Expense (Income) a) Other Expense (Income) For the years ended December 31 Other Expense: Consulting fees Bank charges Loss (gain) on sale of non-current assets1 Office closure Other $ 44 88 59 6 11 14 15 119 8 4 42 19 $ 237 $ 355 $ 47 116 Impairment of non-current assets1 Impairment of goodwill1 Total 1. Refer to note 21 for further details. $ (250) – $ 1,726 2,171 $ (250) $ 3,897 11  General and Administrative Expenses For the years ended December 31 2016 2015 Corporate administration2 Operating segment administration Total1 $ 201 55 $ 191 42 $ 256 $ 233 1. Includes employee costs of $153 million (2015: $155 million). 2. Includes $9 million (2015: $29 million) related to one-time severance payments. 2016 2015 12  Income Tax Expense (Recovery) For the years ended December 31 2016 2015 $ 12 20 42 (4) 6 $ 12 19 (187) 30 27 Tax on profit Current tax Charge for the year Adjustment in respect of prior years Total other expense $ 76 $ (99) Other Income: Other Total other income Total (16) $ (16) $ 60 (14) $ (14) $ (113) Deferred tax Origination and reversal of temporary differences in the current year Adjustment in respect of prior years $ 911 (2) $ 476 (71) $ 909 $ 405 $ 10 (2) $ (551) 115 $ 8 $ (436) 1. 2016 includes losses of $17 million from the sale of Bald Mountain and Round Mountain and $39 million from the sale of Zaldívar. 2015 includes gains of $110 million from the sale of Ruby Hill and Spring Valley, $39 million from the sale of Porgera, and $34 million from the sale of Cowal. Income tax expense (recovery) $ 917 $ (31) Tax expense related to continuing operations b) Loss on Currency Translation For the years ended December 31 2016 2015 Currency translation losses released as a result of the disposal and reorganization of entities Foreign currency translation losses Total $ 91 108 $ 199 $ – 120 $ 120 Current Canada International Deferred Canada International 7 $ 902 3 $ 402 $ 909 $ 405 $ (30) 38 $ (32) (404) $ 8 $ (436) Income tax expense (recovery) $ 917 $ (31) 125 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Increase in Income Tax Related Contingent Liabilities in Tanzania In the first quarter 2016, Acacia received a judgement from the Tanzania Court of Appeal regarding a long- standing dispute over tax calculations at Bulyanhulu from 2000–2006. The Court of Appeal was reviewing seven issues initially raised by the Tanzania Revenue Authority (TRA) in 2012 regarding certain historic tax loss carry forwards and ruled in favor of Bulyanhulu by the Tax Appeals Board in 2013. The TRA appealed against this ruling and in 2014 the Tax Tribunal reversed the decision for all seven issues. The legal route in Tanzania has now been exhausted; however Acacia is considering its options for the next steps. Acacia is yet to receive a revised tax assessment following the judgement, but has raised further tax provisions of US$70 million in Q1 2016 in order to address the direct impact of the ruling on Bulyanhulu’s tax loss carry forwards and the potential impact this may have on the applicability of certain capital deductions for other years and our other mines in Tanzania. Tax Rate Changes In the fourth quarter 2016, a tax rate change was enacted in Peru, increasing corporate income tax rates. This resulted in a deferred tax recovery of $13 million due to recording the deferred tax asset in Peru at the higher rates. Internal Restructures In the fourth quarter 2015, a deferred tax recovery of $116 million arose from a loss that was realized on internal restructuring of subsidiary corporations. This resulted in a net increase in deferred tax assets. De-recognition of a Deferred Tax Asset In the second quarter 2015, we recorded a deferred tax expense of $20 million related to de-recognition of a deferred tax asset in Pueblo Viejo. Currency Translation Deferred tax balances are subject to remeasurement for changes in currency exchange rates each period. The most significant balances are Argentinean deferred tax liabilities. In 2016 and 2015, tax expense of $23 million and $62 million, respectively, primarily arose from translation losses due to the weakening of the Argentinean peso against the US dollar. These losses are included within deferred tax expense/recovery. Non-Recognition of US Alternative Minimum Tax (AMT) Credits In the fourth quarter 2016 and 2015, we recorded a deferred tax expense of $13 million and $19 million, respectively, related to US AMT credits which are not probable to be realized based on our current life of mine plans. Reconciliation to Canadian Statutory Rate For the years ended December 31 2016 2015 At 26.5% statutory rate Increase (decrease) due to: Allowances and special tax deductions1 Impact of foreign tax rates2 Expenses not tax deductible Goodwill impairment charges not tax deductible Impairment charges not recognized in deferred tax assets Net currency translation losses on deferred $ 471 $ (833) (134) 113 54 – (103) (110) 55 736 – 246 tax balances Tax impact of profits from equity accounted investments Current year tax losses not recognized in deferred tax assets Internal restructures De-recognition of a deferred tax asset Non-recognition of US AMT credits Adjustments in respect of prior years Increase to income tax related contingent liabilities Impact of tax rate changes Other withholding taxes Mining taxes Other items 23 (5) 35 – – 13 (4) 70 (13) 11 267 16 62 – 56 (116) 20 19 44 13 – 12 (125) (7) Income tax expense (recovery) $ 917 $ (31) 1. We are able to claim certain allowances and tax deductions unique to extractive industries that result in a lower effective tax rate. 2. We operate in multiple foreign tax jurisdictions that have tax rates different than the Canadian statutory rate. 126 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 13  Earnings (Loss) per Share For the years ended December 31 ($ millions, except shares in millions and per share amounts in dollars) Net income (loss) Net (income) loss attributable to non-controlling interests 2016 2015 Basic Diluted Basic Diluted $ 861 (206) $ 861 $ (3,113) 275 (206) $ (3,113) 275 Net income (loss) attributable to equity holders of Barrick Gold Corporation $ 655 $ 655 $ (2,838) $ (2,838) Weighted average shares outstanding 1,165 1,165 1,165 1,165 Basic and diluted earnings (loss) per share data attributable to the equity holders of Barrick Gold Corporation $ 0.56 $ 0.56 $ (2.44) $ (2.44) 14  Finance Costs, Net 15  Cash Flow – Other Items For the years ended December 31 2016 2015 Interest1 Amortization of debt issue costs Amortization of discount Loss (gain) on interest rate hedges Interest capitalized2 Accretion Loss (gain) on debt extinguishment3 Finance income $ 591 17 2 (1) – 50 129 (13) $ 737 19 3 2 (17) 63 (68) (13) Total $ 775 $ 726 1. Interest in the consolidated statements of cash flow are presented on a cash basis. In 2016, cash interest paid was $513 million (2015: $677 million). 2. For the year ended December 31, 2016, the general capitalization rate was 5.90% (2015: 5.80%). 3. 2016 loss arose from partial repayment of several notes during the year (2.5% notes due 2018, 4.4% notes due 2021, 4.95% notes due 2020, 6.8% notes due 2018 and 6.95% notes due 2019). 2015 gain arose from partial repayment of several notes during the year (2.50% notes due 2018, 3.85% notes due 2022, 4.10% notes due 2023 and 6.95% notes due 2019). a) Operating Cash Flows – Other Items For the years ended December 31 2016 2015 Adjustments for non-cash income statement items: (Gain) loss on non-hedge derivatives (note 25e) Stock-based compensation expense (Income) loss from investment in equity investees (note 16) Change in estimate of rehabilitation costs at closed mines Net inventory impairment charges (note 17) Change in other assets and liabilities Settlement of rehabilitation obligations Other operating activities Cash flow arising from changes in: Accounts receivable Inventory Other current assets Accounts payable Other current liabilities $ (12) 82 $ 38 18 (20) 7 130 68 (362) (62) (176) (5) (190) 41 (190) 29 3 285 (266) (89) (4) 81 24 39 (35) (148) Change in working capital $ (315) $ (39) b) Investing Cash Flows – Other Items For the years ended December 31 2016 2015 Funding of investments in equity investees (note 16) Other Other investing activities $ (9) – $ (7) (10) $ (9) $ (17) 127 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 16  Investments Equity Accounting Method Investment Continuity At January 1, 2015 Funds invested Transfer to equity accounting method investment Loss from equity investees At December 31, 2015 Funds invested Working capital adjustments Equity pick-up (loss) from equity investees Impairment charges At December 31, 2016 Publicly traded Summarized Equity Investee Financial Information For the years ended December 31 Revenue Cost of sales (excluding depreciation) Depreciation Finance expense Other expense Income (loss) from continuing operations before tax Income tax (expense) recovery Income (loss) from continuing operations after tax Total comprehensive income (loss) Summarized Balance Sheet For the years ended December 31 Cash and equivalents Other current assets1 Total current assets Non-current assets Total assets Current financial liabilities (excluding trade, other payables & provisions) Other current liabilities Total current liabilities Non-current financial liabilities (excluding trade, other payables & provisions) Other non-current liabilities Total non-current liabilities Total liabilities Net assets Kabanga Jabal Sayid Zaldívar GNX Total $ 28 2 – – $ 30 1 – (1) – $ 30 No $ 178 – – – $ 178 – – 2 – $ 180 No $ – – 993 (3) $ 990 – 6 27 (49) $ 974 No $ 206 7 993 (7) $ 1,199 9 6 20 (49) $ 1,185 $ – 5 – (4) $ 1 8 – (8) – $ 1 No Jabal Sayid Zaldívar 2016 $ 80 65 12 – – 3 – 3 3 $ $ $ 2015 $ $ $ $ – – – – – – – – 2016 $ 518 354 87 2 (5) $ 80 (25) $ 55 $ 55 2015 $ 51 46 12 – – (7) 1 (6) (6) $ $ $ Jabal Sayid Zaldívar 2016 $ 14 56 $ 70 473 $ 543 $ – 27 $ 27 – 402 $ 402 $ 429 $ 114 2015 $ 6 66 2016 102 482 $ 2015 $ 17 565 $ 72 $ 584 $ 582 452 1,603 1,640 $ 524 $ 2,187 $ 2,222 $ – 12 $ – 107 $ – 145 $ 12 $ 107 $ 145 – 401 $ 401 $ 413 26 87 113 220 $ $ 7 60 67 212 $ $ $ 111 $ 1,967 $ 2,010 1. Zaldívar other current assets include inventory of $429 million (2015: $471 million). The information above reflects the amounts presented in the financial information of the joint venture adjusted for differences between IFRS and local GAAP. 128 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Reconciliation of Summarized Financial Information to Carrying Value Opening net assets Income for the period Impairment Closing net assets, December 31 Barrick’s share of net assets (50%) Equity earnings adjustment Goodwill recognition Carrying value Jabal Sayid1 Zaldívar $ 111 3 – $ 114 57 – 123 $ 180 $ 2,010 55 (98) $ 1,967 984 (10) – $ 974 1. A $165 million non-interest bearing shareholder loan due from the Jabal Sayid JV is presented as part of Other Assets (see note 22). Gold Copper As at Dec. 31, 2015 As at Dec. 31, 2016 As at Dec. 31, 2015 17  Inventories Raw materials Ore in stockpiles Ore on leach pads Mine operating supplies Work in process Finished products Non-current ore in stockpiles1 As at Dec. 31, 2016 $ 2,067 406 585 219 50 $ 3,327 (1,536) $ 1,912 292 633 210 42 $ 3,089 (1,494) 1. Ore that we do not expect to process in the next 12 months is classified within other long-term assets. Inventory Impairment Charges Ore in Stockpiles For the years ended December 31 2016 2015 $ 1,791 $ 1,595 Cortez Golden Sunlight Porgera Pierina Buzwagi Goldstrike Pueblo Viejo Veladero Lagunas Norte Turquoise Ridge Other $ 57 7 3 1 – – – – – – – $ 84 25 2 3 109 7 16 16 5 1 17 Inventory impairment charges1 $ 68 $ 285 1. Impairment charges in 2016 primarily relate to stockpiles at Cortez. Impairment charges in 2015 primarily relate to production costs exceeding net realizable value at Cortez, stockpile and supplies impairments at Buzwagi as well as mine operating supplies obsolescence across the sites. Gold Goldstrike Pueblo Viejo Cortez Porgera Kalgoorlie Lagunas Norte Buzwagi North Mara Veladero Turquoise Ridge Other Copper Lumwana $ 72 – 62 – 5 $ 139 – $ 139 $ 48 – 74 – 8 $ 130 (8) $ 122 As at Dec. 31, 2016 As at Dec. 31, 2015 $ 932 475 196 77 127 91 64 41 38 22 4 $ 906 406 179 77 113 80 38 48 34 20 11 72 48 $ 2,139 $ 1,960 129 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Ore on Leach Pads 18  Accounts Receivable and Other Current Assets Gold Veladero Cortez Lagunas Norte Pierina As at Dec. 31, 2016 As at Dec. 31, 2015 $ 172 109 97 28 $ 136 71 81 4 $ 406 $ 292 Accounts receivable Amounts due from concentrate sales Receivable from Dominican Republic government1 Working capital adjustments held in escrow Other receivables Purchase Commitments At December 31, 2016, we had purchase obligations for supplies and consumables of approximately $970 million (2015: $1,151 million). Other current assets Derivative assets (note 25f) Goods and services taxes recoverable2 Prepaid expenses Other As at Dec. 31, 2016 As at Dec. 31, 2015 $ 110 $ 77 30 – 109 47 20 131 $ 249 $ 275 $ 1 239 48 18 $ – 199 46 18 $ 306 $ 263 1. Amounts receivable from the Dominican Republic government primarily relate to payments made by Pueblo Viejo on behalf of the government. 2. Primarily includes VAT and fuel tax recoverables of $124 million in Tanzania, $52 million in Argentina, $32 million in Chile, $10 million in the Dominican Republic, and $6 million in Peru (Dec. 31, 2015: $56 million, $56 million, $44 million, $18 million and $9 million, respectively). Mining property costs subject to Mining property costs not subject to depreciation1,3 depreciation1,2 Total Buildings, plant and equipment $ 4,684 $ 7,300 $ 2,450 $ 14,434 71 (80) (794) 217 458 272 – (995) 79 538 933 (37) – 3 (996) 1,276 (117) (1,789) 299 – $ 4,556 $ 7,194 $ 2,353 $ 14,103 19  Property, Plant and Equipment At January 1, 2016 Net of accumulated depreciation Additions4 Disposals Depreciation Impairment reversals Transfers5 At December 31, 2016 At December 31, 2016 Cost Accumulated depreciation and impairments $ 14,111 (9,555) $ 20,778 (13,584) $ 14,634 (12,281) $ 49,523 (35,420) Net carrying amount – December 31, 2016 $ 4,556 $ 7,194 $ 2,353 $ 14,103 1. Includes capitalized reserve acquisition costs, capitalized development costs and capitalized exploration and evaluation costs other than exploration license costs included in intangible assets. 2. Assets not subject to depreciation includes construction-in-progress, projects and acquired mineral resources and exploration potential at operating mine sites and development projects. 3. Assets subject to depreciation includes the following items for production stage properties: acquired mineral reserves and resources, capitalized mine development costs, capitalized stripping and capitalized exploration and evaluation costs. 4. Additions include revisions to the capitalized cost of closure and rehabilitation activities. 5. Primarily relates to long-lived assets that are transferred to PP&E once they are placed into service. 130 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 At January 1, 2015 Cost Accumulated depreciation and impairments Mining property costs subject to depreciation1,3 Mining property costs not subject to depreciation1,2 Total Buildings, plant and equipment $ 15,273 (8,590) $ 21,803 (13,539) $ 16,060 (11,814) $ 53,136 (33,943) Net carrying amount – January 1, 2015 $ 6,683 $ 8,264 $ 4,246 $ 19,193 Additions4 Capitalized interest Disposals Depreciation Impairment charges Transfers5 Assets held for sale At December 31, 2015 At December 31, 2015 (20) – (904) (1,030) (1,041) 1,203 (207) 225 17 (734) (954) (236) 1,062 (344) 1,048 – (55) – (470) (2,265) (54) 1,253 17 (1,693) (1,984) (1,747) – (605) $ 4,684 $ 7,300 $ 2,450 $ 14,434 Cost Accumulated depreciation and impairments $ 13,782 (9,098) $ 19,968 (12,668) $ 14,734 (12,284) $ 48,484 (34,050) Net carrying amount – December 31, 2015 $ 4,684 $ 7,300 $ 2,450 $ 14,434 1. Includes capitalized reserve acquisition costs, capitalized development costs and capitalized exploration and evaluation costs other than exploration license costs included in intangible assets. 2. Assets not subject to depreciation includes construction-in-progress, projects and acquired mineral resources and exploration potential at operating mine sites and development projects. 3. Assets subject to depreciation includes the following items for production stage properties: acquired mineral reserves and resources, capitalized mine development costs, capitalized stripping and capitalized exploration and evaluation costs. 4. Additions include revisions to the capitalized cost of closure and rehabilitation activities. 5. Primarily relates to long-lived assets that are transferred to PP&E once they are placed into service. a) Mineral Property Costs Not Subject to Depreciation Construction-in-progress1 Acquired mineral resources and exploration potential Projects Pascua-Lama Cerro Casale2 Donlin Gold Carrying amount at Dec. 31, 2016 Carrying amount at Dec. 31, 2015 $ 466 $ 529 24 42 1,263 444 156 1,287 444 148 $ 2,353 $ 2,450 1. Represents assets under construction at our operating mine sites. 2. Amounts are presented on a 100% basis and include our partner’s non-controlling interest. b) Changes in Gold and Copper Mineral Life of Mine Plan As part of our annual business cycle, we prepare updated estimates of proven and probable gold and copper mineral reserves and the portion of resources considered probable of economic extraction for each mineral property. This forms the basis for our LOM plans. We prospectively revise calculations of amortization expense for property, plant and equipment amortized using the UOP method, where the denominator is our LOM ounces. The effect of changes in our LOM on amortization expense for 2016 was a $67 million decrease (2015: $94 million decrease). c) Capital Commitments and Operating Leases In addition to entering into various operational commitments in the normal course of business, we had commitments of approximately $103 million at December 31, 2016 (2015: $120 million) for construction activities at our sites and projects. Operating leases are recognized as an operating cost in the consolidated statements of income on a straight-line basis over the lease term. At December 31, 2016, we have operating lease commitments totaling $73 million, of which $17 million is expected to be paid within a year, $48 million is expected to be paid within two to five years and the remaining amount to be paid beyond five years. 131 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 20  Goodwill and Other Intangible Assets a) Intangible Assets Water rights1 Technology2 Supply contracts3 Exploration potential4 Total Opening balance January 1, 2015 $ 116 $ 14 $ 17 $ 161 $ 308 Disposals Amortization (29) – – (2) – (1) (5) – (34) (3) Closing balance December 31, 2015 $ 87 $ 12 $ 16 $ 156 $ 271 Additions Amortization Closing balance December 31, 2016 Cost Accumulated amortization and impairment losses Net carrying amount December 31, 2016 – – $ 87 $ 87 – $ 87 – (1) $ 11 $ 17 (6) $ 11 – (2) $ 14 $ 39 (25) $ 14 4 – 4 (3) $ 160 $ 272 $ 282 (122) $ 425 (153) $ 160 $ 272 1. Relates to water rights in South America, and will be amortized through cost of sales when we begin using these in the future. 2. The amount is amortized through cost of sales using the UOP method over LOM ounces of the Pueblo Viejo mine, with no assumed residual value. 3. Relates to a supply agreement with Michelin North America Inc. to secure a supply of tires and is amortized over the effective term of the contract through cost of sales. 4. Exploration potential consists of the estimated fair value attributable to exploration licenses acquired as a result of a business combination or asset acquisition. The carrying value of the licenses will be transferred to PP&E when the development of attributable mineral resources commences (note 2n(i)). See note 21 for details of impairment charges recorded against exploration assets. b) Goodwill Goldstrike Cortez Pueblo Viejo Lagunas Norte Veladero Turquoise Ridge Hemlo Kalgoorlie Cowal Porgera Zaldívar Total Opening balance January 1, 2015 Impairments Closing balance Closing balance December 31, December 31, 2016 2015 Disposals $ 730 869 412 247 195 528 63 71 64 71 1,176 $ (730) (355) (412) (247) – – – – – – (427) $ – – – – – – – – (64) (71) (749) $ – 514 – – 195 528 63 71 – – – $ – 514 – – 195 528 63 71 – – – $ 4,426 $ (2,171) $ (884) $ 1,371 $ 1,371 On a total basis, the gross amount and accumulated impairment losses are as follows: Cost Accumulated impairment losses January 1, 2015 Impairment losses 2015 Accumulated impairment losses December 31, 2016 Net carrying amount December 31, 2016 $ 8,659 (5,117) (2,171) (7,288) $ 1,371 132 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 21  Impairment of Goodwill and Impairment and Reversal of Non-Current Assets Summary of impairments (reversals) For the year ended December 31, 2016, we recorded net impairment reversals of $250 million (2015: impairment of $1.7 billion) for non-current assets and $nil (2015: impairment of $2.2 billion) for goodwill, as summarized in the following table: For the years ended December 31 2016 2015 Veladero Lagunas Norte Zaldívar Pueblo Viejo Pascua-Lama Bald Mountain/Round Mountain1 Buzwagi Oil Royalty Cortez Other $ (275) (28) 49 – – – – – – 4 $ – 36 – 1,112 399 81 37 36 2 23 Total non-current asset impairment losses (reversals) $ (250) $ 1,726 Goldstrike Zaldívar Pueblo Viejo Cortez Lagunas Norte Total goodwill impairment losses $ $ – – – – – – $ 730 427 412 355 247 $ 2,171 Total impairment losses (reversals) $ (250) $ 3,897 1. As discussed in note 4b, we have disposed of Bald Mountain and Round Mountain in a single transaction. Accordingly, the impairment loss was calculated together. 2016 Indicators of Impairment/Reversal Fourth Quarter 2016 In the fourth quarter 2016, as per our policy, we performed our annual goodwill impairment test. No impairments were identified. Also in the fourth quarter, we reviewed the updated LOM plans for our other operating mine sites for indicators of impairment or reversal. We noted no indicators of impairment, but did note three indicators of potential impairment reversal. As a result of improvements in the cost structure at our Veladero mine in Argentina, we have expanded the open pit in our Life of Mine (“LOM”) plan, increasing our expected production and the number of years in our plan. These changes increased Veladero’s Fair Value Less Costs of Disposal (“FVLCD”) which has resulted in a full reversal of the non-current asset impairment loss recorded in 2013. After reflecting the amount of depreciation that would have been taken on the impaired assets, an amount of $275 million was recorded as an impairment reversal in the fourth quarter of 2016. The recoverable amount, based on the mine’s FVLCD, was $1.6 billion. Also as a result of cost improvements, we have observed an increase in the FVLCD of our Lagunas Norte mine in Peru that has resulted in a full reversal of the non-current asset impairment loss recorded in the fourth quarter of 2015. After reflecting the amount of depreciation that would have been taken on the impaired assets, an amount of $28 million was recorded as an impairment reversal in the fourth quarter of 2016. The recoverable amount, based on the mine’s FVLCD, was $630 million. In the fourth quarter of 2016, our Lumwana copper mine in Zambia completed a new LOM plan incorporating a lower cost structure. We determined this was an indicator of potential reversal of the 2014 impairments recorded on our Lumwana mine. Based on the level of uncertainty surrounding some of the assumptions in our FVLCD calculation, we determined there existed significant uncertainty as to whether or not a change in FVLCD existed that warranted a reversal in the previously recorded impairment. 133 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Third Quarter 2016 As noted in note 4c, in the third quarter 2016 we agreed to an adjustment of the purchase price for the 50% interest in our Zaldívar mine. This adjustment resulted in a non-current asset impairment loss of $49 million. This is in addition to the goodwill impairment loss of $427 million we recognized in third quarter 2015, as detailed below. The recoverable amount after the impairment, based on the FVLCD of our 50% equity interest, was $950 million. Second Quarter 2016 In June 2016, the Zambian government passed legislation to amend the royalty tax for mining operations to a variable rate based on the prevailing copper price effective June 1, 2016. These rates are 4% at copper prices below $2.04 per pound; 5% at copper prices between $2.04 per pound and $2.72 per pound; and 6% at copper prices of $2.72 per pound and above. Legislation was also passed to remove the 15% variable profit tax on income from mining companies. We determined this was an indicator of potential reversal of the 2014 impairments recorded on our Lumwana copper mine and we determined the FVLCD was not in excess of the carrying value and therefore no reversal was recorded. 2015 Indicators of Impairment/Reversal Fourth Quarter 2015 In the fourth quarter 2015, as per our policy, we performed our annual goodwill impairment test. Primarily as a result of the lower gold price assumptions used in the test, which were consistent with market conditions, we identified that the carrying values of our Pueblo Viejo, Goldstrike, Cortez and Lagunas Norte mines exceeded their FVLCD. At Pueblo Viejo, a goodwill impairment loss of $412 million and a non-current asset impairment loss of $1,101 million were recorded and the recoverable amount after the impairment, based on the mine’s FVLCD, was $3.2 billion (100% basis). At Goldstrike, a goodwill impairment loss of $730 million was recorded and the recoverable amount after the impairment, based on the mine’s FVLCD, was $2.7 billion. At Cortez, a goodwill impairment loss of $355 million was recorded and the recoverable amount after the impairment, based on the mine’s FVLCD, was $3.4 billion. At Lagunas Norte, a goodwill impairment loss of $247 million and a non-current asset impairment loss of $36 million was recorded and the recoverable amount after the impairment, based on the mine’s FVLCD, was $480 million. Refer to note 20 for our remaining goodwill balances. As at December 31, 2015, all of the assets and liabilities of Bald Mountain and Round Mountain were classified as held-for-sale. As the agreed selling price was lower than previously recognized carrying values, we recorded a non-current asset impairment loss of $81 million. Throughout the fourth quarter 2015, the trading price of the Company’s shares declined such that the carrying value of our net assets exceeded our market capitalization. We determined that this was an indicator of impairment and tested the remaining assets that were not included in the annual goodwill impairment test. As a result, we determined two additional impairments. At our Pascua-Lama project, we recorded an impairment loss of $404 million (net of a $46 million reversal related to a specific PP&E asset). The recoverable amount after the impairment, based on the project’s FVLCD, was $810 million. At our Buzwagi mine in Tanzania (part of our Acacia subsidiary), we recorded a non-current asset impairment loss of $37 million. The recoverable amount after the impairment, based on the mine’s FVLCD, was $81 million (100% basis). We evaluated the FVLCD of an oil royalty that we received as part of the consideration for one of the Barrick Energy dispositions in 2013 and concluded that 134 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016due to the significant decline in current oil prices in the fourth quarter 2015 and the corresponding constraints on capital investment in the oil industry, its carrying value was not recoverable. We recorded an impairment of $36 million and reduced its carrying value to nil. In the second quarter 2015, we determined that we expected to sell the Monte Rio power asset at our Pueblo Viejo mine. Power supply to Pueblo Viejo was not impacted by this disposition. In the third quarter 2015, we entered into an agreement to sell the asset and recorded a partial reversal of this impairment based on the agreed upon sales price. For the year ended December 31, 2015, we recorded an impairment loss of $11 million to reduce its carrying value down to its net realizable value. Third Quarter 2015 In July 2015, the Zambian government passed legislation that amended the country’s mining tax regime. This was an indicator of potential reversal of previous impairments recorded on our Lumwana mine in the fourth quarter 2014. In the third quarter 2015, we evaluated the FVLCD and concluded that, based on the current mine plan, lower short-term copper prices and a higher observable discount rate offset the lower royalty rate. Therefore no reversal of impairment was required at that time. As at September 30, 2015, all of the assets and liabilities of Zaldívar were classified as held-for-sale as the transaction will result in a loss of control. The agreed selling price was lower than our previous assessment of FVLCD due to lower short-term copper prices, the impact of 10 months’ worth of production on the fair value and an increase in observable discount rates. For the year ended December 31, 2015, we recorded a goodwill impairment loss of $427 million as a result of this transaction. The recoverable amount after this impairment, based on the FVLCD of our 50% equity interest, was $1,010 million. Also, in the third quarter 2015, a net reversal of non-current asset impairment of $16 million was recognized relating to the termination of contracts of certain leased assets at Pascua-Lama that had previously been impaired. They are now carried at their expected realizable value. Key assumptions The recoverable amount has been determined based on its estimated FVLCD, which has been determined to be greater than the VIU amounts. The key assumptions and estimates used in determining the FVLCD are related to commodity prices, discount rates, NAV multiples for gold assets, operating costs, exchange rates, capital expenditures, the LOM production profile, continued license to operate, evidence of value from current year disposals and for our projects the expected start of production. In addition, assumptions are related to observable market evaluation metrics, including identification of comparable entities, and associated market values per ounce and per pound of reserves and/or resources, as well as the valuation of resources beyond what is included in LOM plans. Gold For the gold segments where a recoverable amount was required to be determined, FVLCD was determined by calculating the net present value (“NPV”) of the future cash flows expected to be generated by the mines and projects within the segments (level 3 of the fair value hierarchy). The estimates of future cash flows were derived from the most recent LOM plans and, where the LOM plans excludes a material portion of total reserves and resources, we assign value to reserves and resources not considered in these models. Based on observable market or publicly available data, including forward prices and equity sell-side analyst forecasts, we make an assumption of future gold and silver prices to estimate future revenues. The future cash flows for each gold mine are discounted using a real weighted average cost of capital (“WACC”), which reflects specific market risk factors for each mine. Some gold companies trade at a market capitalization greater than the NPV of their expected cash flows. Market participants describe this as a “NAV multiple”, which represents the multiple applied to the NPV to arrive at the trading price. The NAV multiple is generally understood to take account of a variety of additional value factors such as the exploration potential of the mineral property, namely the ability to find and produce more metal than what 135 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016is currently included in the LOM plan or reserve and resource estimates, and the benefit of gold price optionality. As a result, we applied a specific NAV multiple to the NPV of each CGU within each gold segment based on the NAV multiples observed in the market in recent periods and that we judged to be appropriate to the CGU. Copper For our copper operating segments, the FVLCD for each of the CGUs was determined based on the NPV of future cash flows expected to be generated using the most recent LOM plans (level 3 of the fair value hierarchy). Based on observable market or publicly available data including spot and forward prices and equity sell-side analyst consensus, we make an assumption of future copper prices to estimate future revenues. The future cash flows for each copper mine are discounted using a WACC depending on the location and market risk factors for each mine. Assumptions Our gold price assumptions used in our 2016 impairment testing are 2017: $1,050 and 2018+: $1,200. Our gold price assumptions used in our 2015 impairment testing are 2016: $1,000, 2017: $1,100 and 2018+: $1,200. The other key assumptions used in our impairment testing are summarized in the table below: Copper price per lb (long-term) WACC – gold (range) WACC – gold (avg) WACC – copper NAV multiple – gold (avg) LOM years – gold (avg) 2016 2015 $ 2.75 3%–6% 4% 9% 1.2 15 $ 3.00 3%–8% 4% 7% 1.1 18 Sensitivities Should there be a significant decline in commodity prices, we would take actions to assess the implications on our life of mine plans, including the determination of reserves and resources, and the appropriate cost structure for the operating segments. The recoverable amount of the CGUs would be affected by these changes and also be impacted by other market factors such as changes in net asset value multiples and the value per ounce/pound of comparable market entities. We performed a sensitivity analysis on the gold and copper prices and the WACC, which are the most significant assumptions that impact the impairment calculations. We first assumed a +/- $100 per ounce change in our gold price assumptions or a +/- $0.25 per pound change in copper price assumptions, while holding all other assumptions constant. We then assumed a +/- 1% change in our WACC, independent from the change in gold or copper prices, while holding all other assumptions constant. These sensitivities help to determine the theoretical impairment losses or impairment reversals that would be recorded with these changes in gold or copper prices and WACC. As the non-current asset impairment reversal recorded for Veladero represents a full reversal, none of the sensitivity analysis performed impacted the amount of the reversal. The full reversal of the non-current asset impairment reversal recorded for Lagunas Norte would not be recognized if the gold price per ounce was decreased by $100 and was otherwise not affected by the sensitivity analysis. Other results of the sensitivity analysis are as follows: A $0.25 per pound increase in the copper price would cause a partial reversal of $443 million of the non-current asset impairment recorded in 2013 at Lumwana. A $0.25 per pound decrease in the copper price would result in a non-current asset impairment at Lumwana of $253 million. 136 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 The carrying value of the CGUs that are most sensitive 24  Other Current Liabilities to changes in the key assumptions used in the FVLCD calculation are: As at December 31, 2016 Carrying value Pueblo Viejo1 Pascua-Lama2 Cerro Casale2 Lagunas Norte Lumwana $ 3,081 581 516 453 452 Provision for environmental rehabilitation (note 27b) Derivative liabilities (note 25f) Deposit on Pueblo Viejo gold and silver streaming agreement 1. This CGU had an impairment loss in 2015. As there have been no indicators of impairment or impairment reversal in 2016, the carrying value would remain sensitive to the key assumptions in the FVLCD model from 2015. 2. These CGUs are most sensitive to changes to the value per ounce/pound of comparable market entities. Share-based payments (note 34b) Deposit on Pascua-Lama silver sale agreement Other 22  Other Assets 25  Financial Instruments As at Dec. 31, 2016 As at Dec. 31, 2015 $ 67 50 $ 62 160 77 53 26 36 36 21 22 36 $ 309 $ 337 Derivative assets (note 25f) Goods and services taxes recoverable1 Notes receivable2 Restricted cash3 Prepayments Other investments Other As at Dec. 31, 2016 As at Dec. 31, 2015 $ 1 303 274 118 51 18 181 $ 1 397 291 91 60 8 175 $ 946 $ 1,023 1. Includes VAT and fuel tax receivables of $255 million in Argentina, $8 million in Tanzania and $40 million in Chile (Dec. 31, 2015: $308 million, $52 million and $37 million, respectively). The VAT in Argentina is recoverable once Pascua-Lama enters production. 2. Primarily represents the interest bearing promissory note due from NovaGold and the non-interest bearing shareholder loan due from the Jabal Sayid JV as a result of the divestment of 50 percent interest in Jabal Sayid. 3. Represents cash balance at Pueblo Viejo that is contractually restricted to the disbursements for environmental rehabilitation that are expected to occur near the end of Pueblo Viejo’s mine life. 23  Accounts Payable Accounts payable Accruals As at Dec. 31, 2016 $ 749 335 As at Dec. 31, 2015 $ 736 422 $ 1,084 $ 1,158 Financial instruments include cash; evidence of ownership in an entity; or a contract that imposes an obligation on one party and conveys a right to a second entity to deliver/receive cash or another financial instrument. Information on certain types of financial instruments is included elsewhere in these consolidated financial statements as follows: accounts receivable (note 18); investments (note 16); restricted share units (note 34b). a) Cash and Equivalents Cash and equivalents include cash, term deposits, treasury bills and money market investments with original maturities of less than 90 days. Cash deposits Term deposits Money market investments As at Dec. 31, 2016 $ 1,009 654 726 As at Dec. 31, 2015 $ 1,370 313 772 $ 2,389 $ 2,455 137 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Of total cash and cash equivalents as of December 31, 2016, $943 million (2015: $621 million) was held in subsidiaries which have regulatory regulations, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by the Company. In addition, $nil million (2015: $62 million) of cash and b) Debt and Interest1 equivalents is held in subsidiaries where we have determined the cash is reinvested for the foreseeable future for the calculation of deferred income tax. This cash can be repatriated; however, there would be a tax cost of doing so, which has not yet been recognized in these financial statements. 4.4%/5.7% notes3,9 3.85%/5.25% notes 5.80% notes4,9 6.35% notes5,9 Other fixed rate notes6,9 Project financing Capital leases7 Other debt obligations 2.5%/4.10%/5.75% notes8,9 Acacia Credit Facility10 Less: current portion11 2.9%/4.4%/5.7% notes3,9 3.85%/5.25% notes 5.80% notes4,9 5.75%/6.35% notes5,9 Other fixed rate notes6,9 Project financing Capital leases7 Other debt obligations 2.5%/4.10%/5.75% notes8,9 Acacia Credit Facility10 Less: current portion11 Closing balance Dec. 31, 2015 $ 2,182 1,077 395 592 2,451 646 153 654 1,690 128 $ 9,968 (203) $ 9,765 Proceeds Repayments $ – – – – – – 2 3 – – $ (721) – – – (848) (254) (41) (46) (123) (29) $ 5 – $ 5 $ (2,062) – $ (2,062) Amortization Closing balance and other2 Dec. 31, 2016 $ 6 1 – 1 4 8 – (2) 2 – $ 20 – $ 20 $ 1,467 1,078 395 593 1,607 400 114 609 1,569 99 $ 7,931 (143) $ 7,788 Closing balance Dec. 31, 2014 Proceeds Repayments Amortization Closing balance and other2 Dec. 31, 2015 $ 2,409 1,983 395 855 2,720 850 354 794 2,579 142 $ 13,081 (333) $ 12,748 $ – – – – – – – 9 – – $ (229) (913) – (264) (275) (211) (189) (149) (898) (14) $ 9 – $ 9 $ (3,142) – $ (3,142) $ 2 7 – 1 6 7 (12) – 9 – $ 20 – $ 20 $ 2,182 1,077 395 592 2,451 646 153 654 1,690 128 $ 9,968 (203) $ 9,765 1. The agreements that govern our long-term debt each contain various provisions which are not summarized herein. These provisions allow Barrick, at its option, to redeem indebtedness prior to maturity at specified prices and also may permit redemption of debt by Barrick upon the occurrence of certain specified changes in tax legislation. 2. Amortization of debt premium/discount and increases (decreases) in capital leases. 3. Consists of $1.5 billion (2015: $2.2 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of $629 million (2015: $1.35 billion) of BNAF notes due 2021 and $850 million of BNAF notes due 2041. 4. Consists of $400 million of 5.80% notes which mature in 2034. 5. Consists of $600 million of 6.35% notes which mature in 2036. 6. Consists of $1.6 billion (2015: $2.5 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”) and our wholly-owned subsidiary Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”). This consists of $279 million (2015: $475 million) of BGC notes due 2019, $248 million (2015: $400 million) of BPDAF notes due 2020, $250 million of BNAF notes due 2038 and $850 million of BPDAF notes due 2039. 7. Consists primarily of capital leases at Pascua-Lama, $50 million and Lagunas Norte, $56 million (2015: $57 million and $88 million, respectively). 8. Consists of $1.6 billion (2015: $1.7 billion) in conjunction with our wholly-owned subsidiary Barrick North America Finance LLC (“BNAF”). This consists of $731 million of BGC notes due 2023 and $850 million of BNAF notes due 2043. 9. We provide an unconditional and irrevocable guarantee on all Barrick North America Finance LLC (“BNAF”), Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”), Barrick Gold Finance Company (“BGFC”), and Barrick (HMC) Mining (“BHMC”) notes and generally provide such guarantees on all BNAF, BPDAF, BGFC, and BHMC notes issued, which will rank equally with our other unsecured and unsubordinated obligations. 10. Consists of an export credit backed term loan facility. 11. The current portion of long-term debt consists of project financing ($72 million; 2015: $89 million), other debt obligations ($5 million; 2015: $45 million), capital leases ($38 million; 2015: $41 million) and Acacia credit facility ($28 million; 2015: $28 million). 138 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 1.75%/2.9%/4.4%/5.7% Notes In June 2011, Barrick, and our wholly-owned subsidiary Barrick North America Finance LLC (”BNAF”), issued an aggregate of $4.0 billion in debt securities comprised of: $700 million of 1.75% notes that had an original maturity date in 2014 and $1.1 billion of 2.90% notes that had an original maturity date in 2016 issued by Barrick (collectively, the “Barrick Notes”) as well as $1.35 billion of 4.40% notes that mature in 2021 and $850 million of 5.70% notes that mature in 2041 issued by BNAF (collectively, the “BNAF Notes”). Barrick provides an unconditional and irrevocable guarantee of the BNAF Notes. The Barrick Notes and the guarantee in respect of the BNAF Notes will rank equally with Barrick’s other unsecured and unsubordinated obligations. During 2013, the entire balance ($700 million) of the 1.75% notes was repaid along with $871 million of the $1.1 billion of 2.9% notes. During 2015, the remainder ($229 million) of the $1.1 billion of 2.9% notes was repaid. During 2016, $721 million of the $1.35 billion of 4.4% notes was repaid. 3.85% and 5.25% Notes On April 3, 2012, we issued an aggregate of $2 billion in debt securities comprised of $1.25 billion of 3.85% notes that mature in 2022 and $750 million of 5.25% notes that mature in 2042. During 2015, $913 million of the 3.85% notes was repaid. Other Fixed Rate Notes On October 16, 2009, we issued two tranches of debentures totaling $1.25 billion through our wholly- owned indirect subsidiary Barrick (PD) Australia Finance Pty Ltd. (“BPDAF”) consisting of $850 million of 30-year notes with a coupon rate of 5.95%, and $400 million of 10-year notes with a coupon rate of 4.95%. We also provide an unconditional and irrevocable guarantee of these payments, which rank equally with our other unsecured and unsubordinated obligations. During 2016, $152 million of the $400 million of 4.95% notes was repaid. On March 19, 2009, we issued an aggregate of $750 million of 10-year notes with a coupon rate of 6.95% for general corporate purposes. The notes are unsecured, unsubordinated obligations and rank equally with our other unsecured, unsubordinated obligations. During 2015, $275 million was repaid. During 2016, an additional $196 million was repaid. In September 2008, we issued an aggregate of $1.25 billion of notes through our wholly-owned indirect subsidiaries Barrick North America Finance LLC and Barrick Gold Financeco LLC (collectively, the “LLCs”) consisting of $500 million of 5-year notes with a coupon rate of 6.125%, $500 million of 10-year notes with a coupon rate of 6.8%, and $250 million of 30-year notes with a coupon rate of 7.5%. We also provide an unconditional and irrevocable guarantee of these payments, which rank equally with our other unsecured and unsubordinated obligations. During 2013, the entire balance ($500 million) of the 5-year notes with a coupon rate of 6.125% that was due in September 2013 was repaid. During 2016, the entire balance ($500 million) of the 10-year notes with a coupon rate of 6.8% was repaid. Pueblo Viejo Project Financing Agreement In April 2010, Barrick and Goldcorp finalized terms for $1.035 billion (100% basis) in project financing for Pueblo Viejo. The project financing was non-recourse subject to guarantees provided by Barrick and Goldcorp for their proportionate share which would terminate upon Pueblo Viejo meeting certain operating completion tests and are subject to an exclusion for certain political risk events. On February 17, 2015, we received notification that the completion tests had been met, resulting in termination of the guarantees. The lending syndicate is comprised of international financial institutions including export development agencies and commercial banks. The amount was divided into three tranches of $400 million, $375 million and $260 million with tenors of 15, 15 and 12 years, respectively. The $400 million tranche bears a coupon of LIBOR+3.25% pre-completion and scales gradually to LIBOR+5.10% (inclusive of political risk insurance premium) for years 13–15. The $375 million tranche bears a fixed coupon of 3.86% for the entire 15 years. The $260 million tranche bears a coupon of LIBOR+3.25% pre-completion and scales gradually to LIBOR+4.85% (inclusive of political risk insurance premium) for years 11–12. We have drawn the entire $1.035 billion to date. During the year, $254 million of the financing was repaid. The remaining principal balance under the Pueblo Viejo Financing Agreement is $423 million. 139 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Refinancing of the Credit Facility In January 2012, we finalized a credit and guarantee agreement (the “Credit Facility”, previously referred to as the ”2012 Credit Facility”) with certain Lenders, which requires such Lenders to make available to us a credit facility of $4.0 billion or the equivalent amount in Canadian dollars. The Credit Facility, which is unsecured, currently has an interest rate of LIBOR plus 2.00% on drawn amounts, and a commitment rate of 0.35% on undrawn amounts. In November 2016, $3.66 billion of the $4 billion credit facility was agreed to be extended from January 2021 to January 2022. The remaining $340 million currently terminates in January 2020. The Credit Facility is undrawn as at December 31, 2016. 2.50%/4.10%/5.75% Notes On May 2, 2013, we issued an aggregate of $3 billion in notes through Barrick and our wholly-owned indirect subsidiary Barrick North America Finance LLC consisting of $650 million of 2.50% notes that mature in 2018, $1.5 billion of 4.10% notes that mature in 2023 and $850 million of 5.75% notes issued by BNAF that mature in 2043. $2.0 billion of the net proceeds from this offering were used to repay existing indebtedness under our $4 billion revolving credit facility. We provided an unconditional and irrevocable guarantee on the $850 million of 5.75% notes issued by BNAF, which will rank equally with our other unsecured and unsubordinated obligations. During 2013, $398 million of the $650 million 2.50% notes was repaid. During 2015, $769 million of 4.1% notes and $129 million of 2.5% notes were repaid. During 2016, the remainder ($123 million) of the $650 million of 2.5% notes was repaid. Acacia Credit Facility In January 2013, Acacia concluded negotiations with a group of commercial banks for the provision of an export credit backed term loan facility (the “Facility”) for the amount of US$142 million. The Facility was put in place to fund a substantial portion of the construction costs of the CIL circuit at the process plant at the Bulyanhulu Project (the “Project”). The Facility is collateralized by the Project, has a term of seven years and, when drawn, the spread over LIBOR will be 250 basis points. The Facility is repayable in equal installments over the term of the Facility, after a two-year repayment holiday period. The interest rate has been fixed at an effective rate of 3.6% through the use of an interest rate swap. At December 31, 2014, the full value of the Facility was drawn. During 2015, $14 million was repaid. During 2016, $29 million was repaid. For the years ended December 31 2.9%/4.4%/5.7% notes 3.85%/5.25% notes 5.80% notes 5.75%/6.35% notes Other fixed rate notes Project financing Capital leases Other debt obligations 2.5%/4.10%/5.75% notes Acacia credit facility Deposits on Pascua-Lama silver sale agreement (note 29) Deposits on Pueblo Viejo gold and silver streaming agreement (note 29) Less: interest capitalized 2016 2015 Interest cost Effective rate1 5.09% 4.87% 5.85% 6.41% 6.75% 6.23% 4.02% 6.09% 4.98% 3.59% 8.37% 6.34% $ 104 53 23 38 128 33 5 36 82 7 63 37 $ 609 – $ 609 Interest cost $ 120 86 23 66 177 41 11 44 118 5 61 9 $ 761 (17) $ 744 Effective rate1 5.12% 4.65% 5.87% 8.73% 6.59% 5.46% 4.45% 6.08% 4.73% 3.59% 8.40% 6.15% 1. The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest rate contracts designated in a hedging relationship with debt. 140 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Scheduled Debt Repayments1 6.95% notes3 4.95% notes3 7.31% notes2 4.40% notes 3.85% notes 4.10% notes 7.73% notes2 7.70% notes2 7.37% notes2 8.05% notes2 6.38% notes2 5.80% notes 5.80% notes 6.45% notes2 6.35% notes 7.50% notes3 5.95% notes3 5.70% notes 5.25% notes 5.75% notes Other debt obligations2 Project financing Acacia credit facility Minimum annual payments under capital leases Issuer BGC BPDAF BGC BNAF BGC BGC BGC BGC BGC BGC BGC BGC BGFC BGC BHMC BNAF BPDAF BNAF BGC BNAF Maturity Year 2017 2018 2019 2020 2021 2022 and thereafter Total 2019 2020 2021 2021 2022 2023 2025 2025 2026 2026 2033 2034 2034 2035 2036 2038 2039 2041 2042 2043 $ – – – – – – – – – – – – – – – – – – – – 4 72 29 $ – – – – – – – – – – – – – – – – – – – – 5 72 28 $ 279 – – – – – – – – – – – – – – – – – – – 4 70 28 $ – 248 – – – – – – – – – – – – – – – – – – – 42 14 $ – – 7 629 – – – – – – – – – – – – – – – – – 42 – $ – $ 279 248 – 7 – 629 – 337 337 731 731 7 7 5 5 32 32 15 15 200 200 200 200 200 200 300 300 600 600 250 250 850 850 850 850 750 750 850 850 13 – 423 125 99 – $ 105 $ 105 $ 381 $ 304 $ 678 $ 6,302 $ 7,875 $ 38 $ 31 $ 16 $ 9 $ 6 $ 14 $ 114 1. This table illustrates the contractual undiscounted cash flows, and may not agree with the amounts disclosed in the consolidated balance sheet. 2. Included in Other debt obligations in the Long-Term Debt table. 3. Included in Other fixed rate notes in the Long-Term Debt table. 141 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 The time frame and manner in which we manage those risks varies for each item based upon our assessment of the risk and available alternatives for mitigating risk. For these particular risks, we believe that derivatives are an appropriate way of managing the risk. We use derivatives as part of our risk management program to mitigate variability associated with changing market values related to the hedged item. Many of the derivatives we use meet the hedge effectiveness criteria and are designated in a hedge accounting relationship. Certain derivatives are designated as either hedges of the fair value of recognized assets or liabilities or of firm commitments (“fair value hedges”) or hedges of highly probable forecasted transactions (“cash flow hedges”), collectively known as “accounting hedges”. Hedges that are expected to be highly effective in achieving offsetting changes in fair value or cash flows are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Some of the derivative instruments we use are effective in achieving our risk management objectives, but they do not meet the strict hedge accounting criteria. These derivatives are considered to be “non-hedge derivatives”. c) Derivative Instruments (“Derivatives”) In the normal course of business, our assets, liabilities and forecasted transactions, as reported in US dollars, are impacted by various market risks including, but not limited to: Item  Sales Impacted by   Prices of gold, silver and copper   By-product credits   Prices of silver, copper and gold  Cost of sales   Consumption of diesel fuel, propane, natural gas, and electricity     Prices of diesel fuel, propane, natural gas, and electricity   Non-US dollar expenditures   General and administration, exploration and evaluation costs     Currency exchange rates – US dollar versus A$, ARS, C$, CLP, DOP, EUR, PGK, TZS, ZAR, and ZMW   Currency exchange rates – US dollar versus A$, ARS, C$, CLP, DOP, GBP, PGK, TZS, ZAR, and ZMW   Capital expenditures   Non-US dollar capital     Currency exchange expenditures rates – US dollar versus A$, ARS, C$, CLP, DOP, EUR, GBP, PGK, and ZAR    Consumption of steel     Price of steel   Interest earned on cash  US dollar interest rates and equivalents   Interest paid on fixed-rate  US dollar interest rates borrowings 142 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016d) Summary of Derivatives at December 31, 2016 Notional amount by term to maturity Accounting classification by notional amount Within 1 year 2 to 3 years 4 to 5 years Total Cash flow hedge Non- hedge Fair value (USD) US dollar interest rate contracts (US$ millions) Total receive-float swap positions Currency contracts A$:US$ contracts (A$ millions) PGK:US$ contracts (PGK millions) Commodity contracts Gold collar sell contracts (thousands of ounces) Copper bought floor contracts (millions of pounds) Fuel contracts (thousands of barrels)1 $ 28 $ 57 $ 14 $ 99 $ 99 $ – $ 1 23 21 – – 43 78 2,214 – – 1,207 – – – – – 23 21 43 78 3,421 – – – 65 2,790 23 21 43 13 631 – – 1 – (78) 1. Fuel contracts represent a combination of WTI swaps and BRENT options. These derivatives hedge physical supply contracts based on the price of fuel across our operating mine sites plus a spread. WTI represents West Texas Intermediate and BRENT represents Brent Crude Oil. Fair Values of Derivative Instruments Asset derivatives Liability derivatives Balance Fair value as at sheet Dec. 31, 2016 classification Fair value as at Dec. 31, 2015 Balance Fair value as at sheet Dec. 31, 2016 classification Fair value as at Dec. 31, 2015 Derivatives designated as hedging instruments US dollar interest rate contracts Currency contracts Commodity contracts1 Total derivatives classified as hedging instruments Derivatives not designated as hedging instruments Currency contracts Commodity contracts Total derivatives not designated as hedging instruments Total derivatives Other assets Other assets Other assets $ 1 – – $ 1 – – Other liabilities Other liabilities Other liabilities $ – – 71 $ – 16 190 $ 1 $ 1 $ 71 $ 206 Other assets Other assets $ – 1 $ 1 $ 2 – – $ – $ 1 Other liabilities Other liabilities $ – 7 $ 20 38 $ 7 $ 58 $ 78 $ 264 1. The majority of our fuel contracts are now being designated as hedging instruments as a result of adoption of IFRS 9. These contracts did not qualify for hedge accounting prior to January 1, 2015. 143 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 As of December 31, 2016, we had 17 counterparties to our derivative positions. We proactively manage our exposure to individual counterparties in order to mitigate both credit and liquidity risks. We have four counterparties with which we hold a net asset position of $1 million, and 13 counterparties with which we are in a net liability position, for a total net liability of $77 million. On an ongoing basis, we monitor our exposures and ensure that none of the counterparties with which we hold outstanding contracts has declared insolvency. US Dollar Interest Rate Contracts Cash Flow Hedges At December 31, 2016, Acacia has $99 million of pay-fixed receive-float interest rate swaps to hedge the floating rate debt associated with the Bulyanhulu plant expansion. These contracts, designated as cash flow hedges, convert the floating rate debt as it is drawn against the Financing agreement. Currency Contracts Cash Flow Hedges During the year, no currency contracts have been designated against forecasted non-US dollar denominated expenditures. As at December 31, 2016, there are no outstanding currency contracts designated as cash flow hedges of our anticipated operating, administrative and sustaining capital spend. During 2013, we sold back and effectively closed out approximately A$990 million of our Australian dollar forward contracts as a loss mitigation strategy. No cash settlement occurred and payments will net at maturity (2014–2016). During the year, losses of $14 million were recognized in the consolidated statement of income based on the original hedge contract maturity dates. No losses remain crystallized in OCI at December 31, 2016. Commodity Contracts Diesel/Propane/Electricity/Natural Gas Cash Flow Hedges During 2015, 8,040 thousand barrels of WTI contracts designated against forecasted fuel consumption at our mines were designated as hedging instruments as a result of adopting IFRS 9 and did not qualify for hedge accounting prior to January 1, 2015. As at December 31, 2016, we have 2,790 thousand barrels of WTI designated as cash flow hedges at an average rate of $80 per barrel of our exposure to forecasted fuel purchases at our mines. Non-hedge Derivatives During the year, we entered into a contract to purchase 248 thousand barrels of Brent to economically hedge our exposure to forecasted fuel purchases for expected consumption at our mines. In total, on a combined basis we have 421 thousand barrels of Brent swaps outstanding that economically hedge our exposure to forecasted fuel purchases at our mines. Metals Contracts Cash Flow Hedges During 2016, we purchased 65 million pounds of copper collars that will mature evenly throughout the first half of 2017. These contracts contained purchased put and sold call options with weighted average strike prices of $2.20/lb and $2.82/lb, respectively. These contracts are designated as cash flow hedges, with the effective portion and the changes in time value of the hedge recognized in OCI and the ineffective portion recognized in non-hedge derivative gains (losses). During 2013, we early terminated 65 million ounces of silver hedges. We realized net cash proceeds of approximately $190 million with $9 million remaining crystallized in OCI at December 31, 2016, to be recognized in revenue as the exposure occurs. Any unrealized changes and realized gains/losses on ineffective amounts or time value have been recognized in the consolidated statements of income as gains on non-hedge derivatives. Non-Hedge Derivatives We enter into purchased and written contracts with the primary objective of increasing the realized price on some of our gold and copper sales. During the year, we purchased gold put and sold call options of 199 thousand ounces and purchased copper put and sold call options of 13 million pounds. As a result of these activities, we recorded approximately $2 million in the consolidated statement of income as gains on non-hedge derivatives. There are 43 thousand ounces of gold positions and 13 million pounds of copper positions outstanding at December 31, 2016. 144 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Cash Flow Hedge Gains (Losses) in Accumulated Other Comprehensive Income (“AOCI”) Commodity price hedges Gold/Silver Copper Operating costs Fuel Currency hedges General and administrative costs Interest rate hedges Capital expenditures Long-term debt Total $ 18 $ – $ – $ (79) $ (3) $ – $ (25) $ (89) – (5) – – – (5) (135) (27) (14) (2) 1 (177) At January 1, 2015 Impact of adopting IFRS 9 on January 1, 2015 Effective portion of change in fair value of hedging instruments Transfers to earnings: On recording hedged items in earnings/PP&E1 Hedge ineffectiveness due to changes in original forecasted transaction At December 31, 2015 Effective portion of change in – – (4) – – – – – 19 70 17 14 11 $ 14 $ – $ (102) $ (30) fair value of hedging instruments – Transfers to earnings: On recording hedged items in earnings/PP&E1 (5) – – 23 2 47 28 2 – 2 106 – 25 $ – $ (22) $ (140) – – 25 – 2 72 – $ – – – At December 31, 2016 $ 9 $ – $ (32) $ – $ – $ – $ (20) $ (43) Hedge gains/losses classified within Gold/Silver sales Copper sales Cost of sales Cost of sales General and administrative costs Property, plant and equipment Interest expense Total Portion of hedge gain (loss) expected to affect 2017 earnings2 $ 7 $ – $ (19) $ – $ – $ – $ (3) $ (15) 1. Realized gains (losses) on qualifying currency hedges of capital expenditures are transferred from OCI to PP&E on settlement. 2. Based on the fair value of hedge contracts at December 31, 2016. Cash Flow Hedge Gains (Losses) at December 31 Derivatives in cash flow hedging relationships Amount of gain (loss) recognized in OCI 2016 2015 Location of gain (loss) transferred from OCI into income/PP&E (effective portion) Amount of gain (loss) transferred from OCI into income (effective portion) 2016 2015 Interest rate contracts $ – $ 1 Finance income/finance costs $ (2) $ (2) Foreign exchange contracts 2 (43) Cost of sales/general and administrative costs/PP&E (28) (89) Commodity contracts 23 (135) Revenue/cost of sales (42) (15) Total $ 25 $ (177) $ (72) $ (106) Location of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing) Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing) Gain (loss) on non- hedge derivatives Gain (loss) on non- hedge derivatives Gain (loss) on non- hedge derivatives 2016 2015 $ – $ – – – – (11) (14) $ (25) $ 145 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 e) Gains (Losses) on Non-hedge Derivatives 2016 For the years ended December 31 Commodity contracts Gold Silver1 Fuel Currency contracts Hedge ineffectiveness 1. Relates to the amortization of crystallized OCI. 2015 $ – 5 (10) (8) $ 2 6 5 (1) $ 12 $ (13) – – $ (25) $ (25) $ 12 $ (38) f) Derivative Assets and Liabilities At January 1 Derivatives cash (inflow) outflow Operating activities Change in fair value of: Non-hedge derivatives Cash flow hedges: Effective portion Ineffective portion Excluded from effectiveness changes 2016 2015 $ (263) $ (278) 156 211 6 25 – – (13) (177) 25 (31) At December 31 $ (76) $ (263) Classification: Other current assets Other long-term assets Other current liabilities Other long-term obligations $ 1 1 (50) (28) $ – 1 (160) (104) $ (76) $ (263) 26  Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. 146 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 a) Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair Value Measurements At December 31, 2016 Cash and equivalents Other investments Derivatives Receivables from provisional copper and gold sales Fair Value Measurements At December 31, 2015 Cash and equivalents Other investments Derivatives Receivables from provisional copper and gold sales b) Fair Values of Financial Assets and Liabilities Financial assets Other assets1 Other investments2 Derivative assets Financial liabilities Debt3 Derivative liabilities Other liabilities Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) $ 2,389 18 – – $ 2,407 Quoted prices in active markets for identical assets (Level 1) $ 2,455 8 – – $ 2,463 $ – – (76) 110 $ 34 Significant other observable inputs (Level 2) $ – – (263) 76 $ (187) $ – – – – $ – Significant unobservable inputs (Level 3) $ – – – – $ – Aggregate fair value $ 2,389 18 (76) 110 $ 2,441 Aggregate fair value $ 2,455 8 (263) 76 $ 2,276 At Dec. 31, 2016 At Dec. 31, 2015 Carrying amount Estimated fair value Carrying amount Estimated fair value $ 399 18 2 $ 399 18 2 $ 365 8 1 $ 365 8 1 $ 419 $ 419 $ 374 $ 374 $ 7,931 78 216 $ 8,279 78 216 $ 9,968 264 223 $ 8,516 264 223 $ 8,225 $ 8,573 $ 10,455 $ 9,003 1. Includes restricted cash and amounts due from our partners. 2. Recorded at fair value. Quoted market prices are used to determine fair value. 3. Debt is generally recorded at amortized cost except for obligations that are designated in a fair-value hedge relationship, in which case the carrying amount is adjusted for changes in fair value of the hedging instrument in periods when a hedge relationship exists. The fair value of debt is primarily determined using quoted market prices. Balance includes both current and long-term portions of debt. We do not offset financial assets with financial liabilities. 147 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 c) Assets Measured at Fair Value on a Non-Recurring Basis Other assets1 Property, plant and equipment2 Quoted prices in active markets for identical assets (Level 1) $ – – Significant other observable inputs (Level 2) $ – – Significant unobservable inputs (Level 3) $ 974 1,470 Aggregate fair value $ 974 1,470 1. Other assets were written down by $49 million in the third quarter 2016, which was included in earnings in this period. Refer to note 4c. 2. Property, plant and equipment were written up by $299 million, which was included in earnings in this period, reflecting the historical impairment loss taken on these assets. Valuation Techniques Cash Equivalents The fair value of our cash equivalents is classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. Our cash equivalents are comprised of U.S. Treasury bills and money market securities that are invested primarily in U.S. Treasury bills. Other Investments The fair value of other investments is determined based on the closing price of each security at the balance sheet date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore other investments are classified within Level 1 of the fair value hierarchy. Derivative Instruments The fair value of derivative instruments is determined using either present value techniques or option pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. The fair value of all our derivative contracts includes an adjustment for credit risk. For counterparties in a net asset position, credit risk is based upon the observed credit default swap spread for each particular counterparty, as appropriate. For counterparties in a net liability position, credit risk is based upon Barrick’s observed credit default swap spread. The fair value of US dollar interest rate and currency swap contracts is determined by discounting contracted cash flows using a discount rate derived from observed LIBOR and swap rate curves and CDS rates. In the case of currency contracts, we convert non-US dollar cash flows into US dollars using an exchange rate derived from currency swap curves and CDS rates. The fair value of commodity forward contracts is determined by discounting contractual cash flows using a discount rate derived from observed LIBOR and swap rate curves and CDS rates. Contractual cash flows are calculated using a forward pricing curve derived from observed forward prices for each commodity. Derivative instruments are classified within Level 2 of the fair value hierarchy. Receivables from Provisional Copper and Gold Sales The fair value of receivables arising from copper and gold sales contracts that contain provisional pricing mechanisms is determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, these receivables, which meet the definition of an embedded derivative, are classified within Level 2 of the fair value hierarchy. Other Long-Term Assets The fair value of property, plant and equipment, goodwill, intangibles and other assets is determined primarily using an income approach based on unobservable cash flows and a market multiples approach where applicable, and as a result is classified within Level 3 of the fair value hierarchy. Refer to note 21 for disclosure of inputs used to develop these measures. 148 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 27  Provisions a) Provisions Environmental rehabilitation (“PER”) Post-retirement benefits Share-based payments Other employee benefits Other b) Environmental Rehabilitation At January 1 PERs divested during the year Closed Sites Impact of revisions to expected cash flows recorded in earnings Settlements Cash payments Settlement gains Accretion Operating Sites PERs arising (decreasing) in the year Settlements Cash payments Settlement gains Accretion Assets held for sale At December 31 Current portion (note 24) As at Dec. 31, 2016 As at Dec. 31, 2015 $ 2,179 72 34 45 33 $ 1,920 86 25 46 25 $ 2,363 $ 2,102 2016 2015 $ 1,982 – $ 2,484 (170) 146 (28) (1) 10 38 (78) (5) 19 134 (229) (34) (3) 40 – (11) (1) 44 (109) $ 2,246 (67) $ 1,982 (62) $ 2,179 $ 1,920 The eventual settlement of all PERs is expected to take place between 2017 and 2057. The PER has increased in the fourth quarter 2016 by $32 million primarily due to changes in cost estimates at our Grants, Pierina and McLaughlin properties, partially offset by changes in discount rates. For the year ended December 31, 2016, our PER balance increased by $264 million as a result of various impacts at our mine sites including new requirements related to water treatment, expanded footprints of our operations and updated estimates for reclamation activities. A 1% increase in the discount rate would result in a decrease in PER by $300 million and a 1% decrease in the discount rate would result in an increase in PER by $264 million, while holding the other assumptions constant. 28  Financial Risk Management Our financial instruments are comprised of financial liabilities and financial assets. Our principal financial liabilities, other than derivatives, comprise accounts payable and debt. The main purpose of these financial instruments is to manage short-term cash flow and raise funds for our capital expenditure program. Our principal financial assets, other than derivative instruments, are cash and equivalents and accounts receivable, which arise directly from our operations. In the normal course of business, we use derivative instruments to mitigate exposure to various financial risks. We manage our exposure to key financial risks in accordance with our financial risk management policy. The objective of the policy is to support the delivery of our financial targets while protecting future financial security. The main risks that could adversely affect our financial assets, liabilities or future cash flows are as follows: a) Market risk, including commodity price risk, foreign currency and interest rate risk; b) Credit risk; c) Liquidity risk; and d) Capital risk management. Management designs strategies for managing each of these risks, which are summarized below. Our senior management oversees the management of financial risks. Our senior management ensures that our financial risk-taking activities are governed by policies and procedures and that financial risks are identified, measured and managed in accordance with our policies and our risk appetite. All derivative activities for risk management purposes are carried out by the appropriate functions. a) Market Risk Market risk is the risk that changes in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the value of our financial instruments. We manage market risk by either accepting it or mitigating it through the use of derivatives and other economic hedging strategies. Commodity Price Risk Gold and Copper We sell our gold and copper production in the world market. The market prices of gold and copper are the primary drivers of our profitability and ability to generate both operating and free cash flow. Our corporate 149 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 treasury function implements hedging strategies on an opportunistic basis to protect us from downside price risk on our gold and copper production. We have 43 thousand ounces of gold and 78 million pounds of copper positions outstanding at December 31, 2016. Our remaining gold and copper production is subject to market prices. Fuel On average we consume approximately 4 million barrels of diesel fuel annually across all our mines. Diesel fuel is refined from crude oil and is therefore subject to the same price volatility affecting crude oil prices. Therefore, volatility in crude oil prices has a significant direct and indirect impact on our production costs. To mitigate this volatility, we employ a strategy of using financial contracts to hedge our exposure to oil prices. Foreign Currency Risk The functional and reporting currency for all of our operating segments is the US dollar and we report our results using the US dollar. The majority of our operating and capital expenditures are denominated and settled in US dollars. We have exposure to the Australian dollar and Canadian dollar through a combination of mine operating costs and general and administrative costs; and to the Papua New Guinea kina, Peruvian sol, Chilean peso, Argentinean peso, Dominican Republic peso and Zambian kwacha through mine operating costs. Consequently, fluctuations in the US dollar exchange rate against these currencies increase the volatility of cost of sales, general and administrative costs and overall net earnings, when translated into US dollars. Interest Rate Risk Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instruments will fluctuate due to changes in market interest rates. Currently, our interest rate exposure mainly relates to interest receipts on our cash balances ($2.4 billion at the end of the year); the mark-to-market value of derivative instruments; the fair value and ongoing payments under US dollar interest-rate swaps; and to the interest payments on our variable-rate debt ($0.4 billion at December 31, 2016). The effect on net earnings and equity of a 1% change in interest rate of our financial assets and liabilities as at December 31 is approximately $13 million (2015: $13 million). 150 b) Credit Risk Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. Credit risk arises from cash and equivalents, trade and other receivables as well as derivative assets. For cash and equivalents and trade and other receivables, credit risk exposure equals the carrying amount on the balance sheet, net of any overdraft positions. To mitigate our inherent exposure to credit risk we maintain policies to limit the concentration of credit risk, review counterparty creditworthiness on a monthly basis, and ensure liquidity of available funds. We also invest our cash and equivalents in highly rated financial institutions, primarily within the United States and other investment grade countries1. Furthermore, we sell our gold and copper production into the world market and to private customers with strong credit ratings. Historically customer defaults have not had a significant impact on our operating results or financial position. For derivatives with a positive fair value, we are exposed to credit risk equal to the carrying value. When the fair value of a derivative is negative, we assume no credit risk. We mitigate credit risk on derivatives by:  Entering into derivatives with high credit-quality counterparties;  Limiting the amount of net exposure with each counterparty; and  Monitoring the financial condition of counterparties on a regular basis. The Company’s maximum exposure to credit risk at the reporting date is the carrying value of each of the financial assets disclosed as follows: Cash and equivalents Accounts receivable Net derivative assets by counterparty As at Dec. 31, 2016 $ 2,389 249 As at Dec. 31, 2015 $ 2,455 275 1 – $ 2,639 $ 2,730 1. Investment grade countries include Canada, Chile, Australia, and Peru. Investment grade countries are defined as being rated BBB- or higher by S&P. c) Liquidity Risk Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands. We manage our exposure to liquidity risk by maintaining cash reserves, access to undrawn credit facilities and access to public debt markets, by staggering NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 the maturities of outstanding debt instruments to mitigate refinancing risk and by monitoring of forecasted and actual cash flows. Details of the undrawn credit facility are included in note 25. Our capital structure comprises a mix of debt and shareholders’ equity. As at December 31, 2016, our total debt was $7.9 billion (debt net of cash and equivalents was $5.5 billion) compared to total debt as at December 31, 2015 of $10 billion (debt net of cash and equivalents was $7.5 billion). As part of our capital allocation strategy, we are constantly evaluating our capital expenditures and making reductions where the risk-adjusted returns do not justify the investment. Our primary source of liquidity is our operating cash flow. Other options to enhance liquidity include drawing the $4.0 billion available under our Credit Facility (subject to compliance with covenants and the making of certain representations and warranties, this facility is available for drawdown as a source of financing), further asset sales and issuances of debt or equity securities in the public markets or to private investors, which could be undertaken for liquidity enhancement and/or in connection with establishing a strategic partnership. Many factors, including, but not limited to, general market conditions and then prevailing metals prices could impact our ability to issue securities on acceptable terms, as could our credit ratings. Moody’s and S&P rate our long-term debt Baa3 and BBB-, respectively. Changes in our ratings could affect the trading prices of our securities and our cost of capital. If we were to borrow under our Credit Facility, the applicable interest rate on the amounts borrowed would be based, in part, on our credit ratings at the time. The key financial covenant, which was amended in the fourth quarter 2015, in the Credit Facility (undrawn as at December 31, 2016) requires Barrick to maintain a net debt to total capitalization ratio, as defined in the agreement, of 0.60:1 or lower (Barrick’s net debt to total capitalization ratio was 0.35:1 as at December 31, 2016). The following table outlines the expected maturity of our significant financial assets and liabilities into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. As the amounts disclosed in the table are the contractual undiscounted cash flows, these balances may not agree with the amounts disclosed in the balance sheet. As at December 31, 2016 (in $ millions) Cash and equivalents Accounts receivable Derivative assets Trade and other payables Debt Derivative liabilities Other liabilities As at December 31, 2015 (in $ millions) Cash and equivalents Accounts receivable Derivative assets Trade and other payables Debt Derivative liabilities Other liabilities Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total $ 2,389 249 1 1,084 143 51 42 $ – – 1 – 533 27 51 $ – – – – 997 – 3 $ – – – – 6,316 – 120 $ 2,389 249 2 1,084 7,989 78 216 Less than 1 year 1 to 3 years 3 to 5 years Over 5 years Total $ 2,455 275 – 1,158 203 160 40 $ – – 1 – 934 102 44 $ – – – – 1,122 2 17 $ – – – – 7,786 – 122 $ 2,455 275 1 1,158 10,045 264 223 151 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 d) Capital Risk Management Our objective when managing capital is to provide value for shareholders by maintaining an optimal short-term and long-term capital structure in order to reduce the overall cost of capital while preserving our ability to continue as a going concern. Our capital management objectives are to safeguard our ability to support our operating requirements on an ongoing basis, continue the development and exploration of our mineral properties and support any expansion plans. Our objectives are also to ensure that we maintain a strong balance sheet and optimize the use of debt and equity to support our business and provide financial flexibility in order to maximize shareholder value. We define capital as total debt less cash and equivalents and it is managed by management subject to approved policies and limits by the Board of Directors. We have no significant financial covenants or capital requirements with our lenders or other parties other than what is discussed under liquidity risk in note 28. 29  Other Non-Current Liabilities Deposit on Pascua-Lama silver sale agreement Deposit on Pueblo Viejo gold and silver streaming agreement Derivative liabilities (note 25f) Provision for offsite remediation Other As at Dec. 31, 2016 As at Dec. 31, 2015 $ 749 $ 716 499 28 48 137 565 104 55 146 $ 1,461 $ 1,586 Silver Sale Agreement Our silver sale agreement with Silver Wheaton Corp. (“Silver Wheaton”) requires us to deliver 25 percent of the life of mine silver production from the Pascua-Lama project and 100 percent of silver production from the Lagunas Norte, Pierina and Veladero mines (“South American mines”) until March 31, 2018. In return, we were entitled to an upfront cash payment of $625 million payable over three years from the date of the agreement, as well as ongoing payments in cash of the lesser of $3.90 (subject to an annual inflation adjustment of 1 percent starting three years after project completion at Pascua- Lama) and the prevailing market price for each ounce of silver delivered under the agreement. An imputed interest expense is being recorded on the liability at the rate implicit in the agreement. The liability plus imputed interest will be amortized based on the difference between the effective contract price for silver and the amount of the ongoing cash payment per ounce of silver delivered under the agreement. Gold and Silver Streaming Agreement On September 29, 2015, we closed a gold and silver streaming transaction with Royal Gold, Inc. (“Royal Gold”) for production linked to Barrick’s 60 percent 152 interest in the Pueblo Viejo mine. Royal Gold made an upfront cash payment of $610 million and will continue to make cash payments for gold and silver delivered under the agreement. The $610 million upfront payment is not repayable and Barrick is obligated to deliver gold and silver based on Pueblo Viejo’s production. We have accounted for the upfront payment as deferred revenue and will recognize it in earnings, along with the ongoing cash payments, as the gold and silver is delivered to Royal Gold. We will also be recording accretion expense on the deferred revenue balance as the time value of the upfront deposit represents a significant component of the transaction. Under the terms of the agreement, Barrick will sell gold and silver to Royal Gold equivalent to:  7.5 percent of Barrick’s interest in the gold produced at Pueblo Viejo until 990,000 ounces of gold have been delivered, and 3.75 percent thereafter.  75 percent of Barrick’s interest in the silver produced at Pueblo Viejo until 50 million ounces have been delivered, and 37.5 percent thereafter. Silver will be delivered based on a fixed recovery rate of 70 percent. Silver above this recovery rate is not subject to the stream. Barrick will receive ongoing cash payments from Royal Gold equivalent to 30 percent of the prevailing spot prices for the first 550,000 ounces of gold and 23.1 million ounces of silver delivered. Thereafter payments will double to 60 percent of prevailing spot prices for each subsequent ounce of gold and silver delivered. Ongoing cash payments to Barrick are tied to prevailing spot prices rather than fixed in advance, maintaining exposure to higher gold and silver prices in the future. NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 30  Deferred Income Taxes Recognition and Measurement We record deferred income tax assets and liabilities where temporary differences exist between the carrying amounts of assets and liabilities in our balance sheet and their tax bases. The measurement and recognition of deferred income tax assets and liabilities takes into account: substantively enacted rates that will apply when temporary differences reverse; interpretations of relevant tax legislation; estimates of the tax bases of assets and liabilities; and the deductibility of expenditures for income tax purposes. In addition, the measurement and recognition of deferred tax assets takes into account tax planning strategies. We recognize the effect of changes in our assessment of these estimates and factors when they occur. Changes in deferred income tax assets and liabilities are allocated between net income, other comprehensive income, and goodwill based on the source of the change. Current income taxes of $89 million have been provided on the undistributed earnings of certain foreign subsidiaries. Deferred income taxes have not been provided on the undistributed earnings of all other foreign subsidiaries for which we are able to control the timing of the remittance, and it is probable that there will be no remittance in the foreseeable future. These undistributed earnings amounted to $4,507 million as at December 31, 2016. Expiry Dates of Tax Losses and AMT Sources of Deferred Income Tax Assets and Liabilities Deferred tax assets Tax loss carry forwards Alternative minimum tax (“AMT”) credits Environmental rehabilitation Property, plant and equipment Post-retirement benefit obligations and other employee benefits Accrued interest payable Other working capital Derivative instruments Other Deferred tax liabilities Property, plant and equipment Inventory Classification: Non-current assets Non-current liabilities As at Dec. 31, 2016 As at Dec. 31, 2015 $ 503 – 639 273 $ 475 22 560 320 47 75 54 89 41 42 61 52 106 – $ 1,721 $ 1,638 (1,731) (533) (1,713) (438) $ (543) $ (513) $ 977 (1,520) $ 1,040 (1,553) $ (543) $ (513) The deferred tax asset of $977 million includes $832 million expected to be realized in more than one year. The deferred tax liability of $1,520 million includes $1,470 million expected to be realized in more than one year. Non-capital tax losses1 Canada Argentina Barbados Chile Tanzania Zambia Other AMT credits2 2017 2018 2019 2020 2021+ $ – – 148 – – – 5 $ – – 4,751 – – 176 7 $ – – 926 – – – – $ – – 218 – – – – $ 1,650 301 566 – – 416 – $ No expiry date – – – 914 177 – 524 Total $ 1,650 301 6,609 914 177 592 536 $ 153 $ 4,934 $ 926 $ 218 $ 2,933 $ 1,615 $ 10,779 $ 113 $ 113 1. Represents the gross amount of tax loss carry forwards translated at closing exchange rates at December 31, 2016. 2. Represents the amounts deductible against future taxes payable in years when taxes payable exceed “minimum tax” as defined by United States tax legislation. 153 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 The non-capital tax losses include $8,880 million of losses which are not recognized in deferred tax assets. Of these, $148 million expire in 2017, $4,927 million expire in 2018, $926 million expire in 2019, $218 million expire in 2020, $1,512 million expire in 2021 or later, and $1,149 million have no expiry date. The AMT credits include $113 million which are not recognized in deferred tax assets. Recognition of Deferred Tax Assets We recognize deferred tax assets taking into account the effects of local tax law. Deferred tax assets are fully recognized when we conclude that sufficient positive evidence exists to demonstrate that it is probable that a deferred tax asset will be realized. The main factors considered are:  Historic and expected future levels of taxable income;  Tax plans that affect whether tax assets can be realized; and  The nature, amount and expected timing of reversal of taxable temporary differences. Levels of future income are mainly affected by: market gold, copper and silver prices; forecasted future costs and expenses to produce gold and copper reserves; quantities of proven and probable gold and copper reserves; market interest rates; and foreign currency exchange rates. If these factors or other circumstances change, we record an adjustment to the recognition of deferred assets to reflect our latest assessment of the amount of deferred tax assets that is probable will be realized. A deferred income tax asset totaling $569 million (December 31, 2015: $558 million) has been recorded in Canada. This deferred tax asset primarily arose from derivative realized losses, finance costs, and general and administrative expenses. A deferred tax asset totaling $126 million (December 31, 2015: $116 million) has been recorded in a foreign subsidiary. This deferred tax asset primarily arose from a realized loss on internal restructuring of subsidiary corporations. Projections of various sources of income support the conclusion that the realizability of these deferred tax assets is probable and consequently, we have fully recognized these deferred tax assets. Deferred Tax Assets Not Recognized Australia and Papua New Guinea Canada US Dominican Republic Chile Argentina Barbados Tanzania Zambia Saudi Arabia As at Dec. 31, 2016 $ 162 377 115 – 890 599 66 183 151 70 As at Dec. 31, 2015 $ 383 374 113 18 787 647 72 131 190 70 $ 2,613 $ 2,785 Deferred Tax Assets Not Recognized relate to: non-capital loss carry forwards of $638 million (2015: $516 million), capital loss carry forwards with no expiry date of $440 million (2015: $602 million), US AMT credits of $113 million (2015: $112 million) and other deductible temporary differences with no expiry date of $1,422 million (2015: $1,555 million). Source of Changes in Deferred Tax Balances For the years ended December 31 2016 2015 Temporary differences Property, plant and equipment Environmental rehabilitation Tax loss carry forwards Inventory Derivatives Other Intraperiod allocation to: (Income)/loss from continuing operations before income taxes Zaldívar disposition Cowal disposition OCI Other $ (65) 79 27 (94) (16) 39 $ 741 (25) 106 (34) 74 (13) $ (30) $ 849 $ (8) – – (22) – $ 436 388 7 20 (2) $ (30) $ 849 154 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Income Tax Related Contingent Liabilities 31  Capital Stock Authorized Capital Stock Our authorized capital stock includes an unlimited number of common shares (issued 1,165,574,071 common shares); an unlimited number of first preferred shares issuable in series (the first series is designated as the “First Preferred Shares, Series A” and consists of 10,000,000 first preferred shares (issued nil); the second series is designated as the “First Preference Shares, Series B” and consists of 10,000,000 first preferred shares (issued nil); and the third series is designated as the “First Preferred Shares, Series C Special Voting Share” and consists of 1 Special Voting Share (issued nil)); and an unlimited number of second preferred shares issuable in series (the first series is designated as the “Second Preferred Shares, Series A” and consists of 15,000,000 second preferred shares (issued nil)). Our common shares have no par value. Dividends In 2016, we declared and paid dividends in US dollars totaling $86 million (2015: $160 million). The Company’s dividend reinvestment plan resulted in $8 million (2015: $3 million) reinvested into the Company. At January 1 Net additions based on uncertain tax positions related to prior years Additions based on tax positions related to the current year Reductions for tax positions of prior years 2016 2015 $ 61 $ 49 70 – (3) – 13 (1) At December 311 $ 128 $ 61 1. If reversed, the total amount of $128 million would be recognized as a benefit to income taxes on the income statement, and therefore would impact the reported effective tax rate. We anticipate that it is reasonably possible for the amount of income tax related contingent liabilities to decrease within 12 months of the reporting date by the full amount of $128 million through a potential settlement with tax authorities that may result in a reduction of available tax pools. Tax Years Still Under Examination Canada United States Dominican Republic Peru Chile Argentina Australia Papua New Guinea Saudi Arabia Tanzania Zambia 2013–2016 2016 2013–2016 2009, 2011–2016 2013–2016 2009–2016 2012–2016 2006–2016 2007–2016 All years open 2010–2016 32  Non-Controlling Interests a) Non-Controlling Interests Continuity NCI in subsidiary at December 31, 2016 40% 36.1% 25% Various Pueblo Viejo Acacia Cerro Casale Other Total At January 1, 2015 Share of loss Cash contributed Disbursements At December 31, 2015 Share of income (loss) Cash contributed Disbursements At December 31, 2016 $ 1,521 (199) – (90) $ 1,232 174 – (95) $ 758 (69) – (12) $ 677 34 – (7) $ 1,311 $ 704 $ 319 (3) 2 – $ 318 (1) 2 – $ 319 $ 17 (4) 39 (2) $ 50 (1) 68 (73) $ 2,615 (275) 41 (104) $ 2,277 206 70 (175) $ 44 $ 2,378 155 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 b) Summarized Financial Information on Subsidiaries with Material Non-Controlling Interests Summarized Balance Sheets Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Pueblo Viejo Acacia Cerro Casale As at Dec. 31, 2016 833 $ 3,703 As at Dec. 31, 2015 $ 667 3,540 As at Dec. 31, 2016 $ 673 1,725 As at Dec. 31, 2015 $ 528 1,699 $ 4,536 $ 4,207 $ 2,398 $ 2,227 1,357 603 1,767 499 71 381 15 340 $ 1,960 $ 2,266 $ 452 $ 355 As at Dec. 31, 2016 1 $ 560 $ 561 318 42 $ 360 As at Dec. 31, 2015 $ – 557 $ 557 313 42 $ 355 Summarized Statements of Income Pueblo Viejo Acacia Cerro Casale For the years ended December 31 2016 2015 2016 2015 $ 1,548 $ 1,332 $ 1,045 $ 860 Revenue Income (loss) from continuing operations after tax Other comprehensive income (loss) 810 – (902) – Total comprehensive income (loss) $ 810 $ (902) Dividends paid to NCI $ – $ – 81 – 81 7 $ $ (206) – $ (206) $ 6 2016 $ – (3) – $ (3) $ – 2015 $ – (6) – $ (6) $ – Summarized Statements of Cash Flows Pueblo Viejo Acacia Cerro Casale For the years ended December 31 Net cash provided by (used in) operating activities Net cash used in investing activities Net cash provided by (used in) financing activities 2016 $ 602 (54) (350) 2015 2016 $ 471 (100) (301) $ 324 (190) (49) 2015 $ 165 (189) (37) 2016 $ (1) – 2 2015 $ (5) – 2 Net increase (decrease) in cash and cash equivalents $ 198 $ 70 $ 85 $ (61) $ 1 $ (3) 156 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Under the terms of Pueblo Viejo’s project financing agreement described in note 25b, Pueblo Viejo Dominicana Corporation is restricted from making cash payments to Barrick and Goldcorp in the form of dividends, distributions or certain shareholder loan interest and principal payments. Pueblo Viejo Dominicana Corporation is permitted to make such restricted payments twice per year upon satisfaction of certain conditions. The project financing agreement contains covenants which limit certain activities by Pueblo Viejo Dominicana Corporation, including Pueblo Viejo’s ability to sell assets and incur debt. Furthermore, Pueblo Viejo’s material tangible and intangible assets, including the proceeds from metal sales, are segregated and pledged for the benefit of the project lenders, thus restricting our access to those assets and our ability to use those assets to settle our liabilities to third parties. 34  Stock-Based Compensation a) Global Employee Share Plan (GESP) In 2016, Barrick launched a Global Employee Share Plan. This plan is awarded to all eligible employees. During 2016, Barrick contributed and expensed $3 million to this plan. b) Restricted Share Units (RSUs) and Deferred Share Units (DSUs) Under our RSU plan, selected employees are granted RSUs where each RSU has a value equal to one Barrick common share. RSUs generally vest from two-and-a-half years to three years and are settled in cash upon vesting. Additional RSUs are credited to reflect dividends paid on Barrick common shares over the vesting period. Compensation expense for RSUs incorporates an expected forfeiture rate. The expected forfeiture rate is estimated based on historical forfeiture rates and expectations of future forfeiture rates. We make adjustments if the actual forfeiture rate differs from the expected rate. At December 31, 2016, the weighted average remaining contractual life of RSUs was 1.09 years (2015: 1.37 years). 33  Remuneration of Key Management Personnel Key management personnel include the members of the Board of Directors and the Executive leadership team. Compensation for key management personnel (including Directors) was as follows: For the years ended December 31 2016 2015 Salaries and short-term employee benefits1 Post-employment benefits2 Share-based payments and other3 $ 19 2 17 $ 38 $ 31 2 6 $ 39 1. Includes annual salary and annual short-term incentives/other bonuses earned in the year. 2. Represents Company contributions to retirement savings plans. 3. Relates to stock option, RSU, PGSU and PRSU grants and other compensation. Compensation expense for RSUs was a $60 million charge to earnings in 2016 (2015: $16 million) and is presented as a component of corporate administration and operating segment administration, consistent with the classification of other elements of compensation expense for those employees who had RSUs. Under our DSU plan, Directors must receive a specified portion of their basic annual retainer in the form of DSUs, with the option to elect to receive 100% of such retainer in DSUs. Officers may also elect to receive a portion or all of their incentive compensation in the form of DSUs. Each DSU has the same value as one Barrick common share. DSUs must be retained until the Director or officer leaves the Board or Barrick, at which time the cash value of the DSUs will be paid out. Additional DSUs are credited to reflect dividends paid on Barrick common shares. DSUs are recorded at fair value on the grant date and are adjusted for changes in fair value. The fair value of amounts granted each period together with changes in fair value are expensed. 157 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 DSU and RSU Activity DSUs (thousands) Fair value RSUs ($ millions) (thousands) Fair value ($ millions) At December 31, 2016, 1,536 thousand units had been granted at a fair value of $11 million (2015: 589 thousand units at a value of $1 million). At January 1, 2015 Settled for cash Forfeited Granted Credits for dividends Change in value At December 31, 2015 Settled for cash Forfeited Granted Credits for dividends Change in value 261 (34) – 238 – – 465 (26) – 134 – – $ 2.8 3,605 (1,492) (0.2) (54) – 2.0 4,458 110 – – (1.1) $ 3.5 6,627 (1,102) (0.4) (2,952) – 2.2 3,836 43 – – 3.8 $ 19.8 (11.1) (0.6) 48.9 1.0 (33.4) $ 24.6 (22.7) (46.3) 55.0 0.7 47.3 At December 31, 2016 573 $ 9.2 6,452 $ 58.6 At December 31, 2016, Acacia Mining plc had $1 million of DSUs outstanding (2015: $1 million) and $3 million of RSUs outstanding (2015: $2 million). c) Performance Restricted Share Units (PRSUs) In 2008, Barrick launched a PRSU plan. Under this plan, selected employees are granted PRSUs, where each PRSU has a value equal to one Barrick common share. At December 31, 2016, 489 thousand units were outstanding at a fair value of $6 million (2015: 1,169 thousand units, fair value $5 million). At December 31, 2016, Acacia Mining plc had $8 million of PRSUs outstanding (2015: $12 million). d) Performance Granted Share Units (PGSUs) In 2014, Barrick launched a PGSU plan. Under this plan, selected employees are granted PGSUs, where each PGSU has a value equal to one Barrick common share. Employee Stock Option Activity (Number of Shares in Millions) e) Employee Share Purchase Plan (ESPP) In 2008, Barrick launched an Employee Share Purchase Plan. This plan enables Barrick employees to purchase Company shares through payroll deduction. During 2016, Barrick contributed and expensed $0.3 million to this plan (2015: $0.4 million). f) Stock Options Under Barrick’s stock option plan, certain officers and key employees of the Corporation may purchase common shares at an exercise price that is equal to the closing share price on the day before the grant of the option. The grant date is the date when the details of the award, including the number of options granted by individual and the exercise price, are approved. Stock options vest evenly over four years, beginning in the year after granting. Options are exercisable over seven years. At December 31, 2016, 2.1 million (2015: 2.9 million) common shares were available for granting options. Compensation expense for stock options was $nil million in 2016 (2015: $2 million recovery), and is presented as a component of corporate administration and operating segment administration, consistent with the classification of other elements of compensation expense for those employees who had stock options. The recognition of compensation expense for stock options had no impact on earnings per share for 2016 and 2015. Total intrinsic value relating to options exercised in 2016 was $nil (2015: $nil). C$ options At January 1 Granted Cancelled/expired At December 31 US$ options At January 1 Forfeited Cancelled/expired At December 31 158 2016 2015 Shares Average price Shares Average price 0.3 – – 0.3 2.6 (0.4) (0.4) 1.8 $ 13 – – $ 13 $ 42 45 39 $ 42 0.2 0.2 (0.1) 0.3 5.2 (0.3) (2.3) 2.6 $ 19 10 20 $ 13 $ 41 46 40 $ 42 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 Stock Options Outstanding (Number of Shares in Millions) Range of exercise prices C$ options $ 9 – $ 17 $ 18 – $ 21 US$ options $ 32 – $ 41 $ 42 – $ 55 Outstanding Exercisable Shares Average price Average life (years) Intrinsic value1 ($ millions) Shares Average price Intrinsic value1 ($ millions) 0.2 0.1 0.3 0.9 0.9 1.8 $ 10 18 $ 13 $ 33 51 $ 42 5.6 3.6 4.9 2.9 1.6 2.3 $ 2 1 $ 3 $ (16) (31) $ (47) 0.1 0.1 0.2 0.9 0.8 1.7 $ 10 18 $ 14 $ 33 51 $ 42 $ 1 – $ 1 $ (15) (30) $ (45) 1. Based on the closing market share price on December 31, 2016 of C$21.49 and US$15.98. As at December 31, 2016, there was $0.1 million (2015: $1 million) of total unrecognized compensation cost relating to unvested stock options. We expect to recognize this cost over a weighted average period of 1 year (2015: 1 year). 35  Post-Retirement Benefits Barrick operates various post-employment plans, including both defined benefit and defined contribution pension plans and other post-retirement plans. The table below outlines where the Company’s post- employment amounts and activity are included in the financial statements: For the years ended December 31 2016 2015 Balance sheet obligations for: Defined pension benefits Other post-retirement benefits Liability in the balance sheet Income statement charge included income statement for: Defined pension benefits Other post-retirement benefits Measurements for: Defined pension benefits Other post-retirement benefits $ 66 6 $ 72 $ $ 4 – 4 $ 11 – $ 11 $ 80 6 $ 86 $ 3 – $ 3 $ 7 1 $ 8 The amounts recognized in the balance sheet are determined as follows: For the years ended December 31 2016 2015 Present value of funded obligations Fair value of plan assets Deficit of funded plans Present value of unfunded obligations Total deficit of defined benefit pension plans Impact of minimum funding requirement/ asset ceiling $ 198 (191) $ 7 59 $ 66 $ 219 (201) $ 18 62 $ 80 – – Liability in the balance sheet $ 66 $ 80 a) Defined Benefit Pension Plans We have qualified defined benefit pension plans that cover certain of our former United States and Canadian employees and provide benefits based on an employee’s years of service. The plans operate under similar regulatory frameworks and generally face similar risks. The majority of benefit payments are from trustee- administered funds; however, there are also a number of unfunded plans where the Company meets the benefit payment obligation as it falls due. Plan assets held in trust are governed by local regulations and practice in each country. Responsibility for governance of the plans – overseeing all aspects of the plans including investment decisions and contribution schedules – lies with the Company. We have set up pension committees to assist in the management of the plans and have also appointed experienced independent professional experts such as actuaries, custodians and trustees. 159 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 The significant actuarial assumptions were as follows: As at December 31 Discount rate Pension Plans 2016 Other Post-Retirement Benefits 2016 Pension Plans 2015 Other Post-Retirement Benefits 2015 2.10–3.90% 3.70% 2.10–4.25% 3.85% b) Other Post-Retirement Benefits We provide post-retirement medical, dental, and life insurance benefits to certain employees in the US. All of these plans are unfunded. The weighted average duration of the defined benefit obligation is 10 years (2015: 11 years). Pension benefits Other post-retirement benefits At December 31, 2015 Pension benefits Other post-retirement benefits At December 31, 2016 Less than a year Between 1–2 years Between 2–5 years Over 5 years $ 19 1 $ 20 18 1 $ 19 $ 19 1 $ 20 19 1 $ 20 $ 56 2 $ 58 54 2 $ 56 $ 364 6 $ 370 313 6 $ 319 Total $ 458 10 $ 468 404 10 $ 414 c) Defined Contribution Pension Plans Certain employees take part in defined contribution employee benefit plans and we also have a retirement plan for certain officers of the Company. Our share of contributions to these plans, which is expensed in the year it is earned by the employee, was $32 million in 2016 (2015: $38 million). 36  Contingencies Certain conditions may exist as of the date the financial statements are issued that 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. The impact of any resulting loss from such matters affecting these financial statements and noted below may be material. Litigation and Claims In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, the Company with assistance from 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. U.S. Shareholder Class Action On December 6, 2013, lead counsel and plaintiffs in the securities class action filed a consolidated amended complaint (the “Complaint”) in the U.S. District Court for the Southern District of New York (the “Court”), on behalf of anyone who purchased the common stock of the Company between May 7, 2009, and November 1, 2013. The Complaint asserted claims against the Company and individual defendants Jamie Sokalsky, Aaron Regent, Ammar Al-Joundi, Igor Gonzales, Peter Kinver, George Potter and Sybil Veenman (collectively, the “Defendants”). The Complaint alleged that the Defendants made false and misleading statements to the investing public relating (among other things) to the cost of the Pascua-Lama project (the “Project”), the amount 160 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016 of time it would take before production commenced at the Project, and the environmental risks of the Project, as well as alleged internal control failures. The Complaint sought an unspecified amount of damages. The Complaint largely tracked the legal theories advanced in three prior complaints filed on June 5, 2013, June 14, 2013 and August 2, 2013. The Court consolidated those complaints and appointed lead counsel and lead plaintiffs for the resulting consolidated action in September 2013. On April 1, 2015, the Court issued its ruling on the Defendants’ motion to dismiss. The Court dismissed the plaintiffs’ claims relating to the cost and scheduling of the Project. However, the Court allowed the plaintiffs’ claims relating to the environmental risks of the Project and alleged internal control failures to go forward. The Court denied Barrick’s motion for reconsideration of certain aspects of that ruling on June 2, 2015. On May 31, 2016, the Company confirmed that it had reached a $140 million settlement in this matter. The settlement was approved by the Court on December 2, 2016. The amount of the settlement is insured. The Company continues to believe that the allegations by the lead plaintiffs in this matter are unfounded, and under the terms of the settlement agreement, the Company has not accepted any allegations of wrongdoing or liability. Proposed Canadian Securities Class Actions Between April and September 2014, eight proposed class actions were commenced against the Company in Canada in connection with the Pascua-Lama project. Four of the proceedings were commenced in Ontario, two were commenced in Alberta, one was commenced in Saskatchewan, and one was commenced in Quebec. The allegations in each of the eight Canadian proceedings are substantially similar to those in the Complaint filed by lead counsel and plaintiffs in the U.S. shareholder class action (see “U.S. Shareholder Class Action” above). The first Ontario and Alberta actions were commenced by Statement of Claim on April 15 and 17, 2014, respectively. The same law firm acts for the plaintiffs in these two proceedings, and the Statements of Claim are largely identical. Aaron Regent, Jamie Sokalsky and Ammar Al-Joundi were also named as defendants in the two actions. Both actions purported to be on behalf of anyone who, during the period from May 7, 2009 to May 23, 2013, purchased Barrick securities in Canada. Both actions sought $4.3 billion in general damages and $350 million in special damages for alleged misrepresentations in the Company’s public disclosure. The first Ontario action was subsequently consolidated with the fourth Ontario action, as discussed below. The first Alberta action was discontinued by plaintiffs’ counsel on June 26, 2015. The second Ontario action was commenced on April 24, 2014. Aaron Regent, Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver were also named as defendants. Following a September 8, 2014 amendment to the Statement of Claim, this action purported to be on behalf of anyone who acquired Barrick securities during the period from October 29, 2010 to October 30, 2013, and sought $3 billion in damages for alleged misrepresentations in the Company’s public disclosure. As a result of the outcome of the carriage motion and appeals described below, the second Ontario action has now been stayed. The amended claim also reflects the addition of a law firm that previously acted as counsel in a third Ontario action, which was commenced by Notice of Action on April 28, 2014 and included similar allegations but was never served or pursued. The Quebec action was commenced on April 30, 2014. Aaron Regent, Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver are also named as defendants. This action purports to be on behalf of any person who resides in Quebec and acquired Barrick securities during the period from May 7, 2009 to November 1, 2013. The action seeks unspecified damages for alleged misrepresentations in the Company’s public disclosure. The second Alberta action was commenced on May 23, 2014. Aaron Regent, Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver are also named as defendants. This action purports to be on behalf of any person who acquired Barrick securities during the period from May 7, 2009 to November 1, 2013, and seeks $6 billion in damages for alleged misrepresentations in the Company’s public disclosure. The Saskatchewan action was commenced by Statement of Claim on May 26, 2014. Aaron Regent, Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver were also named as defendants. This action purported to be on behalf of any person who acquired Barrick securities during the period from May 7, 2009 to November 1, 2013, 161 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016and sought $6 billion in damages for alleged misrepresentations in the Company’s public disclosure. The action was discontinued by plaintiffs’ counsel on December 19, 2016. The fourth Ontario action was commenced on September 5, 2014. Aaron Regent, Jamie Sokalsky, Ammar Al-Joundi and Peter Kinver are also named as defendants. This action purports to be on behalf of any person who acquired Barrick securities during the period from May 7, 2009 to November 1, 2013 in Canada, and seeks $3 billion in damages plus an unspecified amount for alleged misrepresentations in the Company’s public disclosure. The Statement of Claim was amended on October 20, 2014, to include two additional law firms, one of which is acting as counsel in the first Ontario action referred to above. In November 2014, an Ontario court heard a motion to determine which of the competing counsel groups will take the lead in the Ontario litigation. The court issued a decision in December 2014 in favor of the counsel group that commenced the first and fourth Ontario actions, which have been consolidated in a single action. The lower court’s decision was subsequently affirmed by the Divisional Court in May 2015 and the Court of Appeal for Ontario in July 2016 following appeals by the losing counsel group. The losing counsel group sought leave to appeal to the Supreme Court of Canada but later discontinued the application after reaching an agreement with the counsel group that commenced the first and fourth Ontario actions. The Company intends to vigorously defend all of the proposed Canadian securities class actions. No amounts have been recorded for any potential liability arising from any of the proposed class actions, as the Company cannot reasonably predict the outcome. Pascua-Lama – SMA Regulatory Sanctions In May 2013, Compañía Minera Nevada (“CMN”), Barrick’s Chilean subsidiary that holds the Chilean portion of the Pascua-Lama project (the “Project”), received a Resolution (the “Resolution”) from Chile’s environmental regulator (the Superintendencia del Medio Ambiente, or “SMA”) that requires the company to complete the water management system for the Project in accordance with the Project’s environmental permit before resuming construction activities in Chile. The Resolution also required CMN to pay an administrative fine of approximately $16 million for deviations from certain requirements of the Project’s Chilean environmental approval, including a series of reporting requirements and instances of non-compliance related to the Project’s water management system. CMN paid the administrative fine in May 2013. In June 2013, CMN began engineering studies to review the Project’s water management system in accordance with the Resolution. The studies were suspended in the second half of 2015 as a result of CMN’s decision to file a temporary and partial closure plan for the Project (for more information about this plan, see “Pascua-Lama – Constitutional Protection Action” below). The review of the Project’s water management system may require a new environmental approval and the construction of additional water management facilities. In June 2013, a group of local farmers and indigenous communities challenged the Resolution. The challenge, which was brought in the Environmental Court of Santiago, Chile (the “Environmental Court”), claims that the fine was inadequate and requests more severe sanctions against CMN including the revocation of the Project’s environmental permit. The SMA presented its defense of the Resolution in July 2013. On August 2, 2013, CMN joined as a party to this proceeding and vigorously defended the Resolution. On March 3, 2014, the Environmental Court annulled the Resolution and remanded the matter back to the SMA for further consideration in accordance with its decision (the “Environmental Court Decision”). In particular, the Environmental Court ordered the SMA to issue a new administrative decision that recalculates the amount of the fine to be paid by CMN using a different methodology and addresses certain other errors it identified in the Resolution. A new resolution from the SMA could include more severe sanctions against CMN such as a material increase in the amount of the fine above the approximately $16 million imposed by the SMA in May 2013 and/or the revocation of the Project’s environmental permit. The Environmental Court did not annul the portion of the SMA Resolution that required the Company to halt construction on the Chilean side of the project until the water management system is completed in 162 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016accordance with the project’s environmental permit. On December 30, 2014, the Chilean Supreme Court declined to consider CMN’s appeal of the Environmental Court Decision on procedural grounds. As a result of the Supreme Court’s ruling, on April 22, 2015, the SMA reopened the administrative proceeding against CMN in accordance with the Environmental Court Decision. On April 22, 2015, CMN was notified that the SMA has initiated a new administrative proceeding for alleged deviations from certain requirements of the Project’s environmental approval, including with respect to the Project’s environmental impact and a series of monitoring requirements. In May 2015, CMN submitted a compliance program to address certain of the allegations and presented its defense to the remainder of the alleged deviations. The SMA rejected CMN’s proposed compliance program on June 24, 2015, and denied CMN’s administrative appeal of that decision on July 31, 2015. On December 30, 2016, the Environmental Court rejected CMN’s appeal and CMN declined to challenge this decision. The decision of the SMA with respect to CMN’s defense to the remainder of the alleged deviations is still pending. On June 8, 2016, the SMA consolidated the two administrative proceedings against CMN into a single proceeding encompassing both the reconsideration of the 2013 Resolution in accordance with the decision of the Environmental Court and the alleged deviations from the Project’s environmental approval notified by the SMA in April 2015. A final resolution from the SMA with respect to these matters is pending and could result in additional sanctions including new administrative fines and/or the revocation of the Project’s environmental permit. The Company has recorded an estimated amount for the potential liability arising from administrative fines in these matters. In the Company’s view, it would be prejudicial to disclose the amount of that estimate as the proceedings are ongoing and the SMA has not issued any additional proposed administrative fines. Pascua-Lama – Constitutional Protection Action CMN filed a temporary and partial closure plan for the Pascua-Lama project (the “Temporary Closure Plan”) with the Chilean mining authority (Sernageomin) on August 31, 2015. Sernageomin approved the Temporary Closure Plan on September 29, 2015, and issued a resolution requiring CMN to comply with certain closure- related maintenance and monitoring obligations for a period of two years. The Temporary Closure Plan does not address certain facilities, including the Project’s water management system, which remain subject to the requirements of the Project’s original environmental approval and other regulations. On December 4, 2015, a constitutional protection action was filed in the Court of Appeals of Santiago, Chile by a group of local farmers and other individuals against CMN and Sernageomin in order to challenge the Temporary Closure Plan and the resolution that approved it. The plaintiffs assert that the Temporary Closure Plan cannot be approved until the water management system for the Project has been completed in accordance with the Project’s environmental permit. On August 12, 2016, the court ruled in favor of CMN and Sernageomin, rejecting the plaintiffs’ challenges to the Temporary and Partial Closure Plan for the Pascua-Lama project. On August 19, 2016, the plaintiffs appealed the court’s decision to the Chilean Supreme Court. A decision of the Supreme Court is pending. No amounts have been recorded for any potential liability arising from this matter, as the Company cannot reasonably predict the outcome. Pascua-Lama – Water Quality Review CMN initiated a review of the baseline water quality of the Rio Estrecho in August 2013 as required by a July 15, 2013 decision of the Court of Appeals of Copiapo, Chile. The purpose of the review was to establish whether the water quality baseline has changed since the Pascua-Lama project received its environmental approval in February 2006 and, if so, to require CMN to adopt the appropriate corrective measures. As a result of that study, CMN requested certain modifications to its environmental permit water quality requirements. On June 6, 2016, the responsible agency approved a partial amendment of the environmental permit to better reflect the water quality baseline from 2009. That approval was appealed by certain water users and indigenous residents of the Huasco Valley. On October 19, 2016, the Chilean Committee of Ministers for the Environment, which has jurisdiction over claims of this nature, voted to uphold the permit amendments. On January 27, 2017, the 163 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Environmental Court agreed to consider an appeal of the Chilean Committee’s decision brought by CMN and the water users and indigenous residents. No amounts have been recorded for any potential liability arising from this matter, as the Company cannot reasonably predict any potential losses. Veladero – Release of Cyanide-Bearing Process Solution San Juan Provincial Regulatory Sanction Proceeding On September 13, 2015, a valve on a leach pad pipeline at the Company’s Veladero mine in San Juan Province, Argentina failed, resulting in a release of cyanide-bearing process solution into a nearby waterway through a diversion channel gate that was open at the time of the incident. Minera Argentina Gold SRL (“MAG”) (formerly, Minera Argentina Gold S.A. or MAGSA), Barrick’s Argentine subsidiary that operates the Veladero mine, notified regulatory authorities of the situation. Environmental monitoring was conducted by MAG and independent third parties following the incident. The Company believes this monitoring demonstrates that the incident posed no risk to human health at downstream communities. A temporary restriction on the addition of new cyanide to the mine’s processing circuit was lifted on September 24, 2015, and mine operations have returned to normal. Monitoring and inspection of the mine site will continue in accordance with a court order. On October 9, 2015, the San Juan mining authority initiated an administrative sanction process against MAG for alleged violations of the mining code relating to the valve failure and release of cyanide-bearing process solution. MAG submitted its response to these allegations in October 2015 and provided additional information in January 2016. On March 11, 2016, the San Juan Provincial mining authority announced its intention to impose an administrative fine against MAG in connection with the solution release. MAG was formally notified of this decision on March 15, 2016. On April 6, 2016, MAG sought reconsideration of certain aspects of the decision but did not challenge the amount of the administrative fine. On April 14, 2016, in accordance with local requirements, MAG paid the administrative fine of approximately $10 million (at the then-applicable Argentine peso/$ exchange rate) while the request for reconsideration is pending. On December 29, 2016, the request for reconsideration was rejected by the Provincial mining authority. MAG is considering whether to continue challenging certain aspects of the decision. MAG is implementing a remedial action plan at Veladero in response to the incident as required by the San Juan mining authority. Certain construction-related activities in the Valley Fill Leach Facility (the “VLF”) are still pending. Criminal Matters On March 11, 2016, a San Juan Provincial court laid criminal charges based on alleged negligence against nine current and former MAG employees in connection with the solution release (the “Provincial Action”). The individual defendants have appealed the indictment. In addition, a federal criminal investigation was initiated by a Buenos Aires federal court based on the alleged failure of certain current and former federal and provincial government officials and individual directors of MAG to prevent the solution release (the “Federal Investigation”). The federal judge overseeing the Federal Investigation admitted a local group in San Juan Province as a party. In March 2016, this group requested an injunction against the operations of the Veladero mine. The federal judge ordered technical studies to assess the solution release and its impact and appointed a committee to conduct a site visit, which occurred in late April 2016. On May 5, 2016, the National Supreme Court of Argentina limited the scope of the Federal Investigation to the potential criminal liability of the federal government officials, ruling that the Buenos Aires federal court does not have jurisdiction to investigate the solution release. As a result of this decision, the investigation into the incident will continue to be conducted by the San Juan Provincial judge in the Provincial Action. To date, no charges have been laid against any specific individuals in connection with the Federal Investigation, consistent with its more limited scope. MAG is not a party to either the Provincial Action or the Federal Investigation. No amounts have been recorded for any potential liability arising from these matters, as the Company cannot reasonably predict any potential losses. 164 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016Veladero – Release of Crushed Ore Saturated with Process Solution Temporary Suspension of Operations and Regulatory Infringement Proceeding On September 8, 2016, ice rolling down the slope of the leach pad at the Veladero mine damaged a pipe carrying process solution, causing some material to leave the leach pad. This material, primarily crushed ore saturated with process solution, was contained on the mine site and returned to the leach pad. Extensive water monitoring in the area conducted by MAG has confirmed that the incident did not result in any environmental impacts. A temporary suspension of operations at the Veladero mine was ordered by the San Juan Provincial mining authority and a San Juan Provincial court on September 15, 2016 and September 22, 2016, respectively, as a result of this incident. On October 4, 2016, following, among other matters, the completion of certain urgent works required by the San Juan Provincial mining authority and a judicial inspection of the mine, the San Juan Provincial court lifted the suspension of operations and ordered that mining activities be resumed. On September 14, 2016, the San Juan Provincial mining authority commenced an administrative proceeding in connection with this incident that included, in addition to the issue of the suspension order, an infringement proceeding against MAG. On December 2, 2016, the San Juan Provincial mining authority notified MAG of two charges under the infringement proceeding for alleged violations of the Mining Code. A new criminal judicial investigation has also been commenced by the Provincial prosecutor’s office in the same San Juan Provincial court that is hearing the Provincial Action. The court in this proceeding issued the orders suspending and resuming the operations at the Veladero mine described above. No amounts have been recorded for any potential liability arising from these matters, as the Company cannot reasonably predict the outcome. Veladero Cyanide Leaching Process – Civil Action On December 15, 2016, MAG was served notice of a lawsuit by certain persons who claim to be living in Jachal, Argentina and to be affected by the Veladero mine and, in particular, the VLF. In the lawsuit, which was filed in the San Juan Provincial court, the plaintiffs have requested a court order that MAG cease leaching metals with cyanide solutions, mercury and other similar substances at the Veladero mine and replace that process with one that is free of hazardous substances, that MAG implement a closure and remediation plan for the VLF and surrounding areas, and create a committee to monitor this process. The lawsuit is proceeding as an ordinary civil action. The company expects to reply to the lawsuit in mid-February 2017, and the case will then proceed to the evidentiary stage. The Company intends to defend this matter vigorously. No amounts have been recorded for any potential liability or asset impairment under this matter, as the Company cannot reasonably predict the outcome. Argentine Glacier Legislation and Constitutional Litigation On September 30, 2010, the National Law on Minimum Requirements for the Protection of Glaciers was enacted in Argentina, and came into force in early November 2010. The federal law bans new mining exploration and exploitation activities on glaciers and in the “peri-glacial” environment, and subjects ongoing mining activities to an environmental audit. If such audit identifies significant impacts on glaciers and peri-glacial environment, the relevant authority is empowered to take action, which according to the legislation could include the suspension or relocation of the activity. In the case of the Veladero mine and the Pascua-Lama project, the competent authority is the Province of San Juan. In late January 2013, the Province announced that it had completed the required environmental audit, which concluded that Veladero and Pascua-Lama do not impact glaciers or peri-glaciers. On October 3, 2016, federal authorities published a partial national inventory of glaciers, which includes the area where the Veladero mine and Pascua- Lama Project are located. The Company has analyzed the national inventory in the area where Veladero and Pascua-Lama are located and has concluded that this inventory is consistent with the provincial inventory that the Province of San Juan used in connection with its January 2013 environmental audit. The constitutionality of the federal glacier law is the subject of a challenge before the National Supreme Court of Argentina, which has not yet ruled on the issue. On October 27, 2014, the Company submitted its response to a motion by the federal government to dismiss the constitutional challenge to the federal glacier law on standing grounds. A decision on the motion is pending. If the federal government’s arguments with respect to standing are accepted then the case will be 165 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016dismissed. If they are not accepted then the National Supreme Court of Argentina will proceed to hear evidence on the merits. No amounts have been recorded for any potential liability or asset impairment under this matter, as the Company cannot reasonably predict the outcome and in any event the provincial audit concluded that the Company’s activities do not impact glaciers or peri-glaciers. Pueblo Viejo – Amparo Action In October 2014, Pueblo Viejo Dominicana Corporation (“PVDC”) received a copy of an action filed in an administrative court (the “Administrative Court”) in the Dominican Republic by Rafael Guillen Beltre (the “Petitioner”), who claims to be affiliated with the Dominican Christian Peace Organization. The action alleges that environmental contamination in the vicinity of the Pueblo Viejo mine has caused illness and affected water quality in violation of the Petitioner’s fundamental rights under the Dominican Constitution and other laws. The primary relief sought in the action, which is styled as an “Amparo” remedy, is the suspension of operations at the Pueblo Viejo mine as well as other mining projects in the area until an investigation into the alleged environmental contamination has been completed by the relevant governmental authorities. On November 21, 2014, the Administrative Court granted PVDC’s motion to remand the matter to a trial court in the Municipality of Cotuí (the “Trial Court”) on procedural grounds. On June 25, 2015, the Trial Court rejected the Petitioner’s amparo action, finding that the Petitioner failed to produce evidence to support his allegations. The Petitioner appealed the Trial Court’s decision to the Constitutional Court on July 21, 2015. On July 28, 2015, PVDC filed a motion to challenge the timeliness of this appeal as it was submitted after the expiration of the applicable filing deadline. The Company intends to vigorously defend this matter. No amounts have been recorded for any potential liability or asset impairment arising from this matter, as the Company cannot reasonably predict any potential losses. Perilla Complaint In 2009, Barrick Gold Inc. and Placer Dome Inc. were purportedly served in Ontario with a complaint filed in November 2008 in the Regional Trial Court of Boac (the “Court”), on the Philippine island of Marinduque, on behalf of two named individuals and purportedly on behalf of the approximately 200,000 residents of Marinduque. The complaint alleges injury to the economy and the ecology of Marinduque as a result of the discharge of mine tailings from the Marcopper mine into Calancan Bay, the Boac River, and the Mogpog River. The plaintiffs are claiming for abatement of a public nuisance allegedly caused by the tailings discharge and for nominal damages for an alleged violation of their constitutional right to a balanced and healthful ecology. In June 2010, Barrick Gold Inc. and Placer Dome Inc. filed a motion to have the Court resolve their unresolved motions to dismiss before considering the plaintiffs’ motion to admit an amended complaint and also filed an opposition to the plaintiffs’ motion to admit on the same basis. It is not known when these motions or the outstanding motions to dismiss will be decided by the Court. The Company intends to defend the action vigorously. No amounts have been recorded for any potential liability under this complaint, as the Company cannot reasonably predict the outcome. Writ of Kalikasan In February 2011, a Petition for the Issuance of a Writ of Kalikasan with Prayer for Temporary Environmental Protection Order was filed in the Supreme Court of the Republic of the Philippines (the “Supreme Court”) in Eliza M. Hernandez, Mamerto M. Lanete and Godofredo L. Manoy versus Placer Dome Inc. and Barrick Gold Corporation (the “Petition”). In March 2011, the Supreme Court issued an En Banc Resolution and Writ of Kalikasan, directed service of summons on Placer Dome Inc. and the Company, ordered Placer Dome Inc. and the Company to make a verified return of the Writ with ten (10) days of service and referred the case to the Court of Appeal for hearing. The Petition alleges that Placer Dome Inc. violated the petitioners’ constitutional right to a balanced and healthful ecology as a result of, among other things, the discharge of tailings into Calancan Bay, the 1993 Maguila-Guila dam break, the 1996 Boac River tailings spill and failure of Marcopper to properly decommission the Marcopper mine. The petitioners have pleaded that the Company is liable for the alleged actions and omissions of Placer Dome Inc., which was a minority indirect shareholder of Marcopper at all relevant times, and is seeking orders requiring the Company to 166 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016environmentally remediate the areas in and around the mine site that are alleged to have sustained environmental impacts. The petitioners purported to serve the Company in March 2011, following which the Company filed an Urgent Motion For Ruling on Jurisdiction with the Supreme Court challenging the constitutionality of the Rules of Procedure in Environmental Cases (the “Environmental Rules”) pursuant to which the Petition was filed, as well as the jurisdiction of the Supreme Court over the Company. In November 2011, two local governments, or “baranguays” (Baranguay San Antonio and Baranguay Lobo) filed a motion with the Supreme Court seeking intervenor status with the intention of seeking a dismissal of the proceedings. No decision has as yet been issued with respect to the Urgent Motion for Ruling on Jurisdiction, the motion for intervention, or certain other matters before the Supreme Court. The Company intends to continue to defend the action vigorously. No amounts have been recorded for any potential liability under this matter, as the Company cannot reasonably predict the outcome. Cerro Casale One of the environmental permits related to the open pit and water management system at the Company’s 75 percent-owned Cerro Casale project in Chile is subject to an environmental regulation (the “Regulation”) that, if applied as written, would have required the Company to begin construction of the project by January 26, 2015 or risk cancellation of the environmental permit. The Company sought relief from the Regulation as construction was not feasible and did not begin by that date. On October 15, 2015, the Chilean environmental authority issued a resolution confirming that initial project activities were timely commenced as required by the environmental permit and the matter is now closed. Permits required for the majority of the project’s proposed operations were obtained under a second environmental approval (the “Cerro Casale environmental permit”) that is subject to a January 2018 construction deadline. On August 10, 2016, the Company filed documentation and supporting materials related to initial activities at the Cerro Casale project and expects to obtain relief from this deadline through the procedure outlined above. The Cerro Casale environmental permit was challenged in 2013 by local and indigenous community members for alleged procedural deficiencies in the community consultation process and other aspects of the evaluation of the project by the Chilean environmental authority. The challenge was brought before the Chilean Committee of Ministers for the Environment, which has jurisdiction over procedural claims of this nature. On January 19, 2015, the Committee of Ministers for the Environment rejected the majority of claims made against the Cerro Casale environmental permit while also imposing new limitations on the volume of groundwater that the project may extract for mining operations. The Company appealed this decision to the Environmental Court, which held a hearing on August 27, 2015. A decision of the Environmental Court is pending in this matter. The Company intends to defend the action vigorously. No amounts have been recorded for any potential liability or asset impairment arising from this matter, as the Company cannot reasonably predict the outcome. Acacia Mining plc – Tanzanian Revenue Authority Assessments In January 2016, The Tanzanian Revenue Authority (“TRA”) issued an assessment to Acacia Mining plc (“Acacia”) in the amount of $41.3 million for withholding tax on certain historic offshore dividend payments paid by Acacia to its shareholders. Acacia is appealing this assessment on the substantive grounds that, as an English incorporated company, it is not resident in Tanzania for taxation purposes. The appeal is currently pending at the Court of Appeal and the substantive grounds of appeal will be filed on receipt of the record of appeal required from the lower tribunals. Further TRA assessments were issued to Acacia in January 2016 in the amount of $500.7 million, based on an allegation that Acacia is resident in Tanzania for corporate and dividend withholding tax purposes. The corporate tax assessments have been levied on certain of Acacia’s net profits before tax. Acacia is in the process of appealing these assessments at the TRA Board level. Acacia’s substantive grounds of appeal are based on the correct interpretation of Tanzanian permanent establishment principles and law, relevant to a non- resident English incorporated company. Accordingly no amounts have been recorded for any potential liability and Acacia intends to continue to defend these actions vigorously. 167 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSBarrick Gold Corporation | Financial Report 2016SHAREHOLDER INFORMATION Shareholder Information Shares are traded on two stock exchanges New York Toronto Ticker Symbol ABX Number of Registered Shareholders at December 31, 2016 16,463 Index Listings S&P/TSX Composite Index S&P/TSX 60 Index S&P Global 1200 Index Philadelphia Gold/Silver Index NYSE Arca Gold Miners Index Dow Jones Sustainability Index (DJSI) – North America Dow Jones Sustainability Index (DJSI) – World Common Shares (millions) Outstanding at December 31, 2016 Weighted average 2016 Basic Fully diluted 1,166 1,165 1,165 The Company’s shares were split on a two-for-one basis in 1987, 1989 and 1993. Volume of Shares Traded (millions) NYSE TSX Closing Price of Shares December 31, 2016 NYSE TSX 2016 2015 4,980 1,218 1,437 766 US$15.98 C$21.49 2016 Dividend per Share US$0.08 Share Trading Information New York Stock Exchange Quarter First Second Third Fourth Toronto Stock Exchange Quarter First Second Third Fourth Share Volume (millions) High Low 2016 1,491 1,246 1,082 1,161 4,980 2015 2016 2015 2016 2015 US$15.52 21.43 23.47 18.95 US$13.25 13.70 11.00 8.32 US$7.39 13.04 16.75 13.81 US$10.15 10.57 5.91 6.14 353 243 468 373 1,437 Share Volume (millions) High Low 2016 2015 2016 2015 2016 2015 389 321 246 262 1,218 184 133 229 220 766 C$20.17 27.86 30.44 25.36 C$16.54 16.40 13.92 10.97 C$10.62 17.09 22.02 18.52 C$12.15 13.15 7.89 8.15 168 Barrick Gold Corporation | Financial Report 2016 SHAREHOLDER INFORMATION Dividend Policy The Board of Directors reviews the dividend policy quarterly based on the cash requirements of the Company’s operating assets, exploration and development activities, as well as potential acquisitions, combined with the current and projected financial position of the Company. Dividend Payments In 2015, the Company paid a cash dividend of $0.14 per share – $0.05 on March 16, $0.05 on June 15, $0.02 on September 15, and $0.02 on December 15. In 2016, the Company paid a cash dividend of $0.08 per share – $0.02 on March 15, $0.02 on June 15, $0.02 on September 15, and $0.02 on December 15. Form 40-F The Company’s Annual Report on Form 40-F is filed with the United States Securities and Exchange Commission. This report is available on Barrick’s website www.barrick.com and will be made available to shareholders, without charge, upon written request to the Secretary of the Company at the Head Office at corporatesecretary@barrick.com or at 416-861-9911. Shareholder Contacts Shareholders are welcome to contact the Investor Relations Department for general information on the Company at investor@barrick.com or at 416-861-9911. For information on such matters as share transfers, dividend cheques and change of address, inquiries should be directed to the Company’s Transfer Agents. Transfer Agents and Registrars CST Trust Company P.O. Box 700, Postal Station B Montreal, Quebec, Canada H3B 3K3 or American Stock Transfer & Trust Company, LLC 6201 – 15th Avenue Brooklyn, NY 11219, USA Tel: 1-800-387-0825 Toll-free throughout North America Fax: 1-888-249-6189 Email: inquiries@canstockta.com Website: www.canstockta.com Auditors PricewaterhouseCoopers LLP Toronto, Canada Annual Meeting The Annual Meeting of Shareholders will be held on Tuesday, April 25, 2017 at 10:00 a.m. (Toronto time) in the Metro Toronto Convention Centre, John Bassett Theatre, 255 Front Street West, Toronto, Ontario. Barrick Gold Corporation | Financial Report 2016 169 Cautionary Statement on Forward-Looking Information Certain information contained or incorporated by reference in this Annual Report 2016, including any information as to our strategy, projects, plans, or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “objective”, “aspiration”, “aim”, “intend”, “project”, “goal”, “continue”, “budget”, “estimate”, “potential”, “may”, “will”, “can”, “should”, “could”, “would”, and similar expressions identify forward-looking statements. In particular, this Annual Report 2016 contains forward-looking statements including, without limitation, with respect to: (i) Barrick’s forward-looking production guidance; (ii) estimates of future cost of sales per ounce for gold and per pound for copper, all-in-sustaining costs per ounce/pound, cash costs per ounce, and C1 cash costs per pound; (iii) cash flow forecasts; (iv) projected capital, operating, and exploration expenditures; (v) targeted debt and cost reductions; (vi) mine life and production rates; (vii) potential mineralization and metal or mineral recoveries; (viii) Barrick’s Best-in-Class program (including potential improvements to financial and operating performance that may result from certain Best-in-Class initiatives); (ix) the Lama starter project and the potential for phased-in development of the Pascua-Lama project; (x) the potential to identify new reserves and resources; (xi) our pipeline of high confidence projects at or near existing operations; (xii) the extension of mine life at Lagunas Norte; (xiii) the benefits of integrating the Cortez and Goldstrike operations; (xiv) the potential impact and benefits of Barrick’s digital transformation; (xv) asset sales, joint ventures, and partnerships; and (xvi) expectations regarding future price assumptions, financial performance, and other outlook or guidance. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation, and exploration successes; risks associated with the fact that certain Best-in-Class initiatives are still in the early stages of evaluation, and additional engineering and other analysis is required to fully assess their impact; risks associated with the implementation of Barrick’s digital transformation initiative, and the ability of the projects under this initiative to meet the Company’s capital allocation objectives; diminishing quantities or grades of reserves; increased costs, delays, suspensions, and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges, and disruptions in the maintenance or provision of required infrastructure and information technology systems; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; uncertainty whether some or all of the Best-in-Class initiatives and targeted investments will meet the Company’s capital allocation objectives; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit ratings; the impact of inflation; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; changes in national and local government legislation, taxation, controls or regulations, and/or changes in the administration of laws, policies, and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States, and other jurisdictions in which the Company does or may carry on business in the future; lack of certainty with respect to foreign legal systems, corruption, and other factors that are inconsistent with the rule of law; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; risk of loss due to acts of war, terrorism, sabotage, and civil disturbances; litigation; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the Company; our ability to successfully integrate acquisitions or complete divestitures; risks associated with working with partners in jointly controlled assets; employee relations including loss of key employees; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed Company. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this Annual Report 2016 are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. 170 Barrick Gold Corporation | Financial Report 2016 a d a n a C n o i t a r o p r o C l l i r r e M / . c n I e l b a e v o M / n g i s e D l d n a r B e v O www.barrick.com Barrick Gold Corporation Head Office: Brookfield Place TD Canada Trust Tower 161 Bay Street, Suite 3700 P.O. Box 212 Toronto, Canada M5J 2S1 Tel: 416 861-9911 Toll-free throughout North America: 1 800 720-7415 Fax: 416 861-2492 Email: investor@barrick.com On our cover: Majed Badra (left), RIL/Elution Supervisor Holly Saucier TCM Operations General Supervisor TCM Circuit, Goldstrike, Nevada Connect with us 

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