Barrick's Net Income Rises 29% to $514 Million

TORONTO, ON - Barrick Gold Corporation reported Q1 production of 1.74 million ounces of gold at total cash costs of $393 per ounce compared to 2.03 million ounces produced at total cash costs of $309 per ounce for the prior year period.
First quarter net income of $514 million and operating cash flow of $728 million compare to a net loss of $159 million and operating cash flow of $163 million in the prior year period.
In Q1 2008, Barrick produced 1.74 million ounces of gold at total cash costs of $393 per ounce and a realized gold price of $925 per ounce. Q1 was a lower production quarter as lower grades and throughput were experienced at some larger operations due to a combination of planned mine sequencing and operational disruptions. Improved performance is anticipated at a number of mines that experienced disruptions and as higher grades are accessed at Goldstrike starting in the second quarter.
The Company maintains its full year production guidance of 7.6 - 8.1 million ounces of gold at total cash costs of $390 - $415 per ounce. Assuming continuing cost pressures associated with higher than assumed gold and energy prices, cash costs for gold are expected to be in line with the higher end of the guidance range.
The North American business unit contributed 0.61 million ounces in Q1 at total cash costs of $497 per ounce, including 0.30 million ounces from the Goldstrike complex at cash costs of $521 per ounce. Planned waste stripping and processing of lower grade stockpiled ore continues at the Betze-Post pit, where grades were 36% below prior year levels. Goldstrike was also impacted by a SAG mill gear failure and a fire associated with the north roaster bucket elevator, which significantly reduced capacity in February. Production and costs at Goldstrike are expected to improve starting in the second quarter of the year as equipment issues have been resolved and the roaster and autoclave are running at full capacity, and as higher grade ore from the pit becomes accessible in the latter part of the quarter. The Cortez mine produced 83,000 ounces (reflects one month of 100% ownership) at total cash costs of $503 per ounce. Once Cortez Hills enters production, annual production at Cortez is expected to increase to about 1.0 million ounces annually in the first full five years at estimated cash costs of $280 - $290 per ounce. A 15-month construction period is anticipated to begin when the Record of Decision, which is expected in the second half of 2008, becomes effective.
Copper production of 87 million pounds was lower than in the prior year period, primarily due to temporary lower leach recovery rates at Zaldivar and grade sequencing at Osborne. Copper sales were 98 million pounds at total cash costs of $0.94 per pound and a realized price of $3.54 per pound. The Company maintains its 2008 operating guidance for copper of 380 - 400 million pounds at total cash costs of $1.15 - $1.25 per pound.
In Nevada, detailed engineering is essentially complete at Cortez Hills, which remains on schedule and within the $480 - $500 million pre-production capital budget. About 50% of funds have been committed or spent on the purchase of the bulk of mobile equipment and on significant underground development. During the quarter, $17 million was spent on procurement of crusher and conveyor equipment and engineering for the project infrastructure. The exploration decline advanced an additional 544 meters and is about 95% complete. Pre-production waste stripping is expected to commence in late 2008 once a Record of Decision is issued and becomes effective.
Feasibility studies are on track for completion at the Fedorova PGM project in Russia in the second half of 2008 and at the large Reko Diq gold-copper project on the highly prospective Tethyan Belt in Pakistan in early 2009.
At the Kabanga JV in Tanzania, operator Xstrata Plc expects to conclude a pre-feasibility study in the third quarter of 2008.
The Company's top exploration focus remains in Nevada, where 23 exploration drill rigs are active at Cortez, Bald Mountain, Goldstrike, Turquoise Ridge, Arturo-Dee, and Pinson. Drift development was completed at the High Grade Bullion Zone at Turquoise Ridge and initial results from the underground drill program are confirming the potential of the zone. At Cortez Hills, in-fill and extension drill programs are underway and results are expected throughout the year.
During the quarter, the Company purchased the remaining 40% interest in Cortez for cash of $1.695 billion, giving Barrick 100% ownership of this key, long life asset. Barrick has been entitled to the production and economic benefit of 100% of the property from March 1, 2008.
The acquisition will increase Barrick's share of proven and probable reserves by 4.6 million ounces to 11.5 million ounces and measured and indicated mineral resources by 1.4 million ounces to 3.5 million ounces.
The company's address is 161 Bay Street, Suite 3700, P.O. Box 212, Toronto  M5J 2S1, (416) 861-9911, fax: (416) 861-2492.