Barrick Earns $492 Million In Q2

 

TORONTO, ON - Barrick Gold Corporation reported Q2 production of 1.87 million ounces of gold at net cash costs of $360 per ounce (applying credit for non-gold sales) or total cash costs of $452 per ounce was ahead of plan.

The realized gold price for the quarter was $931 per ounce(1), which was $9 higher than the average spot price of $922 per ounce. The Company reported second quarter net income of $492 million compared to net income of $485 million in the prior year period. Q2 adjusted net income of $431 million compares to $442 million in the prior year period. Lower adjusted net income reflects higher cost of sales, offset by higher sales revenue, and lower project development and exploration expenses.

Q2 2009 operating cash flow increased to $718 million compared to $505 million in Q2 2008 and reflects lower income tax payments as a result of the production mix and the use of tax loss carry forwards.

"Our portfolio of operations performed strongly in Q2, exceeding plan, and positioning us well to meet our production and cost targets for the year," said Aaron Regent, Barrick's President and CEO. "The go-ahead decision on Pascua-Lama during the quarter marks an important milestone for Barrick and our strategy of developing long life, low cost mines. Pascua-Lama is expected to be one of the industry's lowest cost gold operations and joins the world-class Cortez Hills and Pueblo Viejo projects in construction.

The North America region followed up a strong Q1 by delivering another quarter of results that exceeded plan with production of 0.77 million ounces at total cash costs of $484 per ounce. The result was largely driven by the Goldstrike operation, which produced 0.41 million ounces at total cash costs of $441 per ounce, as higher grade ore continued to be mined in the open pit and underground. Cortez contributed 0.12 million ounces at total cash costs of $542 per ounce. Further improvements to production and costs are anticipated at Cortez in the second half of the year with access to higher grade material.

The Company is on track with full year copper production guidance of 375-400 million pounds at total cash costs of $1.25-$1.35 per pound. Q2 copper production of 96 million pounds at total cash costs of $1.25 per pound was in line with plan. The Company benefited from its copper hedge position, realizing $3.18 per pound, $1.06 per pound higher than the average spot price.

Barrick's production base is underpinned by the industry's largest gold reserves of 138.5 million ounces.

Barrick's three projects in construction continue to progress on schedule and in line with their respective pre-production capital budgets. Together with Buzwagi, they are expected to contribute nearly 2.6 million ounces(4) of lower cost production once at full capacity. Production is expected to increase to 7.7-8.1 million ounces in 2010 with new production from Cortez Hills(5).

Construction of the Cortez Hills project in Nevada is approximately 60% complete and is on schedule and in line with its $500 million capital budget. Initial production continues to be anticipated in Q1 2010 assuming the satisfactory resolution of the pending litigation regarding the project. The Cortez property is expected to contribute one million ounces per year at total cash costs of $350-$400 per ounce in the first full five years once Cortez Hills is in operation.

The companys address is 161 Bay Street, Suite 3700, P.O. Box 212,?Toronto, Canada M5J 2S1, (416) 861-9911, fax: (416) 861-2492.