Barrick Has Over 50 Drill Rigs Operating In Nevada

 

TORONTO - Barrick Gold reported net earnings of $1.03 billion a three percent increase from $1.00 billion in the first quarter of 2011 and adjusted net earnings of $1.09 billion, an eight percent increase from $1.00 billion in same prior year period

Barrick maintains its full year 2012 gold production guidance of 7.3-7.8 million ounces at total cash costs of $520-$560 per ounce and net cash costs of $400-$450 per ounce, and the company expects full year 2012 copper production of 550-600 million pounds at cash costs of $1.90-$2.20 per pound.

"We made good progress on a number of areas in the quarter," stated Aaron Regent, President and Chief Executive Officer. "We had good operating performance, which translated into solid financial results and further advanced our projects under construction with Pueblo Viejo, in the Dominican Republic, and Jabal Sayid, in Saudi Arabia, to start producing this year and Pascua-Lama, located in Chile and Peur, in the middle of next year. We also progressed our exploration program, which continues to increase our resource base, improved our liquidity and returned more capital back to shareholders with a further increase in our dividend."

Exploration - The 2012 exploration budget increased to $450-$490 million from the prior year actual expenditure of $350 million as a result of exploration success in 2011. The major exploration programs at Goldrush, Turquoise Ridge, in Nevada, and Lumwana, in Zambia, comprise about 40 percent of the budget. These programs have large drill campaigns, which are expected to add and upgrade gold and copper resources in 2012-2013.

In Nevada, over 50 drill rigs are operating currently, 11 of which are located at Goldrush. More than 20 percent of 2012 planned drilling has been completed to date (101,000 feet of 468,000 planned). Drilling 400 feet west of Goldrush and 3,000 feet to the south has revealed good indicators of strong mineralization, and the limits of the mineralized system have not yet been defined. Infill drilling to upgrade the resource is in line with expectations.

At the 75 percent-owned Turquoise Ridge operation in Nevada, resource definition drilling has ramped up to 14 drill rigs, which have completed over 91,000 feet (22 percent) of planned 2012 drilling. Drilling in 2012 is targeting resource upgrades and additions. This drilling is an important component in evaluating the potential to develop a large scale open pit that would operate simultaneously with the high grade underground mine. The open pit project has the potential to significantly increase annual production. A prefeasibility study is expected to be completed by the end of 2012.

At Lumwana, drill rates have now doubled at the Chimiwungo deposit since the fourth quarter of 2011. Approximately 35 percent of the 18 month drill program to the end of 2012 has been completed (109,000 meters of 314,000 meters planned). Results to date are in line with expectations and continue to confirm and extend the size and thickness of the mineralized zones, including the thickened, high grade Equinox and Roan ore shoots. Drilling is expected to increase and will continue to focus on upgrading and adding resources. Barrick expects to complete a prefeasibility study by the end of 2012 on the expansion opportunity, which has the potential to double processing rates.

Developing high return projects - Barrick has targeted growth in gold production to about 9 million ounces in 2016, driven primarily by Pueblo Viejo and Pascua-Lama. Once at full capacity, these two mines are expected to contribute average annual gold production of approximately 1.5 million ounces. The company's total cash costs are also anticipated to benefit from new, low cost production from these two world-class assets. Together, they are expected to generate average annual EBITDA of about $2.5 billion8 in their first full five years.

 

Projects in feasibility - At the Cerro Casale project in Chile, the Environmental Impact Assessment (EIA) permitting process is expected to be completed by the end of 2012. Following the approval of the EIA, Barrick will consider a construction decision, commencement of detailed engineering and sectoral permitting.

Barrick's 75 percent share of average annual production from Cerro Casale is anticipated to be 750,000-825,000 ounces of gold and 190-210 million pounds of copper in the first full five years of operation at total cash costs of $200-$250 per ounce16. Estimated mine construction capital is approximately $6.0 billion (100 percent basis).

At the 50 percent-owned Donlin Gold project in Alaska, management is working to conclude negotiations on a surface land use agreement, at which time, the Board of Donlin Gold LLC is expected to accept the revised feasibility study. Mine construction capital is estimated to be approximately $6.7 billion (100 percent basis)17, which includes a natural gas pipeline that is anticipated to lower long term power costs and offer a better environmental and operational solution for power. Donlin Gold is anticipated to produce an average of about 1.5 million ounces of gold annually (100 percent basis) in its first full five years of operation.

Prefeasibility studies are expected to be completed for the Turquoise Ridge open pit project and the Lumwana expansion by the end of 2012 and in the first quarter of 2013 for the Lagunas Norte deep sulfides and the ZaldÆvar deep sulfides.

The company's address is 161 Bay Street, Suite 3700, P.O. Box 212, Toronto, ON M5J 2S1, 416-861-9911, fax: 416-861-2492.