Barrick Gold’s Net Income Increased 22% in Q 2

Barrick Gold’s Net Income Increased 22% in Q 2

TORONTO, ON – Barrick Gold Corporation reported second quarter net income of $485 million  and operating cash flow of $531 million compared to net income of $396 million and operating cash flow of $336 million in the prior year period. Net income rose 22% and operating cash flow increased 58% compared to the prior year period.
   Barrick continues to be in line with its gold production guidance for 2008 of 7.6 – 8.1 million ounces but now expects full year production to trend towards the lower end of the range. With higher assumed energy, gold and other consumables prices, total cash costs for 2008 have been revised and are now expected to be in the range of $425 – $445 per ounce.
   In Q2 2008, Barrick produced 1.86 million ounces of gold at total cash costs of $417 per ounce and realized a gold price of $894 per ounce. Higher production is anticipated for the balance of the year largely as a result of better grades at the Goldstrike operation. Production is expected to be weighted to the last quarter of the year, which is also expected to have lower cash costs than Q3.
   The North American business unit contributed 0.69 million ounces in Q2 at total cash costs of $448 per ounce, including 0.37 million ounces from the Goldstrike complex at cash costs of $452 per ounce. Average ore grades processed for the Betze pit in the quarter were 20% lower than the prior year period but increased 28% from Q1 as the waste stripping phase neared completion and ore started to be mined. Production and costs at Goldstrike are expected to improve in the second half, particularly in Q4, as higher grade ore is now being sourced from the open pit. A contractor fatality in April resulted in the decision to place the Getchell mine at the Turquoise Ridge JV on care and maintenance and an expected loss of about 30,000 ounces in 2008.
 The Cortez Hills project in Nevada remains on schedule and within its initial capital budget of $480 – $500 million, with over 50% of funds committed or spent. Receipt of the Record of Decision (ROD) is anticipated in the second half, enabling the start of pre-production waste stripping and a 15 month construction period. 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 total cash costs of about $300 per ounce based on an oil price of $100 per barrel.
   The 2008 exploration budget has been increased to $225 million to reflect 100% ownership in Cortez and drilling success at a number of exploration properties. The Company’s top exploration focus remains in Nevada, where drilling focused on confirming potential at Turquoise Ridge and Cortez Hills during the second quarter.
   The South American business unit produced 0.54 million ounces of gold in Q2 at total cash costs of $270 per ounce. The Lagunas Norte mine continued to benefit from positive grade reconciliations, producing 0.26 million ounces of gold at total cash costs of $135 per ounce. The Veladero mine produced 0.16 million ounces at total cash costs of $464 per ounce.
   The Australia Pacific business unit produced 0.47 million ounces in Q2 at total cash costs of $520 per ounce. The Porgera mine contributed 0.15 million ounces at $414 per ounce, while lower grades were experienced at Plutonic, Kanowna, Cowal and Kalgoorlie. Access to higher grade ore at Cowal continues to be restricted due to a slip on the east wall, which is expected to limit production to lower grade stockpiles until Q4. Production at Plutonic was also impacted by an explosion at a gas pipeline in northwestern Australia, which resulted in a loss of gas supply.
   Production from the African business unit was 0.15 million ounces in Q2 at total cash costs of $493 per ounce. The Bulyanhulu mine experienced lower mining rates due to continued effects from the illegal strike in late 2007.
   Copper production of 87 million pounds was below prior year levels, primarily due to lower leach recoveries at Zaldivar as a result of acid supply shortages and also from ore grade sequencing at the Osborne mine. Copper sales were 78 million pounds at total cash costs of $1.08 per pound and a realized price of $3.65 per pound.
   Barrick maintains its full year guidance for copper of 380 – 400 million pounds at total cash costs of $1.15 – $1.25 per pound but expects production to be at the low end of the range largely due to acid supply shortages which have impacted leach recoveries at Zaldivar and also from ore gradesequencing at Osborne. Cash costs per pound are also expected to trend to the higher end of guidance, largely due to higher energy costs, exchange rates and acid prices.
   Stronger gold prices in 2008 have resulted in higher year on year cash margins. Barrick continues to be in line with its gold production guidance for 2008 of 7.6 – 8.1 million ounces but now expects full year production to trend towards the lower end of the range due to lower mining rates at Bulyanhulu; lower ore grades at Plutonic; limited access to higher grade ore at Cowal; and the impact of placing the Getchell mine on care and maintenance.
The company’s address is 161 Bay Street, Suite 3700, P.O. Box 212, Toronto  M5J 2S1, (416) 861-9911, fax: (416) 861-2492.