Exhibit 99.3  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 United States
generally accepted accounting principles and reflect Managements best
estimates and judgments based on currently available information. The company
has developed and maintains a system of internal accounting 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
Accountants. Their report outlines the scope of their examination and opinion
on the consolidated financial statements.   Jamie
  C. SokalskyExecutive Vice
  Presidentand Chief Financial
  OfficerToronto, CanadaFebruary 20, 2008  76


Managements Report on Internal
Control
Over Financial Reporting  Barricks management is
responsible for establishing and maintaining adequate internal control over
financial reporting.  Barricks
management assessed the effectiveness of the Companys internal control over
financial reporting as of December 31, 2007. Barricks management used the
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
framework to evaluate the effectiveness of Barricks internal control over
financial reporting. Based on that evaluation, Barricks management concluded
that the Companys internal control over financial reporting was effective as
of December 31, 2007.  Based on Barrick
managements assessment, Barricks internal control over financial reporting is
effective as of December 31, 2007.  The effectiveness
of the Companys internal control over financial reporting as of December 31,
2007 has been audited by PricewaterhouseCoopers LLP, independent auditors, as
stated in their report which is located on pages 7880 of Barricks
Financial Report 2007.  77


Independent
Auditors Report  Independent
Auditors Report  To the
Shareholders of 
Barrick Gold Corporation  We have completed
integrated audits of the consolidated financial statements and internal control
over financial reporting of Barrick Gold Corporation (the Company) as at December 31,
2007 and 2006 and an audit of its 2005 consolidated financial statements. Our
opinions, based on our audits, are presented below.  Consolidated financial statements  We have audited the
accompanying consolidated balance sheets of Barrick Gold Corporation as at December 31,
2007 and December 31, 2006, and the related consolidated statements of
income, cash flow, shareholders equity and comprehensive income for each of
the years in the three year period ended December 31, 2007. These
financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our
audits of the Companys financial statements as at December 31, 2007 and December 31,
2006 and for each of the years then ended in accordance with Canadian generally
accepted auditing standards and the standards of the Public Company Accounting
Oversight Board (United States). We conducted our audit of the Companys
financial statements for the year ended December 31, 2005 in accordance
with Canadian generally accepted auditing standards. Those standards require
that we plan and perform an audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit of
financial statements includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. A financial statement
audit also includes assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.  In our opinion,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of the Company as at December 31,
2007 and December 31, 2006 and the results of its operations and its cash
flows for each of the years in the three year period ended December 31,
2007 in accordance with accounting principles generally accepted in the United
States of America.  78


Internal
control over financial reporting  We have also audited the
Companys internal control over financial reporting as at December 31,
2007, based on criteria established in Internal
Control  Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Companys 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 on page 77 of the 2007 Annual Report to Shareholders.
Our responsibility is to express an opinion on the effectiveness of 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 exits,
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 opinion.  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.  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.  In our opinion,
the Company maintained, in all material respects, effective internal control
over financial reporting as at December 31, 2007 based on criteria
established in Internal Control  Integrated
Frameworkissued by the COSO.     Chartered
Accountants, Licensed Public Accountants Toronto, Canada 
February 20, 2008  79


Comments
by Auditors for U.S. Readers on Canada-U.S. Reporting Differences  In the United States,
reporting standards for auditors require the addition of an explanatory
paragraph (following the opinion paragraph) when there is a change in
accounting principles that has a material effect on the comparability of the
Companys financial statements, such as the changes described in Note 2e to
these consolidated financial statements. Our report to the shareholders dated February 20,
2008 is expressed in accordance with Canadian reporting standards which do not
require a reference to such a change in accounting principles in the Auditors
report when the change is properly accounted for and adequately disclosed in
the financial statements.     Chartered
Accountants, Licensed Public Accountants Toronto, Canada 
February 20, 2008  80


Consolidated
Statements of Income  Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars, except per share data)
  
  2007
  
  2006
  
  2005Sales (notes 4 and 5)
  
  $
  6,332
  
  $
  5,630
  
  $
  2,348Costs and expensesCost of sales(1)(note 6)
  
  3,184
  
  2,741
  
  1,198Amortization(note 4)
  
  1,004
  
  735
  
  427Corporate administration
  
  155
  
  142
  
  71Exploration(notes 4 and 7)
  
  179
  
  171
  
  109Project development expense(note 7)
  
  188
  
  119
  
  32Other expense(note 8a)
  
  208
  
  216
  
  114Impairment charges(note 8b)
  
  65
  
  23
  
  164,983
  
  4,147
  
  1,967Interest income
  
  141
  
  110
  
  38Interest expense(note 20b)
  
  (113
  )
  (126
  )
  (3
  )Other income(note 8c)
  
  103
  
  93
  
  46131
  
  77
  
  81Income from continuing operations before
  income taxes and other items
  
  1,480
  
  1,560
  
  462Income tax expense(note 9)
  
  (341
  )
  (348
  )
  (60
  )Non-controlling interests(note 2c)
  
  14
  
  1
  
  (1
  )Equity in investees(note 12)
  
  (43
  )
  (4
  )
  (6
  )Income from continuing operations
  
  1,110
  
  1,209
  
  395Income from discontinued operations(note 3h)
  
  9
  
  297
  
  Income before cumulative effect of changes
  in accounting principles
  
  1,119
  
  1,506
  
  395Cumulative effect of changes in accounting
  principles
  
  
  
  
  
  6Net income for the year
  
  $
  1,119
  
  $
  1,506
  
  $
  401Earnings per share data (note 10)Income from continuing operationsBasic
  
  $
  1.28
  
  $
  1.44
  
  $
  0.74Diluted
  
  $
  1.27
  
  $
  1.42
  
  $
  0.73Net incomeBasic
  
  $
  1.29
  
  $
  1.79
  
  $
  0.75Diluted
  
  $
  1.28
  
  $
  1.77
  
  $
  0.75  
 (1)Exclusive of
amortization (note 6).  The accompanying notes
are an integral part of these consolidated financial statements.  81


Consolidated
Statements of Cash Flow  Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)
  
  2007
  
  2006
  
  2005Operating ActivitiesNet income
  
  $
  1,119
  
  $
  1,506
  
  $
  401Amortization(note 4)
  
  1,004
  
  735
  
  427Income tax expense(notes 9 and 23)
  
  341
  
  348
  
  60Gains on sale of investments(note 8c)
  
  (71
  )
  (6
  )
  (17
  )Revisions to AROs at closed mines(notes 8a and 21)
  
  6
  
  53
  
  15Income taxes paid
  
  (585
  )
  (280
  )
  (80
  )Income from discontinued operations(note 3h)
  
  (9
  )
  (297
  )
  Other items(note 11a)
  
  (73
  )
  63
  
  (80
  )Net cash provided by operating activities
  
  1,732
  
  2,122
  
  726Investing ActivitiesProperty, plant and equipmentCapital expenditures(note 4)
  
  (1,046
  )
  (1,087
  )
  (1,104
  )Sales proceeds
  
  100
  
  8
  
  8Acquisitions, net of cash acquired of $13
  million (2006: $1,108 million)(note 3)
  
  (1,122
  )
  (208
  )
  Investments(note 12)Purchases
  
  (11
  )
  (369
  )
  (89
  )Sales
  
  625
  
  46
  
  10Reclassifications(note 12)
  
  (66
  )
  
  
  Other investing activities(note 11b)
  
  (42
  )
  17
  
  (5
  )Net cash used in investing activities
  
  (1,562
  )
  (1,593
  )
  (1,180
  )Financing ActivitiesCapital stockProceeds on exercise of stock options
  
  142
  
  74
  
  92Dividends (note 24a)
  
  (261
  )
  (191
  )
  (118
  )Long-term debt(note 20b)Proceeds
  
  408
  
  2,189
  
  179Repayments
  
  (1,128
  )
  (1,581
  )
  (59
  )Settlement of derivative instruments
  acquired with Placer Dome
  
  (197
  )
  (1,840
  )
  Other financing activities
  
  
  
  2
  
  (1
  )Net cash (used in) provided by financing
  activities
  
  (1,036
  )
  (1,347
  )
  93Cash Flows of Discontinued OperationsOperating activities
  
  21
  
  29
  
  Investing activities
  
  
  
  2,788
  
  Financing activities
  
  
  
  11
  
  21
  
  2,828
  
  Effect of exchange rate changes on cash and
  equivalents
  
  9
  
  (4
  )
  Net increase (decrease) in cash and
  equivalents
  
  (836
  )
  2,006
  
  (361
  )Cash and equivalents at beginning of year(note 20a)
  
  3,043
  
  1,037
  
  1,398Cash and equivalents at end of year(note 20a)
  
  $
  2,207
  
  $
  3,043
  
  $
  1,037  The accompanying notes
are an integral part of these consolidated financial statements.  82


Consolidated
Balance Sheets  Barrick Gold CorporationAt December 31 (in millions of United States dollars)
  
  2007
  
  2006AssetsCurrent assetsCash and equivalents(note 20a)
  
  $
  2,207
  
  $
  3,043Accounts receivable(note 14)
  
  256
  
  234Inventories(note 13)
  
  1,118
  
  931Other current assets(note 14)
  
  707
  
  5884,288
  
  4,796Non-current assetsInvestments(note 12)
  
  142
  
  646Equity method investments(note 12)
  
  1,074
  
  327Property, plant and equipment(note 15)
  
  8,596
  
  8,390Intangible assets(note 16)
  
  68
  
  75Goodwill (note 17)
  
  5,847
  
  5,855Other assets(note 18)
  
  1,936
  
  1,421Total assets
  
  $
  21,951
  
  $
  21,510Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
  
  $
  808
  
  $
  686Short-term debt(note 20b)
  
  233
  
  863Other current liabilities(note 19)
  
  255
  
  3031,296
  
  1,852Non-current liabilitiesLong-term debt(note 20b)
  
  3,153
  
  3,244Asset retirement obligations(note 21)
  
  892
  
  843Deferred income tax liabilities(note 23)
  
  841
  
  798Other liabilities(note 22)
  
  431
  
  518Total liabilities
  
  6,613
  
  7,255Non-controlling interests
  
  82
  
  56Shareholders equityCapital stock(note 24)
  
  13,273
  
  13,106Retained earnings
  
  1,832
  
  974Accumulated other comprehensive income(note 25)
  
  151
  
  119Total shareholders equity
  
  15,256
  
  14,199Contingencies and commitments(notes 15 and 28)Total liabilities and shareholders equity
  
  $
  21,951
  
  $
  21,510  The accompanying notes
are an integral part of these consolidated financial statements.  Signed on behalf of the Board,Gregory C. Wilkins,
  Director
  
  Steven J. Shapiro, Director  83


Consolidated Statements 
of Shareholders Equity  Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)
  
  2007
  
  2006
  
  2005Common shares(number in millions)At January 1
  
  864
  
  538
  
  534Issued on exercise of stock options (note
  26a)
  
  6
  
  3
  
  4Issued on acquisition of Placer Dome
  
  
  
  323
  
  At December 31
  
  870
  
  864
  
  538Common sharesAt January 1
  
  $
  13,106
  
  $
  4,222
  
  $
  4,129Issued on exercise of stock options (note
  26a)
  
  142
  
  74
  
  93Issued on acquisition of Placer Dome (note
  3g)
  
  
  
  8,761
  
  Options issued on acquisition of Placer
  Dome (note 3g)
  
  
  
  22
  
  Recognition of stock option expense (note
  26a)
  
  25
  
  27
  
  At December 31
  
  13,273
  
  13,106
  
  4,222Retained earnings (deficit)At January 1
  
  974
  
  (341
  )
  (624
  )Net income
  
  1,119
  
  1,506
  
  401Dividends (note 24a)
  
  (261
  )
  (191
  )
  (118
  )At December 31
  
  1,832
  
  974
  
  (341
  )Accumulated other comprehensive income
  (loss) (note 25)
  
  151
  
  119
  
  (31
  )Total shareholders equity at December 31
  
  $
  15,256
  
  $
  14,199
  
  $
  3,850  Consolidated Statements 
of Comprehensive Income  Barrick Gold Corporation
  For the years ended December 31 (in millions of United States dollars)
  
  2007
  
  2006
  
  2005Net income
  
  $
  1,119
  
  $
  1,506
  
  $
  401Other comprehensive income (loss), net of
  tax(note 25)
  
  32
  
  150
  
  (100
  )Comprehensive income
  
  $
  1,151
  
  $
  1,656
  
  $
  301  The accompanying notes
are an integral part of these consolidated financial statements.  84


Notes to Consolidated 
Financial Statements  Barrick Gold Corporation.Tabular dollar amounts in millions of United
States dollars, unless otherwise shown. References to C$, A$, ZAR, EUR, CLP,
ARS, PGK and TZS are to Canadian dollars, Australian dollars, South African
Rands, Euros, Chilean Pesos, Argentinean Pesos, Papua New Guinea Kina and
Tanzanian Schillings respectively.  1· Nature of Operations  Barrick Gold Corporation
(Barrick or the Company) principally engages in the production and sale of
gold, as well as related activities such as exploration and mine development.
We also produce some copper and hold interests in a platinum group metals
development project and a nickel development project, both located in Africa,
and a platinum group metals project located in Russia. Our mining operations
are concentrated in our four regional business units: North America, South America,
Africa and Australia Pacific. We sell our gold production into the world market
and we sell our copper production into the world market and to private
customers.  2·Significant Accounting Policies  a) Basis of Preparation  These consolidated
financial statements have been prepared under United States generally accepted
accounting principles (US GAAP). In 2007, we amended the income statement
classification of certain income and expense items, including non-hedge
derivative gains and losses (see note 2e), to provide enhanced disclosure of
significant business activities and reflect the increasing significance of
amounts spent on those activities. To ensure comparability of financial
information, prior year amounts have been reclassified to reflect changes in
the financial statement presentation.  b) Principles of Consolidation  These consolidated
financial statements include the accounts of Barrick Gold Corporation and those
entities we have the ability to control either through voting rights or means
other than voting rights. FIN 46R provides guidance on the identification and
reporting of entities controlled through means other than voting rights and
defines such entities as variable interest entities (VIEs). We apply this
guidance to all entities, including those in the development stage, except for
unincorporated joint ventures, which are outside the scope of FIN 46R. For VIEs
where we are the primary beneficiary, we consolidate the entity and record a
non-controlling interest, measured initially at its estimated fair value, for
the interest held by other entity owners. For VIEs where we are not the primary
beneficiary we use the equity method of accounting.  For incorporated
joint ventures (JVs) where we have the ability to exercise control, subject
in some cases to protective rights held by our JV partners, we consolidate the
JV and record a non-controlling interest for the interest held by our JV
partner. For incorporated JVs where we do not have the ability to exercise
control, we account for our investment using the equity method of accounting.
For unincorporated JVs under which we hold an undivided interest in the assets
and liabilities of the joint venture, we include our pro rata share of the
assets and liabilities in our financial statements.  85


The following table
illustrates our policy used to account for significant entities where we hold
less than a 100% economic interest. We consolidate all other wholly owned
entities.  Consolidation Method at December 31, 2007  Entity type at December 31, 2007
  
  Economic Interest
  
  MethodNorth AmericaRound Mountain Mine
  
  Unincorporated
  JV
  
  50%
  
  Pro RataHemlo Property Mine
  
  Unincorporated
  JV
  
  50%
  
  Pro RataMarigold Mine
  
  Unincorporated
  JV
  
  33%
  
  Pro RataCortez Mine(1)
  
  Unincorporated
  JV
  
  60%
  
  Pro RataTurquoise Ridge Mine
  
  Unincorporated
  JV
  
  75%
  
  Pro RataPueblo Viejo Project
  
  VIE
  
  60%
  
  ConsolidationDonlin Creek Project(2)
  
  VIE
  
  50%
  
  Equity
  MethodSouth AmericaCerro Casale Project
  
  VIE
  
  51%
  
  Equity
  MethodAustraliaKalgoorlie Mine
  
  Unincorporated
  JV
  
  50%
  
  Pro RataPorgera Mine(3)
  
  Unincorporated
  JV
  
  95%
  
  Pro RataReko Diq Project(4)
  
  VIE
  
  37.5%
  
  Equity
  MethodAfricaTulawaka Mine
  
  Corporate
  Joint Venture
  
  70%
  
  ConsolidationKabanga Project(5)
  
  VIE
  
  50%
  
  Equity
  MethodSedibelo Project(6)
  
  Not
  Applicable
  
  50%
  
  ConsolidationRussiaFedorova Project(7)
  
  VIE
  
  50%
  
  Consolidation  
 (1)Including
Cortez Hills Project.  (2)For the period
from January 2006 until November 2007, we recorded our proportionate
70% share of project expenditures in project development expense based on the
previous joint venture agreement. Effective in November 2007, a new
agreement was reached with our partner which caused us to classify our interest
as an equity method investment on a prospective basis (note 12).  (3)We hold an
undivided interest in our share of assets and liabilities at the Porgera mine.
In August 2007, we increased our ownership interest from 75% to 95% (note
3e).  (4)We hold a 50%
interest in Atacama Copper, which has a 75% interest in the Reko Diq project.
We use the equity method to account for our interest in Atacama Copper (note
12).  (5)In accordance
with an agreement with our partner, in 2007 and 2006 our partner was
responsible for funding 100% of exploration and project expenditures and we did
not record any amounts for our economic interest in this period. After our
partner has funded $145 million of exploration and project expenditures we will
be responsible for funding our share of future expenditures. At December 31,
2007 our partner had spent $103 million of this funding commitment.  (6)Until
completion of a bankable feasibility study (BFS), we are responsible for
funding 100% of project expenditures at the Sedibelo project. In the year ended
December 31, 2007, we recorded project development expenses totaling $22
million (2006: $10 million). On completion of a BFS, as part of our earn-in
agreement, we are entitled to earn a 50% economic interest in the entity that
owns the Sedibelo project and to recoup from our partner their 50% share of the
costs to complete the BFS.  (7)In accordance
with our agreement with minority shareholders, we have an earn-in option for an
additional 29% interest in the entity that owns the rights to the Fedorova
project (for a total 79% interest), provided that we deliver a BFS by January 1,
2009. We are responsible for funding 100% of project expenditures until the BFS
is finalized, and therefore a non-controlling interest has not been recorded
through December 31, 2007.  86


Entities
Consolidated using the Pro Rata Method Income Statement and Cash Flow
Information (100%)  For the years ended December 31
  
  2007
  
  2006
  
  2005Revenues
  
  $
  2,076
  
  $
  1,776
  
  $
  1,009Costs and expenses
  
  (1,665
  )
  (1,457
  )
  (796
  )Net income
  
  $
  411
  
  $
  319
  
  $
  213Operating activities(1)
  
  $
  147
  
  $
  473
  
  $
  318Investing activities(1)
  
  $
  (139
  )
  $
  (284
  )
  $
  (75
  )Financing activities(1),(2)
  
  $
  81
  
  $
  (185
  )
  $
  (237
  )  
 (1)Net cash inflow (outflow).  (2)Includes cash flows between the
joint ventures and joint venture partners.  Balance Sheet Information (100%)  At December 31
  
  2007
  
  2006AssetsInventories
  
  $
  430
  
  $
  365Property, plant and equipment
  
  2,620
  
  2,468Other assets
  
  462
  
  126$
  3,512
  
  $
  2,959LiabilitiesCurrent liabilities
  
  $
  216
  
  $
  205Long-term obligations
  
  267
  
  202Deferred tax
  
  47
  
  42$
  530
  
  $
  449  Non-controlling Interests  Income Statement  For the years ended December 31
  
  2007
  
  2006
  
  2005Pueblo Viejo project
  
  $
  30
  
  $
  9
  
  $
  Tulawaka mine
  
  (16
  )
  (8
  )
  (2
  )Other
  
  
  
  
  
  1$
  14
  
  $
  1
  
  $
  (1
  )  c)Foreign Currency Translation  The functional currency
of all our operations is the US dollar. We translate non-US dollar balances
into US dollars as follows:  ·Property, plant and equipment,
intangible assets and equity method investments using historical rates; ·Available-for-sale securities using
closing rates with translation gains and losses recorded in other comprehensive
income; ·Asset retirement obligations using
historical rates; ·Long-term debt using closing rates; ·Deferred tax assets and liabilities
using closing rates with translation gains and losses recorded in income tax
expense; ·Other assets and liabilities using
closing rates with translation gains and losses recorded in other income/
expense; and ·Income and expenses using average
exchange rates, 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.  d)Use of Estimates  The preparation of these
financial statements requires us to make estimates and assumptions. The most
significant ones are: quantities of proven and probable mineral reserves; fair
values of acquired assets and liabilities under business combinations,
including the value of mineralized material beyond proven and probable mineral
reserves; future costs and expenses to produce proven and probable mineral
reserves; future commodity prices for gold, copper, silver and other products;
the future cost of asset retirement obligations; amounts and likelihood of
contingencies; the fair values of reporting units that include goodwill; and
uncertain tax positions. Using these and other estimates and assumptions, we
make various decisions in preparing the financial statements including:  ·The treatment of expenditures at
mineral properties prior to when production begins as either an asset or an
expense (note 15); ·Whether tangible and intangible
long-lived assets are impaired, and if so, estimates of the fair value of those
assets and any corresponding impairment charge (note 15); ·Our ability to realize deferred income
tax assets and amounts recorded for any corresponding valuation allowances
(note 23); ·The useful lives of tangible and
intangible long-lived assets and the measurement of amortization (note 15); ·The fair value of asset retirement
obligations (note 21); ·Whether to record a liability for loss
contingencies and the amount of any liability (notes 15 and 28); ·Whether investments are other than
temporarily impaired (note 12); ·The amount of income tax expense (note
9); ·Allocations of the purchase price in
business combinations to assets and liabilities acquired, including goodwill
(notes 3 and 17); ·Whether any impairments of goodwill
have occurred and if so the amounts of impairment charges (note 17); ·Transfers of value beyond proven and
probable reserves to amortized assets (note 15); ·Amounts recorded for uncertain tax
positions (note 23), and ·The timing and amounts recorded of
proceeds for insurable losses under insurance claims (note 15).  87


As the estimation process
is inherently uncertain, actual future outcomes could differ from present
estimates and assumptions, potentially having material future effects on our
financial statements.  e)Accounting Changes  Accounting
Changes Implemented in 2007  FSP AUG
AIR-1  Accounting for Planned Major Maintenance Activities (FSP AIR-1)  On January 1, 2007,
we adopted FSP AIR-1 which amends guidance from the AICPA Industry Audit Guide,
Audits of Airlines (Airline Guide) with respect to planned major maintenance
activities and makes this guidance applicable to entities in all industries. Of
the three methods of accounting for planned major maintenance allowed by FSP
AIR-1, we adopted the built-in overhaul method. The built-in overhaul method is
based on segregation of plant and equipment costs into those that should be depreciated
over the useful life of the asset and those that require overhaul at periodic
intervals. The estimated cost of the overhaul component included in the
purchase price of an asset is set up separately from the cost of the asset and
is amortized to the expected date of the initial overhaul. The cost of the
initial overhaul is then capitalized and amortized to the next overhaul, at
which time the process is repeated. We adopted FSP AIR-1 on January 1,
2007. The implementation of this standard did not have a material impact on our
Financial Statements.  FASB
Interpretation No. 48  Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 (Accounting for Income Taxes)
(FIN 48)  In June 2006, the
Financial Accounting Standards Board (FASB) issued FIN 48 to create a single
model to address accounting for uncertainty in tax positions. FIN 48 clarifies
the accounting for income taxes, by prescribing a minimum recognition threshold
a tax position is required to meet before being recognized in the financial
statements. FIN 48 also provides guidance on de-recognition, measurement,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006.  We adopted the
provisions of FIN 48, Accounting for Uncertainty in Income Taxes, on January 1,
2007. As a result of the implementation of FIN 48, no adjustment was required
to the liability for unrecognized tax benefits.  Change
in Financial Statement Presentation  Derivative Gains and Losses  In 2007, we made a change
in the financial statement classification of changes in the fair value of
derivative instruments that do not qualify for hedge accounting under FAS 133
(non-hedge derivatives), which was retroactively applied. Prior to this change,
we recorded the change in fair value of all non-hedge derivative gains and
losses as a component of other income, with the exception of changes in the
fair value of embedded derivatives implicit in concentrate sales contracts,
which were recorded as a component of revenue.  Beginning in 2007,
we record changes in the fair value of non-hedge derivatives in a manner
consistent with the intended purpose of the instrument as follows: gold and
copper derivative instruments are recorded in revenue; silver and fuel
derivative contracts are recorded in cost of sales; interest rate swaps are
recorded in interest income or interest expense, depending on the intended
purpose of the swap; and share purchase warrants are recorded in other income.  The impact of this change
in accounting policy for prior periods was as follows:  Increase
  (decrease)For the years ended December 31
  
  2006
  
  2005Gold revenue
  
  $
  8
  
  $
  (2
  )Copper revenue
  
  (14
  )
  Cost of sales
  
  5
  
  (16
  )Other expense
  
  
  
  20Interest income
  
  9
  
  Interest expense
  
  
  
  (4
  )Other income
  
  2
  
  2  88


Accounting
Changes Implemented in 2006  FAS
123R, Accounting for Stock-Based Compensation  On January 1, 2006,
we adopted FAS 123R. Prior to this date we applied FAS 123 and accounted for
stock options under the intrinsic value method, recording compensation cost for
stock options as the excess of the market price of the stock at the grant date of
an award over the exercise price. Historically, the exercise price of stock
options equaled the market price of the stock at the grant date resulting in no
recorded compensation cost. We provided pro forma disclosure of the effect of
expensing the fair value of stock options.  We adopted FAS
123R using the modified prospective method, which meant that financial
statements for periods prior to adoption were not restated. From January 1,
2006 we recorded compensation expense for all new stock option grants based on
the grant date fair value, amortized on a straight-line basis over the vesting
period. We also recorded compensation expense for the unvested portion of stock
option grants occurring prior to January 1, 2006, based on the grant date
fair value that was previously estimated and used to provide for pro forma
disclosures for financial statement periods prior to 2006, amortized on a
straight-line basis over the remaining vesting period for those unvested stock
options. Details of stock-based compensation expense are included in note 26.  The application of
FAS 123R to Restricted Share Units (RSUs) and Deferred Share Units (DSUs) did
not result in any significant change in the method of accounting for RSUs or
DSUs.  FAS 151,
Inventory Costs  FAS 151 specifies the
general principles applicable to the pricing and allocation of certain costs to
inventory. Under FAS 151, abnormal amounts of idle facility expense, freight,
handling costs and wasted materials are recognized as current period charges
rather than capitalized to inventory. FAS 151 also requires that the allocation
of fixed production overhead to the cost of inventory be based on the normal
capacity of production facilities.  FAS 151 was
applicable prospectively from January 1, 2006 and we modified our
inventory accounting policy consistent with its requirements. Under our
modified accounting policy for inventory, production-type costs that are
considered abnormal are excluded from inventory and charged directly to the
cost of sales. Interruptions to normal activity levels at a mine could occur
for a variety of reasons including equipment failures and major maintenance
activities, strikes, power supply interruptions and adverse weather conditions.
When such interruptions occur we evaluate the impact on the cost of inventory
produced in the period, and to the extent the actual cost exceeds the cost
based on normal capacity we expense any excess directly to cost of sales. The
adoption of FAS 151 did not have any significant effect on our financial statements.  FAS 158,
Employers Accounting for Defined Benefit Pension and Other Post-retirement
Plans  In September 2006,
the FASB issued FAS 158 that requires employers to fully recognize the
obligations associated with single-employer defined benefit pension, retiree
health care and other post-retirement plans in their financial statements. FAS
158 was developed to respond to concerns that past accounting standards needed
to be revisited to improve the transparency and usefulness of the information
reported. Under past accounting standards, the funded status of an the
difference between the plan assets and obligations) was not completely reported
in the balance sheet. Employers reported an asset or liability that differed
from the funded status because previous accounting standards allowed employers
to delay recognition of certain changes in plan assets and obligations that
affected the costs of providing such benefits. Past standards only required an
employer to disclose the funded status of its plans in the notes to the
financial statements.  FAS 158 requires
recognition of the funded status of a benefit plan on the balance sheet 
measured as the difference between plan assets at fair value (with limited
exceptions) and the benefit obligation, as at the fiscal year-end. For a
pension plan, the benefit obligation is the projected benefit obligation; for
any other post-retirement benefit plan, such as a retiree health care plan, the
benefit obligation is the accumulated post-retirement benefit obligation. FAS 158
also requires recognition, as a component of other comprehensive income, net of
tax, of the gains or losses and prior service costs or credits that arise
during the period but are not recorded as components of net periodic benefit
cost. Amounts recorded in accumulated other comprehensive income are adjusted
as they are subsequently recorded as components of net periodic cost. FAS 158
requires disclosure of information about certain effects of net periodic
benefit cost for the next fiscal year that arise from delayed recognition of
the gains or losses, prior service costs or credits, and transition asset or
obligation.  We adopted the
provisions of FAS 158 in 2006, as required, except for the requirement to
measure the plan assets and benefit obligations at the fiscal year-end, which
is effective in fiscal years ending after December 15, 2008. The adoption
of FAS 158 did not significantly impact our financial statements.  89


SEC
Staff Accounting Bulletin No. 108  Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements (SAB 108)  In September 2006,
the SEC issued SAB 108, which was effective in fourth quarter 2006 for Barrick.
SAB 108 addresses the multiple methods used to quantify financial statement
misstatements and evaluate the accumulation of misstatements on the balance
sheet. SAB 108 requires registrants to evaluate prior period misstatements
using both a balance sheet approach (the iron curtain method) and an income
statement approach (the rollover method). Barrick historically used the
rollover method in quantifying potential financial statement misstatements. As
required by SAB 108, we re-evaluated prior period immaterial errors using the
iron curtain method. Based upon the result of our evaluation, we did not
identify any material errors or misstatements that were previously deemed not
material under the rollover approach.  Accounting
Changes Implemented in 2005  EITF
04-6 Accounting for Stripping Costs Incurred During Production in the Mining
Industry  In 2005, we adopted EITF
04-6 and changed our accounting policy for stripping costs incurred in the
production phase. Prior to adopting EITF 04-6, we capitalized stripping costs
incurred in the production phase, and we recorded amortization of the
capitalized costs as a component of the cost of inventory produced each period.
Under EITF 04-6, stripping costs are recorded directly as a component of the
cost of inventory produced each period. Using an effective date of adoption of January 1,
2005, we recorded a decrease in capitalized mining costs of $226 million; an
increase in the cost of inventory of $232 million; and a $6 million credit to
earnings for the cumulative effect of this change. For 2005, the effect of
adopting EITF 04-6 compared to the prior policy was an increase in net income
of $44 million ($0.08 per share), excluding the cumulative effect on prior
periods.  f) Accounting Developments  FAS 157,
Fair Value Measurements (FAS 157)  In September 2006,
the FASB issued FAS 157 that provides enhanced guidance for using fair value to
measure assets and liabilities. FAS 157 is meant to ensure that the measurement
of fair value is more comparable and consistent, and improve disclosure about
fair value measures. As a result of FAS 157, there is now a common definition
of fair value to be used throughout US GAAP. FAS 157 applies whenever US GAAP
requires (or permits) measurement of assets or liabilities at fair value. FAS
157 does not address when the use of fair value measurements is required.  In December 2007
the FASB issued FSP FAS 157-b, which provided a one year deferral until January 1,
2009 for the implementation of FAS 157 for non-financial assets and
liabilities. The deferral is intended to provide the FASB additional time to
consider the effects of various implementation issues that have arisen, or that
may arise, from the application of FAS 157. Barrick is required to implement
FAS 157 for financial assets and liabilities that are carried at fair value
effective January 1, 2008. We do not expect the adoption of FAS 157 to
have any significant impact on valuations of investments or derivative
instruments.  FAS 159 
The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159)  In February 2007 the
FASB issued FAS 159, which allows an irrevocable option, Fair Value Option
(FVO), to carry eligible financial assets and liabilities at fair value, with
the election made on an instrument-by-instrument basis. Changes in fair value
for these instruments would be recorded in earnings. The objective of FAS 159
is to improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  Under FAS 159 an
entity must elect whether to use the FVO on the date an item is initially
recognized, with limited exceptions. Since the FVO is an instrument by
instrument election, companies may record identical financial assets and
liabilities either at fair value or on another measurement basis permitted by
US GAAP, such as amortized cost. One exception to the instrument-by-instrument
guidance is that for investments that would otherwise fall under equity method
accounting, the election must be made for all of the investors financial
interests (equity and debt, including guarantees) in the same entity.  FAS 159 will be
effective for Barrick beginning in first quarter 2008 and must be applied
prospectively. Barrick will not adopt the FVO on its eligible financial
instruments, which include available-for-sale securities, equity method
investments and long-term debt, existing as at January 1, 2008.  90


FAS
141(R), Business Combinations (FAS 141(R))  In December 2007 the
FASB issued FAS 141(R), which will replace FAS 141 prospectively for business
combinations consummated after the effective date of December 15, 2008.
Early adoption is not permitted. Under FAS 141(R), business acquisitions will
be accounted for under the acquisition method, compared to the purchase
method mandated by FAS 141.  The more
significant changes that will result from applying the acquisition method include:
(i) the definition of a business is broadened to include development stage
entities, and therefore more acquisitions will be accounted for as business
combinations rather than asset acquisitions; (ii) the measurement date for
equity interests issued by the acquirer is the acquisition date instead of a
few days before and after terms are agreed to and announced, which may
significantly change the amount recorded for the acquired business if share
prices differ from the agreement and announcement date to the acquisition date;
(iii) all future adjustments to income tax estimates will be recorded to
income tax expense, whereas under FAS 141 certain changes in income tax
estimates were recorded to goodwill; (iv) acquisition-related costs of the
acquirer, including investment banking fees, legal fees, accounting fees,
valuation fees, and other professional or consulting fees will be expensed as
incurred, whereas under FAS 141 these costs are capitalized as part of the cost
of the business combination; (v) the assets acquired and liabilities
assumed are recorded at 100% of fair value even if less than 100% is obtained,
whereas under FAS 141 only the controlling interests portion is recorded at
fair value; and (vi) the non-controlling interest will be recorded at its
share of fair value of net assets acquired, including its share of goodwill,
whereas under FAS 141 the non-controlling interest is recorded at its share of
carrying value of net assets acquired with no goodwill being allocated.  FAS 160,
Non-controlling Interests in Consolidated Financial Statements (FAS 160)  In December 2007 the
FASB issued FAS 160, which is effective for fiscal years beginning after December 15,
2008. Under FAS 160, non-controlling interests will be measured at 100% of the
fair value of assets acquired and liabilities assumed. Under current standards,
the non-controlling interest is measured at book value. For presentation and disclosure
purposes, non-controlling interests will be classified as a separate component
of shareholders equity. In addition, FAS 160 will change the manner in which
increases/decreases in ownership percentages are accounted for. Changes in
ownership percentages will be recorded as equity transactions and no gain or
loss will be recognized as long as the parent retains control of the
subsidiary. When a parent company deconsolidates a subsidiary but retains a
non-controlling interest, the non-controlling interest is re-measured at fair
value on the date control is lost and a gain or loss is recognized at that time.
Under FAS 160, accumulated losses attributable to the non-controlling interests
are no longer limited to the original carrying amount, and therefore
non-controlling interests could have a negative carrying balance. The
provisions of FAS 160 are to be applied prospectively with the exception of the
presentation and disclosure provisions, which are to be applied for all prior
periods presented in the financial statements. Early adoption is not permitted.  g) Other
Notes to the Financial Statements  Note
  
  PageSignificant acquisitions and divestitures
  
  3
  
  92Segment information
  
  4
  
  95Revenue and gold sales contracts
  
  5
  
  97Cost of sales
  
  6
  
  99Exploration and project development expense
  
  7
  
  100Other (income) expense
  
  8
  
  100Income tax expense
  
  9
  
  101Earnings per share
  
  10
  
  102Cash flow  other items
  
  11
  
  103Investments
  
  12
  
  104Inventories
  
  13
  
  107Accounts receivable and other current
  assets
  
  14
  
  109Property, plant and equipment
  
  15
  
  109Intangible assets
  
  16
  
  111Goodwill
  
  17
  
  112Other assets
  
  18
  
  113Other current liabilities
  
  19
  
  113Financial instruments
  
  20
  
  113Asset retirement obligations
  
  21
  
  123Other non-current liabilities
  
  22
  
  124Deferred income taxes
  
  23
  
  124Capital stock
  
  24
  
  126Other comprehensive income (loss)
  
  25
  
  127Stock-based compensation
  
  26
  
  127Post-retirement benefits
  
  27
  
  131Litigation and claims
  
  28
  
  134  91


3·Significant
Acquisitions and Divestitures  For the years ended December 31
  
  2007
  
  2006
  
  2005Cash paid on acquisition(1)Arizona Star
  
  $
  722
  
  $
  
  
  $
  Porgera (additional 20% interest)
  
  259
  
  
  
  Kainantu
  
  135
  
  
  
  Pioneer Metals
  
  6
  
  48
  
  Placer Dome
  
  
  
  160
  
  $
  1,122
  
  $
  208
  
  $
  Cash proceeds on sale(1)Celtic(2)
  
  21
  
  
  
  Paddington Mill(3)
  
  30
  
  
  
  Grace Claim(3)
  
  54
  
  
  
  $
  105
  
  $
  
  
  $
  Cash proceeds on sale of
  discontinued operationsSouth Deep mine
  
  $
  
  
  $
  1,209
  
  $
  Operations sold to Goldcorp
  
  
  
  1,619
  
  $
  
  
  $
  2,828
  
  $
    
 (1)All amounts are
presented net of cash acquired/divested. Potential deferred tax adjustments may
arise from these acquisitions.  (2)Included within
investment sales in the Consolidated Statement of Cash Flow.  (3)Included within
Property, Plant and Equipment sales in the Consolidated Statement of Cash flow.  a)
Acquisition of 40% Interest in Cortez  In February 2008, our
subsidiary, Barrick Gold Finance Inc., entered into a definitive purchase
agreement with Kennecott Explorations (Australia) Ltd., a subsidiary of Rio
Tinto plc (Rio Tinto) to acquire its 40% interest in the Cortez property for
$1.695 billion in cash consideration, due on closing, with a further $50
million payable if and when we add an additional 12 million ounces of contained
gold resources to our December 31, 2007 reserve statement for Cortez. A
sliding scale royalty is payable to Rio Tinto on 40% of all production in
excess of 15 million ounces on and after January 1, 2008. The acquisition
will consolidate 100% ownership for Barrick of the existing Cortez mine and the
Cortez Hills development project plus any future potential from the property.
We expect to fund the purchase price through a combination of our existing cash
balances and by drawing down our line of credit. The agreement is subject to
the normal and customary closing conditions and is expected to close in the
first quarter of 2008.  b) Acquisition
of Arizona Star Resources Corporation (Arizona Star)  On December 19,
2007, we paid $722 million which reflects the purchase price net of cash
acquired of $8 million, for 40.7 million common shares of Arizona Star. These
shares represent 94% of the outstanding common shares of Arizona Star on a
fully-diluted basis. It is our intention to acquire the remaining outstanding
Arizona Star common shares by way of a compulsory acquisition. The Offer price
for Arizona Stars common shares was CDN$18.00. Arizona Star owns a 51%
interest in the Cerro Casale deposit in the Maricunga district of Region III in
Chile. The acquisition of Arizona Star has been accounted for as an asset
purchase. The purchase price allocation will be finalized in 2008 with the determination
of the deferred tax portion, if any.  Purchase Cost  Purchase cost per agreement
  
  $
  728Purchase price adjustments and transaction
  costs
  
  2Less: cash acquired
  
  (8
  )$
  722  Preliminary Purchase Price Allocation  Equity investment in Cerro Casale project
  
  $
  732Total assets
  
  732Accounts payable
  
  8Non-controlling interest
  
  2Total liabilities
  
  10Net assets acquired
  
  $
  722  c)
Kainantu Acquisition  On December 12, 2007
we completed the acquisition of the Kainantu mineral property and various
exploration licenses in Papua New Guinea from Highlands Pacific Limited for
$135 million in cash, which reflects the purchase price, net of $7 million
withheld pending certain permit renewals. The acquisition has been accounted for
as a purchase of assets. The purchase price allocation will be finalized in
2008.  d) Sale
of Paddington Mill  In 2007, we completed the
sale of the Paddington mill and associated land tenements in Australia to
Norton Goldfields Limited and the sale of certain land tenements to Apex
Minerals for total proceeds of $32 million, $30 million in cash and $2 million
in Apex Minerals NL shares, respectively. We recorded a gain of $8 million in
other income on closing.  e)
Porgera Mine Acquisition  In 2007, we completed the
acquisition of an additional 20% interest in the Porgera mine in Papua New
Guinea from Emperor Mines Limited, for cash consideration of $259 million. The
acquisition has been accounted for as a business combination. Following this
transaction our interest in the Porgera mine increased from 75% to 95%. The
Government of Papua New Guinea holds the remaining 5% undivided interest in
Porgera. We have entered into a call option deed regarding the possible sale of
up to a 5% interest to the Government of Papua New Guinea, for the
proportionate acquisition cost paid by Barrick.   92


Purchase CostPurchase cost agreement with Emperor Mines
  Limited
  
  $
  250Purchase price adjustments and transaction
  costs
  
  14Less: cash acquired
  
  (5
  )$
  259  Summary Purchase Price AllocationInventories
  
  $
  17Other current assets
  
  2Property, plant and equipment
  
  145Non-current ore in stockpiles
  
  60Deferred tax assets
  
  20Goodwill
  
  34Total assets
  
  278Current liabilities
  
  11Asset retirement obligations
  
  8Total liabilities
  
  19Net assets acquired
  
  $
  259  f)  Acquisition of Pioneer Metals Inc.
(Pioneer)  In 2006, we acquired
control of Pioneer through the acquisition of 59.2 million shares, representing
approximately 91% of the outstanding shares of Pioneer, for cash consideration
of $54 million. Pioneer had a portfolio of exploration properties and
interests, including the Grace property which is adjacent to NovaGold Resources
Inc.s (NovaGold) Galore Creek project. In 2007, we acquired all of the
remaining outstanding shares of Pioneer for cash consideration of $6 million
and recorded purchase price adjustments totaling $3 million.  Purchase CostPurchase cost
  
  $
  63Less: cash acquired
  
  (9
  )$
  54  The acquisition has been
accounted for as a purchase of assets. The purchase price allocation was as
follows:  Summary Purchase Price AllocationProperty, plant and equipment
  
  $
  69Total assets
  
  69Current liabilities
  
  Deferred tax liabilities
  
  15Total liabilities
  
  15Net assets acquired
  
  $
  54  In third quarter 2007 we
sold the Grace property to Nova-Gold for cash proceeds of $54 million. There
was no after-tax gain or loss arising on closing.  g)  Acquisition of Placer Dome Inc. (Placer
Dome)  In first quarter 2006 we
acquired 100% of the outstanding common shares of Placer Dome. Placer Dome was
one of the worlds largest gold mining companies. It had 12 mining operations
based in North America, South America, Africa and Australia/Papua New Guinea,
as well as four projects that are in various stages of exploration/development.
Its most significant mines were Cortez in the United States, Zaldívar in Chile,
Porgera in Papua New Guinea, North Mara in Tanzania and South Deep in South
Africa. The most significant projects are Cortez Hills and Donlin Creek LLC
(Donlin Creek) in the United States, and Pueblo Viejo in the Dominican
Republic. The business combination between ourselves and Placer Dome was an
opportunity to create a Canadian-based leader in the global gold mining
industry, which strengthens our competitive position, including in respect of
gold reserves, gold production, growth opportunities, and balance sheet
strength.  Accounting
for the Placer Dome Acquisition  The Placer Dome
acquisition has been accounted for as a purchase business combination, with
Barrick as the accounting acquirer. We acquired Placer Dome on January 20,
2006, with the results of operations of Placer Dome consolidated from
January 20, 2006 onwards. The purchase cost was $10 billion and was funded
through a combination of common shares issued, the drawdown of a $1 billion
credit facility, and cash resources.  Value of
  322.8 million Barrick common shares issued at $27.14 per share(1)
  
  $
  8,761Value of 2.7 million fully vested stock
  options
  
  22Cash
  
  1,239Transaction costs
  
  32$
  10,054  
 (1)The measurement of the common
share component of the purchase consideration represents the average closing price
on the New York Stock Exchange for the two days prior to and two days after the
public announcement on December 22, 2005 of our final offer for Placer
Dome.  In accordance with the purchase method of accounting, the purchase cost
was allocated to the underlying assets acquired and liabilities assumed based
primarily upon their estimated fair values at the date of acquisition. The
estimated fair values were based on a combination of independent appraisals and
internal estimates. The excess of purchase cost over the net identifiable
tangible and intangible assets acquired represents goodwill. Goodwill arising
on  93


the acquisition of Placer
Dome principally represents the ability for the company to continue as a going
concern by finding new mineral reserves as well as the value of synergies that
we expect to realize as a direct consequence of the acquisition of Placer Dome.
Details of the allocation of goodwill arising on acquisition are included in note
17.  On the acquisition
of Placer Dome in first quarter 2006, we completed a preliminary purchase price
allocation for assets and liabilities acquired. Amortization expense for the
first three quarters of 2006 was based on this preliminary purchase price allocation.
In fourth quarter 2006, we completed final purchase price allocations and
updated our calculations of amortization expense prospectively. The effect of
the final purchase price allocation on the amount of amortization expense
recorded in 2007 compared to amounts recorded in 2006 based on the preliminary
allocation, was an increase of $189 million.  The principal valuation
methods for major classes of assets and liabilities were:  Inventory
  
  Finished goods and work in process valued at
  estimated selling prices less disposal costs, costs to complete and a
  reasonable profit allowance for the completing and selling effort.Building and equipment
  
  Reproduction and/or replacement cost or market value
  for current function and service potential, adjusted for physical, functional
  and economic obsolescence.Proven and probable reserves and value beyond proven
  and probable reserves at producing mines
  
  Multi-period excess earnings approach considering
  the prospective level of cash flows and fair value of other assets at each
  mine.Development projects
  
  Discounted future cash flows considering the
  prospective level of cash flows from future operations and necessary capital
  cost expenditures.Exploration properties
  
  Appraised values considering costs incurred, earn-in
  agreements and comparable market transactions, where applicable.Long-term debt and derivative instruments
  
  Estimated fair values consistent with the methods
  disclosed in note 20c.Asset retirement obligations
  
  Estimated fair values consistent with the methods
  disclosed in note 21.  Final Summary Purchase Price AllocationCash
  
  $
  1,102Inventories
  
  428Other current assets
  
  198Property, plant and equipmentBuildings, plant and equipment
  
  2,946Proven and probable reserves
  
  1,571Value beyond proven and probable reserves
  
  419Intangible assets
  
  85Assets of discontinued operations(1)
  
  1,744Deferred tax assets
  
  93Other assets
  
  254Goodwill
  
  6,506Total assets
  
  15,346Current liabilities
  
  669Liabilities of discontinued operations(1)
  
  107Derivative instrument liabilities
  
  1,729Long-term debt
  
  1,252Asset retirement obligations
  
  387Deferred income tax liabilities
  
  686Total liabilities
  
  4,830Non-controlling interests
  
  462Net assets acquired
  
  $
  10,054  
 (1)Includes operations that were
sold to Goldcorp Inc.  At acquisition we
recorded liabilities totaling $48 million that primarily relate to employee
severance at Placer Dome offices that were closed during the year. All amounts
were settled by the end of 2007.  h)  Discontinued Operations  Results of Discontinued OperationsFor the years ended December 31
  
  2007
  
  2006
  
  2005Gold salesSouth Deep operations
  
  $
  
  
  $
  158
  
  $
  Operations sold to Goldcorp
  
  
  
  83
  
  $
  
  
  $
  241
  
  $
  Income before taxSouth Deep
  
  9
  
  8
  
  Gain on sale of South Deep
  
  
  
  288
  
  Operations sold to Goldcorp
  
  
  
  1
  
  $
  9
  
  $
  297
  
  $
    South
Deep  On December 1, 2006,
we sold our 50% interest in the South Deep mine in South Africa to Gold Fields
Limited (Gold Fields). The consideration on closing was $1,517 million, of
which $1,209 million was received in cash and $308 million in Gold Fields
shares. On closing we recorded a gain of $288 million, representing the
consideration received less transaction costs and the carrying amount of  94


net assets of South Deep,
including goodwill relating to South Deep of $651 million.  The results of the
operations of South Deep in 2006 are presented under discontinued operations
in the income statement and cash flow statement. As required by accounting
rules applicable to discontinued operations, amortization of property,
plant and equipment at South Deep ceased on September 1, 2006, the date
when they were classified as held for sale, and we allocated interest expense
of $2 million to these discontinued operations.  In second quarter
2006, a loaded skip and 6.7 kilometers of rope fell 1.6 kilometers down the
South Deep mines Twin Shaft complex during routine maintenance, causing
extensive damage but no injuries. Repair costs for assets that were damaged
were expensed as incurred. We were insured for property damage and a portion of
business interruption losses. In fourth quarter 2006 we recorded a receivable
for insurance recoveries of $12 million related to this incident. In second
quarter 2007, a final settlement was reached with Gold Fields on the allocation
of insurance proceeds and, as a result, we recorded further proceeds of $9
million within income from discontinued operations. During the third quarter,
$21 million was received in cash and has been classified under Cash Flows of
Discontinued Operations in our Consolidated Statement of Cash Flows.  Operations
Sold to Goldcorp  In second
quarter 2006, we sold all of Placer Domes Canadian properties and operations
(other than Placer Domes office in Vancouver), including all mining,
reclamation and exploration properties, Placer Domes interest in the La
Coipa mine in Chile, 40% of Placer Domes interest in the Pueblo Viejo project
in the Dominican Republic, certain related assets and, our share in Agua de la
Falda S.A., which included our interest in the Jeronimo project, to Goldcorp
Inc. (Goldcorp) (collectively, the Operations sold to Goldcorp). Goldcorp
is responsible for all liabilities relating solely to these properties and
operations, including employment commitments and environmental, closure and
reclamation liabilities.  The sales proceeds
for the operations sold to Goldcorp were $1,641 million. The aggregate net
amount of assets and liabilities of these operations were recorded in the
purchase price allocation at $1,641 million based on the terms of the sale agreement
with Goldcorp that was in place at the time we acquired Placer Dome.The results
of the operations sold to Goldcorp were included under discontinued
operations in the income statement and cash flow statement until closing.
Interest expense of $21 million was allocated to the results from the
operations sold to Goldcorp. No gain or loss arose on closing of the sale.  4·  Segment
Information  Income Statement Information
  
  Sales
  
  Segment cost of sales
  
  Segment income(1)For the years ended December 31
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005GoldNorth America
  
  $
  2,001
  
  $
  1,791
  
  $
  1,247
  
  $
  1,194
  
  $
  1,052
  
  $
  693
  
  $
  493
  
  $
  492
  
  $
  341South America
  
  1,306
  
  1,131
  
  506
  
  408
  
  311
  
  137
  
  664
  
  693
  
  268Australia Pacific
  
  1,292
  
  1,144
  
  411
  
  945
  
  757
  
  260
  
  108
  
  201
  
  105Africa
  
  428
  
  427
  
  184
  
  295
  
  228
  
  108
  
  55
  
  111
  
  27CopperSouth America
  
  1,065
  
  955
  
  
  
  233
  
  283
  
  
  
  752
  
  621
  
  Australia Pacific
  
  240
  
  182
  
  
  
  109
  
  110
  
  
  
  92
  
  55
  
  $
  6,332
  
  $
  5,630
  
  $
  2,348
  
  $
  3,184
  
  $
  2,741
  
  $
  1,198
  
  $
  2,164
  
  $
  2,173
  
  $
  741  
 (1)Segment income
represents segment sales, less cost of sales and amortization.  Income Statement Information
  
  Exploration(1)
  
  Regional business unit costs(1)For the years ended December 31
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005North America
  
  $
  70
  
  $
  64
  
  $
  34
  
  $
  27
  
  $
  32
  
  $
  16South America
  
  40
  
  22
  
  19
  
  23
  
  19
  
  6Australia Pacific
  
  46
  
  44
  
  13
  
  38
  
  38
  
  16Africa
  
  15
  
  22
  
  34
  
  11
  
  1
  
  Other expenses outside reportable segments
  
  8
  
  19
  
  9
  
  
  
  
  
  $
  179
  
  $
  171
  
  $
  109
  
  $
  99
  
  $
  90
  
  $
  38  
 (1)Exploration
and regional business unit costs are excluded from the measure of segment
income but are reported separately by operating segment to the Chief Operating
Decision Maker.  95


Geographic Information
  
  Long-lived assets(1)
  
  Sales(2)For the years ended December 31
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005North AmericaUnited States
  
  $
  2,638
  
  $
  2,518
  
  $
  1,431
  
  $
  1,882
  
  $
  1,702
  
  $
  1,068Canada
  
  1,528
  
  976
  
  313
  
  119
  
  89
  
  179Dominican Republic
  
  139
  
  78
  
  
  
  
  
  
  
  South AmericaPeru
  
  392
  
  492
  
  540
  
  1,033
  
  878
  
  506Chile
  
  1,764
  
  1,599
  
  269
  
  1,065
  
  955
  
  Argentina
  
  1,048
  
  1,014
  
  843
  
  273
  
  253
  
  Australia PacificAustralia
  
  1,724
  
  2,142
  
  815
  
  1,250
  
  1,116
  
  411Papua New Guinea
  
  702
  
  438
  
  
  
  282
  
  210
  
  AfricaTanzania
  
  1,336
  
  993
  
  669
  
  428
  
  427
  
  184Other
  
  477
  
  534
  
  301
  
  
  
  
  
  $
  11,748
  
  $
  10,784
  
  $
  5,181
  
  $
  6,332
  
  $
  5,630
  
  $
  2,348  
 (1)Long-lived
assets include property, plant and equipment and other tangible non-current
assets.  (2)Presented
based on the location in which the sale originated.  Reconciliation
of Segment Income to Income from Continuing Operations
Before Income Taxes and Other Items  For the years ended December 31
  
  2007
  
  2006
  
  2005Segment income
  
  $
  2,164
  
  $
  2,173
  
  $
  741Amortization of corporate assets
  
  (20
  )
  (19
  )
  (18
  )Exploration
  
  (179
  )
  (171
  )
  (109
  )Project development expense
  
  (188
  )
  (119
  )
  (32
  )Corporate administration
  
  (155
  )
  (142
  )
  (71
  )Other expenses
  
  (208
  )
  (216
  )
  (114
  )Impairment charges(1)
  
  (65
  )
  (23
  )
  (16
  )Interest income
  
  141
  
  110
  
  38Interest expense
  
  (113
  )
  (126
  )
  (3
  )Other income
  
  103
  
  93
  
  46Income from continuing operations before
  income taxes and other items
  
  $
  1,480
  
  $
  1,560
  
  $
  462  
 (1)In
2007, impairment charges include $42 million of goodwill impairments in the
North America region.  96


Asset Information
  
  Segment
  long-lived assets
  
  Amortization
  
  Segment
  capital expenditures(1)For the years ended December 31
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005GoldNorth America
  
  $
  4,305
  
  $
  3,572
  
  $
  1,744
  
  $
  314
  
  $
  247
  
  $
  213
  
  $
  236
  
  $
  226
  
  $
  218South America
  
  1,922
  
  1,829
  
  1,652
  
  234
  
  127
  
  101
  
  343
  
  343
  
  525Australia Pacific
  
  2,310
  
  2,434
  
  815
  
  239
  
  186
  
  46
  
  208
  
  313
  
  308Africa
  
  1,336
  
  993
  
  669
  
  78
  
  88
  
  49
  
  240
  
  93
  
  45CopperSouth America
  
  1,282
  
  1,276
  
  
  
  80
  
  51
  
  
  
  27
  
  17
  
  Australia Pacific
  
  116
  
  146
  
  
  
  39
  
  17
  
  
  
  11
  
  22
  
  Segment total
  
  11,271
  
  10,250
  
  4,880
  
  984
  
  716
  
  409
  
  1,065
  
  1,014
  
  1,096Cash and equivalents
  
  2,207
  
  3,043
  
  1,037
  
  
  
  
  
  
  
  
  
  
  
  Other current assets
  
  2,081
  
  1,753
  
  711
  
  
  
  
  
  
  
  
  
  
  
  Intangible assets
  
  68
  
  75
  
  
  
  
  
  
  
  
  
  
  
  
  
  Goodwill
  
  5,847
  
  5,855
  
  
  
  
  
  
  
  
  
  
  
  
  
  Other items not allocated to segments
  
  477
  
  534
  
  301
  
  20
  
  19
  
  18
  
  25
  
  17
  
  8Enterprise total
  
  $
  21,951
  
  $
  21,510
  
  $
  6,929
  
  $
  1,004
  
  $
  735
  
  $
  427
  
  $
  1,090
  
  $
  1,031
  
  $
  1,104  
 (1)Segment
capital expenditures are presented on an accrual basis. Capital expenditures in
the Consolidated Statements of Cash Flows are presented on a cash basis. In
2007, cash expenditures were $1,046 million (2006: $1,087 million; 2005: $1,104
million) and the increase in accrued expenditures were $44 million (2006: $(56)
million; 2005: nil).  5Revenue and Gold
Sales Contracts  For the years ended December 31
  
  2007
  
  2006
  
  2005Gold bullion sales(1)Spot market sales
  
  $
  3,823
  
  $
  3,957
  
  $
  1,938Gold sales contracts
  
  1,026
  
  369
  
  3004,849
  
  4,326
  
  2,238Concentrate sales(2)
  
  178
  
  167
  
  110$
  5,027
  
  $
  4,493
  
  $
  2,348Copper sales(1),(3)Copper cathode sales
  
  $
  1,063
  
  $
  937
  
  $
  Concentrate sales
  
  242
  
  200
  
  $
  1,305
  
  $
  1,137
  
  $
    
 (1)Revenues include amounts
transferred from OCI to earnings for commodity cash flow hedges (see notes 20c
and 25).  (2)Gold sales include gains
and losses on gold derivative contracts which have been economically offset,
but not yet settled, and on embedded derivatives in smelting contracts: 2007:
$4 million loss (2006: $4 million gain; 2005: $3 million gain).  (3)Copper sales include gains
and losses on economic copper hedges that do not qualify for hedge accounting
treatment and on embedded derivatives in copper smelting contracts: 2007: $53
million gain (2006: $14 million loss; 2005: $nil).  Principal
Products  All of our gold
mining operations produce gold in doré form, except Eskay Creek, which produces
gold concentrate and gold doré; Bulyanhulu which produces both gold doré and
gold concentrate; and Osborne which produces a concentrate that contains both
gold and copper. 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.
Gold concentrate is a processing product containing the valuable ore mineral
(gold) from which most of the waste mineral has been eliminated, that undergoes
a smelting process to convert it into gold bullion. Gold bullion is sold
primarily in the London spot market or under gold sales contracts. Gold
concentrate is sold to third-party smelters. At our Zaldívar mine we produce
pure copper cathode, which consists of 99.9% copper, a form that is deliverable
for sale in world metals exchanges.  Revenue
Recognition  We record revenue
when the following conditions are met: persuasive evidence of an arrangement
exists; delivery and transfer of title (gold revenue only) have occurred under
the terms of the arrangement; the price is fixed or determinable; and collectability
is reasonably assured. Revenue in 2007 is presented net of direct sales taxes
of $15 million (2006: $16 million; 2005: $nil).  97


Gold
Bullion Sales  We record revenue
from gold and silver bullion sales at the time of physical delivery, which is
also the date that title to the gold or silver passes. The sales price is fixed
at the delivery date based on either the terms of gold sales contracts or the
gold spot price. Incidental revenues from the sale of byproducts such as silver
are classified within cost of sales.  Gold
Sales Contracts  At December 31,
2006, we had 2.5 million ounces of Corporate Gold Sales Contracts. We delivered
2.5 million ounces into the Corporate Gold Sales Contracts at an average price
of $404 per ounce in the first half of 2007. At December 31, 2007, there
were no remaining Corporate Gold Sales Contracts. At December 31, 2007, we
had Project Gold Sales Contracts with various customers for a total of 9.5
million ounces of future gold production of which 1.7 million ounces are at
floating spot prices.  The terms of gold sales contracts are governed by master trading
agreements (MTAs) that we have in place with customers. The contracts have
final delivery dates primarily over the next 10 years, but we have the right to
settle these contracts at any time over this period. Contract prices are
established at inception through to an interim date. If we do not deliver at
this interim date, a new interim date is set. The price for the new interim
date is determined in accordance with the MTAs which have contractually agreed
price adjustment mechanisms based on the market gold price. The MTAs have both
fixed and floating price mechanisms. The fixed-price mechanism represents the market
price at the start date (or previous interim date) of the contract plus a
premium based on the difference between the forward price of gold and the
current market price. If at an interim date we opt for a floating price, the
floating price represents the spot market price at the time of delivery of gold
adjusted based on the difference between the previously fixed price and the
market gold price at that interim date. The final realized selling price under
a contract primarily depends upon the timing of the actual future delivery
date, the market price of gold at the start of the contract and the actual
amount of the premium of the forward price of gold over the spot price of gold
for the periods that fixed selling prices are set.  Mark-to-Market
Value  Total
  
  At Dec. 31,ounces in
  
  2007$
  millions
  
  millions
  
  value(1)Project Gold Sales Contracts
  
  9.5
  
  $
  (4,626
  )  
 (1)At
a spot gold price of $834 per ounce.  Concentrate
Sales  Under the terms of
concentrate sales contracts with independent smelting companies, gold and
copper sales prices are 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 title passes to the smelting companies, using
forward market gold and copper prices on the expected date that final sales
prices will be fixed. 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, and result in an embedded derivative
in the accounts receivable. The embedded derivative is recorded at fair value
each period until final settlement occurs, with changes in fair value
classified as a component of revenue. The notional amount outstanding in
accounts receivable is typically between ten and fifteen thousand ounces of
gold and four and seven million pounds of copper.  Copper
Cathode Sales  Under the terms of
copper cathode sales contracts, copper sales prices are set on a specified
future date based upon market commodity prices plus certain price adjustments.
Revenue is recognized at the time of shipment when risk of loss passes to the
customer, and collectability is reasonably assured. Revenue is measured using
forward market prices on the expected date that final selling prices will be
fixed. 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 the accounts receivable. This embedded derivative is recorded at
fair value each period until final settlement occurs, with changes in fair
value classified as a component of revenue. The notional amount outstanding in
accounts receivable is between twenty and thirty million pounds of copper.  98


6.Cost
of Sales  Gold
  
  CopperFor the years ended December 31
  
  2007
  
  2006
  
  2005
  
  2007
  
  2006
  
  2005Cost of goods sold(1)
  
  $
  2,757
  
  $
  2,294
  
  $
  1,249
  
  $
  337
  
  $
  390
  
  $
  By-product revenues(2),(3)
  
  (105
  )
  (123
  )
  (132
  )
  (2
  )
  (1
  )
  Royalty expense
  
  161
  
  150
  
  63
  
  7
  
  4
  
  Mining production taxes
  
  29
  
  27
  
  18
  
  
  
  
  
  $
  2,842
  
  $
  2,348
  
  $
  1,198
  
  $
  342
  
  $
  393
  
  $
    
 (1)Cost of goods sold includes
accretion expense at producing mines of $40 million (2006: $31 million; 2005:
$11 million). Cost of goods sold includes charges to reduce the cost of
inventory to net realizable value as follows: $13 million in 2007; $28 million
in 2006 and $15 million in 2005. The cost of inventory sold in the period
reflects all components capitalized to inventory, except that, for presentation
purposes, the component of inventory cost relating to amortization of property,
plant and equipment is classified in the income statement under amortization.
Some companies present this amount under cost of sales. The amount presented
in amortization rather than cost of sales was $984 million in 2007; $716
million in 2006 and $409 million in 2005.  (2)We use silver sales
contracts to sell a portion of silver produced as a by-product. Silver sales
contracts have similar delivery terms and pricing mechanisms as gold sales
contracts. At December 31, 2007, we had sales contract commitments to
deliver 18.2 million ounces of silver over periods up to 10 years. The
mark-to-market on silver sales contracts at December 31, 2007 was negative
$111 million (2006: negative $100 million; 2005: $52 million).  (3)By-product credits include
gains and losses on economic silver hedges that do not qualify for hedge
accounting treatment: 2007: $nil (2006: $5 million loss; 2005: $nil).  Royalties  Certain of our
properties are subject to royalty arrangements based on mineral production at
the properties. The most significant royalties are at the Goldstrike,
Bulyanhulu and Veladero mines and the Pascua-Lama project. 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. Other types of royalties include:  ·Net profits interest (NPI)
royalty, ·Net smelter return sliding
scale (NSRSS) royalty, ·Gross proceeds sliding
scale (GPSS) royalty ·Gross smelter return (GSR)
royalty, ·Net Value (NV) royalty,
and a ·Land tenement (LT) royalty  Royalty expense is
recorded at the time of sale of gold production, measured using the applicable
royalty percentage for NSR royalties or estimates of NPI amounts.  Producing mines
  
  Type of royaltyNorth AmericaGoldstrike
  
  0%5% NSR, 0%6% NPIEskay Creek
  
  1% NSRWilliams
  
  1.5% NSR, 0.5% NV, 1% NVDavid Bell
  
  3% NSRRound Mountain
  
  3.53%6.35% NSRSSBald Mountain
  
  3.5%4% NSRRuby Hill
  
  3% modified NSRCortez
  
  1.5% GSRCortez  Pipeline/South Pipeline deposit
  
  0.4%5% GSRCortez  portion of
  Pipeline/South Pipeline deposit
  
  5% NVSouth AmericaVeladero
  
  3.75% modified NSRLagunas Norte
  
  2.51% NSRAustraliaPorgera
  
  2% NSRQueensland and WesternAustralia production
  
  2.5%2.7% of gold revenueAfricaBulyanhulu
  
  3% NSRNorth Mara
  
  3% NSRNorth Mara  Gokona pit
  
  3% NSR, 1.1% LT  99


7.Exploration
and Project Development Expense  For the years ended December 31
  
  2007
  
  2006
  
  2005Exploration:Minesite exploration
  
  $
  63
  
  $
  54
  
  $
  27Projects
  
  116
  
  117
  
  82$
  179
  
  $
  171
  
  $
  109Project development expense:Pueblo Viejo(1)
  
  67
  
  25
  
  Donlin Creek(2)
  
  32
  
  37
  
  Sedibelo
  
  22
  
  10
  
  Fedorova
  
  18
  
  
  
  Buzwagi
  
  5
  
  12
  
  5Pascua-Lama
  
  12
  
  8
  
  7Cowal(3)
  
  
  
  1
  
  9Other
  
  32
  
  26
  
  11$
  188
  
  $
  119
  
  $
  32  
 (1)Represents 100% of project
expenditures. We record a non-controlling interest credit for our partners
share of expenditures within non-controlling interests in the income
statement.  (2)Amounts for 2007 include a
recovery of $64 million of cumulative project costs from our partner. See note
12 for further details.  (3)The Cowal mine began
production in second quarter 2006.  Accounting Policy  We capitalize
costs incurred at projects that meet the definition of an asset after mineralization
is classified as proven and probable gold reserves (as defined by United States
reporting standards). Before classifying mineralization as proven and probable
reserves, costs incurred at projects are considered project development
expenses that are expensed as incurred. Project costs include: drilling costs;
costs to prepare engineering scoping and feasibility studies; metallurgical
testing; permitting; and sample mining. The cost of start-up activities at
mines and projects such as recruiting and training are also expensed as
incurred within project development expense. Drilling costs incurred at our
operating mines are expensed as incurred as mine site exploration expense,
unless we can conclude with a high degree of confidence, prior to the commencement
of a drilling program, that the drilling costs will result in the conversion of
a mineral resource into a proven and probable reserve. Our assessment of
confidence is based on the following factors: results from previous drill
programs; results from geological models; results from a mine scoping study
confirming economic viability of the resource; and preliminary estimates of
mine inventory, ore grade, cash flow and mine life. The costs of a drilling
program that meets our highly confident threshold are capitalized as mine
development costs.  The Pueblo Viejo, Donlin Creek, Sedibelo, and Fedorova projects are in
various stages and none of the projects had met the criteria for cost
capitalization at December 31, 2007. The Reko Diq project is owned through
an equity investee and project expenses are included in equity investees in
the income statement (see note 12).  Effective May 1, 2007, we determined that mineralization at
Buzwagi met the definition of proven and probable reserves for United States
reporting purposes. Following this determination, we began capitalizing costs
that meet the definition of an asset at Buzwagi.  Funding of our partners share of ongoing project expenses for Donlin
Creek, which is recoverable from the other partner, is shown under loans issued
to joint venture partners under investing activities in the cash flow
statement.  8  Other Expense  a)  Other Expenses  For the years ended December 31
  
  2007
  
  2006
  
  2005Regional business unit costs(1)
  
  $
  99
  
  $
  90
  
  $
  38Community development costs(2)
  
  28
  
  15
  
  Environmental costs
  
  15
  
  11
  
  17World Gold Council fees
  
  12
  
  13
  
  10Changes in estimate of AROs at closed
  mines(3)
  
  6
  
  53
  
  15Accretion expense at closed mines(note 21)
  
  10
  
  8
  
  10Non-hedge derivative losses(note 20c)
  
  8
  
  
  
  12Currency translation losses
  
  1
  
  
  
  Pension and other post-retirementbenefit expense (notes 27b and
  27e)(4)
  
  5
  
  3
  
  8Other items
  
  24
  
  23
  
  4$
  208
  
  $
  216
  
  $
  114  
 (1)Relates to costs incurred
at regional business unit offices.  (2)In 2007, amounts relate to
community programs in Peru, Tanzania and Papua New Guinea. In 2006, amounts
related to community programs in Peru and Tanzania.  (3)In 2006, amount relates to
change in estimate of the ARO at the Nickel Plate property in British Columbia,
Canada.  (4)For the year ended December 31,
2007, $nil million of pension credit that relates to active employees at
producing mines is included in cost of sales (2006: $4 million; 2005: $nil), and
$nil million is included in corporate administration (2006: $2 million; 2005:
$nil).  100


Environmental
Costs  During the
production phases of a mine, we incur and expense the cost of various
activities connected with environmental aspects of normal operations, including
compliance with and monitoring of environmental regulations; disposal of
hazardous waste produced from normal operations; and operation of equipment
designed to reduce or eliminate environmental effects. In limited
circumstances, costs to acquire and install plant and equipment are capitalized
during the production phase of a mine if the costs are expected to mitigate
risk or prevent future environmental contamination from normal operations.  When a contingent loss arises from the improper use of an asset, a loss
accrual is recorded if the loss is probable and reasonably estimable. Amounts
recorded are measured on an undiscounted basis, and adjusted as further
information develops or if circumstances change. Recoveries of environmental
remediation costs from other parties are recorded as assets when receipt is
deemed probable.  b) Impairment Charges  For the years ended December 31
  
  2007
  
  2006
  
  2005Impairment of goodwill(note 17)(1)
  
  $
  42
  
  $
  
  
  $
  Impairment charges on investments(note 12)(2)
  
  23
  
  6
  
  16Impairment of long-lived assets(3)
  
  
  
  17
  
  $
  65
  
  $
  23
  
  $
  16  
 (1)In 2007, the carrying
amounts of Eskay Creek and Golden Sunlight were tested for impairment as part
of the annual goodwill impairment test. Impairment charges of $7 million and
$35 million respectively, were recorded to reduce the carrying amount for
goodwill to its implied fair value.  (2)In 2007, we recorded an
impairment charge on Asset Backed Commercial Paper of $20 million.  (3)In 2006, the carrying
amount of Cuerpo Sur, an extension of Pierina, was tested for impairment on
completion of the annual life of mine planning process. An impairment charge of
$17 million was recorded to reduce the carrying amount to the estimated fair
value.  c)Other Income  For the years ended December 31
  
  2007
  
  2006
  
  2005Non-hedge derivative gains(note 20c)
  
  $
  
  
  $
  2
  
  $
  Currency translation gains
  
  
  
  2
  
  3Gains on sale of assets(1)
  
  2
  
  9
  
  5Gains on sale of investments(note 12)
  
  71
  
  6
  
  17Gain on vend-in to Highland Gold(note 12)
  
  
  
  51
  
  Royalty income
  
  17
  
  10
  
  6Sale of water rights
  
  5
  
  5
  
  Other
  
  8
  
  8
  
  15$
  103
  
  $
  93
  
  $
  46  
 (1)In 2007, we
sold certain properties in South America and Australia, including an $8 million
gain on the sale of the Paddington Mill. In 2006, we sold certain properties in
Canada and Chile. In 2005, we sold some land positions in Australia.  9  Income Tax Expense  For the years ended December 31
  
  2007
  
  2006
  
  2005CurrentCanada
  
  $
  (3
  )
  $
  13
  
  $
  (3
  )International
  
  518
  
  444
  
  93$
  515
  
  $
  457
  
  $
  90DeferredCanada
  
  $
  19
  
  $
  (131
  )
  $
  (6
  )International
  
  (25
  )
  46
  
  (8
  )$
  (6
  )
  $
  (85
  )
  $
  (14
  )Income tax expense before elements below
  
  $
  509
  
  $
  372
  
  $
  76Net currency translation gains on deferred
  tax balances
  
  (76
  )
  (5
  )
  (11
  )Canadian tax rate changes
  
  64
  
  12
  
  Change in tax status in Australia
  
  
  
  (31
  )
  (5
  )Release of end of year valuation allowances
   Tanzania
  
  (156
  )
  
  
  Total expense
  
  $
  341
  
  $
  348
  
  $
  60  Currency
Translation  Deferred tax
balances are subject to remeasurement for changes in currency exchange rates
each period. The most significant balances are Canadian deferred tax assets
with a carrying amount of approximately $439 million and Australian deferred
tax liabilities with a carrying amount of approximately $95 million. In 2007,
the appreciation of the Canadian and Australian dollar against the US dollar
resulted in net translation gains arising totaling $76 million. These gains are
included within deferred tax expense/recovery.  Canadian Tax Rate Changes  In the second and
fourth quarters of 2007 and the second quarter of 2006, federal rate changes
were enacted in Canada that lowered the applicable tax rate. The impact of this
tax rate change was to reduce net deferred tax assets in Canada by $64 million
in 2007 and $35 million in 2006 that was recorded as a component of deferred
income tax expense. Also in second quarter 2006, on change of tax status of a
Canadian subsidiary, we recorded a deferred income tax credit of $23 million to
reflect the impact on the measurement of deferred income tax assets and
liabilities.  101


Change
in Tax Status in Australia  In first quarter
2006, an interpretative decision (ID) was issued by the Australia Tax Office
that clarified the tax treatment of currency gains and losses on foreign
denominated liabilities. Under certain conditions, for taxpayers who have made
the functional currency election, and in respect of debt that existed at the
time the election was made, the ID provided clarification that unrealized
foreign exchange gains that currently exist on intercompany debt will not
crystallize upon repayment of the debt. The effect of the ID was recorded as a
$31 million reduction of deferred tax liabilities.  Release
of Tanzanian Valuation Allowances  In 2007, we
released $156 million of end of year deferred tax valuation allowances in
Tanzania due to the impact of higher market gold prices.  Reconciliation to Canadian
  Statutory Rate
  For the years ended December 31
  
  2007
  
  2006
  
  2005At 36.12% (2006 36.12% and 2005: 38%)
  statutory rate
  
  $
  535
  
  $
  563
  
  $
  176Increase (decrease) due to:Allowances and special tax deductions(1)
  
  (99
  )
  (55
  )
  (92
  )Impact of foreign tax rates(2)
  
  38
  
  (131
  )
  (54
  )Expenses not tax-deductible
  
  63
  
  20
  
  9Net currency translation gains on deferred
  tax balances
  
  (76
  )
  (5
  )
  (11
  )Release of end of year valuation allowances
   Tanzania
  
  (156
  )
  
  
  Release of valuation allowances  Other
  
  (88
  )
  (53
  )
  (32
  )Valuation allowances set up against current
  year tax losses
  
  5
  
  7
  
  59Impact of changes in tax status in
  Australia
  
  
  
  (31
  )
  (5
  )Canadian tax rate changes
  
  64
  
  12
  
  Withholding taxes
  
  17
  
  19
  
  8Mining taxes
  
  19
  
  9
  
  1Other items
  
  19
  
  (7
  )
  1Income tax expense
  
  $
  341
  
  $
  348
  
  $
  60  
 (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. Additionally, we have reinvested earnings and cash flow
generated by the Zaldívar mine in Chile to fund a portion of the construction
cost of Pascua-Lama. The reinvestment of these earnings and cash flow resulted
in a lower tax rate applied for the period. Amounts in 2007, included the
impact of losses realized on deliveries into corporate gold sales contracts in
a low tax jurisdiction.  10Earnings per share  For the years ended December 31
  ($ millions, except shares in millions
  
  2007
  
  2006
  
  2005and per share amounts in
  dollars)
  
  Basic
  
  Diluted
  
  Basic
  
  Diluted
  
  Basic
  
  DilutedIncome from continuing operations
  
  $
  1,110
  
  $
  1,110
  
  $
  1,209
  
  $
  1,209
  
  $
  395
  
  $
  395Plus: interest on convertible debentures
  
  
  
  2
  
  
  
  4
  
  
  
  Income available to common shareholders and after assumed conversions
  
  1,110
  
  1,112
  
  1,209
  
  1,213
  
  395
  
  395Income from discontinued operations
  
  9
  
  9
  
  297
  
  297
  
  
  
  Income before cumulative effect of changes in accounting principles
  
  1,119
  
  1,121
  
  1,506
  
  1,510
  
  395
  
  395Cumulative effect of changes in accounting principles
  
  
  
  
  
  
  
  
  
  6
  
  6Net income
  
  $
  1,119
  
  $
  1,121
  
  $
  1,506
  
  $
  1,510
  
  $
  401
  
  $
  401Weighted average shares outstanding
  
  867
  
  867
  
  842
  
  842
  
  536
  
  536Effect of dilutive securitiesStock options
  
  
  
  3
  
  
  
  4
  
  
  
  2Convertible debentures
  
  
  
  9
  
  
  
  9
  
  
  
  867
  
  879
  
  842
  
  855
  
  536
  
  538Earnings per shareIncome from continuing operations
  
  $
  1.28
  
  $
  1.27
  
  $
  1.44
  
  $
  1.42
  
  $
  0.74
  
  $
  0.73Income before cumulative effect of changes in accounting principles
  
  $
  1.29
  
  $
  1.28
  
  $
  1.79
  
  $
  1.77
  
  $
  0.74
  
  $
  0.73Net income
  
  $
  1.29
  
  $
  1.28
  
  $
  1.79
  
  $
  1.77
  
  $
  0.75
  
  $
  0.75  102


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. For
convertible debentures, the number of additional shares for inclusion in
diluted earnings per share calculations is determined using the as if converted
method. The incremental number of common shares issued is included in the
number of weighted average shares outstanding and interest on the convertible
debentures is excluded from the calculation of income.  11Cash Flow  Other Items  a) Operating Cash Flows  Other Items  For the years ended December 31
  
  2007
  
  2006
  
  2005Adjustments for non-cash income statement
  items:Currency translation (gains) losses(note 8a and 8c)
  
  $
  1
  
  $
  (2
  )
  $
  (3
  )Accretion expense(note 21)
  
  50
  
  39
  
  21Cumulative accounting changes
  
  
  
  
  
  (6
  )Amortization of discount/premium on debt
  securities(note
  20b)
  
  (3
  )
  (12
  )
  Amortization of debt issue costs(note 20b)
  
  9
  
  12
  
  2Stock option expense(note 26)
  
  25
  
  27
  
  Non-hedge derivative gold options
  
  30
  
  14
  
  Hedge losses on acquired gold hedge
  position
  
  2
  
  165
  
  Gain on Highland vend-in(note 8c)
  
  
  
  (51
  )
  Gain on Kabanga transaction(note 8c)
  
  
  
  
  
  (15
  )Equity in investees(note 12)
  
  43
  
  4
  
  6Gain on sale of long-lived assets(note 8c)
  
  (2
  )
  (9
  )
  (5
  )Impairment charges(notes 8b and 12)
  
  65
  
  23
  
  16Losses on write-down of inventory(note 13)
  
  13
  
  28
  
  15Non-controlling interests(note 2b)
  
  (14
  )
  (1
  )
  1ARO reduction
  
  (15
  )
  
  
  Net changes in operating assets and
  liabilities
  
  (244
  )
  (142
  )
  (82
  )Settlement of AROs(note 21)
  
  (33
  )
  (32
  )
  (30
  )Other net operating activities
  
  $
  (73
  )
  $
  63
  
  $
  (80
  )Operating cash flow includes payments for:Pension plan contributions(note 27a)
  
  $
  49
  
  $
  36
  
  $
  20Interest (net of amounts capitalized)
  
  $
  236
  
  $
  211
  
  $
  108  b)
Investing Cash Flows  Other Items  For the years ended December 31
  
  2007
  
  2006
  
  2005Loans to joint venture partners
  
  $
  (47
  )
  $
  
  
  $
  Non-hedge derivative copper options
  
  (23
  )
  
  
  Decrease in restricted cash(note 14)
  
  19
  
  
  
  Other
  
  9
  
  17
  
  (5
  )Other net investing activities
  
  $
  (42
  )
  $
  17
  
  $
  (5
  )  c)
Non-Cash Investing and Financing Activities  Donlin
Creek  In 2007, we formed
a limited liability company with NovaGold to advance the Donlin Creek project.
We determined that we share joint control with NovaGold and we use the equity
method of accounting for our investment in Donlin Creek. The initial cost of
our investment is $64 million.  103


Placer
Dome Acquisition  We purchased all
of the common shares of Placer Dome in 2006 for $10,054 million (see note 3g).
In conjunction with the acquisition, liabilities were assumed as follows:  Fair value of assets acquired(1)
  
  $
  15,346Consideration paid
  
  10,054Liabilities assumed(2)
  
  $
  4,830  
 (1)Includes cash of $1,102
million.  (2)Includes debt obligations
of $1,252 million (note 20b).  Vend-in
of Assets to Highland Gold (Highland)  In 2006 we
exchanged various interests in mineral properties for 34.3 million Highland
shares with a value of $95 million at the time of closing of the transaction
(see note 12).  Sale
of South Deep  In 2006 we sold
the South Deep mine to Gold Fields Limited (Gold Fields) for $1,517 million.
The proceeds included 18.7 million Gold Fields common shares with a value of
$308 million (see note 3h).  12Investments  2007
  
  2006Gains
  
  
  
  GainsFair
  
  (losses)
  
  Fair
  
  (losses)At December 31
  
  value
  
  in OCI
  
  value
  
  in OCIAvailable-for-sale securities in an
  unrealized gain positionBenefit plans:(1)Fixed-income securities
  
  $
  4
  
  $
  
  
  $
  5
  
  $
  Equity securities
  
  14
  
  1
  
  16
  
  2Other investments:NovaGold
  
  
  
  
  
  231
  
  13Gold Fields
  
  
  
  
  
  314
  
  6Other equity securities
  
  73
  
  41
  
  77
  
  3391
  
  42
  
  643
  
  54Securities in an unrealized loss positionOther equity securities(2)
  
  5
  
  (1
  )
  3
  
  (1
  )$
  96
  
  $
  41
  
  $
  646
  
  $
  53Held-to-maturity securitiesAsset-Backed Commercial Paper
  
  46
  
  
  
  
  
  $
  142
  
  $
  41
  
  $
  646
  
  $
  53  
 (1)Under various benefit plans
for certain former Homestake executives, a portfolio of marketable fixed-income
and equity securities are held in a rabbi trust that is used to fund
obligations under the plans.  (2)Other equity securities in
a loss position consist of investments in various junior mining companies.  Accounting Policy for
Available-for-Sale Securities  Available-for-sale
securities are recorded at fair value with unrealized gains and losses recorded
in other comprehensive income (OCI). Realized gains and losses are recorded
in earnings when investments mature or on sale, calculated using the average
cost of securities sold. Investments in debt securities that we intend to hold
to maturity are classified as held-to-maturity. Held-to-maturity investments
are recorded at amortized cost. If the fair value of an investment declines
below its carrying amount, we undertake an assessment of whether the impairment
is other-than-temporary. We consider all relevant facts and circumstances in
this assessment, particularly: the length of time and extent to which fair
value has been less than the carrying amount; the financial condition and
near-term prospects of the investee, including any specific events that have
impacted its fair value; both positive and negative evidence that the carrying
amount is recoverable within a reasonable period of time; and our ability and
intent to hold the investment for a reasonable period of time sufficient for an
expected recovery of the fair value up to or beyond the carrying amount. We
record in earnings any unrealized declines in fair value judged to be other
than temporary.  Available-for-Sale
Securities Continuity  Goldfields
  
  NovaGold
  
  Other
  
  TotalJanuary 1, 2005
  
  $
  
  
  $
  
  
  $
  61
  
  $
  61Purchases
  
  
  
  
  
  31
  
  31Sales proceeds
  
  
  
  
  
  (10
  )
  (10
  )Mark-to-market adjustments
  
  
  
  
  
  (20
  )
  (20
  )January 1, 2006
  
  
  
  
  
  62
  
  62Purchases
  
  
  
  218
  
  27
  
  245Received in consideration for sale of South
  Deep (note 3h)
  
  308
  
  
  
  
  
  308Sales proceeds
  
  
  
  
  
  (46
  )
  (46
  )Mark-to-market adjustments
  
  6
  
  13
  
  58
  
  77January 1, 2007
  
  314
  
  231
  
  101
  
  646Purchases
  
  
  
  
  
  11
  
  11Sales proceeds
  
  (356
  )
  (221
  )
  (48
  )
  (625
  )Mark-to-market adjustments
  
  42
  
  (10
  )
  32
  
  64December 31, 2007
  
  $
  
  
  $
  
  
  $
  96
  
  $
  96  104


Gold Fields Limited (Gold Fields)  The investment in
Gold Fields was acquired on December 1, 2006, as partial consideration for
the sale of our interest in South Deep and was recorded net of an initial
liquidity discount of $48 million to reflect a 120-day restriction on our
ability to trade the shares. During 2007, we sold our entire position of 18.7
million shares for proceeds of $356 million and recorded a gain of $48 million.  NovaGold Resources Inc. (NovaGold)  During 2007, we
sold our entire investment in NovaGold for proceeds of $221 million and we
recorded a gain of $3 million on the sale.  Asset-Backed Commercial Paper (ABCP)  As at December 31,
2007, we held $66 million of Asset-Backed Commercial Paper (ABCP) which has
matured, but for which no payment has been received. On August 16, 2007,
it was announced that a group representing banks, asset providers and major
investors had agreed to a standstill with regard to all non-bank sponsored ABCP
(the Montreal Proposal ABCP).  On December 23, 2007, a tentative deal was reached between
investors and banks to restructure the majority of the Montreal Proposal ABCP.
It has been determined that our ABCP investments are ineligible for inclusion
in the proposed Master Asset Partnerships. As with other ineligible Montreal
Proposal ABCP, our investments will be restructured on an individual basis and
will not be pooled with other Montreal Proposal ABCP assets. Our investments will
maintain exposure to the existing underlying ineligible assets. New floating
rate notes will be issued with maturities and interest rates based on the
respective maturities and amounts available from the underlying investments. We
have assessed the fair value of the ABCP considering the best available data
regarding market conditions for such investments at December 31, 2007. We
recorded an impairment of $20 million in 2007 on the ABCP investments.  Our ownership of ABCP investments is comprised of trust units which
have underlying investments in various securities. The underlying investments
are further represented by residential mortgage-backed securities, commercial
mortgage-backed securities, other asset-backed securities and collateralized
debt obligations. We have based the 30% impairment on our assessment of the
inherent risks associated with the underlying investments. The 30% impairment
is comprised of reductions for credit, liquidity and market risk of 5%, 20% and
5%, respectively. The impairment is further supported by an indicative value
obtained from a third party. We believe that our valuation approximates fair
value. The impairment of our ABCP investments has no effect on our investment
strategy or covenant compliance.  There is currently no certainty regarding the outcome of the ABCP
investments and therefore there is uncertainty in estimating the amount and
timing of cash flows associated. This ABCP was classified under Other
Investments at December 31, 2007, and as an investing activity in the
Consolidated Statement of Cash Flow.  Equity Method Investment Continuity  Highland
  
  Atacama
  
  Cerro Casale
  
  Donlin Creek
  
  Other
  
  TotalAt January 1, 2005
  
  $
  86
  
  $
  
  
  $
  
  
  $
  
  
  $
  
  
  $
  86Purchases
  
  50
  
  
  
  
  
  
  
  8
  
  58Equity pick-up
  
  (5
  )
  
  
  
  
  
  
  (1
  )
  (6
  )At January 1, 2006
  
  131
  
  
  
  
  
  
  
  7
  
  138Purchases
  
  
  
  123
  
  
  
  
  
  1
  
  124Vend-in
  
  71
  
  
  
  
  
  
  
  
  
  71Equity pick-up
  
  (3
  )
  
  
  
  
  
  
  (1
  )
  (4
  )Impairment charges
  
  
  
  
  
  
  
  
  
  (2
  )
  (2
  )At January 1, 2007
  
  199
  
  123
  
  
  
  
  
  5
  
  327Acquired under Arizona Star acquisition
  
  
  
  
  
  732
  
  
  
  
  
  732Reclassifications
  
  
  
  
  
  
  
  64
  
  (4
  )
  60Equity pick-up
  
  (30
  )
  (14
  )
  
  
  
  
  1
  
  (43
  )Impairment charges
  
  
  
  
  
  
  
  
  
  (2
  )
  (2
  )At December 31, 2007
  
  $
  169
  
  $
  109
  
  $
  732
  
  $
  64
  
  $
  
  
  $
  1,074  105


Accounting Policy for Equity Method Investments  Under the equity
method, we record our equity share of the income or loss of equity investees
each period. On acquisition of an equity investment, the underlying
identifiable assets and liabilities of an equity investee are recorded at fair
value and the income or loss of equity investees is based on these fair values.
For an investment in a company that represents a business, if the cost of any
equity investment exceeds the total amount of the fair value of identifiable
assets and liabilities, any excess is accounted for in a manner similar to
goodwill, with the exception that an annual goodwill impairment test is not
required. Additional funding into an investee is recorded as an increase in the
carrying value of the investment. The carrying amount of each investment in an
equity investee is evaluated for impairment using the same method as an
available-for-sale security.  Highland Gold Mining Ltd. (Highland)  We acquired 11
million common shares for cash of $50 million in 2005; and 34.3 million common
shares as part of a vend-in transaction in 2006.  On November 17, 2006, we entered into an agreement with Highland
to transfer ownership of certain companies holding Russian and Kyrgyz licenses
in return for 34.3 million Highland common shares increasing our ownership of
Highland from 20% to 34%. In effect, we contributed our 50% interest in the
Taseevskoye deposit, as well as other exploration properties in Russia and
Central Asia, to Highland, thereby consolidating ownership of these properties
under one company. As part of the transaction, we seconded several of our
employees to Highland, and received two additional Board seats. Completion of
the transaction occurred on December 15, 2006. On closing, the fair value
of Highland common shares exceeded the carrying amount of assets exchanged by
$76 million. We recorded this difference as a gain of $51 million in other
income to the extent of the ownership in Highland held by independent third
parties, and the balance of $25 million as a reduction in the carrying amount
of our investment in Highland. The Fedorova PGM deposit was not included in
this transaction.  The difference between the cost of our investment in Highland and the
underlying historic cost of net assets was $111 million at June 30, 2007.  During 2007, Highland announced the issue of 130.1 million new shares
for $400 million. The equity was purchased by Millhouse LLC (Millhouse) in
two tranches. The first tranche of 65 million shares was completed on December 11,
2007 giving Millhouse a 25% interest in Highland and reducing our position to
25.4%. The second tranche of 65 million shares was completed on January 16,
2008 giving Millhouse a 40% interest in Highland and further reducing our
interest to 20.3%.  On completion of the first tranche, Millhouse is entitled to appoint 3
of 9 Directors to the Board. On completion of the second tranche, Millhouse is
entitled to appoint the CEO of Highland who will not serve on the Board. Our
ability to appoint Directors has been reduced from 3 to 2. We continue to
account for the investment in Highland under the equity method of accounting.  Donlin Creek  In January 2006,
as part of the acquisition of Placer Dome, we acquired an interest in the
Donlin Creek project. Under a pre-existing joint venture agreement we held the
right to earn a 70% interest in the project subject to meeting certain
conditions under the agreement. In December 2007, we restructured our
agreement with our joint venture partner and formed a limited liability
company, Donlin Creek LLC, to advance the Donlin Creek project. Donlin Creek
has a board of four directors, with two nominees selected by each company. All
significant decisions related to Donlin Creek require the approval of both
companies. We own 50% of the limited liability company.  We determined that Donlin Creek LLC is a VIE and consequently used the
principles of FIN 46R to determine how to account for our ownership interest.
We concluded that neither ourselves nor NovaGold are a primary beneficiary and
neither ourselves nor NovaGold have the right to control Donlin Creek under the
limited liability company agreement. We determined that we share joint control with
NovaGold, and because Donlin Creek is a corporate joint venture we use the
equity method of accounting for our investment in Donlin Creek. The initial
cost of our investment in Donlin Creek is $64 million and represents the cost
basis of assets transferred into the limited liability company. Our maximum
exposure to loss in this entity is limited to the carrying amount of our
investment in Donlin Creek, which totaled $64 million and accounts receivable
from our partner totaling a further $64 million that are collateralized against
NovaGolds interest in the value of Donlin Creek as of December 31, 2007.  106


Atacama Copper Pty Limited (Atacama
Copper)  In September 2006,
we acquired a 50% interest in Atacama Copper. The other 50% interest in Atacama
Copper is owned by Antofagasta plc. Atacama Copper is responsible for advancing
the Reko Diq project. The Reko Diq project is located in Pakistan and comprises
a variety of exploration licenses, an interest in some of which has been
retained by the government of Balochistan.  We determined that
Atacama Copper is a VIE and consequently we have used the principles of FIN 46R
to determine how to account for our ownership interest. We concluded that
neither ourselves nor Antofagasta are a primary beneficiary and consequently we
evaluated whether either ourselves or Antofagasta have the right to control
Atacama under the joint venture agreement. We determined that we share joint
control with Antofagasta and because Atacama is a corporate joint venture we
use the equity method of accounting for our investment. Our maximum exposure to
loss in this entity is limited to our investment in Atacama, which totaled $109
million as of December 31, 2007, and amounts we will prospectively fund
for Atacamas interim exploration program.  Companía Minera Casale (Cerro Casale)  In December 2007, we
acquired 94% of the common shares of Arizona Star. We have determined that
Arizona Stars interest in the entity that holds the Cerro Casale deposit is a
VIE and consequently we have used the principles of FIN 46R to determine how to
account for this ownership interest. We evaluated whether either ourselves or
Kinross have the right to control Cerro Casale under the joint venture
agreement and we determined that we share joint control with Kinross.
Therefore, neither ourselves nor Kinross are a primary beneficiary and because
Cerro Casale is a corporate joint venture, we use the equity method of
accounting for Arizona Stars investment in Cerro Casale. Our maximum exposure
to loss in this entity is limited to our investment in Cerro Casale, which
totaled $732 million as of December 31, 2007.  13·Inventories  Gold
  
  CopperAt December 31
  
  2007
  
  2006
  
  2007
  
  2006Raw
  materialsOre in stockpiles
  
  $
  698
  
  $
  485
  
  $
  63
  
  $
  51Ore on leach pads
  
  149
  
  104
  
  81
  
  76Mine
  operating supplies
  
  351
  
  284
  
  20
  
  16Work in
  process
  
  109
  
  89
  
  5
  
  25Finished
  productsGold doré/bullion
  
  87
  
  98
  
  
  
  Copper cathode
  
  
  
  
  
  9
  
  12Copper concentrate
  
  
  
  
  
  16
  
  5Gold concentrate
  
  40
  
  54
  
  
  
  1,434
  
  1,114
  
  194
  
  185Non-current
  ore in stockpiles(1)
  
  (414
  )
  (298
  )
  (96
  )
  (70
  )$
  1,020
  
  $
  816
  
  $
  98
  
  $
  115  
 (1)Ore that
we do not expect to process in the next 12 months.  Accounting Policy for Inventory  Material extracted from
our mines is classified as either ore or waste. Ore represents material that we
expect to be processed into a saleable form, and sold at a profit. Ore is
recorded as an asset that is classified within inventory at the point it is
extracted from the mine. Ore is accumulated in stockpiles that are subsequently
processed into gold/copper in a saleable form under a mine plan that takes into
consideration optimal scheduling of production of our reserves, present plant
capacity, and the market price of gold/copper. Gold/copper in process
represents gold/copper in the processing circuit that has not completed the
production process, and is not yet in a saleable form.  Gold ore
stockpiles are measured by estimating the number of tons added and removed from
the stockpile, the number of contained ounces (based on assay data) and the
estimated metallurgical recovery rates (based on the expected processing
method). Copper ore stockpiles are measured estimating the number of tons added
and removed from the stockpile. Stockpile ore tonnages are verified by periodic
surveys. Costs are allocated to a stockpile based on relative values of
material stockpiled and processed using current mining costs incurred up to the
point of stockpiling the ore, including applicable overhead, depreciation,
depletion and amortization relating to mining operations, and removed at each
stockpiles average cost per recoverable unit.  107


We record gold in
process, gold doré and gold in concentrate form at average cost, less
provisions required to reduce inventory to market value. Average cost is
calculated based on the cost of inventory at the beginning of a period, plus
the cost of inventory produced in a period. Costs capitalized to inventory
include direct and indirect materials and consumables; direct labor; repairs
and maintenance; utilities; amortization of property, plant and equipment;
waste stripping costs; and local mine administrative expenses. Costs are
removed from inventory and recorded in cost of sales and amortization expense
based on the average cost per ounce of gold in inventory. Mine operating
supplies are recorded at purchase cost.  We record
provisions to reduce inventory to net realizable value, to reflect changes in
economic factors that impact inventory value or to reflect present intentions
for the use of slow moving and obsolete supplies inventory.  For the years ended
  December 31
  
  2007
  
  2006
  
  2005Inventory
  impairment charges
  
  $
  13
  
  $
  28
  
  $
  15  Heap
Leach Inventory  The recovery of gold and
copper from certain oxide ores is achieved through the heap leaching process.
Our Pierina, Lagunas Norte, Veladero, Cortez, Bald Mountain, Round Mountain,
Ruby Hill and Marigold mines all use a heap leaching process for gold and our
Zaldívar mine uses a heap leaching process for copper. Under this method, ore
is placed on leach pads where it is treated with a chemical solution, which
dissolves the gold or copper contained in the ore. The resulting pregnant
solution is further processed in a plant where the gold or copper is recovered.
For accounting purposes, costs are added to ore on leach pads based on current
mining and leaching costs, including applicable depreciation, depletion and
amortization relating to mining operations. Costs are removed from ore on leach
pads as ounces or pounds are recovered based on the average cost per
recoverable ounce of gold or pound of copper on the leach pad.  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). In general, leach pads recover between 35% and
95% of the ounces or pounds placed on the pads.  Although the
quantities of recoverable gold or copper placed on the leach pads are
reconciled by comparing the grades of ore placed on pads to the quantities of
gold or copper actually recovered (metallurgical balancing), the nature of the
leaching process inherently limits the ability to precisely monitor inventory
levels. As a result, the metallurgical balancing process is constantly
monitored and estimates are refined based on actual results over time.
Historically, our operating results have not been materially impacted by
variations between the estimated and actual recoverable quantities of gold or
copper on our leach pads. At December 31, 2007, the weighted average cost
per recoverable ounce of gold and recoverable pound of copper on leach pads was
$287 per ounce and $0.39 per pound, respectively (2006: $180 per ounce of gold
and $0.45 per pound of copper). Variations between actual and estimated
quantities resulting from changes in assumptions and estimates that do not
result in write-downs to net realizable value are accounted for on a
prospective basis.  The ultimate recovery
of gold or copper from a leach pad will not be known until the leaching process
is concluded. Based on current mine plans, we expect to place the last ton of
ore on our current leach pads at dates for gold ranging from 2013 to 2020 and
for copper ranging from 2024 to 2029. Including the estimated time required for
residual leaching, rinsing and reclamation activities, we expect that our
leaching operations will terminate within a period of up to six years following
the date that the last ton of ore is placed on the leach pad.  The current
portion of ore inventory on leach pads is determined based on estimates of the
quantities of gold or copper at each balance sheet date that we expect to
recover during the next 12 months.  Ore in
Stockpiles  At December 31
  
  2007
  
  2006GoldGoldstrikeOre that requires roasting
  
  $
  320
  
  $
  239Ore that requires autoclaving
  
  67
  
  84Kalgoorlie
  
  75
  
  58Porgera
  
  88
  
  17Cowal
  
  36
  
  9Veladero
  
  23
  
  9Cortez
  
  19
  
  3Turquoise Ridge
  
  15
  
  15Golden Sunlight
  
  15
  
  1Other
  
  40
  
  50CopperZaldívar
  
  63
  
  51$
  761
  
  $
  536  At Goldstrike, we expect
to fully process the ore in stockpiles by 2031. At Kalgoorlie, we expect to
fully process the stockpile by 2018. At Porgera, we expect to fully process the
stockpile by 2021. At Zaldívar, we expect to fully process the stockpile by
2029.  108


14·Accounts
Receivable and Other Current Assets  At December 31
  
  2007
  
  2006Accounts
  receivableAmounts due from concentrate sales
  
  $
  19
  
  $
  24Amounts due from copper cathode sales
  
  89
  
  83Other receivables
  
  148
  
  127$
  256
  
  $
  234Other
  current assetsDerivative assets(note 20c)
  
  $
  334
  
  $
  201Goods and services taxes recoverable
  
  161
  
  137Restricted cash
  
  131
  
  150Prepaid expenses
  
  40
  
  32Other
  
  41
  
  68$
  707
  
  $
  588  15·Property, Plant and Equipment  At December 31
  
  2007
  
  2006Assets
  not subject to amortizationAcquired mineral properties and capitalized
  mine development costs(1),(4)
  
  $
  2,010
  
  $
  1,856Assets
  subject to amortizationCapitalized mineral property acquisition
  and mine development costs(4),(5)
  
  6,297
  
  6,436Buildings, plant and equipment(2),(5)
  
  8,192
  
  7,01716,499
  
  15,309Accumulated
  amortization(3)
  
  (7,903
  )
  (6,919
  )$
  8,596
  
  $
  8,390  
 (1)Assets in the
exploration or development stage that are not subject to amortization.  (2)Includes $146 million
(2006: $131 million) of assets under capital leases.  (3)Includes $66 million
(2006: $41 million) of accumulated amortization for assets under capital
leases.  (4)Includes a $176
million reclassification from amortized assets to assets not subject to
amortization for Cortez Hills. This reclassification has no impact on total
property, plant & equipment and no impact on amortization expense.  (5)Includes a $108
million reclassification in 2006 from Buildings, plant and equipment to
Capitalized mine development costs. This classification has no impact on total
property, plant and equipment and no impact on amortization expense.  a)
Unamortized Assets  Acquired Mineral Properties and Capitalized Mine Development
Costs  Carrying amount
  at December 31,
  
  Carrying amount
  at December 31,2007
  
  2006Exploration projects and
  other land positions
  
  $
  109
  
  $
  287Value beyond proven and
  probable reserves at producing mines
  
  299
  
  353ProjectsRuby Hill
  
  
  
  49Pascua-Lama
  
  609
  
  459Cortez Hills(1)
  
  361
  
  306Pueblo Viejo
  
  157
  
  152Sedibelo
  
  81
  
  76Donlin Creek(2)
  
  
  
  66Buzwagi
  
  224
  
  108Punta Colorada Wind Farm
  
  35
  
  Kainantu and PNG exploration licenses
  
  135
  
  $
  2,010
  
  $
  1,856  
 (1)$176 million and $48
million have been classified from acquired mineral properties and capitalized
mine development costs and value beyond proven and probable reserves of
producing mines, respectively, to the Cortez Hills development stage project
for 2007 and 2006. This reclassification has no effect on the total property,
plant and equipment balance and no effect on net income in either year.  (2)See note 12 for
further details.  Value
beyond proven and probable reserves (VBPP)  At the end of each fiscal
year, as part of our annual business cycle, we prepare estimates of proven and
probable gold and copper mineral reserves for each mineral property. An amount
is transferred out of VBPP into amortizable assets based on the quantity of
resources converted into reserves. In 2007, we transferred $54 million from
VBPP to amortizable assets (2006 and 2005: $nil).  Acquisitions  We capitalize the cost of
acquisition of land and mineral rights. On acquiring a mineral property, we
estimate the fair value of proven and probable reserves as well as the value
beyond proven and probable reserves and we record these amounts as assets at
the date of acquisition. At the time mineralized material is converted into
proven and probable reserves, we classify the capitalized acquisition cost
associated with those reserves as a component of acquired mineral properties,
which are subject to amortization. When production begins, capitalized
acquisition costs that are subject to amortization are amortized to operations
using the units-of-production method.  109


In 2007,
amortization of property, plant and equipment began at our Ruby Hill mine after
it moved from construction into the production phase. (2006: Cowal mine; 2005:
Tulawaka, Lagunas Norte and Veladero mines). Amortization also began in 2005 at
the Western 102 power plant in Nevada that was built to supply power for the
Goldstrike mine as it moved from construction into the production phase.  Gold and
Copper Mineral Reserves  At the end of each fiscal
year, as part of our annual business cycle, we prepare estimates of proven and
probable gold and copper mineral reserves for each mineral property, including
the transfer of the values beyond proven and probable (VBPP) reserves to
assets subject to amortization. We prospectively revise calculations of
amortization of property, plant and equipment. The effect of changes in reserve
estimates and transfers of VBPP reserves to assets subject to amortization on
amortization expense for 2007 was an increase of $31 million (2006: $75 million
decrease; 2005: $28 million decrease).  Interest
Costs  Interest cost is
considered an element of the historical cost of an asset when a period of time
is necessary to prepare it for its intended use. We capitalize interest costs
to assets under development or construction while activities are in progress.
We also capitalize interest costs on the value assigned to projects acquired
from third parties. We also capitalize interest costs on the carrying amount of
eligible equity method investments.  b) Assets Subject to Amortization  Capitalized
Mineral Property Acquisition and Mine Development Costs  We start amortizing
capitalized mineral property acquisition and mine development costs when
production begins. Amortization is calculated using the units-of-production
method, where the numerator is the number of ounces produced and the
denominator is the estimated recoverable ounces of gold contained in proven and
probable reserves.  During production
at 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, and
in some cases could be up to 25 years. These underground development costs are
capitalized as incurred. Costs incurred and capitalized to enable access to
specific ore blocks or areas of the mine, and which only provide an economic
benefit over the period of mining that ore block or area, are attributed to
earnings using the units-of-production method where the denominator is estimated
recoverable ounces of gold contained in proven and probable reserves within
that ore block or area. If capitalized underground development costs provide an
economic benefit over the entire mine life, the costs are attributed to
earnings using the units-of-production method, where the denominator is the
estimated recoverable ounces of gold contained in total accessible proven and
probable reserves. At our Open Pit mining operations, costs of moving
overburden waste materials are capitalized until the production stage has
commenced.  Buildings,
Plant and Equipment  We record buildings,
plant and equipment at cost. We capitalize costs that extend the productive
capacity or useful economic life of an asset. Costs incurred that do not extend
the productive capacity or useful economic life of an asset are considered
repairs and maintenance and expensed as incurred. We amortize the capitalized
cost of assets less any estimated residual value, using the straight-line
method over the estimated useful economic life of the asset based on their
expected use in our business. The longest estimated useful economic life for
buildings and equipment at ore processing facilities is 25 years and for mining
equipment is 15 years.  In the normal
course of our business, we have entered into certain leasing arrangements whose
conditions meet the criteria for the leases to be classified as capital leases.
For capital leases, we record an asset and an obligation at an amount equal to
the present value at the beginning of the lease term of minimum lease payments
over the lease term. In the case of our capital leasing arrangements, there is
transfer of ownership of the leased assets to us at the end of the lease term
and therefore we amortize these assets on a basis consistent with our other
owned assets.  c) Impairment Evaluations  Producing
Mines and Development Projects  We review and test the
carrying amounts of assets when events or changes in circumstances suggest that
the carrying amount may not be recoverable. We group assets at the lowest level
for which identifiable cash flows are largely independent of the cash flows of
other assets and liabilities. For operating mines and development projects, all
assets related to a mine or project are included in one group. If there are
indications that an impairment may have occurred at a particular mine site, we
compare the sum of the undiscounted cash flows expected to be generated from
that mine to its carrying amount. If the sum of undiscounted cash flows is less
than the carrying amount, an impairment charge is recognized if the carrying
amounts of the individual long-lived assets within the group exceed their fair
values.  110


Long-lived assets subject
to potential impairment at operating mines and development projects include
buildings, plant and equipment, and capitalized mineral property acquisition and
mine development costs. For impairment assessment purposes, the estimated fair
value of buildings, plant and equipment is based on a combination of current
depreciated replacement cost and current market value. The estimated fair value
of capitalized mineral property acquisition and mine development costs is based
on a discounted cash flow model.  Exploration
Projects  After acquisition,
various factors can affect the recoverability of the capitalized cost of land
and mineral rights, particularly the results of exploration drilling. The
length of time between the acquisition of land and mineral rights and when we
undertake exploration work varies based on the prioritization of our
exploration projects and the size of our exploration budget. If we conclude
that an impairment may exist, we compare the carrying amount to its fair value.
The fair value for exploration projects is based on a discounted cash flow
model. For projects that do not have reliable cash flow projections, a market
approach is applied. In the event land and mineral rights are impaired, we
reduce the carrying amount to estimated fair value and an impairment charge is
recorded.  d) Capital Commitments  In addition to entering
into various operational commitments in the normal course of business, we had
commitments of approximately $159 million at December 31, 2007 for
construction activities at our development projects.  e) Insurance  We purchase insurance
coverage for certain insurable losses, subject to varying deductibles, at our
mineral properties including losses such as property damage and business
interruption. We record losses relating to insurable events as they occur.
Proceeds receivable from insurance coverage are recorded at such time as
receipt is probable and the amount receivable is fixed or determinable.  Insurance
Proceeds  2007
  
  2006
  
  2005Cost of
  sales
  
  $
  16
  
  $
  
  
  $
  Discontinued
  operations
  
  21
  
  12
  
  $
  37
  
  $
  12
  
  $
    16·Intangible Assets  2007
  
  2006Gross carrying
  
  Accumulated
  
  Net carrying
  
  Gross carrying
  
  Accumulated
  
  Net carryingFor the years ended
  December 31
  
  amount
  
  amortization
  
  amount
  
  amount
  
  amortization
  
  amountWater
  rights(1)
  
  $
  28
  
  $
  
  
  $
  28
  
  $
  28
  
  $
  
  
  $
  28Technology(2)
  
  17
  
  
  
  17
  
  17
  
  
  
  17Supply
  contracts(3)
  
  23
  
  15
  
  8
  
  23
  
  9
  
  14Royalties(4)
  
  17
  
  2
  
  15
  
  17
  
  1
  
  16$
  85
  
  $
  17
  
  $
  68
  
  $
  85
  
  $
  10
  
  $
  75Aggregate period amortization expense
  
  $
  
  
  $
  7
  
  $
  
  
  $
  
  
  $
  10
  
  $
  For the years ended December 31
  
  2008
  
  2009
  
  2010
  
  2011
  
  2012Estimated aggregate amortization expense
  
  
  
  $
  5
  
  $
  3
  
  $
  1
  
  $
  1
  
  $
  1  
 (1)The
water rights at Zaldívar are subject to annual impairment testing and will be
amortized when we use them in the future.  (2)The
acquired technology will be used at the Pueblo Viejo project. The amount will
be amortized using the units-of-production method over the estimated proven and
probable reserves of the mine, with no assumed residual value.  (3)Supply
contracts are being amortized over the weighted average contract lives of 48
years, with no assumed residual value.  (4)Royalties
are being amortized using the units-of-production method over the total ounces
subject to royalty payments under the agreement.  Supply Agreement with Yokohama Rubber Co. Ltd. (Yokohama)  In December 2007, we
signed an agreement with Yokohama to secure the supply of tires. Under the
agreement, in January 2008, we advanced Yokahama $35 million to fund
expansion of their production facility and secure supply of tires for a 10-year
period.  111


17·Goodwill  Gold
  
  CopperNorth
  America
  
  Australia
  
  South
  America
  
  Africa
  
  Australia
  
  South
  America
  
  TotalOpening balance, January 1, 2006
  
  $
  
  
  $
  
  
  $
  
  
  $
  
  
  $
  
  
  $
  
  
  $
  Additions(1)
  
  2,423
  
  1,811
  
  441
  
  1,024
  
  64
  
  743
  
  6,506Disposals(2)
  
  
  
  
  
  
  
  (651
  )
  
  
  
  
  (651
  )Closing balance, December 31, 2006
  
  $
  2,423
  
  $
  1,811
  
  $
  441
  
  $
  373
  
  $
  64
  
  $
  743
  
  $
  5,855Additions(3)
  
  
  
  34
  
  
  
  
  
  
  
  
  
  34Impairments(4)
  
  (42
  )
  
  
  
  
  
  
  
  
  
  
  (42
  )Closing balance, December 31, 2007
  
  $
  2,381
  
  $
  1,845
  
  $
  441
  
  $
  373
  
  $
  64
  
  $
  743
  
  $
  5,847  
 (1)Represents
goodwill acquired as a result of the acquisition of Placer Dome Inc. No portion
of this goodwill is expected to be deductible for income tax purposes.  (2)Represents
goodwill associated with the sale of our 50% interest in the South Deep mine to
Gold Fields Ltd.  (3)Represents
goodwill acquired as a result of the acquisition of an additional 20% interest
in Porgera. This goodwill is expected to be deductible for income tax purposes.
(note 3e).  (4)Impairment
charges recorded in the fourth quarter related to the Golden Sunlight ($35
million) and Eskay Creek ($7 million) mines, as a result of our annual goodwill
impairment test. The goodwill impairment charges are primarily due to the short
remaining lives of these mines.  Accounting Policy for Goodwill and Goodwill Impairment  Under the purchase
method, the cost of business acquisitions is allocated to the assets acquired
and liabilities assumed based on the estimated fair value at the date of
acquisition. The excess of purchase cost over the net fair value of identified
tangible and intangible assets and liabilities acquired represents goodwill
that is allocated to reporting units. We believe that goodwill arises
principally because of the following factors: (1) The going concern value
implicit in our ability to sustain and/or grow our business by increasing
reserves and resources through new discoveries; and (2) The ability to
capture unique synergies that can be realized from managing a portfolio of both
acquired and existing mines and mineral properties in our regional business
units.  In 2006, we
determined that goodwill should be allocated to reporting units that would
either represent components (individual mineral properties) or aggregations of
components up to a regional business unit level. As at December 31, 2006,
the process of determining the appropriate level to allocate goodwill was
ongoing. In fourth quarter 2006, we completed impairment tests of goodwill
assuming both no aggregation of mineral properties, and aggregation of mineral
properties up to the regional business unit level and determined that there
were no impairments at that date under either methodology. In second quarter
2007, we determined that an individual mineral property that is an operating
mine is a reporting unit for the purposes of allocating goodwill. On this
basis, we allocated goodwill arising from the Placer Dome acquisition to both
acquired and existing mineral properties.  Allocations for
goodwill arising on the acquisition of Placer Dome were calculated by first
comparing the fair value of acquired reporting units to the fair value of net
identified assets allocated to the reporting units. Secondly, the fair value of
estimated synergies arising on the combination between Barrick and Placer Dome
was used to allocate goodwill both to reporting units acquired and existing
Barrick reporting units expected to benefit from the combination.  On an annual basis
in the fourth quarter of our fiscal year, we evaluate the carrying amount of
goodwill assigned to reporting units for potential impairment. This impairment
assessment involves estimating the fair value of each reporting unit that
includes goodwill. We compare this fair value to the total carrying amount of
each reporting unit (including goodwill). If the carrying amount exceeds this
fair value, then we estimate the fair values of all identifiable assets and
liabilities in the reporting unit, and compare this net fair value of assets
less liabilities to the estimated fair value of the entire reporting unit. The
difference represents the implied fair value of the reporting units goodwill,
which is compared to its carrying amount. Any excess of the carrying value over
the fair value is charged to earnings.  112


Gold mining
companies typically trade at a market capitalization that is based on a
multiple of net asset value (NAV), whereby NAV represents a discounted cash
flow valuation based on projected future cash flows. For goodwill impairment
testing purposes, we estimate the fair value of a gold property by applying a
multiple to the reporting units NAV. For a copper property, the estimated fair
value is based on its NAV and no multiple is applied. The process for
determining fair value is subjective and requires us to make numerous
assumptions including, but not limited to, projected future revenues based on
estimated production, long-term metal prices, operating expenses, capital
expenditures, discount rates and NAV multiples. In particular, our assumptions
with respect to long-term gold prices and the appropriate NAV multiple to apply
have a significant impact on our estimate of fair value. In our 2007 annual
goodwill impairment test we used a long-term gold price of $800 per ounce and
NAV multiples ranging from 1.0 to 2.0, depending on each propertys geographic
location and estimated remaining economic life. On completion of this test, we
recorded a goodwill impairment charge of $35 million at our Golden Sunlight
mine and $7 million at our Eskay Creek mine. The goodwill impairment charges at
these mines are primarily a result of their short remaining lives.  18·Other Assets  At December 31
  
  2007
  
  2006Non-current
  ore in stockpiles(note
  13)
  
  $
  510
  
  $
  368Derivative
  assets(note 20c)
  
  220
  
  209Goods and
  services taxes recoverable
  
  54
  
  48Deferred
  income tax assets(note
  23)
  
  722
  
  528Debt issue
  costs
  
  27
  
  36Deferred
  share-based compensation(note 26b)
  
  75
  
  36Notes
  receivable
  
  97
  
  65Deposits
  receivable
  
  147
  
  82Other
  
  84
  
  49$
  1,936
  
  $
  1,421  Debt Issue Costs  In 2007, no new debt
financings were put into place and there were no additions to debt issue costs.
Amortization of debt issue costs is calculated using the interest method over
the term of each debt obligation, and classified as a component of interest
cost (see note 20b).  19·Other Current Liabilities  At December 31
  
  2007
  
  2006Asset
  retirement obligations(note 21)
  
  $
  74
  
  $
  50Derivative
  liabilities(note
  20c)
  
  100
  
  82Post-retirement
  benefits(note
  27)
  
  11
  
  11Deferred
  revenue
  
  23
  
  Income taxes
  payable(note 9)
  
  38
  
  159Other
  
  9
  
  1$
  255
  
  $
  303  20·Financial Instruments  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 financial statements as follows:
accounts receivable  note 14; investments  note 12; restricted share units 
note 26b.  a) Cash and Equivalents  Cash and equivalents
include cash, term deposits and treasury bills with original maturities of less
than 90 days. Cash and equivalents include $480 million (2006: $605 million)
held in Argentinean and Chilean subsidiaries that have been designated for use
in funding construction costs at our Pascua-Lama project.  113


b)Long-Term
Debt(6)  2007
  
  2006
  
  2005AssumedAt
  
  
  
  
  
  
  
  At
  
  
  
  
  
  
  
  on acquisition of
  
  AtDec. 31
  
  Proceeds
  
  Repayments
  
  Amortization(5)
  
  Dec. 31
  
  Proceeds
  
  Repayments
  
  Amortization(5)
  
  Placer Dome
  
  Dec. 31
  
  Proceeds
  
  Repayments
  
  Amortization(5)7.50% debentures(1)
  
  $        
  
  $          
  
  $             500
  
  $                      
  
  $      498
  
  $          
  
  $               
  
  $                      
  
  $                      
  
  $      490
  
  $          
  
  $               
  
  $                      5.80%/4.875% notes
  
  745
  
  
  
  
  
  
  
  745
  
  
  
  
  
  
  
  
  
  745
  
  
  
  
  
  Veladero financing
  
  163
  
  
  
  57
  
  
  
  220
  
  13
  
  30
  
  
  
  
  
  237
  
  39
  
  
  
  Bulyanhulu financing
  
  51
  
  
  
  34
  
  
  
  85
  
  
  
  34
  
  
  
  
  
  119
  
  
  
  31
  
  Other debt(2)
  
  923
  
  
  
  101
  
  
  
  1,024
  
  50
  
  
  
  6
  
  867
  
  113
  
  50
  
  
  
  Copper-linked notes
  
  515
  
  
  
  393
  
  
  
  908
  
  995
  
  87
  
  
  
  
  
  
  
  
  
  
  
  US dollar notes
  
  480
  
  393
  
  
  
  
  
  87
  
  87
  
  
  
  
  
  
  
  
  
  
  
  
  
  Senior convertible
  debentures
  
  293
  
  
  
  
  
  3
  
  296
  
  
  
  
  
  4
  
  300
  
  
  
  
  
  
  
  Capital leases
  
  85
  
  15
  
  24
  
  
  
  94
  
  7
  
  16
  
  
  
  6
  
  97
  
  90
  
  28
  
  Series B Preferred
  Securities
  
  
  
  
  
  
  
  
  
  
  
  
  
  77
  
  2
  
  79
  
  
  
  
  
  
  
  First credit facility(3)
  
  
  
  
  
  
  
  
  
  
  
  1,000
  
  1,000
  
  
  
  
  
  
  
  
  
  
  
  3,255
  
  408
  
  1,109
  
  3
  
  3,957
  
  2,152
  
  1,244
  
  12
  
  1,252
  
  1,801
  
  179
  
  59
  
  Less: current portion
  
  (102
  )
  
  
  
  
  
  
  (713
  )
  
  
  
  
  
  
  
  
  (80
  )
  
  
  
  
  $   3,153
  
  $        408
  
  $          1,109
  
  $                        3
  
  $   3,244
  
  $     2,152
  
  $          1,244
  
  $                      12
  
  $                 1,252
  
  $   1,721
  
  $        179
  
  $               59
  
  $                      Short-term
  debtDemand financing
  facility
  
  131
  
  
  
  19
  
  
  
  150
  
  
  
  
  
  
  
  150
  
  
  
  
  
  
  
  Second credit
  facility(4)
  
  
  
  
  
  
  
  
  
  
  
  37
  
  337
  
  
  
  300
  
  
  
  
  
  
  
  $      131
  
  $          
  
  $               19
  
  $                      
  
  $      150
  
  $          37
  
  $             337
  
  $                      
  
  $                    450
  
  $        
  
  $          
  
  $               
  
  $                        
 (1)During
second quarter 2007, we repaid the $500 million 7.5% debentures from existing
cash balances and proceeds from the sale of investments.  (2)The debt
has an aggregate principal amount of $923 million, of which $163 million is
subject to floating interest rates and $760 million is subject to fixed interest
rates ranging from 6.37% to 7.75%. The notes mature at various times between
2009 and 2035.  (3)We have a
credit and guarantee agreement with a group of banks (the Lenders), which
requires the Lenders to make available to us a credit facility of up to $1.5
billion or the equivalent amount in Canadian currency. The credit facility,
which is unsecured, has an interest rate of Libor plus 0.25% to 0.35% on drawn
down amounts, and a commitment rate of 0.07% to 0.08% on undrawn amounts. We
increased the limit of this facility from $1 billion in August 2006. The
facility currently matures in 2011.  (4)During
third quarter 2006, we terminated a second credit facility which consisted of
unused bank lines of credit of $850 million with an international consortium of
banks.  (5)Amortization
of debt discount/premium.  (6)The
agreements which govern our long-term debt each contain various provisions
which are not summarized herein. In certain cases, these provisions allow
Barrick to, at its option, 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.  Veladero Financing  One of our wholly owned
subsidiaries, Minera Argentina Gold S.A. in Argentina, has a limited recourse
amortizing loan facility for $250 million, the majority of which has a variable
interest rate. We have guaranteed the loan until completion occurs, after which
it will become non-recourse to the parent company. As at December 31,
2007, completion as defined in the loan agreement has not occurred. The loan is
insured for political risks by branches of the Canadian and German governments.  Copper-Linked Notes/US Dollar Notes  In October 2006, we
issued $1,000 million of Copper-Linked Notes. During the first three years, the
full $1,000 million obligation of these notes is to be repaid through the
delivery of (the US dollar equivalent of) 324 million pounds of copper. At December 31,
2007, 156 million pounds of copper remained to be delivered (2008  103 million
pounds; 2009  53 million pounds). Coincident with the repayment of (the US
dollar equivalent of) 324 million pounds of copper, we will reborrow $1,000
million. Over the next two years,  114


the total amount
outstanding under these notes will continue to be $1,000 million, with a
portion repayable in a copper-linked equivalent and a portion repayable in a
fixed amount of US dollars at the maturity of the notes (2016 and 2036). As the
copper-linked equivalent is repaid, the fixed US dollar obligation will
increase. After 2009, only the fixed US dollar obligation will remain. The
accounting principles applicable to these Copper-Linked Notes require separate
accounting for the future delivery of copper (a fixed-price forward sales
contract that meets the definition of a derivative that must be separately
accounted for) and for the underlying bond (see note 20c).  Senior
Convertible Debentures  The convertible senior
debentures (the Securities) mature in 2023 and had an aggregate principal
amount of $293 million outstanding as at the end of 2007. Holders of the
Securities may, upon the occurrence of certain circumstances and within
specified time periods, convert their Securities into common shares of Barrick.
These circumstances are: if the closing price of our common shares exceeds 120%
of the conversion price for at least 20 trading days in the 30 consecutive
trading days ending on the last trading day of the immediately preceding fiscal
quarter; if certain credit ratings assigned to the Securities fall below
specified levels or if the Securities cease to be rated by specified rating
agencies or such ratings are suspended or withdrawn; if for each of five
consecutive trading days, the trading price per $1,000 principal amount of the
Securities was less than 98% of the product of the closing price of our common
shares and the then current conversion rate; if the Securities have been called
for redemption provided that only such Securities called for redemption may be
converted and upon the occurrence of specified corporate transactions. On December 31,
2007 the conversion rate per each $1,000 principal amount of Securities was
39.99 common shares and the effective conversion price was $25.01 per common
share. The conversion rate is subject to adjustment in certain circumstances.
As such, the effective conversion price may also change.  The Securities
were convertible from October 1, 2007 through December 31, 2007. No
holder of Securities converted during this period. However, had all the
Securities been converted and settlement occurred on December 31, 2007, we
would have issued approximately 9.2 million common shares with an aggregate
fair value of approximately $ 386.7 million based on our closing share price on
December 31, 2007. The Securities are also convertible from January 1,
2008 through March 31, 2008.  We may redeem the
Securities at any time on or after October 20, 2010 and prior to maturity,
in whole or in part, at a prescribed redemption price that varies depending
upon the date of redemption from 100.825% to 100% of the principal amount, plus
accrued and unpaid interest. The maximum amount we could be required to pay to
redeem the securities is $232 million plus accrued interest. Holders of the
Securities can require the repurchase of the Securities for 100% of their
principal amount, plus accrued and unpaid interest, on October 15, 2013
and October 15, 2018. In addition, if specified designated events occur
prior to maturity of the Securities, we will be required to offer to purchase
all outstanding Securities at a repurchase price equal to 100% of the principal
amount, plus accrued and unpaid interest. For accounting purposes the
Securities are classified as a conventional convertible debenture and the
conversion feature has not been bifurcated from the host instrument.  Series B
Preferred Securities  On December 18,
2006, we redeemed all of the outstanding 8.5% Series B Preferred
Securities due December 31, 2045 for total cash of $80 million. The
redemption price was comprised of the outstanding principal amount of $77
million plus accrued and unpaid interest to December 17, 2006 of $3
million.  Demand
Financing Facility  We have a demand
financing facility that permits borrowings of up to $150 million. The terms of
the facility require us to maintain cash on deposit with the lender as a
compensating balance equal to the amount outstanding under the facility, which
is restricted as to use. The net effective interest rate is 0.4% per annum. At December 31,
2007, $131 million had been drawn on the facility and an equal amount had been
placed on deposit that is included in restricted cash (see note 14).  115


For the years ended December 312007
  
  2006
  
  2005Interest
  
  Effective
  
  Interest
  
  Effective
  
  Interest
  
  EffectiveInterest
  
  cost
  
  rate(1)
  
  cost
  
  rate(1)
  
  cost
  
  rate(1)7.50% debentures
  
  $
  16
  
  9.9
  %
  $
  49
  
  9.8
  %
  $
  41
  
  8.21
  %5.80%/4.875% notes
  
  41
  
  5.6
  %
  41
  
  5.5
  %
  42
  
  5.6
  %Veladero financing
  
  21
  
  10.2
  %
  25
  
  10.2
  %
  20
  
  8.6
  %Bulyanhulu financing
  
  5
  
  6.2
  %
  6
  
  5.5
  %
  10
  
  7.5
  %Other debt
  
  60
  
  6.1
  %
  53
  
  5.4
  %
  3
  
  4.1
  %Copper-linked notes/US dollar notes
  
  63
  
  6.2
  %
  13
  
  5.8
  %
  
  
  Senior convertible debentures
  
  2
  
  0.8
  %
  6
  
  2.0
  %
  
  
  Capital leases
  
  6
  
  7.7
  %
  6
  
  6.7
  %
  6
  
  6.2
  %Series B Preferred Securities
  
  
  
  
  
  3
  
  4.4
  %
  
  
  Demand financing facility
  
  13
  
  8.9
  %
  12
  
  8.8
  %
  
  
  First credit facility
  
  1
  
  
  
  29
  
  7.4
  %
  
  
  Second credit facility
  
  
  
  
  
  6
  
  5.0
  %
  
  
  Other interest
  
  9
  
  
  
  2
  
  
  
  (1
  )237
  
  
  
  251
  
  
  
  121Less: interest allocated to discontinued
  operations
  
  
  
  
  
  (23
  )
  
  
  Less: interest capitalized
  
  (124
  )
  
  
  (102
  )
  
  
  (118
  )$
  113
  
  
  
  $
  126
  
  
  
  $
  3Cash interest paid
  
  $
  236
  
  
  
  $
  211
  
  
  
  $
  108Amortization of debt issue costs
  
  9
  
  
  
  12
  
  
  
  2Amortization of premium
  
  (3
  )
  
  
  (12
  )
  
  
  Losses on interest rate hedges
  
  4
  
  
  
  12
  
  
  
  5Increase (decrease) in interest accruals
  
  (9
  )
  
  
  28
  
  
  
  6Interest cost
  
  $
  237
  
  
  
  $
  251
  
  
  
  $
  121  
 (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 long-term
debt.  Scheduled
Debt Repayments  2012 and2008
  
  2009
  
  2010
  
  2011
  
  thereafter5.80%/4.875%
  notes
  
  $
  
  
  $
  
  
  $
  
  
  $
  
  
  $
  750Veladero
  financing
  
  48
  
  53
  
  30
  
  10
  
  22Bulyanhulu
  financing
  
  34
  
  17
  
  
  
  
  
  Copper-linked
  notes/US dollar notes(1)
  
  
  
  
  
  
  
  
  
  1,000Other debt
  
  
  
  16
  
  
  
  
  
  844Senior
  convertible debentures
  
  
  
  
  
  
  
  
  
  230$
  82
  
  $
  86
  
  $
  30
  
  $
  10
  
  $
  2,846Minimum annual payments under capital
  leases
  
  $
  21
  
  $
  24
  
  $
  20
  
  $
  8
  
  $
  6  
 (1)The
Copper-linked notes/US dollar notes have scheduled repayments through the
delivery of pre-determined amounts of copper (see Copper-Linked Notes/ US
Dollar Notes).  116


c)Use of Derivative
Instruments (Derivatives) in Risk Management  In the normal
course of business, our assets, liabilities and forecasted transactions are
impacted by various market risks including:  Item
  
  Impacted by·  Sales
  
  ·  Prices
  of gold and copper·  Cost
  of sales·  Consumption
  of diesel fuel and propane
  
  ·  Prices
  of diesel fuel, propane and natural gas·  Local
  currency denominated expenditures
  
  ·  Currency
  exchange rates  US dollar versus A$, C$, CLP, ARS, PGK and TZS·  By-product
  credits
  
  ·  Prices
  of silver and copper·  Administration,
  exploration and business development costs in local currencies
  
  ·  Currency
  exchange rates  US dollar versus A$, ZAR, CLP, ARS, PGK and C$·  Capital
  expenditures in local currencies
  
  ·  Currency
  exchange rates  US dollar versus A$, C$, CLP, ARS, PGK and EUR·  Interest
  earned on cash
  
  ·  US
  dollar interest rates·  Fair
  value of fixed-rate debt
  
  ·  US
  dollar interest rates  Under our risk management
policy, we seek to mitigate the impact of these market risks to provide
certainty for a portion of our revenues and to control costs and enable us to
plan our business with greater certainty. The timeframe and manner in which we
manage these 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 effective means of managing risk.  The primary
objective of the hedging elements of our derivative positions is that changes
in the values of hedged items are offset by changes in the values of
derivatives. Most of the derivatives we use meet the FAS 133 hedge
effectiveness criteria and are designated in a hedge accounting relationship.
Some of the derivative positions are effective in achieving our risk management
objectives but they do not meet the strict FAS 133 hedge effectiveness
criteria, and they are classified as non-hedge derivatives. The change in
fair value of these non-hedge derivatives is recorded in earnings, in a manner consistent
with the derivative positions intended use.  Non-Hedge
Derivative Gains/Losses  Income statementclassificationGold contracts
  
  RevenueCopper contracts
  
  RevenueSilver contracts
  
  Cost of salesFuel contracts
  
  Cost of salesCurrency contracts
  
  Other expenseInterest rate swaps
  
  Interest income/expenseShare purchase warrants
  
  Other income  117


Summary of Derivatives at December 31, 2007(1)  Notional amount by term to maturity
  
  Accounting
  classification by
  notional amount
  
  Fair valueWithin
  
  2 to 5
  
  Over 5
  
  
  
  Cash flow
  
  Fair value
  
  Non-1 year
  
  years
  
  years
  
  Total
  
  hedge
  
  hedge
  
  hedgeUS dollar interest rate contractsReceive-fixed swaps (millions)
  
  $
  
  
  $
  50
  
  $
  
  
  $
  50
  
  $
  
  
  $
  
  
  $
  50
  
  $
  1Pay-fixed swaps (millions)
  
  
  
  (125
  )
  
  
  (125
  )
  
  
  
  
  (125
  )
  (11
  )Net swap position
  
  $
  
  
  $
  (75
  )
  $
  
  
  $
  (75
  )
  $
  
  
  $
  
  
  $
  (75
  )
  $
  (10
  )Currency contractsC$:US$contracts (C$millions)
  
  C$
  331
  
  C$
  219
  
  C$
  
  
  C$
  550
  
  C$
  450
  
  C$
  
  
  C$
  100
  
  $
  31A$:US$contracts (A$millions)
  
  A$
  1,379
  
  A$
  3,232
  
  A$
  
  
  A$
  4,611
  
  A$
  4,518
  
  A$
  
  
  A$
  93
  
  210EUR:US$contracts (millions)
  
  
  4
  
  
  
  
  
  
  
  
  4
  
  
  1
  
  
  
  
  
  3
  
  CLP:US$contracts (CLP billions)
  
  CLP
  42
  
  CLP
  
  
  CLP
  
  
  CLP
  42
  
  CLP
  42
  
  CLP
  
  
  CLP
  
  
  Commodity contractsCopper call option spread contracts (millions
  of pounds)
  
  103
  
  53
  
  
  
  156
  
  
  
  
  
  156
  
  $
  25Copper sold forward contracts (millions of
  pounds)
  
  100
  
  72
  
  
  
  172
  
  172
  
  
  
  
  
  Copper collar contracts (millions of
  pounds)
  
  299
  
  
  
  
  
  299
  
  272
  
  
  
  27
  
  49Diesel forward contracts (thousands of
  barrels)(2)
  
  1,868
  
  2,910
  
  440
  
  5,218
  
  4,505
  
  
  
  713
  
  84  
 (1)Excludes
gold sales contracts (see note 5), gold lease rate swaps (see note 5).  (2)Diesel
commodity contracts represent a combination of WTI, WTB, MOPS and JET hedge
contracts and diesel price contracts based on the price of WTI, WTB, MOPS, and
JET, respectively, plus a spread. WTI represents West Texas intermediate, WTB
represents Water Borne, MOPS represents Mean of Platts Singapore, JET
represents Jet Fuel.  US
Dollar Interest Rate Contracts  Receive-fixed swaps
totaling $300 million were closed out in third quarter 2007. They had been
designated against the Copper-linked notes/US dollar notes, included in
long-term debt, as a hedge of the variability in the fair value of the
debentures caused by changes in LIBOR. For these hedges, prospective hedge
effectiveness was assessed by comparing the effects of theoretical shifts in
forward interest rates on the fair value of both the debt and the swaps. The
retrospective assessment involved comparing the effect of changes in the
underlying interest rate (i.e., LIBOR) on both the debt and the swaps.  In the second
quarter, receive-fixed swaps totaling $500 million expired. These swaps were
set up as fair value hedges of the $500 million 7.5% debentures which matured
on May 1, 2007. Changes in fair value of the swaps, together with changes
in fair value of the debentures caused by changes in LIBOR, were recorded in
earnings each period. Also, as interest payments on the debentures are recorded
in earnings, an amount equal to the net of the fixed-rate interest receivable
and the variable-rate interest payable is recorded in earnings as a component
of interest costs.  Currency
Contracts  Cash
Flow Hedges  Currency contracts
totaling C$450 million, A$4,518 million, 1 million and CLP 42 billion have
been designated against forecasted local currency denominated expenditures as a
hedge of the variability of the US dollar amount of those expenditures caused
by changes in currency exchange rates over the next four years. Hedged items
are identified as the first stated quantity of dollars of forecasted
expenditures in a future month. For a C$450 million, A$4,452 million, 1
million and CLP 42 billion portion of the contracts, we have concluded that the
hedges are 100% effective under FAS 133 because the critical terms (including
notional amount and maturity date) of the hedged items and currency contracts
are the same. For the remaining A$66 million, prospective and retrospective
hedge effectiveness is assessed using the hypothetical derivative method under
FAS 133. The prospective test involves comparing the effect of a theoretical
shift in forward exchange rates on the fair value of both the actual and
hypothetical derivative. The retrospective test involves comparing the effect
of historic changes in exchange rates each period on the fair value of both the
actual and hypothetical derivative using a dollar offset approach. The
effective portion of changes in fair value of the currency contracts is
recorded in OCI until the forecasted expenditure impacts earnings. For
expenditures capitalized to the cost of inventory, this is upon sale of
inventory, and for capital expenditures, this is when amortization of the
capital assets is recorded in earnings.  Non-hedge
Contracts  On December 31,
2007, we had non-hedge Canadian currency contracts of $100M. We entered these
contracts to hedge the purchase price of Arizona Star. The contracts qualified
for hedge accounting treatment from the designation date to the  118


acquisition date of December 20,
2007. After December 20, 2007, the contracts were no longer considered
hedges under FAS 133, and all changes in fair value subsequent to that date
were recorded in current period earnings. These non-hedge contracts matured at
the end of January 2008.  During 2007, we
entered into a series of A$ contracts as identified above. A$93 million
contracts were not designated as hedges and are outstanding as of December 31,
2007.  Commodity
Contracts  Cash
Flow Hedges  Commodity contracts
totaling 4,505 thousand barrels of diesel fuel have been designated against
forecasted purchases of the commodities for expected consumption at our mining
operations. The contracts act as a hedge of the impact of variability in market
prices on the cost of future commodity purchases over the next seven years.
Hedged items are identified as the first stated quantity in millions of
barrels/gallons of forecasted purchases in a future month. Prospective and retrospective
hedge effectiveness is assessed using the hypothetical derivative method under
FAS 133. The prospective test is based on regression analysis of the
month-on-month change in fair value of both the actual derivative and a
hypothetical derivative caused by actual historic changes in commodity prices
over the last three years. The retrospective test involves comparing the effect
of historic changes in commodity prices each period on the fair value of both
the actual and hypothetical derivative using a dollar offset approach. The
effective portion of changes in fair value of the commodity contracts is
recorded in OCI until the forecasted transaction impacts earnings. The cost of
commodity consumption is capitalized to the cost of inventory, and therefore
this is upon the sale of inventory.  The terms of a
series of copper-linked notes resulted in an embedded fixed-price forward
copper sales contract for 324 million pounds that meets the definition of a
derivative and must be separately accounted for. At December 31, 2007,
embedded fixed-price forward copper sales contracts for 156 million pounds were
outstanding due to deliveries of copper totaling 168 million pounds. The
resulting copper derivative has been designated against future copper cathode
at the Zaldívar mine as a cash flow hedge of the variability in market prices
of those future sales. Hedged items are identified as the first stated quantity
of pounds of forecasted sales in a future month. Prospective hedge
effectiveness is assessed on these hedges using a dollar offset method. The
dollar offset assessment involves comparing the effect of theoretical shifts in
forward copper prices on the fair value of both the actual hedging derivative
and a hypothetical hedging derivative. The retrospective assessment involves
comparing the effect of historic changes in copper prices each period on the
fair value of both the actual and hypothetical derivative using a dollar offset
approach. The effective portion of changes in fair value of the copper contracts
is recorded in OCI until the forecasted copper sale impacts earnings.  During 2007 we
added 392 million pounds of copper collar contracts which provide a floor price
and a cap price for copper sales. 315 million pounds of the collars were
designated against copper cathode sales at our Zaldívar mine and 77 million
pounds are designated against copper concentrate sales at our Osborne mine. At December 31,
2007 we had 207 million pounds of copper collar contracts remaining at Zaldívar
and 65 million pounds at Osborne.  For collars
designated against copper cathode production, the hedged items are identified
as the first stated quantity of pounds of forecasted sales in a future month.
Prospective hedge effectiveness is assessed on these hedges using a dollar
offset method. The dollar offset assessment involves comparing the effect of
theoretical shifts in forward copper prices on the fair value of both the
actual hedging derivative and a hypothetical hedging derivative. The
retrospective assessment involves comparing the effect of historic changes in
copper prices each period on the fair value of both the actual and hypothetical
derivative using a dollar offset approach. The effective portion of changes in
fair value of the copper contracts is recorded in OCI until the forecasted
copper sale impacts earnings.  Concentrate sales
at our Osborne mine contain both gold and copper, and as a result, are exposed
to price changes of both commodities. Prospective hedge effectiveness is
assessed using a regression method. The regression method involves comparing
month-by-month changes in fair value of both the actual hedging derivative and
a hypothetical derivative (derived from the price of concentrate) caused by
actual historical changes in commodity prices over the last three years. The
retrospective assessment involves comparing the effect of historic changes in
copper prices each period on the fair value of both the actual and hypothetical
derivative using a dollar offset approach. The effective portion of changes in fair
value of the copper contracts is recorded in OCI until the forecasted copper
sale impacts earnings. During 2007, we recorded ineffectiveness of $5 million
on these hedges. The ineffectiveness was caused by changes in the price of gold
impacting the hypothetical derivative, but not the hedging derivative.
Prospective effectiveness tests indicate that these hedges are expected to be
highly effective in the future.  Non-hedge
Contracts  Non-hedge fuel contracts
are used to mitigate the risk of oil price changes on other fuel consumption.
On completion of regression analysis, we concluded that the contracts do not
meet the highly effective criterion in FAS 133 due to currency and basis
differences between contract prices and  119


the prices charged
to the mines by oil suppliers. Despite not qualifying as an accounting hedge,
the contracts protect the Company to a significant extent from the effects of
oil price changes. Changes in fair value of non-hedge fuel contracts are
recorded in current period cost of sales.  In first quarter
2007, we purchased and sold call options on 274 million pounds of copper over
the next 21/2 years.
These options, when combined with the aforementioned fixed-price forward copper
sales contracts, economically lock in copper sales prices between $3.08/lb and
$3.58/lb over a period of 21/2 years. years. At December 31,
2007, the notional amount of options outstanding had decreased to 156 million
pounds due to expiry of options totaling 118 million pounds in 2007. These
contracts do not meet the highly effective criterion for hedge accounting in
FAS 133.We paid net option premiums of $23 million for these positions that
were included under investing activities in the cash flow statement. Changes in
fair value of these copper options are recorded in current period revenue.  During 2007, we
entered into a series of copper collar contracts for 27 million pounds of
copper that were not designated as hedges and were outstanding as of December 31,
2007.  Non-hedge
Derivative Gains (Losses)  For the years ended December 31
  
  2007
  
  2006
  
  2005
  
  Income statement classificationCommodity contractsCopper
  
  $
  48
  
  $
  (14
  )
  $
  
  
  RevenueGold
  
  (8
  )
  7
  
  (4
  )
  RevenueSilver
  
  
  
  (5
  )
  
  
  Cost of
  salesFuel
  
  7
  
  1
  
  8
  
  Cost of
  salesCurrency contracts
  
  (7
  )
  
  
  3
  
  Other
  income/expenseInterest rate contracts
  
  (2
  )
  8
  
  2
  
  Interest
  income/expenseShare purchase warrants
  
  (1
  )
  
  
  (5
  )
  Other
  income/expense37
  
  (3
  )
  4Hedge ineffectivenessOngoing hedge inefficiency
  
  4
  
  3
  
  1
  
  VariousDue to changes in timing of hedged items
  
  
  
  
  
  1
  
  Various$
  41
  
  $
  
  
  $
  6  Derivative
Assets and Liabilities  2007
  
  2006At January 1
  
  $
  178
  
  $
  204Acquired with Placer Dome
  
  
  
  (1,707
  )Derivatives cash (inflow) outflowOperating activities
  
  (309
  )
  (184
  )Financing activities
  
  197
  
  1,840Investing activities
  
  23
  
  Change in fair value of:Non-hedge derivatives
  
  33
  
  (3
  )Cash flow hedgesEffective portion
  
  257
  
  17Ineffective portion
  
  9
  
  3Share purchase warrants
  
  (1
  )
  Fair value hedges
  
  2
  
  8At December 31
  
  $
  389
  
  $
  178Classification:Other current assets
  
  $
  334
  
  $
  201Other assets
  
  220
  
  209Other current liabilities
  
  (100
  )
  (82
  )Other long-term obligations
  
  (65
  )
  (150
  )$
  389
  
  $
  178  
 (1)Derivative
assets and liabilities are presented net by offsetting related amounts due
to/from counterparties if the conditions of FIN No. 39, Offsetting of
Amounts Related to Certain Contracts, are met. Amounts receivable from
counterparties netted against derivative liabilities totaled $5 million at December 31,
2007.  120


Cash Flow Hedge Gains (Losses) in
OCI  Commodity
  price hedges
  
  Currency hedges
  
  Interest rate hedgesGold/
  silver
  
  Copper
  
  Fuel
  
  Operating
  costs
  
  Administration
  costs
  
  Capital
  expenditures
  
  Cash
  balances
  
  Long-term
  debt
  
  TotalAt
  December 31, 2004
  
  $
  
  
  $
  
  
  $
  2
  
  $
  240
  
  $
  33
  
  $
  48
  
  $
  3
  
  $
  (25
  )
  $
  301Effective portion
  of change in fair value of hedging instruments
  
  
  
  
  
  46
  
  (38
  )
  13
  
  (4
  )
  1
  
  5
  
  23Transfers to
  earnings:On recording
  hedged items in earnings
  
  
  
  
  
  (10
  )
  (100
  )
  (16
  )
  (4
  )
  (6
  )
  2
  
  (134
  )Hedge
  ineffectiveness due to changes in timing of hedged items
  
  
  
  
  
  
  
  
  
  
  
  (1
  )(1)
  
  
  
  
  (1
  )At
  December 31, 2005
  
  
  
  
  
  38
  
  102
  
  30
  
  39
  
  (2
  )
  (18
  )
  189Effective portion
  of change in fair value of hedging instruments
  
  (148
  )
  29
  
  (1
  )
  137
  
  (2
  )
  4
  
  (2
  )
  
  
  17Transfers to
  earnings:On recording
  hedged items in earnings
  
  165
  
  28
  
  (16
  )
  (84
  )
  (14
  )
  (4
  )(1)
  1
  
  1
  
  77At
  December 31, 2006
  
  $
  17
  
  $
  57
  
  $
  21
  
  $
  155
  
  $
  14
  
  $
  39
  
  $
  (3
  )
  $
  (17
  )
  $
  283Effective portion
  of change in fair value of hedging instruments
  
  
  
  (75
  )
  87
  
  249
  
  32
  
  (35
  )
  
  
  (1
  )
  257Transfers to
  earnings:On recording
  hedged items in earnings
  
  (2
  )
  32
  
  (29
  )
  (166
  )
  (19
  )
  (5
  )(1)
  3
  
  1
  
  (185
  )At
  December 31, 2007
  
  $
  15
  
  $
  14
  
  $
  79
  
  $
  238
  
  $
  27
  
  $
  (1
  )
  $
  
  
  $
  (17
  )
  $
  355  Hedge gains/losses classified within
  
  Gold
  sales
  
  Copper
  sales
  
  Cost of
  sales
  
  Cost of
  sales
  
  Administration
  
  Amortization
  
  Interest
  income
  
  Interest
  expensePortion of hedge
  gain (loss) expected to affect 2008 earnings(2)
  
  $
  2
  
  $
  24
  
  $
  27
  
  $
  141
  
  $
  18
  
  $
  
  
  $
  
  
  $
  (1
  )
  $
  211  
 (1)On
determining that certain forecasted capital expenditures were no longer likely
to occur within two months of the originally specified time frame.  (2)Based
on the fair value of hedge contracts at December 31, 2007.  d) Fair
Value of Financial Instruments  Fair value is the value
at which a financial instrument could be closed out or sold in a transaction
with a willing and knowledgeable counterparty over a period of time consistent
with our risk management or investment strategy. Fair value is based on quoted
market prices, where available. If market quotes are not available, fair value
is based on internally developed models that use market-based or independent
information as inputs. These models could produce a fair value that may not be
reflective of future fair value.  121


Fair
Value Information  2007
  
  2006At December 31
  
  Carrying
  amount
  
  Estimated
  fair
  value
  
  Carrying
  amount
  
  Estimated
  fair
  valueFinancial assetsCash and equivalents(1)
  
  $
  2,207
  
  $
  2,207
  
  $
  3,043
  
  $
  3,043Accounts receivable(1)
  
  256
  
  256
  
  234
  
  234Available-for-sale securities(2)
  
  96
  
  96
  
  646
  
  646Equity-method investments(3)
  
  1,074
  
  1,113
  
  204
  
  212Derivative assets(4)
  
  554
  
  554
  
  410
  
  410Held-to-maturity securities(5)
  
  46
  
  46
  
  
  
  $
  4,233
  
  $
  4,272
  
  $
  4,537
  
  $
  4,545Financial liabilitiesAccounts payable(1)
  
  $
  808
  
  $
  808
  
  $
  686
  
  $
  686Long-term debt(6)
  
  3,255
  
  3,151
  
  3,957
  
  3,897Derivative liabilities(4)
  
  165
  
  165
  
  232
  
  232Restricted share units(7)
  
  100
  
  100
  
  42
  
  42Deferred share units(7)
  
  4
  
  4
  
  2
  
  2$
  4,332
  
  $
  4,228
  
  $
  4,919
  
  $
  4,859  
 (1)Recorded
at cost. Fair value approximates the carrying amounts due to the short-term
nature and generally negligible credit losses.  (2)Recorded
at fair value. Quoted market prices are used to determine fair value.  (3)Recorded
at cost, adjusted for our share of income/loss and dividends of equity
investees. Excludes the investment in Atacama Pty for which there is no readily
determinable fair value.  (4)Recorded
at fair value based on internal valuation models that reflect forward market
commodity prices, currency exchange rates and interest rates, and a discount
factor that is based on market US dollar interest rates. If a forward market
does not exist, we obtain broker-dealer quotations. Valuations assume all
counterparties have an AA credit rating.  (5)Includes
ABCP.  (6)Long-term
debt is generally recorded at cost except for obligations that are designated
in a fair-value hedge relationship, which are recorded at fair value in periods
where a hedge relationship exists. The fair value of long-term debt is
calculated by discounting the future cash flows under a debt obligation by a
discount factor that is based on US dollar market interest rates adjusted for
our credit quality.  (7)Recorded
at fair value based on our period end closing market share price.  e)
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. For cash and equivalents and accounts
receivable, credit risk represents the carrying amount on the balance sheet,
net of any overdraft positions.  For derivatives,
when the fair value is positive, this creates credit risk.When the fair value
of a derivative is negative, we assume no credit risk. In cases where we have a
legally enforceable master netting agreement with a counterparty, credit risk
exposure represents the net amount of the positive and negative fair values for
similar types of derivatives. For a net negative amount, we regard credit risk
as being zero. A net positive amount for a counterparty is a reasonable measure
of credit risk when there is a legally enforceable master netting agreement.We
mitigate credit risk by:  ·entering into derivatives
with high credit-quality counterparties; ·limiting the amount of
exposure to each counterparty; and ·monitoring the financial
condition of counterparties.  Location of credit
risk is determined by physical location of the bank branch, customer or
counterparty.  Credit
Quality of Financial Assets  S&P Credit ratingAt December 31, 2007
  
  AA or
  higher
  
  A or
  higher
  
  B to BBB
  
  TotalCash and equivalents(1)
  
  $
  2,225
  
  $
  30
  
  $
  
  
  $
  2,255Derivatives(2)
  
  405
  
  
  
  
  
  405Accounts receivable
  
  
  
  
  
  256
  
  256Other non-current assets(3)
  
  42
  
  3
  
  1
  
  46$
  2,672
  
  $
  33
  
  $
  257
  
  $
  2,962Number of counterparties
  
  22
  
  3Largest counterparty (%)
  
  31
  %
  96
  %  Concentrations of Credit Risk  OtherAt December 31, 2007
  
  United
  States
  
  Canada
  
  Inter-
  national
  
  TotalCash and equivalents(1)
  
  $
  1,831
  
  $
  103
  
  $
  321
  
  $
  2,255Derivatives(2)
  
  151
  
  139
  
  115
  
  405Accounts receivable
  
  191
  
  46
  
  19
  
  256Other non-current assets(3)
  
  46
  
  
  
  
  
  46$
  2,219
  
  $
  288
  
  $
  455
  
  $
  2,962  
 (1)The
amounts presented reflect the outstanding bank balance held with institutions
as at December 31, 2007.  (2)The
amounts presented reflect the net credit exposure after considering the effect
of master netting agreements.  (3)Other
non-current assets include ABCP.  122


f)
Risks Relating to the Use of Derivatives  By using derivatives, in
addition to credit risk, we are affected by market risk and market liquidity
risk. Market risk is the risk that the fair value of a derivative might be
adversely affected by a change in commodity prices, interest rates, gold lease
rates, or currency exchange rates, and that this in turn affects our financial
condition. We manage market risk by establishing and monitoring parameters that
limit the types and degree of market risk that may be undertaken. We mitigate
this risk by establishing trading agreements with counterparties under which we
are not required to post any collateral or make any margin calls on our
derivatives. Our counterparties cannot require settlement solely because of an
adverse change in the fair value of a derivative.  Market liquidity
risk is the risk that a derivative cannot be eliminated quickly, by either
liquidating it or by establishing an offsetting position. Under the terms of
our trading agreements, counterparties cannot require us to immediately settle
outstanding derivatives, except upon the occurrence of customary events of
default such as covenant breaches, including financial covenants, insolvency or
bankruptcy. We generally mitigate market liquidity risk by spreading out the
maturity of our derivatives over time.  21· Asset Retirement Obligations  Asset Retirement Obligations (AROs)
  
  2007
  
  2006At January 1
  
  $
  893
  
  $
  446AROs acquired with Placer Dome
  
  
  
  387AROs arising in the period
  
  53
  
  27Impact of revisions to expected cash flowsRevisions to carrying amount of assets
  
  
  
  (7
  )Recorded in earnings(1)
  
  6
  
  53SettlementsCash payments
  
  (33
  )
  (32
  )Settlement gains
  
  (3
  )
  (4
  )AROs reclassified under Liabilities of
  discontinued operations
  
  
  
  (16
  )Accretion
  
  50
  
  39At December 31
  
  966
  
  893Current portion
  
  (74
  )
  (50
  )$
  892
  
  $
  843  
 (1)In
2006, we recognized an increase of $37 million for a change in estimate of the
ARO at the Nickel Plate property in British Columbia, Canada. The adjustment
was made on receipt of an environmental study that indicated a requirement to
treat ground water for an extended period of time. The increase was recorded as
a component of other expense (note 8a).  Each period we assess
cost estimates and other assumptions used in the valuation of AROs at each of
our mineral properties to reflect events, changes in circumstances and new
information available. Changes in these cost estimates and assumptions have a
corresponding impact on the fair value of the ARO. For closed mines, any change
in the fair value of AROs results in a corresponding charge or credit within
other expense, whereas at operating mines the charge is recorded as an
adjustment to the carrying amount of the corresponding asset. In 2007, we
recorded adjustments of $53 million for changes in estimates of the AROs at our
Hemlo, Cowal, Bulyanhulu, Lagunas Norte and Veladero operating mines. In 2007,
charges of $ 6 million were recorded for changes in cost estimates for AROs at
closed mines (2006: $53 million; 2005: $15 million expense).  AROs arise from
the acquisition, development, construction and normal operation of mining
property, plant and equipment, due to government controls and regulations that
protect the environment on the closure and reclamation of mining properties.
The major parts of the carrying amount of AROs relate to tailings and heap
leach pad closure/rehabilitation; demolition of buildings/mine facilities;
ongoing water treatment; and ongoing care and maintenance of closed mines. The
fair values of AROs are measured by discounting the expected cash flows using a
discount factor that reflects the credit-adjusted risk-free rate of interest.
We prepare estimates of the timing and amount of expected cash flows when an
ARO is incurred. We update expected cash flows to reflect changes in facts and
circumstances. 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 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; and changes in laws and regulations
governing the protection of the environment. When expected cash flows increase,
the revised cash flows are discounted using a current discount factor whereas
when expected cash flows decrease the reduced cash flows are discounted using a
historic discount factor, and then in both cases any change in the fair value
of the ARO is recorded. We record the fair value of an ARO when it is incurred.
At producing mines AROs incurred and changes in the fair value of AROs are
recorded as an adjustment to the corresponding asset carrying amounts. At
closed mines, any adjustment to the fair value of an ARO is charged directly to
earnings. AROs are  123


adjusted to reflect the
passage of time (accretion) calculated by applying the discount factor implicit
in the initial fair-value measurement to the beginning-of-period carrying
amount of the AROs. For producing mines, accretion is recorded in the cost of
goods sold each period. For development projects and closed mines, accretion is
recorded in other expense. Upon settlement of an ARO, we record a gain or loss
if the actual cost differs from the carrying amount of the ARO. Settlement
gains/losses are recorded in other (income) expense. Other environmental
remediation costs that are not AROs as defined by FAS 143 are expensed as
incurred (see note 8a).  22· Other Non-current Liabilities  At December 31
  
  2007
  
  2006Pension benefits(note 27)
  
  $
  87
  
  $
  85Other post-retirement benefits(note 27)
  
  27
  
  33Derivative liabilities(note 20c)
  
  65
  
  150Restricted share units(note 26b)
  
  94
  
  42Deferred revenue
  
  88
  
  136Other
  
  70
  
  72$
  431
  
  $
  518  23· 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: enacted rates that will apply when temporary differences
reverse; interpretations of relevant tax legislation; tax planning strategies;
estimates of the tax bases of assets and liabilities; and the deductibility of
expenditures for income tax purposes. We recognize the effect of changes in our
assessment of these estimates and factors when they occur. Changes in deferred
income tax assets, liabilities and valuation allowances are allocated between
net income and other comprehensive income based on the source of the change.  Deferred income
taxes have not been provided on the undistributed earnings of foreign
subsidiaries, which are considered to be reinvested indefinitely outside
Canada. The determination of the unrecorded deferred income tax liability is
not considered practicable.  Sources of Deferred Income Tax Assets and Liabilities  At December 31
  
  2007
  
  2006Deferred tax assetsTax loss carry forwards
  
  $
  729
  
  $
  798Capital tax loss carry forwards
  
  
  
  30Alternative minimum tax (AMT) credits
  
  247
  
  198Asset retirement obligations
  
  342
  
  303Property, plant and equipment
  
  331
  
  333Inventory
  
  
  
  95Post-retirement benefit obligations
  
  23
  
  40Other
  
  3
  
  31,675
  
  1,800Valuation allowances
  
  (419
  )
  (658
  )1,256
  
  1,142Deferred tax liabilitiesProperty, plant and equipment
  
  (1,243
  )
  (1,377
  )Derivative instruments
  
  (122
  )
  (9
  )Other
  
  (10
  )
  (26
  )$
  (119
  )
  $
  (270
  )Classification:Non-current assets(note 18)
  
  $
  722
  
  $
  528Non-current liabilities
  
  (841
  )
  (798
  )$
  (119
  )
  $
  (270
  )  Expiry
Dates of Tax Losses and AMT Credits  Noexpiry2008
  
  2009
  
  2010
  
  2011
  
  2012+
  
  date
  
  TotalTax losses(1)Canada
  
  $
  3
  
  $
  5
  
  $
  
  
  $
  
  
  $
  1,583
  
  $
  
  
  $
  1,591Australia
  
  
  
  
  
  
  
  
  
  
  
  150
  
  150Barbados
  
  
  
  
  
  
  
  
  
  1,056
  
  
  
  1,056Chile
  
  
  
  
  
  
  
  
  
  
  
  679
  
  679Tanzania
  
  
  
  
  
  
  
  
  
  
  
  242
  
  242U.S.
  
  
  
  
  
  
  
  
  
  67
  
  
  
  67Other
  
  
  
  
  
  2
  
  
  
  
  
  
  
  2$
  3
  
  $
  5
  
  $
  2
  
  $
  
  
  $
  2,706
  
  $
  1,071
  
  $
  3,787AMT credits(2)
  
  
  
  
  
  
  
  
  
  
  
  $
  247
  
  $
  247  
 (1)Represents the gross amount
of tax loss carry forwards translated at closing exchange rates at December 31,
2007.  (2)Represents
the amounts deductible against future taxes payable in years when taxes payable
exceed minimum tax as defined by United States tax legislation.  124


Net
Deferred Tax Assets  2007
  
  2006Gross deferred tax assetsCanada
  
  $
  494
  
  $
  487Chile
  
  117
  
  113Tanzania
  
  197
  
  217United States
  
  225
  
  247Other
  
  108
  
  1221,141
  
  1,186Valuation allowancesCanada
  
  (55
  )
  (59
  )Chile
  
  (105
  )
  (110
  )Tanzania
  
  (30
  )
  (217
  )United States
  
  (190
  )
  (211
  )Other
  
  (39
  )
  (61
  )$
  (419
  )
  $
  (658
  )Non-current assets
  
  $
  722
  
  $
  528  Valuation Allowances  We consider the need to record
a valuation allowance against deferred tax assets, taking into account the
effects of local tax law. A valuation allowance is not recorded when we
conclude that sufficient positive evidence exists to demonstrate that it is
more likely than not that a deferred tax asset will be realized. The main
factors considered are:  ·Historic
and expected future levels of future 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 taxable
income are mainly affected by: market gold and silver prices; forecasted future
costs and expenses to produce gold reserves; quantities of proven and probable
gold reserves; market interest rates and foreign currency exchange rates. If
these factors or other circumstances change, we record an adjustment to
valuation allowances to reflect our latest assessment of the amount of deferred
tax assets that will more likely than not be realized.  A deferred income
tax asset totaling $439 million has been recorded in Canada. This deferred tax
asset primarily arose due to mark-to-market losses realized for acquired Placer
Dome derivative instruments. Projections of various sources of income support
the conclusion that the realizability of this deferred tax asset is more likely
than not, and consequently no valuation allowance has been set up for this
deferred tax asset.  A deferred tax
asset of $167 million has been recorded in Tanzania following the release of
tax valuation allowances totaling $189 million in 2007. The release of tax
valuation allowances resulted from the impact of rising market gold prices on
expectations of future taxable income and the ability to realize these tax
assets.  A partial
valuation allowance of $190 million has been set up against deferred tax assets
in the United States at December 31, 2007. The majority of this valuation
allowance relates to AMT credits in periods when partly due to low market gold
prices, Barrick was an AMT tax payer in the United States. If market gold
prices continue to rise, it is reasonably possible that some or all of these
valuation allowances could be released in future periods.  A valuation
allowance of $105 million exists as at December 31, 2007 against tax loss
carry forwards in Chile that exist in entities that have no present sources of
income.  Source
of Changes in Deferred Tax Balances  For the years ended December 31
  
  2007
  
  2006
  
  2005Temporary differencesProperty, plant and equipment
  
  $
  24
  
  $
  (1,111
  )
  $
  30Asset retirement obligations
  
  39
  
  128
  
  (69
  )Tax loss carry forwards
  
  (69
  )
  546
  
  38Derivatives
  
  (113
  )
  52
  
  (34
  )Other
  
  9
  
  (17
  )
  (3
  )$
  (110
  )
  $
  (402
  )
  $
  (38
  )Net currency translation gains on deferred
  tax balances
  
  76
  
  5
  
  11Canadian tax rate changes
  
  (64
  )
  (12
  )
  Adjustment to deferred tax balances due to
  change in tax status(1)
  
  
  
  31
  
  (5
  )Release of end of year Tanzanian valuation
  allowances
  
  156
  
  
  
  Release of other valuation allowances
  
  88
  
  53
  
  (32
  )$
  146
  
  $
  (325
  )
  $
  (64
  )Intraperiod allocation to:Income from continuing operations before
  income taxes
  
  $
  174
  
  $
  109
  
  $
  (30
  )Placer Dome
  acquisition (note 3g)
  
  
  
  (432
  )
  Porgera mine acquisition (note 3e)
  
  20
  
  
  
  OCI (note 25)
  
  (48
  )
  (2
  )
  (34
  )Other
  
  5
  
  28
  
  (5
  )$
  151
  
  $
  (297
  )
  $
  (69
  )  
 (1)Relates to changes in
tax status in Australia (note 9).  Unrecognized
Tax Benefits  Balance at January 1, 2007
  
  20Additions based on tax positions related to
  the current year
  
  1Additions for tax positions of prior years
  
  Reductions for tax positions of prior years
  
  (2
  )Settlements
  
  (4
  )Balance at December 31, 2007(1),(2)
  
  15  
 (1)If
recognized, the total amount of $15 million would be recognized as a benefit to
income taxes on the income statement, and therefore would impact the reported
effective tax rate.  (2)Includes interest and
penalties of $1 million.  125


We expect the amount of
unrecognized tax benefits to decrease within 12 months of the reporting date by
approximately $2 to $3 million, related primarily to the expected settlement of
Canadian income and mining tax assessments.  Tax Years Still Under Examination  Canada
  
  20032007United States
  
  20032007Peru
  
  20042007Chile
  
  20042007Argentina
  
  20022007Australia
  
  all years openPapua New Guinea
  
  20022007Tanzania
  
  all years open  Peruvian
Tax Assessment  On September 30,
2004, the Tax Court of Peru issued a decision in our favor in the matter of our
appeal of a 2002 income tax assessment for an amount of $32 million, excluding
interest and penalties. The assessment mainly related to the validity of a
revaluation of the Pierina mining concession, which affected its tax basis for
the years 1999 and 2000. The full life-of-mine effect on current and deferred
income tax liabilities totaling $141 million was fully recorded at December 31,
2002, as well as other related costs of about $21 million.  In January 2005,
we received written confirmation that there would be no appeal of the September 30,
2004 Tax Court of Peru decision. In December 2004, we recorded a $141
million reduction in current and deferred income tax liabilities and a $21
million reduction in other accrued costs. The confirmation concluded the
administrative and judicial appeals process with resolution in Barricks favor.  Notwithstanding
the favorable Tax Court decision we received in 2004 on the 1999 to 2000
revaluation matter, on an audit concluded in 2005, SUNAT has reassessed us on
the same issue for tax years 2001 to 2003. On October 19, 2007, SUNAT
confirmed their reassessment. The tax assessment is for $49 million of tax,
plus interest and penalties of $116 million. We filed an appeal to the Tax
Court of Peru within the statutory period. We believe that the audit reassessment
has no merit, that we will prevail in court again, and accordingly no liability
has been recorded for this reassessment.  24· Capital Stock  a)Common Shares  Our authorized capital
stock includes an unlimited number of common shares (issued 869,886,631 common
shares); 9,764,929 First preferred shares Series A (issued nil); 9,047,619
Series B (issued nil); 1 Series C special voting share (issued 1);
and 14,726,854 Second preferred shares Series A (issued nil).  In 2007, we
declared and paid dividends in US dollars totaling $0.30 per share ($261
million) (2006: $0.22 per share, $191 million; 2005: $0.22 per share, $118
million).  b)Exchangeable Shares  In connection with a 1998
acquisition, Barrick Gold Inc. (BGI), issued 11.1 million BGI exchangeable shares,
which are each exchangeable for 0.53 of a Barrick common share at any time at
the option of the holder, and have essentially the same voting, dividend
(payable in Canadian dollars), and other rights as 0.53 of a Barrick common
share. BGI is a subsidiary that holds our interest in the Hemlo and Eskay Creek
Mines.  At December 31,
2007, 1.4 million (2006  1.4 million) BGI exchangeable shares were
outstanding, which are equivalent to 0.7 million Barrick common shares (2006 
0.7 million common shares), and are reflected in the number of common shares
outstanding. We have the right to require the exchange of each outstanding BGI
exchangeable share for 0.53 of a Barrick common share. While there are
exchangeable shares outstanding, we are required to present summary
consolidated financial information relating to BGI.  Summarized Financial Information for BGI  For the years ended December 31
  
  2007
  
  2006
  
  2005Total revenues and other income
  
  $
  213
  
  $
  233
  
  $
  181Less: costs and expenses(1)
  
  202
  
  215
  
  186Income (loss) before taxes
  
  $
  11
  
  $
  18
  
  $
  (5
  )Net income
  
  $
  22
  
  $
  33
  
  $
  21  At December 31
  
  2007
  
  2006AssetsCurrent assets
  
  $
  123
  
  $
  127Non-current assets
  
  47
  
  50$
  170
  
  $
  177Liabilities and shareholders equityLiabilitiesOther current liabilities
  
  22
  
  25Intercompany notes payable
  
  409
  
  387Other long-term liabilities
  
  109
  
  80Shareholders equity
  
  (370
  )
  (315
  )$
  170
  
  $
  177  
 (1)   2006 includes a $37 million
increase in the ARO at the Nickel Plate property (see note 21).  126


25Other
Comprehensive Income (Loss) (OCI)  2007
  
  2006
  
  2005Accumulated OCI at January 1Cash flow hedge gains, net of tax of $60,
  $61, $95
  
  $
  223
  
  $
  128
  
  $
  206Investments, net of tax of $7, $nil, $nil
  
  46
  
  12
  
  21Currency translation adjustments, net of
  tax of $nil, $nil, $nil
  
  (143
  )
  (143
  )
  (146
  )Pension plans and other post-retirement
  benefits, net of tax of $4, $nil, $nil
  
  (7
  )
  (28
  )
  (12
  )$
  119
  
  $
  (31
  )
  $
  69Other comprehensive income (loss) for the
  period:Changes in fair value of cash flow hedges
  
  257
  
  17
  
  23Changes in fair value of investments
  
  58
  
  43
  
  (8
  )Currency translation adjustments
  
  
  
  
  
  3Pension plans and other post-retirement
  benefits:Adjustments to minimum pension liability
  prior to adoption of FAS 158
  
  
  
  15
  
  (16
  )FAS 158 adjustments(note 27c):Elimination of minimum pension liability
  
  
  
  13
  
  Net actuarial gain (loss)
  
  19
  
  (9
  )
  Transition obligation
  
  1
  
  (2
  )
  Less: reclassification adjustments for
  gains/losses recorded in earnings:Transfers of cash flow hedge (gains) losses
  to earnings:On recording hedged items in earnings
  
  (185
  )
  77
  
  (134
  )Hedge ineffectiveness due to changes in
  timing of hedged items
  
  
  
  
  
  (1
  )Investments:Other than temporary impairment charges
  
  1
  
  4
  
  16Gains realized on sale
  
  (71
  )
  (6
  )
  (17
  )Other comprehensive income (loss), before
  tax
  
  80
  
  152
  
  (134
  )Income tax recovery (expense) related to
  OCI
  
  (48
  )
  (2
  )
  34Other comprehensive income (loss), net of
  tax
  
  $
  32
  
  $
  150
  
  $
  (100
  )Accumulated OCI at December 31Cash flow hedge gains, net of tax of $105,
  $60, $61
  
  250
  
  223
  
  128Investments, net of tax of $4, $7, $nil
  
  37
  
  46
  
  12Currency translation adjustments, net of
  tax of $nil, $nil, $nil
  
  (143
  )
  (143
  )
  (143
  )Pension plans and other post-retirement
  benefits, net of tax of $2, $4, $nil
  
  7
  
  (7
  )
  (28
  )$
  151
  
  $
  119
  
  $
  (31
  ) 26Stock-based
Compensation  a)Stock Options  In
September 2006, the SEC released a letter on accounting for stock options.
The letter addresses the determination of the grant date and measurement date
for stock option awards. For Barrick, the stock option 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. The application of the
principles in the letter issued by the SEC did not change the date that has
been historically determined as the measurement date for stock option grants.  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. Stock
options vest evenly over four years, beginning in the year after granting.
Options granted in July 2004 and prior are exercisable over 10 years,
whereas options granted since December 2004 are exercisable over 7 years.
At December 31, 2007, 10 million (2006: 13 million; 2005: 12 million)
common shares, in addition to those currently outstanding, were available for
granting options. Stock options when exercised result in an increase to the
number of common shares issued by Barrick.  127


Compensation expense for stock options was $25 million in 2007 (2006:
$27 million; 2005: $nil), and is presented as a component of cost of sales,
corporate administration and other expense, 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 reduced
earnings per share for 2007 by $0.03 per share (2006: $0.03 per share).  Total intrinsic value relating to options exercised in 2007 was $58
million (2006: $27 million; 2005: $22 million).  Employee Stock Option Activity (Number of Shares in
Millions)  2007
  
  2006
  
  2005Average
  
  
  
  Average
  
  
  
  AverageShares
  
  price
  
  Shares
  
  price
  
  Shares
  
  priceC$ optionsAt January 1
  
  11.9
  
  $
  28
  
  14.7
  
  $
  28
  
  19.4
  
  $
  28Granted
  
  
  
  $
  
  
  
  
  $
  
  
  
  
  $
  Issued on acquisition of Placer Dome
  
  
  
  $
  
  
  1.7
  
  $
  34
  
  
  
  $
  Exercised
  
  (3.9
  )
  $
  28
  
  (2.4
  )
  $
  26
  
  (3.8
  )
  $
  25Forfeited
  
  (0.1
  )
  $
  29
  
  (0.2
  )
  $
  27
  
  (0.8
  )
  $
  27Cancelled/expired
  
  (0.8
  )
  $
  35
  
  (1.9
  )
  $
  40
  
  (0.1
  )
  $
  40At December 31
  
  7.1
  
  $
  27
  
  11.9
  
  $
  28
  
  14.7
  
  $
  28US$ optionsAt January 1
  
  7.7
  
  $
  25
  
  6.9
  
  $
  24
  
  5.9
  
  $
  22Granted
  
  1.4
  
  $
  40
  
  1.1
  
  $
  30
  
  2.1
  
  $
  25Issued on acquisition of Placer Dome
  
  
  
  $
  
  
  1.0
  
  $
  19
  
  
  
  $
  Exercised
  
  (1.7
  )
  $
  23
  
  (0.9
  )
  $
  21
  
  (0.3
  )
  $
  15Forfeited
  
  (0.3
  )
  $
  25
  
  (0.4
  )
  $
  24
  
  (0.4
  )
  $
  28Cancelled/expired
  
  (0.1
  )
  $
  22
  
  
  
  $
  25
  
  (0.4
  )
  $
  26At December 31
  
  7.0
  
  $
  28
  
  7.7
  
  $
  25
  
  6.9
  
  $
  24  Stock
Options Outstanding (Number of Shares in Millions)  Outstanding
  
  ExercisableAverage
  
  Average
  
  Intrinsic
  value(1)
  
  
  
  Average
  
  Intrinsic
  Value(1)Range of exercise prices
  
  Shares
  
  price
  
  life (years)
  
  ($ millions)
  
  Shares
  
  price
  
  ($ millions)C $ options$ 22  $ 27
  
  3.2
  
  $
  24
  
  4
  
  $
  57
  
  3.2
  
  $
  24
  
  $
  57$ 28  $ 31
  
  3.8
  
  $
  29
  
  4
  
  47
  
  3.7
  
  $
  29
  
  46$ 32  $ 43
  
  0.1
  
  $
  32
  
  4
  
  1
  
  0.1
  
  $
  32
  
  17.1
  
  $
  27
  
  4
  
  $
  105
  
  7.0
  
  $
  27
  
  $
  104US$ options$  9  $ 19
  
  0.2
  
  $
  13
  
  5
  
  $
  5
  
  0.2
  
  $
  13
  
  $
  5$ 20  $ 27
  
  4.3
  
  $
  24
  
  4
  
  77
  
  2.8
  
  $
  24
  
  51$ 28  $ 41
  
  2.5
  
  $
  35
  
  8
  
  16
  
  0.3
  
  $
  30
  
  47.0
  
  $
  28
  
  6
  
  $
  98
  
  3.3
  
  $
  24
  
  $
  60  
 (1)Based on
the closing market share price on December 31, 2007 of C$41.78 and
US$42.05.  128


Option
Information  For the years ended December 31(per share and per option amounts in dollars)
  
  2007
  
  2006
  
  2005Valuation assumptions
  
  Lattice (1),(2)
  
  Lattice (1),(2)
  
  Black-Scholes
  (1)
  Lattice
  (2)Expected term (years)
  
  4.55
  
  4.55
  
  5
  
  5Expected volatility(2)
  
  30%38
  %
  30%38
  %
  23%30
  %
  31%38
  %Weighted average expected volatility(2)
  
  36.6
  %
  31.6
  %
  n/a
  
  33.3
  %Expected dividend yield
  
  0.7%0.9
  %
  0.7%0.9
  %
  0.8%1.0
  %
  0.9
  %Risk-free interest rate(2)
  
  3.2%5.1
  %
  4.3%5.1
  %
  3.8%4.0
  %
  4.3%4.5
  %Options granted (in millions)(3)
  
  1.4
  
  1.1
  
  1.1
  
  1.0Weighted average fair value per option
  
  $
  12.91
  
  $
  9.42
  
  $
  7.30
  
  $
  8.13  
 (1)Different
assumptions were used for the multiple stock option grants during the year.  (2)Stock
option grants issued after September 30, 2005 were valued using the
Lattice valuation model. The volatility and risk-free interest rate assumption
varied over the expected term of these stock option grants.  (3)Excludes
2.7 million fully vested options issued on the acquisition of Placer Dome.  We changed the
model used to value stock option grants from the Black-Scholes model to the
Lattice valuation model for stock options granted after September 30,
2005. We believe the Lattice valuation model provides a more representative
fair value because it incorporates more attributes of stock options such as
employee turnover and voluntary exercise patterns of option holders. For
options granted before September 30, 2005, fair value was determined using
the Black-Scholes method. The expected volatility assumptions have been
developed taking into consideration both historical and implied volatility of
our US dollar share price. The risk-free rate for periods within the
contractual life of the option is based on the US Treasury yield curve in
effect at the time of the grant.  We use the straight-line method 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 forfeitures rates. We make
adjustments if the actual forfeiture rate differs from the expected rate.  Under the Black-Scholes model the expected term assumption takes into
consideration assumed rates of employee turnover and represents the estimated
average length of time stock options remain outstanding before they are either
exercised or forfeited. Under the Lattice valuation model, the expected term
assumption is derived from the option valuation model and is in part based on
historical data regarding the exercise behavior of option holders based on
multiple share-price paths. The Lattice model also takes into consideration
employee turnover and voluntary exercise patterns of option holders.  As at December 31, 2007, there was $33 million (2006: $39 million;
2005:$56 million) of total unrecognized compensation cost relating to unvested
stock options. We expect to recognize this cost over a weighted average period
of 2 years (2006: 2 years; 2005: 2 years).  For years prior to 2006, we utilized the intrinsic value method of
accounting for stock options, which resulted in no compensation expense. If
compensation expense had been determined in accordance with the fair value
provisions of SFAS No. 123 pro-forma net income and net income per share
would have been as follows:  Stock
Option Expense  For the years ended December 31($ millions, except per shareamounts in dollars)
  
  2005Pro forma effectsNet income, as reported
  
  401Stock option expense
  
  (26
  )Pro forma net income
  
  375Net income per share:As reported  basic
  
  $
  0.75As reported  diluted
  
  $
  0.75Pro forma(1)
  
  $
  0.70  
 (1)Basic and diluted.  129


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 vest at the end of a three  year period and are settled in cash on the
third anniversary of the grant date. Additional RSUs are credited to reflect
dividends paid on Barrick common shares over the vesting period.  A liability for RSUs is recorded at fair value on the grant date, with
a corresponding amount recorded as a deferred compensation asset that is
amortized on a straight-line basis over the vesting period. Changes in the fair
value of the RSU liability are recorded each period, with a corresponding
adjustment to the deferred compensation asset. 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, 2007, the weighted average
remaining contractual life of RSUs was 2.5 years.  Compensation expense for RSUs was $16 million in 2007 (2006: $6
million; 2005: $2 million) and is presented as a component of cost of sales,
corporate administration and other expense, consistent with the classification
of other elements of compensation expense for those employees who had RSUs. As
at December 31, 2007 there was $75 million of total unamortized
compensation cost relating to unvested RSUs (2006: $36 million; 2005: $11
million).  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. 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 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.  DSU
and RSU Activity  Fair
  
  
  
  FairDSUs
  
  value
  
  RSUs
  
  value(thousands)
  
  (millions)
  
  (thousands)
  
  (millions)At December 31, 2004
  
  31
  
  $
  0.7
  
  235
  
  $
  5.6Settled for cash
  
  (3
  )
  (0.1
  )
  
  
  Forfeited
  
  
  
  
  
  (38
  )
  (0.9
  )Granted
  
  19
  
  0.5
  
  415
  
  11.1Converted to stock options
  
  
  
  
  
  (3
  )
  (0.1
  )Credits for dividends
  
  
  
  
  
  2
  
  0.1Change in value
  
  
  
  0.3
  
  
  
  0.6At December 31, 2005
  
  47
  
  $
  1.4
  
  611
  
  $
  16.4Settled for cash
  
  
  
  
  
  (82
  )
  (2.5
  )Forfeited
  
  
  
  
  
  (58
  )
  (1.6
  )Granted(1)
  
  22
  
  0.7
  
  893
  
  27Converted to stock options(1)
  
  
  
  
  
  (18
  )
  (0.5
  )Credits for dividends
  
  
  
  
  
  8
  
  0.2Change in value
  
  
  
  
  
  
  
  2.6At December 31, 2006
  
  69
  
  $
  2.1
  
  1,354
  
  $
  41.6Settled for cash
  
  (11
  )
  (0.3
  )
  (119
  )
  (4.9
  )Forfeited
  
  
  
  
  
  (38
  )
  (1.4
  )Granted
  
  42
  
  1.4
  
  1,174
  
  47.5Credits for dividends
  
  
  
  
  
  12
  
  0.4Change in value
  
  
  
  0.9
  
  
  
  17.0At December 31, 2007
  
  100
  
  $
  4.1
  
  2,383
  
  $
  100.2  
 (1)In January 2006,
under our RSU plan, 18,112 restricted share units were converted to 72,448
stock options.  c)
Employee Share Purchase Plan  During the first
quarter of 2008, Barrick is expected to launch an Employee Share Purchase Plan.
This plan will enable Barrick employees to purchase Company shares through
payroll deduction. Each year, employees may contribute 1%6% of their combined
base salary and annual bonus, and Barrick will match 50% of the contribution,
up to a maximum of $5,000 per year.  130


27Post-retirement Benefits  a) Defined Contribution Pension Plans  Certain employees
take part in defined contribution employee benefit plans. We also have a
retirement plan for certain officers of the Company, under which we contribute
15% of the officers annual salary and bonus. Our share of contributions to
these plans, which is expensed in the year it is earned by the employee, was
$49 million in 2007, $36 million in 2006 and $20 million in 2005.  b) Defined Benefit Pension Plans  We have qualified
defined benefit pension plans that cover certain of our United States, Canadian
and Australian employees and provide benefits based on employees years of
service. Through the acquisition of Placer Dome, we acquired pension plans in
the United States, Canada and Australia. 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. On
June 30, 2007, one of our qualified defined benefit plans in Canada was
wound-up. No curtailment gain or loss resulted and the obligations of the plans
are expected to be settled at the end of 2008. On November 30, 2007, one
of our defined benefit plans in Australia was wound-up and on December 31,
2007, the other defined benefit plan in Australia was wound-up. No curtailment
gain or loss resulted for either plan. In 2006, actuarial assumptions were
amended for one of our qualified defined benefit plans in Canada and on
June 30, 2006, one of our other plans in Canada was partially wound-up; no
curtailment gain or loss resulted for either plan. Also in 2006, one of our
qualified defined benefit plans was amended to freeze benefits in the United
States accruals for all employees, resulting in a curtailment gain of $8
million.  As well as the qualified plans, we have non-qualified defined benefit
pension plans covering certain employees and former directors of the Company.
An irrevocable trust (rabbi trust) was set up to fund these plans. The fair
value of assets held in this trust was $19 million in 2007 (2006: $21 million),
and is recorded in our consolidated balance sheet under available-for-sale
securities.  Actuarial gains and losses arise when the actual return on plan assets
differs from the expected return on plan assets for a period, or when the
expected and actuarial accrued benefit obligations differ at the end of the
year. We amortize actuarial gains and losses over the average remaining life
expectancy of plan participants, in excess of a 10% corridor.  Pension
Expense (Credit)  For the years ended December 31
  
  2007
  
  2006
  
  2005Expected return on plan assets
  
  $
  (21
  )
  $
  (20
  )
  $
  (11
  )Service cost
  
  2
  
  4
  
  Interest cost
  
  21
  
  22
  
  12Actuarial losses
  
  1
  
  1
  
  Curtailment gains
  
  
  
  (8
  )
  $
  3
  
  $
  (1
  )
  $
  1  c) Pension Plan Information  Fair Value of Plan AssetsFor the years ended December 31
  
  2007
  
  2006
  
  2005Balance at January 1
  
  $
  301
  
  $
  166
  
  $
  170Increase for plans assumed on acquisition
  of Placer Dome
  
  
  
  127
  
  Actual return on plan assets
  
  31
  
  35
  
  10Company contributions
  
  10
  
  10
  
  10Settlements
  
  (14
  )
  
  
  Benefits paid
  
  (35
  )
  (37
  )
  (24
  )Balance at December 31
  
  $
  293
  
  $
  301
  
  $
  166  2007
  
  2006At December 31
  
  Target
  
  Actual
  
  Actual
  
  ActualComposition of plan assets:Equity securities
  
  60
  %
  45
  %
  $
  130
  
  $
  180Debt securities
  
  40
  %
  42
  %
  123
  
  106Fixed income securities
  
  
  
  12
  %
  35
  
  Real estate
  
  
  
  
  
  
  
  9Other
  
  
  
  2
  %
  5
  
  6100
  %
  $
  293
  
  $
  301  Projected
Benefit Obligation (PBO)  For the years ended December 31
  
  2007
  
  2006Balance at January 1
  
  $
  389
  
  $
  224Increase for plans assumed on acquisition
  of Placer Dome
  
  
  
  191Service cost
  
  2
  
  4Interest cost
  
  21
  
  22Actuarial (gains) losses
  
  1
  
  (7
  )Benefits paid
  
  (35
  )
  (37
  )Curtailments
  
  (14
  )
  (8
  )Balance at December 31
  
  $
  364
  
  $
  389Funded status(1)
  
  $
  (71
  )
  $
  (88
  )ABO (2),(3)
  
  $
  254
  
  $
  386  
 (1)Represents
the fair value of plan assets less projected benefit obligations. Plan assets
exclude investments held in a rabbi trust that are recorded separately on our
balance sheet under Investments (fair value $19 million at December 31,
2007). In the year ending December 31, 2008, we do not expect to make any
further contributions.  (2)For 2007,
we used a measurement date of December 31, 2007 to calculate accumulated
benefit obligations.  (3)Represents
the accumulated benefit obligation (ABO) for all plans. The ABO for plans
where the PBO exceeds the fair value of plan assets was $254 million (2006:
$110 million).  131


Pension
Plan Assets/Liabilities  For the years ended December 31
  
  2007
  
  2006Non-current assets
  
  $
  25
  
  $
  5Current liabilities
  
  (8
  )
  (8
  )Non-current liabilities
  
  (87
  )
  (85
  )Other comprehensive income(1)
  
  (8
  )
  6$
  (78
  )
  $
  (82
  )  
 (1)Amounts
represent actuarial (gains) losses.  The projected
benefit obligation and fair value of plan assets for pension plans with a
projected benefit obligation in excess of plan assets at December 31, 2007
and 2006 were as follows:  For the years ended December 31
  
  2007
  
  2006Projected benefit obligation, end of year
  
  $
  329
  
  $
  111Fair value of plan assets, end of year
  
  $
  258
  
  $
  62  The projected
benefit obligation and fair value of plan assets for pension plans with an
accumulated benefit obligation in excess of plan assets at December 31,
2007 and 2006 were as follows:  For the years ended December 31
  
  2007
  
  2006Projected benefit obligation, end of year
  
  $
  329
  
  $
  111Accumulated benefit obligation, end of year
  
  $
  330
  
  $
  110Fair value of plan assets, end of year
  
  $
  258
  
  $
  62  Expected Future Benefit Payments  For the years ending December 312008
  
  $
  612009
  
  242010
  
  312011
  
  242012
  
  242013  2017
  
  $
  117  d) Actuarial Assumptions  For the years ended December 31
  
  2007
  
  2006
  
  2005Discount rate(1)Benefit obligation
  
  4.506.30
  %
  4.405.90
  %
  5.50
  %Pension cost
  
  4.505.81
  %
  4.405.90
  %
  5.50
  %Return on plan assets(1)
  
  4.507.25
  %
  7.007.25
  %
  7.00
  %Wage increases
  
  3.505.00
  %
  3.55.00
  %
  5.00
  %  
 (1)Effect of
a one-percent change: Discount rate: $25 million decrease in ABO and $1 million
increase in pension cost; Return on plan assets: $3 million decrease in pension
cost.  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, assumed rate of return on plan assets
and wage increases are the assumptions that generally have the most significant
impact on our pension cost and obligation.  The discount rate for benefit obligation and pension cost purposes is
the rate at which the pension obligation could be effectively settled. This
rate was developed by matching the cash flows underlying the pension obligation
with a spot rate curve based on the actual returns available on high-grade
(Moodys Aa) US corporate bonds. Bonds included in this analysis were
restricted to those with a minimum outstanding balance of $50 million. Only
non-callable bonds, or bonds with a make-whole provision, were included.
Finally, outlying bonds (highest and lowest 10%) were discarded as being
non-representative and likely to be subject to a change in investment grade.
The resulting discount rate from this analysis was rounded to the nearest 25
basis points. The procedure was applied separately for pension and
post-retirement plan purposes, and produced the same rate in each case.  The assumed rate of return on assets for pension cost purposes is the
weighted average of expected long-term asset return assumptions. In estimating
the long-term rate of return for plan assets, historical markets are studied
and long-term historical returns on equities and fixed-income investments
reflect the widely accepted capital market principle that assets with higher
volatility generate a greater return over the long run. Current market factors
such as inflation and interest rates are evaluated before long-term capital
market assumptions are finalized.  Wage increases reflect the best estimate of merit increases to be
provided, consistent with assumed inflation rates.  132


e) Other Post-retirement Benefits  We provide
post-retirement medical, dental, and life insurance benefits to certain
employees. We use the corridor approach in the accounting for post-retirement
benefits. Actuarial gains and losses resulting from variances between actual
results and economic estimates or actuarial assumptions are deferred and
amortized over the average remaining life expectancy of participants when the
net gains or losses exceed 10% of the accumulated post-retirement benefit
obligation.  Other Post-retirement Benefits Expense  For the years ended December 31
  
  2007
  
  2006
  
  2005Interest cost
  
  $
  2
  
  $
  2
  
  $
  2Other
  
  
  
  
  
  5$
  2
  
  $
  2
  
  $
  7  Fair Value of Plan Assets  For the years ended December 31
  
  2007
  
  2006
  
  2005Balance at January 1
  
  $
  
  
  $
  
  
  $
  Contributions
  
  2
  
  3
  
  4Benefits paid
  
  (2
  )
  (3
  )
  (4
  )Balance at December 31
  
  $
  
  
  $
  
  
  $
    Accumulated
Post-retirement Benefit Obligation (APBO)  For the years ended December 31
  
  2007
  
  2006
  
  2005Balance at January 1
  
  $
  37
  
  $
  39
  
  $
  29Interest cost
  
  2
  
  2
  
  2Actuarial losses
  
  (7
  )
  (1
  )
  11Benefits paid
  
  (2
  )
  (3
  )
  (3
  )Balance at December 31
  
  $
  30
  
  $
  37
  
  $
  39Funded status
  
  (30
  )
  (37
  )
  (38
  )Unrecognized net transition obligation
  
  n/a
  
  n/a
  
  1Unrecognized actuarial losses
  
  n/a
  
  n/a
  
  6Net benefit liability recorded
  
  n/a
  
  n/a
  
  $
  (31
  )  Other
Post-retirement Assets/Liabilities  For the year ended December 31
  
  2007
  
  2006Current liability
  
  $
  (3
  )
  $
  (3
  )Non-current liability
  
  (27
  )
  (33
  )Accumulated other comprehensive income
  
  (1
  )
  5$
  (31
  )
  $
  (31
  ) Amounts recognized
in accumulated other comprehensive income consist of:(1)  For the year ended December 31
  
  2007
  
  2006Net actuarial loss (gain)
  
  $
  (2
  )
  $
  3Transition obligation (asset)
  
  1
  
  2$
  (1
  )
  $
  5  
 (1)The
estimated amounts that will be amortized into net periodic benefit cost in
2008.  We have assumed a
health care cost trend of 9% in 2008, decreasing ratability to 5% in 2010 and
thereafter. The assumed health care cost trend had a minimal effect on the
amounts reported. A one percentage point change in the assumed health care cost
trend rate at December 31, 2007 would have had no significant effect on
the post-retirement obligation and would have had no significant effect on the
benefit expense for 2007.  Expected Future Benefit Payments  For the years ending December 312008
  
  $
  32009
  
  32010
  
  32011
  
  32012
  
  32013  2017
  
  $
  11  133


28Litigation and Claims  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 and 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.  Wagner Complaint  On June 12,
2003, a complaint was filed against Barrick and several of its current or
former officers in the U.S. District Court for the Southern District of New
York. The complaint is on behalf of Barrick shareholders who purchased Barrick
shares between February 14, 2002 and September 26, 2002. It alleges
that Barrick and the individual defendants violated U.S. securities laws by
making false and misleading statements concerning Barricks projected operating
results and earnings in 2002. The complaint seeks an unspecified amount of
damages. Other parties filed several other complaints, making the same basic
allegations against the same defendants. In September 2003, the cases were
consolidated into a single action in the Southern District of New York. The
plaintiffs filed a Third Amended Complaint on January 6, 2005. On
May 23, 2005, Barrick filed a motion to dismiss part of the Third Amended
Complaint. On January 31, 2006, the Court issued an order granting in part
and denying in part Barricks motion to dismiss. Both parties moved for
reconsideration of a portion of the Courts January 31, 2006 Order. On
December 12, 2006, the Court issued its order denying both parties
motions for reconsideration. On February 15, 2008, the Court issued an
order granting the plaintiffs motion for class certification. Discovery is
ongoing. We intend to defend the action vigorously. No amounts have been
accrued for any potential loss under this complaint.  Marinduque Complaint  Placer Dome has
been named the sole defendant in a Complaint filed on October 4, 2005, by
the Provincial Government of Marinduque, an island province of the Philippines
(Province), with the District Court in Clark County, Nevada. The action was
removed to the Nevada Federal District Court on motion of Placer Dome. The
Complaint asserts that Placer Dome is responsible for alleged environmental
degradation with consequent economic damages and impacts to the environment in
the vicinity of the Marcopper mine that was owned and operated by Marcopper
Mining Corporation (Marcopper). Placer Dome indirectly owned a minority
shareholding of 39.9% in Marcopper until the divestiture of its shareholding in
1997. The Province seeks to recover damages for injuries to the natural,
ecological and wildlife resources within its territory, but does not seek to
recover damages for individual injuries sustained by its citizens either to
their persons or their property. In addition to damages for injury to natural
resources, the Province seeks compensation for the costs of restoring the
environment, an order directing Placer Dome to undertake and complete the
remediation, environmental cleanup, and balancing of the ecology of the
affected areas, and payment of the costs of environmental monitoring. The
Complaint addresses the discharge of mine tailings into Calancan Bay, the 1993
Maguila-guila dam breach, the 1996 Boac river tailings spill, and alleged past
and continuing damage from acid rock drainage.  At the time of the amalgamation of Placer Dome and Barrick Gold
Corporation, a variety of motions were pending before the District Court,
including motions to dismiss the action for lack of personal jurisdiction and
for forum non conveniens(improper
choice of forum). However, on June 29, 2006, the Province filed a Motion
to join Barrick Gold Corporation as an additional named Defendant and for leave
to file a Third Amended Complaint. The Court granted that motion on
March 2, 2007. On March 6, 2007, the Court issued an order setting a
briefing schedule on the Companys motion to dismiss on grounds of forum non conveniens. Briefing was
completed on May 21, 2007, and on June 7, 2007, the Court issued an
order granting the Companys motion to dismiss. On June 25, 2007, the
Province filed a motion requesting the Court to reconsider its Order dismissing
the action. The Company opposed the motion for reconsideration. On July 6,
2007, the Province filed a Notice of Appeal to the Ninth Circuit from the Order
on the motion to dismiss. On August 8, 2007, the Ninth Circuit issued an
order holding the appeal in abeyance pending the district courts resolution of
the motion for reconsideration.  134


On January 16,
2008, the district court issued an order denying the Provinces motion for
reconsideration. Following the district court order, the Province has filed an
amended Notice of Appeal. We will challenge the claims of the Province on
various grounds and otherwise vigorously defend the action. No amounts have
been accrued for any potential loss under this complaint.  Calancan Bay (Philippines) Complaint  On July 23,
2004, a complaint was filed against Marcopper and Placer Dome Inc. (PDI) in
the Regional Trial Court of Boac, on the Philippine island of Marinduque, on
behalf of a putative class of fishermen who reside in the communities around
Calancan Bay, in northern Marinduque. The complaint alleges injuries to health
and economic damages to the local fisheries resulting from the disposal of mine
tailings from the Marcopper mine. The total amount of damages claimed is
approximately US$900 million.  On October 16, 2006, the court granted the plaintiffs application
for indigent status, allowing the case to proceed without payment of filing
fees. On January 17, 2007, the Court issued a summons to Marcopper and
PDI. To date, we are unaware of any attempts to serve the summons on PDI, nor
do we believe that PDI is properly amenable to service in the Philippines. If
service is attempted, the Company intends to defend the action vigorously. No
amounts have been accrued for any potential loss under this complaint.  Pakistani Constitutional Litigation  On
November 28, 2006, a Constitutional Petition was filed in the High Court
of Balochistan by three Pakistan citizens against: Barrick, the governments of
Balochistan and Pakistan, the Balochistan Development Authority (BDA),
Tethyan Copper Company ( TCC), Antofagasta Plc (Antofagasta), Muslim
Lakhani and BHP (Pakistan) Pvt Limited (BHP).  The Petition alleged, among other things, that the entry by the BDA
into the 1993 Joint Venture Agreement (JVA) with BHP to facilitate the
exploration of the Reko Diq area and the grant of related exploration licenses
were illegal and that the subsequent transfer of the interests of BHP in the
JVA and the licenses to TCC was also illegal and should therefore be set aside.
Barrick currently indirectly holds 50% of the shares of TCC, with Antofagasta
indirectly holding the other 50%.  On June 26, 2007, the High Court of Balochistan dismissed the
Petition against Barrick and the other respondents in its entirety. On
August 23, 2007, the petitioners filed a Civil Petition for Leave to
Appeal in the Supreme Court of Pakistan. The Supreme Court of Pakistan has not
yet considered the Civil Petition for Leave to Appeal. Barrick intends to
defend this action vigorously. No amounts have been accrued for any potential
loss under this complaint.  NovaGold Litigation  On August 24,
2006, during the pendency of Barricks unsolicited bid for NovaGold Resources
Inc., NovaGold filed a complaint against Barrick in the United States District
Court for the District of Alaska. The complaint was amended on several
occasions with the most recent amendment having been filed in
January 2007. The complaint, as amended, sought a declaration that Barrick
will be unable to satisfy the requirements of the Mining Venture Agreement
between NovaGold and Barrick which would allow Barrick to increase its interest
in the Donlin Creek joint venture from 30% to 70%. NovaGold also asserted that
Barrick breached its fiduciary and contractual duties to NovaGold, including
its duty of good faith and fair dealing, by misusing confidential information
of NovaGold regarding NovaGolds Galore Creek project in British Columbia.
NovaGold sought declaratory relief, an injunction and an unspecified amount of
damages. Barricks Motion to Dismiss NovaGolds amended complaint was heard on
February 9, 2007. On July 17, 2007 the Court issued its order
granting the Motion to Dismiss with respect to all claims. On August 28,
2007, NovaGold filed a notice of appeal as to a portion of the district courts
order granting Barricks motion to dismiss.  On August 11, 2006, NovaGold filed a complaint against Barrick in
the Supreme Court of British Columbia. The complaint asserted that in the
course of discussions with NovaGold of a potential joint venture for the
development of the Galore Creek project, Barrick misused confidential
information of NovaGold regarding that project to, among other things,
wrongfully acquire Pioneer Metals, a company that holds mining claims adjacent
to NovaGolds project. NovaGold asserted that Barrick breached fiduciary duties
owed to NovaGold, intentionally and wrongfully interfered with NovaGolds
interests and has been unjustly enriched. NovaGold sought a constructive trust
over the shares in Pioneer acquired by Barrick and an accounting for any
profits of Barricks conduct, as well as an unspecified amount of damages.  On December 3, 2007 Barrick and NovaGold announced that a global
settlement of all disputes between them had been reached. As a result of this
settlement, all pending legal actions between Barrick and NovaGold have been
dismissed.  135