##### 



EXHIBIT 4


MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL AND OPERATING RESULTS

The Company prepares its primary consolidated financial statements and
related notes under United States GAAP, which are included in the Companys
annual report. The accompanying consolidated financial statements and related
notes are presented in accordance with Canadian generally accepted accounting
principles (Canadian GAAP) and are expressed in US dollars. These
statements, together with the following discussion and analysis, are intended
to provide investors with a reasonable basis for assessing our operational
and financial performance as well as certain forward looking information
relating to potential future performance.

STRATEGIC PERSPECTIVES

Barrick Gold Corporation is among the worlds largest gold producers in terms
of market capitalization, production and reserves, with operating properties
and development projects on four continents. With 2003 marking Barricks 20th
year in the gold business, we believe that we are positioned to benefit from
the opportunities presented by a favorable gold price environment.

Since its founding, Barrick has been run in accordance with clear and concise
business principles, focusing on profitability and financial performance
rather than sheer size. We know that the key drivers of performance in our
business are spot gold prices, production, reserves and costs per ounce.

In 2002, our financial results were below our expectations, primarily due to
higher costs at our operations. As we move into 2003, we intend to focus on
optimizing our operating mines and setting achievable targets based on each
mines stage of operation. Overall, we have a solid portfolio of operating -
albeit mature  properties. Even as the average ore grade mined at each of
our operations declines toward reserve grade, these mines remain long-life,
low-cost operations compared to the industry. The key feature of these
properties is their ability to generate significant free cash flow, which we
plan to use in part to fund our exploration and development programs.

In addition to our operating mines, we have the largest portfolio of
development projects in the industry, and the financial and development
strengths to build them. For the last five years, as the lower gold price
environment reduced exploration spending across the industry, we invested
extensively in our exploration program. This investment paid dividends in
2002 with a major gold discovery  Alto Chicama in Peru. By early 2003, our
work at Alto Chicama allowed us to add 6.5 million ounces to reserves,
bringing our total reserves to 86.9 million ounces, one of the largest gold
asset bases in the industry.

Coupled with the development projects obtained through our Homestake merger
in 2001, we now have a four mine,
$2-billion development program that we expect to contribute to production,
earnings and cash flows beginning in 2005. At full production, we expect this
group of projects to add 2 million ounces of low-cost gold production
annually to our portfolio for their first decade of operation. With such a
sizeable development program underway, our strategic focus for the immediate
future will be to continue our exploration efforts in ways that further
enhance our operating mines and development projects. While our strategy does
not make us dependent on acquisitions, we will consider transactions that we
believe are capable of increasing earnings and cash flows.

We have the financial resources to move ahead with our exploration and
development programs without diluting our shareholders because of our solid
balance sheet, strong free cash flows from our existing operations and the
support of our forward sales program.

HIGHLIGHTS

We completed the merger with Homestake on December 14, 2001. The merger has
been accounted for as a purchase under Canadian GAAP, with the results of
Homestakes operations included in our consolidated financial statements
effective December 31, 2001. Consequently, the statements of income and cash
flows for 2002 include the following principal Homestake mines: Round
Mountain; Eskay Creek; Hemlo; Plutonic; Darlot; Lawlers and Kalgoorlie. We
have not provided comparative financial information and statistics for these
mines and instead we focused our analysis on any known trends or factors that
will affect their future performance compared to fiscal 2002.

33



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##### 



For 2002, our net income was $229 million ($0.42 per share) compared to $271
million ($0.68 per share) in 2001, while operating cash flow was $652 million
($1.20 per share) for 2002 versus $679 million ($1.71 per share) for 2001.

For the year, we produced 5.7 million ounces of gold at total cash costs of
$177 per ounce compared to 3.7 million ounces of gold at $159 per ounce in
2001. Higher 2002 production was largely due to the inclusion of production
from the Homestake mines acquired at the end of 2001.

Overall, we met our production target for the year as solid contributions
from our Pierina mine in Peru and two of our North American operations offset
lower production from four of our seven underground mines. The lower
production and the resulting higher cash costs at the four underground mines
were due largely to difficulties in accessing higher-grade ores. The four
mines spent 2002 improving mine planning and increasing development to
provide better production flexibility in 2003 and beyond.

The $18 per ounce increase in total cash costs in 2002 over 2001 was mainly
due to our ongoing operations processing more ore at lower grades at
marginally higher unit costs.

Our 2002 earnings were also affected by an increase in our exploration and
development expense by $12 million to $52 million.

We generated solid cash flows from our operating mines and as a result of our
lowest capital expenditures in 14 years, our free cash flows reached $361
million(1), the highest in Company history. Our forward sales program also
contributed, generating $148 million in additional revenue in 2002. As a
result, we ended the year with more than $1 billion in cash, and no net debt.

Our forward sales program provides us the flexibility to deliver at our
forward price or the spot gold price  whichever is higher. For the first
time in 15 years, in the first quarter of 2003 spot gold prices increased
above our current year forward price, allowing us to defer delivery of our
forward contracts and sell at the higher spot gold price. Our forward sales
program has performed as it was designed, providing a higher floor price
during periods of low gold prices and the flexibility to sell all of our mine
production at higher spot prices.

We believe that our forward sales programs flexibility is one of the
significant strengths of this Company. At a time when spot gold prices rose
by more than $100 per ounce and our unrealized mark-to-market loss increased,
our program remained solid. What makes gold hedging unique  in sharp
contrast to derivative instruments in general  is the fact that our program
is supported by gold in the ground which can be delivered in the normal
course of our business. Every ounce hedged represents a product we own  and
we only have about one in five ounces sold forward under our program.

While the program has worked well for us in the past and remains an important
asset, changing circumstances make adjustments necessary. Given the present
environment of low interest rates and concerns over complex financial
transactions, we intend to make our forward selling program both smaller and
simpler. Accordingly, over the course of 2002 we reduced the size of our
program and focused on plain vanilla spot deferred forward sales contracts.

Global  Results

|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|--------------------------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | -
|For the year ended December 31(Canadian GAAP Basis) |  | 2002 |       | 2001 |  | % Change
|                                                    |  |      |       |      |  |         
|Gold production  ounces (thousands)                |  |      | 5,695 |      |  |          | 3,739 |  |  |  | 52  |  
|Revenue per ounce                                   |  | $    | 336   |      |  | $        | 341   |  |  |  | (1  | )
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|Cash operating costs per ounce                      |  |      | 170   |      |  |          | 152   |  |  |  | 12  |  
|Royalties                                           |  |      | 6     |      |  |          | 6     |  |  |  |     |  
|Production taxes                                    |  |      | 1     |      |  |          | 1     |  |  |  |     |  
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|Total cash costs per ounce                          |  |      | 177   |      |  |          | 159   |  |  |  | 11  |  
|Amortization and reclamation                        |  |      | 82    |      |  |          | 94    |  |  |  | (13 | )
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|Total production costs per ounce                    |  | $    | 259   |      |  | $        | 253   |  |  |  | 2   |  
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|Capital expenditures (millions)                     |  | $    | 291   |      |  | $        | 549   |  |  |  | (47 | )
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  
|Mineral reserves (millions of ounces)               |  |      | 86.9  |      |  |          | 82.3  |  |  |  | 6   |  
|                                                    |  |      |       |      |  |          |       |  |  |  |     |  



---

|(1) |  | See non-GAAP measures page 63.
|--- |  | ------------------------------

34



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##### 



OUTLOOK

While no company can predict future performance with certainty, we have a
solid portfolio of assets capable of generating significant free cash flows.
Our pipeline of development projects gives us the flexibility to add to our
production profile without the necessity of acquisitions. While we believe
that consolidation and rationalization of the gold industry will continue,
our primary focus is on optimizing our existing mines and the development of
our new mines.

For 2003, we expect to produce between 5.4 and 5.5 million ounces at a cash
cost of $180 to $190 per ounce. Including amortization, total production
costs for the year are expected to be between $270 and $280 per ounce. Our
forward sales program provides us with the ability to sell our production at
a minimum selling price of $340 per ounce for 2003; however, as our objective
is to maximize the value of every ounce we produce, we plan to sell our
production at the higher of the spot price or our forward price.

We expect administration costs to be approximately $70 million, with
exploration and business development of about $70 million. Interest expense
is expected to be about $50 million. Based on $350 per ounce gold, our tax
rate is expected to be between 15% and 20%; at $400 per ounce gold, our tax
rate would increase to 25% to 30%.

We plan to begin implementing our development program in 2003, increasing
capital expenditures to approximately $430 million compared to $291 million
last year, with the increase aimed at starting construction at the Veladero
and Cowal projects. In addition to the steady stream of free cash flow
generated by our existing operations, we bring the strength of our balance
sheet  with $1 billion in cash and low levels of debt  to provide the
financial base to proceed with these projects.

The forward looking statements included in this discussion and analysis
involve risks and uncertainties and are based upon assumptions, which we
believe are reasonable, but which could prove incorrect. Factors which could
cause actual results to differ from those implied in the forward looking
statements include: changes in the price of gold and certain other
commodities; currency fluctuations; regulatory, political or economic
developments in the areas in which we carry on business; and changes in
mining or processing rates. With a large proportion of our reserve base
undeveloped, the timing of commencement of production, as well as capital
cost, production and cash costs of our development projects will have a
significant impact on future financial performance in 2005 and beyond. For a
more detailed discussion of risks relevant to Barrick, see our Form
40-F/Annual Information Form on file with securities regulatory authorities.

INCOME STATEMENT

Gold Sales

Revenue for 2002 totaled $1,947 million on gold sales of 5.8 million ounces,
compared with $1,324 million on gold sales of 3.9 million ounces in 2001. In
2002, gold sales were 1.9 million ounces higher than 2001, reflecting the
contributions of mines acquired in the Homestake merger at the end of 2001.
With the exception of one mine closure in 2004, our existing operations
should continue to produce at similar levels for the next several years.

The higher 2002 revenue compared to the prior year resulted from a 49%
increase in gold sales due to the inclusion of the Homestake operations,
partially offset by a $5 per ounce, or 1% decrease in the average realized
price.

In 2002, gold prices rose to their highest level since 1997, averaging $310
per ounce, compared to 2001, when gold averaged $271 per ounce. Higher spot
gold prices, combined with deliveries into our forward sales program, allowed
us to realize an average price of $336 per ounce compared to an average
realized price of $341 per ounce in 2001. The forward sales program generated
$148 million in additional revenue in 2002 and $276 million in additional
revenue in 2001. The decline in additional revenue generated through our
forward sales program in 2002 was due to higher spot gold prices, reducing
the amount of the premium over the spot price from $83 per ounce in 2001 to
$37 per ounce in 2002.

35



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##### 



As we saw in 2002 when spot gold prices rise toward our higher forward sale
price, the additional revenue earned through the program decreases. When spot
gold prices rise above our forward sale price, as occurred in early 2003, we
can sell all of our gold production at the higher spot price and defer
delivery of our forward sales contracts to a future date. While the value of
our reserves and cash flows increase as spot gold prices rise, the unrealized
mark-to-market loss on our program also rises. The mark-to-market value
declined from an unrealized gain of $356 million at the end of 2001 to an
unrealized loss of $639 million at the end of 2002. The decline in the
mark-to-market value is primarily due to increasing spot gold prices (year
end spot gold prices, 2002  $347 compared to 2001  $279) and the
realization of $148 million of additional contract revenue during 2002,
partially offset by unrealized gains on changes in forward gold price
differentials (or contango), which are influenced principally by changes in
interest and gold lease rates and premiums (US interest rates less gold lease
rates) earned during the year. For additional detail see Off-Balance Sheet
Arrangements  Significance of mark-to-market gains and losses page 61.

Future gold production committed under our forward sales program totaled 18.1
million ounces at December 31, 2002. This represents approximately 21% of
proven and probable reserves, deliverable over the next 10 to 15 years at an
average estimated future price of $341 per ounce at the scheduled delivery
dates. For 2003, we have the ability to sell our production into the forward
sales program at an average price of $340 per ounce. In early 2003, the
delivery dates on those contracts have been extended pursuant to their terms,
as we elected to sell our production at the higher spot price of
approximately $360 per ounce. This is the first time in 15 years that gold
prices have risen above our current year forward sales price, leading us to
defer scheduled deliveries under those contracts and sell our production at
the higher spot price.

Gold deliveries into these forward sales contracts can be deferred for up to
10 to 15 years; as they are deferred, the delivery price under these
contracts increases over time. The increase in the delivery price of these
deferred contracts is based on the present spot-forward gold price
differential, primarily influenced by US dollar interest rates. In a high US
dollar interest rate environment, the delivery price rises quickly, while in
the present low interest rate environment, the delivery price rises at a
slower rate.

In an effort to make our program smaller and simpler, we delivered production
against forward sales contracts without replacing those contracts, and we
reduced our variable price sales commitments by approximately two-thirds.
These steps allowed us to close the year at 18.1 million ounces committed
under our forward sales program, leaving approximately 80% of our reserves
unhedged. With our positive outlook for the gold price, interest rates at
40-year lows (leading to lower forward sales premiums), and our strong
financial position, we intend to continue to manage the program down to a
lower portion of overall reserves.

36



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##### 



OPERATIONS REVIEW BY GEOGRAPHIC AREA

North America
South America
Africa
Australia

As noted in the Highlights, 2002 production increased to 5.7 million ounces
from 3.7 million ounces in 2001. Total operating costs, including
reclamation, increased to $1,073 million in 2002 from $633 million in 2001
mainly due to the increase in gold sales volumes. On a per ounce basis, total
cash costs for the year increased to $177, from $159 in 2001. Higher cash
costs were attributable to three main factors:



| |  |  | Mining and processing more lower-grade tons during the year;        
| | - |  | --------------------------------------------------------------------
|
| |  |  | Increased amortization of deferred mining costs; and                
|
| |  |  | Increased royalty and mining tax payments due to higher gold prices.

One of the operational facts inherent in our industry is that as operations
mature, grades decline and it becomes more difficult to add reserves at these
operations. The lower grades lead to less production flexibility as the
operations have fewer choices of which areas to mine. Most of our operations
have reduced controllable unit mining, processing and administrative costs
through productivity improvements, resulting in higher mining and processing
rates. However, comparatively small changes in tons and grades processed and
recovery rates have a more pronounced impact on production, cash costs and
earnings than before.

A variety of unrelated operating difficulties accessing higher-grade ores in
2002 at Bulyanhulu, Hemlo, Plutonic and Meikle led to lower production and
higher costs per ounce, overshadowing strong contributions from Round
Mountain, Pierina, and Eskay Creek. We responded to the operational issues by
enhancing mine planning, scheduling and budgeting to ensure better
information and providing greater production flexibility, giving us greater
ability to optimize the value of our underground mines. In addition, we have
reviewed our operating systems and procedures to improve controls to
facilitate timely updating of forecast information at our mines. Our efforts
centered on improving the accuracy of periodic forecasting by the General
Managers and putting a stronger emphasis on achievability through the
corporate office review process.

In addition, planned increases in expensing of deferred mining costs at
Betze-Post and Pierina resulted in higher cash costs at those operations as
mining moved into lower-grade areas of the open pits.

With the closure of five mines in 2002 and our new projects not expected to
begin to contribute to production until 2005, we anticipate lower production
in 2003 and 2004. Production for 2003 is expected to be between 5.4 and 5.5
million ounces, at a cash cost of between $180 and $190 per ounce. Following
is a summary of each of our mines and development projects. For a more
detailed discussion of our operations and development projects see the most
current Annual Information Form (AIF  on file with the securities regulatory
authorities in Canada and the U.S.).

NORTH AMERICA



| |  |  | Largest producing region, accounting for 62% of the Companys total production.                                                                                     
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Region represents 50% of our developed reserve base at 26.2 million ounces.                                                                                         
|
| |  |  | Long-life asset base.                                                                                                                                               
|
| |  |  | Fully developed operations generating the majority of the
Companys free cash flow, which will be used to fund exploration and
to build our new generation of mines.

NORTH AMERICAN PROPERTIES

Goldstrike, Nevada     Betze-Post     Meikle
Round

Mountain, Nevada
Eskay Creek, British Columbia
Hemlo, Ontario
Holt-McDermott, Ontario

37



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##### 



Goldstrike Property (Nevada)

|                                  |  |      |         |      |  |          |         |  |  |  |     |  
|--------------------------------- |  | ---- | ------- | ---- |  | -------- | ------- |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |         | 2001 |  | % Change
|                                  |  |      |         |      |  |         
|OPERATIONAL STATISTICS            |  |      |         |      |  |          |         |  |  |  |     |  
|Tons Mined (000s)                |  |      | 144,533 |      |  |          | 155,606 |  |  |  | (7  | )
|Tons Processed (000s)            |  |      | 11,960  |      |  |          | 10,562  |  |  |  | 13  |  
|Grade Processed (ounces per ton)  |  |      | 0.20    |      |  |          | 0.25    |  |  |  | (20 | )
|Gold Production(000s of ounces)  |  |      | 2,050   |      |  |          | 2,263   |  |  |  | (9  | )
|Mineral Reserves(000s of ounces) |  |      | 19,939  |      |  |          | 20,379  |  |  |  | (2  | )
|                                  |  |      |         |      |  |          |         |  |  |  |     |  
|FINANCIAL STATISTICS              |  |      |         |      |  |          |         |  |  |  |     |  
|Cash cost per ounce               |  |      |         |      |  |          |         |  |  |  |     |  
|Cash operating costs              |  | $    | 209     |      |  | $        | 183     |  |  |  | 14  |  
|Royalties and production taxes    |  |      | 9       |      |  |          | 10      |  |  |  | (10 | )
|                                  |  |      |         |      |  |          |         |  |  |  |     |  
|Total cash costs                  |  | $    | 218     |      |  | $        | 193     |  |  |  | 13  |  
|                                  |  |      |         |      |  |          |         |  |  |  |     |  

The Goldstrike Property remains the Companys single largest producer and has
just completed its eighth straight year producing more than 2 million ounces.
Cash costs have increased over the past five years as the Property has moved
from mining and processing high-grade material to near reserve grade material
in both the open pit and underground. As well, electric power and fuel cost
increases have pressured costs higher. Power costs increased in the Western
United States in 2001, causing our supplier to increase our rates
substantially (4.3 cents per kwh to over 7 cents per kwh). We are looking at
alternative power suppliers to lower our power costs.

While the Property has matured, it replaced 80% of production in 2002 through
reserve expansion in both the open pit (1.3 million ounces) and the
underground (642,000 ounces), its best showing since 1999. Overall, the
Property is expected to continue to produce at the 2 million ounce level for
at least the next four years. Cash costs are expected to remain relatively
constant. With the large capital program completed, the Property contributes
the majority of the free cash flow from our existing operations  free cash
flow that will play a key role in funding our exploration program and
developing our new generation of mines.

In 2002, production declined 9% compared to 2001, while total cash costs
increased to $218 per ounce, up from $193 a year earlier. The lower
production and higher cash costs were largely due to processing more tons (up
13%) at lower grade (down 20%). In addition, higher power costs (up $6 per
ounce) and expensing of deferred stripping costs at Betze-Post (up $14 per
ounce) led to higher costs.

In 2003, the Property is expected to produce 2,115,000 ounces of gold (3%
higher than 2002) at cash costs of $225 per ounce. The increase in cash costs
is largely due to higher royalties and production taxes resulting from higher
gold prices.

Betze-Post Mine

|                                  |  |      |         |      |  |          |         |  |  |  |     |  
|--------------------------------- |  | ---- | ------- | ---- |  | -------- | ------- |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |         | 2001 |  | % Change
|                                  |  |      |         |      |  |         
|OPERATIONAL STATISTICS            |  |      |         |      |  |          |         |  |  |  |     |  
|Tons Mined (000s)                |  |      | 142,898 |      |  |          | 154,233 |  |  |  | (7  | )
|Tons Processed (000s)            |  |      | 10,322  |      |  |          | 9,187   |  |  |  | 12  |  
|Grade Processed (ounces per ton)  |  |      | 0.16    |      |  |          | 0.20    |  |  |  | (20 | )
|Gold Production(000s of ounces)  |  |      | 1,410   |      |  |          | 1,550   |  |  |  | (9  | )
|Mineral Reserves(000s of ounces) |  |      | 16,051  |      |  |          | 16,433  |  |  |  | (2  | )
|                                 
|FINANCIAL STATISTICS              |  |      |         |      |  |          |         |  |  |  |     |  
|Cash cost per ounce               |  |      |         |      |  |          |         |  |  |  |     |  
|Cash operating costs              |  | $    | 221     |      |  | $        | 207     |  |  |  | 7   |  
|Royalties and production taxes    |  |      | 7       |      |  |          | 8       |  |  |  | (14 | )
|                                  |  |      |         |      |  |          |         |  |  |  |     |  
|Total cash costs                  |  | $    | 228     |      |  | $        | 215     |  |  |  | 6   |  
|                                  |  |      |         |      |  |          |         |  |  |  |     |  

38



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##### 



Betze-Post production declined 9% from the previous year. The lower
production was due to lower grades processed (down 20%), partially offset by
higher throughput (up 12%). To maximize investment returns, the mine plan was
designed to process higher-grade ore first and stockpile the lower-grade
material in the earlier years of its life. Over the past four years
(1999-2002), the average grade processed declined by 41%, while in the past
two years the cost of power increased by $19 per ounce. Despite the lower
grade, cash costs increased by only $6 per ounce or 3% (excluding power cost
increases) over the four-year period because of the mines productivity
improvements and cost-reduction initiatives.

Proven and probable gold reserves at Betze-Post decreased to 16.1 million
ounces from 16.4 million ounces in 2001. The partial reserve replacement in
2002 was due to lower unit mining and processing costs, which allowed the
conversion of a small underground reserve into a larger open pit reserve, as
well as the discovery of lower-grade material at the pit bottom last year.

For 2003, production is expected to increase to 1,495,000 ounces due to
better grades mined and processed (up 6%) and increased tons processed (up
5%). Lower unit mining costs, combined with higher recovery rates and
throughput, are expected to more than offset another power cost increase,
resulting in a 4% reduction in cash operating costs per ounce before
royalties and production taxes. However, higher spot gold prices are expected
to result in higher royalties and production taxes, resulting in total cash
costs similar to 2002 at $228 per ounce.

Meikle Mine

|                                  |  |      |       |      |  |          |       |  |  |  |     |  
|--------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |       | 2001 |  | % Change
|                                  |  |      |       |      |  |         
|OPERATIONAL STATISTICS            |  |      |       |      |  |          |       |  |  |  |     |  
|Tons Mined (000s)                |  |      | 1,635 |      |  |          | 1,372 |  |  |  | 19  |  
|Tons Processed (000s)            |  |      | 1,638 |      |  |          | 1,375 |  |  |  | 19  |  
|Grade Processed (ounces per ton)  |  |      | 0.43  |      |  |          | 0.56  |  |  |  | (23 | )
|Gold Production(000s of ounces)  |  |      | 640   |      |  |          | 713   |  |  |  | (10 | )
|Mineral Reserves(000s of ounces) |  |      | 3,888 |      |  |          | 3,946 |  |  |  | (1  | )
|                                  |  |      |       |      |  |          |       |  |  |  |     |  
|FINANCIAL STATISTICS              |  |      |       |      |  |          |       |  |  |  |     |  
|Cash cost per ounce               |  |      |       |      |  |          |       |  |  |  |     |  
|Cash operating costs              |  | $    | 184   |      |  | $        | 133   |  |  |  | 38  |  
|Royalties and production taxes    |  |      | 14    |      |  |          | 14    |  |  |  |    |  
|                                  |  |      |       |      |  |          |       |  |  |  |     |  
|Total cash costs                  |  | $    | 198   |      |  | $        | 147   |  |  |  | 35  |  
|                                  |  |      |       |      |  |          |       |  |  |  |     |  

Meikle production declined 10% from 2001, as total cash costs increased to
$198 per ounce from $147 per ounce in 2001. The lower production relates to
lower grades processed (down 23%), partially offset by higher mining and
processing rates (up 19%), as the Rodeo deposit ramps up to full production.
The higher cash costs were due to lower grades mined and processed and higher
unit mining costs, particularly in the remnant material of the Main Meikle
zone.

In recent years, Meikle has been transitioning from a compact high-grade
mining operation to a lower-grade operation spread over a much larger area.
Between 1999 and 2002, the average grade mined and processed declined (by
57%) while cash costs per ounce doubled. As the mine has matured, mining in
Main Meikle is now focused on secondary stopes where ground conditions are
not as competent, leading to production difficulties and higher unit mining
costs in 2002. As a result, the mine focused on improving planning and
scheduling during the year to ensure a more stable production plan going
forward.

Proven and probable reserves at year end 2002 declined marginally to 3.89
million ounces from 3.95 million in 2001, as the mine replaced about 85% of
2002 production. Most of the material added in 2002 had been removed from
reserves a year earlier when management determined that more drilling was
required to classify the material as reserves. While exploration drilling
will continue at depth below Main Meikle and in the Rodeo area, the best
potential for reserve additions is likely north of Main Meikle, in an area
known as Banshee. Surface drilling is expected to be completed in first
quarter 2003; based on the assessment of economic potential, a decision on a
Meikle-to-Banshee access drift is expected by mid-2003.

39



---



##### 



Production for 2003 is expected to decline to 620,000 ounces, while total
cash costs are expected to rise to $219 per ounce. The lower production is
largely due to expected lower recovery rates (down 2%), as lower grades
processed (down 7%) are offset by higher mining rates (up 7%). Beginning in
2003, Meikle is mining and processing at the average grade of its remaining
reserves; as a result, production and costs should be stable around current
levels for the remainder of its mine life.

Round Mountain Mine (Nevada)

|                                                  |  |      |        | 
|------------------------------------------------- |  | ---- | ------ | 
|For
the year ended December 31,                   |  | 2002
|                                                  |  |     
|OPERATIONAL STATISTICS                            |  |      |        | 
|Tons Mined (000s)                                |  |      | 63,146 | 
|Tons Processed (000s)                            |  |      | 62,222 | 
|Grade Processed (ounces per ton)                  |  |      | 0.019  | 
|Gold Production(000s of ounces)                  |  |      | 755    | 
|Gold Production(Barricks share, 000s of ounces) |  |      | 378    | 
|Mineral Reserves(000s of ounces)                 |  |      | 1,875  | 
|                                                  |  |      |        | 
|FINANCIAL STATISTICS                              |  |      |        | 
|Cash cost per ounce                               |  |      |        | 
|Cash operating costs                              |  | $    | 172    | 
|Royalties and production taxes                    |  |      | 15     | 
|                                                  |  |      |        | 
|Total cash costs                                  |  | $    | 187    | 
|                                                  |  |      |        | 

The Round Mountain joint venture had a strong year, contributing 377,747
ounces of gold to our 50 percent account in 2002. Total cash costs were $187
per ounce. The results were better than plan for both production and costs,
as a result of better than anticipated grades processed through the mill as
well as to the leach pad.

Proven and probable reserves decreased from 2.2 million to 1.9 million
ounces, as only a small portion of production was replaced during the year.
This is a solid but mature operation with an expected remaining mine life of
four years. Future potential beyond the current deposit resides in an
exploration program at the Gold Hill property (located 5 miles from Round
Mountain), where follow-up drilling continues to yield encouraging results.
The work planned for 2003 will further test the potential economics of this
pit and continue to delineate the mineralized zone.

For 2003, the mine is expected to have another solid year. The marginally
lower production of 363,000 ounces and higher cash costs of $198 per ounce,
are primarily due to lower production from the leach pad, as longer haulage
cycles result in fewer tons being placed on the pad.

Eskay Creek Mine (British Columbia)

|                                   |  |      |        | 
|---------------------------------- |  | ---- | ------ | 
|For
the year ended December 31,    |  | 2002
|                                   |  |     
|OPERATIONAL STATISTICS             |  |      |        | 
|Tons Mined (000s)                 |  |      | 254    | 
|Tons Processed (000s)             |  |      | 256    | 
|Grade Processed (ounces per ton)   |  |      | 1.50   | 
|Grade  Silver (ounces per ton)    |  |      | 72.18  | 
|Gold Production(000s of ounces)   |  |      | 359    | 
|Silver Production(000s of ounces) |  |      | 17,763 | 
|Mineral Reserves(000s of ounces)  |  |      | 1,430  | 
|                                   |  |      |        | 
|FINANCIAL STATISTICS               |  |      |        | 
|Cash cost per ounce                |  |      |        | 
|Cash operating costs               |  | $    | 36     | 
|Royalties and production taxes     |  |      | 4      | 
|                                   |  |      |        | 
|Total cash costs                   |  | $    | 40     | 
|                                   |  |      |        | 

40



---



##### 



Eskay Creek had a good year for production despite lower grades and a strike
at one of the mines key third-party smelters. The good production and cash
costs performance were primarily the result of a 10% increase in tons mined
and an increase in silver by-product credits compared to periods prior to the
acquisition.

To mitigate the impact of the third-party smelter strike which began in July
2002, the mine optimized its milling capacity, increasing throughput (by
12%), re-sequenced the mining efforts to source higher grade ore, and
arranged for increased sales to its other main smelter. Though the labor
strike continues, shipments of ore and concentrate in late 2002 and early
2003 were close to pre-strike levels, and we anticipate being able to sustain
these rates through the balance of this year, even without a labor strike
settlement.

Proven and probable gold reserves at Eskay decreased to 1.4 million from 1.8
million ounces due to production during the year. A development ramp was
completed during the year to follow up on encouraging exploration results.
Future reserve expansion is most likely to come from this program. In
addition, the surface program generated positive results, with follow-up
scheduled in 2003.

For 2003, production is expected to increase marginally to 363,000 ounces, as
higher mining and processing rates (up 11%) are expected to more than offset
the lower grades processed. Cash costs are expected to rise to $64 per ounce,
primarily due to lower silver grades significantly reducing by-product
credits. Longer term, based on current reserves, production is expected to
decline and cash costs are expected to rise as the mining and processing move
to the average grade of the reserve.

Hemlo Property (Ontario)

|                                                  |  |      |       | 
|------------------------------------------------- |  | ---- | ----- | 
|For
the year ended December 31,                   |  | 2002
|                                                  |  |     
|OPERATIONAL STATISTICS                            |  |      |       | 
|Tons Mined (000s)                                |  |      | 3,785 | 
|Tons Processed (000s)                            |  |      | 3,812 | 
|Grade Processed (ounces per ton)                  |  |      | 0.149 | 
|Gold Production(000s of ounces)                  |  |      | 538   | 
|Gold Production(Barricks share, 000s of ounces) |  |      | 269   | 
|Mineral Reserves(000s of ounces)                 |  |      | 2,118 | 
|                                                  |  |      |       | 
|FINANCIAL STATISTICS                              |  |      |       | 
|Cash cost per ounce                               |  |      |       | 
|Cash operating costs                              |  | $    | 216   | 
|Royalties and production taxes                    |  |      | 8     | 
|                                                  |  |      |       | 
|Total cash costs                                  |  | $    | 224   | 
|                                                  |  |      |       | 

Hemlo, of which we own a 50 percent interest, is a joint venture comprised of
the David Bell and Williams underground mines and the Williams open pit.
Production and cash costs reflect ground control problems that began early in
2002 and resulted in restricted access to some high-grade areas and increased
dilution levels. A revised mine sequence, new backfill methods and improved
planning should provide the foundation for more secure and predictable
results from the underground operation in the future.

Hemlos proven and probable reserves at year end 2002 stood at 2.1 million
ounces compared to 2.5 million ounces one year earlier. In addition to not
replacing 2002 production, mining recovery rates used for reserve estimation
purposes were adjusted in those areas affected by the ground control
problems, resulting in an additional 115,000 ounces being removed from
reserves.

For 2003, production for our account is expected to be 253,000 ounces,
resulting in marginally higher cash costs of $231 per ounce. The lower
production and higher cash costs are primarily due to lower grades, only
partially offset by an increase in mill throughput. Longer term production
and costs are expected to be similar to 2003.

41



---



##### 



Holt-McDermott Mine (Ontario)

|                                  |  |      |      |      |  |          |      |  |  |  |      |  
|--------------------------------- |  | ---- | ---- | ---- |  | -------- | ---- |  |  |  | ---- | -
|For the year ended December 31,   |  | 2002 |      | 2001 |  | % Change
|                                  |  |      |      |      |  |         
|OPERATIONAL STATISTICS            |  |      |      |      |  |          |      |  |  |  |      |  
|Tons Mined (000s)                |  |      | 520  |      |  |          | 489  |  |  |  | 6    |  
|Tons Processed (000s)            |  |      | 520  |      |  |          | 497  |  |  |  | 5    |  
|Grade Processed (ounces per ton)  |  |      | 0.17 |      |  |          | 0.18 |  |  |  | (4   | )
|Gold Production(000s of ounces)  |  |      | 84   |      |  |          | 84   |  |  |  |     |  
|Mineral Reserves(000s of ounces) |  |      | 154  |      |  |          | 293  |  |  |  | (47  | )
|                                  |  |      |      |      |  |          |      |  |  |  |      |  
|FINANCIAL STATISTICS              |  |      |      |      |  |          |      |  |  |  |      |  
|Cash cost per ounce               |  |      |      |      |  |          |      |  |  |  |      |  
|Cash operating costs              |  | $    | 173  |      |  | $        | 163  |  |  |  | 6    |  
|Royalties and production taxes    |  |      |     |      |  |          | 2    |  |  |  | (100 | )
|                                  |  |      |      |      |  |          |      |  |  |  |      |  
|Total cash costs                  |  | $    | 173  |      |  | $        | 165  |  |  |  | 5    |  
|                                  |  |      |      |      |  |          |      |  |  |  |      |  

While Holt-McDermotts 2002 production was the same as the prior year, cash
costs were higher (up 5%). Higher costs were a result of an increase in tons
mined and processed combined with a 4% decline in grade.

Proven and probable reserves at year end 2002 stood at 154,000 ounces. Based
on mining experience, anticipated reserve grades were adjusted down,
resulting in a loss of 51,000 ounces net of 2002 production.

For 2003, production is expected to rise 16% to 97,000 ounces as cash costs
rise to $218 per ounce. Production will be up as a result of accessing
higher-grade ore, while costs will rise primarily due to the expensing of
mining costs relating to ongoing development.

SOUTH AMERICA



| |  | Home of Barricks second-largest cash flow generator, the Pierina mine.      
|- |  | -----------------------------------------------------------------------------
| 
| |  | Three development projects that make up the majority of our current pipeline:



| |  |  | Our recently discovered Alto Chicama Property in Peru.                                                                
| | - |  | ----------------------------------------------------------------------------------------------------------------------
|
| |  |  | Our largest development project, the Pascua-Lama and Veladero district, straddling the
Chilean and Argentinean border.
|
| |  |  | Large grass roots exploration programs in Peru and Argentina.                                                         

SOUTH AMERICAN PROPERTIES

Pierina, Peru
Alto Chicama, Peru
Pascua-Lama, Chile and Argentina
Veladero, Argentina

42



---



##### 



Pierina Mine (Peru)

|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|--------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |        | 2001 |  | % Change
|                                  |  |      |        |      |  |         
|OPERATIONAL STATISTICS            |  |      |        |      |  |          |        |  |  |  |     |  
|Tons Mined (000s)                |  |      | 32,311 |      |  |          | 30,742 |  |  |  | 5   |  
|Leach  Tons to Pad (000s)       |  |      | 13,414 |      |  |          | 10,968 |  |  |  | 22  |  
|Grade Processed (ounces per ton)  |  |      | 0.080  |      |  |          | 0.097  |  |  |  | (18 | )
|Gold Production(000s of ounces)  |  |      | 898    |      |  |          | 911    |  |  |  | (1  | )
|Mineral Reserves(000s of ounces) |  |      | 3,602  |      |  |          | 4,748  |  |  |  | (24 | )
|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|FINANCIAL STATISTICS              |  |      |        |      |  |          |        |  |  |  |     |  
|Cash cost per ounce               |  |      |        |      |  |          |        |  |  |  |     |  
|Cash operating costs              |  | $    | 80     |      |  | $        | 40     |  |  |  | 100 |  
|Royalties and production taxes    |  |      |       |      |  |          |       |  |  |  |    |  
|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|Total cash costs                  |  | $    | 80     |      |  | $        | 40     |  |  |  | 100 |  
|                                  |  |      |        |      |  |          |        |  |  |  |     |  

Pierina production declined marginally (down 1%) compared to the prior year,
at cash costs of $80 per ounce compared to $40 per ounce in 2001. Cash costs
included an unbudgeted increase of $6 per ounce related to higher operating
costs caused by a tax assessment received late in the year. Cash costs
doubled over the prior year, largely as a result of deferred mining costs
being charged as mining activity moves to lower-grade areas of the pit.
Similar to the Goldstrike Property, Pierinas higher-grade material was mined
and processed early in the mines life to maximize cash flows and investment
returns. To date, the mine has been able to increase mining and processing
rates and lower unit costs to offset declining grades.

At year end 2002, proven and probable reserves declined to 3.6 million ounces
of gold, as the mine did not replace 2002 production. The 2002 exploration
program identified a resource south and southeast of the pit, targets located
near surface at the north end of the pit, as well as one adjacent to the
final wall of the south end of the pit, all of which are scheduled for
follow-up in 2003. Any positive exploration results would likely only extend
the mine life marginally past its remaining mine life of five years. In 2003,
production and total cash costs are expected to rise marginally to 908,000
ounces at $86 per ounce. Grades mined are expected to decline by 5%, but
should be more than offset by a 22% increase in tons mined. Beginning in
2004, the mine is expected to move to lower grades in the open pit, resulting
in lower production and marginally higher cash costs.

Alto Chicama Project (Peru)

In April 2002, we announced a significant discovery at our Alto Chicama
Property. The initial inferred resource at the time of the announcement was
estimated at 3.5 million ounces of gold. As a result of drilling during the
course of the year, 6.5 million ounces were brought into probable reserves.
In addition, we have 2 million ounces in the measured and indicated resource
category and 1 million ounces of inferred resource for a total reserve and
resource of 9.5 million ounces of gold (as of January 31, 2003).

We began exploring the Alto Chicama area in the first quarter of 2001, when
we acquired the option to explore the Property from the Peruvian state mining
company (Centromin). In November 2002, we exercised our rights under the
option agreement to acquire the Property by completing a technical evaluation
and paying a $2 million advance royalty. We now have a 100% interest in the
Property subject to a 2.51% net smelter return royalty to Centromin.

The preliminary feasibility study estimates Alto Chicama will produce 500,000
ounces per year beginning in 2005, at an average cash cost over the first
decade of $130 per ounce. Capital costs are projected at $300 to $350
million. As 2002 ended, work focused on infill drilling, mine planning and
condemnation drilling. Metallurgical tests indicate the oxide ore is amenable
to heap leaching with recoveries in the range of 80%.

For 2003, the focus at Alto Chicama will be to complete the Environmental
Impact Statement and a final feasibility study. Subject to Board approval and
final permitting, construction is expected to start in late 2003 or early
2004. The timing of construction and production is most dependent on when we
receive our permits. Based on the work to date, the construction, geologic,
mining and processing risks appear low, as the project is very similar in
many respects to our Pierina mine.

43



---



##### 



Pascua-Lama and Veladero Projects (Chile/Argentina)

Veladero

The Veladero feasibility study was completed during third quarter 2002. It
defines an operation mining ore from two open pits (Filo Federico and
Amable), a two-stage crushing circuit and a valley fill heap leach, very
similar to our Pierina mine in Peru, at an estimated initial construction
cost of $425 million. Veladero is expected to commence production in early
2006, producing 530,000 ounces of gold at a cash cost of $155 per ounce over
the first decade of the mines operation. The Propertys Environmental Impact
Statement was submitted in January 2003.

Definition drilling during the year expanded the reserves for the two pits to
9.4 million ounces, compared to 8.4 million in 2001. Between these two pits
is a third mineralized zone, Cuatro Esquinas, which provides future
exploration potential.

Veladeros 2003 field program will focus on the construction of the access
road and camp infrastructure. Full construction is expected to commence
September 2003, subject to receiving all permits and arranging any project
financing. However, this schedule is dependent on our ability to gain comfort
with the political and economic uncertainty in Argentina. Based on the work
to date, the geologic, mining and processing risks appear manageable, as the
project is very similar to our Pierina mine.

Pascua-Lama

In late 2000, a decision was made to postpone construction start-up at
Pascua-Lama, based on the then low gold and silver price environment. Now,
with the inclusion of nearby Veladero in the portfolio (as a result of our
Homestake merger) and the higher gold price environment, Pascua-Lama is
expected to commence production in 2008, subject to final permitting,
completing optimization of the feasibility study and arranging any project
financing. Over the past year, work on Pascua-Lama has been directed at
further optimization of the development plan to reduce the capital and
operating cost structure. With the completion of the Veladero feasibility
study, we are now in a position to evaluate synergies in terms of
infrastructure, administrative support and construction activities.

The mine is planned as an open pit, centered at an elevation of 4,600 meters.
The majority of the gold is expected to come from oxide ores in the first
several years of operation. As deeper sulfide ores are encountered, a
flotation circuit is expected to be added to maintain recovery rates. On the
processing front, Pascua-Lamas metallurgy is challenging, but based on the
extensive work we have done to date, we believe we can successfully process
the various ores Pascua-Lama presents. While the property is located very
high in the Andes, the altitude is not dissimilar to our former El
Indio/Tambo operations in Chile or several large copper mines.

Proven and probable reserves at year end 2002 were unchanged at 16.9 million
ounces of gold and 594 million ounces of silver, as the project did not have
any further reserve development activity during the year.

The optimized feasibility study is expected to be completed in 2004, with
construction start-up potentially occurring in late 2005. Production is
targeted at 800,000 ounces of gold annually at cash costs of $85 per ounce
for the first decade. The initial construction cost is currently estimated at
$1,175 million.

AFRICA



| |  | Tanzania (East Africa) represents Barricks African expansion.                                                                                                                      
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Bulyanhulu completed its first full year of production in 2002.                                                                                                                     
| 
| |  | A significant land position in the Lake Victoria goldfields of northern Tanzania with a large and active
exploration program.                                                       
| 
| |  | Geology in the Lake Victoria area is similar to the gold belts in Northern Ontario and Quebec and
Western Australia, two of the most successful gold producing regions of the
world.

AFRICAN PROPERTIES

Bulyanhulu
Tulawaka
Kabanga

44



---



##### 



Bulyanhulu Mine (Tanzania)

|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|--------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |        | 2001 |  | % Change
|                                  |  |      |        |      |  |         
|OPERATIONAL STATISTICS            |  |      |        |      |  |          |        |  |  |  |     |  
|Tons Mined (000s)                |  |      | 944    |      |  |          | 455    |  |  |  | 107 |  
|Tons Processed (000s)            |  |      | 1,075  |      |  |          | 778    |  |  |  | 38  |  
|Grade Processed (ounces per ton)  |  |      | 0.39   |      |  |          | 0.38   |  |  |  | 2   |  
|Gold Production(000s of ounces)  |  |      | 356    |      |  |          | 242    |  |  |  | 47  |  
|Mineral Reserves(000s of ounces) |  |      | 11,653 |      |  |          | 12,009 |  |  |  | (3  | )
|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|FINANCIAL STATISTICS              |  |      |        |      |  |          |        |  |  |  |     |  
|Cash cost per ounce               |  |      |        |      |  |          |        |  |  |  |     |  
|Cash operating costs              |  | $    | 190    |      |  | $        | 186    |  |  |  | 2   |  
|Royalties and production taxes    |  |      | 8      |      |  |          | 11     |  |  |  | (27 | )
|                                  |  |      |        |      |  |          |        |  |  |  |     |  
|Total cash costs                  |  | $    | 198    |      |  | $        | 197    |  |  |  | 1   |  
|                                  |  |      |        |      |  |          |        |  |  |  |     |  

In its first full year of operation, Bulyanhulu produced 356,319 ounces of
gold at a cash cost of $198 per ounce. Production was marginally lower than
plan (by 2%), while cash costs exceeded our 2002 estimates by $25 per ounce.
The slightly lower production and higher costs were due to two main factors.
First, we mined and processed more tons at lower than planned grade to
produce total ounces similar to plan. Grades were lower as a result of delays
in accessing higher-grade stopes and higher than planned dilution. Second,
higher concentrate transportation and treatment costs and royalties also
pushed costs up. While full-year costs were above plan, the trend within the
year shows improvement, as cash costs in fourth quarter 2002 decreased to
$185 per ounce as grades increased.

While Bulyanhulu has experienced teething pains ramping up to full
production, we see positive signs moving forward. Mining and processing rates
are now exceeding feasibility study levels and grades mined continue to
improve as the mining team gains experience. The $194 million outstanding
under the project loan has become non-recourse to Barrick as the mine met the
physical and technical requirements of completion during the first quarter of
2003.

For 2003, production is expected to increase to 415,000 ounces (up 16%) as
total cash costs decline to $175 per ounce, reflecting a full year of
expected better grades and recovery rates.

The mining and processing rates are expected to rise with both the September
2002 completion of the mine-shaft, allowing ore and waste to be transported
faster than the current ramp system and the installation of a second tailings
pipeline.

Tanzanian Exploration Update

2003 will mark the beginning of our fourth year of exploration in Tanzania,
one of the more prospective areas in the world. The strategy of land
acquisition and cost-effective grass roots exploration that succeeded in
evaluating a large ground position and generating drill targets, is now
nearly complete. Our focus in 2003 will be on fewer properties with higher
exploration potential.

During 2002, engineering studies were carried out at Tulawaka. A feasibility
study for a small open pit, milling operation is nearing completion.
Preparation of an Environmental Impact Statement is progressing on schedule,
and a development decision is expected in the first half of 2003 for the
operation. Exploration drilling is scheduled for second quarter 2003 on the
West Zone as well as on other targets outlined in 2002.

The Kabanga nickel property was part of a 1999 acquisition, which also gave
us Bulyanhulu. We have been evaluating the potential of the project over the
course of 2002, expanding the resource and completing a scoping study to
ascertain the value of the asset.

45



---



##### 



AUSTRALIA



| |  | Second-largest-producing region for the Company
|- |  | -----------------------------------------------
| 
| |  | Two key assets:                                



| |  |  | Yilgarn District, comprised of three mines (Plutonic, Darlot and Lawlers)
| | - |  | -------------------------------------------------------------------------
|
| |  |  | Kalgoorlie Super Pit, Australias largest gold mine  50 percent interest



| |  | A portfolio of exploration properties, plus the Cowal development project with 2.8 million ounces
of proven and probable reserves.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------

AUSTRALIAN PROPERTIES

Yilgarn District
     Plutonic
     Darlot
     Lawlers
Kalgoorlie
Cowal

Plutonic Mine (Western Australia)

|                                  |  |      |        | 
|--------------------------------- |  | ---- | ------ | 
|For
the year ended December 31,   |  | 2002
|                                  |  |     
|OPERATIONAL STATISTICS            |  |      |        | 
|Open Pits Tons mined (000s)      |  |      | 13,233 | 
|U/G Tons of ore mined (000s)     |  |      | 1,056  | 
|Tons Processed (000s)            |  |      | 3,532  | 
|Grade Processed (ounces per ton)  |  |      | 0.097  | 
|Gold Production(000s of ounces)  |  |      | 307    | 
|Mineral Reserves(000s of ounces) |  |      | 2,533  | 
|                                  |  |      |        | 
|FINANCIAL STATISTICS              |  |      |        | 
|Cash cost per ounce               |  |      |        | 
|Cash operating costs              |  | $    | 175    | 
|Royalties and production taxes    |  |      | 9      | 
|                                  |  |      |        | 
|Total cash costs                  |  | $    | 184    | 
|                                  |  |      |        | 

Plutonic, the largest of the three Yilgarn District mines, consists of both
open pit and underground operations. Production and cash costs reflect delays
in meeting the timetable for mining the new higher-grade underground Timor
zone. To substitute for the lower underground production, the mine
accelerated production of higher-cost open pit ore and low-grade stockpiles.

Proven and probable reserves increased net of production by 945,000 ounces
(adding three years of production to the mine life) to 2.5 million ounces.
This made 2002 the fourth consecutive year the mine more than replaced
production  and, more importantly, at better grade than the existing
reserves. We view the exploration potential of this mine favorably and will
continue with a significant exploration program in the area in 2003.

For 2003, production is expected to decline to 295,000 ounces due to lower
throughput and recovery rates, resulting in marginally higher cash costs of
$194 per ounce. The lower production and higher cost are primarily due to
lower throughput, resulting from lower open pit mining rates and depletion of
low-grade stockpiles.

46



---



##### 



Darlot Mine (Western Australia)

|                                  |  |      |       | 
|--------------------------------- |  | ---- | ----- | 
|
|For the year ended December 31,   |  | 2002
|                                  |  |     
|OPERATIONAL STATISTICS            |  |      |       | 
|Tons Mined (000s)                |  |      | 840   | 
|Tons Processed (000s)            |  |      | 849   | 
|Grade Processed (ounces per ton)  |  |      | 0.176 | 
|Gold Production(000s of ounces)  |  |      | 145   | 
|Mineral Reserves(000s of ounces) |  |      | 1,269 | 
|                                  |  |      |       | 
|FINANCIAL STATISTICS              |  |      |       | 
|Cash cost per ounce               |  |      |       | 
|Cash operating costs              |  | $    | 160   | 
|Royalties and production taxes    |  |      | 8     | 
|                                  |  |      |       | 
|Total cash costs                  |  | $    | 168   | 
|                                  |  |      |       | 

Production at Darlot and total cash costs reflect higher throughput and
higher grades than in periods prior to the acquisition. The mine replaced
half of its production in 2002, finishing the year with approximately 1.3
million ounces of proven and probable reserves. Based on its current reserve
base, the mine has a remaining mine life of about 10 years.

For 2003, Darlot expects to have a similar year in terms of both production
at 143,000 ounces and cash costs of $176 per ounce.

Lawlers Mine (Western Australia)

|                                  |  |      |       | 
|--------------------------------- |  | ---- | ----- | 
|For
the year ended December 31,   |  | 2002
|                                  |  |     
|OPERATIONAL STATISTICS            |  |      |       | 
|Open Pits Tons mined (000s)      |  |      | 4,030 | 
|U/G Tons of ore mined (000s)     |  |      | 716   | 
|Tons Processed (000s)            |  |      | 718   | 
|Grade Processed (ounces per ton)  |  |      | 0.162 | 
|Gold Production(000s of ounces)  |  |      | 113   | 
|Mineral Reserves(000s of ounces) |  |      | 509   | 
|                                  |  |      |       | 
|FINANCIAL STATISTICS              |  |      |       | 
|Cash cost per ounce               |  |      |       | 
|Cash operating costs              |  | $    | 171   | 
|Royalties and production taxes    |  |      | 8     | 
|                                  |  |      |       | 
|Total cash costs                  |  | $    | 179   | 
|                                  |  |      |       | 

Production at Lawlers and cash costs reflect an increase in grades processed
(15%) compared to periods prior to the acquisition. The mine replaced
production in 2002, finishing the year with about 500,000 ounces of proven
and probable reserves. Based on its current reserve base, Lawlers has about
five years remaining in its mine life. An extensive 2003 exploration program
will test deeper extensions to the ore body.

Lawlers expects production similar to 2002 at 111,000 ounces, but at higher
cash costs of $213 per ounce, due to lower grades, recovery rates and
higher-cost open pit production.

47



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Kalgoorlie Mine (Western Australia)

|                                                  |  |      |        | 
|------------------------------------------------- |  | ---- | ------ | 
|For
the year ended December 31,                   |  | 2002
|                                                  |  |     
|OPERATIONAL STATISTICS                            |  |      |        | 
|Open Pits Tons mined (000s)                      |  |      | 91,843 | 
|U/G Tons of ore mined (000s)                     |  |      | 805    | 
|Tons Processed (000s)                            |  |      | 14,101 | 
|Grade Processed (ounces per ton)                  |  |      | 0.061  | 
|Gold Production(000s of ounces)                  |  |      | 720    | 
|Gold Production(Barricks share, 000s of ounces) |  |      | 360    | 
|Mineral Reserves(000s of ounces)                 |  |      | 5,551  | 
|                                                  |  |      |        | 
|FINANCIAL STATISTICS                              |  |      |        | 
|Cash cost per ounce                               |  |      |        | 
|Cash operating costs                              |  | $    | 215    | 
|Royalties and production taxes                    |  |      | 7      | 
|                                                  |  |      |        | 
|Total cash costs                                  |  | $    | 222    | 
|                                                  |  |      |        | 

2002 production at the Kalgoorlie joint venture and total cash costs reflect
lower grades (down 8%) and recovery rates (off 2%) compared to periods prior
to the acquisition. The Mt. Charlotte underground deposit was originally
scheduled for closure at the end of 2001, but remained open, contributing
63,200 ounces (Barricks share) to total production in 2002. Mt. Charlotte is
not budgeted for production in 2003, but is still mining residual ore that
may prolong its life by a few months.

Barricks share of proven and probable reserves at year end declined to 5.6
million ounces compared to 5.7 million in the prior year. Extensive inpit
drilling during the year and remodeling of proven and probable reserves
resulted in a reduction of the mineral resource base. The 2003 exploration
program will concentrate on testing deep structurally controlled targets
under the Super Pit and to the east of Mt. Charlotte. While Kalgoorlie
remains one of the longest-life assets, the asset is maturing, and future
reserve additions are less likely to be identified.

For 2003, our share of production is expected to be lower at 344,000 ounces
(down 4%) and cash costs higher at $237 per ounce (up 7%), with lower
throughput after the winding down of the higher-grade underground operation
in 2002, partially offset by an increase in open pit tons mined. A technical
committee made up of the two joint venture partners was formed last year to
explore ways to improve the production and cost profiles at Kalgoorlie. The
committees recommendations are expected by mid-year.

Cowal Project (New South Wales)

The Cowal project, acquired in 2001, came to us with a completed
Environmental Impact Statement and feasibility study. In the latter part of
2001, we began a technical program, including drilling and engineering
studies, to optimize the feasibility study, which we anticipate will be
completed in 2003.

Cowals mine plan and process facilities have been designed to produce
approximately 270,000 ounces of gold per year at an average cash cost of $170
per ounce. The main deposit contains proven and probable reserves of 2.8
million ounces. While the total contained ounces remained the same as the
year earlier, the grade declined (by 25%) due to additional drilling and more
conservative reserve modeling. However, cash costs are expected to be similar
because of the optimization work completed during the year.

Construction is expected to commence in 2003, with production expected
mid-2005, subject to final permitting and an optimized feasibility study. In
2003, we will continue metallurgical test work aimed at further optimizing
the scope and economics of the project. The timing of construction and
production is most dependent on the timing of receiving our final permits.

48



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Our Australian asset base represents solid long-term production. The
principal risk to that production is the impact of a stronger Australian
dollar that would push cash costs up. To mitigate that risk, we have entered
into currency hedge contracts for most of our Australian dollar costs through
2005. For additional detail regarding foreign currency contracts, see note
23D Other derivative instruments outstanding to our consolidated financial
statements.

OTHER PROPERTIES

Other Properties include five mines (El Indio, Bousquet, McLaughlin, Ruby
Hill and Agua de la Falda) that were closed during the year due to the
depletion of reserves, as well as the Marigold mine in Nevada, in which we
have a 33% interest and which remains in operation. In 2002, our Other
Properties produced 374,774 ounces of gold, 7% of our production, at an
average total cash cost of $189 per ounce, compared to 239,000 ounces at
total cash costs of $241 per ounce in the prior year.

For 2003, Marigold is expected to produce 45,000 ounces at a cash cost of
$170 per ounce. The decline in overall production for the Company in 2003,
relates to the closure of the five mines over the course of 2002.

|                                  |  |      |     |      |  |          |       |  |  |  |     |  
|--------------------------------- |  | ---- | --- | ---- |  | -------- | ----- |  |  |  | --- | -
|For the year ended December 31,   |  | 2002 |     | 2001 |  | % Change
|                                  |  |      |     |      |  |         
|OPERATIONAL STATISTICS            |  |      |     |      |  |          |       |  |  |  |     |  
|Gold Production(000s of ounces)  |  |      | 375 |      |  |          | 239   |  |  |  | 57  |  
|Mineral Reserves(000s of ounces) |  |      | 678 |      |  |          | 1,100 |  |  |  | (38 | )
|                                  |  |      |     |      |  |          |       |  |  |  |     |  
|FINANCIAL STATISTICS              |  |      |     |      |  |          |       |  |  |  |     |  
|Cash cost per ounce               |  |      |     |      |  |          |       |  |  |  |     |  
|Cash operating costs              |  | $    | 180 |      |  | $        | 238   |  |  |  | (24 | )
|Royalties and production taxes    |  |      | 9   |      |  |          | 3     |  |  |  | 200 |  
|                                  |  |      |     |      |  |          |       |  |  |  |     |  
|Total cash costs                  |  | $    | 189 |      |  | $        | 241   |  |  |  | (22 | )
|                                  |  |      |     |      |  |          |       |  |  |  |     |  

COSTS AND EXPENSES

Exploration and Business Development

Our exploration strategy is to maintain a geographic mix of projects at
different stages in the exploration process. Our early stage exploration
effort focuses on four major areas where we possess significant
infrastructure: Peru, Tanzania, Australia and Chile/Argentina. The increase
in expenditures in 2002 mainly reflects amounts spent on properties acquired
through the Homestake merger at the end of 2001.

|                                                           |  |       |    |      |  |      |    |  |  |   |    | 
|---------------------------------------------------------- |  | ----- | -- | ---- |  | ---- | -- |  |  | - | -- | 
|Exploration and Business Development Expense (in millions) |  | 2003E |    | 2002 |  | 2001
|                                                           |  |       |    |      |  |     
|North America                                              |  | $     | 17 |      |  | $    | 13 |  |  | $ | 10 | 
|Australia                                                  |  |       | 11 |      |  |      | 8  |  |  |   |   | 
|Africa                                                     |  |       | 8  |      |  |      | 6  |  |  |   | 10 | 
|South America                                              |  |       | 9  |      |  |      | 8  |  |  |   | 10 | 
|Other/Business Development                                 |  |       | 24 |      |  |      | 17 |  |  |   | 10 | 
|                                                           |  |       |    |      |  |      |    |  |  |   |    | 
|                                                           |  | $     | 69 |      |  | $    | 52 |  |  | $ | 40 | 
|                                                           |  |       |    |      |  |      |    |  |  |   |    | 

Amortization

Amortization totaled $483 million ($79 per ounce) in 2002, compared to $343
million or $90 per ounce in 2001. The overall increase in amortization
expense was mainly caused by the inclusion of the acquired Homestake mines in
2002. The decrease in amortization charges per ounce reflects overall lower
charges per ounce at the Homestake mines, partially offset by an increase in
amortization per ounce at Meikle.

Higher absolute amortization of $17 million at Meikle reflects the completion
of construction of Rodeo in 2001 and the reduction of proven and probable
reserves at the beginning of 2002, which raised Meikles amortization
expense.

For 2003, amortization is expected to increase to about $500 million, or $90
per ounce. A large part of this increase is a function of the changing mix of
production and capital additions. Beyond 2003, we expect amortization to be
in the $80 to $90 per ounce range, depending on the extent of exploration
success at our operating mines. Our new development

49



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projects are expected to have amortization rates of between $65 and $80 per
ounce, which could bring our overall per ounce amortization charge down over
time.

Administration

In 2002, administration costs increased by $18 million to $64 million due to
the increase in corporate support functions with the increase in size of the
Company following the Homestake merger at the end of 2001 ($9 million); a $3
million compensation expense for our restricted share unit plan, and a $6
million increase in World Gold Council fees. World Gold Council fees totaled
$13 million in 2002. For 2003, administration costs are expected to be about
$70 million.

In 2002, we recorded a pension benefit expense of $2 million relating to
pre-existing Homestake pension plans. We do not expect that our future
earnings will be significantly affected by our existing defined benefit
pension plans due to the relatively small size of the plans. Also, most
members in these plans are no longer actively employed by us, and have
therefore ceased earning benefits under the plans.

Through 2002, a significant portion of our defined benefit pension plan
assets were invested in fixed income securities, with the remainder invested
in equity securities. Because of this mix of investments, the return on plan
assets and funding status of our plans were not as adversely affected by the
general decline in equity markets compared to plans operated by some other
companies. At the end of 2002, we had an unfunded liability of $27 million.
As a result, based on current markets, we may be required to make a
contribution to more fully fund the plans in the future.

Interest Expense

We incurred $59 million in interest costs and financing charges in 2002,
related mainly to our debentures and our Bulyanhulu project financing.
Overall, our effective interest rate declined slightly in 2002 to 7.2%, from
7.3% in 2001. In 2002, we expensed interest of $57 million and capitalized $2
million to mine development activities at Cowal. In 2001, we expensed $14
million and capitalized $42 million to development and construction
activities at Pascua-Lama, Bulyanhulu and Rodeo.

We use interest rate swaps to manage the effective rates of interest we pay
on our long-term debt. On $250 million of our $500 million debentures, we
have converted the fixed 7.5% interest rate to a floating rate through 2007,
taking advantage of low market interest rates. Through this strategy, we
managed to reduce the effective rate on this portion of the debentures to
5.7% in 2002. On our Bulyanhulu financing, we have taken advantage of the
present low interest rates to fix the interest rate for the term of the debt
at a rate of about 7%. For 2003, we expect to incur a similar amount of
interest as in 2002, but interest expense is expected to decline to about $50
million after capitalizing about $9 million at Cowal and Veladero.

Interest and Other Income

Interest and other income increased to $42 million in 2002 from $11 million
in 2001. The increase primarily reflects other income earned during 2002 at
the Homestake operations and year on year variations in foreign currency
translation gains and losses.

In 2002, we earned an effective interest rate on our cash of 3.4% compared to
5.3% in 2001. The decrease in the effective rate in 2002 reflects a general
decline in market interest rates from 3.8% to 1.8% over the last two years.
Through interest rate swaps we earned a fixed rate of 4.1% for 2002 on $500
million of our cash balances, with the additional cash earning interest at
lower market interest rates.

For 2003, we expect interest and other income to decrease further to about
$23 million, reflecting a full years effect of lower market interest rates.
Through the use of interest rate swaps we have locked in a fixed rate of 3.8%
on $650 million of our cash balances, with the excess cash earning interest
at market interest rates.

Non-Hedge Derivative Gains (Losses)

|                                               |  |      |     |      |  |   |     |  
|---------------------------------------------- |  | ---- | --- | ---- |  | - | --- | -
|Non-Hedge Derivative Gains (Losses) (millions) |  | 2002 |     | 2001
|                                               |  |      |     |     
|Commodity contracts                            |  | $    | (2  | )    |  | $ | 51  |  
|Currency contracts                             |  |      |    |      |  |   | (15 | )
|Interest and lease rate contracts              |  |      | (30 | )    |  |   | (9  | )
|                                               |  |      |     |      |  |   |     |  
|                                               |  | $    | (32 | )    |  | $ | 27  |  
|                                               |  |      |     |      |  |   |     |  

Non-hedge derivative gains and losses arise on derivative instruments used in
our risk management strategy that do not qualify for hedge accounting
treatment. These gains and losses do not include any gains or losses on our
gold sales contracts. The gains and losses occur because of changes in
commodity prices, currency exchange rates and interest rates.

50



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Commodity Contracts

In 2001, gains of $51 million on written call options were realized. In 2002,
we did not have a significant call option position outstanding and incurred
net losses of $2 million.

Currency Contracts

Losses in 2001 were due to the effects of changes in the Canadian dollar. In
2002, all outstanding currency contracts qualified for hedge accounting
treatment under Canadian GAAP, and consequently we did not record any
non-hedge gains or losses.

Interest and Lease Rate Contracts

Losses on interest and lease rate swaps in 2002 were $30 million (2001  $9
million loss). The losses were primarily related to our total return swaps
and were largely the result of the widening of credit spreads over yields on
government securities. During 2002, we closed out substantially all of the
total return swaps, so our future results will not be significantly affected
by these contracts. At the end of 2002, we held pay-fixed US dollar interest
rate swaps with notional amounts of $150 million (2001  $275 million) and
receive fixed gold lease rate swaps with notional amounts of 6.4 million
ounces or about $2 billion (2001  6.2 million ounces). Both are being
marked-to-market through earnings. These gold lease rate swaps represent all
of our current gold lease rate exposure.

Income Taxes

In 2002, we recorded a tax credit of $1 million compared to an expense of $15
million in 2001. In fourth quarter 2002, we recorded a tax credit of $22
million, mainly reflecting the resolution of certain tax uncertainties.
Excluding the credit recorded in fourth quarter 2002, our relatively low
effective tax rate is mainly because a significant portion of our earnings
are generated in a low tax-rate jurisdiction. We have also begun to realize
the benefit of tax synergies from the Homestake merger through the
integration of our North American operations.

Should gold prices remain in the $350 per ounce range, we expect our
underlying effective tax rate to rise to about 15 to 20%, because a larger
portion of our earnings would come from tax jurisdictions with higher tax
rates. At spot gold prices in excess of $400, we estimate that our effective
tax rate would be about 25% to 30%.

Our income tax expense is also affected by changes in the level of valuation
allowances recorded against future income tax assets. Valuation allowances
are recorded where there is substantial uncertainty over the realization of a
tax asset. Among other things, a sustained upward trend in gold prices may
result in a decrease in valuation allowances with corresponding tax credits
recorded in earnings.

LIQUIDITY & CAPITAL RESOURCES

Liquidity

Liquidity can be described as the ability of an enterprise to generate
adequate amounts of cash to meet its needs. In recent history, the main
sources of liquidity for us have been our net cash inflow from operating
activities, our large cash position, and our various debt-financing
facilities. Currently, our debt facilities include our debentures, our
Bulyanhulu project financing, and our $1 billion revolving credit facility
with a syndicate of global banks.

In the last three years we have generated substantial levels of operating
cash flow, and we believe this to be one of our fundamental financial
strengths. We expect capital needs of about $2 billion over the next five
years to build our four development projects, as well as between $100 and
$200 million per year for sustaining capital at our existing operations. Our
alternatives for sourcing this capital include our $1 billion cash position,
our future operating cash flows and project financings. We are evaluating
these alternatives to determine the optimal mix of capital resources for the
projects. We expect that present levels of liquidity in these sources of
financing will be adequate to meet our expected capital needs.

While a deterioration in our credit rating would not adversely affect our
existing debt obligations or gold sales contracts, it could impact the cost
of borrowing for any new financings. There are a number of factors that are
important to our A credit rating, including: our market capitalization; the
strength of our balance sheet, including the amount of net debt and our
debt-to-equity ratio; our cash generating ability, including cash generated
by operating activities and expected capital expenditure requirements; the
quantity of our gold reserves; and our relatively low geo-political risk
profile due to the location of our mines.

51



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Like most financial contracts, our revolving credit facility and our gold
sales contracts require us to comply with certain financial covenants. These
covenants, which are based on our US GAAP financial statements, include:



| | (a) |  | Maintaining a minimum consolidated tangible net worth of over
$2.0 billion (our consolidated net worth as at December 31, 2002 was
over $3.3 billion); and                                                                                                                     
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Maintaining a maximum long-term debt to consolidated net worth
ratio below 1.5:1 (the ratio as at December 31, 2002 was under
0.25:1). The calculation of net worth excludes the unrealized
mark-to-market gain or loss on our derivative instruments and gold
sales contracts.

In the unlikely event that we breach these covenants, we would be in default
of our gold sales contracts, which could result in the counterparties
requiring settlement of these contracts; and also the syndicate of banks in
our credit facility could require repayment of amounts outstanding at that
time.

In this discussion of financial resources and liquidity, we address our
Consolidated Statements of Cash Flows, our Consolidated Balance Sheets and
our Consolidated Statements of Shareholders Equity.

Statements of Cash Flows

Our consolidated cash and equivalents totaled $1,044 million at the end of
2002, up from $574 million at the end of 2001. The main reasons for the
increase in 2002 were the maturity of term deposits totaling $159 million,
and free cash flow generated in the year of $361 million(1) (2001  $130
million; 2000  $174 million). The increase in free cash flow is mainly due
to lower capital expenditures in 2002 compared with prior years. Our free
cash flow will be reduced by capital expenditures relating to our development
plan over the next few years.

Operating Activities

Our operating cash flow is significantly affected by the volume of gold
sales, as well as realized gold prices and cash operating costs. In 2002, our
average realized gold price per ounce sold decreased by $5, and total cash
operating costs increased by $18. Overall, our operating cash flow remained
similar to 2001, due to the combined effect of a variety of factors,
including: increased sales volumes ($364 million), offset by: lower cash
margins in 2002 ($134 million) (defined as gold sales less cash operating
costs); payments of merger related costs of about $50 million; payments
related to non-hedge derivative instruments of about $60 million; a decrease
in interest capitalized by about $40 million; and an increase in cash
payments for reclamation and closure costs by about $35 million, mainly at
inactive mines.

For 2003, we expect our operating cash flow to remain at similar levels to
2002, assuming an average realized gold price of $350, as higher gold prices
are offset by higher cash operating costs and lower gold sales volumes.

Investing Activities

Our most significant ongoing investing activities are for capital
expenditures at our mines. Annually, we invest in sustaining capital at our
mines, including expenditures relating to underground development activities.
We also incur significant capital expenditures in the development and
construction phases of new mines, although the yearly level varies depending
on the status of our development projects.

Capital expenditures decreased by $258 million in 2002 to $291 million. In
2002, expenditures were mainly for sustaining capital and underground
development. Higher expenditures in the previous two years were mainly due
to: underground development at Meikle and Rodeo (2001  $90 million; 2000 -
$80 million); construction of the Bulyanhulu Mine (2001  $153 million; 2000
  $203 million); and higher levels of development activity at Pascua-Lama
(2001  $69 million; 2000  $107 million).

For 2003, we expect to spend a total of $430 million, including $218 million
for sustaining capital, which is similar to 2002, and $212 million on our
development plan ($136 million at Veladero, $34 million at Cowal, $42 million
at Alto Chicama).

We sometimes invest excess cash in term deposits with initial maturities
greater than 90 days, which are excluded from cash and equivalents and
included in short-term investments. At the end of 2001, we held cash of $159
million in the form of term deposits that were included under short-term
investments. As the term deposits matured in 2002, the cash received was
reflected as an inflow under investing activities and is included in cash and
equivalents.



---

|(1) |  | See non-GAAP measures page 63.
|--- |  | ------------------------------

52



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Financing Activities

Our most significant ongoing financing activities are repayments/drawdowns of
debt obligations, dividend payments, and proceeds from issuing capital stock.

The most significant financing cash flows in 2002 were $83 million received
on the exercise of employee stock options and dividend payments totaling $119
million, which were $32 million higher than in 2001. We also made scheduled
payments under our long-term debt obligations totaling $25 million in 2002.

For 2003, we will be required to make scheduled long-term debt repayments of
$20 million. The amount of any dividends will be determined by the Board of
Directors.

Consolidated Balance Sheet

Working Capital

Our non-cash working capital position was largely unchanged from 2001.
Inventories declined by $29 million as gold sales exceeded production in
2002, which was partially offset by an increase in accounts receivable by $16
million.

Capitalized Mining Costs

Amounts decreased in 2002 primarily due to mining in areas of the Betze-Post
pit where the actual ounces to total ore and waste ratio was lower than the
life-of-mine ratio. As a result, amortization exceeded incurred cash
expenditures.

Other Assets

The increase resulted from the inclusion of future income tax assets totaling
$45 million in 2002.

Statement of Shareholders Equity

Shareholders equity increased by $175 million in 2002. The increase is
mainly attributable to net income of $229 million and an increase in capital
stock by $86 million (from the exercise of employee stock options), offset by
dividends totaling $119 million.

FINANCIAL RISK MANAGEMENT

In the normal course of business, the main financial risks that affect us
arise from changes in commodity prices, interest rates, foreign currency
exchange rates and energy prices. We use privately negotiated contracts
(rather than exchange-traded contracts) with a group of 19 leading
international counterparties to manage our risk exposures. Because of the
long-life, low-cost nature of our mines, as well as our financial strength,
we have been able to secure trading lines and terms that we believe are the
most favorable offered to companies in our industry.

These contracts are valued using pricing inputs that are readily available
from independent sources. Changes in the value of the contracts are mainly
affected by, among other things, changes in commodity prices, interest rates,
gold lease rates and currency exchange rates.

Our use of these contracts is based on established practices and parameters,
which are subject to the oversight of the Finance Committee of the Board of
Directors. We also maintain a separate compliance function to independently
monitor our hedging and financial risk management activities and segregate
the duties of personnel responsible for entering into transactions from those
responsible for recording transactions.

Gold and Silver Price Risk

We manage our exposure to volatility in gold prices through our forward sales
contracts. A detailed discussion of the nature of these contracts, how we use
them in our business, and the historic benefits we have derived from them is
included on page 60.

53



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Certain of our mines, and in particular Eskay Creek, produce significant
quantities of silver as a by-product. The quantities of silver present in the
ore processed, as well as prices realized for silver production,
significantly impact our cash operating costs per ounce at these mines
because by-product revenue is deducted from operating costs. We use spot
deferred silver contracts as a means to sell silver production and to act as
an economic hedge of our exposure to changes in silver prices. Substantially
all of our silver production in 2003 is protected by these contracts, at an
average price of about $4.95 per ounce.

Interest Rate Risk

Our interest rate risk exposure mainly relates to future contango returns in
our spot deferred contracts, the fair value and ongoing payments under lease
rate and US dollar interest-rate swaps, and interest receipts on our cash
balances. We are more adversely affected by lower interest rates than higher
rates, because the net amount of assets less liabilities affected by interest
rates is an asset and also because the forward price of gold is significantly
affected by US dollar interest rates. In higher interest rate environments,
we realize higher prices under our spot deferred sales contracts because the
premium on the forward gold price over spot prices is greater, and we receive
higher interest income on our cash balances.

Most of our $774 million of outstanding long-term debt obligations are at
fixed interest rates. The exceptions are $250 million of our debentures where
we have converted the interest rate from fixed to floating rates, and our $80
million of variable-rate bonds. For $650 million of our cash balances, we
have fixed the interest return we are earning through 2006  2007, with the
excess generating interest income at variable US dollar interest rates.

The excess of interest-bearing assets over liabilities recognized on our
balance sheet, which are subject to variable interest rates, was $64 million
at December 31, 2002 (representing cash of $394 million, less the
floating-rate portion of debentures of $250 million, and our $80 million of
variable-rate bonds).

Like all fixed price sales contracts with future fixed cash flows, the
mark-to-market value of our existing gold sales contracts is affected by
changes in the forward price of gold, which in turn is affected by market US
dollar interest rates and gold lease rates. As we explain on page 61, the
mark-to-market value is not recorded on our balance sheet, and it does not
affect the level of our future earnings or cash flows.

For new gold sales contracts, the level of market US dollar interest rates
and gold lease rates at that time will influence forward gold prices and will
therefore affect the realized gold prices under these contracts.

As disclosed in note 22 to our financial statements, we enter into gold lease
rate swaps as part of our overall gold price optimization strategy. Because
these gold lease rate swaps include fixed US dollar cash flows, changes in
the fair value of these swaps (which flow through earnings each period) are
affected by changes in US dollar interest rates. Changes in US dollar
interest rates affect only the mark-to-market value of these gold lease rate
swaps, and do not impact the actual cash flows arising on the swaps.

Foreign Currency Exchange Risk

Although we operate on four continents, we do not view currency fluctuations
as a significant risk in the next few years at most of our operations because
all our revenues and most of our cash expenditures are denominated in US
dollars, and we have hedged most of our non-US dollar operating costs. Nearly
half of our production comes from our United States mines, while most of our
Peruvian and Tanzanian operating and capital expenditures  such as diesel
fuel, reagents and equipment  are denominated in United States dollars.

Our main foreign currency exposures relate to cash expenditures at our
Canadian and Australian mines that are denominated in local currencies. We
use foreign currency contracts to economically hedge our exposure to changes
in the Canadian and Australian dollar against the US dollar. With the recent
strengthening of the Canadian dollar and Australian dollar against the US
dollar, unhedged producers with operations in these countries could be facing
significantly higher US dollar operating costs.

In 2002, substantially all of our Canadian dollar expenditures were hedged at
$0.65 and substantially all of our Australian dollar expenditures were hedged
at $0.54. For 2003, we have hedged about 90% of our Canadian dollar
expenditures at $0.65 and substantially all of our Australian dollar
expenditures at $0.53. Beyond 2003, we have contracts in place to reduce our
currency risk exposure on about 60  70% of our Australian and Canadian
dollar exposures through 2005. Consequently, we do not expect fluctuations in
these currencies to significantly affect our near term earnings or operating
cash flows.

54



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Energy Price Risk

Our operating costs reflect the quantities of electricity and diesel fuel
consumed, at prices that are mainly based on the market prices of these
commodities. These costs represent approximately 16% of our total cash costs
per ounce for 2002.

|                                               |  |                            |  |                     |  |  |  | 
|---------------------------------------------- |  | -------------------------- |  | ------------------- |  |  |  | 
|                                               |  | Electricity                |  | Diesel             
|                                               |  |                            |  |                    
|Quantity consumed in 2002                      |  | 1.9 billion kilowatt hours |  | 1.3 million barrels
|Cost (dollars)                                 |  | $0.06 per kilowatt hour    |  | $38 per barrel(1)  
|Impact on total cash
costs per ounce
(dollars) |  | $20                        |  | $9                 



---

|(1) |  | Includes transportation and refining charges
|--- |  | --------------------------------------------

The table above illustrates our actual consumption of these commodities, the
average purchase cost and the impact on our average total cash costs per
ounce.

Substantially all of our costs arising from consumption of these items is
subject to variations in market prices, except that we have hedged about 20%
of diesel fuel requirements for 2003. We are evaluating ways in which to
mitigate these risk exposures, and we may take steps to hedge these costs in
the future or utilize alternative sources of supply to lower costs.

Derivatives Risk

The derivative contracts we enter into are an integral part of our financial
risk management strategy. The contracts act as economic hedges of our
underlying exposures that arise in the normal course of our business and are
not held for speculative purposes. Because we produce gold and silver, incur
costs in foreign currencies and invest and borrow in US dollars and are
therefore subject to US interest rates, all of our derivative contracts cover
natural underlying asset or liability positions. By using derivative
instruments, we have various financial risks, which we manage in the
following manner.

Credit risk is the risk that one or more counterparties will fail to perform
on an obligation to us. We mitigate credit risk by dealing with high quality
counterparties, by spreading our credit risk exposure over a number of
counterparties, by limiting our exposure to individual counterparties, and by
using master netting arrangements such that our credit risk exposure is
limited to the net positive fair value of contracts with individual
counterparties.

Market liquidity risk is the risk that a derivative position cannot be
eliminated quickly, by either liquidating derivative instruments or by
establishing an offsetting position. Under the terms of our trading
agreements with counterparties, the counterparties cannot require us to
immediately settle outstanding contracts, unless we breach any financial
covenants. We mitigate market liquidity risk by spreading out the maturity of
our derivative instruments over time. This ensures that the size of positions
maturing is such that for commodity contracts we are able to physically
deliver gold and silver against the contracts, and for other contracts the
relevant markets for currencies and interest rates will be able to absorb the
contracts.

Mark-to-market risk is the risk that an adverse change in market prices for
commodities, currencies or interest rates will affect our financial
condition. We have mitigated 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 derivative instruments. Also, the counterparties
cannot require settlement of a derivative solely because of an adverse change
in the mark-to-market value. We enter into derivative instruments to act as
economic hedges of underlying exposure to commodity prices, foreign currency
exchange rates and interest rates that arise in the normal course of our
business. Consequently, for most of the derivative instruments we use,
changes in the mark-to-market value do not affect earnings.

CRITICAL ACCOUNTING ESTIMATES

What follows is a discussion of our application of critical accounting
policies that require us to make assumptions about matters that are highly
uncertain at the time the accounting estimate is made, and where different
estimates that we reasonably could have used in the current period  or
changes in the accounting estimate that are reasonably likely to occur from
period to period  would have a material impact on our financial statements.
We have identified the following accounting estimates as critical:



| |  |  | impairment assessments of goodwill;                                       
| | - |  | --------------------------------------------------------------------------
|
| |  |  | amortization of property, plant and equipment and intangible assets;      
|
| |  |  | impairment assessments of long-lived assets (including intangible assets);

55



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| |  |  | mine reclamation and closure costs;                                                          
| | - |  | ---------------------------------------------------------------------------------------------
|
| |  |  | the measurement and recognition of valuation allowances against future income tax assets; and
|
| |  |  | contingencies.                                                                               

We also have certain accounting policies that we consider to be important 
such as our policies for revenue recognition, exploration costs and
derivative instruments  that do not meet the definition of critical
accounting estimates as they do not require us to make estimates or
judgements that are subjective or highly uncertain.

Management has discussed the development and selection of our critical
accounting estimates with the Audit Committee of the Board of Directors, and
the Audit Committee has reviewed the disclosure relating to such estimates in
this Managements Discussion and Analysis.

Impairment Assessments of Goodwill

In accounting for the Homestake merger, we determined that goodwill of $1,247
million existed at the date of acquisition. The allocation of goodwill to
reporting units was based on estimates of the individual fair values of those
reporting units acquired or benefiting from synergies arising directly from
the merger. Subsequent to the acquisition, we are required to test this
goodwill annually for impairment. This impairment assessment is fundamentally
based on updated estimates of the fair values of those reporting units, which
could be affected by, among other things, changes in quantities of gold
mineral reserves and resources; changes in the price of gold; changes in
expected future operating costs; and changes in expected future capital
expenditures and mine closure costs. An adverse change in any one or a number
of these factors could cause us to recognize an impairment charge relating to
goodwill. In particular if we were unable to replace or increase gold mineral
reserves and resources at the mines where we have allocated goodwill, then we
would expect the value of goodwill to be depleted over time as we approach
the end of the mine life.

Amortization of property, plant and equipment and intangible assets

Property, plant and equipment and capitalized mining costs, which totaled
$4.2 billion at December 31, 2002, represent a significant portion of our
assets (54%). Due to the large size of these assets, the application of our
accounting policies for these assets has a material impact on our reported
earnings.

In accordance with our accounting policy for property, plant and equipment,
we capitalize costs incurred on properties when proven and probable reserves
exist, or when sufficient objective evidence exists to support a conclusion
that it is probable non-reserve material will be produced. Upon commencement
of gold production, we amortize capitalized property acquisition and mine
development costs under the units of production method.

The process of estimating quantities of gold reserves is complex, requiring
significant decisions in the evaluation of all available geological,
geophysical, engineering and economic data. The data for a given ore body may
also change substantially over time as a result of numerous factors,
including, but not limited to, additional development activity, evolving
production history and the continual reassessment of the viability of
production under various economic conditions. A material revision (upward or
downward) to existing reserve estimates could occur because of, among other
things: revisions to geological data or assumptions; a change in the assumed
gold prices; and the results of drilling and exploration activities. We make
every effort to ensure that reported reserve estimates represent the most
accurate assessment possible. However, because of the subjective decisions we
have to make, as well as variances in available data for each ore body, these
estimates are generally uncertain.

Changes in reserve quantities, including changes resulting from gold and
silver price assumptions, would cause corresponding changes in amortization
expense in periods subsequent to the revision, and could result in impairment
of the carrying amount of property, plant and equipment, intangible assets
and capitalized mining costs.

For the past three years, we estimated reserves assuming a $300 per ounce
gold price. At December 31, 2002 a $25 per ounce reduction (8%) in gold price
would reduce our reserves by about 4 million contained ounces (6%), relating
primarily to our Kalgoorlie and Bulyanhulu operating mines and the
Pascua-Lama development project. Such a decrease in reserves would increase
annual amortization by about $20 million and decrease net income by about $15
million ($0.03 per share). Conversely, a $25 per ounce increase in gold price
would increase our reserves by about 2 million contained ounces (3%),
relating primarily to Kalgoorlie, Goldstrike and Pascua-Lama. Such an
increase in reserves would decrease annual amortization by about $15 million
and increase net income by about $10 million ($0.02 per share).

56



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In addition to changes in gold prices, reserve quantities can also change for
other reasons, including but not limited to, new drilling results, changes in
production costs and changes in geological assumptions. The mines where
amortization charges would be most significantly affected by changes in
reserve estimates are Pierina, Meikle, Eskay Creek and Bulyanhulu. These
mines generally have the largest amounts of property, plant and equipment and
intangible assets subject to amortization using the units of production
method and the highest per ounce amortization charges. The effect of a 10%
change in reserves at these mines on amortization would be as follows:

|            |  |                                      |    |                                |  |   |    | 
|----------- |  | ------------------------------------ | -- | ------------------------------ |  | - | -- | 
|            |  | Impact of a 10% change in gold       |    | Impact on earnings, based on  
|            |  | reserves on amortization (per ounce) |    | Ounces sold in 2002 (millions)
|            |  |                                      |    |                               
|Pierina     |  | $                                    | 17 |                                |  | $ | 15 | 
|Meikle      |  |                                      | 12 |                                |  |   | 8  | 
|Eskay Creek |  |                                      | 14 |                                |  |   | 5  | 
|Bulyanhulu  |  |                                      | 11 |                                |  |   | 4  | 
|            |  |                                      |    |                                |  |   |    | 

Impairment assessments of long-lived assets (including intangible assets)

We believe that our estimates are critical for these assets because they are
susceptible to change from period to period and the potentially material
effect that recognizing an impairment could have on the assets reported on
our balance sheet and on our reported earnings.

They are based on estimates of future cash flows, which include estimates of:



| |  |  | the quantity of gold reserves at our mines;                                                                       
| | - |  | ------------------------------------------------------------------------------------------------------------------
|
| |  |  | future gold and silver prices; and                                                                                
|
| |  |  | future operating and capital costs to mine and process our reserves over extended periods of time
(5 to 25 years).

In 2000 we recorded a $1.3 billion provision to reduce the carrying values of
various assets. With the recent rise in spot gold prices, the current
likelihood of a significant impairment at our operating mines has diminished.
Based on a long-term gold price of $300 per ounce and our gold mineral
reserves at December 31, 2002, we have completed a sensitivity analysis that
indicates that a 10% decrease in net cash flows resulting from a combination
of a lower spot gold price and an increase in operating and capital costs at
each of our properties would not result in the recognition of a provision for
impairment.

Reclamation and closure costs

Our mining, exploration and development activities are subject to various
levels of federal, provincial and state laws and regulations relating to the
protection of the environment, including requirements for closure and
reclamation of mining properties. In general, these laws and regulations are
continually changing and, over time, becoming more restrictive.

We estimate that future site reclamation and closure obligations will be $169
million at our closed mines and $292 million at our operating mines. At
December 31, 2002, we had fully accrued for the future costs at our closed
mines ($169 million), and we had accrued $112 million for our current
operating mines. Based on our existing accounting policy, the remaining $180
million for our operating mines will be accrued over their estimated lives,
based on the units of production method as gold is produced and sold. Changes
in estimated costs are recognized prospectively as a revision to future cost
accruals.

Our operating mines and approximately 50 closed mines are located in the
United States, Canada, Australia, Chile, Peru and Tanzania. We expect to
spend about $135 to $160 million over the next five years on reclamation and
closure activities, with about 85% of these amounts at our closed mines. Our
current operating mines have estimated productive lives, based on reserves at
December 31, 2002, ranging from 2 to 25 years.

Significant management judgements and estimates are made when estimating
reclamation and closure costs, which will be incurred, in some cases, many
years from the date of estimate. A 10% change in the current overall estimate
of reclamation and closure costs for our closed mines would increase or
decrease net income by about $12 million or $0.02 per share. A 10% change at
each of our operating mines may not have a significant effect on net income
in a period because the effect of the change would be accrued over the
estimated remaining life of each mine.

Valuation allowances against future income tax assets

For each future income tax asset, we evaluate the likelihood of whether some
portion or all of the asset will not be realized. This evaluation is based
on, among other things, expected levels of future taxable income. If, based
on the

57



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weight of available evidence, we determine that it is more likely than not (a
likelihood of more than 50 percent) that all or some portion of a future
income tax asset will not be realized, then we record a valuation allowance
against it. As of December 31, 2002, we have recorded a valuation allowance
of $436 million on a portion of our net future income tax assets totaling
$497 million.

Our most significant valuation allowances, and the related tax jurisdictions
are:

|                |  |                     |     | 
|--------------- |  | ------------------- | --- | 
|(millions)      |  | Valuation allowance
|                |  |                    
|United States   |  | $                   | 166 | 
|Chile/Argentina |  |                     | 113 | 
|Tanzania        |  |                     | 83  | 
|Canada          |  |                     | 67  | 
|Other           |  |                     | 7   | 
|                |  |                     |     | 
|                |  | $                   | 436 | 
|                |  |                     |     | 

In the United States, Chile and Argentina, valuation allowances relate to tax
assets in subsidiaries that do not have any present sources of income against
which to utilize the assets. In the event these subsidiaries have sources of
income in the future, we may be able to reduce the level of valuation
allowances recorded.

In Canada, substantially all of the valuation allowances relate to capital
losses that will only be utilized if we realize any capital gains in the
future.

In Australia, the valuation allowances relate to operating losses in
subsidiaries that have had a history of losses over the last three years. In
the event there is a sustained upward movement in the price of gold or other
factors occur that increase the profitability of these subsidiaries over the
next few years, we may reduce the level of valuation allowances against these
assets.

In Tanzania, the tax legislation provides for a compounding of unused tax
depreciation which results in an additional deduction for tax purposes for
amounts spent on property, plant and equipment. After considering the effect
of this compounding, and the expected levels of future taxable income at the
Bulyanhulu Mine, we recorded a valuation allowance against the portion of the
future income tax assets that we believe will more than likely not be
realized. In the event that levels of future taxable income at Bulyanhulu are
higher than we presently expect, which could be because of a number of
factors, including a sustained upward movement in gold prices, operating
efficiencies or the discovery of additional reserves, we may reduce the level
of valuation allowances against these assets.

In future years, levels of taxable income will be affected by, among other
things, changes in gold prices, cash operating costs, proven and probable
gold reserves, interest rates and foreign currency exchange rates.
Significant changes in these and other factors could have a material impact
on the amount of valuation allowances recorded and on income tax expense.

Contingencies

We account for contingencies in accordance with CICA Handbook Section 3290,
Contingencies (Section 3290). Section 3290 requires that we record an
estimated loss from a loss contingency when information available prior to
issuance of our financial statements indicates that it is likely that a
future event will confirm that an asset has been impaired or a liability has
been incurred at the date of the financial statements, and the amount of the
loss can be reasonably estimated. By their nature, contingencies will only
be resolved when one or more future events occur or fail to occur  and
typically those events will occur a number of years in the future. We assess
such contingent liabilities, which inherently involves the exercise of
significant management judgement and estimates of the outcome of future
events.

Income tax contingencies

We record liabilities for known tax contingencies when, in our judgement, it
is likely that a liability has been incurred. It is reasonably possible that
actual amounts payable resulting from audits by tax authorities could be
materially different from the liabilities we have recorded, due to the
complex nature of the tax legislation that affects us.

As described in note 21 to our financial statements, we have recorded current
and future income tax liabilities of $141 million for the cost arising from
the denial by the Peruvian tax authorities (SUNAT) of our right to revalue
the Pierina mining concession. This reduction on the Pierina cost base for
tax purposes results in a temporary difference between income for tax and
accounting purposes, and the recognition of liabilities for income taxes
under our accounting policy

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for income taxes. We have appealed this decision, a process that we expect to
take several years. Until the appeal is resolved, we will not be required to
make any payments of this incremental tax liability. However, if at the end
of the appeal process we are unsuccessful, we will be required to pay SUNAT
the additional taxes owing at that time. Through the end of 2002, the impact
on current income taxes payable amounts to $41 million, and this current part
will continue to increase each year up to the full $141 million over the
remaining life of the mine.

We have not recorded any potential interest and penalties, currently
estimated at $51 million based on the SUNAT assessment, because we believe
that it is not likely that these amounts are payable to SUNAT. A liability
for interest and penalties will only be recorded should it become likely that
SUNATs position on interest and penalties will be upheld or settled. In the
event that we are unsuccessful in our appeal of the assessment of interest
and penalties in Peru, based on the amounts potentially payable at the end of
2002, we would recognize a charge of about $51 million ($0.09 per share).

Legal contingencies

As described in note 21 to our financial statements, we are involved in
claims and legal proceedings, the resolution of which could have a material
effect on our financial condition or future results of operations. In
assessing these contingencies, we evaluated the perceived merits of the legal
proceedings or unasserted claims, as well as the perceived merits of the
amount of relief sought or that we expect to seek.

Inmet Litigation

As disclosed in note 21 to our financial statements, we have accrued the
amount of judgement awarded to Inmet, and in August 2002 we posted a letter
of credit for C$95 million pending a decision on our appeal. We expect to
receive a decision on our appeal in 2004, at which time, if we are
unsuccessful, we will be required to satisfy the judgement.

In the event that the income tax and Inmet contingencies described above and
that we have recorded in our financial statements are resolved in our favor,
we would recognize in income gains of about $182 million ($0.34 per share),
net of tax, in aggregate.

OFF-BALANCE SHEET ARRANGEMENTS

We do not enter into off-balance sheet arrangements with special purpose
entities in the normal course of our business, nor do we have any
unconsolidated affiliates. In the case of joint ventures, our proportionate
interest for consolidation purpose is equivalent to the economic returns to
which we are entitled as a joint venture partner. Our only significant
off-balance sheet arrangements are our gold sales contracts.

GOLD SALES CONTRACTS

Overview

We have entered into gold sales contracts with high quality banking
counterparties. The banking counterparties with whom we enter into these
contracts engage in derivative transactions with numerous third parties in
addition to us. We do not have any relationships with special purpose
entities whose sole business purpose is to enter into derivative transactions
with us.

We use gold sales contracts to protect our earnings and cash flow from
declining gold prices, while permitting us to sell our gold production in the
gold spot market in a rising gold price environment, as we have done in early
2003. At the end of 2002, our gold sales commitments under these contracts
totaled 18.1 million ounces.

We account for these agreements as executory sales contracts with the
proceeds under the contract recorded as revenue at the date we physically
deliver gold to the counterparties.

Under these contracts:



| | 1. |  | We can deliver gold to meet our commitments at any time we
choose over periods of up to 10 or 15 years. We have the flexibility
over this period to sell our production in either the spot gold
market or through these contracts. Generally, our strategy is to sell
our gold production in the spot market if the market price exceeds
the price under our sales agreements.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | We are not subject to any margin calls, regardless of the price
of gold.                                                                                                                                                                                                                                                                                                      
|
| | 3. |  | There are no credit downgrade provisions in these contracts.                                                                                                                                                                                                                                                                                                                  

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| | 4. |  | We carefully manage credit exposure to our counterparties under
these contracts. Generally, the counterparties have credit ratings
of AA, and any credit exposure is spread over the 19
counterparties.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 5. |  | We regularly review our gold sales commitments to ensure that
we have the gold mineral reserves and
future gold production that substantially exceed our contract
commitments.                           

Through the use of these contracts over the last three years, we have
realized higher revenues than if we had sold our gold production in the spot
gold market at average spot gold prices. The benefits of using these
contracts can be illustrated as follows:

Revenue from Forward Sales Contracts

|                                                                                     |  |      |       |      |  |      |       |  |  |   |       | 
|------------------------------------------------------------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                                                                     |  | 2002 |       | 2001 |  | 2000
|                                                                                     |  |      |       |      |  |     
|Total revenues from contract sales (millions)                                        |  | $    | 1,381 |      |  | $    | 1,179 |  |  | $ | 1,220 | 
|Average contract selling price ($/oz)                                                |  | $    | 347   |      |  | $    | 354   |  |  | $ | 363   | 
|Average spot price ($/oz)                                                            |  | $    | 310   |      |  | $    | 271   |  |  | $ | 279   | 
|Incremental revenues from contracts in
excess of average spot
gold prices (millions) |  | $    | 148   |      |  | $    | 276   |  |  | $ | 299   | 

The terms of our gold sales contracts provide flexibility and benefits that
we believe are unique to us and unavailable to any other gold producer. We
are able to realize benefits from the contracts mainly because we are able to
choose a suitable delivery date at any time over the 10 to 15 year term of
the contract. Over this period, we can sell our gold at the spot price, but
if the spot price is lower than the contract price, our production is
protected because we are able to sell at the contract price. These
advantageous terms reflect, among other things, our strong credit rating and
our high quality, long-life, low-cost asset base. We believe that the
benefits we derive from these contracts give us a substantial economic and
financial advantage over other companies in the gold mining industry.

The main factors that affect our future ability to derive benefits from these
agreements are two financial covenants, which are based on our financial
statements prepared under US GAAP: maintain a consolidated net worth of at
least $2 billion (2002  $3.3 billion) and our debt to equity ratio must not
exceed 1.5:1 (2002  less than 0.25:1).

Key Contract terms and conditions
Spot deferred sales contracts

A spot deferred sales contract is an agreement that we will sell a fixed
number of ounces of gold to the contract counterparty on a delivery date in
the future at an agreed price. We have the flexibility to choose the delivery
date at any time over a 10 to 15 year period from the start of the contract.
Our rights and obligations under these contracts are defined by Master
Trading Agreements (MTAs) that we have executed with our counterparties.

The selling price under the contract is based on the forward price of gold at
the future delivery date, which is essentially a function of the spot gold
price on the date the contract is entered into plus a premium (commonly
referred to as contango) through the future delivery date. The amount of
contango is often quoted as a percentage return that reflects the spread
between market LIBOR interest rates (i.e., US dollar interest rates) and gold
lease rates. Generally, US dollar interest rates are higher than the gold
lease rate, which means that the future price is higher than the current
price under the contract. The longer the period of time until delivery, the
greater the amount of the forward premium or contango and  so long as US
dollar interest rates are higher than gold lease rates  the greater the
contract price compared to the spot price at the start of the contract.

Over the past five years, three-month US dollar interest rates have averaged
4.6% and gold lease rates have averaged 1.2%, resulting in an average
contango rate of 3.4%. With the recent decline in interest rates, three-month
US dollar interest rates have been about 1.8% and gold lease rates have been
about 0.4%, resulting in a contango rate of 1.4%. The level of contango rates
is one of the most significant factors that affect the price we realize from
these contracts. At the end of 2002, the average rate of contango implied in
our gold spot deferred contracts was 3.2%. The selling prices under our spot
deferred contracts are fixed over an average future period of two years.

Beyond the dates that contango is presently fixed, future premiums earned
under the spot deferred contracts will be based on market contango rates at
that time, for those future periods until the actual delivery date. In the
event gold lease rates are higher than US dollar interest rates, the
premium becomes negative (known as backwardation). Over the past five
years, backwardation has occurred only once, and only for a period of two
days.

Since we have the flexibility to deliver gold under our sales contracts at
any time over the next 10 to 15 years, we can sell our gold at the higher of
the spot price or the contract price well into the future. In the event spot
prices consistently

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exceed the contract price for the next 10 to 15 years, and assuming that we
choose to deliver our gold at spot prices over this period, we would
eventually deliver gold at a price of about $500 per ounce under our existing
contracts (assuming typical historical long-term contango rates of 4%);
however, if todays low interest rate environment persists, the forward price
of the contract would rise to about $400 per ounce. By choosing to deliver
gold at higher spot gold prices, we are able to take advantage of those
higher prices, but it remains probable that we will physically deliver gold
over the term of the contract, and we will not be required to cash settle the
contracts. In most cases, under the terms of our MTAs, the period over which
we are required to deliver gold is extended annually by one year, or kept
evergreen, regardless of our intended delivery dates, unless otherwise
notified by the counterparty. This means that, with each year that passes,
the Termination Date is extended into the future by one year.

Variable price sales contracts

A variable price sales contract is a version of our spot deferred sales
contract, the difference being that the price of gold is variable within
certain limits. While most of our spot deferred contracts are to sell gold at
a fixed price in the future, the variable price sales contracts have a
variable price for gold, typically either i) within a range, or ii) capped to
a maximum level based on the spot price at an agreed future date.

The variable price sales contracts enjoy all the same benefits and
flexibility as our spot deferred sales contracts: we can deliver gold against
our variable price sales contracts at any time up to 10 to 15 years in the
future; most contracts have the evergreen clause; and they are not subject
to margin calls.

Significance of mark-to-market gains and losses

Mark-to-market gains and losses represent unrealized changes in the fair
value of our gold sales contracts. For example, if we had a contract to sell
gold currently at $340 an ounce and the spot price of gold was $375 an ounce,
then the mark-to-market value of the contract is about negative $35 per
ounce. This has no impact on the selling price under the contract, which
remains intact at $340 per ounce.

The mark-to-market value represents a calculation of the fair value of the
contracts at a point in time, based on market conditions at that time.
Because we intend to physically deliver future production against our sales
contracts, we do not expect to ever have to financially settle this gain or
loss and record it in our income statement. On delivery of gold under the
contract, we receive cash equivalent to the selling price in the contract and
we record this amount under gold sales in our income statement. Therefore, we
do not expect a significant increase in the price of gold and an adverse
change in the mark-to-market value of these contracts to result in the
mark-to-market value being recorded in our earnings and cash flow.

A short-term spike in gold lease rates would not have a material negative
impact on us because we are not exposed under our gold sales contracts to
short-term gold lease rate variations. A prolonged rise in gold lease rates
could result in lower contango (or negative contango i.e. backwardation)
and therefore a smaller forward premium (or backwardation) under the
contract. However, because of the large amount of Central Bank gold available
for lending relative to demand, gold lease rates tend to be low and any
spikes short-lived.

The estimated fair value of the gold contracts at December 31, 2002 was
approximately negative $639 million, and the fair value of silver contracts
was $7 million positive. The most significant factors affecting this
mark-to-market value are spot gold prices and market contango rates. The
mark-to-market value of our gold sales contracts would approach zero
(breakeven) at a spot gold price of approximately $310 per ounce, assuming
all other variables are constant.

The fair value of our foreign currency contracts at December 31, 2002 was $25
million positive. The value of gold contracts is based on the net present
value of cash flows under the contracts, based on a gold spot price of $347
per ounce and market rates for Libor and gold lease rates. The year-to-date
change in the fair value of our gold contracts is detailed as follows:

Continuity Schedule of the Change in the Mark-to-Market

|                                                                                                                      |  |   |        |  
|--------------------------------------------------------------------------------------------------------------------- |  | - | ------ | -
|Value of our Gold Sales Contract Position (millions)                                                                  |  |   |        |  
|                                                                                                                      |  |   |        |  
|Fair value as at December 31, 2001  Gain                                                                             |  | $ | 356    |  
|Impact of realized gains in the year                                                                                  |  |   | (168   | )
|Impact of change in spot price (from $279 per ounce to $347 per ounce)                                                |  |   | (1,353 | )
|Contango earned in the year                                                                                           |  |   | 182    |  
|Impact of change in valuation inputs other than spot metal prices
(e.g., interest rates, lease rates, and volatility) |  |   | 344    |  
|                                                                                                                      |  |   |        |  
|Fair value as at December 31, 2002  Loss                                                                             |  | $ | (639   | )
|                                                                                                                      |  |   |        |  

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##### 



CONTRACTUAL OBLIGATIONS AND COMMITMENTS

|                                   |  |                 |     |           |  |           |     |       |  |       |     |  |  |   |     |  |  |   |       | 
|---------------------------------- |  | --------------- | --- | --------- |  | --------- | --- | ----- |  | ----- | --- |  |  | - | --- |  |  | - | ----- | 
|                                   |  | Payments due in |     |           |  |          
|                                   |  |                 |     |           |  |          
|(millions)                         |  | 2003            |     | 2004-2005 |  | 2006-2007 |     | 2008+ |  | Total
|                                   |  |                 |     |           |  |           |     |       |  |      
|Contractual obligations            |  |                 |     |           |  |           |     |       |  |       |     |  |  |   |     |  |  |   |       | 
|Long-term debt                     |  | $               | 20  |           |  | $         | 72  |       |  | $     | 568 |  |  | $ | 114 |  |  | $ | 774   | 
|Reclamation and closure costs      |  |                 | 45  |           |  |           | 51  |       |  |       | 50  |  |  |   | 357 |  |  |   | 503   | 
|Capital leases                     |  |                 |    |           |  |           | 3   |       |  |       |    |  |  |   |    |  |  |   | 3     | 
|Operating leases                   |  |                 | 6   |           |  |           | 7   |       |  |       | 5   |  |  |   | 10  |  |  |   | 28    | 
|Purchase obligations:              |  |                 |     |           |  |           |     |       |  |       |     |  |  |   |     |  |  |   |       | 
|Supplies inventory and
consumables |  |                 | 50  |           |  |           | 21  |       |  |       | 4   |  |  |   |    |  |  |   | 75    | 
|Power contracts                    |  |                 | 18  |           |  |           | 24  |       |  |       | 44  |  |  |   |    |  |  |   | 86    | 
|Capital expenditures               |  |                 | 20  |           |  |           |    |       |  |       |    |  |  |   |    |  |  |   | 20    | 
|Other                              |  |                 | 57  |           |  |           | 20  |       |  |       | 18  |  |  |   | 19  |  |  |   | 114   | 
|                                   |  |                 |     |           |  |           |     |       |  |       |     |  |  |   |     |  |  |   |       | 
|Total                              |  | $               | 216 |           |  | $         | 198 |       |  | $     | 689 |  |  | $ | 500 |  |  | $ | 1,603 | 
|                                   |  |                 |     |           |  |           |     |       |  |       |     |  |  |   |     |  |  |   |       | 

Long-term debt

Our debt obligations do not include any subjective acceleration clauses or
other clauses that enable the holder of the debt to call for early repayment,
except in the event that we breach any of the terms and conditions of the
debt. We are not required to post any collateral under any debt obligations,
and the terms of the obligations would not be affected by a deterioration in
our credit rating.

Reclamation and closure costs

The amounts included in the table for reclamation and closure costs represent
our present legal obligations for costs at all our existing operating mines
and mines in various stages of closure. For those mining operations where our
interest is in a joint venture arrangement, the table reflects our
proportionate share of the liability for reclamation and closure costs.

Under our present accounting policy, we accrue these costs on an undiscounted
basis, using the units of production method over the life of each mine. After
closure, changes to future cost estimates are recorded in earnings as they
occur. The liability recorded on our balance sheet under this accounting
policy represents the difference between costs accrued to date and actual
payments made.

The most significant contingent liability relating to reclamation and closure
activities, which is not recorded on our balance sheet, relates to potential
obligations to monitor water quality and treat ground water on an ongoing
basis. We record a liability for these activities if environmental laws and
regulations require us to conduct these activities.

Power Purchase Agreements

We enter into contracts to purchase power at each of our operating mines. The
contracts provide for fixed prices, which in certain circumstances are
adjusted for inflation. Some agreements obligate us to purchase fixed
quantities per hour, seven days a week, while others are based on a
percentage of actual consumption. These contracts extend through various
dates in 2004 to 2007.

In addition to the purchase obligations set out in the table, we purchase
about 0.9 billion kilowatt-hours annually at market rates that were about 7
cents per kilowatt-hour in 2002. Under the terms of one contract, we purchase
power based on actual consumption, which has an exit fee of $12 million
should we decide to switch to an alternate power supplier.

COMMITMENTS

Royalties

Virtually all of our royalty commitments only give rise to obligations at the
time we produce gold. In the event that we do not produce gold at our mining
properties, we have no obligation to the royalty holders. The amounts that we
expect to pay in the future are: 2003  $37 million; 2004 to 2005  $92
million; 2006 to 2007  $89 million; and 2008 and beyond  $297 million.
These amounts are estimated based on our expected gold production from proven
and probable reserves for the periods indicated, assuming a $300 gold price.
The most significant royalty arrangements are disclosed in note 4 to our
financial statements.

62



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##### 



Payments to maintain land tenure and mineral property rights

In the normal course of business, we are committed to make annual payments to
maintain title to certain of our properties and to maintain our rights to
mine gold at certain of our properties. In the event we choose to abandon a
property or discontinue mining operations, the payments relating to that
property can be suspended, resulting in our rights to the property lapsing.

NON GAAP MEASURES

We have included cash costs per ounce data because we understand that certain
investors use this information to assess our performance and also determine
our ability to generate cash flow for use in investing and other activities.
The inclusion of cash costs per ounce statistics enables investors to better
understand year-on-year changes in production costs, which in turn affect our
profitability and cash flow. We also make reference to the term free cash
flow, which we define as cash flow from operations less cash used in the
purchase of property, plant and equipment. This cash is available to reinvest
in our business or to return to shareholders, either through dividends or
share repurchases. Because we operate in a capital-intensive industry, the
illustration of free cash flow enables investors to appreciate the
year-on-year performance of our mines in generating cash for other purposes.
This data is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP. The measures are not necessarily indicative
of operating costs or cash flow measures presented under GAAP.

Reconciliation of Cash Costs per Ounce

|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(in millions of US dollars except per ounce amounts) |  | 2002 |       | 2001 |  | 2000
|                                                     |  |      |       |      |  |     
|Operating costs per financial statements             |  | $    | 1,073 |      |  | $    | 633   |   |  | $ | 533   |  
|Reclamation, closure and other costs(1)              |  |      | (45   | )(1) |  |      | (17   | ) |  |   | (13   | )
|Operating costs for per ounce calculation            |  | $    | 1,028 |      |  | $    | 616   |   |  | $ | 520   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Ounces sold (thousands)                              |  |      | 5,805 |      |  |      | 3,879 |   |  |   | 3,614 |  
|Total cash costs per ounce                           |  | $    | 177   |      |  | $    | 159   |   |  | $ | 144   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  



---

|(1) |  | In 2002, includes costs totaling $15 million in connection with the
Peruvian tax assessment. Total cash costs per ounce data is calculated
in accordance with The Gold Institute Production Cost Standard (the
Standard). Adoption of the Standard is voluntary, and the data
presented may not be comparable to data presented by other gold
producers. Cash costs per ounce are derived from amounts included in the
Statements of Income and include mine site operating costs such as
mining, processing, administration, royalties and production taxes, but
exclude amortization, reclamation costs, financing costs, and capital,
development and exploration.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Reconciliation of Free Cash Flow(in millions)

|                                                |  |      |     |      |  |      |     |  |  |   |     | 
|----------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                                |  | 2002 |     | 2001 |  | 2000
|                                                |  |      |     |      |  |     
|Free cash flow                                  |  | $    | 361 |      |  | $    | 130 |  |  | $ | 174 | 
|Capital expenditures and mine development costs |  |      | 291 |      |  |      | 549 |  |  |   | 698 | 
|                                                |  |      |     |      |  |      |     |  |  |   |     | 
|Operating cash flow                             |  | $    | 652 |      |  | $    | 679 |  |  | $ | 872 | 
|                                                |  |      |     |      |  |      |     |  |  |   |     | 

QUARTERLY INFORMATION(in millions, except per share data)

|                      |                   |      |       |      |      |      |           |      |          |      |     |      |  |      |     |      |  |   |     |      |  |   |     |      |  |   |     |      |  |   |     |      | 
|--------------------- | ----------------- | ---- | ----- | ---- | ---- | ---- | --------- | ---- | -------- | ---- | --- | ---- |  | ---- | --- | ---- |  | - | --- | ---- |  | - | --- | ---- |  | - | --- | ---- |  | - | --- | ---- | 
|                      |                   |      | March |      | June |      | September |      | December
|                      |                   |      |       |      |      |      |           |      |         
|(Canadian GAAP basis) |                   | 2002 |       | 2001 |      | 2002 |           | 2001 |          | 2002 |     | 2001 |  | 2002 |     | 2001
|                      |                   |      |       |      |      |      |           |      |          |      |     |      |  |      |     |     
|Gold sales            |                   | $    | 475   |      |      | $    | 340       |      |          | $    | 483 |      |  | $    | 338 |      |  | $ | 468 |      |  | $ | 306 |      |  | $ | 521 |      |  | $ | 340 |     
|Net income            |                   | $    | 28    |      |      | $    | 77        |      |          | $    | 52  |      |  | $    | 66  |      |  | $ | 38  |      |  | $ | 63  |      |  | $ | 111 |      |  | $ | 65  |     
|Net income per share  |                   |      |       |      |      |      |           |      |          |      |     |      |  |      |     |      |  |   |     |      |  |   |     |      |  |   |     |      |  |   |     |     
|                      | Basic and diluted |      | $     | 0.05 |      |      | $         | 0.19 |          |      | $   | 0.10 |  |      | $   | 0.17 |  |   | $   | 0.07 |  |   | $   | 0.16 |  |   | $   | 0.20 |  |   | $   | 0.16 | 
|                      |                   |      |       |      |      |      |           |      |          |      |     |      |  |      |     |      |  |   |     |      |  |   |     |      |  |   |     |      |  |   |     |     

63