##### 



EXHIBIT 2

Managements
Responsibility

Managements Responsibility for Financial Statements

The accompanying consolidated financial statements have been prepared by and
are the responsibility of the Board of Directors and Management of the Company.

The consolidated financial statements have been prepared in accordance with
United States generally accepted accounting principles and reflect Managements
best estimates and judgements based on currently available information. The
Company has developed and maintains a system of internal accounting controls in
order to ensure, on a reasonable and cost effective basis, the reliability of
its financial information.

The consolidated financial statements have been audited by
PricewaterhouseCoopers LLP, Chartered Accountants. Their report outlines the
scope of their examination and opinion on the consolidated financial
statements.

/s/ Jamie C.
SokalskyJamie C. Sokalsky
Senior Vice President
and Chief Financial Officer
Toronto, Canada
February 11, 2004

62

BARRICK Annual Report 2003



---



##### 



Auditors
Report

To the Shareholders of Barrick Gold Corporation

We have audited the consolidated balance sheets of Barrick Gold Corporation as
at December 31, 2003 and 2002 and the consolidated statements of income, cash
flows, and shareholders equity and comprehensive income for each of the three
years in the period ended December 31, 2003. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in both Canada and the United States. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2003 and 2002 and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2003 in accordance with United States generally accepted
accounting principles.

As discussed in Note 2 to the consolidated financial statements, during 2003
the Company changed its policy on accounting for amortization of underground
development costs and for asset retirement obligations, during 2002 the Company
changed its policy on deferred stripping costs, and during 2001 the Company
changed its policy on accounting for derivative instruments.

On February 11, 2004 we reported separately to the shareholders of Barrick Gold
Corporation on the consolidated financial statements for the same periods,
prepared in accordance with Canadian generally accepted accounting principles.

/s/ PricewaterhouseCoopers LLPChartered Accountants
Toronto, Canada
February 11, 2004

63

BARRICK Annual Report 2003



---



##### 



Financial
Statements

Consolidated Statements of Income

Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars,
except per share data)

|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |      | 
|------------------------------------------------------------------- | ----------------- | - | ----- | ---- | ---- | - | ----- | ---- |  | - | ----- | ---- | 
|                                                                    |                   |   | 2003  |      | 2002 |   | 2001 
|                                                                    |                   |   |       |      |      |   |      
|Gold Sales (notes 4 and 5)                                          |                   | $ | 2,035 |      |      | $ | 1,967 |      |  | $ | 1,989 |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Costs and expenses                                                  |                   |   |       |      |      |   |       |      |  |   |       |     
|Cost of sales and other operating expenses1 (note 6)                |                   |   | 1,134 |      |      |   | 1,071 |      |  |   | 1,080 |     
|Amortization (note 4)                                               |                   |   | 522   |      |      |   | 519   |      |  |   | 501   |     
|Administration                                                      |                   |   | 83    |      |      |   | 64    |      |  |   | 86    |     
|Merger and related costs (notes 3 and 18)                           |                   |   |      |      |      |   | (2    | )    |  |   | 117   |     
|Exploration and business development                                |                   |   | 137   |      |      |   | 104   |      |  |   | 103   |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|                                                                    |                   |   | 1,876 |      |      |   | 1,756 |      |  |   | 1,887 |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Other income/expense (note 7)                                       |                   |   | 52    |      |      |   | 29    |      |  |   | 32    |     
|Litigation (note 25)                                                |                   |   | (16   | )    |      |   |      |      |  |   | (59   | )   
|Interest expense (note 19)                                          |                   |   | (44   | )    |      |   | (57   | )    |  |   | (25   | )   
|Non-hedge derivative gains (losses) (note 11)                       |                   |   | 71    |      |      |   | (6    | )    |  |   | 33    |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Income before income taxes and other items                          |                   |   | 222   |      |      |   | 177   |      |  |   | 83    |     
|Income tax (expense) recovery (note 8)                              |                   |   | (5    | )    |      |   | 16    |      |  |   | 14    |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Income before cumulative effect of changes in
accounting principles |                   |   | 217   |      |      |   | 193   |      |  |   | 97    |     
|Cumulative effect of changes in accounting
principles (note 2)      |                   |   | (17   | )    |      |   |      |      |  |   | (1    | )   
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Net income for the year                                             |                   | $ | 200   |      |      | $ | 193   |      |  | $ | 96    |     
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     
|Earnings per share data (note 9):                                   |                   |   |       |      |      |   |       |      |  |   |       |     
|Income before cumulative effect
of changes in accounting principles |                   |   |       |      |      |   |       |      |  |   |       |     
|                                                                    | Basic and diluted |   | $     | 0.40 |      |   | $     | 0.36 |  |   | $     | 0.18 | 
|Net income                                                          |                   |   |       |      |      |   |       |      |  |   |       |     
|                                                                    | Basic and diluted |   | $     | 0.37 |      |   | $     | 0.36 |  |   | $     | 0.18 | 
|                                                                    |                   |   |       |      |      |   |       |      |  |   |       |     



|1. |  | Exclusive of amortization (note 6)
|-- |  | ----------------------------------

The accompanying notes are an integral part of these consolidated financial
statements.

64

BARRICK Annual Report 2003



---



##### 



FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows

Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)

|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |   |      |  
|------------------------------------------------------- |  | -------------------------------------------------------- | ----- | ---- | ---- | ---- | ----- | ---- | ---- | - | ---- | - | ---- | -
|                                                        |  |                                                          |       | 2003 |      | 2002 |       | 2001
|                                                        |  |                                                          |       |      |      |      |       |     
|Operating
Activities                                    |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Net income for the year                                 |  | $                                                        | 200   |      |      | $    | 193   |      |      | $ | 96   |  
|Amortization                                            |  |                                                          | 522   |      |      |      | 519   |      |      |   | 501  |  
|Changes in capitalized mining costs                     |  |                                                          | 37    |      |      |      | 29    |      |      |   | 17   |  
|Deferred income taxes (note 8)                          |  |                                                          | (49   | )    |      |      | (75   | )    |      |   | (50  | )
|Inmet litigation settlement (note 25)                   |  |                                                          | (86   | )    |      |      |      |      |      |   |     |  
|Gains on sale of long-lived assets (note 7)             |  |                                                          | (39   | )    |      |      | (8    | )    |      |   | (9   | )
|Other items (note 12)                                   |  |                                                          | (64   | )    |      |      | (69   | )    |      |   | 33   |  
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Net cash provided by operating activities               |  |                                                          | 521   |      |      |      | 589   |      |      |   | 588  |  
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Investing
Activities                                    |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Property, plant and equipment                           |  |                                                          |       |      |      |      |       |      |      |   |      |  
|                                                        |  | Capital expenditures (note 4)                            |       |      | (322 | )    |       |      | (228 | ) |      |   | (474 | )
|                                                        |  | Sales proceeds                                           |       |      | 48   |      |       |      | 11   |   |      |   | 5    |  
|Purchase of investments (note 13)                       |  |                                                          | (55   | )    |      |      |      |      |      |   |     |  
|Increase in restricted cash                             |  |                                                          |      |      |      |      |      |      |      |   | (24  | )
|Change in short-term cash deposits                      |  |                                                          |      |      |      |      | 159   |      |      |   | (153 | )
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Net cash used in investing activities                   |  |                                                          | (329  | )    |      |      | (58   | )    |      |   | (646 | )
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Financing
Activities                                    |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Capital
stock                                           |  |                                                          |       |      |      |      |       |      |      |   |      |  
|                                                        |  | Proceeds from shares issued on exercise of stock options |       |      | 29   |      |       |      | 83   |   |      |   | 7    |  
|                                                        |  | Repurchased for cash (note 22b)                          |       |      | (154 | )    |       |      |     |   |      |   |     |  
|Long-term debt                                          |  |                                                          |       |      |      |      |       |      |      |   |      |  
|                                                        |  | Proceeds                                                 |       |      |     |      |       |      |     |   |      |   | 55   |  
|                                                        |  | Repayments (note 19)                                     |       |      | (23  | )    |       |      | (25  | ) |      |   | (152 | )
|Dividends (note 22d)                                    |  |                                                          | (118  | )    |      |      | (119  | )    |      |   | (93  | )
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Net cash used in financing activities                   |  |                                                          | (266  | )    |      |      | (61   | )    |      |   | (183 | )
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Effect of exchange rate changes on cash and equivalents |  |                                                          |      |      |      |      |      |      |      |   | (1   | )
|Net increase (decrease) in cash and equivalents         |  |                                                          | (74   | )    |      |      | 470   |      |      |   | (241 | )
|Cash and equivalents at beginning of year (note 12)     |  |                                                          | 1,044 |      |      |      | 574   |      |      |   | 816  |  
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  
|Cash and equivalents at end of year (note 12)           |  | $                                                        | 970   |      |      | $    | 1,044 |      |      | $ | 574  |  
|                                                        |  |                                                          |       |      |      |      |       |      |      |   |      |  

The accompanying notes are an
integral part of these consolidated financial
statements.

65

BARRICK Annual Report 2003



---



##### 



FINANCIAL STATEMENTS

Consolidated Balance Sheets

Barrick Gold Corporation
At December 31 (in millions of United States dollars)

|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|------------------------------------------ | ------------------- | -------------------------------------------------------- | ----- | ---- | ----- | ---- | ----- | - | ----- | -
|                                           |                     |                                                          |       | 2003 |       | 2002
|                                           |                     |                                                          |       |      |       |     
|Assets                                     |                     |                                                          |       |      |       |      |       |  
|                                           | Current assets      |                                                          |       |      |       |      |       |   |      
|                                           |                     | Cash and equivalents (note 12)                           |       | $    | 970   |      |       | $ | 1,044 |  
|                                           |                     | Accounts receivable (note 14)                            |       |      | 69    |      |       |   | 72    |  
|                                           |                     | Inventories (note 14)                                    |       |      | 157   |      |       |   | 159   |  
|                                           |                     | Other current assets (note 14)                           |       |      | 169   |      |       |   | 47    |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|                                           |                     |                                                          |       |      | 1,365 |      |       |   | 1,322 |  
|                                           |                     | Investments (note 13)                                    |       |      | 127   |      |       |   | 41    |  
|                                           |                     | Property, plant and equipment (note 15)                  |       |      | 3,131 |      |       |   | 3,311 |  
|                                           |                     | Capitalized mining costs (note 16)                       |       |      | 235   |      |       |   | 272   |  
|                                           |                     | Unrealized fair value of derivative contracts (note 11d) |       |      | 256   |      |       |   | 78    |  
|                                           |                     | Other assets (note 17)                                   |       |      | 248   |      |       |   | 237   |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Total assets                               |                     | $                                                        | 5,362 |      |       | $    | 5,261 |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Liabilities
and Shareholders Equity       |                     |                                                          |       |      |       |      |       |  
|                                           | Current liabilities |                                                          |       |      |       |      |       |   |      
|                                           |                     | Accounts payable                                         |       | $    | 245   |      |       | $ | 213   |  
|                                           |                     | Other current liabilities (note 18)                      |       |      | 105   |      |       |   | 270   |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|                                           |                     |                                                          | 350   |      |       |      | 483   |  
|                                           |                     | Long-term debt (note 19)                                 |       |      | 719   |      |       |   | 761   |  
|                                           |                     | Other long-term obligations (note 20)                    |       |      | 569   |      |       |   | 528   |  
|                                           |                     | Deferred income tax liabilities (note 21)                |       |      | 230   |      |       |   | 155   |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Total liabilities                          |                     |                                                          | 1,868 |      |       |      | 1,927 |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Shareholders equity                       |                     |                                                          |       |      |       |      |       |  
|                                           |                     | Capital stock (note 22)                                  |       |      | 4,115 |      |       |   | 4,148 |  
|                                           |                     | Deficit                                                  |       |      | (694  | )    |       |   | (689  | )
|                                           |                     | Accumulated other comprehensive income (loss) (note 10)  |       |      | 73    |      |       |   | (125  | )
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Total shareholders equity                 |                     |                                                          | 3,494 |      |       |      | 3,334 |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  
|Contingencies and commitments (note 25)    |                     |                                                          |       |      |       |      |       |  
|Total liabilities and shareholders equity |                     | $                                                        | 5,362 |      |       | $    | 5,261 |  
|                                           |                     |                                                          |       |      |       |      |       |   |       |  

The accompanying notes are an integral part of these consolidated financial
statements.

Signed on behalf of the Board

|                       |  |                   
|---------------------- |  | ------------------
|/s/ Gregory C.
Wilkins |  | /s/ Howard L. Beck
|Gregory C. Wilkins     |  | Howard L. Beck    
|Director               |  | Director          

66

BARRICK Annual Report 2003



---



##### 



FINANCIAL STATEMENTS

Consolidated Statements of Shareholders Equity

Barrick Gold Corporation
for the years ended December 31 (in millions of United States dollars)

|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |     |  
|------------------------------------------------------- | -------------------------------------------- | - | ----- | ---- | ---- | - | ----- | ---- | - | - | ----- | --- | -
|                                                        |                                              |   | 2003  |      | 2002 |   | 2003 
|                                                        |                                              |   |       |      |      |   |      
|Common shares(number in millions)                       |                                              |   |       |      |      |   |       |      |   |   |       |    
|At January 1                                            |                                              |   | 542   |      |      |   | 536   |      |   |   | 536   |    
|                                                        | Issued for cash/on exercise of stock options |   |       | 2    |      |   |       | 6    |   |   |       |    |  
|                                                        | Repurchased for cash (note 22b)              |   |       | (9   | )    |   |       |     |   |   |       |    |  
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|At December 31                                          |                                              |   | 535   |      |      |   | 542   |      |   |   | 536   |    
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|Common shares                                           |                                              |   |       |      |      |   |       |      |   |   |       |    
|At January 1                                            |                                              | $ | 4,148 |      |      | $ | 4,062 |      |   | $ | 4,051 |    
|                                                        | Issued for cash/on exercise of stock options |   |       | 34   |      |   |       | 86   |   |   |       | 11  |  
|                                                        | Repurchased for cash (note 22b)              |   |       | (67  | )    |   |       |     |   |   |       |    |  
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|At December 31                                          |                                              | $ | 4,115 |      |      | $ | 4,148 |      |   | $ | 4,062 |    
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|Deficit                                                 |                                              |   |       |      |      |   |       |      |   |   |       |    
|At January 1                                            |                                              | $ | (689  | )    |      | $ | (763  | )    |   | $ | (766  | )  
|                                                        | Net income                                   |   |       | 200  |      |   |       | 193  |   |   |       | 96  |  
|                                                        | Repurchase of common shares (note 22b)       |   |       | (87  | )    |   |       |     |   |   |       |    |  
|                                                        | Dividends (note 22d)                         |   |       | (118 | )    |   |       | (119 | ) |   |       | (93 | )
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|At December 31                                          |                                              | $ | (694  | )    |      | $ | (689  | )    |   | $ | (763  | )  
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|Accumulated other comprehensive income (loss)
(note 10) |                                              | $ | 73    |      |      | $ | (125  | )    |   | $ | (107  | )  
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    
|Total shareholders equity at December 31               |                                              | $ | 3,494 |      |      | $ | 3,334 |      |   | $ | 3,192 |    
|                                                        |                                              |   |       |      |      |   |       |      |   |   |       |    

Consolidated Statements of Comprehensive Income

|                                                                                  |  |      |     |      |  |      |     |   |  |   |     |  
|--------------------------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | -
|                                                                                  |  | 2003 |     | 2002 |  | 2001
|                                                                                  |  |      |     |      |  |     
|Net income                                                                        |  | $    | 200 |      |  | $    | 193 |   |  | $ | 96  |  
|Foreign currency translation adjustments                                          |  |      | (3  | )    |  |      | (21 | ) |  |   | (26 | )
|Transfers of realized (gains) losses on cash flow hedges
to earnings (note 10)    |  |      | (61 | )    |  |      | (21 | ) |  |   | 25  |  
|Hedge ineffectiveness transferred to earnings (note 10)                           |  |      | (12 | )    |  |      |    |   |  |   |    |  
|Change in gains accumulated in OCI for cash flow hedges
(note 10)                 |  |      | 230 |      |  |      | 28  |   |  |   |     |  
|Additional minimum pension liability                                              |  |      |    |      |  |      | (2  | ) |  |   | (5  | )
|Transfers of realized (gains) losses on
available-for-sale securities to earnings |  |      | 12  |      |  |      | 4   |   |  |   | (2  | )
|Unrealized gains (losses) on available for sale securities                        |  |      | 32  |      |  |      | (6  | ) |  |   | (4  | )
|                                                                                  |  |      |     |      |  |      |     |   |  |   |     |  
|Comprehensive income                                                              |  | $    | 398 |      |  | $    | 175 |   |  | $ | 84  |  
|                                                                                  |  |      |     |      |  |      |     |   |  |   |     |  

The accompanying notes are an integral part of these consolidated financial
statements.

67

BARRICK Annual Report 2003



---



##### 



Notes to Consolidated
Financial Statements

Barrick Gold Corporation. Tabular dollar amounts in millions of United States
dollars, unless otherwise shown. References to C$ and A$ are to Canadian and
Australian dollars, respectively.

1.     Nature of Operations

Barrick Gold Corporation (Barrick or the Company) engages in the production
and sale of gold, including related mining activities such as exploration,
development, mining and processing. Our operations are mainly located in the
United States, Canada, Australia, Peru, Tanzania, Chile and Argentina. They
require specialized facilities and technology, and we rely on those facilities
to support our production levels. The market price of gold, quantities of gold
mineral reserves and future gold production levels, future cash operating
costs, foreign currency exchange rates, market interest rates and the level of
exploration expenditures are some of the things that could materially affect
our operating cash flow and profitability. Due to the global nature of our
operations we are also affected by government regulations, political risk and
the interpretation of taxation laws and regulations. We seek to mitigate these
risks, and in particular we use derivative instruments as part of a risk
management program that seeks to mitigate the effect of volatility in commodity
prices, interest rates and foreign currency exchange rates (refer to note 11).
Many of the factors affecting these risks are beyond our control and their
effects could materially impact our consolidated financial statements.

2.     Significant Accounting Policies

a) Basis of presentation

The United States dollar is the principal currency of our operations. We
prepare our primary consolidated financial statements in United States dollars
and under United States generally accepted accounting principles (US GAAP).
These financial statements are filed
with Canadian and US regulatory authorities. We also include consolidated
financial statements prepared under Canadian GAAP (in United States dollars) in
our Proxy Statement that we file with various Canadian regulatory authorities.
Summarized below are the accounting policies we that have adopted under US GAAP
and that we consider particularly significant. References to the Company in
these financial statements relate to Barrick and its consolidated subsidiaries.
We have reclassified certain prior-year amounts to conform with the current
year presentation.

These consolidated financial statements include the accounts of Barrick and its
subsidiaries. Intercompany transactions and balances are eliminated upon
consolidation. We control our subsidiaries through existing majority voting
interests. Our ownership interests in the Round Mountain, Hemlo and Kalgoorlie
Mines are held through unincorporated joint venture agreements, under which we
share joint control with our joint venture partners. Under long-standing
practice for extractive industries, we include the assets, liabilities,
revenues, expenses and cash flows of unincorporated joint ventures in our
financial statements using the proportionate consolidation method.

The preparation of financial statements under US GAAP requires us to make
estimates and assumptions that affect:

> the reported amounts of assets and liabilities;

> disclosures of contingent assets and liabilities; and

> revenues and expenses recorded
in each reporting period.

The most significant estimates and assumptions that affect our financial
position and results of operations are those that use estimates of proven and
probable gold reserves; future estimates of costs and expenses; and/or
assumptions of future commodity prices, interest rates and foreign currency
exchange rates. Such estimates and assumptions include:

> decisions as to whether exploration and mine
development costs should be capitalized or expensed;

68

BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  >
    
    assessments of whether property, plant and equipment, ore in stockpiles and capitalized mining costs
may be impaired;>
    
    assessments of our ability to realize the benefits of
deferred income tax assets;>
    
    the useful lives of long-lived assets and the rate at
which we record amortization in earnings;>
    
    the estimated fair value of asset retirement obligations;>
    
    the timing and amounts of forecasted future
expenditures that represent the hedged items
underlying hedging relationships for our cash flow
hedge contracts;>
    
    the estimated fair values of derivative instruments;>
    
    the value of slow-moving and obsolete inventories
(which are stated at the lower of average cost and
net realizable value); and>
    
    assessments of the likelihood and amounts
of contingencies. We regularly review the estimates and assumptions that affect our financial
statements; however, what actually happens could differ from those estimates
and assumptions. b) Accounting changes FAS 143, Accounting for asset retirement obligations On January 1, 2003, we adopted FAS 143 and changed
our accounting policy for recording obligations relating
to the retirement of long-lived assets (as described in
note 20a). On adoption of FAS 143 in first quarter 2003, we recorded on our balance sheet
an increase in property, plant and equipment by $39 million; an increase in
other long-term obligations by $32 million; and an increase in deferred income
tax liabilities by $3 million. We recorded in our income statement a $4
million credit for the cumulative effect of this accounting change. On the
adoption of FAS 143, the total amount of recorded asset retirement obligations
was $334 million, and the comparative amount would have been $353 million at
December 31, 2001. Amortization of underground development costs On January 1, 2003, we changed our accounting policy for amortization of
underground mine development costs to exclude estimates of future underground
development costs (as described in note 15a). On adoption of this change on January 1, 2003, we decreased property, plant
and equipment by $19 million, and increased deferred income tax liabilities by
$2 million. We recorded in our income statement a $21 million charge for the
cumulative effect of this accounting change. FAS 133, Accounting for derivative instruments We adopted FAS 133 on January 1,
2001. On adoption, we recorded the fair value of derivative instruments
as follows: Carrying
    
    FairAt January 1, 2001
    
    amount
    
    value
    
    AdjustmentAsset (liability)
    
    LossHedge derivativesPurchased gold
call options
    
    $
    44
    
    
    $
    5
    
    
    $
    (39
    )1Non-hedge derivativesWritten gold call options and
total return swaps
    
    $
    (42
    )
    
    $
    (42
    )
    
    $
    Other derivatives
    
    $
    
    
    
    $
    (3
    )
    
    $
    (3
    )2
 1. Recorded in Other
Comprehensive Income (OCI), net of
tax benefits of $4 million. We also reclassified into OCI
deferred gains on hedge contracts that had been closed out in
previous years that totaled $35 million. 2. Recorded as a cumulative effect accounting change in
earnings, net of tax benefits of $2 million. The following table identifies certain changes in accounting principles and
accounting estimates that we have made in each year and the effect such
changes had on earnings for that year. 69


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Effect of various
accounting changes on earnings For the years ended December 31 ($ millions except per share amounts)
    
    2003
    
    2002
    
    2001Pro-forma effect of changes in accounting policies
(excluding related tax effects)1Adoption of FAS 143Earnings increase (decrease)
    
    $
    (36
    )
    
    $
    (4
    )
    
    $
    4Per share
    
    $
    (0.07
    )
    
    $
    (0.01
    )
    
    $
    0.01Amortization of underground development costsEarnings increase (decrease)
    
    
    
    
    
    
    
    
    
    
    Per share
    
    
    
    
    
    
    
    
    
    
    Total effectEarnings increase (decrease)
    
    $
    (36
    )
    
    $
    (4
    )
    
    $
    4Per share
    
    $
    (0.07
    )
    
    $
    (0.01
    )
    
    $
    0.01Changes in estimates recorded in earnings (excluding related tax
effects
for non-tax items)Pension costs actuarial assumptions (note 24e)Earnings (decrease)
    
    $
    (2
    )
    
    
    
    
    
    
    Per share
    
    $
    nil
    
    
    
    
    
    
    Deferred tax valuation allowances and
outcome of tax uncertainties (note 8)2Earnings increase (decrease)
    
    $
    39
    
    
    $
    (21
    )
    
    $
    (45
    )Per share
    
    $
    0.07
    
    
    $
    (0.04
    )
    
    $
    (0.09
    )Asset retirement obligations (note 20a)Earnings (decrease)
    
    $
    (10
    )
    
    
    
    
    
    
    Per share
    
    $
    (0.02
    )
    
    
    
    
    
    
    Hedge ineffectiveness arising due to changes in the expected timing
and amounts of forecasted transactions (note l1e)Earnings increase
    
    $
    18
    
    
    
    
    
    
    
    Per share
    
    $
    0.03
    
    
    
    
    
    
    
    Total effectEarnings increase (decrease)
    
    $
    45
    
    
    $
    (21
    )
    
    $
    (45
    )Per share
    
    $
    0.08
    
    
    $
    (0.04
    )
    
    $
    (0.09
    )Cumulative effect of changes in accounting principles (net of tax
effects)Adoption of FAS 133
    
    
    
    
    
    
    
    
    
    $
    (1
    )Per share
    
    
    
    
    
    
    
    
    
    $
    nilAdoption of FAS 143
    
    $
    4
    
    
    
    
    
    
    
    Per share
    
    $
    0.01
    
    
    
    
    
    
    
    Amortization of underground development costs
    
    $
    (21
    )
    
    
    
    
    
    
    Per share
    
    $
    (0.04
    )
    
    
    
    
    
    
    Total effectEarnings (decrease)
    
    $
    (17
    )
    
    
    
    
    
    $
    (1
    )Per share
    
    $
    (0.03
    )
    
    
    
    
    
    $
    nil
 1. Represents the impact of the revised accounting policy. For 2003,
earnings increased or decreased by the amount disclosed.
For 2002 and 2001, because prior years were not restated, the amount
disclosed is a pro forma amount only and has
not been recorded in these financial statements. 2. Includes both reversals of prior year allowances and allowances recorded
against current-year tax losses. 70


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS c) Foreign currency translation The functional currency of all our operations is the United States dollar
(the US dollar). We re-measure balances into US dollars as follows:  >
    
    non-monetary assets and liabilities using
historical rates;>
    
    monetary assets and liabilities using period-end
exchange rates; and>
    
    income and expenses using average exchange rates,
except for expenses related to assets and liabilities
re-measured at historical exchange rates. Gains and losses arising from re-measurement of foreign currency financial
statements into US dollars, and from foreign currency transactions, are
recorded in earnings. In 2003, various changes in economic facts and circumstances led us to
conclude that the functional currency of our Argentinean operations was the
United States dollar and not the Argentinean Peso. These changes included the
completion of the Veladero mine feasibility study, the denomination of selling
prices for gold production and US dollar based expenditures. After the merger with Homestake in 2001, various changes in economic facts and
circumstances led us to conclude that the functional currency of certain of its
operations was the United States dollar and not the local currency. These
changes included the denomination of selling prices for gold production, and
more use of United States dollar financing. For periods before January 1, 2002, the financial statements of those
operations were translated as follows: assets and liabilities using period-end
exchange rates; and revenues and expenses at average rates. Translation
adjustments were included in OCI. d) Other significant accounting policies Note
    
    PageBusiness combinations
    
    
    3
    
    
    
    p. 72Segment information
    
    
    4
    
    
    
    p. 72Revenue recognition and
sales contracts
    
    
    5
    
    
    
    p. 74Cost of sales and
other operating expenses
    
    
    6
    
    
    
    p. 75Other income/expense
    
    
    7
    
    
    
    p. 76Income taxes
    
    
    8
    
    
    
    p. 76Earnings per share
    
    
    9
    
    
    
    p. 77Comprehensive income
    
    
    10
    
    
    
    p. 78Derivative instruments
    
    
    11
    
    
    
    p. 79Cash and equivalents
    
    
    12
    
    
    
    p. 83Investments
    
    
    13
    
    
    
    p. 84Accounts receivable, inventories and
other current assets
    
    
    14
    
    
    
    p. 85Property, plant and equipment
    
    
    15
    
    
    
    p. 86Capitalized Mining Costs
    
    
    16
    
    
    
    p. 87Other assets
    
    
    17
    
    
    
    p. 88Other current liabilities
    
    
    18
    
    
    
    p. 88Long-term debt
    
    
    19
    
    
    
    p. 88Asset retirement obligations
    
    
    20
    
    
    
    p. 89Other post-retirement benefits
    
    
    20
    
    
    
    p. 90Deferred income taxes
    
    
    21
    
    
    
    p. 90Capital stock
    
    
    22
    
    
    
    p. 92Stock options
    
    
    23
    
    
    
    p. 93Restricted stock units
    
    
    23
    
    
    
    p. 94Pension plans
    
    
    24
    
    
    
    p. 95Contingencies and commitments
    
    
    25
    
    
    
    p. 97Fair value of financial instruments
    
    
    26
    
    
    
    p. 100Joint ventures
    
    
    27
    
    
    
    p. 101Differences from Canadian GAAP
    
    
    28
    
    
    
    p. 101
 71


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Business Combinations Homestake Mining Company On December 14, 2001, a wholly-owned subsidiary of Barrick merged with
Homestake Mining Company (Homestake). Under the terms of the merger
agreement, we issued 139.5 million Barrick common shares in exchange for all
the outstanding common shares of Homestake, using an exchange ratio of 0.53:1.
The merger was accounted for as a pooling-of-interests. The consolidated
financial statements give retroactive effect to the merger, with all periods
presented as if Barrick and Homestake had always been combined. In 2001, we recorded charges for merger-related costs totaling $117 million
($107 million after tax). These costs included transaction costs of $32
million for investment banking, legal, accounting and other costs directly
related to the merger. They also include integration and restructuring costs
of $85 million, mainly for employee termination costs. 4. Segment Information We operate in the gold mining industry and our operations are managed on a
regional basis. Our three primary regions are North America, Australia/Africa,
and South America, which includes Peru, Chile and Argentina. In 2003, we
changed the composition of our reportable segments by the addition of our
development projects. We also changed our determination of which costs are
charged to segments. Prior periods have been restated to conform to the current
presentation. Financial information on all our individual mines and development
projects is reviewed regularly by our chief operating decision maker, and
accordingly our definition of a business segment includes each of our operating
mines and development projects. Our development projects are not presently
generating revenue and therefore the measure of segment loss represents
expensed exploration and development costs. Our other operating mines segment
includes mainly operations which have been, or are being, closed. Income statement information Total cash
    
    Segment income (loss)Gold sales
    
    production costs1
    
    before income taxesFor the years ended December 31
    
    2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001Operating mines:Goldstrike
    
    $
    813
    
    
    $
    678
    
    
    $
    774
    
    
    $
    531
    
    
    $
    437
    
    
    $
    467
    
    
    $
    122
    
    
    $
    94
    
    
    $
    169Pierina
    
    
    332
    
    
    
    303
    
    
    
    299
    
    
    
    76
    
    
    
    71
    
    
    
    38
    
    
    
    90
    
    
    
    71
    
    
    
    86Bulyanhulu
    
    
    109
    
    
    
    134
    
    
    
    56
    
    
    
    73
    
    
    
    78
    
    
    
    35
    
    
    
    (1
    )
    
    
    16
    
    
    
    4Kalgoorlie
    
    
    153
    
    
    
    124
    
    
    
    118
    
    
    
    87
    
    
    
    82
    
    
    
    78
    
    
    
    46
    
    
    
    23
    
    
    
    23Eskay Creek
    
    
    130
    
    
    
    121
    
    
    
    99
    
    
    
    18
    
    
    
    16
    
    
    
    16
    
    
    
    65
    
    
    
    57
    
    
    
    43Hemlo
    
    
    98
    
    
    
    97
    
    
    
    94
    
    
    
    60
    
    
    
    64
    
    
    
    60
    
    
    
    27
    
    
    
    23
    
    
    
    24Plutonic
    
    
    120
    
    
    
    105
    
    
    
    90
    
    
    
    62
    
    
    
    57
    
    
    
    48
    
    
    
    48
    
    
    
    37
    
    
    
    30Round Mountain
    
    
    139
    
    
    
    132
    
    
    
    117
    
    
    
    66
    
    
    
    73
    
    
    
    71
    
    
    
    53
    
    
    
    38
    
    
    
    28Other operating mines
    
    
    141
    
    
    
    273
    
    
    
    342
    
    
    
    78
    
    
    
    150
    
    
    
    207
    
    
    
    37
    
    
    
    87
    
    
    
    85Development projects:Veladero
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    (20
    )
    
    
    (26
    )Cowal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pascua-Lama
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alto Chicama
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29
    )
    
    
    (29
    )
    
    
    Segment total
    
    $
    2,035
    
    
    $
    1,967
    
    
    $
    1,989
    
    
    $
    1,051
    
    
    $
    1,028
    
    
    $
    1,020
    
    
    $
    440
    
    
    $
    397
    
    
    $
    466
 1. Includes cost of sales, by-product revenues, royalty expenses and
production taxes (note 6). Excludes accretion expense, other reclamation and
closure costs, and amortization. 72


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Asset information Segment capitalSegment assets
    
    Amortization
    
    expendituresFor the years ended December 31
    
    2003
    
    2002
    
    2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001Operating mines:Goldstrike
    
    $
    1,372
    
    
    $
    1,496
    
    
    $
    160
    
    
    $
    147
    
    
    $
    138
    
    
    $
    51
    
    
    $
    46
    
    
    $
    122Pierina
    
    
    434
    
    
    
    546
    
    
    
    166
    
    
    
    161
    
    
    
    175
    
    
    
    17
    
    
    
    5
    
    
    
    12Bulyanhulu
    
    
    670
    
    
    
    661
    
    
    
    37
    
    
    
    40
    
    
    
    17
    
    
    
    36
    
    
    
    56
    
    
    
    153Kalgoorlie
    
    
    250
    
    
    
    240
    
    
    
    20
    
    
    
    19
    
    
    
    17
    
    
    
    14
    
    
    
    14
    
    
    
    6Eskay Creek
    
    
    215
    
    
    
    258
    
    
    
    47
    
    
    
    48
    
    
    
    40
    
    
    
    5
    
    
    
    8
    
    
    
    10Hemlo
    
    
    55
    
    
    
    60
    
    
    
    11
    
    
    
    10
    
    
    
    10
    
    
    
    10
    
    
    
    6
    
    
    
    6Plutonic
    
    
    84
    
    
    
    59
    
    
    
    10
    
    
    
    11
    
    
    
    12
    
    
    
    44
    
    
    
    20
    
    
    
    11Round Mountain
    
    
    75
    
    
    
    79
    
    
    
    20
    
    
    
    21
    
    
    
    18
    
    
    
    6
    
    
    
    8
    
    
    
    15Other operating mines
    
    
    113
    
    
    
    234
    
    
    
    26
    
    
    
    36
    
    
    
    50
    
    
    
    29
    
    
    
    33
    
    
    
    54Development projects:Veladero
    
    
    85
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    
    
    
    
    Cowal
    
    
    49
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    13
    
    
    
    Pascua-Lama
    
    
    239
    
    
    
    223
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    11
    
    
    
    69Alto Chicama
    
    
    9
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    5
    
    
    
    Segment total
    
    
    3,650
    
    
    
    3,893
    
    
    
    497
    
    
    
    493
    
    
    
    477
    
    
    
    317
    
    
    
    225
    
    
    
    458Cash and equivalents
    
    
    970
    
    
    
    1,044
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other items outside operating
segments
    
    
    742
    
    
    
    324
    
    
    
    25
    
    
    
    26
    
    
    
    24
    
    
    
    5
    
    
    
    3
    
    
    
    16Enterprise total
    
    $
    5,362
    
    
    $
    5,261
    
    
    $
    522
    
    
    $
    519
    
    
    $
    501
    
    
    $
    322
    
    
    $
    228
    
    
    $
    474
 Geographic information Assets
    
    Gold salesFor the years ended December 31
    
    2003
    
    2002
    
    2003
    
    2002
    
    2003United States
    
    $
    1,835
    
    
    $
    1,834
    
    
    $
    970
    
    
    $
    905
    
    
    $
    1,041Peru
    
    
    757
    
    
    
    733
    
    
    
    332
    
    
    
    303
    
    
    
    297Australia
    
    
    556
    
    
    
    480
    
    
    
    364
    
    
    
    316
    
    
    
    288Canada
    
    
    480
    
    
    
    533
    
    
    
    260
    
    
    
    299
    
    
    
    269Tanzania
    
    
    707
    
    
    
    695
    
    
    
    109
    
    
    
    134
    
    
    
    56Chile/Argentina
    
    
    309
    
    
    
    173
    
    
    
    
    
    
    
    4
    
    
    
    38Other
    
    
    718
    
    
    
    813
    
    
    
    
    
    
    
    6
    
    
    
    $
    5,362
    
    
    $
    5,261
    
    
    $
    2,035
    
    
    $
    1,967
    
    
    $
    1,989
 73


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Reconciliation of segment income to enterprise net income For the years ended December 31
    
    2003
    
    2002
    
    2001Segment income
    
    $
    440
    
    
    $
    397
    
    
    $
    466Accretion expense, reclamation, closure and other costs
    
    
    (83
    )
    
    
    (43
    )
    
    
    (60
    )Amortization outside operating segments
    
    
    (25
    )
    
    
    (26
    )
    
    
    (24
    )Exploration and business development costs,
excluding development projects
    
    
    (90
    )
    
    
    (55
    )
    
    
    (77
    )Merger and related costs
    
    
    
    
    
    
    2
    
    
    
    (117
    )Administration
    
    
    (83
    )
    
    
    (64
    )
    
    
    (86
    )Other income/expense
    
    
    52
    
    
    
    29
    
    
    
    32Interest expense
    
    
    (44
    )
    
    
    (57
    )
    
    
    (25
    )Non-hedge derivative gains (losses)
    
    
    71
    
    
    
    (6
    )
    
    
    33Income tax (expense) recovery
    
    
    (5
    )
    
    
    16
    
    
    
    14Cumulative effect of changes in accounting principles
    
    
    (17
    )
    
    
    
    
    
    
    (1
    )Inmet litigation
    
    
    (16
    )
    
    
    
    
    
    
    (59
    )Net income
    
    $
    200
    
    
    $
    193
    
    
    $
    96
 5. Revenue Recognition and Sales Contracts We recognize revenue from the
sale of gold and by-products when the following
conditions are met:  >
    
    persuasive evidence of an arrangement exists;>
    
    delivery has occurred under the terms of
the arrangement;>
    
    the price is fixed or determinable; and>
    
    collectability is reasonably assured. For gold and silver bullion sold under forward sales contracts or in the spot
market, we consider that delivery has occurred on transfer of title to the
gold or silver to counterparties. Revenue from the sale of by-products such as
silver is credited against cost of sales and other operating expenses. Concentrate sales contracts Our Eskay Creek and Bulyanhulu mines produce ore and concentrate containing
both gold and silver. Under the terms of our sales contracts with third-party
smelters final gold and silver prices are set on a specified future date after
the shipment date based on spot market metal prices. We record revenues under
these contracts based on the forward gold and silver prices at the time of
shipment, which is when transfer of legal
title to concentrate passes to the third-party smelters. The terms of the
contracts result in embedded derivatives, because of the difference between the
recorded one-month forward price and the final settlement price. These embedded
derivatives are adjusted to fair value through revenue each period until the
date of final gold and silver pricing. Forward gold sales contracts We have fixed-price forward gold sales contracts with various counterparties
for 15.5 million ounces of future gold production. The terms of the contracts
are governed by master trading agreements that we have in place with the
counterparties to the contracts. The contracts have final delivery dates
primarily over the next 10 years, but we have the right to settle these
contracts at any time over these periods. Contract prices are established at
inception through to an interim date. Based on the contractual terms of the
fixed-price contracts and current spot and forward gold market prices, the
average price that would be realized if all production in the next three years
was used to deliver into these contracts would be $309 per ounce. If we do not 74


BARRICK Annual Report 2003



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

deliver at this interim date, a new interim date is set. The price for the new
interim date is determined in accordance with the master trading agreements
which have contractually agreed price adjustment mechanisms based on the market
gold price. The master trading agreements have both fixed and floating price
mechanisms. The fixed price mechanism represents the market price at the start
date (or previous interim date) of the contract plus a premium based on the
difference between the forward price of gold and the current market price of
gold. For the majority of fixed-price forward gold sales contracts, selling
prices are fixed through 2006. If at an interim date we opt for a floating
price, the floating price represents the spot market price of gold plus or
minus the difference between the previously fixed price and the market gold
price at that interim date. In addition to the fixed-price forward gold sales
contracts, we have floating-price forward gold sales contracts under which we
are committed to deliver 0.5 million ounces of gold over the next 10 years at
prices that will be based on the then prevailing spot price. Forward gold
market prices are principally influenced by the current market price of gold,
gold lease rates and US dollar interest rates. The final realized selling price
under a contract will depend on the timing of the actual future delivery date,
the market price of gold at the start of the contract and the actual amount of
the premium of the forward price of gold over the spot price of gold for the
periods that fixed selling prices are set.

We use gold lease rate swap contracts to manage our gold lease rate exposure.
Based on the fact that historical short-term gold lease rates have been lower
than longer-term gold lease rates, and because fixed price forward gold sales
contracts have fixed gold lease rates, we have used these gold lease rate swap
contracts to economically achieve a more optimal term structure for gold lease
costs. Under these swaps we receive a fixed
gold lease rate, and pay a floating gold lease rate, on a notional 3.3 million
ounces of gold spread from 2004 to 2013. The swaps are associated with forward
gold sales contracts with expected delivery dates beyond 2006. These lease
rate swap contracts are accounted for as non-hedge derivatives (note 11).

Major customers

The largest single counterparty as of December 31, 2003 made up 12% of the
ounces of outstanding forward gold sales contracts.

Forward silver sales contracts

Forward silver sales contracts have similar delivery terms and pricing
mechanisms as forward gold sales contracts. At December 31, 2003, we had
fixed-price commitments to deliver 22.3 million ounces of silver over periods
primarily of up to 10 years at an average price of $5.24 per ounce.

6.     Cost of Sales and Other Operating Expenses

|                                    |  |      |       |      |  |      |       |   |  |   |       |  
|----------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|For the years ended                 |  |      |       |      |  |      |       |   |  |   |       |  
|December 31                         |  | 2003 |       | 2002 |  | 2001
|                                    |  |      |       |      |  |     
|Cost of sales1                      |  | $    | 1,100 |      |  | $    | 1,114 |   |  | $ | 1,088 |  
|By-product
revenues (note 5)        |  |      | (114  | )    |  |      | (119  | ) |  |   | (112  | )
|Royalty expenses                    |  |      | 50    |      |  |      | 37    |   |  |   | 39    |  
|Production taxes                    |  |      | 15    |      |  |      | 5     |   |  |   | 5     |  
|Accretion expense (note 20)         |  |      | 17    |      |  |      |      |   |  |   |      |  
|Other reclamation and
closure costs |  |      | 66    |      |  |      | 34    |   |  |   | 60    |  
|                                    |  |      |       |      |  |      |       |   |  |   |       |  
|                                    |  | $    | 1,134 |      |  | $    | 1,071 |   |  | $ | 1,080 |  
|                                    |  |      |       |      |  |      |       |   |  |   |       |  

1.     Cost of sales includes all costs that are capitalized to inventory, except
for amortization of property, plant and equipment. The amount of amortization
capitalized to inventory, but excluded from cost of sales was $497 million in
2003; $493 million in 2002; and $477 million in 2001.

75

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a) Royalty expenses

Certain of our properties are subject to royalty obligations based on mineral
production at the properties. The most significant royalties are at the
Goldstrike and Bulyanhulu mines and the Pascua-Lama and Veladero projects. The
primary type of royalty obligation is a net smelter return (NSR) royalty. Under
this type of royalty we pay the holder an amount calculated as the royalty
percentage multiplied by the value of gold production at market gold prices
less third-party smelting, refining and transportation costs. Most Goldstrike
production is subject to an NSR or net profits interest (NPI) royalty. The
highest Goldstrike royalties are a 5% NSR and a 6% NPI royalty. Bulyanhulu is
subject to an NSR-type royalty of 3%. Pascua-Lama gold production from the
areas located in Chile is subject to a gross proceeds sliding scale royalty,
ranging from 1.5% to 10%, and a 2% NSR on copper production. For areas located
in Argentina, Pascua-Lama is subject to a 3% NSR on extraction of all gold,
silver, and other ores. Production at Veladero is subject to a 3.75% NSR on
extraction of all gold, silver and other ores.

b) Other reclamation and closure costs

Various types of costs associated with the reclamation and closure of our
mining properties do not meet the definition of asset retirement obligations
as set out in FAS 143 (see note 20). We expense these costs as they are
incurred. For comparative periods, the amounts represent our reclamation and
closure costs expense under our accounting policy prior to the adoption of FAS
143 (see note 20).

7.Other Income/Expense

|                                                          |  |      |     |      |  |      |    |   |  |   |     |  
|--------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | -- | - |  | - | --- | -
|For the years ended                                       |  |      |     |      |  |      |    |   |  |   |     |  
|December 31                                               |  | 2003 |     | 2002 |  | 2001
|                                                          |  |      |     |      |  |     
|Interest income                                           |  | $    | 34  |      |  | $    | 30 |   |  | $ | 36  |  
|Gains on sale of
long-lived assets1                       |  |      | 39  |      |  |      | 8  |   |  |   | 9   |  
|Foreign currency translation
gains (losses)               |  |      | 2   |      |  |      | 1  |   |  |   | (10 | )
|Gains (losses) on available
for sale securities (note 13) |  |      | (12 | )    |  |      | (4 | ) |  |   | 2   |  
|Other items                                               |  |      | (11 | )    |  |      | (6 | ) |  |   | (5  | )
|                                                          |  |      |     |      |  |      |    |   |  |   |     |  
|                                                          |  | $    | 52  |      |  | $    | 29 |   |  | $ | 32  |  
|                                                          |  |      |     |      |  |      |    |   |  |   |     |  

1.     In 2003 we sold various assets, including: several land positions around
inactive mine sites in the United States, as well as the East Malartic Mill
and Bousquet mine in Canada.We may continue to sell further land positions
around our inactive mine sites in the United States. These land positions
have been fully amortized, and therefore any proceeds would likely generate
gains on sale, before selling costs and taxes.

8.     Income Taxes

Income tax (expense) recovery

|                    |         |      |     |      |   |      |     |     |   |   |     |     |  
|------------------- | ------- | ---- | --- | ---- | - | ---- | --- | --- | - | - | --- | --- | -
|For the years ended |         |      |     |      |   |      |     |     |   |   |     |    
|December 31         |         | 2003 |     | 2002 |   | 2001
|                    |         |      |     |      |   |     
|Current             |         |      |     |      |   |      |     |     |   |   |     |    
|                    | Canada  |      | $   | (40  | ) |      | $   | (44 | ) |   | $   | (14 | )
|                    | Foreign |      |     | (14  | ) |      |     | (15 | ) |   |     | (22 | )
|                    |         |      |     |      |   |      |     |     |   |   |     |     |  
|                    |         | $    | (54 | )    |   | $    | (59 | )   |   | $ | (36 | )  
|                    |         |      |     |      |   |      |     |     |   |   |     |     |  
|Deferred            |         |      |     |      |   |      |     |     |   |   |     |    
|                    | Canada  |      |     | 32   |   |      |     | 45  |   |   |     | 74  |  
|                    | Foreign |      |     | 17   |   |      |     | 30  |   |   |     | (24 | )
|                    |         |      |     |      |   |      |     |     |   |   |     |     |  
|                    |         | $    | 49  |      |   | $    | 75  |     |   | $ | 50  |    
|                    |         |      |     |      |   |      |     |     |   |   |     |     |  
|                    |         | $    | (5  | )    |   | $    | 16  |     |   | $ | 14  |    
|                    |         |      |     |      |   |      |     |     |   |   |     |     |  

76

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation to the Canadian federal statutory rate

|                                                  |                                                                       |      |     |      |   |      |     |     |   |   |     |     |  
|------------------------------------------------- | --------------------------------------------------------------------- | ---- | --- | ---- | - | ---- | --- | --- | - | - | --- | --- | -
|For the years ended December 31                   |                                                                       | 2003 |     | 2002 |   | 2001
|                                                  |                                                                       |      |     |      |   |     
|Income tax expense based on statutory rate of 38% |                                                                       | $    | (84 | )    |   | $    | (67 | )   |   | $ | (32 | )  
|(Increase) decrease resulting from:               |                                                                       |      |     |      |   |      |     |     |   |   |     |    
|                                                  | Resource and depletion allowances1                                    |      |     | 17   |   |      |     | 12  |   |   |     | 11  |  
|                                                  | Earnings in foreign jurisdictions at different tax rates1             |      |     | 42   |   |      |     | 67  |   |   |     | 84  |  
|                                                  | Non-deductible expenses                                               |      |     | (11  | ) |      |     | (9  | ) |   |     | (56 | )
|                                                  | Release of deferred tax valuation allowances recorded in
prior years2 |      |     | 62   |   |      |     |    |   |   |     |    |  
|                                                  | Valuation allowances recorded against current year tax losses         |      |     | (23  | ) |      |     | (43 | ) |   |     | (45 | )
|                                                  | Outcome of income tax uncertainties3                                  |      |     |     |   |      |     | 22  |   |   |     |    |  
|                                                  | Other items                                                           |      |     | (8   | ) |      |     | 34  |   |   |     | 52  |  
|                                                  |                                                                       |      |     |      |   |      |     |     |   |   |     |    
|Income tax (expense) recovery                     |                                                                       | $    | (5  | )    |   | $    | 16  |     |   | $ | 14  |    
|                                                  |                                                                       |      |     |      |   |      |     |     |   |   |     |    

1.     We operate in a specialized industry and in several tax jurisdictions. Our
income is subject to varying rates of taxation, and
we are able to claim certain allowances and deductions unique to extractive
industries that result in a lower effective tax rate.

2.     In 2003, we released valuation allowances totaling $62 million, which mainly
included: $21 million in North America
following a corporate reorganization of certain subsidiaries that enabled us to
utilize certain previously unrecognized tax assets;
$16 million in Australia realized in 2003 due to an increase in taxable income
from higher gold prices; and $15 million in
Argentina after the approval to begin construction of our new Veladero mine and
classification of mineralization as a proven and
probable reserve.

3.     In 2002, we recorded a credit of $22 million reflecting the net impact
of tax planning completed in the period and the
outcome of certain tax uncertainties.

Temporary differences and their tax effects

|                                |  |      |    |      |  |      |    |   |  |   |    |  
|------------------------------- |  | ---- | -- | ---- |  | ---- | -- | - |  | - | -- | -
|For the years ended December 31 |  | 2003 |    | 2002 |  | 2001
|                                |  |      |    |      |  |     
|Amortization                    |  | $    | 13 |      |  | $    | 52 |   |  | $ | 21 |  
|Reclamation costs               |  |      | 2  |      |  |      | (4 | ) |  |   | (8 | )
|Net operating losses            |  |      | 36 |      |  |      | 22 |   |  |   | 37 |  
|Other                           |  |      | (2 | )    |  |      | 5  |   |  |   |   |  
|                                |  |      |    |      |  |      |    |   |  |   |    |  
|                                |  | $    | 49 |      |  | $    | 75 |   |  | $ | 50 |  
|                                |  |      |    |      |  |      |    |   |  |   |    |  

9.     Earnings per Share

|                                                                   |         |      |     |      |  |      |     |      |  |   |     |      | 
|------------------------------------------------------------------ | ------- | ---- | --- | ---- |  | ---- | --- | ---- |  | - | --- | ---- | 
|For the years ended December 31                                    |         |      |     |      |  |      |     |      |  |   |     |     
|($ millions, except shares in millions and per share amounts)      |         | 2003 |     | 2002 |  | 2001
|                                                                   |         |      |     |      |  |     
|Income available to common stockholders                            |         | $    | 200 |      |  | $    | 193 |      |  | $ | 96  |     
|Effect of dilutive stock options                                   |         |      |    |      |  |      |    |      |  |   |    |     
|                                                                   |         |      |     |      |  |      |     |      |  |   |     |     
|Income available to common stockholders and
on assumed conversions |         | $    | 200 |      |  | $    | 193 |      |  | $ | 96  |     
|                                                                   |         |      |     |      |  |      |     |      |  |   |     |     
|Weighted average shares outstanding  basic                        |         |      | 539 |      |  |      | 541 |      |  |   | 536 |     
|Effect of dilutive stock options                                   |         |      |    |      |  |      |    |      |  |   | 2   |     
|                                                                   |         |      |     |      |  |      |     |      |  |   |     |     
|Weighted average shares outstanding and on
assumed conversions     |         |      | 539 |      |  |      | 541 |      |  |   | 538 |     
|                                                                   |         |      |     |      |  |      |     |      |  |   |     |     
|Earnings per share                                                 |         |      |     |      |  |      |     |      |  |   |     |     
|                                                                   | Basic   |      | $   | 0.37 |  |      | $   | 0.36 |  |   | $   | 0.18 | 
|                                                                   | Diluted |      | $   | 0.37 |  |      | $   | 0.36 |  |   | $   | 0.18 | 
|                                                                   |         |      |     |      |  |      |     |      |  |   |     |     

77

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We compute basic earnings per share by dividing net income or loss (the
numerator) by the weighted-average number of outstanding common shares for the
period
(the denominator). In computing diluted earnings per share, an adjustment is
made for the dilutive effect of outstanding stock options.

10.     Comprehensive Income

Comprehensive income consists of net income and other gains and losses that are
excluded from net income. These other gains and losses consist mainly of gains
and losses
on derivative instruments accounted for as cash flow hedges; unrealized gains
and losses on available for sale securities; and foreign currency translation
adjustments.

Parts of comprehensive income (loss)

|                                                                                  |  |         |     |          |  |         |     |          |  |         |     |          |  |   |     |   |  |   |     |   |  |   |     |  
|--------------------------------------------------------------------------------- |  | ------- | --- | -------- |  | ------- | --- | -------- |  | ------- | --- | -------- |  | - | --- | - |  | - | --- | - |  | - | --- | -
|For the years ended December 31                                                   |  | 2003    |     | 2002     |  | 2001   
|                                                                                  |  |         |     |          |  |        
|                                                                                  |  | Pre-tax |     | Post-tax |  | Pre-tax |     | Post-tax |  | Pre-tax |     | Post-tax
|                                                                                  |  | amount  |     | amount   |  | amount  |     | amount   |  | amount  |     | amount  
|                                                                                  |  |         |     |          |  |         |     |          |  |         |     |         
|Foreign currency translation adjustments                                          |  | $       | (3  | )        |  | $       | (3  | )        |  | $       | (21 | )        |  | $ | (21 | ) |  | $ | (26 | ) |  | $ | (26 | )
|Transfers of realized (gains) losses, on
cash flow hedges to earnings (note 11e)  |  |         | (91 | )        |  |         | (61 | )        |  |         | (25 | )        |  |   | (21 | ) |  |   | 29  |   |  |   | 25  |  
|Hedge ineffectiveness transferred to
earnings (note 11e)                          |  |         | (19 | )        |  |         | (12 | )        |  |         |    |          |  |   |    |   |  |   |    |   |  |   |    |  
|Change in gains accumulated in OCI for
cash flow hedges (note 11e)                |  |         | 349 |          |  |         | 230 |          |  |         | 49  |          |  |   | 28  |   |  |   |    |   |  |   |    |  
|FAS 133 transition adjustment (note 2)                                            |  |         |    |          |  |         |    |          |  |         |    |          |  |   |    |   |  |   | (4  | ) |  |   |    |  
|Additional minimum pension liability                                              |  |         |    |          |  |         |    |          |  |         | (2  | )        |  |   | (2  | ) |  |   | (5  | ) |  |   | (5  | )
|Transfers of (gains) losses on available
for sale securities to earnings (note 7) |  |         | 12  |          |  |         | 12  |          |  |         | 4   |          |  |   | 4   |   |  |   | (2  | ) |  |   | (2  | )
|Change in gains (losses) on available
for sale securities (note 13)               |  |         | 32  |          |  |         | 32  |          |  |         | (6  | )        |  |   | (6  | ) |  |   | (4  | ) |  |   | (4  | )
|                                                                                  |  |         |     |          |  |         |     |          |  |         |     |          |  |   |     |   |  |   |     |   |  |   |     |  
|                                                                                  |  | $       | 280 |          |  | $       | 198 |          |  | $       | (1  | )        |  | $ | (18 | ) |  | $ | (12 | ) |  | $ | (12 | )
|                                                                                  |  |         |     |          |  |         |     |          |  |         |     |          |  |   |     |   |  |   |     |   |  |   |     |  

Accumulated other comprehensive income (loss) (OCI)

|                                                                     |  |         |      |        |  |       |     |        |  |         |      |       |  |   |      |   |  |   |     |   |  |   |      |  
|-------------------------------------------------------------------- |  | ------- | ---- | ------ |  | ----- | --- | ------ |  | ------- | ---- | ----- |  | - | ---- | - |  | - | --- | - |  | - | ---- | -
|At December 31                                                       |  | 2003    |      | 2002  
|                                                                     |  |         |      |       
|                                                                     |  | Pre-tax |      | Tax    |  |       |     |        |  | Pre-tax |      | Tax   |  |   |      |  
|                                                                     |  | amount  |      | credit |  | Total |     | amount |  | credit  |      | Total
|                                                                     |  |         |      |        |  |       |     |        |  |         |      |      
|Foreign currency translation adjustments                             |  | $       | (147 | )      |  | $     |    |        |  | $       | (147 | )     |  | $ | (144 | ) |  | $ |    |   |  | $ | (144 | )
|Accumulated gains on cash flow
hedges (note l1e)                     |  |         | 288  |        |  |       | (99 | )      |  |         | 189  |       |  |   | 49   |   |  |   | (17 | ) |  |   | 32   |  
|Additional minimum pension
liability (note 24d)                      |  |         | (7   | )      |  |       |    |        |  |         | (7   | )     |  |   | (7   | ) |  |   |    |   |  |   | (7   | )
|Unrealized gains (losses) on available
for sale securities (note 13) |  |         | 38   |        |  |       |    |        |  |         | 38   |       |  |   | (6   | ) |  |   |    |   |  |   | (6   | )
|                                                                     |  |         |      |        |  |       |     |        |  |         |      |       |  |   |      |   |  |   |     |   |  |   |      |  
|                                                                     |  | $       | 172  |        |  | $     | (99 | )      |  | $       | 73   |       |  | $ | (108 | ) |  | $ | (17 | ) |  | $ | (125 | )
|                                                                     |  |         |      |        |  |       |     |        |  |         |      |       |  |   |      |   |  |   |     |   |  |   |      |  

78

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.     Derivative Instruments

a) Use of derivative instruments

We use derivative instruments to mitigate the effects of certain risks that are
inherent in our business, and also to take advantage of opportunities to secure
attractive pricing for commodities, currencies and interest rates. The inherent
risks that we most often attempt to mitigate by the use of derivative
instruments occur from changes in commodity prices (gold and silver), interest
rates and foreign currency exchange rates. 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, our derivative instruments cover
natural underlying asset or liability positions. The purpose of the hedging
elements of our derivative program is so that changes in the values of cash
flows from hedged items are offset by equivalent changes in the values of
derivative instruments.

We do not hold derivatives for the purpose of speculation; our risk management
programs are designed to enable us to plan our business effectively and, where
possible, mitigate adverse effects of future movements in gold and silver
prices, interest rates and foreign currency exchange rates.

The main types of derivatives we use are:

Forward gold and silver sales contracts:These contracts provide for the sale
of future gold production in fixed quantities with delivery dates at our
discretion over a period of up to 15 years (refer to note 5 for more
information relating to our sales contracts).

Interest rate swaps:These instruments are used to counteract the volatility of
variable short-term interest rates by substituting fixed interest rates over
longer terms on cash and short-term investments. We also use interest rate
swaps to swap our interest due on long-term debt obligations from fixed to
floating, to take advantage of the present low interest-rate environment.

Foreign currency contracts:These instruments are used for the cash flows at
our operating mines and development projects from forecasted expenditures
denominated in Canadian and Australian dollars to insulate them from currency
fluctuations.

Gold lease rate swap contracts:These contracts are used to manage the fixed
gold lease rate element of fixed-price forward gold sales contracts and to take
advantage of lower short-term gold lease rates (refer to note 5).

We mainly use over-the-counter (OTC) derivative contracts. Using privately
negotiated master trading agreements with our counterparties, we are, in many
cases, able to secure more favorable terms than if we used exchange-traded
derivative instruments. We have been able to negotiate these master trading
agreements due to our credit standing and the quality and long-life nature of
our mines and gold mineral reserves.

We value derivative instruments using pricing inputs that are readily
available from independent sources. The fair value of the contracts is mainly
affected by, among other things, changes in commodity prices, interest rates,
gold lease rates and foreign 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.

79

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

b) Accounting for derivative instruments and hedging activities

Under US GAAP, companies are required to include on their balance sheet the
fair value of derivative instruments, which are defined under FAS 133. This
accounting standard excludes certain derivative instruments from its scope,
including instruments that meet the definition of normal sales contracts.
Such contracts include those whose obligations will be met by physical
delivery of a companys production and that meet other requirements set out in
paragraph 10(b) of FAS 133. Our forward gold and silver sales contracts have
contractual terms that are consistent with the FAS 133 definition of a normal
sales contract. In addition, our past sales practices, productive capacity and
delivery intentions are also consistent with that definition. Accordingly, we
have elected to designate these instruments as normal sales contracts with the
result that the fair value recognition provisions of FAS 133 are not applied
to them. Instead we apply our normal revenue recognition principles to our
normal sales contracts as described in note 5, which results in recognition of
proceeds from the contracts as revenue at the date of physical delivery. All
other derivatives are recognized on our balance sheet at their fair value as
either an asset or a liability. On the date we enter into a derivative
contract, we designate the derivative as either:



|> |  | a fair value hedge of a recognized asset or liability;                                                                                
|- |  | --------------------------------------------------------------------------------------------------------------------------------------
| 
|> |  | a cash flow hedge of either a forecasted transaction
or the variability of cash flows associated with a
recognized asset or liability;
| 
|> |  | a foreign currency cash flow hedge of forecasted
transactions; or                                                                     
| 
|> |  | an instrument that does not qualify for hedge
accounting treatment (non-hedge derivatives).                                         

Fair value hedges:We record in earnings any changes in the fair value of the
derivatives as they occur, along with changes in the fair value of the hedged
asset or liability.

Cash flow hedges:We record changes in the fair value of the derivatives in
Other Comprehensive Income (OCI) until earnings are affected by the forecasted
transaction or variability in future cash flows.

Non-hedge derivatives:Changes in the fair value are recorded in earnings as
they occur.

All cash flows relating to derivative instruments are included under operating
cash flows.

We formally document all relationships between hedge derivative instruments
and the items they are hedging, as well as the risk-management goals and
strategy for entering into hedge transactions. This documentation includes
linking all derivatives designated as fair value, cash flow, or foreign
currency hedges to either specific assets and liabilities in the balance
sheet, specific firm commitments or specific forecasted transactions.

For these documented relationships, we formally assess (both at the start of
the hedge and on an ongoing basis) whether the derivatives used in hedging
transactions are highly effective in offsetting changes in the fair value or
cash flows of hedged items, and whether those derivatives are expected to
remain highly effective in the future. If it is clear that a derivative is not
highly effective as a hedge, we stop hedge accounting prospectively.

Other circumstances under which we stop hedge accounting prospectively
include:



|> |  | a derivative expires or is sold, terminated, or exercised;             
|- |  | -----------------------------------------------------------------------
| 
|> |  | it is no longer probable that the forecasted transaction
will occur; or
| 
|> |  | if we decide to remove the designation as a hedge
from a derivative.   

If it is clear that a forecasted transaction will not occur in the originally
specified time frame, or within a further two-month period, gains and losses
accumulated in OCI are recognized at once in earnings as hedge
ineffectiveness. In all situations in which hedge accounting stops and a
derivative remains outstanding, future changes in its fair value are
recognized in earnings as they occur.

80

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

c) Derivative instruments outstanding as at December 31, 2003

|                                 |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |       |  
|-------------------------------- | -------------------------- | ---- | ----- | ---- | - | ---- | ----- | ---- |  | ----- | --- | ----- | - | - | --- | ---- | - | - | --- | ---- | - | - | ----- | ----- | -
|Maturity                         |                            | 2004 |       | 2005 |   | 2006 |       | 2007 |  | 2008+ |     | Total
|                                 |                            |      |       |      |   |      |       |      |  |       |     |      
|Written silver call options      |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Ounces (thousands)               |                            |      | 5,000 |      |   |      | 2,000 |      |  |       |    |       |   |   |    |      |   |   |    |      |   |   | 7,000 |      
|Average exercise price per ounce |                            | $    | 6.04  |      |   | $    | 5.00  |      |  |       |    |       |   |   |    |      |   |   |    |      |   | $ | 5.74  |      
|                                 |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Interest rate contracts          |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Receive-fixed swaps              |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | Notional amount (millions) |      | $     | 50   |   |      |       |     |  |       | $   | 100   |   |   | $   | 575  |   |   | $   | 275  |   |   | $     | 1,000 |  
|                                 | Fixed rate (%)             |      |       | 3.6  | % |      |       |     |  |       |     | 3.0   | % |   |     | 3.5  | % |   |     | 4.0  | % |   |       | 3.6   | %
|Pay-fixed swaps                  |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | Notional amount (millions) |      |       |      |   |      |       |     |  |       |     |      |   |   |     |     |   |   | $   | 324  |   |   | $     | 324   |  
|                                 | Fixed rate (%)             |      |       |      |   |      |       |     |  |       |     |      |   |   |     |     |   |   |     | 5.7  | % |   |       | 5.7   | %
|                                 |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Net notional position            |                            | $    | 50    |      |   |      |      |      |  | $     | 100 |       |   | $ | 575 |      |   | $ | (49 | )    |   | $ | 676   |      
|                                 |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Foreign currency contracts       |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|Canadian dollar forwards         |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | C$ (millions)              |      | $     | 442  |   |      | $     | 329  |  |       | $   | 145   |   |   | $   | 96   |   |   | $   | 22   |   |   | $     | 1,034 |  
|                                 | Average price (US$)        |      |       | 0.68 |   |      |       | 0.67 |  |       |     | 0.72  |   |   |     | 0.67 |   |   |     | 0.68 |   |   |       | 0.68  |  
|Australian dollar forwards       |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | A$ (millions)              |      | $     | 591  |   |      | $     | 440  |  |       | $   | 193   |   |   | $   | 139  |   |   | $   | 19   |   |   | $     | 1,382 |  
|                                 | Average price (US$)        |      |       | 0.57 |   |      |       | 0.58 |  |       |     | 0.55  |   |   |     | 0.58 |   |   |     | 0.53 |   |   |       | 0.57  |  
|Australian dollar                |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | min-max contracts          |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |       |  
|                                 | A$ (millions)              |      | $     | 20   |   |      | $     | 10   |  |       | $   | 10    |   |   |     |     |   |   |     |     |   |   | $     | 40    |  
|                                 | Average cap price (US$)    |      |       | 0.53 |   |      |       | 0.52 |  |       |     | 0.52  |   |   |     |     |   |   |     |     |   |   |       | 0.53  |  
|                                 | Average floor price (US$)  |      |       | 0.52 |   |      |       | 0.51 |  |       |     | 0.51  |   |   |     |     |   |   |     |     |   |   |       | 0.52  |  
|Fuel contracts                   |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      
|                                 | Barrels WTI (thousands)    |      |       | 360  |   |      |       | 180  |  |       |     |      |   |   |     |     |   |   |     |     |   |   |       | 540   |  
|                                 | Cap                        |      | $     | 30   |   |      | $     | 30   |  |       |     |      |   |   |     |     |   |   |     |     |   |   | $     | 30    |  
|                                 | Floor                      |      | $     | 23   |   |      | $     | 22   |  |       |     |      |   |   |     |     |   |   |     |     |   |   | $     | 23    |  
|                                 |                            |      |       |      |   |      |       |      |  |       |     |       |   |   |     |      |   |   |     |      |   |   |       |      

Classification of interest rate and foreign currency contracts

|                                                |  |           |       |            |  |       |     |       |  |   |     |  |  |   |       | 
|----------------------------------------------- |  | --------- | ----- | ---------- |  | ----- | --- | ----- |  | - | --- |  |  | - | ----- | 
|                                                |  | Cash flow |       | Fair value |  | Non-  |     |       |  |  
|At December 31, 2003                            |  | hedge     |       | hedge      |  | hedge |     | Total
|                                                |  |           |       |            |  |       |     |      
|Interest rate contracts                         |  |           |       |            |  |       |     |       |  |   |     |  |  |   |       | 
|Receive-fixed swaps on cash balances            |  | $         | 650   |            |  |       |    |       |  |   |    |  |  | $ | 650   | 
|Receive-fixed swaps on debentures               |  |           |      |            |  | $     | 350 |       |  |   |    |  |  | $ | 350   | 
|Pay-fixed swaps on Bulyanhulu project financing |  | $         | 174   |            |  |       |    |       |  |   |    |  |  | $ | 174   | 
|Pay-fixed swaps on lease rate swaps             |  |           |      |            |  |       |    |       |  | $ | 150 |  |  | $ | 150   | 
|Foreign currency contracts                      |  |           |       |            |  |       |     |       |  |   |     |  |  |   |       | 
|Canadian dollar contracts                       |  | $         | 1,012 |            |  |       |    |       |  | $ | 22  |  |  | $ | 1,034 | 
|Australian dollar contracts                     |  | $         | 1,279 |            |  |       |    |       |  | $ | 143 |  |  | $ | 1,422 | 
|                                                |  |           |       |            |  |       |     |       |  |   |     |  |  |   |       | 

We also held gold lease rate swaps at December 31,
2003 that are based on a notional amount of 3.3
million ounces of gold spread from 2004 to 2013 (see note 5). These contracts are classified as non-hedge derivatives.

81

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

d) Unrealized fair value of derivative instruments (excluding normal
sales contracts)

|                                                |                       |   |      |     |      |   |     |    |  
|----------------------------------------------- | --------------------- | - | ---- | --- | ---- | - | --- | -- | -
|                                                |                       |   | 2003 |     | 2002
|                                                |                       |   |      |     |     
|At January 1                                    |                       | $ | 29   |     |      | $ | (16 | ) 
|Derivative instruments settled                  |                       |   | (91  | )   |      |   | (2  | ) 
|Change in fair value of
derivative instruments: |                       |   |      |     |      |   |     |   
|                                                | Non-hedge derivatives |   |      | 52  |      |   |     | (6 | )
|                                                | Cash flow hedges      |   |      | 349 |      |   |     | 49 |  
|                                                | Fair value hedges     |   |      | (2  | )    |   |     | 4  |  
|                                                |                       |   |      |     |      |   |     |   
|At December 31                                  |                       | $ | 337  | 1   |      | $ | 29  |   
|                                                |                       |   |      |     |      |   |     |   

1.     Included on the balance sheet as
follows: $154 million in other
current assets; $256 million in
non-current assets as unrealized fair
value of derivative contracts; $3
million in other current liabilities;
and $70 million in other long-term
obligations.

The fair values of recorded derivative assets and liabilities reflect the
netting of the fair values of individual derivative instruments, and amounts
due to/from counterparties that arise from derivative instruments, when the
conditions of FIN No. 39, Offsetting of Amounts Related to Certain Contracts,
have been met. Amounts receivable from counterparties that have been offset
against derivative liabilities totaled $16 million at December 31, 2003.

e) Change in gains (losses) accumulated in OCI for cash flow hedge contracts

|                                              |  |           |     |                  |  |               |     |       |  |   |     |    |  |   |     |  
|--------------------------------------------- |  | --------- | --- | ---------------- |  | ------------- | --- | ----- |  | - | --- | -- |  | - | --- | -
|                                              |  | Commodity |     | Foreign currency |  | Interest rate |     |       |  |  
|                                              |  | contracts |     | contracts        |  | contracts     |     | Total
|                                              |  |           |     |                  |  |               |     |      
|At January 1, 2001                            |  | $         | (4  | )                |  | $             |    |       |  | $ |    |    |  | $ | (4  | )
|Hedge losses transferred to earnings          |  |           | 29  | 1                |  |               |    |       |  |   |    |    |  |   | 29  |  
|                                              |  |           |     |                  |  |               |     |       |  |   |     |    |  |   |     |  
|At December 31, 2001                          |  |           | 25  |                  |  |               |    |       |  |   |    |    |  |   | 25  |  
|Change in fair value                          |  |           | (4  | )                |  |               | 33  |       |  |   | 20  |    |  |   | 49  |  
|Hedge gains transferred to earnings           |  |           | (12 | )1               |  |               | (7  | )2    |  |   | (6  | )3 |  |   | (25 | )
|                                              |  |           |     |                  |  |               |     |       |  |   |     |    |  |   |     |  
|At December 31, 2002                          |  |           | 9   |                  |  |               | 26  |       |  |   | 14  |    |  |   | 49  |  
|Change in fair value                          |  |           | 3   |                  |  |               | 337 |       |  |   | 9   |    |  |   | 349 |  
|Hedge gains transferred to earnings           |  |           | (13 | )1               |  |               | (65 | )2    |  |   | (13 | )3 |  |   | (91 | )
|Hedge ineffectiveness transferred
to earnings |  |           |    |                  |  |               | (18 | )4    |  |   | (1  | )4 |  |   | (19 | )
|                                              |  |           |     |                  |  |               |     |       |  |   |     |    |  |   |     |  
|At December 31, 2003                          |  | $         | (1  | )                |  | $             | 280 |       |  | $ | 9   |    |  | $ | 288 |  
|                                              |  |           |     |                  |  |               |     |       |  |   |     |    |  |   |     |  

1.     Included under revenues and by-product credits

2.     Included under operating expenses

3.     Included under interest income

4.     During 2003, we determined that certain Australian dollar hedge contracts
designated as hedges of forecasted capital
expenditures no longer met the FAS 133 qualifying hedge criteria due to
changes in the expected timing of the forecasted
expenditures. On determining that these hedges were no longer effective for
accounting purposes, gains totaling $18 million
on these contracts were transferred out of OCI to earnings in 2003. For 2003
the total amount of hedge ineffectiveness,
including the gains on ineffective capital expenditure hedges, recorded and
recognized in non-hedge derivative gains was
$19 million (2002  $nil; 2001  $nil).

Based on the fair value of cash flow hedge contracts at December 31, 2003,
in fiscal 2004 we expect to transfer hedge gains of $134 million from OCI to
earnings, to be
matched with the related hedged items. These gains will be reflected as a
reduction in cash operating costs, and as a component of interest income.

82

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

f) Non-hedge derivative gains (losses)

|                                           |  |      |    |      |  |      |     |   |  |   |     |  
|------------------------------------------ |  | ---- | -- | ---- |  | ---- | --- | - |  | - | --- | -
|For the years ended                        |  |      |    |      |  |      |     |   |  |   |     |  
|December 31                                |  | 2003 |    | 2002 |  | 2001
|                                           |  |      |    |      |  |     
|Commodity contracts                        |  | $    | 3  |      |  | $    | (2  | ) |  | $ | 57  |  
|Currency contracts                         |  |      | 17 |      |  |      | 8   |   |  |   | (15 | )
|Interest and lease
rate contracts          |  |      | 32 |      |  |      | (12 | ) |  |   | (9  | )
|Hedge ineffectiveness
recorded in earnings |  |      | 19 |      |  |      |    |   |  |   |    |  
|                                           |  |      |    |      |  |      |     |   |  |   |     |  
|                                           |  | $    | 71 |      |  | $    | (6  | ) |  | $ | 33  |  
|                                           |  |      |    |      |  |      |     |   |  |   |     |  

g) Derivative instrument risks

By using derivative instruments, we expose ourselves to various financial
risks. Market risk is the risk that the fair value of a derivative instrument
might be adversely affected by a change in commodity prices, interest rates,
gold lease rates, or currency exchange rates, and that this in turn affects our
financial condition. We manage market risk by establishing and monitoring
parameters that limit the types and degree of market risk that may be
undertaken. We mitigate this risk by establishing trading agreements with
counterparties under which we are not required to post any collateral or make
any margin calls on our derivative instruments. Our counterparties cannot
require settlement solely because of an adverse change in the fair value of a
derivative.

Credit risk is the risk that a counterparty might fail to fulfill its
performance obligations under the terms of a derivative contract. When the fair
value of a derivative contract is positive, this indicates that the
counterparty owes us, thus creating a repayment risk for us. When the fair
value of a derivative contract is negative, we owe the counterparty and,
therefore, we assume no repayment risk. We minimize our credit (or repayment)
risk in derivative instruments by:



|> |  | entering into transactions with high-quality
counterparties whose credit ratings are generally
AA or higher;
|- |  | --------------------------------------------------------------------------------------------------------------
| 
|> |  | limiting the amount of exposure to each
counterparty; and                                                     
| 
|> |  | monitoring the financial condition of counterparties.                                                         

When we have more than one outstanding derivative transaction with the same
counterparty, and we also
have a legally enforceable master netting agreement with that counterparty, the
net credit exposure represents the net of the positive and negative exposures
between the applicable Barrick entity and that counterparty for similar types
of derivative instruments. When there is a net negative exposure, we regard the
credit exposure of a Barrick entity to the counterparty as being zero. The net
mark-to-market position with a particular counterparty represents a reasonable
measure of credit risk when there is a legally enforceable master netting
agreement (i.e. a legal right to a setoff of receivable and payable derivative
contracts) between ourselves and that counterparty. Our policy is to use
master netting agreements with all 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, except upon the occurrence of customary events
of defaults such as covenant breaches, including financial covenants,
insolvency or bankruptcy. 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.

12.     Cash and Equivalents

Cash and equivalents include cash, term deposits and treasury bills with
original maturities of less than 90 days. We anticipate holding these cash
balances for an extended period of time. We have entered into receive-fixed
interest rate swaps with a total notional amount of $650 million that have
been designated, and are effective, as cash flow hedges of expected future
floating rate interest receipts. These swaps mature at various times from 2004
to 2007 (refer to note l1c).

83

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information

|                                                |                                                              |      |     |      |   |      |     |     |   |   |    |      |  
|----------------------------------------------- | ------------------------------------------------------------ | ---- | --- | ---- | - | ---- | --- | --- | - | - | -- | ---- | -
|For the years ended December 31                 |                                                              | 2003 |     | 2002 |   | 2001
|                                                |                                                              |      |     |      |   |     
|Components of other net operating activities    |                                                              |      |     |      |   |      |     |     |   |   |    |     
|                                                | Add (deduct):                                                |      |     |      |   |      |     |     |   |   |    |      |  
|                                                | Merger and related costs                                     |      | $   |     |   |      | $   | (2  | ) |   | $  | 117  |  
|                                                | Reclamation cost accruals                                    |      |     |     |   |      |     | 34  |   |   |    | 54   |  
|                                                | Foreign currency translation gains (losses) (note 7)         |      |     | (2   | ) |      |     | (1  | ) |   |    | 10   |  
|                                                | (Gains) losses on available for sale securities (note 7)     |      |     | 12   |   |      |     | 4   |   |   |    | (2   | )
|                                                | Amortization of deferred stock-based compensation (note 23b) |      |     | 4    |   |      |     | 3   |   |   |    |     |  
|                                                | Cumulative effect of changes in accounting policies (note 2) |      |     | 17   |   |      |     |    |   |   |    | 1    |  
|                                                | Accretion expense (note 6)                                   |      |     | 17   |   |      |     |    |   |   |    |     |  
|                                                | Non-hedge derivative (gains) losses (note 11)                |      |     | (71  | ) |      |     | 6   |   |   |    | (33  | )
|                                                | Inmet litigation expense (note 25)                           |      |     | 16   |   |      |     |    |   |   |    | 59   |  
|Changes in operating assets and liabilities:    |                                                              |      |     |      |   |      |     |     |   |   |    |     
|                                                | Accounts receivable                                          |      |     | 3    |   |      |     | (12 | ) |   |    | (2   | )
|                                                | Inventories                                                  |      |     | 2    |   |      |     | 32  |   |   |    | 67   |  
|                                                | Accounts payable and accrued liabilities                     |      |     | 13   |   |      |     | (9  | ) |   |    | (135 | )
|                                                | Current income taxes accrued                                 |      |     | 54   |   |      |     | 59  |   |   |    | 36   |  
|                                                | Other assets and liabilities                                 |      |     | 7    |   |      |     | (11 | ) |   |    | (44  | )
|Cash payments:                                  |                                                              |      |     |      |   |      |     |     |   |   |    |     
|                                                | Merger and related costs                                     |      |     |     |   |      |     | (50 | ) |   |    | (13  | )
|                                                | Reclamation and closure costs                                |      |     | (25  | ) |      |     | (70 | ) |   |    | (35  | )
|                                                | Income taxes                                                 |      |     | (111 | ) |      |     | (52 | ) |   |    | (47  | )
|                                                |                                                              |      |     |      |   |      |     |     |   |   |    |      |  
|Other net operating activities                  |                                                              | $    | (64 | )    |   | $    | (69 | )   |   | $ | 33 |     
|                                                |                                                              |      |     |      |   |      |     |     |   |   |    |      |  
|Cash payments included in operating activities: |                                                              |      |     |      |   |      |     |     |   |   |    |     
|                                                | Interest, net of amounts capitalized                         |      | $   | 44   |   |      | $   | 57  |   |   | $  | 24   |  
|                                                |                                                              |      |     |      |   |      |     |     |   |   |    |      |  

13.     Investments

Available for sale securities

|                                  |                              |      |            |      |        |   |                |    |        |   |    |    |                |   |    |    |  
|--------------------------------- | ---------------------------- | ---- | ---------- | ---- | ------ | - | -------------- | -- | ------ | - | -- | -- | -------------- | - | -- | -- | -
|At December 31                    |                              | 2003 |            | 2002
|                                  |                              |      |            |     
|                                  |                              |      |            |      |        |   | Unrealized     |    |        |   |    |    | Unrealized    
|                                  |                              |      |            |      |        |   | Gains (losses) |    |        |   |    |    | Gains (losses)
|                                  |                              |      | Fair value |      | in OCI |   | Fair value     |    | in OCI
|                                  |                              |      |            |      |        |   |                |    |       
|Pension and other
defined plans:1 |                              |      |            |      |        |   |                |    |        |   |    |    |                |   |    |   
|                                  | Fixed-income debt securities |      | $          | 6    |        |   | $              |   |        |   | $  | 7  |                |   | $  |   |  
|                                  | Equity securities            |      |            | 26   |        |   |                | 8  |        |   |    | 23 |                |   |    | (6 | )
|Other investments:                |                              |      |            |      |        |   |                |    |        |   |    |    |                |   |    |   
|                                  | Equity securities2           |      |            | 95   |        |   |                | 30 |        |   |    | 11 |                |   |    |   |  
|                                  |                              |      |            |      |        |   |                |    |        |   |    |    |                |   |    |    |  
|Total                             |                              | $    | 127        |      |        | $ | 38             |    |        | $ | 41 |    |                | $ | (6 | ) 
|                                  |                              |      |            |      |        |   |                |    |        |   |    |    |                |   |    |    |  

1.     Under various benefit plans for certain former Homestake executives, a
portfolio of marketable fixed-income and equity
securities are held in a rabbi trust that is used to fund obligations under
the plans.

2.     Other investments mainly include an investment in Highland Gold that had a
fair value of $57 million at December 31, 2003.

84

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investments, which are all classified as available for sale, are recorded at
fair value, with unrealized gains and losses recorded in OCI. The fair value of
investments is determined by quoted market prices. We record realized gains and
losses in earnings as investments mature or on sale. For purposes of
calculating realized gains and losses, we use the average cost of securities
sold. We recognize in earnings all unrealized declines in fair value judged to
be other than temporary which included losses of $11 million in
2003 (2002  $nil; 2001  $nil). During the three years ended December 31, total proceeds
from the sale of investments were: 2003  $7 million; 2002
 $64 million; and
2001  $24 million.

Gains and losses on investments recorded in earnings

|                    |                             |      |     |      |   |      |    |    |   |   |   |   | 
|------------------- | --------------------------- | ---- | --- | ---- | - | ---- | -- | -- | - | - | - | - | 
|For the years ended |                             |      |     |      |   |      |    |    |   |   |   |  
|December 31         |                             | 2003 |     | 2002 |   | 2001
|                    |                             |      |     |      |   |     
|Realized            |                             |      |     |      |   |      |    |    |   |   |   |  
|                    | Gains                       |      | $   |     |   |      | $  |   |   |   | $ | 2 | 
|                    | Losses                      |      | $   | (1   | ) |      | $  | (4 | ) |   | $ |  | 
|Unrealized          |                             |      |     |      |   |      |    |    |   |   |   |  
|                    | Other than
temporary losses |      | $   | (11  | ) |      | $  |   |   |   | $ |  | 
|                    |                             |      |     |      |   |      |    |    |   |   |   |   | 
|                    |                             | $    | (12 | )    |   | $    | (4 | )  |   | $ | 2 |  
|                    |                             |      |     |      |   |      |    |    |   |   |   |   | 

14.     Accounts Receivable, Inventories and Other Current Assets

|                     |                                       |      |     |      |  |   |     |     | 
|-------------------- | ------------------------------------- | ---- | --- | ---- |  | - | --- | --- | 
|At December 31       |                                       | 2003 |     | 2002
|                     |                                       |      |     |     
|Accounts receivable  |                                       |      |     |      |  |   |     |    
|                     | Amounts due from customers            |      | $   | 26   |  |   | $   | 30  | 
|                     | Taxes recoverable                     |      |     | 10   |  |   |     | 12  | 
|                     | Other                                 |      |     | 33   |  |   |     | 30  | 
|                     |                                       |      |     |      |  |   |     |     | 
|                     |                                       | $    | 69  |      |  | $ | 72  |    
|                     |                                       |      |     |      |  |   |     |     | 
|Inventories          |                                       |      |     |      |  |   |     |    
|                     | Gold in process and ore in stockpiles |      | $   | 99   |  |   | $   | 100 | 
|                     | Mine operating supplies               |      |     | 58   |  |   |     | 59  | 
|                     |                                       |      |     |      |  |   |     |     | 
|                     |                                       | $    | 157 |      |  | $ | 159 |    
|                     |                                       |      |     |      |  |   |     |     | 
|Other current assets |                                       |      |     |      |  |   |     |    
|                     | Derivative
assets (note 11d)          |      | $   | 154  |  |   | $   | 37  | 
|                     | Prepaid expenses                      |      |     | 15   |  |   |     | 10  | 
|                     |                                       |      |     |      |  |   |     |     | 
|                     |                                       | $    | 169 |      |  | $ | 47  |    
|                     |                                       |      |     |      |  |   |     |     | 

Inventories

We record gold in process, ore in stockpiles and mine operating supplies at
average cost, less provisions required to reduce any obsolete or slow-moving
inventory to its net realizable value. For gold in process and ore in
stockpiles costs capitalized to inventory include: direct and indirect
materials and consumables; direct labor; repairs and maintenance; utilities;
amortization of capitalized mining costs; and local mine administrative
expenses. By-product revenues, royalty expenses and production taxes are
included in cost of sales and other operating expenses, but we do not
capitalize these items into inventory. We capitalize amortization of mine
property, plant and equipment into inventory, but we present this expense
separately on the face of our income statement outside of cost of sales. The
amount of mine amortization that is capitalized to inventory, but excluded from
cost of sales, was $497 million in 2003; $493 million in 2002; and $477 million
in 2001.

We classify material as ore in stockpiles when its grade exceeds the cut-off
grade used in the determination of quantities of proven and probable reserves.
We process ore in stockpiles under a life of mine plan that is intended to
optimize use of our known mineral reserves, present plant capacity and pit
design. Gold in process and ore in stockpiles excludes
$64 million (2002  $61
million) of stockpiled ore that we do not expect to process in the next 12
months. This amount is included in other assets. The market price of gold can
affect the timing of processing of ore in stockpiles.

Our Goldstrike property is the only one that has significant stockpiled ore.
The stockpiles consist of two ore types: ore that will require autoclaving,
and ore that will require roasting. Stockpiled ore is exposed to the elements,
but we do not expect its condition to deteriorate significantly. Processing of
roaster ore commenced on start up of the roaster facility in 2000. We are now
processing ore from both the autoclave and roaster stockpiles. We expect to
fully process the autoclave stockpile by 2009 and the roaster stockpile by
2016.

85

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.     Property, Plant and Equipment

|                                                |  |      |        |      |  |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|At December 31                                  |  | 2003 |        | 2002
|                                                |  |      |        |     
|Property acquisition and mine
development costs |  | $    | 4,245  |      |  | $ | 4,222  |  
|Buildings, plant and
equipment                  |  |      | 2,831  |      |  |   | 2,812  |  
|                                                |  |      |        |      |  |   |        |  
|                                                |  |      | 7,076  |      |  |   | 7,034  |  
|Accumulated amortization                        |  |      | (3,945 | )    |  |   | (3,723 | )
|                                                |  |      |        |      |  |   |        |  
|                                                |  | $    | 3,131  |      |  | $ | 3,311  |  
|                                                |  |      |        |      |  |   |        |  

a) Property acquisition and mine development costs

We capitalize payments for the acquisition of land and mineral rights. After
acquisition, a number of factors affect the recoverability of the cost of land
and mineral rights, particularly the results of exploration drilling. The
length of time between the acquisition of land and mineral rights and when we
undertake exploration work varies based on the prioritization of our
exploration projects and the size of our exploration budget. When we establish
the existence of proven and probable reserves, we allocate a portion of
property acquisition costs to those reserves.

We capitalize mine development costs on our properties after proven and
probable reserves have been found. Before finding proven and probable reserves,
development costs are considered exploration costs, which are expensed as
incurred. For the year ended December 31, 2003, we expensed development costs
totaling $18 million at our Veladero Project in Argentina because in accordance
with our accounting policy for these costs, we do not capitalize costs incurred
until after proven and probable reserves, as defined by United States reporting
standards, have been found. Effective October 1, 2003, we determined that the
projects mineral reserves met the definition of proven and probable reserves
for United States reporting purposes. Following this determination we began
capitalizing mine development costs at the Veladero project prospectively for
future periods.

At December 31, 2003, property acquisition and mine development costs included
various properties in the exploration or development stage that are not
presently being amortized. Details of the carrying amounts for major properties and the
years when we expect to put these properties into production and begin amortization are:

|                       |  |                 |     |                 |  |  |      | 
|---------------------- |  | --------------- | --- | --------------- |  |  | ---- | 
|                       |  | Carrying amount |     | Expected timing
|                       |  | at December 31  |     | of production  
|Property               |  | 2003            |     | start up       
|                       |  |                 |     |                
|Veladero               |  | $               | 68  |                 |  |  | 2005 | 
|Cowal                  |  |                 | 49  |                 |  |  | 2006 | 
|Alto Chicama           |  |                 | 9   |                 |  |  | 2005 | 
|Pascua-Lama            |  |                 | 200 |                 |  |  | 2008 | 
|Exploration properties |  |                 | 213 |                 |  |  |     | 
|                       |  |                 |     |                 |  |  |      | 
|Total                  |  | $               | 539 |                 |  |  |      | 
|                       |  |                 |     |                 |  |  |      | 

We capitalize financing costs, including interest, relating to mine
development costs while development or construction activities at the
properties are in progress. Capitalization occurs without restriction to
specific borrowings. We stop capitalizing financing costs when the asset or
mine is substantially complete and ready for its intended use.

We start amortizing capitalized acquisition and mine development costs when
production begins. Amortization is calculated using the units-of-production
method based on the estimated recoverable ounces of gold in proven and
probable reserves.

Future underground development costs, which are significant, are necessary
to enable us to physically gain access to our underground ore bodies, expected
to be mined in some cases over the next 25 years. In years prior to 2003 we
amortized the aggregate total of historical capitalized costs and estimated
future costs using the units of production method over total proven and probable gold mineral reserves. In 2003, we changed our accounting for these costs.
This change was made to better match amortization with ounces of gold sold and
to remove the inherent uncertainty in estimating future development costs from
amortization calculations.

Under our revised accounting policy, costs incurred to access specific ore
blocks or areas, and that only provide benefit over the life of that area, are
amortized over the gold mineral proven and probable reserves within the
specific ore block or area. Infrastructure and other

86

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common costs which have a useful life over the entire mine life continue to be
amortized over total accessible proven and probable gold mineral reserves of
the mine.

b) Buildings, plant and equipment

We record buildings, plant and equipment at purchase or construction cost,
including any capitalized financing costs. We amortize them, net of their
residual value, using the straight-line method over their estimated useful
lives. The longest estimated useful life for buildings and mill equipment is
25 years and for mine equipment is 15 years.

We expense repairs and maintenance expenditures as incurred. We capitalize
major improvements and replacements that increase productive capacity or
extend the useful life of an asset, and amortize them over the remaining
estimated useful life of the related asset.

c) Impairment evaluations

We review and test the carrying amounts of our mineral properties and related
buildings, plant and equipment when events or changes in circumstances suggest
that the carrying amount may not be recoverable. If we have reason to suspect
an impairment may exist, we prepare estimates of future net cash flows that we
expect to generate for the related asset or group of assets. Where there is a
range of potential outcomes, we use a probability-weighted approach in the
estimation of future net cash flows. We group assets at the lowest level for
which identifiable cash flows are largely independent of the cash flows of
other assets and liabilities. For our operating mines, we include all mine
property, plant and equipment in one group at each mine for impairment testing
purposes. For our development projects and exploration properties, we assess
the carrying amount of each property separately on a property-by-property
basis.

For our operating mines and development projects, the cash flow estimates are
based on:



|> |  | estimated recoverable ounces of gold mainly representing proven and
probable mineral reserves. We consider possible reserves where all
economic and geo-technical studies are complete and support economic
recovery of gold, but where we are awaiting government approvals to allow
mining of the material;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|> |  | estimated future commodity prices (considering
historical and current prices, price trends and related
factors); and                                                                                                                                                                                         
| 
|> |  | expected future operating costs, capital expenditures
and unrecorded reclamation and closure expenditures.                                                                                                                                                                                                   

Our estimates of production levels and operating costs are based on life of
mine plans that are developed to model the expected cash flows from processing
our known gold reserves, assuming current plant capacity and current operating
costs, but excluding the impact of inflation.

In our most recent impairment assessments we used a future average gold price
assumption of $375 per ounce. We also assumed a US dollar foreign exchange rate
of $0.67 against the Australian dollar, based on recent market forward currency
exchange rates over the periods for which we are estimating future cash flows.

We record a reduction of the assets or group of assets to their estimated fair
value as a charge to earnings, if the estimated future net cash flows are less
than the carrying amount. We calculate fair value by discounting the estimated
future net cash flows using a discount factor. The discount factor is our
estimate of the risk-adjusted rate used to determine the fair value of our
mining properties in a transaction between willing buyers and sellers.

16.     Capitalized Mining Costs

We charge most mine operating costs to inventory as incurred. However, we
capitalize and amortize certain mining costs associated with open-pit deposits
that have diverse ore grades and waste-to-ore ton ratios over the mine life.
These mining costs arise from the removal of waste rock at our open-pit mines,
and we commonly refer to them as deferred stripping costs. We charge to
inventory amortization of amounts capitalized based on a stripping ratio
using the units-of-production method.

This accounting method results in the smoothing of these costs over the life of
a mine. Instead of capitalizing these costs, some mining companies expense them
as incurred, which may result in the reporting of greater

87

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

volatility in period-to-period results of operations. If we followed a policy
of expensing these costs as incurred, then using this alternative policy, our
reported cost of sales would have been $37 million lower in 2003
(2002  $29
million lower, 2001  $17 million lower).

Capitalized mining costs represent the excess of costs capitalized over
amortization recorded, although it is possible that a liability could arise if
cumulative amortization exceeds costs capitalized. The carrying amount of
capitalized mining costs is grouped with related mining property, plant and
equipment for impairment testing purposes.

Average stripping ratios1

|                        |  |      |       |      |  |      |       |  |  |  |      | 
|----------------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ---- | 
|For the years ended     |  |      |       |      |  |      |       |  |  |  |      | 
|December 31             |  | 2003 |       | 2002 |  | 2001
|                        |  |      |       |      |  |     
|Betze-Post (Goldstrike) |  |      | 112:1 |      |  |      | 112:1 |  |  |  | 98:1 | 
|Pierina                 |  |      | 48:1  |      |  |      | 48:1  |  |  |  | 21:1 | 
|                        |  |      |       |      |  |      |       |  |  |  |      | 

1.     The stripping ratio is calculated as the ratio of total tons (ore and
waste) of material to be moved compared to total recoverable proven and
probable gold reserves.,

The average remaining life of open-pit mine operations where we capitalize
these types of mining costs is 8 years. The full amount of costs incurred will
be expensed by the end of the mine lives.

17.     Other Assets

|                                             |  |      |     |      |  |   |     | 
|-------------------------------------------- |  | ---- | --- | ---- |  | - | --- | 
|At December 31                               |  | 2003 |     | 2002
|                                             |  |      |     |     
|Ore in stockpiles (note 14)                  |  | $    | 64  |      |  | $ | 61  | 
|Taxes recoverable                            |  |      | 52  |      |  |   | 35  | 
|Deferred income tax assets (note 21)         |  |      | 59  |      |  |   | 45  | 
|Debt issue costs                             |  |      | 11  |      |  |   | 11  | 
|Deferred stock-based
compensation (note 23b) |  |      | 6   |      |  |   | 5   | 
|Prepaid pension asset (note 24d)             |  |      |    |      |  |   | 7   | 
|Other                                        |  |      | 56  |      |  |   | 73  | 
|                                             |  |      |     |      |  |   |     | 
|                                             |  | $    | 248 |      |  | $ | 237 | 
|                                             |  |      |     |      |  |   |     | 

18.     Other Current Liabilities

|                                                             |  |      |     |      |  |   |     | 
|------------------------------------------------------------ |  | ---- | --- | ---- |  | - | --- | 
|At December 31                                               |  | 2003 |     | 2002
|                                                             |  |      |     |     
|Asset retirement obligations (note 20a)                      |  | $    | 36  |      |  | $ | 53  | 
|Merger and related costs1                                    |  |      | 1   |      |  |   | 3   | 
|Inmet litigation (note 25)                                   |  |      |    |      |  |   | 58  | 
|Derivative
liabilities (note 11d)                            |  |      | 3   |      |  |   | 28  | 
|Income taxes payable                                         |  |      |    |      |  |   | 52  | 
|Pension and other post-retirement
benefits (notes 20 and 24) |  |      | 5   |      |  |   | 9   | 
|Current part of long-term debt
(note 19)                     |  |      | 41  |      |  |   | 20  | 
|Deferred revenue                                             |  |      | 17  |      |  |   | 35  | 
|Other                                                        |  |      | 2   |      |  |   | 12  | 
|                                                             |  |      |     |      |  |   |     | 
|                                                             |  | $    | 105 |      |  | $ | 270 | 
|                                                             |  |      |     |      |  |   |     | 

1.     In 2002, cash payments of merger and related costs totaled $50 million.
Other amounts totaling $10 million were settled through pension plan benefit
enhancements. Excess accruals totaling $2 million were recorded in 2002
earnings.

19.     Long-Term Debt

|                               |  |      |     |      |  |   |     |  
|------------------------------ |  | ---- | --- | ---- |  | - | --- | -
|At December 31                 |  | 2003 |     | 2002
|                               |  |      |     |     
|Debentures                     |  | $    | 501 |      |  | $ | 504 |  
|Project financing  Bulyanhulu |  |      | 174 |      |  |   | 194 |  
|Variable rate bonds            |  |      | 80  |      |  |   | 80  |  
|Capital leases                 |  |      | 5   |      |  |   | 3   |  
|                               |  |      |     |      |  |   |     |  
|                               |  |      | 760 |      |  |   | 781 |  
|Current part                   |  |      | (41 | )    |  |   | (20 | )
|                               |  |      |     |      |  |   |     |  
|                               |  | $    | 719 |      |  | $ | 761 |  
|                               |  |      |     |      |  |   |     |  

Interest expense

|                    |  |      |    |      |  |      |    |   |  |   |     |  
|------------------- |  | ---- | -- | ---- |  | ---- | -- | - |  | - | --- | -
|For the years ended |  |      |    |      |  |      |    |   |  |   |     |  
|December 31         |  | 2003 |    | 2002 |  | 2001
|                    |  |      |    |      |  |     
|Interest incurred   |  | $    | 49 |      |  | $    | 59 |   |  | $ | 67  |  
|Less: capitalized   |  |      | (5 | )    |  |      | (2 | ) |  |   | (42 | )
|                    |  |      |    |      |  |      |    |   |  |   |     |  
|Interest expense    |  | $    | 44 |      |  | $    | 57 |   |  | $ | 25  |  
|                    |  |      |    |      |  |      |    |   |  |   |     |  

a) Debentures

On April 22, 1997, we issued $500 million of redeemable, non-convertible
debentures. The debentures bear interest at 7.5% per annum, payable
semi-annually, and mature on May 1, 2007 We entered into interest-rate swap
contracts as a fair value hedge of our interest rate risk exposure on $350
million of the debentures,

88

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

effectively converting them to floating-rate debt instruments (note 11). Under
the swaps, we receive fixed-rate interest receipts at 7.5% in exchange for
floating-rate interest payments of LIBOR plus a credit spread of 4.0%, which,
in 2003, resulted in an effective rate of 6.1%.

b) Project financing  Bulyanhulu

One of our wholly-owned subsidiaries, Kahama Mining Corporation Ltd. in
Tanzania, has a limited-recourse amortizing loan for $174 million. We
guaranteed the loan until completion, which occurred in March 2003. After
completion, the loan became non-recourse. The loan is insured for political
risks equally by branches of the Canadian government and the World Bank. The
interest rate, inclusive of political risk insurance premiums, is LIBOR plus
2.6% before completion, and increased after completion to about LIBOR plus
3.6%. The effective interest rate for 2003, including amortization of
debt-issue costs and political risk insurance, was 77% (2002 
72%, 2001  73%). The effective interest rate includes payments made under a
receive-floating, pay-fixed interest-rate swap which matches the loan principal
over the term to repayment.

Scheduled repayments for each of the
next five years are: 2004  $24 million,
2005  $31 million, 2006 -$34 million, 2007 
$34 million, 2008  $34 million,
and 2009  $17 million.

c) Variable rate bonds

Certain of our wholly-owned subsidiaries have issued variable-rate, tax-exempt
bonds of $17 million (due 2004), $25 million (due 2029) and $38 million (due
2032) for a total of $80 million. We pay interest monthly on the bonds based
on variable short-term, tax-exempt obligation rates. The average interest rate
for 2003 was 1.1% (2002  1.4%). No principal repayments are due until
cancellation, redemption or maturity.

d) Credit facilities

We have a credit and guarantee agreement with a group of banks (the
Lenders), which requires the Lenders to make available to us a credit
facility of up to $1 billion or the equivalent amount in Canadian currency. We
extended the Credit Agreement on March 28, 2003 for
one year from April 2007 to April 2008. The Credit Agreement, which is
unsecured, matures in April 2008 and has an interest rate of LIBOR plus 0.27%
to 0.35% when used, and an annual fee of 0.08%. We have not drawn any amounts
under the Credit Agreement.

20.     Other
Long-Term Obligations

|                                  |  |      |     |      |  |   |     | 
|--------------------------------- |  | ---- | --- | ---- |  | - | --- | 
|At December 31                    |  | 2003 |     | 2002
|                                  |  |      |     |     
|Asset retirement obligations      |  | $    | 282 |      |  | $ | 249 | 
|Pension benefits1 (note 24d)      |  |      | 48  |      |  |   | 55  | 
|Other post-retirement benefits    |  |      | 26  |      |  |   | 28  | 
|Derivative
liabilities (note 11d) |  |      | 70  |      |  |   | 58  | 
|Restricted stock units (note 23b) |  |      | 10  |      |  |   | 7   | 
|Other                             |  |      | 133 |      |  |   | 131 | 
|                                  |  |      |     |      |  |   |     | 
|                                  |  | $    | 569 |      |  | $ | 528 | 
|                                  |  |      |     |      |  |   |     | 

1.     Includes additional minimum liability of $7 million (see note 24d)

a) Asset retirement obligations

|                                         |  |      |     |  
|---------------------------------------- |  | ---- | --- | -
|                                         |  | 2003
|                                         |  |     
|At January 1                             |  | $    | 334 |  
|Changes in cash flow estimates (note 2b) |  |      | 10  |  
|Settlements                              |  |      | (43 | )
|Accretion expense                        |  |      | 17  |  
|                                         |  |      |     |  
|At December 31                           |  |      | 318 |  
|Current part                             |  |      | (36 | )
|                                         |  |      |     |  
|                                         |  | $    | 282 |  
|                                         |  |      |     |  

Our mining, processing, exploration and development activities are subject to
various government controls and regulations relating to protection of the
environment, including requirements for the closure and reclamation of mining
properties.

Effective January 1, 2003, we adopted FAS 143 and changed our accounting
policy for reclamation and closure costs. Prior to the adoption of FAS 143, we
accrued estimated reclamation and closure costs over the life of our mines
using the units of production method based on recoverable ounces of gold
contained in proven and probable reserves. Under FAS 143, if a liability meets
the definition of an asset retirement obligation, then it is accounted for in
accordance with

89

BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the principles of FAS 143. Other reclamation and closure costs that are not
asset retirement obligations are expensed as incurred (see note 6).

Through the construction and normal operation of our mining property, plant and
equipment, asset retirement obligations are incurred. We record the fair value
of a liability for an asset retirement obligation when it is incurred. When the
liability is initially recorded, we capitalize the cost by increasing the
carrying amount of the related long-lived asset. Over time, the liability is
increased to reflect an interest element (accretion expense) considered in the
initial measurement at fair value. The capitalized cost is amortized over the
useful life of the related asset. Upon settlement of the liability, we record a
gain or loss if the actual cost incurred is different than the liability
recorded.

We estimate that the present value of asset retirement obligations under
present environmental regulations was $318 million at December 31, 2003. The
major parts of this $318 million estimate are for: tailing and heap leach pad
closure/rehabilitation  $ 105 million; demolition of buildings/mine
facilities  $30 million; ongoing water treatment  $76 million; ongoing
monitoring and care and maintenance  $28 million; and other
costs  $79
million.

b) Other post-retirement benefits

We provide post-retirement medical, dental, and life insurance benefits to
certain employees. We use the corridor approach in the accounting for
post-retirement benefits, under which all actuarial gains and losses resulting
from variances between actual results and economic estimates or actuarial
assumptions are deferred. We amortize the deferred amounts when the net gains
or losses exceed 10% of the accumulated post-retirement benefit obligation at
the beginning of the year. The amortization period is the average remaining
life expectancy of participants. For 2003, we recorded a benefit expense of
$nil (2002  $nil, 2001  $2 million credit).

We have assumed a health care cost trend of 6.5% in 2003, 7% in 2002 and 7.5%
in 2001, decreasing ratability to 5% in 2006 and thereafter. The assumed
health care
cost trend had a minimal effect on the amounts reported. A one percentage
point change in the assumed health care cost trend rate at December 31, 2003
would have increased the post-retirement obligation by $3 million or decreased
the post-retirement benefit obligation by $2 million and would have had no
significant effect on the benefit expense for 2003.

Expected future benefit payments

|                                |  |   |   | 
|------------------------------- |  | - | - | 
|For the year ending
December 31 |  |   |   | 
|2004                            |  | $ | 2 | 
|2005                            |  |   | 2 | 
|2006                            |  |   | 2 | 
|2007                            |  |   | 2 | 
|2008                            |  |   | 2 | 
|2009-2013                       |  |   | 8 | 

21.     Deferred Income Taxes

Net deferred income tax liabilities

|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|---------------------------------------------- | --------------------------------------------- | ---- | - | ---- | ---- | ----- | - | - | ---- | ---- | -
|At December 31                                 |                                               | 2003 |   |      |      | 20021
|                                               |                                               |      |   |      |      |      
|Assets                                         |                                               |      |   |      |      |       |   |   |      |     
|                                               | Operating loss carry forwards                 |      | $ |      | 398  |       |   |   | $    | 389  |  
|                                               | Reclamation and closure costs                 |      |   |      | 82   |       |   |   |      | 82   |  
|                                               | Property, plant and equipment                 |      |   |      | 3    |       |   |   |      | 50   |  
|                                               | Post-retirement benefit
plan obligations      |      |   |      | 21   |       |   |   |      | 46   |  
|                                               | Alternative minimum tax
credit carry forwards |      |   |      | 120  |       |   |   |      | 110  |  
|                                               | Other                                         |      |   |      | 58   |       |   |   |      | 43   |  
|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|                                               | Gross deferred tax assets                     |      |   |      | 682  |       |   |   |      | 720  |  
|                                               | Valuation allowances                          |      |   |      | (394 |       | ) |   |      | (433 | )
|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|Net deferred tax assets                        |                                               |      |   | 288  |      |       |   |   | 287  |     
|Liabilities                                    |                                               |      |   |      |      |       |   |   |      |     
|                                               | Property, plant and equipment                 |      |   |      | (361 |       | ) |   |      | (381 | )
|                                               | Other                                         |      |   |      | (98  |       | ) |   |      | (16  | )
|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|                                               |                                               | $    |   | (171 |      | )     |   | $ | (110 | )   
|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|Net deferred
ncome tax
liabilities consist of: |                                               |      |   |      |      |       |   |   |      |     
|                                               | Non-current assets (note 17)                  |      |   |      | 59   |       |   |   |      | 45   |  
|                                               | Non-current liabilities                       |      |   |      | (230 |       | ) |   |      | (155 | )
|                                               |                                               |      |   |      |      |       |   |   |      |      |  
|                                               |                                               | $    |   | (171 |      | )     |   | $ | (110 | )   
|                                               |                                               |      |   |      |      |       |   |   |      |     

1. Reclassified to conform with
current presentation.

90
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a) Recognition and measurement

We recognize deferred income tax assets and liabilities for the future tax
consequences of temporary differences between the carrying amounts of assets
and liabilities in our balance sheet and their tax bases. We measure deferred
income tax assets and liabilities using enacted rates that apply to the years
when we expect to recover or settle the temporary differences. Our income tax
expense or recovery includes the effects of changes in our deferred income tax
assets and liabilities. We reduce deferred income tax assets by a valuation
allowance if we decide it is more likely than not that some or all of the
assets will not be realized.

We measure and recognize deferred income tax assets and liabilities based on:
our interpretation of relevant tax legislation; our tax planning strategies;
estimates of the tax bases of individual assets and liabilities; and the
deductibility of expenditures for income tax purposes. We will recognize the
effects of changes in our assessment of these estimates and factors when they
occur.

Deferred income taxes have not been provided on the undistributed earnings of
foreign subsidiaries, which are considered to be reinvested indefinitely
outside Canada. The determination of the unrecorded deferred income tax
liability is not considered practicable.

Operating loss carry forwards amount to $1,535 million, of which $973 million
do not expire and $562 million expire at various times over the next 20 years.
Alternative minimum tax credit carry forwards amount to $120 million and do
not expire.

Our income tax returns for the major jurisdictions where we operate have been
fully examined through the following years: Canada  1999, United States 
2001 and Peru  2000. Other than the matter of interest and penalties
associated with the Peruvian tax assessment, we are not aware of any tax
matters outstanding in any country in which we operate that could potentially
have a material adverse effect on our financial position or results of
operations.

b) Valuation allowances

Because we operate in multiple tax jurisdictions, we consider the need for a
valuation allowance on a country-by-country basis, taking into account the
effects of local tax law. When a valuation allowance is not recorded, we
believe that there is sufficient positive evidence to support a conclusion that
it is more likely than not that the asset will be realized. When facts or
circumstances change, we record an adjustment to a valuation allowance to
reflect the effects of the change. The main factors that affect the amount of a
valuation allowance are:



| |  |  expected levels of future taxable income;                                               
| |  | ------------------------------------------------------------------------------------------
|
| |  |  opportunities to implement tax plans that affect
whether tax assets can be realized; and
|
| |  |  the nature and amount of taxable temporary
differences.                                 

Levels of future taxable income are affected by, among other things,
prevailing gold prices; cash operating costs; changes in proven and probable
gold reserves; and changes in interest rates and foreign currency exchange
rates. It is reasonably possible that circumstances could occur resulting in a
material change in the valuation allowances.

c) Peruvian tax assessment

One of our Peruvian subsidiaries received a revised income tax assessment of
$32 million, excluding interest and penalties, from the Peruvian tax
authority, SUNAT. The tax assessment related to a tax audit of our Pierina
Mine for the 1999 and 2000 fiscal years. The assessment mainly relates to the
revaluation of the Pierina mining concession for the purpose of determining
its tax basis. Under the valuation proposed by SUNAT, the tax basis of the
Pierina assets would change from what we previously assumed with a resulting
increase in current and deferred income taxes. We believe that the tax
assessment is incorrect and we are appealing the decision. The full life of
mine effect on our current and deferred income tax liabilities was fully
recorded at December 31, 2002, as well as other payments of about $21 million
due for periods through 2003. The case is pending before Perus Tax Court. If
the case is not resolved in our favor, we intend to pursue all available
remedies, including judicial appeals. If we are successful and our original

91
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

valuation is confirmed as the appropriate tax basis of the Pierina assets, we
would benefit from a $141 million reduction in current and deferred tax
liabilities. The effect of this contingent gain, if any, will be recorded in
the period the contingency is resolved.

In the event of an unfavorable Tax Court ruling, Peruvian law is unclear with
respect to whether it is necessary to make payment of the disputed current
taxes for the years covered by the tax assessment, pending the outcome of an
appeal process, a process which can take several years. The amount of current
income taxes that is potentially payable is $80 million. In the event of an
unfavorable Tax Court ruling, we will consider taking all available action to
prevent payment of the amount in dispute until the appeal process is complete.

We have not provided for $57 million of potential interest and penalties on the
income tax assessed in the audit. Even if the tax assessment is upheld, we
believe that we will prevail on the interest and penalties part, because the
assessment runs counter to applicable law and previous Peruvian tax audits. The
potential amount of interest and penalties will continue to increase over time
while we contest the tax assessment. A liability for interest and penalties
will only be recorded should it become probable that SUNATs position on
interest and penalties will be upheld, or if we exhaust our available remedies.

22.     Capital Stock

a) Authorized capital

Our authorized capital stock includes an unlimited number of common shares
(issued 535,250,227 shares), 9,764,929 First preferred shares, Series A (issued
nil); 9,047,619 Series B (issued nil); 1 Series C special voting share (issued
1); and 14,726,854 Second preferred shares Series A (issued nil).

b) Share repurchase program

During the year ended December 31, 2003, we repurchased 8.75 million common
shares for $154 million, at an average cost of $17.56 per share. This resulted
in a reduction of common share capital by $67 million, and an $87 million charge
(being the difference between the repurchase cost and the average historic book
value of shares repurchased) to retained earnings.

c) Barrick Gold Inc. (BGI) Exchangeable Shares

In connection with a 1998 acquisition, BGI, formerly Homestake Canada Inc.,
issued 11.1 million BGI exchangeable shares. Each BGI exchangeable share is
exchangeable for 0.53 of a Barrick common share at any time at the option of
the holder and has essentially the same voting, dividend (payable in Canadian
dollars), and other rights as 0.53 of a Barrick common share. BGI is a
subsidiary that holds our interest in the Hemlo and Eskay Creek Mines.

At December 31, 2003,
1.5 million (2002  1.6 million) BGI exchangeable shares
were outstanding, which are equivalent to 0.8 million Barrick common shares
(2002  0.8 million common shares). The equivalent common share amounts are
reflected in the number of common shares outstanding.

At any time on or after December 31, 2008, or when fewer than 1.4 million BGI
exchangeable shares are outstanding, we have the right to require the exchange
of each outstanding BGI exchangeable share for 0.53 of a Barrick common share.
While there are exchangeable shares outstanding, we are required to present
summary consolidated financial information relating to BGI for holders of
exchangeable shares.

Summarized financial information for BGI

|                                |  |      |     |      |  |      |     |   |  |   |      |  
|------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | ---- | -
|For the years ended December 31 |  | 2003 |     | 2002 |  | 2001
|                                |  |      |     |      |  |     
|Total revenues and
other income |  | $    | 226 |      |  | $    | 203 |   |  | $ | 175  |  
|Less: costs and expenses        |  |      | 245 |      |  |      | 191 |   |  |   | 281  |  
|                                |  |      |     |      |  |      |     |   |  |   |      |  
|Income (loss) before taxes      |  | $    | (19 | )    |  | $    | 12  |   |  | $ | (106 | )
|                                |  |      |     |      |  |      |     |   |  |   |      |  
|Net loss                        |  | $    | (38 | )    |  | $    | (1  | ) |  | $ | (84  | )
|                                |  |      |     |      |  |      |     |   |  |   |      |  

92
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                                     |                             |      |     |      |   |   |     |      |  
|------------------------------------ | --------------------------- | ---- | --- | ---- | - | - | --- | ---- | -
|At December 31                       |                             | 2003 |     | 2002
|                                     |                             |      |     |     
|Assets                               |                             |      |     |      |   |   |     |     
|                                     | Current assets              |      | $   | 72   |   |   | $   | 91   |  
|                                     | Non-current assets          |      |     | 233  |   |   |     | 236  |  
|                                     |                             |      |     |      |   |   |     |      |  
|                                     |                             | $    | 305 |      |   | $ | 327 |     
|                                     |                             |      |     |      |   |   |     |      |  
|Liabilities and shareholders equity |                             |      |     |      |   |   |     |     
|                                     | Other current
liabilities   |      |     | 20   |   |   |     | 75   |  
|                                     | Intercompany notes payable  |      |     | 546  |   |   |     | 407  |  
|                                     | Other long-term liabilities |      |     | 11   |   |   |     | 18   |  
|                                     | Deferred income taxes       |      |     | 67   |   |   |     | 122  |  
|                                     | Shareholders equity        |      |     | (339 | ) |   |     | (295 | )
|                                     |                             |      |     |      |   |   |     |      |  
|                                     |                             | $    | 305 |      |   | $ | 327 |     
|                                     |                             |      |     |      |   |   |     |      |  

d) Dividends

In 2003, we declared and paid dividends in US dollars totaling $0.22 per share
(2002  $0.22 per share, 2001  $0.22 per share).

23.     Employee Stock-Based Compensation

a) Common stock options

We have a stock option plan for selected employees. At December 31, 2003, 24
million common stock options were outstanding, expiring at various dates to
December 7, 2013. The exercise price of the options is set at our closing
share price on the day before the grant date. They vest over four years at a
rate of one quarter each year, beginning in the year after granting, and are
exercisable over 10 years. At December 31, 2003, 1 million (2002  5 million,
2001  9 million) common shares, in addition to those currently outstanding,
were available for granting options.

Besides the common stock options in the table below, we are obliged to issue
about 0.5 million common shares (2002  0.5 million common shares) in
connection with outstanding stock options assumed as part of a business
combination in 1999. These options have an average exercise price of C$19.70
(2002  C$19.68) and an average remaining term of two years.

Stock option activity (shares in millions)

|               |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |       | 
|-------------- | -------------------- |  | -------- | -- | ------- |  | -------- | ----- | ------- |  | -------- | -- | ------- |  | - | ----- |  |  | -- | -- | - |  | - | ----- | 
|               |                      |  | 2003     |    | 2002    |  | 2001     |      
|               |                      |  | Shares   |    | Average |  | Shares   |       | Average |  | Shares   |    | Average
|               |                      |  | (number) |    | price   |  | (number) |       | price   |  | (number) |    | price  
|               |                      |  |          |    |         |  |          |       |         |  |          |    |        
|C$ options     |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |      
|At January 1   |                      |  | 19       |    |         |  |          |       |         |  | 19       |    |         |  |   |       |  |  | 22 |    |   |  |   |      
|               | Granted              |  |          | 5  |         |  | $        | 28.61 |         |  |          | 6  |         |  | $ | 24.71 |  |  |    | 1  |   |  | $ | 24.32 | 
|               | Exercised            |  |          | (1 | )       |  | $        | 23.99 |         |  |          | (4 | )       |  | $ | 24.79 |  |  |    |   |   |  |   |       | 
|               | Cancelled or expired |  |          | (1 | )       |  | $        | 27.95 |         |  |          | (2 | )       |  | $ | 33.99 |  |  |    | (4 | ) |  | $ | 29.66 | 
|               |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |       | 
|At December 31 |                      |  | 22       |    |         |  |          |       |         |  | 19       |    |         |  |   |       |  |  | 19 |    |   |  |   |      
|               |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |       | 
|US$ options    |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |      
|At January 1   |                      |  | 3        |    |         |  |          |       |         |  | 6        |    |         |  |   |       |  |  | 4  |    |   |  |   |      
|               | Granted              |  |          |   |         |  |          |       |         |  |          |   |         |  |   |       |  |  |    | 2  |   |  | $ | 9.03  | 
|               | Exercised            |  |          | (1 | )       |  | $        | 13.07 |         |  |          | (2 | )       |  | $ | 11.99 |  |  |    |   |   |  |   |       | 
|               | Cancelled or expired |  |          |   |         |  |          |       |         |  |          | (1 | )       |  | $ | 25.10 |  |  |    | -  |   |  |   |       | 
|               |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |       | 
|At December 31 |                      |  | 2        |    |         |  |          |       |         |  | 3        |    |         |  |   |       |  |  | 6  |    |   |  |   |      
|               |                      |  |          |    |         |  |          |       |         |  |          |    |         |  |   |       |  |  |    |    |   |  |   |       | 

93
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock options outstanding (shares in millions)

|                |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|--------------- |  | ----------- | -- | ------- |  | ------------ | ----- | ----------- | ------- | ----- | - |  |  |  | -- |  |  | - | ----- | 
|                |  | Outstanding |    |         |  |              |       | Exercisable
|                |  |             |    |         |  |              |       |            
|Range of        |  | Shares      |    | Average |  | Average life |       | Shares      | Average
|exercise prices |  | (number)    |    | price   |  | (years)      |       | (number)    |         | price
|                |  |             |    |         |  |              |       |             |         |      
|C$ options      |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|$22.08 - $31.05 |  |             | 20 |         |  | $            | 26.29 |             |         |       | 8 |  |  |  | 9  |  |  | $ | 26.11 | 
|$32.32 -$43.20  |  |             | 2  |         |  |              | 39.26 |             |         |       | 3 |  |  |  | 2  |  |  | $ | 39.55 | 
|                |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|                |  |             | 22 |         |  |              |       |             |         |       | 7 |  |  |  | 11 |  |  |   |       | 
|                |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|US $ options    |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|$8.96 -$17.68   |  |             | 1  |         |  | $            | 12.40 |             |         |       | 6 |  |  |  | 1  |  |  | $ | 13.57 | 
|$17.75 - $40.66 |  |             | 1  |         |  | $            | 26.30 |             |         |       | 3 |  |  |  | 1  |  |  | $ | 26.30 | 
|                |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 
|                |  |             | 2  |         |  |              |       |             |         |       | 5 |  |  |  | 2  |  |  |   |       | 
|                |  |             |    |         |  |              |       |             |         |       |   |  |  |  |    |  |  |   |       | 

Under APB 25, we recognize compensation cost for stock options in earnings
based on the excess, if any, of the quoted market price of the stock at the
grant date of the award over the option exercise price. Generally, the exercise
price for stock options granted to employees equals the fair market value of
our common stock at the date of grant, resulting in no compensation cost.

FASB Statement No. 123 (Accounting for Stock-Based Compensation) (FAS 123)
encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans based on the fair value of options
granted. We have elected to continue to account for stock-based compensation
using the intrinsic value method prescribed in Accounting Principles Board
Opinion No. 25 (Accounting for Stock Issued to Employees) (APB 25) and its
related interpretations, and to provide disclosures of the pro forma effects
of adoption had we recorded compensation expense under the fair value method.

Option value information

|                                          |                              |      |      |      |   |      |      |      |   |   |      |      |  
|----------------------------------------- | ---------------------------- | ---- | ---- | ---- | - | ---- | ---- | ---- | - | - | ---- | ---- | -
|For the years ended December 31           |                              |      |      |      |   |      |      |      |   |   |      |     
|(per share and option amounts in dollars) |                              | 2003 |      | 2002 |   | 2001
|                                          |                              |      |      |      |   |     
|Fair value per option                     |                              | $    | 8.50 |      |   | $    | 6.40 |      |   | $ | 5.10 |     
|Valuation assumptions:                    |                              |      |      |      |   |      |      |      |   |   |      |     
|                                          | Expected option
term (years) |      |      | 6    |   |      |      | 6    |   |   |      | 10   |  
|                                          | Expected volatility          |      |      | 40   | % |      |      | 40   | % |   |      | 30   | %
|                                          | Expected dividend yield      |      |      | 1.0  | % |      |      | 1.4  | % |   |      | 1.4  | %
|                                          | Risk-free interest rate      |      |      | 4.5  | % |      |      | 5.0  | % |   |      | 5.5  | %
|                                          |                              |      |      |      |   |      |      |      |   |   |      |     
|Pro forma effects                         |                              |      |      |      |   |      |      |      |   |   |      |     
|Net income, as reported                   |                              | $    | 200  |      |   | $    | 193  |      |   | $ | 96   |     
|Stock-option expense                      |                              |      | (24  | )    |   |      | (21  | )    |   |   | (31  | )   
|                                          |                              |      |      |      |   |      |      |      |   |   |      |     
|Pro forma net income                      |                              | $    | 176  |      |   | $    | 172  |      |   | $ | 65   |     
|                                          |                              |      |      |      |   |      |      |      |   |   |      |     
|Net income per share:                     |                              |      |      |      |   |      |      |      |   |   |      |     
|                                          | As
reported1                 |      | $    | 0.37 |   |      | $    | 0.36 |   |   | $    | 0.18 |  
|                                          | Pro
forma1                   |      | $    | 0.33 |   |      | $    | 0.32 |   |   | $    | 0.12 |  
|                                          |                              |      |      |      |   |      |      |      |   |   |      |     

1. Basic and diluted.

b) Restricted stock units

In 2001, we put in place a restricted stock unit incentive plan (RSU Plan) for
selected employees. Under the RSU Plan, a participant is granted a number of
RSUs, where each unit has a value equal to one Barrick common share at the time
of grant. Each RSU, which vests and will be paid out on the third anniversary
of the date of

94
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

grant, has a value equivalent to the market price of a Barrick common share.
RSUs are recorded at their fair value on the grant date, with a corresponding
amount recorded as deferred compensation that is amortized on a straight-line
basis over the vesting period. Changes in the fair market value of the units
during the vesting period are recorded, with a corresponding adjustment to the
carrying amount of deferred compensation. Compensation expense for the year
ended December 31, 2003 was $4 million (2002  $3 million). At December
31,2003, the weighted average remaining contractual life was 1.6 years, and
the fair value of outstanding RSUs was $10 million (included in other
long-term obligations).

RSU activity

|                             |           |  |                |      |              |   |            |       | 
|---------------------------- | --------- |  | -------------- | ---- | ------------ | - | ---------- | ----- | 
|                             |           |  |                |      |              |   | Fair value
|                             |           |  | RSUs           |      | per unit    
|                             |           |  | (in thousands) |      | (in dollars)
|                             |           |  |                |      |             
|Balance at December 31, 2000 |           |  |               |      |              | $ |           |      
|                             | Granted   |  |                | 515  |              |   |            | 15.49 | 
|                             |           |  |                |      |              |   |            |      
|Balance at December 31, 2001 |           |  | 515            |      |              | $ | 15.95      |      
|                             | Cancelled |  |                | (30  | )            |   |            | 19.74 | 
|                             | Dividends |  |                | 4    |              |   |            | 17.45 | 
|                             |           |  |                |      |              |   |            |      
|Balance at December 31, 2002 |           |  | 489            |      |              | $ | 15.41      |      
|                             | Cancelled |  |                | (171 | )            |   |            | 16.62 | 
|                             | Granted   |  |                | 130  |              |   |            | 21.92 | 
|                             | Dividends |  |                | 4    |              |   |            | 19.82 | 
|                             |           |  |                |      |              |   |            |      
|Balance at December 31, 2003 |           |  | 452            |      |              | $ | 22.71      |      
|                             |           |  |                |      |              |   |            |      

24.     Pension Plans

a) Defined contribution pension plans

Certain employees take part in defined contribution employee benefit plans. We
also have a retirement plan for certain officers of the Company, under which
we contribute 15% of the officers annual salary and bonus. Our share of
contributions to these plans, which is expensed in the year it is earned by
the employee, was $15 million in 2003, $12 million in 2002 and $12 million in
2001.

b) Defined benefit pension plans

We have various qualified defined benefit pension plans that cover certain of
our United States employees and provide benefits based on employees years of
service. Our policy for these plans is to fund, at a minimum, the
amounts necessary on an actuarial basis to provide enough assets to meet the
benefits payable to plan members under the Employee Retirement Income Security
Act of 1974. Independent trustees administer assets of the plans, which are
invested mainly in fixed-income securities and equity securities.

As well as the qualified plans, we have nonqualified defined benefit pension
plans covering certain employees and a director of the Company. An irrevocable
trust (rabbi trust) was set up to fund these plans. The fair value of assets
held in this trust, which mainly includes investments, was
$32 million (2002 
$31 million), are recorded in our consolidated balance sheet and accounted for
under our accounting policies for such assets.

Actuarial gains and losses arise when the actual return on plan assets for a
period differs from the expected return on plan assets for that period, and
when actual experience causes the expected and actuarial accrued benefit
obligations to differ at the end of the year. We amortize actuarial gains and
losses over the average remaining life
expectancy of participants.

Pension expense

|                                    |  |      |     |      |  |      |     |   |  |   |     |  
|----------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | -
|For the years ended December 31     |  | 2003 |     | 2002 |  | 2001
|                                    |  |      |     |      |  |     
|Expected return on
plan assets      |  | $    | (11 | )    |  | $    | (17 | ) |  | $ | (21 | )
|Service cost for
benefits earned    |  |      |    |      |  |      | 3   |   |  |   | 4   |  
|Interest cost on
benefit obligation |  |      | 14  |      |  |      | 16  |   |  |   | 16  |  
|Prior service cost                  |  |      |    |      |  |      |    |   |  |   | 1   |  
|Actuarial gains                     |  |      |    |      |  |      | (1  | ) |  |   | (2  | )
|Special termination charges1        |  |      |    |      |  |      |    |   |  |   | 39  |  
|Effect of curtailments/settlements  |  |      | 1   |      |  |      | 1   |   |  |   | (4  | )
|                                    |  |      |     |      |  |      |     |   |  |   |     |  
|                                    |  | $    | 4   |      |  | $    | 2   |   |  | $ | 33  |  
|                                    |  |      |     |      |  |      |     |   |  |   |     |  

1.     In 2001, the planned closure of certain mine sites caused some terminated
employees at the sites to receive extra pension entitlements. As well, certain
employees with change of control clauses in their employment agreements became
entitled to enhanced pension benefits on the closing of the merger. We recorded
a charge of $39 million included in merger and related costs to reflect the
impact of these events.

95
BARRICK Annual Report 2003





---



##### 



c) Pension plan asset information

Fair value of plan assets

|                                  |  |      |     |      |  |   |     |  
|--------------------------------- |  | ---- | --- | ---- |  | - | --- | -
|For the years ended December 31   |  | 2003 |     | 2002
|                                  |  |      |     |     
|Balance at January 1              |  | $    | 170 |      |  | $ | 235 |  
|Actual return on plan assets      |  |      | 19  |      |  |   | (2  | )
|Company contributions             |  |      | 8   |      |  |   | 7   |  
|Benefits paid                     |  |      | (31 | )    |  |   | (70 | )
|                                  |  |      |     |      |  |   |     |  
|Balance at December 31            |  |      | 166 |      |  |   | 170 |  
|                                  |  |      |     |      |  |   |     |  
|Funded status1                    |  | $    | (55 | )    |  | $ | (57 | )
|Unrecognized net actuarial losses |  |      | 11  |      |  |   | 9   |  
|                                  |  |      |     |      |  |   |     |  
|Net benefit liability recognized  |  | $    | (44 | )    |  | $ | (48 | )
|                                  |  |      |     |      |  |   |     |  

|                            |  |      |     |      |  |   |     | 
|--------------------------- |  | ---- | --- | ---- |  | - | --- | 
|As of December 31           |  | 2003 |     | 2002
|                            |  |      |     |     
|Composition of plan assets: |  |      |     |      |  |   |     | 
|Equity securities           |  | $    | 66  |      |  | $ | 41  | 
|Debt securities             |  |      | 100 |      |  |   | 129 | 
|                            |  |      |     |      |  |   |     | 
|                            |  | $    | 166 |      |  | $ | 170 | 
|                            |  |      |     |      |  |   |     | 

1. Represents the fair value of plan assets less projected benefit
obligations. Plan assets exclude investments held in a rabbi trust that are
recorded separately on our balance sheet under Investments (fair value $32
million at December 31, 2003). In the year ending December 31, 2004 we expect
to make further contributions totaling about $3 million to our defined benefit
pension plans to address the funding status of the plans.

Investment strategy

We employ a total return investment approach, whereby a mix of equities and
fixed-income investments are used to maximize the long-term return of plan
assets. The intent of this strategy is to minimize plan expenses by
outperforming plan liabilities over the long run. Our overall expected
long-term rate of return on assets is the actuarial assumption rate of 7%.
Risk is diversified through a blend of equity and fixed income investments.
Furthermore, equity investments are diversified across geography and market
capitalization in US large cap stocks, US small cap stocks, and international
securities. Investment risk is measured and monitored on an ongoing basis
through annual liability measurements, periodic asset/liability studies, and
quarterly investment portfolio reviews.

Assumed rate of return on plan assets

We employ a building block
approach in determining the long-term rate of return for plan assets.
Historical markets are studied and long-term historical relationships
between equities and fixed income investments are preserved congruent
with the widely accepted capital market principle that assets with
higher volatility generate a greater return over the long run. Current
market factors such as inflation and interest rates are evaluated before
long-term capital market assumptions are determined.

d) Benefit obligations

Project benefit obligation (PBO)

|                                |                                     |      |     |      |   |   |     |     |  
|------------------------------- | ----------------------------------- | ---- | --- | ---- | - | - | --- | --- | -
|For the
years ended December 31 |                                     | 2003 |     | 2002
|                                |                                     |      |     |     
|Balance at January 1            |                                     | $    | 227 |      |   | $ | 279 |    
|                                | Service cost for benefits earned    |      |     |     |   |   |     | 3   |  
|                                | Interest cost on benefit obligation |      |     | 14   |   |   |     | 16  |  
|                                | Actuarial (gains) losses            |      |     | 11   |   |   |     | (1  | )
|                                | Benefits paid                       |      |     | (31  | ) |   |     | (70 | )
|                                |                                     |      |     |      |   |   |     |    
|Balance at December 31          |                                     | $    | 221 |      |   | $ | 227 |    
|                                |                                     |      |     |      |   |   |     |    

For the year ended December 31, 2003 we used a measurement date of December
31, 2003 to calculate the accumulated benefit obligations.

Expected future benefit payments

|                                |  |   |    | 
|------------------------------- |  | - | -- | 
|For the year ending
December 31 |  |   |    | 
|2004                            |  | $ | 15 | 
|2005                            |  |   | 16 | 
|2006                            |  |   | 16 | 
|2007                            |  |   | 18 | 
|2008                            |  |   | 18 | 
|2009 - 2013                     |  | $ | 94 | 
|                                |  |   |   

96
BARRICK Annual Report 2003





---



##### 



Pension plans where accumulated benefit obligation (ABO) exceeds the fair value of
plan assets

|                             |  |      |     |      |  |   |     | 
|---------------------------- |  | ---- | --- | ---- |  | - | --- | 
|At December 31               |  | 2003 |     | 2002
|                             |  |      |     |     
|Projected benefit obligation |  | $    | 221 |      |  | $ | 193 | 
|ABO                          |  | $    | 217 |      |  | $ | 193 | 
|Fair value of plan assets    |  | $    | 166 |      |  | $ | 132 | 

Total recorded benefit asset (liability)

|                                          |             |      |     |      |   |   |     |      |  
|----------------------------------------- | ----------- | ---- | --- | ---- | - | - | --- | ---- | -
|At December 31                            |             | 2003 |     | 2002
|                                          |             |      |     |     
|Prepaid pension asset                     |             | $    |    |      |   | $ | 7   |     
|Accrued benefit plan liability            |             |      |     |      |   |   |     |     
|                                          | Current     |      |     | (3   | ) |   |     | (7   | )
|                                          | Non-current |      | $   | (41  | ) |   |     | (48  | )
|                                          |             |      |     |      |   |   |     |     
|Net benefit plan liability                |             |      |     |      |   |   |     |     
|Additional                                |             | $    | (44 | )    |   | $ | (48 | )   
|minimum
liability  non-current (note 10) |             |      | (7  | )    |   |   | (7  | )   
|                                          |             |      |     |      |   |   |     |     
|                                          |             | $    | (51 | )    |   | $ |     | (55)
|                                          |             |      |     |      |   |   |     |     

e) Actuarial assumptions

|                                |                         |      |      |      |   |      |      |      |   |          |      |      |   |  |                       |     |           |   |     |     | 
|------------------------------- | ----------------------- | ---- | ---- | ---- | - | ---- | ---- | ---- | - | -------- | ---- | ---- | - |  | --------------------- | --- | --------- | - | --- | --- | 
|                                |                         |      |      |      |   |      |      |      |   |          |      |      |   |  | Sensitivity analysis1
|                                |                         |      |      |      |   |      |      |      |   |          |      |      |   |  |                      
|                                |                         |      |      |      |   |      |      |      |   |          |      |      |   |  | Effect on             |     | Effect on
|For the years ended December 31 |                         | 2003 |      | 2002 |   | 2001 |      | ABO  |   | earnings
|                                |                         |      |      |      |   |      |      |      |   |         
|Discount rate                   |                         |      |      |      |   |      |      |      |   |          |      |      |   |  |                       |     |           |   |     |    
|                                | For benefit obligations |      |      | 6.25 | % |      |      | 6.50 | % |          |      | 6.75 | % |  | $                     | 23  |           |   |     | N/A | 
|                                | For net pension cost    |      |      | 6.50 | % |      |      | 6.75 | % |          |      | 7.25 | % |  |                       | N/A |           |   | $   |    | 
|Expected return on plan assets  |                         |      | 7.00 | %    |   |      | 8.50 | %    |   |          | 8.50 | %    |   |  | N/A                   |     |           | $ | 2   |    
|Compensation increases          |                         |      | 5.00 | %    |   |      | 5.00 | %    |   |          | 5.00 | %    |   |  | N/A                   |     |           |   | N/A |    

1. Effect of a one-percent decrease

In 2003, we reduced the assumed rate of return on pension plan assets from
8.5% to 7% to reflect our revised expectations for long-term returns based on
recent  experience and considering the mix
of plan assets and our investment strategy.

25.     Contingencies and Commitments

a) Contingencies, litigation and claims

Certain conditions may exist as of the date the financial statements are
issued, which may result in a loss to the Company but which will only be
resolved when one or more future events occur or fail to occur. Management and,
where appropriate, legal counsel, assess such contingent liabilities, which
inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending
against us or unasserted claims that may result in such proceedings, the
Company and its legal counsel evaluate the perceived merits of any legal
proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought.

If the assessment of a contingency suggests that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability is accrued in the financial statements. If the
assessment suggests that a potentially material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent loss, together with an estimate of the range
of possible loss, if determinable, are disclosed. Loss contingencies considered
remote are generally not disclosed unless they involve guarantees, in which
case we disclose the nature of the guarantee.

97
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inmet litigation

In October 1997, Barrick Gold Inc. (BGI), a wholly-owned subsidiary of
Barrick, entered into an agreement with Inmet Mining Corporation (Inmet) to
purchase the Troilus mine in Quebec for $110 million plus working capital. In
December 1997, BGI terminated the agreement after deciding that, on the basis
of due diligence studies, conditions to closing the arrangement would not be
satisfied. In February 1998, Inmet filed suit against BGI in the British
Columbia (B.C.) Supreme Court disputing the termination of the agreement and
alleging that BGI had breached the agreement. In January 2002, the Court
released its decision in the matter and found in favor of Inmet. The Court
awarded Inmet equitable damages of C$88.2 (US$59) million, which was recorded
as an expense in 2001. The Court did not award Inmet pre-judgment interest.
Inmet made a request to the Court to re-open the trial to make submissions on
its claim for pre-judgment interest, which was denied in May 2002. In February
2002, BGI filed a Notice of Appeal with the B.C. Court of Appeal, and Inmet
filed a Cross-Appeal of the decision regarding pre-judgment interest. In
November 2003, the B.C. Court of Appeal dismissed the appeal made by BGI, and
also awarded Inmet pre-judgment interest. In November 2003, BGI paid Inmet
C$111 million (US$86 million), in full settlement of the lawsuit. The
settlement resulted in a further expense of US$14 million in fourth quarter
2003, combined with post-judgment interest of $2 million in the first nine
months of 2003.

Bre-X Minerals

On April 30, 1998, we were added as a defendant in a class action lawsuit
initiated against Bre-X Minerals Ltd., certain of its directors and officers
or former directors and officers and others in the United States District
Court for the Eastern District of Texas, Texarkana Division. The class action
alleges, among other things, that statements made by us in connection with our
efforts to secure the right to develop and operate the Busang gold deposit in
East Kalimantan, Indonesia were materially false and misleading and omitted to
state material facts relating to the preliminary due diligence investigation
undertaken by us in late 1996.

On July 13, 1999, the Court dismissed the claims against us and several other
defendants on the grounds that the plaintiffs had failed to state a claim
under United States securities laws. On August 19, 1999, the plaintiffs filed
an amended complaint restating their claims against us and certain other
defendants and on June 14,
2000 filed a further amended complaint, the Fourth
Amended Complaint.

On March 31, 2001, the Court granted in part and denied in part our Motion to
Dismiss the Fourth Amended Complaint. As a result, we remain a defendant in
the case. We believe that the remaining claims against us are without merit.
We filed our formal answer to the Fourth Amended Complaint on April 27,
2001 denying all relevant allegations of the plaintiffs
against us. Discovery in the case has been stayed by the
Court pending the Courts decision on whether or not
to certify the case as a class action. The amount of
potential loss, if any, which we may incur arising out of
the plaintiffs claims is not presently determinable.

On March 31, 2003, the Court denied all of the Plaintiffs motions to certify
the case as a class action. Plaintiffs have not filed an interlocutory appeal
of the Courts decision denying class certification to the Fifth Circuit Court
of Appeals. On June 2, 2003, the Plaintiffs submitted a proposed Trial and Case
Management Plan, suggesting that the Plan would cure the defects in the
Plaintiffs motions to certify the class. The Court has taken no action with
respect to the proposed Trial and Case Management Plan. The Plaintiffs case
against the Defendants may now proceed in due course, but not on behalf of a
class of Plaintiffs but only with respect to the specific claims of the
Plaintiffs named in the lawsuit. Having failed to certify the case as a class
action, we believe that the likelihood of any of the named Defendants
succeeding against Barrick with respect to their claims for securities fraud is
remote.

98
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Blanchard complaint

On January 7, 2003, we were served with a Complaint for Injunctive Relief by
Blanchard and Company, Inc. (Blanchard), and Herbert Davies (Davies). The
complaint, which is pending in the US District Court for the Eastern District
of Louisiana, also names J.P. Morgan Chase & Company (J.P. Morgan) as a
defendant, along with an unspecified number of additional defendants to be
named later. The complaint, which has been amended several times, alleges that
we and bullion banks with which we entered into spot deferred contracts have
manipulated the price of gold, in violation of US antitrust laws and the
Louisiana Unfair Trade Practices and Consumer Protection Law. Blanchard alleges
that it has been injured as a seller of gold due to reduced interest in gold as
an investment. Davies, a customer of Blanchard, alleges injury due to the
reduced value of his gold investments. The complaint seeks damages and an
injunction terminating certain of our trading agreements with J.P. Morgan and
other bullion banks. In September 2003 the Court issued an Order granting in
part and denying in part Barricks motions to dismiss this action. Discovery
has commenced in the case and a trial date has been tentatively set for
February 2005. We intend to defend the action vigorously.

Wagner complaint

On June 12, 2003, a complaint was filed against Barrick and several of its
current or former officers in the US District Court for the Southern District
of New York. The complaint is on behalf of Barrick shareholders who purchased
Barrick shares between February 14, 2002 and September 26,2002. It alleges
that Barrick and the individual defendants violated US securities laws by
making false and misleading statements concerning Barricks projected operating
results and earnings in 2002. The complaint seeks an unspecified amount of
damages. Several other complaints, making the same basic allegations against
the same defendants, were filed
by other parties on behalf of the same proposed class of Barrick shareholders.
In September the cases were consolidated into a single action in the Southern
District of New York. The plaintiffs filed a Consolidated and/or Amended
Complaint on November 5, 2003. On January 14, 2004 Barrick filed a motion to
dismiss the Wagner complaint. We intend to defend the action vigorously.

Other

From time to time, we are involved in various claims, legal proceedings and
complaints arising in the ordinary course of business. We are also subject to
reassessment for income and mining taxes for certain years. We do not believe
that adverse decisions in any pending or threatened proceedings related to any
potential tax assessments or other matters, or any amount which we may be
required to pay by reason thereof, will have a material adverse effect on our
financial condition or future results of operations.

b) Commitments

Our mining and exploration activities are subject to various federal,
provincial and state laws and regulations governing the protection of the
environment. These laws and regulations are continually changing and generally
becoming more restrictive. We conduct our operations so as to protect public
health and the environment, and we believe that our operations are materially
in compliance with all applicable laws and regulations. We have made, and
expect to make in the future, expenditures to meet such laws and regulations.

We have entered into various commitments in the ordinary course of business,
including commitments to perform assessment work and other obligations
necessary to maintain or protect our interests in mining properties, financing
and other obligations to joint ventures and partners under venture and
partnership agreements, and commitments under federal and state/provincial
environmental, health and safety permits.

99
BARRICK Annual Report 2003





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 26.     Fair Value of Financial
Instruments Fair value is defined as the value at which positions could be closed out or
sold in a transaction with a willing and knowledgeable counterparty over a
period of time consistent with our risk management or investment strategy. The accounting for an asset or liability may differ based on the type of
instrument and/or its use in a risk management or investing strategy. The
measurement approaches used in financial statements include the following:  >
    
    recorded at fair value on the balance sheet
with changes in fair value recorded each period
in earnings;>
    
    recorded at fair value on the balance sheet with
changes in fair value recorded each period in a
separate component of shareholders equity and as
part of other comprehensive income;>
    
    recorded at cost (less other-than-temporary
impairments) with changes in fair value not
recorded in the financial statements but disclosed
in the notes thereto; or>
    
    recorded at the lower of cost or market. Fair value is based on quoted market prices, where available. If listed prices
or quotes are not available, fair value is based on internally developed models
that primarily use market-based or independent information as inputs. These
methods may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Fair value information At December 31
    
    2003
    
    2002Carrying
    
    Estimated
    
    Carrying
    
    Estimatedamount
    
    fair value
    
    amount
    
    fair valueFinancial assetsCash and equivalents1
    
    $
    970
    
    
    $
    970
    
    
    $
    1,044
    
    
    $
    1,044Accounts receivable1
    
    
    69
    
    
    
    69
    
    
    
    72
    
    
    
    72Available for sale securities2
    
    
    127
    
    
    
    127
    
    
    
    41
    
    
    
    41Derivative assets3
    
    
    410
    
    
    
    410
    
    
    
    115
    
    
    
    115$
    1,576
    
    
    $
    1,576
    
    
    $
    1,272
    
    

    $
    1,272Financial liabilitiesAccounts payable1
    
    $
    245
    
    
    $
    245
    
    
    $
    213
    
    
    $
    213Long-term debt4
    
    
    760
    
    
    
    841
    
    
    
    781
    
    
    
    858Derivative liabilities3
    
    
    73
    
    
    
    73
    
    
    
    86
    
    
    
    86$
    1,078
    
    
    $
    1,159
    
    
    $
    1,080
    
    
    $
    1,157
 1. Fair values of cash and equivalents, accounts receivable and accounts
payable approximate their carrying amounts due to
their short-term nature and generally negligible credit losses. 2. Our investment in debt and equity securities are recorded at their estimated
fair value. Quoted market prices, when available,
are used to determine fair value. If quoted market prices are not available,
then fair values are estimated by using quoted
prices of instruments with similar characteristics or discounted cash flows. 3. The fair value for derivative instruments is determined based on liquid
market pricing as evidenced by exchange traded prices,
broker-dealer quotations or related input factors which assume all
counterparties have the same credit rating. 4. The fair value of long-term debt is based on current market interest rates,
adjusted for our credit quality. 100
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 27.     Joint Ventures Our major interests in joint ventures are our 50% interest in the
Kalgoorlie
Mine in Australia; our 50% interest in the Round Mountain Mine in the United
States; and our 50% interest in the Hemlo Mine in Canada. Summary financial information for joint ventures (100%) Income statement and cash flow information For the years endedDecember 31
    
    2003
    
    2002
    
    2001Revenues
    
    $
    775
    
    
    $
    650
    
    
    $
    578Costs and expenses
    
    
    638
    
    
    
    582
    
    
    
    522Net income
    
    $
    137
    
    
    $
    68
    
    
    $
    56Operating
activities1
    
    $
    127
    
    
    $
    175
    
    
    $
    163Investing
activities1
    
    $
    (60
    )
    
    $
    (54
    )
    
    $
    (78
    )Financing
activities1
    
    $
    
    
    
    $
    
    
    
    $
    
 1. Net cash inflow (outflow) Balance sheet information At December 31
    
    2003
    
    2002AssetsInventories
    
    $
    99
    
    
    $
    46Property, plant and equipment
    
    
    543
    
    
    
    553Other assets
    
    
    64
    
    
    
    79$
    706
    
    
    $
    678LiabilitiesCurrent liabilities
    
    $
    77
    
    
    $
    116Long-term obligations
    
    
    104
    
    
    
    67$
    181
    
    
    $
    183
 28.     Differences from Canadian Generally Accepted Accounting Principles These consolidated financial statements have been prepared in accordance with
US GAAP. A reconciliation of our income statement and balance sheet between US
GAAP and Canadian GAAP is presented below together with a description of the
significant measurement differences affecting these financial statements. a) Business combinations The acquisitions of Sutton Resources (Sutton) and Homestake Mining Company
(Homestake), which were accounted for using the pooling-of-interests method
under US GAAP, were accounted for as a purchase under Canadian GAAP. Under US
GAAP, the assets, liabilities and shareholders equity of Sutton and Homestake
were combined with the Companys own recorded amounts. Comparative figures were
restated for all periods presented prior to the acquisitions to include the
combined statements of income and balance sheets of the merged entities
adjusted to conform to our US GAAP accounting policies. Under Canadian GAAP,
rules which existed at the time of the Sutton and Homestake acquisitions prior
to the effective date of CICA 1581 Business Combinations, allowed for two
possible accounting methods, the purchase method or the pooling-of-interests
method. The selection of the method of accounting used for business
combinations under the previous rules depended upon whether or not one of the
combining companies could be identified as an acquirer. In situations where
voting shares were issued or exchanged to effect the combination, factors
relating to control over the resultant combined company were considered. Under
those previous rules, due to the fact that the Barrick shareholders (as a
group) held more than 50% of the voting shares of the combined company after
the acquisitions of Sutton and Homestake, Barrick was identified as the
acquirer, thereby requiring the purchase method to be used under Canadian GAAP.
The application of the purchase method under Canadian GAAP required that
identifiable assets and liabilities of the acquired entity be recorded at fair
values at the date of acquisition, with any excess purchase price allocated to
goodwill. This resulted in certain assets and liabilities being recorded at
different carrying amounts under Canadian GAAP compared with US GAAP. These
differences arise because the fair values at the date of acquisition differed
from historic cost, which is the basis of accounting under the
pooling-of-interests method under US GAAP. The assets and liabilities most
significantly affected are: property, plant and equipment, intangible assets,
inventories, goodwill and obligations recorded for reclamation and closure
costs. 101
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS b) Exploration and development expenditures For Canadian GAAP purposes we capitalize mine development costs on our
properties after proven and probable reserves have been found. We also
capitalize costs on properties where we have found non-reserve material that
does not meet all the criteria required for classification as proven or
probable reserves. Managements determination as to whether the existence of
non-reserve material should result in the capitalization of costs or the
material should be included in the amortization and recoverability calculations
is based on various factors, including, but not limited to: the existence and
nature of known mineralization; the location of the property (for example,
whether the presence of existing mines and ore bodies in the immediate vicinity
increases the likelihood of development of a mine on the property); the
existence of proven and probable reserves on the property; whether the ore body
is an extension of an existing producing ore body on an adjacent property; the
results of recent drilling on the property; and the existence of a feasibility
study or other analysis to demonstrate that the ore is commercially
recoverable. Under US GAAP, exploration and development expenditures incurred
on properties where mineralization has not been classified as a proven and
probable reserve under SEC rules are expensed as incurred. Accordingly, certain
expenditures are capitalized for Canadian GAAP purposes but expensed under US
GAAP. c)
Amortization of property, plant and equipment Under Canadian GAAP, amortization of property, plant and equipment using the
units-of-production method is calculated using historical capitalized costs
plus future underground mine development costs for a whole mine and proven and
probable mineral reserves and non-reserve material for the whole mine (when
sufficient objective evidence exists to support a conclusion that it is
probable the non-reserve material will be produced). For US GAAP purposes,
amortization is calculated using historical capitalized costs incurred to
access specific ore blocks or areas and only proven and probable reserves
within the specific block or area; infrastructure and other common costs which
have a useful life over
the entire mine are amortized over total accessible proven and probable
reserves of the mine. These different methods result in a different rate of
amortization for Canadian GAAP. In addition, where differences exist in the
carrying amounts of property, plant and equipment between US GAAP and Canadian
GAAP, due to the historic effects of the application of GAAP to these items
(for example, arising from differences in business combinations accounting,
capitalization of exploration expenditures, and accounting for asset
retirement obligations), this also results in a difference in the amount of
amortization expense. d) Amortization of intangible assets In our Canadian GAAP financial statements we have certain intangible assets
that arose from the application of purchase accounting. These assets are not
present in our US GAAP financial statements. Under Canadian GAAP, we amortize
the carrying amounts of mining rights for proven and probable reserves as gold
is produced using the units of production method based on the estimated
recoverable ounces in proven and probable reserves. Amortization of the
carrying amounts of mining rights for mineralized material commences when the
mineralized material is converted into proven and probable reserves.
Intangible assets recorded under Canadian GAAP are tested for impairment using
the same method that is applied to property, plant and equipment under
Canadian GAAP. e) Goodwill Under Canadian GAAP, on the acquisition of Homestake, goodwill was identified
and was allocated to reporting units by preparing estimates of the fair value
of each reporting unit and comparing this amount to the fair value of assets
and liabilities (including intangibles) in the reporting unit. We test goodwill for impairment annually in the fourth quarter of our fiscal
year. This impairment assessment involves estimating the fair value of each
reporting unit that includes goodwill. We compare this fair value to the total
carrying amount of the reporting unit (including goodwill). If the fair value
exceeds this carrying amount, we consider that goodwill is not impaired. If
the fair 102
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS value is less than this carrying amount, then we estimate the fair values of
all identifiable assets and liabilities in the reporting unit, and compare this
net fair value of assets less liabilities to the estimated fair value of the
entire reporting unit. The difference represents the fair value of goodwill,
and if necessary, we reduce the carrying amount of goodwill to this fair value. f) Future income taxes In accordance with Canadian GAAP, we implemented CICA Handbook Section 3465,
(Future income taxes) in 2000. Prior to the adoption of this standard,
Canadian GAAP did not require recognition of the tax effects of temporary
timing differences arising from acquisitions. Under US GAAP, acquisitions
occurring prior to January 1, 2000 have been accounted for by grossing up
assets and deferred tax liabilities for the underlying tax effect of treating
the purchase consideration allocated to assets acquired that is not tax
deductible as a temporary taxable timing difference. Under the transition provisions of CICA 3465, the recorded amounts of assets
acquired were not restated to reflect differences in their carrying amounts at
acquisition for tax and accounting purposes. Consequently, under Canadian
GAAP, property, plant and equipment was $190 million lower and future income
tax liabilities were $94 million higher than the amounts recorded under US
GAAP. Where assets and liabilities are recorded at different carrying amounts for US
GAAP and Canadian GAAP, due to differences in the accounting policies that
affect these assets and liabilities, a difference also arises in the amount of
temporary timing differences that give rise to deferred tax assets and
liabilities. Consequently, the amounts of deferred tax assets and liabilities
recorded under US GAAP differ from the amounts of future income taxes recorded
under Canadian GAAP. g)
Impairment evaluations for long-lived assets In accordance with US GAAP, financing costs are excluded from the evaluation
of long-lived assets for impairment purposes. Under Canadian GAAP, financing
costs are included, but where an asset is impaired, the asset is reduced to its
net recoverable amount, calculated as the future estimated undiscounted net
cash flow expected to be generated by the asset. Under US GAAP, if assets are
impaired, a reduction in the carrying amount to estimated fair value is
required. Fair value is calculated by discounting the estimated future net cash
flows using a discount factor. The discount factor is our estimate of the
risk-adjusted rate used to determine the fair value of our mining properties in
a transaction between willing buyers and sellers. h) Investments Under US GAAP, investments which are considered to be available for sale
securities are recorded at fair value, with unrealized gains or losses
included in Comprehensive Income. Under Canadian GAAP, the concept of
Comprehensive Income does not exist and these investments are recorded at
cost. i) Derivative financial instruments Under Canadian GAAP, derivative financial instruments that qualify for hedge
accounting treatment are recognized on the balance sheet only to the extent
that cash has been paid or received together with adjustments necessary to
offset recognized gains or losses arising on the hedged items. Under US GAAP,
such derivative financial instruments are recognized on the balance sheet at
fair value with a corresponding charge or credit recorded in Other
Comprehensive Income. j) Minimum pension liability Under US GAAP, if the accumulated pension plan benefit obligation exceeds the
market value of plan assets, a minimum pension liability for the excess is
recognized to the extent that the liability recorded in the balance sheet is
less than the minimum liability. Any portion of this additional liability that
relates to unrecognized prior service cost is recognized as an intangible
asset while the remainder is charged to Comprehensive Income. Canadian GAAP
does not require us to record a minimum liability and does not have the
concept of Comprehensive Income. 103
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS k) Asset retirement obligations Under US GAAP, new policies were adopted
effective January 1, 2003 based on new standards published by the FASB. These
standards are established for the recognition and measurement of liabilities
for legal obligations associated with the retirement of a long-lived asset that
result from its acquisition, construction, development or normal operation. A
liability is recorded for such an obligation at its fair value when incurred
and a corresponding asset retirement cost is added to the carrying amount of
the related asset. In subsequent periods, the carrying amount of the liability
is adjusted to reflect the passage of time and any changes in the timing or
amount of the underlying future cash flows. The asset retirement cost is
amortized to expense over the assets useful life. Under Canadian GAAP, a
similar standard will be effective for the Companys fiscal year beginning on
January 1, 2004. Under current Canadian standards, and US standards prior to
2003, total expected reclamation and closure costs (including legal and
non-legal obligations) are recorded and charged to earnings over the life of a
mine using the units of production method based on proven and probable
reserves, and, for Canadian GAAP, non-reserve material expected to be converted
into reserves. As a result of these different policies, our 2003 US GAAP income
statement includes charges for the cumulative effect of the adoption of the new
policy, amortization of the asset, accretion of the liability, and non-legal
reclamation costs whereas our Canadian GAAP income statement includes a single
charge for reclamation expense. l) Foreign currency Under US GAAP, translation adjustments that arise on the translation of
financial statements of entities whose functional currency is not the US
dollar are reported as a component of Comprehensive Income. Under Canadian
GAAP, the concept of Comprehensive Income does not exist and these translation
adjustments are reported as a separate component of shareholders equity,
called cumulative translation adjustments. m) Revenue Under Canadian GAAP purchase accounting rules, Homestake sales contracts
existing at the date of acquisition were recorded at fair value and any
previous deferred revenue balances eliminated. As these contracts are delivered
into, the revenue recorded under Canadian GAAP is reduced to the extent of the
original fair value adjustment. Under US GAAP pooling rules, existing Homestake
deferred revenue balances were carried forward and recorded in the period of
delivery. Differences between Canadian and US GAAP revenue arise from these
different business combination accounting practices. n) Other Comprehensive Income Under US GAAP, certain assets and liabilities are remeasured at fair value,
with changes in fair value recorded in Other Comprehensive Income. Under
Canadian GAAP, these assets and liabilities are recorded at cost and they are
not remeasured to fair value prior to the date they are realized or settled.
The assets and liabilities affected are: investments, and derivative assets and
liabilities that qualify for hedge accounting treatment. 104
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS o) Consolidated Balance Sheets At December 31
    
    
    
    
    
    2003
    
    2002Canadian
    
    
    
    
    
    
    
    
    
    CanadianNotes
    
    US GAAP
    
    Adjustments
    
    GAAP
    
    US GAAP
    
    Adjustments
    
    GAAPAssetsCurrent assetsCash and equivalents
    
    
    
    
    
    $
    970
    
    
    $
    
    
    
    $
    970
    
    
    $
    1,044
    
    
    $
    
    
    
    $
    1,044Accounts receivable
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    69
    
    
    
    72
    
    
    
    
    
    
    
    72Inventories
    
    
    a
    
    
    
    157
    
    
    
    3
    
    
    
    160
    
    
    
    159
    
    
    
    5
    
    
    
    164Other current assets
    
    
    i, m
    
    
    
    169
    
    
    
    (112
    )
    
    
    57
    
    
    
    47
    
    
    
    (35
    )
    
    
    121,365
    
    
    
    (109
    )
    
    
    1,256
    
    
    
    1,322
    
    
    
    (30
    )
    
    
    1,292Investments
    
    
    h
    
    
    
    127
    
    
    
    (38
    )
    
    
    89
    
    
    
    41
    
    
    
    6
    
    
    
    47Property, plant and
equipment
    
    
    a, b, c, f, k
    
    
    
    3,131
    
    
    
    612
    
    
    
    3,743
    
    
    
    3,311
    
    
    
    559
    
    
    
    3,870Capitalized mining costs, net
    
    
    
    
    
    
    235
    
    
    
    
    
    
    
    235
    
    
    
    272
    
    
    
    
    
    
    
    272Intangible assets
    
    
    a, d
    
    
    
    
    
    
    
    683
    
    
    
    683
    
    
    
    
    
    
    
    724
    
    
    
    724Goodwill
    
    
    a, e
    
    
    
    
    
    
    
    1,081
    
    
    
    1,081
    
    
    
    
    
    
    
    1,247
    
    
    
    1,247Unrealized fair value of
derivative contracts
    
    
    i
    
    
    
    256
    
    
    
    (256
    )
    
    
    
    
    
    
    78
    
    
    
    (78
    )
    
    
    Other assets
    
    
    a, i, m
    
    
    
    248
    
    
    
    31
    
    
    
    279
    
    
    
    237
    
    
    
    7
    
    
    
    244Total
assets
    
    
    
    
    
    $
    5,362
    
    
    $
    2,004
    
    
    $
    7,366
    
    
    $
    5,261
    
    
    $
    2,435
    
    
    $
    7,696Liabilities and Shareholders
EquityAccounts payable
    
    
    
    
    
    $
    245
    
    
    $
    
    
    
    $
    245
    
    
    $
    213
    
    
    $
    
    
    
    $
    213Other current liabilities
    
    
    i, k
    
    
    
    105
    
    
    
    14
    
    
    
    119
    
    
    
    270
    
    
    
    (45
    )
    
    
    225350
    
    
    
    14
    
    
    
    364
    
    
    
    483
    
    
    
    (45
    )
    
    
    438Long-term debt
    
    
    i
    
    
    
    719
    
    
    
    (1
    )
    
    
    718
    
    
    
    761
    
    
    
    (4
    )
    
    
    757Other long-term obligations
    
    
    i,  j, k
    
    
    
    569
    
    
    
    (147
    )
    
    
    422
    
    
    
    528
    
    
    
    (69
    )
    
    
    459Deferred income tax liabilities
    
    
    f
    
    
    
    230
    
    
    
    136
    
    
    
    366
    
    
    
    155
    
    
    
    291
    
    
    
    446Total
liabilities
    
    
    
    
    
    
    1,868
    
    
    
    2
    
    
    
    1,870
    
    
    
    1,927
    
    
    
    173
    
    
    
    2,100Capital stock
    
    
    a, p
    
    
    
    4,115
    
    
    
    873
    
    
    
    4,988
    
    
    
    4,148
    
    
    
    892
    
    
    
    5,040Retained earnings (deficit)
    
    
    a, p

    
    
    
    (694
    )
    
    
    1,226
    
    
    
    532
    
    
    
    (689
    )
    
    
    1,266
    
    
    
    577Accumulated other comprehensive
income (loss)
    
    
    n, p
    
    
    
    73
    
    
    
    (73
    )
    
    
    
    
    
    
    (125
    )
    
    
    125
    
    
    
    Cumulative translation
adjustments
    
    
    l, p
    
    
    
    
    
    
    
    (24
    )
    
    
    (24
    )
    
    
    
    
    
    
    (21
    )
    
    
    (21
    )Total
shareholders equity
    
    
    
    
    
    
    3,494
    
    
    
    2,002
    
    
    
    5,496
    
    
    
    3,334
    
    
    
    2,262
    
    
    
    5,596Total liabilities and
shareholders equity
    
    
    
    
    
    $
    5,362
    
    
    $
    2,004
    
    
    $
    7,366
    
    
    $
    5,261
    
    
    $
    2,435
    
    
    $
    7,696
 105
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS p) Reconciliation of shareholders equity At December 31, 2003 Retained
    
    Other
    
    CumulativeCapital
    
    earnings
    
    Comprehensive
    
    translationNotes
    
    stock
    
    (deficit)
    
    Income
    
    adjustmentsBalance per
US GAAP
    
    
    
    
    
    $
    4,115
    
    
    $
    (694
    )
    
    $
    73
    
    
    $
    Adjustments (net of tax effects):Valuation of
equity issued in business combinations1
    
    
    
    
    
    
    (293
    )
    
    
    
    
    
    
    
    
    
    
    Cumulative effect of difference in accounting
policiesAccounting changes in 2003
    
    
    c,k
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    Amortization of property, plant and equipment
    
    
    c
    
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    Exploration and development costs
    
    
    b
    
    
    
    
    
    
    
    137
    
    
    
    
    
    
    
    Provisions
for mining assets in 2000 and 19972
    
    
    
    
    
    
    
    
    
    
    683
    
    
    
    
    
    
    
    Investments
    
    
    h
    
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    Derivatives accounted for as cash flow hedges
    
    
    i
    
    
    
    
    
    
    
    
    
    
    
    (189
    )
    
    
    Non-hedge derivative adjustments
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    Minimum pension liability
    
    
    j
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    Asset retirement obligations
    
    
    k
    
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    Interest capitalization
    
    
    q2
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    Merger related costs
    
    
    q7
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )
    
    
    
    
    
    
    Cumulative effect of differences in accounting for
business combinations under the pooling-of-
interests versus the purchase methodExcess of fair value of shareholders equity over
historic book value
    
    
    a
    
    
    
    1,185
    
    
    
    
    
    
    
    123
    
    
    
    Deficit of Sutton and Homestake at acquisition
    
    
    a
    
    
    
    
    
    
    
    749
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    d
    
    
    
    
    
    
    
    (74
    )
    
    
    
    
    
    
    Deferred revenue
    
    
    m
    
    
    
    
    
    
    
    (23
    )
    
    
    
    
    
    
    Gains on asset sales
    
    
    a
    
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    Homestake inventory
    
    
    a
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    Effect of different book values of capital stock on
common share repurchases
    
    
    
    
    
    
    (14
    )
    
    
    14
    
    
    
    
    
    
    
    Deferred income taxesEffect of historic differences in accounting policies
under CICA 3465 versus FAS 109
    
    
    f
    
    
    
    
    
    
    
    (284
    )
    
    
    
    
    
    
    Effect on deferred tax assets and liabilities of
timing differences for US GAAP and
Canadian GAAP purposes
    
    
    f
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    Tax valuation allowances
    
    
    q3
    
    
    
    
    
    
    
    (106
    )
    
    
    
    
    
    
    Impairment charge on goodwill
    
    
    e
    
    
    
    
    
    
    
    (48
    )
    
    
    
    
    
    
    Reclassification of translation adjustments
    
    
    l
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    (24
    )Balance per Canadian GAAP
    
    
    
    
    
    $
    4,988
    
    
    $
    532
    
    
    $
    
    
    
    $
    (24
    )
 1. In determining the value of the shares exchanged in acquisitions, for
accounting purposes under US GAAP we used the
unadjusted quoted market prices of our shares. For CanadianGAAP purposes, the
value was adjusted by a 5% to 20% discount
reflecting the fact that the market value for a large block of common shares is
less than our quoted share price. The recognition
of this discount to the value of common shares issued for CanadianGAAP
purposes resulted in a reduction in the value of the shares
for accounting purposes and cost of acquisitions by $293 million. 2. The impact of applying USGAAP in calculating the provisions for mining
assets in 2000 and 1997 was to reduce property,
plant and equipment by $780 million offset by future income taxes of $97
million for a net reduction in shareholders equity
of $683 million. 106
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS q) Reconciliation of consolidated net income For the years ended December 31
    
    Notes
    
    2003
    
    2002
    
    2001Net
income US GAAP
    
    
    
    
    
    $
    200
    
    
    $
    193
    
    
    $
    96Amortization of property, plant and equipment
    
    
    c
    

    
    
    53
    
    
    
    69
    
    
    
    24Exploration and development expenditures
    
    
    b
    
    
    
    53
    
    
    
    52
    
    
    
    23Amortization of intangible assets
    
    
    d
    
    
    
    (41
    )
    
    
    (33
    )
    
    
    Asset retirement obligations
    
    
    k
    
    
    
    26
    
    
    
    19
    
    
    
    Cumulative effect of accounting changes
under US GAAP
    
    
    c, k
    
    
    
    17
    
    
    
    
    
    
    
    1Gains on
asset sales1
    
    
    a
    
    
    
    (10
    )
    
    
    
    
    
    
    Interest
capitalized2
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    Deferred
income tax valuation allowances3
    
    
    a, f
    
    
    
    (87
    )
    
    
    
    
    
    
    (12
    )Future
income tax expense4
    
    
    f
    
    
    
    3
    
    
    
    (15
    )
    
    
    Deferred revenue
    
    
    m
    
    
    
    (29
    )
    
    
    (20
    )
    
    
    Non-hedge
derivative adjustments5
    
    
    
    
    
    
    
    
    
    
    (26
    )
    
    
    (8
    )Homestake
inventory6
    
    
    a
    
    
    
    (2
    )
    
    
    (21
    )
    
    
    Merger
related costs7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25Pre-acquisition net loss of Homestake
    
    
    a
    
    
    
    
    
    
    
    
    
    
    
    138Impairment charge on goodwill
    
    
    e
    
    
    
    (48
    )
    
    
    
    
    
    
    Other items
    
    
    
    
    
    
    2
    
    
    
    11
    
    
    
    (16
    )Net income
 Canadian GAAP
    
    
    
    
    
    $
    146
    
    
    $
    229
    
    
    $
    271Net income per share (dollars)Basic and fully diluted
    
    
    
    
    
    $
    0.27
    
    
    $
    0.42
    
    
    $
    0.68
 1. The gain on sale under CanadianGAAP is different from USGAAP due to the
fact that the carrying amount of assets sold
was higher under CanadianGAAP. 2. Under CanadianGAAP, the Veladero and Alto Chicama projects met the criteria
for interest capitalization for the whole of 2003. 3. Under Canadian GAAP, differences in the carrying amount of certain assets
recorded at fair value at the acquisition of Homestake
resulted in valuation allowances totaling $23 million not being historically
required under CanadianGAAP. The remaining
amount relates to a release of valuation allowances under US GAAP totaling $118
million that has been recorded as a reduction
of goodwill under CanadianGAAP, offset by the release of certain valuation
allowances to earnings under CanadianGAAP
totaling $54 million. 4. The adjustment to future tax expense reflects the reversal of temporary
timing differences under CanadianGAAP caused by
other adjustments that were made to reconcile USGAAP net income to Canadian
GAAP income. The adjustment also reflects
other differences in accounting for income taxes as described in note 28f. 5. Certain derivative instruments classified as non-hedge derivatives under
US GAAP were accounted for under CanadianGAAP
as either hedge derivatives; or recorded at cost with gains and losses recorded
either at maturity or when losses were determined to
be other than temporary. 6. Certain ore in stockpile and in process inventory held by Homestake, which
was adjusted to fair value at the date of acquisition,
caused an adjustment to cost of sales when the inventory was processed and
sold. 7. Various costs totaling $25 million that were incurred in connection with the
Homestake merger in 2001 were expensed under
USGAAP. Under CanadianGAAP, these costs were included as part of the purchase
consideration. 107
BARRICK Annual Report 2003




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS r) Consolidated statements of cash flow under Canadian GAAP For the years ended December 31
    
    2003
    
    2002
    
    2001Operating
ActivitiesNet income
    
    $
    146
    
    
    $
    229
    
    
    $
    271Add (deduct):Amortization
    
    
    510
    
    
    
    483
    
    
    
    343Change in capitalized mining costs
    
    
    37
    
    
    
    29
    
    
    
    17Future income taxes
    
    
    35
    
    
    
    (60
    )
    
    
    (9
    )Inmet litigation settlement
    
    
    (86
    )
    
    
    
    
    
    
    (Gains) losses on sale of long-lived assets
    
    
    (29
    )
    
    
    (8
    )
    
    
    4Impairment charge on goodwill
    
    
    48
    
    
    
    
    
    
    
    Reclamation costs
    
    
    28
    
    
    
    15
    
    
    
    17(Gains) losses on investments
    
    
    12
    
    
    
    4
    
    
    
    (2
    )Amortization of deferred stock-based compensation
    
    
    4
    
    
    
    3
    
    
    
    Foreign currency translation adjustments
    
    
    (2
    )
    
    
    (1
    )
    
    
    8Non-hedge derivative (gains) losses
    
    
    (71
    )
    
    
    32
    
    
    
    (27
    )Inmet litigation expense
    
    
    16
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    3
    
    
    
    (16
    )
    
    
    (14
    )Inventories
    
    
    4
    
    
    
    45
    
    
    
    34Accounts payable and accrued liabilities
    
    
    13
    
    
    
    (7
    )
    
    
    117Current income taxes accrued
    
    
    54
    
    
    
    59
    
    
    
    36Other assets and liabilities
    
    
    31
    
    
    
    17
    
    
    
    (61
    )Cash payments:Merger related costs
    
    
    
    
    
    
    (50
    )
    
    
    (13
    )Reclamation and closure costs
    
    
    (59
    )
    
    
    (70
    )
    
    
    (35
    )Income taxes
    
    
    (111
    )
    
    
    (52
    )
    
    
    (7
    )Cash
provided by operating activities1
    
    
    583
    
    
    
    652
    
    
    
    679Investing
ActivitiesProperty, plant and equipmentCapital expenditures
    
    
    (384
    )
    
    
    (291
    )
    
    
    (549
    )Sales proceeds
    
    
    48
    
    
    
    11
    
    
    
    15Purchase of investments
    
    
    (55
    )
    
    
    
    
    
    
    Increase in restricted cash
    
    
    
    
    
    
    
    
    
    
    (24
    )Business combinations and property acquisitions
    
    
    
    
    
    
    
    
    
    
    18Short-term cash deposits
    
    
    
    
    
    
    159
    
    
    
    (157
    )Cash used
in investing activities1
    
    
    (391
    )
    
    
    (121
    )
    
    
    (697
    )Financing
ActivitiesCapital stockProceeds from shares issued on exercise of stock options
    
    
    29
    
    
    
    83
    
    
    
    7Repurchased for cash
    
    
    (154
    )
    
    
    
    
    
    
    Long-term debtProceeds
    
    
    
    
    
    
    
    
    
    
    49Repayments
    
    
    (23
    )
    
    
    (25
    )
    
    
    Dividends
    
    
    (118
    )
    
    
    (119
    )
    
    
    (87
    )Cash used
in financing activities
    
    
    (266
    )
    
    
    (61
    )
    
    
    (31
    )Increase (decrease) in cash and equivalents
    
    
    (74
    )
    
    
    470
    
    
    
    (49
    )Cash and equivalents at beginning of year
    
    
    1,044
    
    
    
    574
    
    
    
    623Cash and equivalents at end of year
    
    $
    970
    
    
    $
    1,044
    
    
    $
    574
 1. Exploration and development expenditures that were capitalized
under Canadian GAAP, but expensed under USGAAP, were $53 million in
2003 (2002  $52 million; 2001  $23 million). This represents the
differences in cash
flows from operating and investing activities between USGAAP and
CanadianGAAP. 108
BARRICK Annual Report 2003