##### 



EXHIBIT 2


MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL AND OPERATING RESULTS

| |  |  |    |  |  |                                         |  |                                     
| |  |  | -- |  |  | --------------------------------------- |  | ------------------------------------
| |  |  | 13 |  |  | Strategic Perspectives                 
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 14 |  |  | Highlights                             
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 15 |  |  | Outlook                                
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 17 |  |  | Income Statement                       
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 17                                      |  | Gold Sales                          
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 19                                      |  | Operations Review by Geographic Area
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 20                                      |  | North America                       
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 28                                      |  | South America                       
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 31                                      |  | Africa                              
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 33                                      |  | Australia                           
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 38                                      |  | Costs and Expenses                  
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 43 |  |  | Liquidity and Capital Resources        
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 45 |  |  | Financial Risk Management              
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 49 |  |  | Critical Accounting Estimates          
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 54 |  |  | Off-Balance Sheet Arrangements         
| |  |  |    |  |  |                                         |  |                                     
| |  |  |    |  |  | 54                                      |  | Gold Sales Contracts                
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 59 |  |  | Contractual Obligations and Commitments
| |  |  |    |  |  |                                         |  |                                     
| |  |  | 60 |  |  | Non GAAP Measures                      





---



##### 



STRATEGIC PERSPECTIVES

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

Since its founding, Barrick
has been run in accordance
with clear and concise
business principles,
focusing on profitability
and financial performance
rather than sheer size. We
know that the key drivers of
performance in our business
are spot gold prices,
production, reserves and
costs per ounce. In 2002,
our financial results were
below our expectations,
primarily due to higher
costs at our operations. As
we move into 2003, we intend
to focus on optimizing our
operating mines and setting
achievable targets based on
each mines stage of
operation. Overall, we have
a solid portfolio of
operating   albeit mature  properties. Even as the
average ore grade mined at
each of our operations
declines toward reserve
grade, these mines remain
long-life, low-cost
operations compared to the
industry. The key feature of
these properties is their
ability to generate
significant free cash flow,
which we plan to use in part
to fund our exploration and
development programs.

In addition to our operating
mines, we have the largest
portfolio of development
projects in the industry,
and the financial and
development strengths to
build them. For the last
five years, as the lower
gold price environment
reduced exploration spending
across the industry, we
invested extensively in our
exploration program. This
investment paid dividends in
2002 with a major gold
discovery  Alto Chicama in
Peru. By early 2003, our
work at Alto Chicama allowed
us to add 6.5 million ounces
to reserves (for Canadian
reporting purposes),
bringing our total reserves
to 86.9 million ounces1, one
of the largest gold asset
bases in the industry.

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



---

1 For United States reporting purposes, Industry Guide 7
(under the Securities Exchange Act of 1934) as
interpreted by the Staff of the U.S. Securities and
Exchange Commission applies different standards in order
to classify mineralization as a reserve. Accordingly,
Alto Chicama and Veladero are classified for U.S.
reporting purposes as mineralized material. Total
reserves for U.S. reporting purposes are 71.0 million
ounces.


BARRICK ANNUAL REPORT 2002         13



---



##### 



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

HIGHLIGHTS

For 2002, our net income was
$193 million ($0.36 per
share) compared to $96
million ($0.18 per share) in
2001, while operating cash
flow was
$589 million ($1.09 per
share) for 2002 versus $588
million ($1.10 per share)
for 2001.

For the year, we produced
5.7 million ounces of gold
at total cash costs of $177
per ounce1 compared to 6.1
million ounces of gold at
$162 per ounce in 2001.
Lower 2002 production was
largely due to the planned
phase-out of five mines over
the course of the year as
reserves were depleted.

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

The $15 per ounce increase
in total cash costs in 2002
over 2001 was due to our
ongoing operations
processing more ore (5%
higher) at lower grades (5%
lower) at marginally higher
unit costs (up 1%).

Our 2002 earnings were also
affected by a sharp increase
in our exploration and
development expense to $104
million  double what we originally
planned to spend. Activity
at our Alto Chicama
discovery increased our
exploration expense by $24
million. At the same time,
we also expensed all of the
feasibility work at Veladero
($15 million) over the
course of 2002. While the
impact on our 2002 earnings
was negative, both Alto
Chicama and Veladero
represent key assets that we
expect to contribute to our
operating and financial
performance beginning in
2005 and 2006, respectively.

We generated solid cash
flows from our operating
mines and as a result of our
lowest capital expenditures
in 14 years, our free cash
flows reached $361 million1,
the highest in Company
history. Our forward sales
program also contributed,
generating $168 million in
additional revenue in 2002.
As a result, we ended the
year with more than $1
billion in cash, and no net
debt.

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



---

1 See non-GAAP measures page 60.


14          BARRICK ANNUAL REPORT 2002



---



##### 



> Global  Results

|                                      |  |      |       |      |  |          |       |  |  |  |     | 
|------------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | 
|                                     
|For the year ended December 31,       |  |      |       |      |  |          |       |  |  |  |     | 
|(US GAAP basis)                       |  | 2002 |       | 2001 |  | % Change
|                                     
|Gold production  ounces(thousands)   |  |      | 5,695 |      |  |          | 6,124 |  |  |  | -7  | 
|Revenue per ounce                     |  | $    | 339   |      |  | $        | 317   |  |  |  | 7   | 
|                                      |  |      |       |      |  |          |       |  |  |  |     | 
|Cash operating costs per ounce        |  |      | 170   |      |  |          | 155   |  |  |  | 10  | 
|Royalties                             |  |      | 6     |      |  |          | 6     |  |  |  |    | 
|Production taxes                      |  |      | 1     |      |  |          | 1     |  |  |  |    | 
|                                      |  |      |       |      |  |          |       |  |  |  |     | 
|Total cash costs per ounce            |  |      | 1771  |      |  |          | 162   |  |  |  | 9   | 
|Amortization and reclamation          |  |      | 91    |      |  |          | 85    |  |  |  | 7   | 
|                                      |  |      |       |      |  |          |       |  |  |  |     | 
|Total production costs per ounce      |  | $    | 268   |      |  | $        | 247   |  |  |  | 9   | 
|                                      |  |      |       |      |  |          |       |  |  |  |     | 
|Capital expenditures (millions)       |  | $    | 228   |      |  | $        | 474   |  |  |  | -52 | 
|Mineral reserves (millions of ounces) |  |      | 86.9  |      |  |          | 82.3  |  |  |  | 6   | 
|                                      |  |      |       |      |  |          |       |  |  |  |     | 



---

1 See non-GAAP measures page 60.


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

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

OUTLOOK

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

For 2003, we expect to
produce between 5.4 and 5.5
million ounces at a cash
cost of $180 to $190 per
ounce. Including
amortization, total
production costs for the
year are expected to be
between $275 and $285 per
ounce. Our forward sales
program provides us with the
ability to sell our
production at a minimum
selling price of $340 per
ounce for 2003; however, as
our objective is to maximize
the value of every ounce we
produce, we plan to sell our
production at the higher of
the spot price or our
forward price.

BARRICK ANNUAL REPORT 2002          15



---



##### 



We expect administration
costs to be approximately
$70 million, with
exploration and business
development in the $100 to
$110 million range. Our
projections assume the
expensing of all of Alto
Chicamas and a portion of
Veladeros development
costs. Interest expense is
expected to be about $70
million (including accretion
expense). Based on $350 per
ounce gold, our tax rate is
expected to be between 15%
and 20%; at $400 per ounce
gold, our tax rate would
increase to 25% to 30%.

We plan to begin
implementing our development
program in 2003, increasing
capital expenditures to
approximately $380 to $390
million from a sustaining
capital level of $228
million last year, with the
increase aimed at starting
construction at the Veladero
and Cowal projects. In
addition to the steady
stream of free cash flow
generated by our existing
operations, we bring the
strength of our balance
sheet  with $1-billion in
cash and low levels of debt  to provide the financial
base to proceed with these
projects.

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

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

The consolidated financial
statements have been
prepared based on United
States reserves standards.
Our reserves for United
States reporting purposes
are the same as our reserves
for Canadian reporting
purposes with the exception
of two projects (Veladero
and Alto Chicama), which we
expect to qualify as
reserves for United States
reporting purposes within
the next twelve months.

16          BARRICK ANNUAL REPORT 2002



---



##### 



INCOME STATEMENT

GOLD SALES

Revenue for 2002 totaled
$1,967 million on gold sales
of 5.8 million ounces,
compared with $1,989 million
on gold sales of 6.3 million
ounces in 2001. 2002 gold
sales were approximately
100,000 ounces higher than
2002 production, reflecting
the impact of ounces
produced at the end of 2001
but not sold until 2002. The
marginally lower 2002
revenue compared to the
prior year resulted from an
8% decrease in gold sales,
partially offset by a $22
per ounce, or 7%, increase
in the average realized
price. The lower gold sales
in 2002 relate to the
planned closure of five
mines during the year due to
the depletion of their
economic reserves. With the
exception of one further
mine closure in 2004, our
existing operations should
continue to produce at
similar levels for the next
several years.

In 2002, gold prices rose to
their highest level since
1997, averaging
$310 per ounce, compared to
2001, when gold averaged
$271 per ounce. Higher spot
gold prices, combined with
deliveries into our forward
sales program, allowed us to
realize an average price of
$339 per ounce compared to
an average realized price of
$317 per ounce in 2001. The
forward sales program
generated $168 million in
additional revenue in 2002
and $289 million in
additional revenue in 2001.
The decline in additional
revenue generated through
our forward sales program in
2002 was due to higher gold
prices, reducing the amount
of the premium over the spot
price from $76 per ounce in
2001 to $42 per ounce in
2002.

As we saw in 2002 when spot
gold prices rise toward our
higher forward sale price,
the additional revenue
earned through the program
decreases. When spot gold
prices rise above our
forward sale price, as
occurred in early 2003, we
can sell all of our gold
production at the higher
spot price and defer
delivery of our forward
sales contracts to a future
date. While the value of our
reserves and cash flows
increase as spot gold prices
rise, the unrealized
mark-to-market loss on our
program also rises. The
mark-to-market value
declined from an unrealized
gain of $356 million at the
end of 2001 to an unrealized
loss of $639 million at the
end of 2002. The decline in
the mark-to-market value is
primarily due to increasing
spot gold prices (year end

(GOLD SALES BY COUNTRY BAR GRAPH)

BARRICK ANNUAL REPORT 2002          17



---



##### 



spot gold prices, 2002  $347 compared to 2001  $279) and the realization of
$168 million of additional
contract revenue during
2002, partially offset by
unrealized gains on changes
in forward gold price
differentials (or contango),
which are influenced
principally by changes in
interest and gold lease
rates and premiums (US
interest rates less gold
lease rates) earned during
the year. For additional
detail see Off-Balance Sheet
Arrangements  Significance
of mark-to-market gains and
losses page 57.

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

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

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

(GROSS OPERATING COSTS BAR GRAPH)

18          BARRICK ANNUAL REPORT 2002



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##### 



OPERATIONS REVIEW BY GEOGRAPHIC AREA

As noted in the Highlights,
2002 production decreased to
5.7 million ounces from 6.1
million ounces in 2001, with
lower production in 2002 due
largely to the planned
phase-out of five mines over
the course of the year as
economic reserves were
depleted. Total operating
costs, including
reclamation, were similar
over the two years, at
$1,071 million in 2002 and
$1,080 million in 2001.
However, on a per ounce
basis, total cash costs for
the year increased to $177,
from $162 in 2001. Higher
cash costs were attributable
to three main factors:

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

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

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

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

With the closure of six
mines over the past 15
months and our new projects
not expected to begin to
contribute to production
until 2005, we anticipate
lower production in 2003 and
2004. Production for 2003 is
expected to be between 5.4
and 5.5 million ounces, at a
cash cost of between $180
and $190 per ounce.
Following is a summary of
each of our mines and
development projects. For a
more detailed discussion of
our operations and
development projects see the
most current Annual
Information Form (AIF  on
file with the securities
regulatory authorities in
Canada and the US).

(PRODUCTION BY CONTINENT PIE CHART)

BARRICK ANNUAL REPORT 2002          19



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##### 



NORTH AMERICAN PROPERTIES

|  |  |                                                 
|- |  | ------------------------------------------------
|> |  | Goldstrike, Nevada 
     Betze-Post 
     Meikle
|  |  |                                                 
|> |  | Round Mountain, Nevada                          
|  |  |                                                 
|> |  | Eskay Creek, British Columbia                   
|  |  |                                                 
|> |  | Hemlo, Ontario                                  
|  |  |                                                 
|> |  | Holt-McDermott, Ontario                         

NORTH AMERICA

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

GOLDSTRIKE PROPERTY (NEVADA)

|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|--------------------------------- |  | ---- | ------- | ---- |  | -------- | ------- |  |  |  | --- | 
|For the year ended December 31,   |  | 2002 |         | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |         |      |  |          |         |  |  |  |     | 
|                                 
|Tons Mined (000s)                |  |      | 144,533 |      |  |          | 155,606 |  |  |  | -7  | 
|Tons Processed (000s)            |  |      | 11,960  |      |  |          | 10,562  |  |  |  | 13  | 
|Grade Processed (ounces per ton)  |  |      | 0.20    |      |  |          | 0.25    |  |  |  | -20 | 
|Gold Production(000s of ounces)  |  |      | 2,050   |      |  |          | 2,263   |  |  |  | -9  | 
|Mineral Reserves(000s of ounces) |  |      | 19,939  |      |  |          | 20,379  |  |  |  | -2  | 
|                                 
|FINANCIAL STATISTICS              |  |      |         |      |  |          |         |  |  |  |     | 
|                                 
|Production cost per ounce         |  |      |         |      |  |          |         |  |  |  |     | 
|Cash operating costs              |  | $    | 209     |      |  | $        | 183     |  |  |  | 14  | 
|Royalties and production taxes    |  |      | 9       |      |  |          | 10      |  |  |  | -10 | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Total cash costs                  |  |      | 218     |      |  |          | 193     |  |  |  | 13  | 
|Amortization and reclamation      |  |      | 74      |      |  |          | 60      |  |  |  | 23  | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Total production costs            |  | $    | 296     |      |  | $        | 253     |  |  |  | 17  | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Capital Expenditures (millions)   |  | $    | 46      |      |  | $        | 122     |  |  |  | -62 | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 

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

While the Property has
matured, it replaced 80% of
production in 2002 through
reserve expansion in both
the open pit (1.3 million
ounces) and the underground
(642,000 ounces), its best
showing since 1999.
Overall, the Property is
expected to continue to
produce at the 2 million
ounce level for at least
the next four years. Cash
costs are expected to
remain relatively
constant. With the large
capital program

20      BARRICK ANNUAL REPORT 2002



---



##### 



completed, the Property
contributes the majority of the free cash flow from our existing
operations  free cash flow that will play a key role in funding our
exploration program and developing our new generation of mines.

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

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

BETZE-POST MINE

|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|--------------------------------- |  | ---- | ------- | ---- |  | -------- | ------- |  |  |  | --- | 
|For the year ended December 31,   |  | 2002 |         | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |         |      |  |          |         |  |  |  |     | 
|                                 
|Tons Mined (000s)                |  |      | 142,898 |      |  |          | 154,233 |  |  |  | -7  | 
|Tons Processed (000s)            |  |      | 10,322  |      |  |          | 9,187   |  |  |  | 12  | 
|Grade Processed (ounces per ton)  |  |      | 0.16    |      |  |          | 0.20    |  |  |  | -20 | 
|Gold Production(000s of ounces)  |  |      | 1,410   |      |  |          | 1,550   |  |  |  | -9  | 
|Mineral Reserves(000s of ounces) |  |      | 16,051  |      |  |          | 16,433  |  |  |  | -2  | 
|                                 
|FINANCIAL STATISTICS              |  |      |         |      |  |          |         |  |  |  |     | 
|                                 
|Production cost per ounce         |  |      |         |      |  |          |         |  |  |  |     | 
|Cash operating costs              |  | $    | 221     |      |  | $        | 207     |  |  |  | 7   | 
|Royalties and production taxes    |  |      | 7       |      |  |          | 8       |  |  |  | -14 | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Total cash costs                  |  |      | 228     |      |  |          | 215     |  |  |  | 6   | 
|Amortization and reclamation      |  |      | 58      |      |  |          | 52      |  |  |  | 12  | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Total production costs            |  | $    | 286     |      |  | $        | 267     |  |  |  | 7   | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 
|Capital Expenditures (millions)   |  | $    | 12      |      |  | $        | 32      |  |  |  | -63 | 
|                                  |  |      |         |      |  |          |         |  |  |  |     | 

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

Proven and probable gold
reserves at Betze-Post
decreased to 16.1 million
ounces from 16.4 million
ounces in 2001. The partial
reserve replacement

BARRICK ANNUAL REPORT 2002          21



---



##### 



in 2002 was due to lower
unit mining and processing
costs, which allowed the
conversion of a small
underground reserve into a
larger open pit reserve, as
well as the discovery of
lower-grade material at the
pit bottom last year.

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

MEIKLE MINE

|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|--------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | 
|For the year ended December 31,   |  | 2002 |       | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |       |      |  |          |       |  |  |  |     | 
|                                 
|Tons Mined (000s)                |  |      | 1,635 |      |  |          | 1,372 |  |  |  | 19  | 
|Tons Processed (000s)            |  |      | 1,638 |      |  |          | 1,375 |  |  |  | 19  | 
|Grade Processed (ounces per ton)  |  |      | 0.43  |      |  |          | 0.56  |  |  |  | -23 | 
|Gold Production(000s of ounces)  |  |      | 640   |      |  |          | 713   |  |  |  | -10 | 
|Mineral Reserves(000s of ounces) |  |      | 3,888 |      |  |          | 3,946 |  |  |  | -1  | 
|                                 
|FINANCIAL STATISTICS              |  |      |       |      |  |          |       |  |  |  |     | 
|                                 
|Production cost per ounce         |  |      |       |      |  |          |       |  |  |  |     | 
|Cash operating costs              |  | $    | 184   |      |  | $        | 133   |  |  |  | 38  | 
|Royalties and production taxes    |  |      | 14    |      |  |          | 14    |  |  |  |    | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Total cash costs                  |  |      | 198   |      |  |          | 147   |  |  |  | 35  | 
|Amortization and reclamation      |  |      | 121   |      |  |          | 74    |  |  |  | 64  | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Total production costs            |  | $    | 319   |      |  | $        | 221   |  |  |  | 44  | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Capital Expenditures (millions)   |  | $    | 34    |      |  | $        | 90    |  |  |  | -62 | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 

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

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

22          BARRICK ANNUAL REPORT 2002



---



##### 



As a result, the mine focused on
improving planning and scheduling
during the year to ensure a more
stable production plan going forward.

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

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

ROUND MOUNTAIN MINE (NEVADA)

|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|---------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |        | 2001 |  | % Change
|                                  
|OPERATIONAL STATISTICS             |  |      |        |      |  |          |        |  |  |  |     | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Tons Mined (000s)                 |  |      | 63,146 |      |  |          | 70,243 |  |  |  | -10 | 
|Tons Processed (000s)             |  |      | 62,222 |      |  |          | 58,660 |  |  |  | 6   | 
|Grade Processed (ounces per ton)   |  |      | 0.019  |      |  |          | 0.017  |  |  |  | 9   | 
|Gold Production (000s of ounces)  |  |      | 755    |      |  |          | 747    |  |  |  | 1   | 
|Gold Production (Barricks share)  |  |      |        |      |  |          |        |  |  |  |     | 
|(000s of ounces)                  |  |      | 378    |      |  |          | 373    |  |  |  | 1   | 
|Mineral Reserves (000s of ounces) |  |      | 1,875  |      |  |          | 2,245  |  |  |  | -16 | 
|                                  
|FINANCIAL STATISTICS               |  |      |        |      |  |          |        |  |  |  |     | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Production
cost per ounce          |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs               |  | $    | 172    |      |  | $        | 176    |  |  |  | -2  | 
|Royalties and production taxes     |  |      | 15     |      |  |          | 11     |  |  |  | 36  | 
|                                   |  |      |        |      |  |         
|Total cash costs                   |  |      | 187    |      |  |          | 187    |  |  |  |    | 
|Amortization and reclamation       |  |      | 69     |      |  |          | 62     |  |  |  | 11  | 
|                                   |  |      |        |      |  |         
|Total production costs             |  | $    | 256    |      |  | $        | 249    |  |  |  | 3   | 
|                                   |  |      |        |      |  |         
|Capital Expenditures (millions)    |  | $    | 8      |      |  | $        | 15     |  |  |  | -47 | 
|                                   |  |      |        |      |  |         

BARRICK ANNUAL REPORT
2002     23



---



##### 



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

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

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

ESKAY CREEK MINE (BRITISH COLUMBIA)

|                                    |  |      |        |      |  |          |        |  |  |  |     | 
|----------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,     |  | 2002 |        | 2001 |  | % Change
|                                   
|OPERATIONAL STATISTICS              |  |      |        |      |  |          |        |  |  |  |     | 
|                                    |  |      |        |      |  |          |        |  |  |  |     | 
|Tons Mined (000s)                  |  |      | 254    |      |  |          | 230    |  |  |  | 10  | 
|Tons Processed (000s)              |  |      | 256    |      |  |          | 229    |  |  |  | 12  | 
|Grade Processed (ounces per ton)    |  |      | 1.50   |      |  |          | 1.55   |  |  |  | -3  | 
|Grade  Silver (ounces per ton)     |  |      | 72.18  |      |  |          | 71.07  |  |  |  | 2   | 
|Gold Production (000s of ounces)   |  |      | 359    |      |  |          | 321    |  |  |  | 12  | 
|Silver Production (000s of ounces) |  |      | 17,763 |      |  |          | 15,454 |  |  |  | 15  | 
|Mineral Reserves (000s of ounces)  |  |      | 1,430  |      |  |          | 1,775  |  |  |  | -19 | 
|                                   
|FINANCIAL STATISTICS                |  |      |        |      |  |          |        |  |  |  |     | 
|                                    |  |      |        |      |  |          |        |  |  |  |     | 
|Production cost per ounce           |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs                |  | $    | 36     |      |  | $        | 46     |  |  |  | -22 | 
|Royalties and production taxes      |  |      | 4      |      |  |          | 3      |  |  |  | 33  | 
|                                    |  |      |        |      |  |         
|Total cash costs                    |  |      | 40     |      |  |          | 49     |  |  |  | -18 | 
|Amortization and reclamation        |  |      | 134    |      |  |          | 127    |  |  |  | 6   | 
|                                    |  |      |        |      |  |         
|Total production costs              |  | $    | 174    |      |  | $        | 176    |  |  |  | -1  | 
|                                    |  |      |        |      |  |         
|Capital Expenditures (millions)     |  | $    | 8      |      |  | $        | 10     |  |  |  | -20 | 
|                                    |  |      |        |      |  |         

24     BARRICK ANNUAL REPORT 2002



---



##### 



Eskay Creek had its best year for
production despite lower grades
and a strike at one of the mines
key third-party smelters. Production
increased 12% in 2002 as cash costs
decreased by 18%. The increase in
production and lower cash costs were
primarily the result of a 10% increase
in tons mined and an increase in silver
by-product credits.

To mitigate the impact of the third-
party smelter strike which began in
July 2002, the mine optimized its
milling capacity, increasing throughput
(by 12%), re-sequenced the mining
efforts to source higher grade ore, and
arranged for increased sales to its other
main smelter. Though the labor strike
continues, shipments of ore and concentrate in late 2002 and early 2003
were close to pre-strike levels, and we
anticipate being able to sustain these
rates through the balance of this year,
even without a labor strike settlement.
Proven and probable gold reserves at
Eskay decreased to 1.4 million from 1.8
million ounces due to production during
the year. A development ramp was completed during the year to follow up on
encouraging exploration results. Future
reserve expansion is most likely to come
from this program. In addition, the surface program generated positive results,
with follow-up scheduled in 2003.

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

BARRICK ANNUAL REPORT
2002     25



---



##### 



HEMLO PROPERTY (ONTARIO)

|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|--------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | 
|For the year ended December 31,   |  | 2002 |       | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |       |      |  |          |       |  |  |  |     | 
|                                 
|Tons Mined (000s)                |  |      | 3,785 |      |  |          | 3,893 |  |  |  | -3  | 
|Tons Processed (000s)            |  |      | 3,812 |      |  |          | 3,849 |  |  |  | -1  | 
|Grade Processed (ounces per ton)  |  |      | 0.149 |      |  |          | 0.167 |  |  |  | -11 | 
|Gold Production (100%)            |  |      |       |      |  |          |       |  |  |  |     | 
|(000s of ounces)                 |  |      | 538   |      |  |          | 632   |  |  |  | -15 | 
|Gold Production (Barricks share) |  |      |       |      |  |          |       |  |  |  |     | 
|(000s of ounces)                 |  |      | 269   |      |  |          | 307   |  |  |  | -12 | 
|Mineral Reserves(000s of ounces) |  |      | 2,118 |      |  |          | 2,517 |  |  |  | -16 | 
|                                 
|FINANCIAL STATISTICS              |  |      |       |      |  |          |       |  |  |  |     | 
|                                 
|Production cost per ounce         |  |      |       |      |  |          |       |  |  |  |     | 
|Cash operating costs              |  | $    | 216   |      |  | $        | 189   |  |  |  | 14  | 
|Royalties and production taxes    |  |      | 8     |      |  |          | 7     |  |  |  | 14  | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Total cash costs                  |  |      | 224   |      |  |          | 196   |  |  |  | 14  | 
|Amortization and reclamation      |  |      | 40    |      |  |          | 36    |  |  |  | 11  | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Total production costs            |  | $    | 264   |      |  | $        | 232   |  |  |  | 14  | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 
|Capital Expenditures (millions)   |  | $    | 6     |      |  | $        | 6     |  |  |  |    | 
|                                  |  |      |       |      |  |          |       |  |  |  |     | 

Hemlo, of which we own a 50 percent
interest, is a joint venture comprised
of the David Bell and Williams underground mines and the Williams open
pit. In 2002, production declined (by
12%) while cash costs increased (by
14%) to $224 per ounce. The lower production and higher costs were primarily
due to ground control problems that
began early in 2002 and resulted in
restricted access to some high-grade
areas and increased dilution levels. A
revised mine sequence, new backfill
methods and improved planning should
provide the foundation for more secure
and predictable results from the underground operation in the future.

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

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

26     BARRICK ANNUAL REPORT 2002



---



##### 



HOLT-MCDERMOTT MINE (ONTARIO)

|                                  |  |      |      |      |  |          |      |  |  |  |      | 
|--------------------------------- |  | ---- | ---- | ---- |  | -------- | ---- |  |  |  | ---- | 
|For the year ended December 31,   |  | 2002 |      | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |      |      |  |          |      |  |  |  |      | 
|                                 
|Mine                              |  |      |      |      |  |          |      |  |  |  |      | 
|Tons Mined (000s)                |  |      | 520  |      |  |          | 489  |  |  |  | 6    | 
|Tons Processed (000s)            |  |      | 520  |      |  |          | 497  |  |  |  | 5    | 
|Grade Processed (ounces per ton)  |  |      | 0.17 |      |  |          | 0.18 |  |  |  | -4   | 
|Gold Production(000s of ounces)  |  |      | 84   |      |  |          | 84   |  |  |  |     | 
|Mineral Reserves(000s of ounces) |  |      | 154  |      |  |          | 293  |  |  |  | -47  | 
|                                 
|FINANCIAL STATISTICS              |  |      |      |      |  |          |      |  |  |  |      | 
|                                 
|Production cost per ounce         |  |      |      |      |  |          |      |  |  |  |      | 
|Cash operating costs              |  | $    | 173  |      |  | $        | 163  |  |  |  | 6    | 
|Royalties and production taxes    |  |      |     |      |  |          | 2    |  |  |  | -100 | 
|                                  |  |      |      |      |  |          |      |  |  |  |      | 
|Total cash costs                  |  |      | 173  |      |  |          | 165  |  |  |  | 5    | 
|Amortization and reclamation      |  |      | 96   |      |  |          | 93   |  |  |  | 3    | 
|                                  |  |      |      |      |  |          |      |  |  |  |      | 
|Total production costs            |  | $    | 269  |      |  | $        | 258  |  |  |  | 4    | 
|                                  |  |      |      |      |  |          |      |  |  |  |      | 
|Capital Expenditures (millions)   |  | $    | 7    |      |  | $        | 7    |  |  |  |     | 
|                                  |  |      |      |      |  |          |      |  |  |  |      | 

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

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

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

BARRICK ANNUAL REPORT 2002     27



---



##### 



SOUTH AMERICA

>Home of Barricks second-largest cash flow generator, the Pierina mine.

>Three development projects that make up the majority of our current
pipeline:

>Our recently discovered Alto Chicama Property in Peru.

>Our largest development project, the Pascua-Lama and Veladero
district, straddling the Chilean and Argentinean border.

>Large grass roots exploration programs in Peru and Argentina.

PIERINA MINE (PERU)

|                                  |  |      |        |      |  |          |        |  |  |  |     | 
|--------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,   |  | 2002 |        | 2001 |  | % Change
|                                 
|OPERATIONAL STATISTICS            |  |      |        |      |  |          |        |  |  |  |     | 
|                                 
|Mine                              |  |      |        |      |  |          |        |  |  |  |     | 
|Tons Mined (000s)                |  |      | 32,311 |      |  |          | 30,742 |  |  |  | 5   | 
|Leach  Tons to pad (000s)       |  |      | 13,414 |      |  |          | 10,968 |  |  |  | 22  | 
|Grade Processed (ounces per ton)  |  |      | 0.080  |      |  |          | 0.097  |  |  |  | -18 | 
|Gold Production(000s of ounces)  |  |      | 898    |      |  |          | 911    |  |  |  | -1  | 
|Mineral Reserves(000s of ounces) |  |      | 3,602  |      |  |          | 4,748  |  |  |  | -24 | 
|                                 
|FINANCIAL STATISTICS              |  |      |        |      |  |          |        |  |  |  |     | 
|                                 
|Production cost per ounce         |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs              |  | $    | 80     |      |  | $        | 40     |  |  |  | 100 | 
|Royalties and production taxes    |  |      |       |      |  |          |       |  |  |  |    | 
|                                  |  |      |        |      |  |          |        |  |  |  |     | 
|Total cash costs                  |  |      | 80     |      |  |          | 40     |  |  |  | 100 | 
|Amortization and reclamation      |  |      | 191    |      |  |          | 195    |  |  |  | -2  | 
|                                  |  |      |        |      |  |          |        |  |  |  |     | 
|Total production costs            |  | $    | 271    |      |  | $        | 235    |  |  |  | 15  | 
|                                  |  |      |        |      |  |          |        |  |  |  |     | 
|Capital Expenditures (millions)   |  | $    | 5      |      |  | $        | 12     |  |  |  | -58 | 
|                                  |  |      |        |      |  |          |        |  |  |  |     | 

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

At year end 2002, proven and probable
reserves declined to 3.6 million ounces
of gold, as the mine did not replace
2002 production. The 2002 exploration
program identified a resource south and
southeast of the pit, targets located
near surface at the north end of the pit,
as well as one adjacent to the final wall
of the south end of the pit, all of which
are scheduled for follow-up in 2003. Any
positive exploration results would likely
only extend the mine life marginally
past its remaining mine life of five years.

28     BARRICK ANNUAL REPORT 2002



---



##### 



In 2003, production and total cash
costs are expected to rise marginally
to 908,000 ounces at $86 per ounce.
Grades mined are expected to decline
by 5%, but should be more than offset
by a 22% increase in tons mined.
Beginning in 2004, the mine is expected
to move to lower grades in the open
pit, resulting in lower production and
marginally higher cash costs.

ALTO CHICAMA PROJECT (PERU)

In April 2002, we announced a significant discovery at our Alto Chicama
Property. The initial inferred resource
at the time of the announcement was
estimated at 3.5 million ounces of gold.
As a result of drilling during the course
of the year, 6.5 million ounces were
brought into probable reserves for
Canadian reporting purposes1. In addition, we have 2 million ounces in the
measured and indicated resource
category and 1 million ounces of
inferred resource for a total reserve
and resource of 9.5 million ounces
of gold (as of January 31, 2003).

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

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

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

PASCUA-LAMA AND VELADERO PROJECTS (CHILE/ARGENTINA)

Veladero

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



---

1 For United States reporting purposes, Industry Guide 7 (under the
Securities Exchange Act of 1934) as interpreted by the Staff of the U.S.
Securities and Exchange Commission applies different standards in order to
classify mineralization as a reserve. Accordingly, Alto Chicama is classified
as mineralized material for U.S. reporting purposes.


BARRICK ANNUAL REPORT
2002     29



---



##### 



Definition drilling during the year
expanded the reserves (for Canadian
reporting purposes) for the two pits
to 9.4 million ounces1, compared
to 8.4 million in 2001. Between these
two pits is a third mineralized zone,
Cuatro Esquinas, which provides
future exploration potential.

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

Pascua-Lama

In late 2000, a decision was made
to postpone construction start-up at
Pascua-Lama, based on the then low
gold and silver price environment.
Now, with the inclusion of nearby
Veladero in the portfolio (as a result of
our Homestake merger) and the higher
gold price environment, Pascua-Lama
is expected to commence production
in 2008, subject to final permitting,
completing optimization of the feasibility
study and arranging any project
financing. Over the past year, work on
Pascua-Lama has been directed at
further optimization of the development
plan to reduce the capital and operating
cost structure. With the completion of
the Veladero feasibility study, we are
now in a position to evaluate synergies
in terms of infrastructure, administrative
support and construction activities.
The mine is planned as an open pit, centered at an elevation of 4,600 meters.
The majority of the gold is expected to
come from oxide ores in the first several
years of operation. As deeper sulfide
ores are encountered, a flotation circuit
is expected to be added to maintain
recovery rates. On the processing front,
Pascua-Lamas metallurgy is challenging, but based on the extensive work
we have done to date, we believe we can
successfully process the various ores
Pascua-Lama presents. While the property is located very high in the Andes,
the altitude is not dissimilar to our
former El Indio/Tambo operations in
Chile or several large copper mines.

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

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



---

|1 |  | For United States reporting purposes, Industry Guide 7 (under the Securities
Exchange Act of 1934) as interpreted by the Staff of the U.S. Securities and
Exchange Commission applies different standards in order to classify mineralization
as a reserve. Accordingly, Veladero is classified as mineralized material for U.S.
reporting purposes.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30     BARRICK ANNUAL REPORT 2002



---



##### 



AFRICA

>Tanzania (East Africa) represents Barricks African expansion.

>Bulyanhulu completed its first full year of production in 2002.

>A significant land position in the Lake Victoria goldfields of northern
Tanzania with a large and active exploration program.

>Geology in the Lake Victoria area is similar to the gold belts in
Northern Ontario and Quebec and Western Australia, two of the most        successful gold
producing regions of the world.

BULYANHULU MINE (TANZANIA)

|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|---------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |        | 2001 |  | % Change
|                                  
|OPERATIONAL STATISTICS             |  |      |        |      |  |          |        |  |  |  |     | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Mine                               |  |      |        |      |  |          |        |  |  |  |     | 
|Tons Mined (000s)                 |  |      | 944    |      |  |          | 455    |  |  |  | 107 | 
|Tons Processed (000s)             |  |      | 1,075  |      |  |          | 778    |  |  |  | 38  | 
|Grade Processed (ounces per ton)   |  |      | 0.39   |      |  |          | 0.38   |  |  |  | 2   | 
|Gold
Production (000s of ounces)  |  |      | 356    |      |  |          | 242    |  |  |  | 47  | 
|Mineral
Reserves (000s of ounces) |  |      | 11,653 |      |  |          | 12,009 |  |  |  | -3  | 
|                                  
|FINANCIAL STATISTICS               |  |      |        |      |  |          |        |  |  |  |     | 
|                                  
|Production
cost per ounce          |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs               |  | $    | 190    |      |  | $        | 186    |  |  |  | 2   | 
|Royalties and production taxes     |  |      | 8      |      |  |          | 11     |  |  |  | -27 | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Total cash costs                   |  |      | 198    |      |  |          | 197    |  |  |  | 1   | 
|Amortization and reclamation       |  |      | 102    |      |  |          | 98     |  |  |  | 4   | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Total
production costs             |  | $    | 300    |      |  | $        | 295    |  |  |  | 2   | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Capital Expenditures (millions)    |  | $    | 56     |      |  | $        | 153    |  |  |  | -63 | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 

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

BARRICK ANNUAL REPORT
2002     31



---



##### 



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

For 2003, production is expected to
increase to 415,000 ounces (up 16%)
as total cash costs decline to $175 per
ounce, reflecting a full year of expected
better grades and recovery rates.
The mining and processing rates
are expected to rise with both the
September 2002 completion of the
mine-shaft, allowing ore and waste to
be transported faster than the current
ramp system and the installation of a
second tailings pipeline.

TANZANIAN EXPLORATION UPDATE

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

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

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

32     BARRICK ANNUAL REPORT 2002



---



##### 



AUSTRALIA

>Second-largest-producing region for the Company.

>Two key assets:

>Yilgarn District, comprised of three mines (Plutonic, Darlot and
Lawlers)

>Kalgoorlie Super Pit, Australias largest gold mine  50 percent
interest

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

AUSTRALIAN PROPERTIES

>Yilgarn District

Plutonic

Darlot

Lawlers

>Kalgoorlie

>Cowal

PLUTONIC MINE (WESTERN AUSTRALIA)

|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|---------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |        | 2001 |  | % Change
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|OPERATIONAL STATISTICS             |  |      |        |      |  |          |        |  |  |  |     | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Open Pit Tons Mined (000s)        |  |      | 13,233 |      |  |          | 11,328 |  |  |  | 17  | 
|U/G Tons Mined (000s)             |  |      | 1,056  |      |  |          | 806    |  |  |  | 31  | 
|Tons Processed (000s)             |  |      | 3,532  |      |  |          | 3,496  |  |  |  | 1   | 
|Grade Processed (ounces per ton)   |  |      | 0.097  |      |  |          | 0.091  |  |  |  | 7   | 
|Gold
Production (000s of ounces)  |  |      | 307    |      |  |          | 288    |  |  |  | 7   | 
|Mineral Reserves (000s of ounces) |  |      | 2,533  |      |  |          | 1,588  |  |  |  | 60  | 
|                                  
|FINANCIAL STATISTICS               |  |      |        |      |  |          |        |  |  |  |     | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Production
cost per ounce          |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs               |  | $    | 175    |      |  | $        | 159    |  |  |  | 10  | 
|Royalties and production taxes     |  |      | 9      |      |  |          | 7      |  |  |  | 29  | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Total cash costs                   |  |      | 184    |      |  |          | 166    |  |  |  | 11  | 
|Amortization and reclamation       |  |      | 38     |      |  |          | 45     |  |  |  | -16 | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Total production costs             |  | $    | 222    |      |  | $        | 211    |  |  |  | 5   | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 
|Capital Expenditures (millions)    |  | $    | 20     |      |  | $        | 11     |  |  |  | 82  | 
|                                   |  |      |        |      |  |          |        |  |  |  |     | 

Plutonic, the largest of the three
Yilgarn District mines, consists of both
open pit and underground operations.
2002 production increased (by 7%)
over 2001, while total cash costs
increased (by 11%) to $184 per ounce.
Production was lower and costs higher
due to delays in meeting the timetable
for mining the new higher-grade under-
ground Timor zone. To substitute for
the lower underground production,
the mine accelerated production
of higher-cost open pit ore and
low-grade stockpiles.

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

BARRICK ANNUAL REPORT
2002     33



---



##### 



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

DARLOT MINE (WESTERN AUSTRALIA)

|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|---------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |       | 2001 |  | % Change
|                                  
|OPERATIONAL STATISTICS             |  |      |       |      |  |          |       |  |  |  |     | 
|                                  
|Tons Mined (000s)                 |  |      | 840   |      |  |          | 794   |  |  |  | 6   | 
|Tons Processed (000s)             |  |      | 849   |      |  |          | 806   |  |  |  | 5   | 
|Grade Processed (ounces per ton)   |  |      | 0.176 |      |  |          | 0.161 |  |  |  | 9   | 
|Gold
Production (000s of ounces)  |  |      | 145   |      |  |          | 125   |  |  |  | 16  | 
|Mineral
Reserves (000s of ounces) |  |      | 1,269 |      |  |          | 1,341 |  |  |  | -5  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|FINANCIAL STATISTICS               |  |      |       |      |  |          |       |  |  |  |     | 
|                                  
|Production
cost per ounce          |  |      |       |      |  |          |       |  |  |  |     | 
|Cash operating costs               |  | $    | 160   |      |  | $        | 167   |  |  |  | -4  | 
|Royalties and production taxes     |  |      | 8     |      |  |          | 6     |  |  |  | 27  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Total cash costs                   |  |      | 168   |      |  |          | 173   |  |  |  | -3  | 
|Amortization and reclamation       |  |      | 47    |      |  |          | 46    |  |  |  | 3   | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Total
production costs             |  | $    | 215   |      |  | $        | 219   |  |  |  | -2  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Capital Expenditures (millions)    |  | $    | 7     |      |  | $        | 11    |  |  |  | -36 | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 

DARLOT

2002 production at Darlot
increased (by 16%) over
2001, while total cash costs
declined (by 3%) to $168 per
ounce, primarily due to
higher throughput and higher
grades. The mine replaced
half of its production in
2002, finishing the year
with approximately 1.3
million ounces of proven and
probable reserves. Based on
its current reserve base,
the mine has a remaining
mine life of about 10 years.

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

LAWLERS

Production at Lawlers
increased (by 9%) over 2001,
at a cash cost of $179 per
ounce, 6% lower than the
prior year mainly due to an
increase in grades processed
(15%). The mine replaced
production in 2002,
finishing the year with
about 500,000 ounces of
proven and probable
reserves. Based on its
current reserve base,
Lawlers has about five years
remaining in its mine life.
An extensive 2003
exploration program
will test deeper extensions
to the ore body.

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

34          BARRICK ANNUAL REPORT 2002



---



##### 



LAWLERS MINE (WESTERN AUSTRALIA)

|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|---------------------------------- |  | ---- | ----- | ---- |  | -------- | ----- |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |       | 2001 |  | % Change
|                                  
|OPERATIONAL STATISTICS             |  |      |       |      |  |          |       |  |  |  |     | 
|                                  
|Open Pit Tons Mined (000s)        |  |      | 4,030 |      |  |          |      |  |  |  | 100 | 
|U/G Tons Mined (000s)             |  |      | 716   |      |  |          | 628   |  |  |  | 14  | 
|Tons Processed (000s)             |  |      | 718   |      |  |          | 775   |  |  |  | -7  | 
|Grade Processed (ounces per ton)   |  |      | 0.162 |      |  |          | 0.141 |  |  |  | 15  | 
|Gold
Production (000s of ounces)  |  |      | 113   |      |  |          | 104   |  |  |  | 9   | 
|Mineral
Reserves (000s of ounces) |  |      | 509   |      |  |          | 505   |  |  |  | 1   | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|FINANCIAL STATISTICS               |  |      |       |      |  |          |       |  |  |  |     | 
|                                  
|Production
cost per ounce          |  |      |       |      |  |          |       |  |  |  |     | 
|Cash operating costs               |  | $    | 171   |      |  | $        | 184   |  |  |  | -7  | 
|Royalties and production taxes     |  |      | 8     |      |  |          | 7     |  |  |  | 14  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Total cash costs                   |  |      | 179   |      |  |          | 191   |  |  |  | -6  | 
|Amortization and reclamation       |  |      | 42    |      |  |          | 52    |  |  |  | -19 | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Total
production costs             |  | $    | 221   |      |  | $        | 243   |  |  |  | -9  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 
|Capital Expenditures (millions)    |  | $    | 7     |      |  | $        | 5     |  |  |  | 40  | 
|                                   |  |      |       |      |  |          |       |  |  |  |     | 

KALGOORLIE MINE (WESTERN AUSTRALIA)

|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|---------------------------------------------------- |  | ---- | ------ | ---- |  | -------- | ------ |  |  |  | --- | 
|For the year ended December 31,                      |  | 2002 |        | 2001 |  | % Change
|                                                    
|OPERATIONAL STATISTICS                               |  |      |        |      |  |          |        |  |  |  |     | 
|                                                    
|Open Pit Tons Mined (000s)                          |  |      | 91,843 |      |  |          | 91,248 |  |  |  | 1   | 
|U/G Tons Mined (000s)                               |  |      | 805    |      |  |          | 1,353  |  |  |  | -40 | 
|Tons Processed (000s) (100%)                        |  |      | 14,101 |      |  |          | 13,192 |  |  |  | 7   | 
|Grade Processed (ounces per ton)                     |  |      | 0.061  |      |  |          | 0.066  |  |  |  | -8  | 
|Gold
Production (100%)
(000s of ounces)             |  |      | 720    |      |  |          | 769    |  |  |  | -6  | 
|Gold
Production (Barricks share)

(000s of ounces) |  |      | 360    |      |  |          | 385    |  |  |  | -6  | 
|Mineral
Reserves (000s of ounces)                   |  |      | 5,551  |      |  |          | 5,724  |  |  |  | -3  | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|FINANCIAL STATISTICS                                 |  |      |        |      |  |          |        |  |  |  |     | 
|                                                    
|Production
cost per ounce                            |  |      |        |      |  |          |        |  |  |  |     | 
|Cash operating costs                                 |  | $    | 215    |      |  | $        | 196    |  |  |  | 10  | 
|Royalties and production taxes                       |  |      | 7      |      |  |          | 7      |  |  |  |    | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|Total cash costs                                     |  |      | 222    |      |  |          | 203    |  |  |  | 9   | 
|Amortization and reclamation                         |  |      | 57     |      |  |          | 49     |  |  |  | 16  | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|Total
production costs                               |  | $    | 279    |      |  | $        | 252    |  |  |  | 11  | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 
|Capital Expenditures (millions)                      |  | $    | 14     |      |  | $        | 19     |  |  |  | -26 | 
|                                                     |  |      |        |      |  |          |        |  |  |  |     | 

BARRICK ANNUAL REPORT
2002          35



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##### 



2002 production at the
Kalgoorlie joint venture
(50%) was 6% lower than in
the prior year, while total
cash costs were 9% higher,
due primarily to lower
grades (down 8%) and
recovery rates (off 2%). The
Mt. Charlotte underground
deposit was originally
scheduled for closure at the
end of 2001, but remained
open, contributing 63,200 ounces
(Barricks share) to total
production in 2002. Mt.
Charlotte is not budgeted
for production in 2003, but
is still mining residual ore
that may prolong its life by
a few months.

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

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

COWAL PROJECT (NEW SOUTH WALES)

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

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

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

36          BARRICK ANNUAL REPORT 2002



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##### 



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

OTHER PROPERTIES

Other Properties include
five mines (El Indio,
Bousquet, McLaughlin, Ruby
Hill and Agua de la Falda)
that were closed during the
year due to the depletion of
reserves, as well as the
Marigold mine in Nevada, in
which we have a 33% interest
and which remains in
operation. In 2002, our
Other Properties produced
374,774 ounces of gold, 7%
of our production, at an
average total cash cost of
$189 per ounce, compared to
721,771 ounces at total cash
costs of $198 per ounce in
the prior year.

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

|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|---------------------------------- |  | ---- | --- | ---- |  | -------- | ----- |  |  |  | --- | 
|For the year ended December 31,    |  | 2002 |     | 2001 |  | % Change
|                                  
|OPERATIONAL STATISTICS             |  |      |     |      |  |          |       |  |  |  |     | 
|                                  
|Gold Production (000s of ounces)  |  |      | 375 |      |  |          | 722   |  |  |  | -48 | 
|Mineral Reserves (000s of ounces) |  |      | 678 |      |  |          | 1,100 |  |  |  | -38 | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|FINANCIAL STATISTICS               |  |      |     |      |  |          |       |  |  |  |     | 
|                                  
|Production
cost per ounce         
|Cash operating costs               |  | $    | 180 |      |  | $        | 195   |  |  |  | -8  | 
|Royalties and production taxes     |  |      | 9   |      |  |          | 3     |  |  |  | 200 | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|Total cash costs                   |  |      | 189 |      |  |          | 198   |  |  |  | -5  | 
|Amortization and reclamation       |  |      | 50  |      |  |          | 84    |  |  |  | -40 | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|Total
production costs             |  | $    | 239 |      |  | $        | 282   |  |  |  | -15 | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 
|Capital Expenditures (millions)    |  | $    | 15  |      |  | $        | 2     |  |  |  | 650 | 
|                                   |  |      |     |      |  |          |       |  |  |  |     | 

BARRICK ANNUAL REPORT
2002          37



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##### 



COSTS AND EXPENSES

EXPLORATION AND BUSINESS DEVELOPMENT

Our exploration strategy is
to maintain a geographic mix
of projects at different
stages in the exploration
process. Our early stage
exploration effort focuses
on four major areas where we
possess significant
infrastructure: Peru,
Tanzania, Australia and
Chile/Argentina.

Gold Reserves Graph

> Exploration and Business Development Expense

|                           |                       |   |       |    |      |   |      |    |  |   |     |    | 
|-------------------------- | --------------------- | - | ----- | -- | ---- | - | ---- | -- |  | - | --- | -- | 
|                           |                       |   | 2003E |    | 2002 |   | 2001
|                           |                       |   |       |    |      |   |     
|North America              |                       | $ | 17    |    |      | $ | 13   |    |  | $ | 17  |   
|Australia                  |                       |   | 11    |    |      |   | 8    |    |  |   | 8   |   
|South
America             
|                           | Veladero              |   |       | 10 |      |   |      | 20 |  |   |     | 44 | 
|                           | Alto Chicama district |   |       | 31 |      |   |      | 29 |  |   |     |   | 
|                           | Other                 |   |       | 9  |      |   |      | 8  |  |   |     | 7  | 
|Africa                     |                       |   | 8     |    |      |   | 9    |    |  |   | 9   |   
|Other/Business Development |                       |   | 24    |    |      |   | 17   |    |  |   | 18  |   
|                           |                       |   |       |    |      |   |      |    |  |   |     |   
|                           |                       | $ | 110   |    |      | $ | 104  |    |  | $ | 103 |   
|                           |                       |   |       |    |      |   |      |    |  |   |     |   

In 2002, our most
significant expenditures
were incurred at our
Veladero and Alto Chicama
projects. At the beginning
of 2002, our plan assumed
that Veladero would achieve
reserve status during the
year. During 2002, we
concluded that greater
certainty was required in
connection with certain
matters to warrant
presentation as a reserve
under SEC rules. As a
result, we expensed costs
incurred throughout 2002. We
expect Veladero to achieve
reserve status under SEC
rules during 2003. Until the
project achieves this status, we
will expense costs incurred,
totaling about $10 million.

Following our exploration
success at Alto Chicama in
2002, we increased our
initial exploration budget
from $5 million, with
actual expenditures for the
year reaching $29 million.
For 2003, we expect to
spend $31 million to
advance the project, which
will be expensed as the
resource does not yet
qualify as a reserve for
U.S. reporting purposes.

AMORTIZATION

Amortization totaled $519
million ($85 per ounce) in
2002, compared to $501
million or $76 per ounce in
2001. The overall increase
in amortization expense was
caused by a rise in
amortization charges per
ounce at some mines, offset
by an 8% decrease in the
number of ounces sold.

38BARRICK ANNUAL REPORT 2002





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##### 



The overall increase in
amortization per ounce in
2002 reflects two main
factors: a change in the mix
of gold sales at our mines,
with a greater proportion of
sales coming from mines with
higher amortization rates,
and higher amortization of
$17 million at Meikle. The
completion of construction
of Rodeo in 2001 and the
reduction of proven and
probable reserves at the
beginning of 2002 raised
Meikles amortization
expense per ounce from $72
to $119 in 2002.

For 2003, amortization is
expected to increase to
$533 million, or $95 per
ounce. A large part of this
increase is due to the low
amortization rates at mines
that closed in 2002, with
the remainder being mainly
a function of the changing
mix of production and
capital additions. Beyond
2003, we expect
amortization to be in the
$80 to $90 per ounce range,
depending on the extent of
exploration success at our
operating mines. Our new
development projects are
expected to have
amortization rates of
between $50 and $75 per
ounce, which could bring
our overall per ounce
amortization charge down
over time.

We are presently reviewing
recent regulatory and
accounting developments in
the preferred practice for
amortizing underground
development costs. Once we
finalize our review, we may
modify our amortization
policy, which will result in
changes to amortization
charges for 2003 and beyond.
At this point, we have yet to
estimate the impact of any
potential changes.

Amortization Graph

ADMINISTRATION

In 2002, administration
costs decreased by $22
million to $64 million. We
achieved administrative
savings of about $27
million, reflecting the
synergies of integrating
Barrick and Homestake, but
this was partially offset by
a $3 million compensation
expense for our restricted
share unit plan, and a $3
million increase in World
Gold Council fees. World
Gold Council fees totaled
$13 million in 2002. For
2003, administration costs
are expected to be about $70
million.

In 2002, we recorded a
pension benefit expense of
$2 million (2001  $6
million credit, excluding
benefit enhancement charges
of $39 million related to
the Homestake merger). We do
not expect that our future
earnings will be
significantly affected by
our existing defined benefit
pension plans due to the
relatively small size of the
plans. Also, most members in
these plans are no longer
actively employed by us, and
have therefore ceased
earning benefits under the
plans.

BARRICK ANNUAL REPORT 2002          39





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##### 



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

INTEREST EXPENSE

We incurred $59 million in
interest costs and financing
charges in 2002, related
mainly to our debentures and
our Bulyanhulu project
financing. Overall, our
effective interest rate
declined slightly in 2002 to
7.2%, from 7.3% in 2001. In
2002, we expensed interest
of $57 million and
capitalized $2 million to
mine development activities
at Cowal. In 2001, we
expensed $25 million and
capitalized $42 million to
development and construction
activities at Pascua-Lama,
Bulyanhulu and Rodeo.

Interest Charges Graph

We use interest rate swaps
to manage the effective
rates of interest we pay on
our long-term debt. On $250
million of our $500 million
debentures, we have
converted the fixed 7.5%
interest rate to a floating
rate through 2007, taking
advantage of low market
interest rates. Through this
strategy, we managed to
reduce the effective rate on
this portion of the
debentures to 5.7% in 2002.
On our Bulyanhulu financing,
we have taken advantage of
the present low interest
rates to fix the interest
rate for the term of the
debt at a rate of about 7%.
For 2003, we expect to incur
a similar amount of interest
as in 2002, but interest
expense is expected to
decline to about $49 million
after capitalizing about $10
million at Cowal and
Veladero.

MERGER AND RELATED COSTS

The cost of completing the
2001 merger with Homestake
of $117 million was recorded
in 2001 earnings. In 2002,
cash payments of merger and
related costs totaled $50
million. Other amounts
totaling $10 million were
settled through pension plan
enhancements. We also
recorded a small adjustment
to the accrual of $2 million
in 2002 earnings that
reflects the difference
between actual and estimated
costs.

LITIGATION COSTS

On January 15, 2002 the
Supreme Court of British
Columbia ruled in favor of
Inmet Mining Corporation and
against Homestake Canada
Inc. (HCI) in connection
with litigation relating to
the proposed sale of the
Troilus gold mine to HCI in
1997. The judgement, which
we have appealed, was for
$59 million, and we recorded
a provision for this amount
in 2001. We expect a
judgement to be rendered on
our appeal in 2004.

INTEREST AND OTHER INCOME

Interest and other income
decreased slightly to $29
million in 2002 from $32
million in 2001. The
decrease primarily reflects
$8 million lower interest
income on cash balances,
mainly due to declining
interest rates, partially
offset by foreign currency
translation losses which
totaled $10 million in
2001.

In 2002, we earned an
effective interest rate on
our cash of 3.4% compared
to 5.3% in 2001. The
decrease in the effective
rate in 2002

40          BARRICK ANNUAL REPORT 2002



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##### 



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

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

> Non-Hedge Derivative Gains (Losses)

|                                  |  |      |     |      |  |   |     |  
|--------------------------------- |  | ---- | --- | ---- |  | - | --- | -
|(millions)                        |  | 2002 |     | 2001
|                                  |  |      |     |     
|Commodity contracts               |  | $    | (2  | )    |  | $ | 57  |  
|Currency contracts                |  |      | 8   |      |  |   | (15 | )
|Interest and lease rate contracts |  |      | (12 | )    |  |   | (9  | )
|                                  |  |      |     |      |  |   |     |  
|                                  |  | $    | (6  | )    |  | $ | 33  |  
|                                  |  |      |     |      |  |   |     |  

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

Commodity Contracts

In 2001, gains of $57
million on written call
options outstanding at that
time were mainly due to
changes in spot gold
prices. In 2002, we did not
have a significant call
option position outstanding
and incurred net losses of
$2 million.

Currency Contracts

Gains on currency
contracts in 2002 were
mainly caused by the
impact of a strengthening
Australian dollar on
non-hedge contracts.
Losses in 2001 were due to
changes in both the
Canadian and Australian
dollar. At the end of
2002, we held foreign
currency contracts with
notional amounts of A$83
million and C$26 million,
which do not qualify for
hedge accounting
treatment. The contracts
act as an economic hedge,
but do not meet the strict
FAS 133 criteria for hedge
accounting treatment, due
to a mismatch in the
timing of contract
maturities and the
forecasted expenditures.
These contracts are being
marked-to-market through
earnings.

Interest and Lease Rate Contracts

Losses on interest and lease
rate swaps in 2002 were $12
million (2001  $9 million
loss). The losses were
primarily related to our
total return swaps and were
largely the result of the
widening of credit spreads
over yields on government
securities. During 2002, we
closed out substantially all
of the total return swaps,
so our future results will
not be significantly
affected by these contracts.
At the end of 2002, we held
pay-fixed US dollar interest
rate swaps with notional
amounts of $150 million
(2001  $275 million) and
receive-fixed gold lease
rate swaps with notional
amounts of 6.4 million
ounces or about $2 billion
(2001  6.2 million ounces).
Both are being marked-to-market
through earnings. These gold
lease rate swaps represent
all of our current gold
lease rate exposure.

BARRICK ANNUAL REPORT 2002          41



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##### 



INCOME TAXES

In 2002, we recorded a tax
credit of $16 million
compared to a credit of $14
million in 2001. In fourth
quarter 2002, we recorded a
tax credit of $22 million,
mainly reflecting the
resolution of certain tax
uncertainties. Excluding the
credit recorded in fourth
quarter 2002, our relatively
low effective tax rate is
mainly because a significant
portion of our earnings are
generated in a low tax-rate
jurisdiction. We have also
begun to realize the benefit
of tax synergies from the
Homestake merger through the
integration of our North
American operations.

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

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

STATEMENT OF COMPREHENSIVE INCOME

Comprehensive income
consists of net income or
loss, together with certain
other economic gains and
losses that are
collectively described as
other comprehensive
income and are excluded
from the income statement.

In 2002, other comprehensive
income included: losses of
$21 million arising on
translation of the
financial statements of our
Argentinean subsidiaries due
to the devaluation of the
Argentinean Peso; unrealized
gains of $28 million arising
on interest rate swaps and
foreign currency contracts
that are accounted for as
cash flow hedges; and the
transfer of $21 million of
gains on these cash flow
hedges to earnings in the
year.

In 2001, other comprehensive
income included losses of
$26 million arising on
translation of the financial
statements of our Australian
subsidiaries due to the
devaluation of the
Australian dollar; and the
transfer of losses of $25
million on cash flow hedges
to earnings in 2001. After
the merger with Homestake in
2001, changes in
circumstances indicated that
the functional currency of
our Australian subsidiaries
is the United States dollar,
which means that, for 2002
and beyond, the financial
statements of our Australian
subsidiaries are translated
at historic exchange rates
rather than current market
rates. Therefore,
translation of these
subsidiaries financial
statements no longer results
in the recognition of
unrealized gains and losses
in other comprehensive
income.

42          BARRICK ANNUAL REPORT 2002



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##### 



LIQUIDITY & CAPITAL RESOURCES

LIQUIDITY

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

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

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

Like most financial
contracts, our revolving
credit facility and our gold
sales contracts require us
to comply with certain
financial covenants. These
covenants include: (a)
Maintaining a minimum
consolidated tangible net
worth of over $2.0 billion
(our consolidated net worth
as at December 31, 2002 was
over $3.3 billion); and (b)
Maintaining a maximum
long-term debt to
consolidated net worth ratio
below 1.5:1 (the ratio as at
December 31, 2002 was under
0.25:1). The calculation of
net worth excludes the
unrealized mark-to-market
gain or loss on our
derivative instruments and
gold sales contracts.

Cash and Short-Term Investments Graph

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

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

BARRICK ANNUAL REPORT 2002          43



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##### 






STATEMENTS OF CASH FLOWS

Our consolidated cash and equivalents
totaled $1,044 million at the end
of 2002, up from $574 million at the
end of 2001. The main reasons for the
increase in 2002 were the maturity
of term deposits totaling $159 million,
and free cash flow generated in the
year of $361 million1 (2001  $114 million; 2000  $230 million). The increase
in free cash flow is mainly due to lower
capital expenditures in 2002 compared
with prior years. Our free cash flow will
be reduced by capital expenditures
relating to our development plan over
the next few years.

OPERATING ACTIVITIES



Our operating cash flow is significantly
affected by the volume of gold sales,
as well as realized gold prices and cash
operating costs. In 2002, our average
realized gold price per ounce sold
increased by $22, although this was
offset by a $15 per ounce increase
in total cash operating costs. Overall,
our operating cash flow remained
similar to 2001, due to the combined
effect of a variety of factors, including:
increased cash margins in 2002 (defined
as gold sales less cash operating costs),
which generated extra operating cash
flow of about $40 million, combined
with a $34 million inflow due to
reduced inventory levels offset by lower
sales volumes that reduced operating
cash flow by about $25 million; and
an increase in cash payments for
reclamation and closure costs by
$35 million, mainly at inactive mines.


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

INVESTING ACTIVITIES



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


Capital expenditures decreased by
$246 million in 2002 to $228 million.
In 2002, expenditures were mainly for
sustaining capital and underground
development. Higher expenditures
in the previous two years were mainly
due to: underground development at
Meikle and Rodeo (2001  $90 million;
2000  $80 million); construction
of the Bulyanhulu Mine (2001  $153
million; 2000  $203 million); and
higher levels of development activity
at Pascua-Lama (2001  $69 million;
2000  $107 million).

For 2003, we expect to spend a total
of $386 million, including $218 million
for sustaining capital, which is similar
to 2002, and $168 million on our
development plan ($123 million at
Veladero, $34 million at Cowal,
$11 million at Alto Chicama).

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

1Defined as operating cash flow less capital expenditures - see Reconciliation of Free Cash Flow page 61.

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FINANCING ACTIVITIES



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


The most significant financing cash
flows in 2002 were $83 million received
on the exercise of employee stock
options and dividend payments totaling
$119 million, which were $26 million
higher than in 2001. We also made
scheduled payments under our
long-term debt obligations totaling
$25 million in 2002.

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

CONSOLIDATED BALANCE SHEET



Working Capital




Our non-cash working capital position
was largely unchanged from 2001.
Inventories declined by $34 million
as gold sales exceeded production
in 2002, which was offset by an increase
in derivative assets included in current
assets reflecting higher unrealized
gains on cash flow hedge contracts,
and an increase in accounts receivable
by $12 million.


Capitalized Mining Costs



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


Other Assets



The increase resulted from the
inclusion of deferred tax assets totaling
$45 million in 2002, and an increase
in derivative assets reflecting higher
unrealized gains on cash flow
hedge contracts.


STATEMENT OF SHAREHOLDERS EQUITY



Shareholders equity increased by
$142 million in 2002. The increase is
mainly attributable to net income of
$193 million and an increase in capital
stock by $86 million (from the exercise
of employee stock options), offset by
dividends totaling $119 million.


FINANCIAL RISK MANAGEMENT

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

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

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

GOLD AND SILVER PRICE RISK

We manage our exposure to volatility
in gold prices through our forward
sales contracts. A detailed discussion
of the nature of these contracts, how
we use them in our business, and the
historic benefits we have derived from
them is included on page 54.

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

INTEREST RATE RISK

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

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

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

Like all fixed price sales
contracts with future fixed
cash flows, the mark-to-market value of our
existing gold sales
contracts is affected by
changes in the



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forward price of gold, which
in turn is affected by
market US dollar interest
rates and gold lease rates.
As we explain on page 57,
the mark-to-market value is
not recorded on our balance
sheet, and it does not
affect the level of our
future earnings or cash
flows.

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

As disclosed in note 23 to our financial
statements, we enter into gold lease
rate swaps as part of our overall gold
price optimization strategy. Because
these gold lease rate swaps include
fixed US dollar cash flows, changes
in the fair value of these swaps (which
flow through earnings each period)
are affected by changes in US dollar
interest rates. Changes in US dollar
interest rates affect only the mark-to-market value of these gold lease
rate swaps, and do not impact the
actual cash flows arising on the swaps.

FOREIGN CURRENCY EXCHANGE RISK



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


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

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

ENERGY PRICE RISK



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


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|                                               |  |                            |     |                     |  |    |  | 
|---------------------------------------------- |  | -------------------------- | --- | ------------------- |  | -- |  | 
|                                               |  | Electricity                |     | Diesel             
|                                               |  |                            |     |                    
|Quantity consumed in 2002                      |  | 1.9 billion kilowatt hours |     | 1.3 million
barrels
|Cost (dollars)                                 |  | $0.06 per kilowatt hour    |     | $38 per
barrel1    
|Impact on total cash costs per ounce (dollars) |  |                            | $20 |                     |  | $9 | 

1 Includes transportation and refining charges

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

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

DERIVATIVES RISK



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


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

Market liquidity risk is the risk that a
derivative position cannot be eliminated
quickly, by either liquidating derivative
instruments or by establishing an
offsetting position. Under the terms of
our trading agreements with counterparties, the counterparties cannot
require us to immediately settle
outstanding contracts, unless we breach
any financial covenants (see page 55).
We mitigate market liquidity risk by
spreading out the maturity of our
derivative instruments over time.
This ensures that the size of positions
maturing is such that for commodity
contracts we are able to physically
deliver gold and silver against the
contracts, and for other contracts the
relevant markets for currencies and
interest rates will be able to absorb
the contracts.

Mark-to-market risk is the risk that
an adverse change in market prices for
commodities, currencies or interest
rates will affect our financial condition.
We have mitigated this risk by
establishing trading agreements with
counterparties under which we are not
required to post any collateral or make
any margin calls on our derivative
instruments. Also, the counterparties
cannot require settlement of a derivative
solely because of an adverse change
in the mark-to-market value. We enter
into derivative instruments to act
as economic hedges of underlying
exposure to commodity prices, foreign



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currency exchange rates and
interest rates that arise in
the normal course of our
business. Consequently, for
most of the derivative instruments
we use, changes in the
mark-to-market value do
not affect earnings.

CRITICAL ACCOUNTING ESTIMATES

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



|> | amortization of property, plant and
equipment;                                                 
|- | -----------------------------------------------------------------------------------------------
| 
|> | impairment assessments of long-lived
assets;                                                   
| 
|> | mine reclamation and closure costs;                                                            
| 
|> | the measurement and recognition of
valuation allowances against deferred
income tax assets; and
| 
|> | contingencies.                                                                                 

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

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

PROPERTY, PLANT AND EQUIPMENT



Property, plant and
equipment and capitalized
mining costs, which totaled
$3.6 billion at December 31,
2002, represent a
significant portion of our
assets (68%). Due to the
large size of these assets,
the application of our
accounting policies for
these assets has a material
impact on our reported
earnings.


AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT



We capitalize mine
development and construction
costs incurred at a property
after we have identified
proven and probable
reserves. Upon commencement
of gold production, we
amortize these costs over
the expected life of the
property, based on proven
and probable reserves and
other factors.


The process of estimating
quantities of gold reserves
is complex, requiring
significant decisions in the
evaluation of all available
geological, geophysical,
engineering and economic
data. The data for a given
ore body may also change
substantially over time as a
result of numerous factors,
including, but not limited
to, additional development
activity, evolving
production history and the
continual reassessment of
the viability of production
under various economic
conditions.

A material revision
(upward or downward) to
existing reserve estimates
could occur because of,
among other things:
revisions to geological
data

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or assumptions; a change in
the assumed gold prices; and
the results of drilling and
exploration activities. We
make every effort to ensure
that reported reserve
estimates represent the most
accurate assessment possible
However, because of the
subjective decisions we have
to make, as well as
variances in available data
for each ore body, these
estimates are generally
uncertain.

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

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

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

|            |  |                                      |    |                                |  |   |    | 
|----------- |  | ------------------------------------ | -- | ------------------------------ |  | - | -- | 
|            |  | Impact of a 10% change in gold       |    | Impact on earnings, based on  
|            |  | reserves on amortization (per ounce) |    | ounces sold in 2002 (millions)
|            |  |                                      |    |                               
|Pierina     |  | $                                    | 18 |                                |  | $ | 16 | 
|Meikle      |  |                                      | 12 |                                |  |   | 8  | 
|Eskay Creek |  |                                      | 13 |                                |  |   | 5  | 
|Bulyanhulu  |  |                                      | 10 |                                |  |   | 4  | 
|            |  |                                      |    |                                |  |   |    | 

IMPAIRMENT ASSESSMENTS OF LONG-LIVED ASSETS

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


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



|> | the quantity of gold
reserves at our mines;
|- | -------------------------------------------



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

In 2000 we recorded a $1.6
billion provision to reduce
the carrying values of
various assets. With the
recent rise in spot gold
prices, the current
likelihood of a significant
impairment at our operating
mines has diminished. Based
on a long-term gold price of
$300 per ounce and our gold
mineral reserves at December
31, 2002, we have completed
a sensitivity analysis that
indicates that a 10%
decrease in net cash flows
resulting from a combination
of a lower spot gold price
and an increase in operating
and capital costs at each of
our properties would not
result in the recognition of
a provision for impairment.

RECLAMATION AND CLOSURE COSTS



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


We estimate that future site
reclamation and closure
obligations will be $169
million at our closed mines
and $292 million at our
operating mines. At December
31, 2002, we had fully
accrued for the future costs
at our closed mines ($169
million), and we had accrued
$133 million for our current
operating mines. Based on our
existing accounting policy, the
remaining $159 million for our
operating mines will be accrued over
their estimated lives, based on the
units of production method as gold
is produced and sold. Changes in
estimated costs are recognized
prospectively as a revision to future
cost accruals. On adoption of FAS 143
in 2003, we will recognize these
liabilities at fair value on our balance
sheet, with a corresponding adjustment
to the carrying amount of the related
assets that give rise to these obligations. Our financial statements will
continue to be materially affected by
our estimates of reclamation and
closure costs.

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

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

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As described in note 2 to our financial
statements, effective January 1, 2003,
we will adopt FAS 143, Accounting for
Asset Retirement Obligations, which
addresses financial accounting and
reporting for obligations associated
with the retirement of tangible long-lived assets and the associated asset
retirement costs. In summary, FAS 143
requires us to record the fair value
of legal liabilities for asset retirement
obligations in the period in which they
are incurred. When a liability is initially
recorded, we will capitalize the cost
by increasing the carrying amount
of the related long-lived asset. Over
time, the liability will be increased each
period to reflect the interest element
(accretion) reflected in its initial
measurement at fair value, and the
capitalized cost is amortized over the
useful life of the related asset. While
FAS 143 will not change the amounts
spent on these activities, it will affect
the timing of recognition of amounts
on our balance sheet and in our
income statement.

VALUATION ALLOWANCES AGAINST DEFERRED TAX ASSETS

For each deferred tax asset,
we evaluate the likelihood of
whether some portion or all
of the asset will not be
realized. This evaluation is
based on, among other things,
expected levels of future
taxable income. If, based on
the weight of available
evidence, we determine that
it is more likely than not (a
likelihood of more than 50
percent) that all or some
portion of a deferred tax
asset will not be realized,
then we record a valuation
allowance against it. As of
December 31, 2002, we have
recorded a valuation
allowance of $476 million on
a portion of our net deferred
tax assets totaling $497
million.

|                |  |                     |     | 
|--------------- |  | ------------------- | --- | 
|(millions)      |  | Valuation allowance
|                |  |                    
|United States   |  | $                   | 173 | 
|Chile/Argentina |  |                     | 120 | 
|Tanzania        |  |                     | 85  | 
|Canada          |  |                     | 67  | 
|Australia       |  |                     | 24  | 
|Other           |  |                     | 7   | 
|                |  |                     |     | 
|                |  | $                   | 476 | 
|                |  |                     |     | 

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



|> | In the United States,
Chile and Argentina,
valuation allowances
relate to tax assets in
subsidiaries that do not
have any present sources
of income against which
to utilize the assets.
In the event these
subsidiaries have
sources of income in the
future, we may be able
to reduce the level of
valuation allowances
recorded.                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|> | In Canada,
substantially all of
the valuation
allowances relate to
capital losses that
will only be utilized
if we realize any
capital gains in the
future.                                                                                                                                                                                                                                                                                                                                     
| 
|> | In Australia, the
valuation allowances
relate to operating
losses in subsidiaries
that have had a history
of losses over the last
three years. In the
event there is a
sustained upward
movement in the price
of gold or other
factors occur that
increase the
profitability of these
subsidiaries over the
next few years, we may
reduce the level of
valuation allowances
against these assets.                                                                                               
| 
|> | In Tanzania, the tax
legislation provides
for a compounding of
unused tax depreciation
which results in an
additional deduction
for tax purposes for
amounts spent on
property, plant and
equipment. After
considering the effect
of this compounding,
and the expected levels
of future taxable
income at the
Bulyanhulu Mine, we
recorded a valuation
allowance against the
portion of the deferred
tax assets that we
believe will more than
likely not be realized.
In the event that
levels



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| | of future taxable income
at Bulyanhulu are higher
than we presently expect,
which could be because of
a number of factors,
including a sustained
upward movement in gold
prices, operating
efficiencies or the
discovery of additional
reserves, we may reduce
the level of valuation
allowances against these
assets.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

CONTINGENCIES

We account for contingencies
in accordance with FAS 5,
Accounting for
Contingencies. FAS 5
requires us to record an
estimated loss for a loss
contingency when information
available indicates that it
is probable that an asset
has been impaired or a
liability has been incurred,
and the amount of the loss
can be reasonably estimated.
By their nature,
contingencies will only be
resolved when one or more
future events occur or fail
to occur  and typically
those events will occur a
number of years in the
future. We assess such
contingent liabilities,
which inherently involves
the exercise of significant
management judgment and
estimates of the outcome of
future events.

Income tax contingencies

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

As described in note 22 to our financial
statements, we have recorded current
and deferred income tax liabilities
of $141 million for the cost arising
from the denial by the Peruvian tax
authorities (SUNAT) of our right to
revalue the Pierina mining concession.
This reduction on the Pierina cost base
for tax purposes results in a temporary
timing difference between income for
tax and accounting purposes, and the
recognition of liabilities for income
taxes under our accounting policy for
income taxes. We have appealed this
decision, a process that we expect to
take several years. Until the appeal is
resolved, we will not be required to
make any payments of this incremental
tax liability. However, if at the end of
the appeal process we are unsuccessful,
we will be required to pay SUNAT the
additional taxes owing at that time.
Through the end of 2002, the impact on
current income taxes payable amounts
to $41 million, and this current part will
continue to increase each year up to
the full $141 million over the remaining
life of the mine.

We have not recorded any
potential interest and
penalties, currently
estimated at $51 million
based on the SUNAT
assessment, because we
believe that it is not
probable that these amounts
are payable to SUNAT. 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 settled. In the
event that we are
unsuccessful in our appeal
of the assessment of
interest and penalties in
Peru, based on the amounts
potentially payable at the
end of 2002, we would
recognize a charge of about
$51 million ($0.09 per
share).

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Legal contingencies

As described in note 22 to
our financial statements, we
are involved in claims and
legal proceedings, the
resolution of which could
have a material effect on
our financial condition or
future results of
operations. In assessing
these contingencies, we
evaluated the perceived
merits of the legal
proceedings or unasserted
claims, as well as the
perceived merits of the
amount of relief sought or
that we expect to seek.

Inmet Litigation

As disclosed in note 22 to
our financial statements, we
have accrued the amount of
judgement awarded to Inmet,
and in August 2002 we posted
a letter of credit for C$95
million pending a decision
on our appeal. We expect to
receive a decision on our
appeal in 2004, at which
time, if we are
unsuccessful, we will be
required to satisfy the
judgement.

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

OFF-BALANCE SHEET ARRANGEMENTS

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

GOLD SALES CONTRACTS

Overview

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

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

These contracts meet the US GAAP
definition of a derivative, but because
they qualify for the normal sales
exception under FAS 133, they are not
recorded on our balance sheet at fair
value. Instead, we account for these
agreements as sales contracts with the
proceeds under the contract recorded
as revenue at the date we physically
deliver gold to the counterparties.

Forward Sales Postion - 2002



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Under these contracts:



|> | We can deliver gold to
meet our commitments at
any time we choose over
periods of up to 10 or
15 years. We have the
flexibility over this
period to sell our
production in either
the spot gold market or
through these
contracts. Generally,
our strategy is to sell
our gold production in
the spot market if the
market price exceeds
the price under our
sales agreements.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|> | We are not subject to
any margin calls,
regardless of the
price of gold.                                                                                                                                                                                                                                                                                                      
| 
|> | There are no
credit downgrade
provisions in
these contracts.                                                                                                                                                                                                                                                                                                                  
| 
|> | We carefully manage credit exposure
to our counterparties under these
contracts. Generally, the counterparties have credit ratings of AA,
and any credit exposure is spread
over the 19 counterparties.                                                                                                                                                                     
| 
|> | We regularly review our gold sales
commitments to ensure that we have
the gold mineral reserves and future
gold production that substantially
exceed our contract commitments.                                                                                                                                                                                                

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

>   Revenues from Forward Sales Contracts

|                                                                                     |  |      |       |      |  |      |       |  |  |   |       | 
|------------------------------------------------------------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                                                                     |  | 2002 |       | 2001 |  | 2000
|                                                                                     |  |      |       |      |  |     
|Total revenues from contract sales (millions)                                        |  | $    | 1,401 |      |  | $    | 1,307 |  |  | $ | 1,341 | 
|Average contract selling price ($/oz)                                                |  | $    | 352   |      |  | $    | 347   |  |  | $ | 365   | 
|Average spot price ($/oz)                                                            |  | $    | 310   |      |  | $    | 271   |  |  | $ | 279   | 
|Incremental revenues from contracts in
excess of average spot gold prices (millions) |  | $    | 168   |      |  | $    | 289   |  |  | $ | 315   | 
|                                                                                     |  |      |       |      |  |      |       |  |  |   |       | 

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

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

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KEY CONTRACT TERMS AND CONDITIONS

Spot deferred sales contracts

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

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

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

Beyond the dates that contango
is presently fixed, future premiums
earned under the spot deferred
contracts will be based on market
contango rates at that time, for those
future periods until the actual delivery
date. In the event gold lease rates are
higher than US dollar interest rates, the

Historical 3-Month gold Lease Rates



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premium becomes negative (known
as backwardation). Over the past five
years, backwardation has occurred only
once, and only for a period of two days.

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

Variable price sales contracts

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

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

Significance of mark-to-market gains and losses

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

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The mark-to-market value represents
a calculation of the fair value of the
contracts at a point in time, based

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

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

The estimated fair value of the gold
contracts at December 31, 2002 was
approximately negative $639 million,
and the fair value of silver contracts
was $7 million positive. The most
significant factors affecting this mark-to-market value are spot gold prices
and market contango rates. The
mark-to-market value of our gold
sales contracts would approach zero
(breakeven) at a spot gold price of
approximately $310 per ounce, assuming all other variables are constant.
The fair value of our foreign currency
contracts at December 31, 2002
was $25 million positive. The value
of gold contracts is based on the
net present value of cash flows under
the contracts, based on a gold spot
price of $347 per ounce and market
rates for LIBOR and gold lease rates.
The year-to-date change in the fair
value of our gold contracts is detailed
as follows:

> Continuity Schedule of the
Change in the Mark-to-Market Value of our Gold Sales Contract Position (millions)

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



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CONTRACTUAL OBLIGATIONS AND COMMITMENTS

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

Long-term debt

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

Reclamation and closure costs

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

Under our present accounting policy,
we accrue these costs on an undiscounted basis, using the units of
production method over the life of each
mine. After closure, changes to future
cost estimates are recorded in earnings
as they occur. The liability recorded
on our balance sheet under this accounting policy represents the difference
between costs accrued to date and
actual payments made. On January 1,
2003, we will adopt FASB Statement
No. 143, Asset Retirement Obligations.
Under FAS 143, we will record our legal
obligations for reclamation and closure
costs at each balance sheet date
at their fair value on January 1, 2003,
resulting in an increase in the obligations
by $32 million.

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

Power Purchase Agreements

We enter into contracts to purchase
power at each of our operating mines.
The contracts provide for fixed prices,

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which in certain circumstances are
adjusted for inflation. Some agreements
obligate us to purchase fixed quantities
per hour, seven days a week, while
others are based on a percentage
of actual consumption. These contracts
extend through various dates in 2004
to 2007.

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

COMMITMENTS

Royalties

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

Payments to maintain land tenure
and mineral property rights

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

NON GAAP MEASURES

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



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RECONCILIATION OF CASH COSTS PER OUNCE

|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(in millions of US dollars except per ounce amounts) |  | 2002 |       | 2001 |  | 2000
|                                                     |  |      |       |      |  |     
|Operating costs per financial statements             |  | $    | 1,071 |      |  | $    | 1,080 |   |  | $ | 950   |  
|Reclamation,
closure and other costs1                |  |      | (43   | )    |  |      | (60   | ) |  |   | (50   | )
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Operating costs for per ounce calculation            |  | $    | 1,028 |      |  | $    | 1,020 |   |  | $ | 900   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Ounces sold (thousands)                              |  |      | 5,805 |      |  |      | 6,278 |   |  |   | 5,794 |  
|Total cash costs per ounce                           |  | $    | 177   |      |  | $    | 162   |   |  | $ | 155   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  



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

RECONCILIATION OF FREE CASH FLOW

|                                                     |  |      |     |      |  |      |     |  |  |   |     | 
|---------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|(in millions of US dollars except per ounce amounts) |  | 2002 |     | 2001 |  | 2000
|                                                     |  |      |     |      |  |     
|Free cash flow                                       |  | $    | 361 |      |  | $    | 114 |  |  | $ | 230 | 
|Capital expenditures and mine development costs      |  |      | 228 |      |  |      | 474 |  |  |   | 612 | 
|                                                     |  |      |     |      |  |      |     |  |  |   |     | 
|Operating cash flow                                  |  | $    | 589 |      |  | $    | 588 |  |  | $ | 842 | 
|                                                     |  |      |     |      |  |      |     |  |  |   |     | 

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| | B A R R I C K   A N N U A L   R E P O R T   2 0 0 2 | 61