##### 



Exhibit
3
 
  Contents
 
 Our Business
    
    
    30Core Business
    
    
    30Vision and Strategy
    
    
    31Capability to Deliver Results
    
    
    32Key Economic Trends
    
    
    34Operations Review
    
    
    40Executive Overview and 2006 Outlook
    
    
    40Consolidated Gold Production and Sales
    
    
    43Total Cash Costs Performance Measures
    
    
    44Results of Operating Segments
    
    
    45Other Costs and Expenses
    
    
    50Quarterly Information
    
    
    54Liquidity, Capital Resources and Financial Position
    
    
    55Cash Flow
    
    
    55Liquidity
    
    
    57Financial Position
    
    
    58Contractual Obligations and Commitments
    
    
    59Financial Instruments
    
    
    60Off-Balance Sheet Arrangements
    
    
    61Critical Accounting Policies and Estimates
    
    
    65Cautionary Statement on Forward-Looking Information
    
    
    73Glossary of Technical Terms
    
    
    74
 
  n
    
    Our Business  a general description of
our core business; our vision and strategy; our
capability to deliver results; and key economic
trends in our present business environment.n
    
    Operations Review  an analysis of our
consolidated results of operations for the
last three years focusing on our material
operating segments and the outlook for 2006.n
    
    Liquidity, Capital Resources and
Financial Position  an analysis of cash
flows; sources and uses of cash; financial
instruments; off-balance sheet arrangements;
contractual obligations and commitments; and
our financial position.n
    
    Critical Accounting Policies and
Estimates  a discussion of accounting
policies that require critical judgments
and estimates.
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 29




---



##### 



Our Business
 
 Core Business
  
  30 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Vision and Strategy
   Long-term
    
    Focus Areas
    
    MeasuresStrategy ElementsGrowth in reserves
and production
    
    
    n
    
    
    Growth at existing mine sites by finding new reserves and
converting mineralized material to reserves.
    
    
    n
    
    
    Additions to and size of reserves
and mineralized material.n
    
    
    Growth through successful
exploration focused principally in key exploration districts
(Goldstrike, Frontera, Lake Victoria and in Russia/Central Asia).
    
    
    n
    
    
    Consistent investment in
exploration and development.n
    
    
    Growth through targeted acquisitions.
    
    
    n
    
    
    Growth in annual gold production.n
    
    
    Advance the development of Cowal, Pascua-Lama, East Archimedes
and Buzwagi as well as newly acquired Placer Dome projects,
including Pueblo Viejo, Cortez Hills and Donlin Creek.
    
    
    n
    
    
    Construction progress versus estimates.n
    
    
    Continue to develop a business unit in Russia/Central Asia.
    
    
    n
    
    
    Actual construction costs versus
estimates.Operational
    
    
    n
    
    
    Control costs.
    
    
    n
    
    
    Total cash costs per ounce.1excellence
    
    
    
    
    
     Global supply chain management.
    
    
    n
    
    
    Amortization per ounce.1 Continuous improvement initiatives.
    
    
    n
    
    
    Ore throughput and equipment Currency, interest rate and commodity hedge programs.
    
    
    
    
    
    utilization statistics.n
    
    
    Improve productivity through continuous improvement initiatives.
    
    
    n
    
    
    Liquidity  operating cash
flow and credit ratings.n
    
    
    Effective assessment and management of risk.
    
    
    n
    
    
    Key balance sheet ratios.n
    
    
    Effective capital allocation.n
    
    
    Secure efficient sources of funding for capital needs.Strengthen the
    
    
    n
    
    
    Workforce  identify and develop talent.
    
    
    n
    
    
    Talent review and performance management.organization
    
    
    n
    
    
    Leadership development and succession planning.n
    
    
    Adopt best practices in corporate governance, including
strengthening internal controls over financial reporting.
    
    
    n
    
    
    Compliance with applicable
corporate governance legislation.Responsible
    
    
    n
    
    
    Reinforce health and safety culture.
    
    
    n
    
    
    Safety leadership and other training initiatives.mining
    
    
    n
    
    
    Enhance environmental performance, including use of innovative
technology to protect the environment.
    
    
    n
    
    
    Medical aid injury frequency.n
    
    
    Maintain positive community and government relations.
    
    
    n
    
    
    Environmental performance.n
    
    
    Compliance with regulatory requirements.
 
 1.
    
    For more information on total cash costs per ounce
performance measures, see pages 4445. Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 31




---



##### 



Capability to Deliver Results
  Experienced Management Team and
Skilled Workforce
   Environmental, Health and Safety
   32 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Cost Control and Supply Sourcing
   Information Management and Technology
  Continuous Improvement
  Internal Controls Over Financial Reporting and Disclosure
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 33




---



##### 



Key Economic Trends
  
 Gold, Silver and Copper Prices
 1
  
  
 1.
    
    Total cash costs per ounce excludes amortization, see pages
44-45 for further information on this performance measure. 34 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 35




---



##### 



Currency Exchange Rates
 
 
 
   36 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Inflationary Cost Pressures
  Fuel
  
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 37




---



##### 



Electricity
   Consumables
   Labor Costs
  38 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



US Dollar Interest Rates
 
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 39




---



##### 



Operations Review
 
 Selected Annual Information
 For the years ended December 31($ millions, except per shareand per ounce data in dollars)
    
    2005
    
    
    2004
    
    
    2003Gold production (000s of ounces)
    
    
    5,460
    
    
    
    4,958
    
    
    
    5,510Gold sales000s of ounces
    
    
    5,320
    
    
    
    4,936
    
    
    
    5,554$ millions
    
    $
    2,350
    
    
    $
    1,932
    
    
    $
    2,035Market gold price1
    
    
    444
    
    
    
    409
    
    
    
    363Realized gold price1
    
    
    439
    
    
    
    391
    
    
    
    366Total cash costs1, 2
    
    
    227
    
    
    
    214
    
    
    
    189Amortization1
    
    
    76
    
    
    
    86
    
    
    
    90Total production costs1
    
    
    303
    
    
    
    300
    
    
    
    279Net income
    
    
    401
    
    
    
    248
    
    
    
    200Net income per shareBasic
    
    
    0.75
    
    
    
    0.47
    
    
    
    0.37Diluted
    
    
    0.75
    
    
    
    0.46
    
    
    
    0.37Cash inflow (outflow)Operating activities
    
    
    726
    
    
    
    509
    
    
    
    519Capital expenditures
    
    
    (1,104
    )
    
    
    (824
    )
    
    
    (322
    )Other investing activities
    
    
    (76
    )
    
    
    3
    
    
    
    (12
    )Financing activities
    
    
    93
    
    
    
    740
    
    
    
    (266
    )Cash position  end of year
    
    
    1,037
    
    
    
    1,398
    
    
    
    970Total assets
    
    
    6,862
    
    
    
    6,287
    
    
    
    5,345Total long-term financial liabilities
    
    $
    1,780
    
    
    $
    1,707
    
    
    $
    789Gold reserves(millions of contained ounces)a
    
    
    88.6
    
    
    
    89.1
    
    
    
    85.9
 1.
    
    Per ounce weighted average.2.
    
    Total cash costs per ounce statistics exclude
amortization. Total cash costs per ounce is a
performance measure that is used throughout
this MD&A. For more information see pages
44-45. 
 Executive Overview and 2006 Outlook
   Key Factors Affecting Earnings
 For the years ended December 31
    
    Refer($ millions)
    
    to pageNet income  2004
    
    
    
    
    
    
    
    
    
    $
    248Increase (decrease)Higher realized gold prices
    
    
    43
    
    
    $
    255Higher sales volumes1
    
    
    43
    
    
    
    35Higher total cash costs
    
    
    44
    
    
    
    (69
    )Lower amortization rates per ounce
    
    
    50
    
    
    
    53Lower interest expense
    
    
    51
    
    
    
    12Higher income tax expense2
    
    
    53
    
    
    
    (36
    )Special items3
    
    
    41
    
    
    
    (111
    )Other
    
    
    52
    
    
    
    14Total increase
    
    
    
    
    
    
    
    
    
    $
    153Net income  2005
    
    
    
    
    
    
    
    
    
    $
    401
 1.
    
    Impact of changing sales volumes on
margin between selling prices, total cash
costs and amortization.2.
    
    Excluding the impact of the tax effects of special items.3.
    
    Special items are post-tax and exclude
the impact on the period of deferred
stripping accounting changes. b a, b b
  
 a.
    
    Calculated in accordance with National Instrument 43-101 as required
by Canadian securities regulatory authorities. For United States reporting
purposes, Industry Guide 7, (under the Securities and Exchange Act of
1934), as interpreted by Staff of the SEC, applies different standards in
order to classify mineralization as a reserve. Accordingly, for US reporting
purposes, Buzwagi is classified as mineralized material. Barrick is currently
assessing the implications of conditions contained in the resolution issued
by Chilean regulatory authorities approving the environmental impact
assessment for the Pascua-Lama project. It is possible that following the
completion of such assessment, up to 1 million ounces of mineralization
at the Pascua-Lama project may be reclassified from reserves to mineralized material for US reporting purposes. For a breakdown of reserves
by category and additional information relating to reserves, see
pages 125-129 of this Annual Report.b.
    
    For a breakdown of Placer Domes reserves and resources by category and
additional information relating to such reserves and resources, see Placer
Domes press release of February 20, 2006. Such reserves and resources
were calculated by employees of Placer Dome in accordance with National
Instrument 43-101, as required by Canadian securities regulatory authorities, and in accordance with Placer Domes previously established policies
and procedures, and have not been independently verified by Barrick Gold
Corporation. Industry Guide 7 (under the Securities and Exchange Act
of 1934), as interpreted by Staff of the SEC, applies different standards to
classify mineralization as a reserve. Based on a preliminary review, Barrick
does not intend to report mineralization at the Pueblo Viejo project as a
reserve for US reporting purposes at this time. 40n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Special Items  Effect on Earnings Increase (Decrease) ($ millions)
 2005
    
    
    2004
    
    
    2003Refer toFor the years ended December 31
    
    page
    
    
    Pre-tax
    
    
    Post-tax
    
    
    Pre-tax
    
    
    Post-tax
    
    
    Pre-tax
    
    
    Post-taxNon-hedge derivative gains
    
    
    52
    
    
    $
    6
    
    
    $
    4
    
    
    $
    5
    
    
    $
    9
    
    
    $
    71
    
    
    $
    60Gains on sale of investments, interests in
mining properties and Kabanga transaction
    
    
    52
    
    
    
    37
    
    
    
    35
    
    
    
    42
    
    
    
    31
    
    
    
    40
    
    
    
    32Impairment charges on investments, long-lived
assets and royalty interest
    
    
    52
    
    
    
    (16
    )
    
    
    (16
    )
    
    
    (144
    )
    
    
    (99
    )
    
    
    (16
    )
    
    
    (14
    )Changes in asset retirement obligation cost
estimates at closed mines
    
    
    52
    
    
    
    (15
    )
    
    
    (11
    )
    
    
    (22
    )
    
    
    (17
    )
    
    
    (10
    )
    
    
    (10
    )Deferred stripping accounting changesCumulative effect
    
    
    65
    
    
    
    6
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact on the period compared to previous
policy
    
    
    65
    
    
    
    64
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Resolution of Peruvian tax assessmentOutcome of tax uncertainties
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    Reversal of other accrued costs
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    15
    
    
    
    
    
    
    
    Deferred tax creditsChange in Australian tax status
    
    
    53
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    Release of valuation allowances
    
    
    53
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    62Total
    
    
    
    
    
    $
    82
    
    
    $
    99
    
    
    $
    (98
    )
    
    $
    166
    
    
    $
    85
    
    
    $
    130
 Cash Flow
  Acquisition of Placer Dome
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 41




---



##### 



n
    
    Operations  through the optimization
and sharing of mining and processing
infrastructure in common jurisdictions,
including Nevada, Australia and Tanzania;n
    
    Exploration  by carefully assessing
our exploration spending and focusing on the
most prospective areas and reducing the overall
exploration spending of the combined enterprise;n
    
    Administration  by eliminating
duplication of offices and overheads;n
    
    Procurement  through the improved
purchasing power of the larger enterprise; andn
    
    Finance and Tax  by realizing tax
synergies in certain jurisdictions,
opportunities for debt optimization and a
lower overall cost of capital resulting
from a larger balance sheet.
 Sale of Certain Placer Dome Operations to Goldcorp
  Selected Pro Forma Consolidated Financial Information (Unaudited)
 Pro formacombinedAs reported
    
    
    Pro forma
    
    
    Barrick/($ millions, except per share data in dollars)
    
    Barrick
    
    
    Placer Dome
    
    
    adjustments1
    
    
    Placer DomeIncome statement  For the year ended December 31, 2005SalesGold
    
    $
    2,350
    
    
    $
    1,458
    
    
    $
    (251
    )
    
    $
    3,557Copper
    
    
    
    
    
    
    520
    
    
    
    
    
    
    
    520Total sales
    
    
    2,350
    
    
    
    1,978
    
    
    
    (251
    )
    
    
    4,077Costs and expenses
    
    
    1,853
    
    
    
    1,781
    
    
    
    (240
    )
    
    
    3,394Income before income taxes and other items
    
    
    455
    
    
    
    113
    
    
    
    (12
    )
    
    
    580Net income
    
    
    401
    
    
    
    80
    
    
    
    8
    
    
    
    489Net income per share  basic and diluted
    
    
    0.75
    
    
    
    0.18
    
    
    
    
    
    
    
    0.57Balance sheet  As at December 31, 2005Cash
    
    
    1,037
    
    
    
    880
    
    
    
    308
    
    
    
    2,225Other current assets
    
    
    711
    
    
    
    769
    
    
    
    (31
    )
    
    
    1,449Non-current assets
    
    
    5,114
    
    
    
    4,045
    
    
    
    (978
    )
    
    
    8,181Unallocated purchase price
    
    
    
    
    
    
    
    
    
    
    7,221
    
    
    
    7,221Current liabilities
    
    
    560
    
    
    
    546
    
    
    
    1
    
    
    
    1,107Long-term debt
    
    
    1,721
    
    
    
    1,107
    
    
    
    
    
    
    
    2,828Other non-current liabilities
    
    
    731
    
    
    
    801
    
    
    
    998
    
    
    
    2,530Net assets
    
    $
    3,850
    
    
    $
    3,240
    
    
    $
    5,521
    
    
    $
    12,611
 1.
    
    Adjustments to reflect certain estimated effects of purchase accounting and the estimated
effects of the sale of certain Placer Dome operations to Goldcorp. See note 3 to the Financial
Statements for details. 42n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



2006 Outlook
  
 Consolidated Gold Production and Sales
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 43




---



##### 



Consolidated Total Cash Costs per Ounce 2
 (in dollars per ounce)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Cost of gold sales1
    
    $
    255
    
    
    $
    248
    
    
    $
    210Currency/commodity hedge gains
    
    
    (21
    )
    
    
    (19
    )
    
    
    (12
    )By-product credits
    
    
    (25
    )
    
    
    (30
    )
    
    
    (21
    )Royalties/mining taxes
    
    
    16
    
    
    
    13
    
    
    
    12Accretion/other costs
    
    
    2
    
    
    
    2
    
    
    
    2Total cash costs2
    
    $
    227
    
    
    $
    214
    
    
    $
    191
 1.
    
    At market currency exchange and commodity rates.2.
    
    Total cash costs per ounce excludes amortization  see page 45.  
 Total Cash Costs Performance Measures
    44n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Illustration of Impact of Excluding Amortization
from Total Cash Costs Per Ounce
 ($ millions, except per ounceinformation in dollars)For the years ended December 31
    
    2005
    
    
    2004Cost of sales per Barrick income statement
    
    $
    1,214
    
    
    $
    1,047Amortization at producing mines
    
    
    409
    
    
    
    425Cost of sales including amortization
    
    $
    1,623
    
    
    $
    1,472Ounces sold (thousands)
    
    
    5,320
    
    
    
    4,936Total cash costs per ounce as reported
    
    $
    227
    
    
    $
    214Amortization per ounce
    
    
    76
    
    
    
    86Cost of sales (including amortization)
per ounce
    
    $
    303
    
    
    $
    300
 
 Results of Operating Segments
    North America
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 45




---



##### 



Goldstrike Open Pit, United States
  Goldstrike Underground, United States
  Western 102 Power Plant in Nevada, United States
  Eskay Creek, Canada
  Round Mountain (50% Owned), United States
  East Archimedes, United States
  n
    
    Construction capital costs of $35
million were incurred in 2005.n
    
    The workforce is in place and all major equipment
is in service.n
    
    The remaining balance of the mining
fleet was received in fourth quarter 2005.n
    
    Pre-strip activities are in progress.
 46n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



South America
  Pierina, Peru
  Lagunas Norte, Peru
  Veladero, Argentina
  Pascua-Lama, Chile/Argentina
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 47




---



##### 



Australia/Africa
  Kalgoorlie (50% Owned), Australia
  Plutonic, Australia
  Bulyanhulu, Tanzania
  48n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Cowal, Australia
  n
    
    Capitalized costs, including
capitalized interest, were $258 million in
2005.n
    
    Construction of the systems necessary
to process oxide ore were over 85% complete.n
    
    Pre-commissioning of the process plant
started in mid-December 2005 and the
electrical transmission line was commissioned
in January 2006.n
    
    Plant-site concrete and buildings
were 98% complete.n
    
    About one million tons of ore have
been stockpiled to date.
 Buzwagi, Tanzania
 1
 Kabanga (50% Owned), Tanzania
 1
  Russia/Central Asia
  
 1.
    
    Calculated in accordance with National
Instrument 43-101 as required by Canadian
securities regulatory authorities. For United
States reporting purposes, Industry Guide 7
(under the Securities Exchange Act of 1934), as
interpreted by the Staff of the SEC, applies
different standards in order to classify
mineralization as a reserve. Accordingly, for
US reporting purposes, Buzwagi is classified as
mineralized material. For additional
information on reserves see the tables on pages
126-129. Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 49




---



##### 



Other Costs and Expenses
 Exploration, Development and Business Development Expense
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    Comments on significant trends and variancesExplorationNorth America
    
    $
    29
    
    
    $
    26
    
    
    $
    19
    
    
    2005 vs 2004  Higher activity at Goldstrike. 2004 vs 2003  Higher activity at Goldstrike, Eskay Creek and Round Mountain.Australia/Africa
    
    
    41
    
    
    
    38
    
    
    
    22
    
    
    2005 vs 2004  Higher activity at Bulyanhulu. 2004 vs 2003  Higher activity in Tanzania, primarily at the Buzwagi project.South America
    
    
    19
    
    
    
    20
    
    
    
    19Russia/Central Asia
    
    
    6
    
    
    
    5
    
    
    
    4
    
    
    2005 vs 2004  Higher activity to support development of the new business unit.Other countries
    
    
    3
    
    
    
    1
    
    
    
    Mine development
    
    
    12
    
    
    
    22
    
    
    
    53
    
    
    2005 vs 2004  In 2004, we expensed Lagunas Norte development costs totaling $9 million until May 1, when the project achieved
the criteria to classify mineralization as a reserve for US reporting purposes. 2004 vs 2003  In 2003, we expensed development costs at Lagunas Norte totaling $29 million, and at Veladero totaling
 $18 million until October 2003 when the project achieved the criteria to classify mineralization as a reserve for US reporting purposes.Non-capitalizable project costs
    
    
    16
    
    
    
    7
    
    
    
    
    
    
    Non-capitalizable costs mainly represent items incurred in the development/construction phase that cannot be capitalized.Business development/other
    
    
    15
    
    
    
    22
    
    
    
    20
    
    
    2005 vs 2004  Decrease in overhead costs associated with the administration of exploration and development programs.Total
    
    $
    141
    
    
    $
    141
    
    
    $
    137
 Amortization Expense
 Incr. (decr.)($ millions, except per
    
    
    
    
    
    due toounce amounts in dollars)For the years ended
    
    2005
    
    
    Sales
    
    
    
    
    
    
    2004
    
    
    2005
    
    
    2004December 31
    
    Amount
    
    
    volumes1
    
    
    Other
    
    
    Amount
    
    
    Per ounce
    
    
    Per ounce
    
    
    Comments on other variancesGoldstrike Open Pit
    
    $
    90
    
    
    $
    3
    
    
    $
    4
    
    
    $
    83
    
    
    $
    60
    
    
    $
    61
    
    
    Capital additions in 2005, partly offset by an increase in reserves.Goldstrike Underground
    
    
    60
    
    
    
    (6
    )
    
    
    
    
    
    
    66
    
    
    
    119
    
    
    
    120
    
    
    Capital additions in 2005, offset by an increase in reserves.Eskay Creek
    
    
    26
    
    
    
    (21
    )
    
    
    (4
    )
    
    
    51
    
    
    
    153
    
    
    
    176
    
    
    Writedown of book value in 2004,
partly offset by an increase in amortization due to a decrease in reserves.Round Mountain
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    45
    
    
    
    47
    
    
    Capital additions in 2005, offset by an increase in reserves.Lagunas Norte
    
    
    29
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    Pierina
    
    
    72
    
    
    
    (2
    )
    
    
    (33
    )
    
    
    107
    
    
    
    115
    
    
    
    165
    
    
    Increase in reserves and transfer of certain assets to Lagunas Norte in 2005.Kalgoorlie
    
    
    20
    
    
    
    (3
    )
    
    
    3
    
    
    
    20
    
    
    
    49
    
    
    
    44
    
    
    Capital additions in 2005.Plutonic
    
    
    10
    
    
    
    (2
    )
    
    
    1
    
    
    
    11
    
    
    
    39
    
    
    
    34
    
    
    Capital additions in 2005.Bulyanhulu
    
    
    34
    
    
    
    (2
    )
    
    
    2
    
    
    
    34
    
    
    
    113
    
    
    
    100
    
    
    Capital additions in 2005.Other mines
    
    
    51
    
    
    
    13
    
    
    
    2
    
    
    
    36
    
    
    
    63
    
    
    
    59Sub total
    
    
    409
    
    
    
    9
    
    
    
    (25
    )
    
    
    425Corporate assets
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    27Total
    
    $
    427
    
    
    
    
    
    
    
    
    
    
    $
    452
 1.
    
    For explanation of changes in sales volumes refer to page 43. 50 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Amortization Expense (contd)
 ($ millions, except per
    
    
    
    
    
    Incr. (decr.)ounce amount in dollars)
    
    
    
    
    
    due toFor the years endedDecember 31
    
    2004
    
    
    Sales
    
    
    
    
    
    
    2003
    
    
    2004
    
    
    2003Amount
    
    
    volumes1
    
    
    Other
    
    
    Amount
    
    
    Per ounce
    
    
    Per ounce
    
    
    Comments on other variancesGoldstrike Open Pit
    
    $
    83
    
    
    $
    (4
    )
    
    $
    
    
    
    $
    87
    
    
    $
    61
    
    
    $
    53
    
    
    Capital additions in 2004, partly offset by an increase in reserves.Goldstrike Underground
    
    
    66
    
    
    
    (6
    )
    
    
    (1
    )
    
    
    73
    
    
    
    120
    
    
    
    122
    
    
    Increase in reserves, partly offset by capital additions in 2004.Eskay Creek
    
    
    51
    
    
    
    (8
    )
    
    
    12
    
    
    
    47
    
    
    
    176
    
    
    
    132
    
    
    Decrease in reserves and capital additions in 2004.Round Mountain
    
    
    17
    
    
    
    
    
    
    
    (3
    )
    
    
    20
    
    
    
    47
    
    
    
    54
    
    
    Increase in reserves, and a decrease in property, plant and equipment as amortization exceeds
 capital additions in the year.Pierina
    
    
    107
    
    
    
    (48
    )
    
    
    (11
    )
    
    
    166
    
    
    
    165
    
    
    
    182
    
    
    Increase in reserves.Kalgoorlie
    
    
    20
    
    
    
    1
    
    
    
    (1
    )
    
    
    20
    
    
    
    44
    
    
    
    48
    
    
    Increase in reserves.Plutonic
    
    
    11
    
    
    
    
    
    
    
    1
    
    
    
    10
    
    
    
    34
    
    
    
    31
    
    
    Capital additions in 2004, partly offset by an increase in reserves.Bulyanhulu
    
    
    34
    
    
    
    3
    
    
    
    (6
    )
    
    
    37
    
    
    
    100
    
    
    
    123Other mines
    
    
    36
    
    
    
    (3
    )
    
    
    2
    
    
    
    37
    
    
    
    59
    
    
    
    57
    
    
    Capital additions at Hemlo and Marigold.Sub total
    
    
    425
    
    
    
    (65
    )
    
    
    (7
    )
    
    
    497Corporate assets
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    25Total
    
    $
    452
    
    
    
    
    
    
    
    
    
    
    $
    522
 1.
    
    For explanation of changes in sales volumes refer to page 43. Corporate Administration, Interest Income and Interest Expense
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    CommentsCorporate administration
    
    $
    71
    
    
    $
    71
    
    
    $
    73
    
    
    2004 vs 2003  Severance costs of $9 million in 2003, with higher regulatory compliance costs in 2004.Interest income
    
    
    (38
    )
    
    
    (25
    )
    
    
    (31
    )
    
    2005 vs 2004  Increase in the average cash balance, combined with an increase in market interest rates.
2004 vs 2003  Lower average cash balances in 2004, combined with higher gains on cash hedges in 2003.Interest costsIncurred
    
    
    125
    
    
    
    60
    
    
    
    49
    
    
    Increase mainly due to new financing put in place in 2004 and 2005.
Average long-term debt outstanding increased from $0.8 billion in 2003 to $0.9 billion in 2004 to $1.8 billion in 2005.Capitalized
    
    
    (118
    )
    
    
    (41
    )
    
    
    (5
    )
    
    2005 vs 2004  Increased amounts were capitalized in 2005 to Pascua-Lama, Cowal, Veladero, and Lagunas Norte development
 projects as construction costs were incurred and capitalized. Capitalization at Lagunas Norte ceased in third quarter 2005, while capitalization at Veladero ceased in fourth quarter 2005. Average book value of these four projects was $1.3 billion in 2005 and
 $0.6 billion in 2004. 2004 vs 2003  Higher amounts were capitalized at development projects due to construction costs
 capitalized in 2004, and capitalization at Pascua-Lama from July 1, 2004.Expensed
    
    $
    7
    
    
    $
    19
    
    
    $
    44
    
    
    We expect interest expense to increase in 2006 over 2005 as
Lagunas Norte and Veladero started production and ceased interest capitalization in third quarter and fourth quarter 2005, respectively.
 Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 51




---



##### 



Impairment of Long-lived Assets
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    CommentsImpairment charge  Eskay Creek
    
    $
    
    
    
    $
    58
    
    
    $
    
    
    
    In 2004, we completed an impairment test for the Eskay Creek mine, due to a downward revision to reserves, the continued
 weakening of the US dollar that impacts Canadian dollar operating costs, and upward revisions in asset retirement obligation costs.Impairment charge  Peruvian
exploration properties
    
    
    
    
    
    
    67
    
    
    
    
    
    
    We completed an impairment test in 2004 on a group of Peruvian exploration-stage properties based on finalization of the exploration
 program for the year and an updated assessment of future plans for the property.Impairment charge  other
    
    
    
    
    
    
    14
    
    
    
    5
    
    
    2004 includes writedown on various exploration-stage properties.Total
    
    $
    
    
    
    $
    139
    
    
    $
    5
 Other (Income) Expense
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    CommentsNon-hedge derivative gains
    
    $
    (6
    )
    
    $
    (5
    )
    
    $
    (71
    )
    
    The gains and losses arise primarily due to changes in commodity prices, currency exchange rates and interest rates.Gains on asset sales
    
    
    (5
    )
    
    
    (36
    )
    
    
    (36
    )
    
    In 2005, we sold certain land positions in Australia. In 2004, we sold various mining properties, including the Holt-McDermott mine
 in Canada and certain land positions around our inactive mine sites in the United States. In 2003, we sold various mining properties,
 including several land positions around inactive mine sites in the United States, as well as the East Malartic Mill and Bousquet mine
 in Canada. The majority of these land positions were fully amortized in prior years and therefore any proceeds generated gains on sale,
 before selling costs and taxes.Gain on Kabanga transaction
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    Gain recorded in 2005 relates to the closing of a transaction with Falconbridge.Gains on investment sales
    
    
    (17
    )
    
    
    (6
    )
    
    
    (4
    )
    
    2005 vs 2004  $10 million of the gains in 2005 related to the sale of investments held in a rabbi trust for a deferred compensation
 plan. Other gains in all years mainly relate to the sale of various other investments.Impairment charges on
investments
    
    
    16
    
    
    
    5
    
    
    
    11
    
    
    2005 impairment charge relates to the writedown of two investments which were determined to be impaired.
2003 impairment charge relates mainly to investments under a deferred compensation plan.Changes in asset retirement
obligations at closed mines
    
    
    15
    
    
    
    22
    
    
    
    10
    
    
    Charges relate to revisions to cost estimates at various closed mines.Environmental remediation costs
    
    
    13
    
    
    
    14
    
    
    
    38
    
    
    In 2003, three North American mines shut down and two South
American mines had recently shut down, and as a result the expenditures were very high in this year.Accretion expense
    
    
    10
    
    
    
    7
    
    
    
    7Currency translation (gains)
losses
    
    
    (3
    )
    
    
    1
    
    
    
    (2
    )
    
    In 2005, gains reflect the strengthening of the Canadian dollar on monetary assets.Other items
    
    
    59
    
    
    
    41
    
    
    
    41
    
    
    Includes charges for World Gold Council fee, legal costs for major litigation and certain costs incurred at our regional business units.Total
    
    $
    67
    
    
    $
    43
    
    
    $
    (6
    )
 52n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Income Taxes
 2005
    
    
    2004
    
    
    2003For the years ended December 31($ millions, except percentages)
    
    
    
    
    
    
    
    
    
    Income tax
    
    
    
    
    
    
    
    
    
    
    Income tax
    
    
    
    
    
    
    
    
    
    
    Income taxEffective income tax rates
    
    Pre-tax
    
    
    Effective
    
    
    expense
    
    
    Pre-tax
    
    
    Effective
    
    
    expense
    
    
    Pre-tax
    
    
    Effective
    
    
    expenseon elements of income
    
    income
    
    
    tax rate
    
    
    (recovery)
    
    
    income
    
    
    tax rate
    
    
    (recovery)
    
    
    income
    
    
    tax rate
    
    
    (recovery)Income tax expense
before elements below
    
    $
    455
    
    
    
    21
    %
    
    $
    97
    
    
    $
    45
    
    
    
    53
    %
    
    $
    24
    
    
    $
    222
    
    
    
    30
    %
    
    $
    67Change in Australian tax status
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (81
    )
    
    
    
    
    
    
    
    
    
    
    Outcome of tax uncertainties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    Release of deferred
tax valuation allowances
recorded in prior years
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (62
    )$
    60
    
    
    
    
    
    
    
    
    
    
    $
    (203
    )
    
    
    
    
    
    
    
    
    
    $
    5
     Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 53




---



##### 



Quarterly Information
 2005
    
    
    2004($ millions, except where indicated)
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Gold sales
    
    $
    776
    
    
    $
    627
    
    
    $
    463
    
    
    $
    484
    
    
    $
    501
    
    
    $
    500
    
    
    $
    454
    
    
    $
    477Net income
    
    
    175
    
    
    
    113
    
    
    
    53
    
    
    
    60
    
    
    
    156
    
    
    
    32
    
    
    
    34
    
    
    
    26Net income per share  basic (dollars)
    
    
    0.33
    
    
    
    0.21
    
    
    
    0.10
    
    
    
    0.11
    
    
    
    0.30
    
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.05Net income per share  diluted
(dollars)
    
    
    0.32
    
    
    
    0.21
    
    
    
    0.10
    
    
    
    0.11
    
    
    
    0.29
    
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.05
  Fourth Quarter Results
 1
 Effect on Earnings Increase (Decrease)
 Three months ended December 312005
    
    
    2004($ millions)
    
    Pre-tax
    
    
    Post-tax
    
    
    Pre-tax
    
    
    Post-taxNon-hedge derivative
gains (losses)
    
    $
    (1
    )
    
    $
    (1
    )
    
    $
    6
    
    
    $
    6Gains on sales of investments
and mining properties
    
    
    8
    
    
    
    8
    
    
    
    35
    
    
    
    25Impairment charges on
long-lived assets
and investments
    
    
    (13
    )
    
    
    (13
    )
    
    
    (135
    )
    
    
    (93
    )Change in asset retirement
obligation estimates
    
    
    (2
    )
    
    
    (3
    )
    
    
    (19
    )
    
    
    (15
    )Deferred stripping
accounting changesImpact on the period
compared to
previous policy
    
    
    35
    
    
    
    24
    
    
    
    
    
    
    
    Resolution of Peruvian
tax assessment
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    156Deferred tax creditsChange in Australian
tax status
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    48Other
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    Total
    
    $
    27
    
    
    $
    52
    
    
    $
    (92
    )
    
    $
    127
  
 1.
    
    Total cash costs per ounce excludes amortization  see pages 44-45. 54 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Liquidity, Capital Resources and
Financial Position
 
 Cash Flow
 
 Operating Activities
  Key Factors Affecting Operating Cash Flow
 Impact on comparativeoperating cash flows($ millions)For the years ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    2005 vs
    
    
    2004 vsDecember 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    Comments on significant trends and variancesGold sales volumes(000s oz)
    
    
    5,320
    
    
    
    4,936
    
    
    
    5,554
    
    
    $
    68
    
    
    $
    (109
    )
    
    See page 43.Realized gold prices($/oz)
    
    $
    439
    
    
    $
    391
    
    
    $
    366
    
    
    
    255
    
    
    
    123
    
    
    See page 43.Total cash costs ($/oz)
    
    
    227
    
    
    
    214
    
    
    
    189
    
    
    
    (69
    )
    
    
    (123
    )
    
    See page 44.Sub-total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254
    
    
    
    (109
    )Other inflows (outflows)Income tax payments
    
    
    (80
    )
    
    
    (45
    )
    
    
    (111
    )
    
    
    (35
    )
    
    
    66
    
    
    2005 vs 2004  Increased payments in 2005 relate to higher gold prices and the start of Lagunas Norte
 production. 2004 vs 2003  Large payment in 2003 paid to Canadian tax authorities in relation to 2002 final payment.Increase in inventories
    
    
    (151
    )
    
    
    (51
    )
    
    
    (1
    )
    
    
    (100
    )
    
    
    (50
    )
    
    Due to build-up of both ore and supplies inventory at operating mines, particularly for mines that went into production in 2005.Other non-cash working capital
    
    
    68
    
    
    
    (65
    )
    
    
    (45
    )
    
    
    133
    
    
    
    (20
    )
    
    2005 vs 2004  Increase in accounts payable in 2005 mainly due to timing of payments and for mines that
 began production in 2005. 2004 vs 2003  Increase in taxes recoverable in 2004 relating to input taxes on mine construction costs.Interest expense
    
    
    7
    
    
    
    19
    
    
    
    44
    
    
    
    12
    
    
    
    25
    
    
    See page 51.Cost of Inmet settlement in 2003
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    86Effect of other factors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47
    )
    
    
    (8
    )Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    217
    
    
    $
    (10
    )
 Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 55




---



##### 



Investing Activities
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    CommentsGrowth capital expenditures1Veladero
    
    $
    213
    
    
    $
    284
    
    
    $
    68
    
    
    Costs mainly relate to construction activity. Production start-up in fourth quarter 2005.Lagunas Norte
    
    
    100
    
    
    
    182
    
    
    
    4
    
    
    Construction activity started in second quarter 2004. Production start-up in second quarter 2005.Cowal
    
    
    258
    
    
    
    73
    
    
    
    24
    
    
    Construction activity started in second quarter 2004. Higher levels of activity in 2005, leading up to production start-up expected in
 first quarter 2006.Tulawaka
    
    
    5
    
    
    
    48
    
    
    
    1
    
    
    Costs mainly relate to construction activity. Production start-up in first quarter 2005.Pascua-Lama
    
    
    98
    
    
    
    35
    
    
    
    9
    
    
    Higher levels of activity since decision in mid-2004 to proceed with the project, as well as capitalized interest since mid-2004.Western 102 Power Plant
    
    
    80
    
    
    
    18
    
    
    
    
    
    
    Construction activity started in first quarter 2004. Higher levels
of activity in 2005 in lead-up to production start-up in the fourth quarter.East Archimedes
    
    
    35
    
    
    
    
    
    
    
    
    
    
    Construction activity started in first quarter 2005.Sub-total
    
    $
    789
    
    
    $
    640
    
    
    $
    106Sustaining capital expendituresNorth America
    
    $
    103
    
    
    $
    86
    
    
    $
    80
    
    
    Higher sustaining capital expenditures at Goldstrike in 2005, in
particular, a 100-ton shovel purchase and higher budgeted expenditures in general.Australia/Africa
    
    
    90
    
    
    
    83
    
    
    
    115
    
    
    2003 was higher due to a transition to owner-mining at Plutonic that resulted in equipment purchases.South America
    
    
    114
    
    
    
    8
    
    
    
    17
    
    
    Purchases of equipment at newly operational mines.Other
    
    
    8
    
    
    
    7
    
    
    
    4Sub-total
    
    $
    315
    
    
    $
    184
    
    
    $
    216Total
    
    $
    1,104
    
    
    $
    824
    
    
    $
    322
 1.
    
    Includes both construction costs and capitalized interest.
   Financing Activities
  56n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Liquidity
 Liquidity Management
   Capital Resources
   Capital Resources 1
 ($ millions)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Opening capital resources
    
    $
    2,476
    
    
    $
    1,970
    
    
    $
    2,044New sourcesOperating cash flow
    
    
    726
    
    
    
    509
    
    
    
    519New and increases to
financing facilities2
    
    
    134
    
    
    
    1,056
    
    
    
    3,336
    
    
    
    3,535
    
    
    
    2,563AllocationsGrowth capital3
    
    
    (789
    )
    
    
    (640
    )
    
    
    (106
    )Sustaining capital3
    
    
    (315
    )
    
    
    (184
    )
    
    
    (216
    )Dividends
    
    
    (118
    )
    
    
    (118
    )
    
    
    (118
    )Share buyback
    
    
    
    
    
    
    (95
    )
    
    
    (154
    )Other
    
    
    (30
    )
    
    
    (22
    )
    
    
    1Closing capital resources
    
    $
    2,084
    
    
    $
    2,476
    
    
    $
    1,970Components of closing
capital resourcesCash and equivalents5
    
    $
    1,037
    
    
    $
    1,398
    
    
    $
    970Unutilized credit facilities4, 5
    
    
    1,047
    
    
    
    1,078
    
    
    
    1,000Total
    
    $
    2,084
    
    
    $
    2,476
    
    
    $
    1,970
 1.
    
    Capital resources include cash balances
and sources of financing that have been
arranged but not utilized.2.
    
    In 2005, includes the $50 million Peruvian
bond offering and $84 million lease facility
for Lagunas Norte. In 2004, includes the $250
million Veladero project financing, $750
million bond offering, and $56 million lease
facility for Lagunas Norte.3.
    
    Growth capital represents capital invested in
new projects to bring new mines into
production. Sustaining capital represents
ongoing capital required at existing mining
operations. Sum of growth and sustaining
capital equals capital expenditures for the
year.4.
    
    Subsequent to December 31, 2005, we drew upon
our $1 billion credit facility to fund the
Placer Dome acquisition. Amounts drawn will be
repaid upon closure of sales of specific Placer
Dome operations to Goldcorp.5.
    
    Excludes Placer Dome capital resources. At
December 31, 2005, Placer Dome had $880
million of cash and equivalents and $873
million of undrawn bank lines of credit
available of which $300 million was drawn
subsequent to year end. Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 57




---



##### 



Credit Rating
 At February 10, 2006 from major rating agencies:
 Standard & Poors (S&P)
    
    AMoodys
    
    Baa1DBRS
    
    A
  
 Financial Position
 Key Balance Sheet Ratios
 As at December 31
    
    2005
    
    
    2004Non-cash working capital ($ millions)1
    
    $
    151
    
    
    $
    141Net debt ($ millions)2
    
    $
    764
    
    
    $
    288Net debt: equity ratio3
    
    
    0.20:1
    
    
    
    0.08:1Current ratio4
    
    
    3.12:1
    
    
    
    4.66:1
 1.
    
    Represents current assets, excluding
cash and equivalents, less current
liabilities.2.
    
    Represents long-term debt less cash and equivalents.3.
    
    Represents net debt divided by shareholders equity.4.
    
    Represents current assets divided by current liabilities.  Shareholders Equity
 Outstanding Share Data
  Dividend Policy
  Comprehensive Income
   58n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Contractual Obligations and
Commitments 1
 Payments due($ millions)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2011 andAt December 31, 2005
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    thereafter
    
    
    TotalContractual obligationsLong-term debt (1)Repayment of principal
    
    $
    62
    
    
    $
    589
    
    
    $
    79
    
    
    $
    67
    
    
    $
    28
    
    
    $
    894
    
    
    $
    1,719Interest (1)
    
    
    102
    
    
    
    79
    
    
    
    56
    
    
    
    51
    
    
    
    49
    
    
    
    696
    
    
    
    1,033Asset retirement obligations (2)
    
    
    37
    
    
    
    30
    
    
    
    24
    
    
    
    48
    
    
    
    33
    
    
    
    498
    
    
    
    670Capital leases
    
    
    19
    
    
    
    23
    
    
    
    19
    
    
    
    19
    
    
    
    16
    
    
    
    1
    
    
    
    97Operating leases
    
    
    13
    
    
    
    13
    
    
    
    13
    
    
    
    14
    
    
    
    14
    
    
    
    9
    
    
    
    76Royalty arrangements and other
long-term liabilities (3)
    
    
    79
    
    
    
    70
    
    
    
    67
    
    
    
    71
    
    
    
    65
    
    
    
    579
    
    
    
    931Purchase obligations for supplies
and consumables
    
    
    109
    
    
    
    89
    
    
    
    53
    
    
    
    24
    
    
    
    17
    
    
    
    20
    
    
    
    312Capital commitments (4)
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Total
    
    $
    506
    
    
    $
    893
    
    
    $
    311
    
    
    $
    294
    
    
    $
    222
    
    
    $
    2,697
    
    
    $
    4,923
 1.
    
    Excludes any Placer Dome obligations and commitments.
 
 Contractual Obligations and Commitments
 (1) Long-term Debt and Interest
  (2) Asset Retirement Obligations
  (3) Royalties and Other Long-term Liabilities
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 59




---



##### 



(4) Capital Commitments
  Capital Expenditures Not Yet Committed
  Payments to Maintain Land Tenure and
Mineral Property Rights
  Contingencies  Litigation
  Financial Instruments
  60n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Summary of Financial Instruments 1
  Principal/
    
    
    
    
    
    Amounts NotFinancial
    
    Notional
    
    Associated
    
    Amounts Recorded
    
    Recorded inInstrument
    
    Amount
    
    Risks
    
    in Earnings
    
    EarningsCash and equivalents
    
    $1,037 million
    
    n  Interest raten  Credit
    
    Interest income less hedge gains on cash
hedging instruments  2005  $32 million;
2004  $6 million; 2003  $13 million
    
    NilInvestments in available-
for-sale securities
    
    $62 million
    
    n  Market
    
    Other income/expense  2005  $1 million
gain; 2004  $1 million gain;
2003  $7 million loss
    
    $12 million gain
in OCILong-term debt
    
    $1,721 million
    
    n  Interest rate
    
    Interest costs  2005  $7 million
expensed ($118 million capitalized);
2004  $19 million expensed ($41 million
capitalized); 2003  $44 million expensed
($5 million capitalized)
    
    Fair value
greater than
carrying value
by $26 millionHedging instruments 
currency contracts
    
    C$788 million
A$2,213 million
ARS 36 million
    
    n  Market/Liquidityn  Credit
    
    Hedge gains in cost of sales, corporate
administration and amortization 
2005  $120 million; 2004  $112 million;
2003  $65 million
    
    $171 million
gain in OCICash hedging instruments 
interest rate contracts
    
    $425 million
    
    n  Market/Liquidityn  Credit
    
    Hedge gains/losses in interest income 
2005  $6 million gain; 2004 
$19 million gain; 2003  $18 million gain
    
    $2 million loss
in OCIDebt hedging instruments 
interest rate contracts
    
    $500 million
    
    n  Market/Liquidityn  Credit
    
    Change in fair value recorded in earnings 
2005  $13 million loss; 2004  $2 million
gain; 2003  $9 million gain
    
    NilHedging instruments  fuel
and propane contracts
    
    Fuel 
2 million barrels
Propane 
17 million
gallons
    
    n  Market/Liquidityn  Credit
    
    Hedge gains in cost of sales 
2005  $10 million; 2004  $4 million;
2003  $nil
    
    $38 million gain
in OCINon-hedge derivatives
    
    Various
    
    n  Market/Liquidityn  Credit
    
    Gains in other income/expense 
2005  $6 million; 2004  $5 million;
2003  $71 million
    
    Nil
 
 1.
    
    Refer to pages 61-64 for information on gold and silver sales contracts. Off-Balance Sheet Arrangements
 Gold and Silver Sales Contracts
  Project Gold Sales Contracts
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n61




---



##### 



Key Aspects of Pascua-Lama Gold Sales Contracts
 (as of December 31, 2005)Expected delivery dates.1
    
    20092018, the term of the expected financing.Future estimated average realizable selling price.
    
    $378/oz.2Mark-to-market value at December 31, 2005.
    
    ($1,453) million.3
 1.
    
    The contract termination dates are in
20162019 in most cases, but we currently
expect to deliver Pascua-Lama production
against these contracts starting in 2009,
subject to the timing of receipt of approvals
of the environmental impact assessments, as
well as the resolution of other external
issues, both of which are largely beyond our
control. Refer to page 47 for further details.2.
    
    Upon delivery of production from 20092018, the term of expected
financing. Approximate estimated value based on
current market US dollar interest rates and on an
average lease rate assumption of 0.75%.3.
    
    At a spot gold price of $513 per ounce and market interest rates.
   Corporate Gold Sales Contracts and
Floating Spot-Price Gold Sales Contracts
  Key Aspects of Corporate Gold Sales Contracts
 (as of December 31, 2005)Current termination date of contracts.
    
    2015 in most cases.Average estimated realizable selling price in 2015.
    
    $458/oz.1Mark-to-market value at December 31, 2005.Corporate Gold Sales Contracts.
    
    ($1,277) million.2Floating Spot-Price Gold Sales Contracts.
    
    ($89) million.2
 1.
    
    Approximate estimated value based on current
market US dollar interest rates and an average
lease rate assumption of 0.75%. Accelerating
gold deliveries would likely lead to reduced
contango that would otherwise have built up over
time. Barrick may choose to settle any gold
sales contract in advance of this termination
date at any time, at its discretion.
Historically, delivery has occurred in advance
of the contractual termination date.2.
    
    At a spot gold price of $513 per ounce, and market interest rates.
 62n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Fixed-Price Silver Sales Contracts
 (as of December 31, 2005)Millions of silver ounces.
    
    15Current termination date of silver sales contracts.
    
    2015 in most cases.Average estimated realizable selling price at 2015 termination date.
    
    $7.40/oz.1Mark-to-market value at December 31, 2005.
    
    ($43) million.2
 1.
    
    Approximate estimated value based on current
market contango of 2.5%. Accelerating silver
deliveries could potentially lead to reduced
contango that would otherwise have built up over
time. Barrick may choose to settle any silver
sales contract in advance of this termination
date at any time, at its discretion.
Historically, delivery has occurred in advance
of the contractual termination date.2.
    
    At a spot silver price of $8.83 per ounce.
 Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 63




---



##### 



Key Terms of Gold and Silver Sales Contracts
  n
    
    The counterparties do not have
unilateral and discretionary right to
break provisions.n
    
    There are no credit downgrade provisions.n
    
    We are not subject to any margin calls
  regardless of the price of gold or silver.n
    
    We have the right to settle our gold and
silver sales contracts on two days notice at
any time during the life of the contracts, or
keep these forward gold and silver sales
contracts outstanding for up to 15 years.n
    
    At our option, we can sell gold or
silver at the market price or the contract
price, whichever is higher, up to the
termination date of the contracts (currently
2015 in most cases).
  n
    
    We must maintain a minimum consolidated
net worth of at least $2 billion; it was $3.9
billion at year end. The MTAs exclude
unrealized mark-to-market valuations in the
calculation of consolidated net worth.n
    
    We must maintain a maximum long-term
debt to consolidated net worth ratio of 2:1;
it was 0.5:1 at year end.
   Fair Value of Derivative Positions
 ($ millions)
    
    UnrealizedAs at December 31, 2005
    
    Gain/(Loss)Corporate Gold Sales Contracts
    
    $
    (1,277
    )Pascua-Lama Gold Sales Contracts
    
    
    (1,453
    )Floating Spot-Price Gold Sales Contracts
    
    
    (89
    )Silver Sales Contracts
    
    
    (43
    )Floating Spot-Price Silver Sales Contracts
    
    
    (9
    )Foreign currency contracts
    
    
    128Interest rate contracts
    
    
    30Fuel contracts
    
    
    42$
    (2,671
    )
 64 n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Critical Accounting Policies and Estimates
   Accounting Policy Changes in 2005
  Emerging Issues Task Force Issue No. 04-6,
Accounting for Stripping Costs Incurred During
Production in the Mining Industry (EITF 04-6)
  Impact of EITF 04-6 on Total Cash Costs
Per Ounce Statistics
 Three months ended
    
    
    Year endedDecember 31, 2005
    
    
    December 31, 2005(dollars per ounce)
    
    Increase (decrease)
    
    
    Increase (decrease)Goldstrike Open Pit
    
    $
    (12
    )
    
    $
    (12
    )Round Mountain
    
    
    1
    
    
    
    16Hemlo
    
    
    19
    
    
    
    11Pierina
    
    
    (45
    )
    
    
    (37
    )Lagunas Norte
    
    
    (96
    )
    
    
    (66
    )Kalgoorlie
    
    
    67
    
    
    
    9Plutonic
    
    
    
    
    
    
    (17
    )Lawlers
    
    
    9
    
    
    
    8Tulawaka
    
    
    11
    
    
    
    48Total cash costs
per ounce
    
    $
    (22
    )
    
    $
    (12
    )
 Future Accounting Policy Changes
  FAS 123R, Share-Based Payment, a Revision to
FAS 123 and a Replacement of APB 25 and FAS
148
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 65




---



##### 



Exposure Draft,
Accounting for Uncertain Tax Positions
   Critical Accounting Estimates and Judgments
  Reserve Estimates Used to Measure Amortization of
Property, Plant and Equipment
  66n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



n
    
    Underground development costs
incurred to access ore at underground mines
are significant and amortized using the
units-of-production method; andn
    
    Reserves at underground mines are
often more sensitive to gold price
assumptions and changes in production costs.
Production costs at underground mines are
impacted by factors such as dilution, which
can significantly impact mining and
processing costs per ounce.
 Impact of Historic Changes in Reserve Estimates on Amortization
 2005
    
    
    2004For the years ended December 31
    
    Reserves
    
    
    Amortization
    
    
    Reserves
    
    
    Amortization($ millions, except reserves in
    
    increase
    
    
    increase
    
    
    increase
    
    
    increasemillions of contained oz)
    
    (decrease)1
    
    
    (decrease)
    
    
    (decrease)1
    
    
    (decrease)Goldstrike Open Pit
    
    
    2.1
    
    
    $
    (5
    )
    
    
    1.5
    
    
    $
    (3
    )Goldstrike Underground
    
    
    0.1
    
    
    
    (4
    )
    
    
    0.2
    
    
    
    (4
    )Round Mountain
    
    
    0.4
    
    
    
    (1
    )
    
    
    0.2
    
    
    
    (1
    )Lawlers
    
    
    0.1
    
    
    
    (2
    )
    
    
    
    
    
    
    Eskay Creek
    
    
    (0.1
    )
    
    
    6
    
    
    
    (0.1
    )
    
    
    5Pierina
    
    
    0.3
    
    
    
    (22
    )
    
    
    0.3
    
    
    
    (10
    )Hemlo
    
    
    (0.2
    )
    
    
    2
    
    
    
    (0.1
    )
    
    
    1Plutonic
    
    
    0.2
    
    
    
    (1
    )
    
    
    0.5
    
    
    
    (2
    )Kalgoorlie
    
    
    (0.2
    )
    
    
    
    
    
    
    0.9
    
    
    
    (1
    )Darlot
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Marigold
    
    
    0.1
    
    
    
    (1
    )
    
    
    0.1
    
    
    
    (1
    )Bulyanhulu
    
    
    0.1
    
    
    
    
    
    
    
    (0.4
    )
    
    
    1Total
    
    
    3.0
    
    
    $
    (28
    )
    
    
    3.1
    
    
    $
    (15
    )
 1.
    
    Each year we update our reserve estimates as at the end of the year as part of our normal
business cycle. Reserve changes presented were calculated at the beginning of the applicable
fiscal year and are in millions of contained ounces.
 Impairment Assessments of Investments
  Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 67




---



##### 



Impairment Assessments of Operating Mines,
Development Projects and Exploration Stage
Properties
  n
    
    Estimated sales proceeds from the
production and sale of recoverable ounces of
gold contained in proven and probable reserves;n
    
    Expected future commodity prices and
currency exchange rates (considering
historical and current prices, price trends
and related factors);n
    
    Expected future operating costs and
capital expenditures to produce proven and
probable gold reserves based on mine plans that
assume current plant capacity, but exclude the
impact of inflation;n
    
    Expected cash flows associated with
value beyond proven and probable reserves,
which includes the expected cash outflows
required to develop and extract the value
beyond proven and probable reserves; andn
    
    Environmental remediation costs
excluded from the measurement of asset
retirement obligations.
     68n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Production Start Date
  n
    
    The level of capital expenditures
compared to construction cost estimatesn
    
    Completion of a reasonable period of
testing of mine plant and equipmentn
    
    Ability to produce gold in saleable
form (within specifications)n
    
    Ability to sustain ongoing production of gold
  Fair Value of Asset Retirement Obligations (AROs)
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 69




---



##### 



AROs at December 31, 2005
 ($ millions)Operating mines
    
    $
    280Closed mines
    
    
    154Development projects
    
    
    12Total
    
    $
    446
 70n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Deferred Tax Assets and Liabilities
 Measurement of Temporary Differences
  Valuation Allowances
    Valuation allowances at December 31
 ($ millions)
    
    2005
    
    
    2004United States
    
    $
    209
    
    
    $
    195Chile
    
    
    124
    
    
    
    129Argentina
    
    
    46
    
    
    
    75Canada
    
    
    63
    
    
    
    73Tanzania
    
    
    204
    
    
    
    146Australia
    
    
    2
    
    
    
    3Other
    
    
    8
    
    
    
    8$
    656
    
    
    $
    629
 Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 71




---



##### 



United States:
 Chile and Argentina:
 Canada:
 Tanzania:
 Stock-Based Compensation
    72n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



Cautionary Statement on
Forward-Looking Information
   Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 73




---



##### 



Glossary of Technical Terms
 AUTOCLAVE:
 BACKFILL:
 BY-PRODUCT:
 CONCENTRATE:
 CONTAINED OUNCES:
 CONTANGO:
 DEVELOPMENT:
 DILUTION:
 DORÉ:
 EXPLORATION:
 GRADE:
 Cut-off grade:
 Mill-head grade:
 Recovered grade:
 Reserve grade:
 HEAP LEACHING:
 HEAP LEACH PAD:
 LIBOR:
 74n Managements Discussion and Analysis
    
    Barrick Annual Report 2005




---



##### 



MILL:
 MINERAL RESERVE:
 MINERAL RESOURCE:
 MINING CLAIM:
 MINING RATE:
 OPEN PIT:
 ORE:
 ORE BODY:
 OUNCES:
 RECLAMATION:
 RECOVERY RATE:
 REFINING:
 ROASTING:
 STRIPPING:
 TAILINGS:
 Barrick Annual Report 2005
    
    Managements Discussion and Analysis n 75




---



##### 



Key Statistics
 Three months ended
    
    
    Year ended(in United States dollars)
    
    December 31,
    
    December 31,(Unaudited)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Operating ResultsGold production (thousands of ounces)1
    
    
    1,648
    
    
    
    1,169
    
    
    
    5,460
    
    
    
    4,958Gold sold (thousands of ounces)
    
    
    1,650
    
    
    
    1,200
    
    
    
    5,320
    
    
    
    4,936Per Ounce DataAverage spot gold price
    
    $
    486
    
    
    $
    434
    
    
    $
    444
    
    
    $
    409Average realized gold price
    
    
    467
    
    
    
    417
    
    
    
    439
    
    
    
    391Total cash costs2
    
    
    221
    
    
    
    223
    
    
    
    227
    
    
    
    214Amortization3
    
    
    74
    
    
    
    76
    
    
    
    76
    
    
    
    86Total production costs
    
    
    295
    
    
    
    299
    
    
    
    303
    
    
    
    300Financial Results(millions)Gold sales
    
    $
    776
    
    
    $
    501
    
    
    $
    2,350
    
    
    $
    1,932Net income
    
    
    175
    
    
    
    156
    
    
    
    401
    
    
    
    248Operating cash flow
    
    
    269
    
    
    
    123
    
    
    
    726
    
    
    
    509Per Share Data (dollars)Net income (basic)
    
    
    0.33
    
    
    
    0.30
    
    
    
    0.75
    
    
    
    0.47Net income (diluted)
    
    
    0.32
    
    
    
    0.29
    
    
    
    0.75
    
    
    
    0.46Operating cash flow (basic and diluted)
    
    
    0.50
    
    
    
    0.23
    
    
    
    1.35
    
    
    
    0.95Weighted average common shares outstanding (millions)4
    
    
    541
    
    
    
    534
    
    
    
    538
    
    
    
    534
 As at
    
    
    As atDecember 31,
    
    
    December 31,2005
    
    
    2004Financial Position(millions)Cash and equivalents
    
    $
    1,037
    
    
    $
    1,398Non-cash working capital
    
    
    151
    
    
    
    141Long-term debt5
    
    
    1,721
    
    
    
    1,655Shareholders equity6
    
    
    3,850
    
    
    
    3,574
 1
    
    Includes equity ounces in Highland Gold.2
    
    Represents cost of goods sold plus royalties, production taxes and accretion expense,
less by-product revenues, divided by ounces of gold sold. For further information on this performance measure, refer to page 17.3
    
    Represents amortization expense at the Companys producing mines divided by ounces of gold sold.4
    
    Fully diluted, includes shares issuable upon exchange of BGI (Barrick Gold Inc.) exchangeable shares.5
    
    We drew down $1 billion under our credit agreement
subsequent to December 31, 2005 to
pay for the cash component of the Placer acquisition. We expect to repay the
amounts borrowed with proceeds realized on closing of the Goldcorp agreement.6
    
    Shareholders equity increased subsequent to
December 31, 2005, in connection with the Placer Dome acquisition, refer to note 3 to the Financial Statements.
 Barrick Year-End 2005
    
    Summary Information n 5




---



##### 



Production and Cost Summary
 Production(attributable ounces) (000s)
    

Total Cash Costs(US$/oz)1Three months ended
    
    Year ended
    
    Three months ended
    
    Year endedDecember 31,
    
    December 31,
    
    December 31,
    
    December 31,(Unaudited)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004North AmericaOpen Pit
    
    
    495
    
    
    
    373
    
    
    
    1,514
    
    
    
    1,381
    
    
    $
    217
    
    
    $
    230
    
    
    $
    235
    
    
    $
    249Underground
    
    
    127
    
    
    
    134
    
    
    
    510
    
    
    
    562
    
    
    
    345
    
    
    
    233
    
    
    
    314
    
    
    
    255Goldstrike Property Total
    
    
    622
    
    
    
    507
    
    
    
    2,024
    
    
    
    1,943
    
    
    
    242
    
    
    
    231
    
    
    
    255
    
    
    
    250Eskay Creek
    
    
    25
    
    
    
    73
    
    
    
    172
    
    
    
    290
    
    
    
    15
    
    
    
    7
    
    
    
    49
    
    
    
    32Round Mountain (50%)
    
    
    78
    
    
    
    84
    
    
    
    368
    
    
    
    381
    
    
    
    291
    
    
    
    267
    
    
    
    246
    
    
    
    225Hemlo (50%)
    
    
    51
    
    
    
    66
    
    
    
    230
    
    
    
    247
    
    
    
    317
    
    
    
    232
    
    
    
    288
    
    
    
    241Holt-McDermott2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    197Marigold (33%)
    
    
    19
    
    
    
    15
    
    
    
    69
    
    
    
    47
    
    
    
    213
    
    
    
    194
    
    
    
    219
    
    
    
    198795
    
    
    
    745
    
    
    
    2,863
    
    
    
    2,963
    
    
    
    245
    
    
    
    212
    
    
    
    244
    
    
    
    223South AmericaPierina
    
    
    174
    
    
    
    94
    
    
    
    628
    
    
    
    646
    
    
    
    165
    
    
    
    155
    
    
    
    139
    
    
    
    111Lagunas Norte
    
    
    298
    
    
    
    
    
    
    
    550
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    110
    
    
    
    Veladero
    
    
    51
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    523
    
    
    
    94
    
    
    
    1,234
    
    
    
    646
    
    
    
    126
    
    
    
    155
    
    
    
    126
    
    
    
    111Australia/AfricaPlutonic
    
    
    57
    
    
    
    74
    
    
    
    251
    
    
    
    305
    
    
    
    293
    
    
    
    251
    
    
    
    263
    
    
    
    223Darlot
    
    
    39
    
    
    
    28
    
    
    
    135
    
    
    
    140
    
    
    
    237
    
    
    
    255
    
    
    
    259
    
    
    
    210Lawlers
    
    
    38
    
    
    
    29
    
    
    
    131
    
    
    
    110
    
    
    
    231
    
    
    
    249
    
    
    
    271
    
    
    
    246Kalgoorlie (50%)
    
    
    81
    
    
    
    110
    
    
    
    417
    
    
    
    444
    
    
    
    331
    
    
    
    241
    
    
    
    248
    
    
    
    234215
    
    
    
    241
    
    
    
    934
    
    
    
    999
    
    
    
    291
    
    
    
    247
    
    
    
    257
    
    
    
    229Bulyanhulu
    
    
    72
    
    
    
    89
    
    
    
    311
    
    
    
    350
    
    
    
    401
    
    
    
    323
    
    
    
    358
    
    
    
    284Tulawaka (70%)
    
    
    33
    
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    253
    
    
    
    320
    
    
    
    330
    
    
    
    1,332
    
    
    
    1,349
    
    
    
    303
    
    
    
    265
    
    
    
    280
    
    
    
    243Highland equity portion
    
    
    10
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    314
    
    
    
    n/a
    
    
    
    303
    
    
    
    n/aTotal
    
    
    1,648
    
    
    
    1,169
    
    
    
    5,460
    
    
    
    4,958
    
    
    $
    221
    
    
    $
    223
    
    
    $
    227
    
    
    $
    214
 Total Production Costs(US$/oz)Three months ended
    
    Year endedDecember 31,
    
    December 31,(Unaudited)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Direct mining costs3
    
    $
    237
    
    
    $
    265
    
    
    $
    255
    
    
    $
    248Hedge gains4
    
    
    (16
    )
    
    
    (24
    )
    
    
    (21
    )
    
    
    (19
    )By-product credits
    
    
    (19
    )
    
    
    (35
    )
    
    
    (25
    )
    
    
    (30
    )Cash operating costs
    
    
    202
    
    
    
    206
    
    
    
    209
    
    
    
    199Royalties
    
    
    12
    
    
    
    13
    
    
    
    12
    
    
    
    11Production taxes
    
    
    5
    
    
    
    2
    
    
    
    4
    
    
    
    2Accretion and other costs
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Total cash costs
    
    
    221
    
    
    
    223
    
    
    
    227
    
    
    
    214Amortization
    
    
    74
    
    
    
    76
    
    
    
    76
    
    
    
    86Total production costs
    
    $
    295
    
    
    $
    299
    
    
    $
    303
    
    
    $
    300
 1
    
    Total cash costs per ounce statistics for 2005 and 2004 are not comparable due to
the change in accounting for deferred stripping costs. Refer to
page 34 for further details. For further information on this
performance measure, refer to page 17.2
    
    Holt-McDermott ceased production in fourth quarter 2004.3
    
    At market currency exchange rates and commodity prices.4
    
    From currency and commodity hedge contracts.
 6n Summary Information
    
    Barrick Year-End 2005