##### 



2004 Annual Report BARRICK GOLD Whats next: Growth.   Building Mines. Building Value.




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##### 



Delivering Growth. Building Mines 
 Barricks pipeline of gold development projects is unrivaled in size, quality, and
immediacy. Three new mines will be in production in 2005, another in early 2006, with two more to
follow in subsequent years. Building Value 
 Barrick is targeting a 12% compound annual growth rate in gold production, 2004-2007 
substantially higher than any of our peers. Reserves have increased to 89 million ounces, and with
our aggressive exploration strategy and large world-class gold districts we expect to grow them
further.




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##### 



FINANCIAL HIGHLIGHTS Barrick Gold CorporationBarrick is one of the worlds largest gold mining companies,
with operating and development properties in the US, Canada, Australia, Peru, Chile, Argentina
and Tanzania. Our vision is to be the worlds best gold mining company by finding, developing
and producing quality reserves in a profitable and socially responsible manner. Barrick shares are traded on the Toronto, New York, London and Swiss stock exchanges and the
Paris Bourse. Financial Highlights (in millions of US dollars, except per share data)(US GAAP basis)
    
    2004
    
    
    
    2003
    
    
    2002Gold Sales
    
    $
    1,932
    
    
    
    $
    2,035
    
    
    $
    1,967Net Income for the Year
    
    
    248
    
    
    
    
    200
    
    
    
    193Operating Cash Flow
    
    
    506
    
    
    
    
    519
    
    
    
    588Cash and Equivalents
    
    
    1,398
    
    
    
    
    970
    
    
    
    1,044Shareholders Equity
    
    
    3,563
    
    
    
    
    3,494
    
    
    
    3,334Net Income per Share (Diluted)
    
    
    0.46
    
    
    
    
    0.37
    
    
    
    0.36Operating Cash Flow per Share
    
    
    0.95
    
    
    
    
    0.97
    
    
    
    1.09Dividends per Share
    
    
    0.22
    
    
    
    
    0.22
    
    
    
    0.22Operating HighlightsGold Production (thousands of ounces)
    
    
    4,958
    
    
    
    
    5,510
    
    
    
    5,695Average Realized Gold Price per Ounce
    
    $
    391
    
    
    
    $
    366
    
    
    $
    339Total Cash Costs per Ounce1
    
    $
    212
    
    
    
    $
    189
    
    
    $
    177Total Production Costs per Ounce
    
    $
    298
    
    
    
    $
    279
    
    
    $
    268Reserves: Proven and Probable (thousands of ounces)2
    
    
    89,056
    
    
    
    
    85,952
    
    
    
    86,927
  1.
    See page 67 for a discussion of non-GAAP measures.  2.
    For the remainder of this report  for a breakdown of reserves
and resources by category in respect of each of Barricks mines and
development projects, see page 126.  ContentsFinancial Highlights
    
    pg.
    
    
    1Letter to Shareholders
    
    pg.
    
    
    2Responsible Mining
    
    pg.
    
    
    8Reserves: Replacement and Growth
    
    pg.
    
    
    11Financial Strategy
    
    pg.
    
    
    18Operations Review
    
    pg.
    
    
    20Managements Discussion and Analysis
    
    pg.
    
    
    25Financial Statements
    
    pg.
    
    
    76Notes to Financial Statements
    
    pg.
    
    
    80Reserves
    
    pg.
    
    
    125Corporate Governance and
Committees of the Board
    
    pg.
    
    
    131Board of Directors and Officers
    
    pg.
    
    
    132Shareholder Information
    
    pg.
    
    
    134Corporate Information
    
    pg.
    
    
    136
 1




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##### 



LETTER TO SHAREHOLDERS Building Mines. Building Value. 
 We met or surpassed the goals we set for ourselves in almost every area of our business, 
and once again we were able to demonstrate Barricks leadership, both in sustainable development
and in social responsibility. Dear Shareholders: By all accounts, 2004 was a successful year
for Barrick and its stakeholders. Our shares
outperformed gold and those of our peer group in
2004. We met or surpassed the goals we set for
ourselves in almost every area of our business,
and once again we were able to demonstrate
Barricks leadership, both in sustainable
development and in social responsibility. Our share price performance in 2004 reaffirms
what we said in last years letter to our
shareholders: Barrick is on track, with the
right people and the right strategies for the
challenges and opportunities that lie ahead. We said that 2004 would be a year of transition
 a year of building a new generation of mines
targeted to increase our production by 40% by
2007, and drive the Companys future growth and
profitability. In 2004, four of our development
projects moved from the engineering stage to
construction, with three of the four expected to
contribute to our production in 2005, and the
fourth, Cowal, expected to pour gold in the first quarter of 2006. During the year, we also
announced positive development decisions for two
new projects, Pascua-Lama and East Archimedes. In last years letter, we also pledged that we
would put new energy into communicating our
exciting future to the investment community 
and we did.  2




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##### 



LETTER TO SHAREHOLDERS Challenges for the industry... The gold price was up 6% during 2004 in US
dollar terms, which, for the industry as a
whole, should have meant significantly higher
profits and cash flow. Instead, financial
results for the industry failed to meet
expectations due to a number of challenges that
impeded performance. The rise in the gold price over the last two
years was tied very closely to the devaluation
of the US dollar. As the dollar fell, the gold
price appreciated. We not only expect this close
inverse correlation between the two to continue,
we believe the combination of soaring US deficits and the trend of decreasing mine supply
will provide a strong but volatile US-dollar
gold price environment over the next three to five years. However, other currencies, notably the South
African Rand and the Canadian and Australian
dollars, appreciated along with the gold price.
This had the effect of negating some or all of
the benefit of the higher US-dollar gold
price, which meant the profitability of mines
in those regions may have actually declined. There were also significant cost increases
in energy, consumables and other
commodities,
as demand in developing countries, such as
China, put upward pressure on commodity
prices. These increases, combined with the
currency impacts, were a key factor in the
rise of gold production costs by some 15% on
an industry-wide basis. Although gold prices in US dollars were up in
the last two years, industry production has
been steadily contracting since 2002.
Investment in the gold industry had been
limited until 2003, when the gold price started
to climb. The lack of investment resulted in
very few large, new discoveries, and these
require a lead time of some 7 to 10 years
before coming into production. Existing
operating mines are also maturing, which
usually results in lower grade, lower
production and higher costs. The increase in commodity prices has spurred a
boom in the mining industry. The number of new
projects in the base metals industry has
increased as producers expand to meet the new
demand. We are all members of the same industry,
and compete for
the same equipment, manpower and professional
staff. Shortages and higher costs are a direct
result. (LINE GRAPH) fig.1 Gold Price and Currency MovementsSeveral currencies appreciated along with the gold price
affecting profitability of mines in those regions. 3




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##### 



LETTER TO SHAREHOLDERS In todays world, there is also a
continuing rise in standards to be met when
developing a new mine. Local communities are
naturally interested in protecting their
environment and sharing in the benefits of new
mining developments. The relationship between
the mining industry and the communities in which
it operates is critical to the success of any
new project. Obtaining and maintaining the
social license to proceed with new and existing
operations is more complex and sophisticated
than ever. It is an ongoing challenge, and any
successful mining company must be ready to meet
it. ...and Barricks response The ultimate proof of a companys
response is in its performance. In 2004, we
responded to the challenges with good
results and, more importantly, we positioned
ourselves for future success. Although our cash costs per ounce were up
approximately 10% over 2003, the increase was
within our target range, and below the industry
average, because we were able to mitigate some of
the inflationary and currency cost pressures
through our cost management initiatives (outlined
more fully later in this report). Most of the
cost increase was due to a 10% decline in ounces
produced, as both the Pierina and Goldstrike
mines sequenced through lower grade ore during
the year. Production from these two mines is

expected to return to better grades in 2005,
which will have a beneficial impact on
costs. In spite of the cost increase, Barrick
emerged as the lowest-cost producer of the
senior gold mining companies in 2004  and we
expect to maintain that ranking. The inflationary pressure we experienced in
2004 is unlikely to be as severe in the coming
year, as energy and commodity prices appear to
have stabilized. Our quality portfolio of
operating mines are mining at or near reserve
grade, which means that cost pressure arising
from having mined above reserve grade is not a
significant factor for Barrick. Through our
continuous improvement program, we will remain
focused on managing our costs and maximizing our
operating margins. Currency fluctuations remain
a concern, as the outlook for the US dollar
remains weak. While this is favorable for the
US-dollar gold price, the benefit will only be
realized if the cost of
production is also US-dollar denominated.
Currently, more than 70% of Barricks cost of
production is in US dollars and this percentage
will grow to above 80% as the new mines come
onstream.
Barrick, of course, is hedged for most of
its cost of production, through the
deployment of hedging instruments to
protect against currency volatility in our
operations whose costs are not US-dollar
based. In spite of the cost increase, Barrick emerged as the lowest-cost producer of the senior
gold mining companies in 2004  and we expect to maintain that ranking. 4




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##### 



LETTER TO SHAREHOLDERS While the industry was retrenching, Barrick had the financial strength to aggressively
invest in exploration and acquisitions. In the long run, the fundamental response
to the challenges we face is to invest in new
high-quality, efficient, low-cost production.
Barrick has done just that and will soon reap
the rewards of that foresight. While the
industry was retrenching, Barrick had the financial strength to aggressively invest in
exploration and acquisitions. As a result, we
are well along in the construction of three new
mines, which will require a total investment of
about $1.2 billion. The expected average
production from these new operations over their
first three full years is 1.8 million ounces,
with operating costs expected to be much lower
than our current cost structure. We made
outstanding headway on these new projects in
2004, having invested more than half of the
capital required, and we are keen to move from
development to production and optimization. Not
only are we converting some 25 million ounces of
reserves from our new projects into long-lived,
cash flow generating assets, we are also
delivering them into a sustained period of
strong gold prices. In addition, and unlike the industry as a whole,
during 2004 we increased our proven and probable
reserves. At year-end they stood at 89.1 million
ounces, an increase of 8.6 million ounces before
production depletion of 5.5 million contained
ounces. The key to Barricks reserve growth is its
exploration focus on assets in new prospective
districts. Assets such as Veladero and Lagunas
Norte have a much better chance to grow because
of their unexplored potential and the large land
packages involved. In 2004, our low-cost suite
of development projects increased their reserves
by nearly 15%. Clearly, our focus on strong land
positions in some of the most prospective gold
districts is paying off. In 2004, we also continued our exploration
success by finding new reserves on existing
properties  for example, Goldstrike in Nevada
added 2.3 million ounces to its reserves. In
short, while the gold industry overall worked to
ramp up exploration investment, Barrick was
already reaping the rewards of having maintained
its strong, consistent exploration program
during the years when low gold prices led others
to retrench. These ambitious plans would not be possible
without the financial strength to execute
them. Barrick is able to fund its development
projects without the need to raise additional
equity. We expect to be able to fund a further
$1.5 billion at Pascua-Lama without the need
for dilution. 5




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##### 



LETTER TO SHAREHOLDERS Barricks definition of success includes
more than financial metrics. We have always
emphasized the importance of sustainable
development, as this is our social license to
operate mines in communities all around the
globe. We strive to improve the communities in
which we operate not just through the royalties
and various taxes our workforce and mines
generate, but also through our focus on building
strong working relationships with local
communities. We operate with a high degree of
transparency, and provide these communities with
skills training, social benefits, local
employment and access to medical assistance.
Some of the highlights in 2004 include our
partnership with World Vision in Peru, and the
strengthening of our relationship with Habitat
for Humanity, an NGO that is constructing
housing in villages surrounding the Bulyanhulu
Mine in Tanzania. Because of this deep, ongoing
commitment to social responsibility, our social
license to operate grows stronger every year. It
is our calling card, and it continues to
facilitate the successful development of our
projects, worldwide. We also strengthened the organization with the
addition of a number of extraordinary new
people  including, at the Board level, two
additional independent directors. Presently, 8
of our 13 directors are independent. We shall miss the wise counsel of Jack Thompson
and John Carrington. Jack, the former Chairman
and CEO of Homestake, has made an invaluable
contribution to our organization since the 2001
merger, while John, our former COO, steered
Barricks operations on the global stage for a
decade. We are proud of our association with
these two high-quality professionals, and wish
them well in their future endeavors. Finally, we remained highly focused on our
people during the year, because people execute
the business plan. The successful execution of
that plan in 2004 reflected our ability to
develop leaders, manage talent, and place the
right people at every level of the organization.
More than ever, Barrick is a dynamic,
professional, growth-oriented organization that
challenges, develops and rewards its people.
During the year, we increased employees
responsibilities and their accountability, which
led to exceptional results. (BAR CHART) fig. 2 Growth Profile  Target Production 2004-20072004 was a year of building a new generation
of mines targeted to drive Barricks future growth. 6




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##### 



LETTER TO SHAREHOLDERS (PHOTO OF PETER MUNK)
`
    
    (PHOTO)
    
    (PHOTO OF GREGORY C. WILKINS)
 Peter Munk (left) and Gregory C. Wilkins (right). The Year Ahead Our objectives for 2005 are straightforward.  >
    Deliver consistent growth in earnings and cash flow.>
    Focus on the execution of our development projects:
Lagunas Norte, Veladero, Cowal, East Archimedes,
and Pascua-Lama.>
    Build our resource base. Reserves are the
lifeblood of a mining company, and our 2005
objective is to replace and augment both our
reserves and resource base. By increasing our
resource base, we prepare for the growth of
reserves and production in the future.>
    Develop employees through an organization-wide
culture of improvement and leadership.>
    Continue to grow the business, whether through
success with the drill bit, asset optimization,
or acquisition.>
    Ensure our employees safety, protect the
environment, and strengthen the communities
in which we operate. In last years letter, we said that 2004 would be
a year of building mines  and it was. We said our
reorganization into regional business units put us on
track to achieve our business plan
objective  and it did. We executed the
plan, and our stakeholders benefited. Finally, we told you that 2004 would position
us for rising production and profitability
in 2005 and beyond. It has. Three of our new mines are expected to make a
meaningful contribution to production in 2005,
with the fourth coming onstream in first quarter
2006. Barrick will continue to meet the
industrys challenges and run counter to industry
trends, by delivering strong reserve development,
new low cash-cost mines, a rising production
profile, and the financial strength needed to
execute our strategies and reward our
stakeholders. We have the strategies, the balance sheet, the
social license and above all the people, to
plan well and then execute. In 2005, all
stakeholders will see a significant return on
all the hard work and perseverance of the last
few years. /s/ Peter Munk
    
    
    
    /s/ Gregory C. WilkinsPeter Munk
    
    
    
    Gregory C. WilkinsChairman
    
    
    
    President andChief Executive Officer
 March 1, 2005 7




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##### 



Corporate Social Responsibility  Responsible Mining At Barrick, contributing long-term benefits to the communities and countries where we
operate is integral to our vision of building mines and building value. Our record of outstanding
performance, partnership and ethical conduct is our calling card, creating opportunities to
generate shareholder value while fostering sustainable development. Our shareholders rightly expect
high standards of corporate responsibility as a matter of good business practice. (PHOTO) Community Development For Barrick, community
development is a priority. We
have partnered with such
organizations as World Vision
who are effectively working
on sustainable development
programs and the needs of
children. (PHOTO) Environment Environmental excellence is
a strategic business
objective. Reclamation
proceeds concurrently with
mining. At Goldstrike in
Nevada, an environmental
engineer inspects the
growth of native plants
seeded on reclaimed land
that has been recontoured
to blend more naturally
into the surrounding
landscape. (PHOTO) Safety and Health Wherever we operate, men
and women have volunteered
and trained to respond to
emergencies. These
volunteers have become
skilled at providing
medical attention, fire
fighting and other
response techniques.
Emergency preparedness is
a key element of the
Barrick Safety System. 8




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##### 



RESPONSIBLE MINING   Corporate Social
Responsibility Charter
 Barricks commitment to
Corporate Social Responsibility
(CSR) is realized through
corporate policies and initiatives
that are implemented at sites
worldwide, with regional and local
priorities in mind. During 2004,
Barricks Board of Directors
approved a Corporate Social
Responsibility Charter, which
codifies the principles and
practices that have long been a
priority at Barrick sites. The
Charter identifies four pillars
that guide Barrick in its business
conduct around the world: Ethics;
Employees; Community; and
Environment, Health and Safety. In
all these areas, the Charter sets
out performance expectations that
aim to establish trust with all
those with whom we interact,
whether they be our employees, the
communities where we live and
work, or our government hosts. For more information on Barricks
Charter and Corporate
Responsibility policies and
programs, please see Barricks
2004 Responsibility Report, which
is available on our website:
www.barrick.com.   Community
Development
 Barricks mines make
significant contributions to
community development, such as
infrastructural investment,
service industry development,
education, small business
development and health service
improvement. Sharing the benefits
associated with our mining
operations is no more clearly
exemplified than in Peru, where 98
percent of our employees are
Peruvian and where 63 percent of
the construction contractors at
our Lagunas Norte development
project are from the local La
Libertad Region. Barrick engages with local and
regional community representatives
to understand their concerns and
interests, and then factors this
input into project design and
operations planning. Whether it involves road or power
system improvements, development
of housing or medical facilities,
or obtaining mine services,
Barrick gives
priority to building partnerships
to enhance local capacity and
sustainable community
development. In addition, Barrick
provides training in specific
trades to allow local community
members to establish their own
businesses, from which they can
benefit well into the future.
Barricks partnership with World
Vision in Peru is one example of
the Companys commitment to
partner with others to promote
community development, in this
particular instance with the
objective of improving the
welfare of area children. 9




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##### 



RESPONSIBLE MINING   Employee
Development
 Employee development is a
vital part of Barricks efforts to
strengthen the organization and
ensure that we have the right
leaders in place at the right
time. Extensive training programs
have been instituted to develop
the skills of employees and to
advance their career potential.
Barrick is committed to fair
employment practices and a
workplace in which all individuals
are treated with dignity and
respect, and are free from
harassment and discrimination as
codified in the Companys Code of
Business Conduct and Ethics. Across Barrick operations, all
employees receive a core group of
health care benefits, such as
medical, dental and life
insurance, that can be tailored to
meet local needs. For example, at
the Bulyanhulu Mine in Tanzania,
Barrick provides comprehensive
employee health education, with a
focus on HIV/AIDS, tuberculosis
and malaria.   Environment
 Barrick is committed to
protecting the environment wherever
the Company is exploring,
developing, operating, or closing
mines. Extensive environmental
investigations precede mine
planning and design. They are then
followed by ongoing monitoring and
regular independent audits to
ensure standards are upheld and
performance improvement
opportunities are recognized.
Throughout a mines lifecycle,
Barrick aims to meet or surpass
regulatory requirements while
safeguarding the environment for
local communities and future
generations. Examples of the wide
variety of environmental
initiatives Barrick undertakes
include a conservation area
established to promote wildlife at
our Bulyanhulu mine and a tree
planting program to prevent soil
erosion in the communities
surrounding our Pierina mine.   Safety and Health
 For Barrick, the only
acceptable health and safety goal
is to ensure every person goes
home safe and healthy every day.
The Barrick Safety and Health
System draws on best practices
inside and outside the Company and
establishes clear roles,
responsibilities and
accountabilities for individuals
and teams, at all levels of the
organization. Personal safety
behaviors and decisions by
managers are key to the
establishment of the required
safety culture. To reinforce
leaderships role in Barricks
safety culture, Courageous Safety
Leadership training was initiated
during 2004.   Charitable
Giving
 Barricks Heart of Gold Fund
is another way we contribute to
the communities where we work and
live. Barricks policy is to give
one percent of annual pre-tax
income to charitable causes.
Recipients range from community
outreach programs, to hospitals
and schools, arts and cultural
events, and major research
institutions. Whether it is direct
monetary support, in-kind service,
or donation of materials or
equipment, Barrick works closely
with community representatives to
identify needs and priorities. As
one of many examples, in 2004,
Barrick contributed toward the
establishment of a local pediatric
medical facility in one of the
communities near our Veladero
project. The Company has committed
to further assist with the
purchase of medical equipment for
the facility in a collaborative
effort with local governments. 10




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##### 



RESERVES: REPLACEMENT AND GROWTH Development Projects  Laying the Groundwork for Growth Barricks pipeline of gold development projects has no rival for size, quality and
immediacy. During 2004 we were focused on building our new mines and laying the groundwork
for growth. In 2005 we will begin to deliver that growth, and the value it creates, even
as we bring the remainder of the development projects onstream. Tulawaka entered production in early 2005; of the remaining five projects, two more,
Lagunas Norte and Veladero, are slated to come into production in 2005 and Cowal in 2006.
Production from Pascua-Lama and East Archimedes is expected to follow. These first four
high-quality projects are expected to drive Barrick to a targeted 40 percent increase in
gold production by 2007 (from 2004 levels)  while maintaining our position with the
lowest cash costs among the senior producers. Going forward, we expect more projects in the development pipeline, for as these current
projects leave the development pipeline and begin production, others are rising through
the exploration pipeline  for example, Buzwagi in Tanzania, which is now undergoing a
scoping study. The following pages will discuss in more detail the three projects which are currently in
construction (Lagunas Norte, Peru; Veladero, Argentina; and Cowal, Australia), followed by
the two projects still in permitting (Pascua-Lama, Chile/Argentina; and East Archimedes,
Nevada). 11




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##### 



RESERVES: REPLACEMENT AND GROWTH Lagunas Norte Located about 175 kilometers from the Pierina Mine, Lagunas Norte is expected to come
onstream in third quarter 2005 and contribute on average about 800,000 ounces per year at about
$155 per ounce over the first three full years. Description
    
    >
    
    Located in north-central Peru, about 175 kilometers from Barricks Pierina Mine>
    
    Oxide mineralization similar to Pierina, with high-grade gold surface
outcroppings and good metallurgy>
    
    Open-pit, valley-fill crushing/leaching operationBackground
    
    >
    
    Barrick announced the Lagunas Norte discovery on April 23, 2002Current
    
    >
    
    Proven and probable gold reserves of 9.1 million ouncesMineralization Status
    
    >
    
    1,350 square kilometer land position with good exploration
potential within a 15 kilometer radius of Lagunas NorteActivities Underway
    
    >
    
    Access road/power line completed>
    
    Site preparation complete>
    
    Pre-mine stripping activities commenced in December 2004>
    
    Leach pad was completed in first quarter 2005>
    
    Crushing facility to be completed in second quarter 2005Timeline
    
    >
    
    Production expected to commence third quarter 2005Construction Cost
Estimate
    
    >
    
    Approximately $340 millionProduction Profile
    
    >
    
    Gold production is expected to average approximately 800,000
ounces per year at an average total cash cost of about $155 per
ounce1 for the first three years
   1.
    See page 67 for a discussion of non-GAAP measures.   (PICTURE) At Lagunas Norte, a grassroots exploration discovery in
2002, production is expected to start up in third quarter
2005, contributing an average of 800,000 ounces annually
for the first three full years. (PICTURE) One of two 23 cubic meter hydraulic shovels. 12




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##### 



RESERVES: REPLACEMENT AND GROWTH Veladero Targeted to enter production in fourth quarter 2005, Veladero has gold reserves of 12.8 million ounces and is the
foundation of one of the worlds largest gold districts, Frontera, with over 30 million ounces of gold reserves. Description
    
    >
    
    Located in San Juan Province, Argentina; 6 kilometers from the Pascua-Lama project
in the Frontera District>
    
    Open-pit, valley-fill heap leach operation with two-stage crushing, similar to
Barricks Pierina MineBackground
    
    >
    
    Merger with Homestake Mining Company in December 2001 gave Barrick 100% of Veladero;
formerly a joint venture owned 40% and 60% by Barrick and Homestake, respectivelyCurrent
Mineralization Status
    
    >
    
    Proven and probable gold reserves of 12.8 million ouncesActivities Underway
    
    >
    
    Access road and camp construction completed>
    
    All major mining equipment has been delivered and pre-stripping is underway>
    
    Assay lab was commissioned in October 2004>
    
    Primary and secondary crusher circuit to be completed June 2005>
    
    Pad loading to commence in July 2005>
    
    Plant facilities to be completed September 2005>
    
    Valley-fill heap leach facility to be completed September 2005>
    
    $250 million project financing signed, $198 million drawn down at year-end 2004Timeline
    
    >
    
    Production targeted to commence in fourth quarter 2005Construction Cost
Estimate
    
    >
    
    Approximately $540 millionProduction Profile
    
    >
    
    Gold production is expected to average approximately 700,000 ounces
per year at an average total cash cost of about $200 per
ounce1, 2 over the first full three years
   1.
    See page 67 for a discussion of non-GAAP measures.2.
    Subject to exchange rate fluctuations and applicable export duties.   (PICTURE) Mining is well underway at Veladero and production is expected to commence in the fourth quarter
of 2005. (PICTURE) The primary crusher nears completion with an initial design capacity of
40,000 tons per day. 13




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##### 



RESERVES: REPLACEMENT AND GROWTH Cowal An important addition to Barricks Australian operations,
Cowal is expected to enter production in the first quarter of 2006. Description
    
    >
    
    Located in Central New South Wales, Australia, 350 kilometers northwest of Sydney>
    
    Open-pit, conventional carbon-in-leach circuitBackground
    
    >
    
    Acquired as part of Barricks merger with Homestake Mining Company in December 2001Current
Mineralization Status
    
    >
    
    Proven and probable reserves of 2.5 million ounces; measured and indicated gold
resource of 1.6 million ouncesActivities Underway
    
    >
    
    Major equipment has been delivered in first quarter 2005>
    
    SAG and ball mill footings completed in first quarter 2005  SAG mill components
arrived first quarter 2005>
    
    Mine stripping activities expected to commence in second quarter 2005>
    
    Process plant to be completed by end of 2005Timeline
    
    >
    
    Production targeted to commence first quarter 2006Construction Cost
Estimate
    
    >
    
    Approximately $305 millionProduction Profile
    
    >
    
    Gold production is expected to average approximately 230,000 ounces at
an average total cash cost of about $240 per ounce1, 2 over the
first three years
   1.
    See page 67 for a discussion of non-GAAP measures.2.
    Subject to exchange rate fluctuations.   (PICTURE) The primary crusher area at Cowal is excavated in preparation for construction.
Production is expected in the first quarter of 2006. (PICTURE) Replanting program begins
with the harvesting of native seeds. 14




---



##### 



RESERVES: REPLACEMENT AND GROWTH Pascua-Lama Pascua-Lama is the second stage of the over 30-million-ounce Frontera District,
and is expected to start construction in 2006. Description
    
    >
    
    Part of the 30-million-ounce Frontera District straddling the border of Chile and Argentina>
    
    Barrick plans to develop Pascua-Lama as part of a unified district, starting with Veladero in 2005>
    
    Open-pit mine with flotation and Merrill-CroweBackground
    
    >
    
    Barrick acquired the Pascua property through the Lac Minerals Ltd. acquisition in
1994, at which time, the property had proven and probable reserves of 1.8 million ouncesCurrent
Mineralization
    
    >
    
    Proven and probable reserves of 17.6 million ounces; measured and indicated gold
resource of 2.8 million ouncesStatus
    
    >
    
    Silver contained within reported gold reserves of 643 million ouncesActivities Underway
    
    >
    
    Received Board of Director approval for development in July 2004>
    
    Awaiting environmental approvals>
    
    Finalizing fiscal and taxation matters>
    
    Implementing Protocol regime>
    
    Developing sustainable development community programsTimeline
    
    >
    
    Expect to receive approvals and finalize other fiscal and taxation matters in late 2005>
    
    Expect to begin three-year construction schedule in 2006>
    
    Production anticipated for 2009Construction Cost
Estimate
    
    >
    
    Approximately $1.4-$1.5 billionProduction Profile
    
    >
    
    Gold production is expected to average 750,000-775,000 ounces per year for
the first decade at an average total cash cost of $130-$140 per ounce1,
2 (silver production is expected to average approximately 30 million
ounces annually for the first ten years). On a gold equivalent basis,
production is expected to be 1,190,000-1,215,000 ounces per year at $220-$230
per ounce.
   1.
    See page 67 for a discussion of non-GAAP measures.2.
    Subject to exchange rate fluctuations and applicable export duties. East Archimedes Part of the Ruby Hill Mine, East Archimedes is now in development, with permits expected
by the end of 2005 and production in mid-2007. Description
    
    >
    
    Part of the Ruby Hill Mine located in Eureka, Nevada>
    
    Open-pit heap leach operationBackground
    
    >
    
    Acquired as part of Barricks merger with Homestake Mining Company in December 2001>
    
    Adjacent to West Archimedes (Ruby Hill Mine) which was mined out as planned in 2002Current
Mineralization Status
    
    >
    
    Proven and probable reserves of 1.0 million ouncesActivities Underway
    
    >
    
    Permits expected by end of 2005>
    
    Mobile equipment purchased>
    
    Site development and refurbishmentTimeline
    
    >
    
    Production targeted to start in mid-2007Capital Cost Estimate
    
    >
    
    Approximately $75 million
 15




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##### 



RESERVES: REPLACEMENT AND GROWTH Exploration Growing Our Asset Base In 2004, Barrick invested a total of $95 million on regional and mine site
exploration (excluding development and business development). Of this total, regional
exploration accounted for $70 million (including Goldstrike) and mine site exploration
accounted for $25 million. In 2005, Barricks exploration budget is approximately $120
million (excluding development and business development), where about $80 million will be
spent on regional exploration and about $40 million on mine site exploration. Barrick has a motivated, discovery-driven team of over 150 geoscientists exploring on
approximately 100 properties in 16 countries around the world. Reserve development and
replacement of production is a major priority at all our sites. The Company consistently
funds its exploration programs throughout all gold cycles, and has a proven track record
of finding ounces at both the greenfield and brownfield projects. Exploration is focused
on highly gold-endowed districts where we control large land positions, the primary ones
being the Goldstrike District in Nevada, the Frontera District in Chile/Argentina, the
Alto Chicama District in northern Peru, and the Lake Victoria District in Tanzania. In
addition, the Company is exploring earlier stage projects in Australia, Canada, Russia and
Central Asia. Three key factors drive our exploration success: the motivation and technical excellence
of our Exploration team; the policy of consistently investing in exploration; and the
robust and balanced pipeline of exploration projects. The Companys disciplined
exploration strategy maximizes the chance of near-term discovery by putting the best
people on the best projects and advancing the best projects more quickly up the
exploration pipeline. 16




---



##### 



RESERVES: REPLACEMENT AND GROWTH 2004 Highlights At Goldstrike, exploration drill programs, focused on targets north and south of the
Open-Pit Mine, were successful in adding both reserves and resources. A total of 2.3
million contained ounces were added to Goldstrikes reserves. This ongoing success
underlines the continuing significant contribution that Goldstrike will make to Barricks
future. In 2005, Barricks single largest exploration expenditure will be in the
Goldstrike District and on the North Carlin Trend. At Storm, the years reserve
development drill program was successful, and exploration in 2005 will be focused on
continuing to expand the reserve. In the Frontera District (Chile/Argentina), Barrick reactivated exploration activity in
mid-2004 after a four-year hiatus resulting in the addition of about 1.75 million and 0.75
million contained ounces to reserves at Veladero and Pascua-Lama respectively. Barrick has
designed an integrated program to explore this 3,000 square kilometer land package that is
now under its ownership. Data compilation and ground surveys carried out in the fourth
quarter generated more than 30 untested exploration targets in the area. Some are
prioritized targets for drill testing early in 2005. Barrick has an extensive land holding in the Alto Chicama District in Peru. First pass
reconnaissance exploration was completed over most of the ground in 2004 and three
properties were drilled. An oxide resource was outlined on the Lagunas Sur property, and
transferred to the Alto Chicama development team. A total of about 2.0 million contained
ounces were added to reserves at Lagunas Norte. At the Buzwagi project in Tanzania, Barrick successfully extended the known mineralization
along strike and down dip and more than met the objective of doubling the geological
resource, adding 2.0 million contained measured and indicated resource ounces. A scoping
study is planned for 2005. As well, a $5 million exploration program is designed to extend
the mineralization along strike and will test other areas on the property. Over the past
few years, Barrick has reduced its extensive land position to 9,000 square kilometers in
the Lake Victoria Goldfields in order to focus on the prospective areas identified during
the regional work. Drill programs are also planned in the Golden Ridge and Nzega West
areas. Barrick is exploring properties at various stages of exploration in Russia and Central
Asia. Barricks own exploration and development programs are complemented by strategic
relationships with Celtic Resources and Highland Gold. These relationships have broadened
our strategy to develop gold assets in Russia and Central Asia. We have an equity position
in Celtic and have back-in rights to participate on an exclusive basis for up to 50% in
any assets acquired in Kazakhstan and to certain other assets including the Nezhdaninskoye
project. Barricks investment in Highland gives it the right to participate on an
exclusive basis for up to 50% on any acquisition made by Highland Gold in Russia; it
extends similar rights to Highland for any acquisition made by Barrick in certain regions
in Russia, excluding among others Irkutsk. These relationships are helping Barrick
familiarize itself with the region and refine project development options in a highly
prospective region. 17




---



##### 



FINANCIAL STRATEGY Financial Strength to Support Growth  Barricks A rating reflects its leading cost profile,
strong pipeline of development projects, solid reserve base,
conservative financial policy, and low geopolitical risk.  Standard & Poors Rating Services, November 2004 Our financial strategy is designed to
provide the sound foundation and resources
needed to bring our development pipeline into
production over the next five years, fund one of
the largest exploration programs in the
industry, and continue to grow our business on a
global basis. This strategy, coupled with our
positive outlook on the gold price, positions us
well for the future. The cornerstone of this financial strategy is
strength. With the industrys highest-rated
balance sheet, $1.4 billion of cash, excellent
access to liquidity, and growing operating cash
flows, Barrick has the ability to execute the
industrys most aggressive growth plan without
the need to issue a single share of new equity. Laying the Groundwork in 2004 In 2004, Barrick was focused on laying the
groundwork for our growth program. In August, we signed a $250 million, nine-year
project financing for our Veladero project.
While this financing was being negotiated and
executed, Argentina was going through a
financial crisis and facing substantial
challenges in attracting new foreign direct
investment. Despite this situation, Barrick was
able to gain the support of key OECD
governmental and commercial bank investors, and
finance the project on a limited recourse basis.
It was the first limited recourse project
financing executed in Argentina since the
crisis. Being able to finance the project under these
conditions is a reflection not only of the
quality of the project, but also of the
operational and financial strength of the
sponsor. Barrick has the financial capability to
get our current projects built and the
flexibility to source and develop gold, even in
difficult economic environments. In November, Barrick issued a total of $750
million of long-term debt in the US capital
markets ($350 million of 10-year debt and $400
million of 30-year debt). We are building
world-class mines that will be in production for
decades. The issuance of this long-term debt
reflects the Companys ability to raise
long-term core capital, at very attractive
yields, consistent with the Companys strategy
of building and developing these long-lived
world-class properties. Risk Mitigation and Cost Control Another important element of Barricks
financial strategy is to work with our
operations and supply chain management teams to
identify exposures and to implement strategies
aimed at controlling risk  and, where possible,
to reduce costs. In 2004, this effort helped Barrick reduce costs
in equipment, currencies, oil, interest rates
and a host of other areas. As a result, Barrick
maintained its position as the lowest cash-cost
senior producer in the industry. 18




---



##### 



FINANCIAL STRATEGY Gold Sales Contracts Barrick historically entered into fixed
price sales contracts as part of a gold hedging
program designed to manage exposure to market
gold prices and protect the earnings and cash
flow from declining gold prices. Given the
strength of our balance sheet, we no longer need
to add any new gold sales contracts, and we are
opportunistically reducing the remaining
position. Barrick believes the long-term
fundamentals for gold will remain strong, and we
will benefit directly in a stronger gold price
environment  both immediately, and in the long
term. In July 2004, we announced the decision to
proceed with the Pascua-Lama project (subject to
receiving required permits and clarification of
the applicable fiscal regimes from the
governments of Argentina and Chile). We expect to
put in place third-party financing for up to $750
million of the expected $1.4-$1.5 billion
construction cost of Pascua-Lama. In anticipation
of building the mine, and in support of any
related financing, we allocated 6.5 million
ounces of existing gold sales contracts
specifically to the Pascua-Lama project in the
fourth quarter of 2004. The allocation of these
contracts will reduce gold price risk and provide
an acceptable return on the Pascua-Lama capital,
while representing only about one-third of
current Pascua-Lama gold reserves (and leaving
the 643 million ounces of silver contained in
gold reserves unhedged). Our remaining 7.0 million ounces of gold sales
contracts (the Corporate Gold Sales Contracts)
represent just over one year of planned
production and about 10% of non-Pascua-Lama
reserves. (PIE CHART) fig. 3 Corporate Gold Sales Position With approximately 90% of our non-Pascua-Lama
reserves unhedged, Barrick has significant
leverage to the gold price.
 ...although closed for routine financing transactions
in Argentina, Ex-Im Bank is open to consider specially
structured deals [like Veladero] that externalize the risk
and provide reasonable assurance of repayment. It is Ex-Im Banks
first project financing in the mining sector since 1997.  -
    Washington D.C.-based Export-Import Bank of theUnited States (Ex-Im Bank), which provided $80 millionof the Veladero financing, April 2004
 19




---



##### 



OPERATIONS REVIEW Cost Management  Cost management is a strategic and collaborative process
that goes beyond cost cutting. It is proactive,
focuses on optimizing efficiency, and is aligned
with Barricks long-term business plan. The Companys cost management strategy is
focused on these key areas: > Development of high-quality, low-cost projects > A culture of continuous improvement > Supply chain management > Commodity and currency price protection > Capital investment Development of high-quality projects The cost structure of a mining company is
largely dependent on the quality of the assets
within that companys portfolio. Barrick is
fortunate to have 12 quality operating mines and
enjoys the lowest cash-cost structure of the
senior gold producers. The Company looks to
solidify this position as it brings two large
low-cost development projects into production in
2005. Barrick also has three more quality
projects in the development pipeline. Continuous improvement In its quest to achieve greater operating
efficiencies and lower costs, Barrick continues
to work towards a culture of continuous
improvement in the organization. The attitude the
workforce brings to each mine will dictate how
effective the Company is at creating value.
Continuous improvement fosters an environment of
collaboration and knowledge-sharing, in which
multidisciplinary teams work across time zones
and geographic regions to solve common problems
or to develop significant new opportunities. Supply chain management Because scale and scope are so large in mining,
Barricks ability to introduce efficiencies
into the supply chain significantly affects
both its profitability, and its continuing
position as the lowest cash-cost senior producer
in the gold industry. We are enhancing our
management of supply chain issues through a
shift in focus from the initial price of
procuring materials, services and equipment, to
a focus on their true total cost. In the long
run, this approach leads to better strategic
purchasing decisions and lower total costs. Commodity and currency price protection Inflationary pressures and exposures to
exchange rates can significantly affect the
Companys capital and operating costs. Barrick
carefully assesses these exposures as part of its
overall cost management exercise, and will
proactively implement commodity and currency
hedge positions to provide protection against
adverse movements in these two areas. Additional capital investment As Barrick looks to minimize costs and
maximize value, it is continually evaluating
capital projects. Because of its long-life asset
base, Barrick is prepared to make investments
today that will result in significant long-term
value to the organization. 20




---



##### 



OPERATIONS REVIEW Barricks Portfolio of Properties  2004 Performance  2005 Prospects 2004 Performance In 2004, Barricks portfolio of mines met its originally stated production and cost
targets. Overall, its 12 operating mines had a solid year producing 4.96 million ounces of
gold at an average total cash cost of $212 per ounce1. Production in 2004 was
10% lower than the prior year as expected, primarily as a result of mining lower-grade ore
at Goldstrike Open Pit, Pierina and Eskay Creek, partly offset by higher production at
Bulyanhulu. For the year, seven of Barricks mines met or exceeded our 2004 production forecasts, with
significant increases at Goldstrike Open Pit, Kalgoorlie and Round Mountain offsetting
shortfalls at the Goldstrike Underground, Plutonic and Hemlo mines. Total cash costs for
2004  although the lowest for all senior gold producers  were 12% higher than 2003. This
was primarily a result of expected processing of lower-grade ore at Goldstrike Open Pit,
Round Mountain and Pierina, combined with the effect of changes in average currency hedge
rates on total cash costs at our Australian mines. At year-end 2004, proven and probable gold reserves increased to over 89 million ounces
calculated at a $375 per ounce gold price. The Companys suite of quality development
projects increased their reserves by about 15%. While the Companys overall reserves
increased by approximately 4%, there was a decline in reserves at some of the older
underground mines with short remaining mine lives. Silver contained in Barricks gold
reserves at year end is 911 million ounces2 and is primarily derived from the
Pascua-Lama deposit, one of the largest silver resources in the world, which contains 643
million ounces of silver. 2005 Prospects Overall for 2005, the Company anticipates producing 5.4 to 5.5 million ounces at an
average total cash cost of $220-$230 per ounce as three new mines come onstream throughout
the year. Tulawaka in Tanzania came into production in the first quarter, Lagunas Norte
in Peru is expected to start contributing to production in the third quarter, followed by
Veladero in Argentina in the fourth quarter. Accordingly, production and total cash costs
in the second half of 2005 are expected to improve significantly. Construction will
continue on Cowal in Australia which is anticipated to come into production in early 2006.   1.
    See page 67 for a discussion of non-GAAP
measures.2.
    See page 129 for details. 21




---



##### 



OPERATIONS  REVIEW Operational
Summary NorthAmericaGoldstrike
    
    
    
    
    
    
    
    
    
    
    Round
    
    
    EskayProperty
    
    
    Goldstrike
    
    
    Goldstrike
    
    
    Mountain
    
    
    CreekFor year ending December 31
    
    
    
    
    Total
    
    
    Open Pit
    
    
    Underground
    
    
    Mine
    
    
    MineOperational StatisticsTons Mined
    
    2004
    
    
    135,785
    
    
    
    134,212
    
    
    
    1,573
    
    
    
    19,743
    
    
    
    269(000s)
    
    2003
    
    
    143,324
    
    
    
    141,693
    
    
    
    1,631
    
    
    
    24,563
    
    
    
    272Tons Processed
    
    2004
    
    
    12,345
    
    
    
    10,779
    
    
    
    1,566
    
    
    
    36,963
    
    
    
    263(000s)
    
    2003
    
    
    11,663
    
    
    
    10,041
    
    
    
    1,622
    
    
    
    31,470
    
    
    
    275Grade Processed
    
    2004
    
    
    0.18
    
    
    
    0.15
    
    
    
    0.40
    
    
    
    0.02
    
    
    
    1.18(ounces per ton)
    
    2003
    
    
    0.22
    
    
    
    0.19
    
    
    
    0.39
    
    
    
    0.02
    
    
    
    1.43Recovery Rate
    
    2004
    
    
    86.2
    
    
    
    85.1
    
    
    
    89.7
    
    
    
    
    
    
    
    93.1(percent)
    
    2003
    
    
    83.6
    
    
    
    82.0
    
    
    
    88.3
    
    
    
    
    
    
    
    93.7Gold Production
    
    2004
    
    
    1,942
    
    
    
    1,381
    
    
    
    561
    
    
    
    381
    
    
    
    290(000s of ounces)
    
    2003
    
    
    2,111
    
    
    
    1,559
    
    
    
    552
    
    
    
    393
    
    
    
    352Mineral Reserves*
    
    2004
    
    
    19,158
    
    
    
    16,188
    
    
    
    2,970
    
    
    
    1,538
    
    
    
    513(000s of ounces)
    
    2003
    
    
    19,145
    
    
    
    15,685
    
    
    
    3,460
    
    
    
    1,583
    
    
    
    941Financial StatisticsProduction costs per ounceCash Operating Costs
    
    2004
    
    $
    231
    
    
    $
    231
    
    
    $
    234
    
    
    $
    187
    
    
    $
    262003
    
    
    220
    
    
    
    215
    
    
    
    234
    
    
    
    150
    
    
    
    48Royalties and
    
    2004
    
    
    18
    
    
    
    16
    
    
    
    21
    
    
    
    34
    
    
    
    5Production Taxes
    
    2003
    
    
    18
    
    
    
    18
    
    
    
    19
    
    
    
    23
    
    
    
    4Total Cash Costs
    
    2004
    
    $
    249
    
    
    $
    247
    
    
    $
    255
    
    
    $
    221
    
    
    $
    312003
    
    
    238
    
    
    
    233
    
    
    
    253
    
    
    
    173
    
    
    
    52Amortization
    
    2004
    
    
    79
    
    
    
    61
    
    
    
    120
    
    
    
    46
    
    
    
    1762003
    
    
    72
    
    
    
    53
    
    
    
    122
    
    
    
    54
    
    
    
    132Total Production Costs
    
    2004
    
    $
    328
    
    
    $
    308
    
    
    $
    375
    
    
    $
    267
    
    
    $
    2072003
    
    
    310
    
    
    
    286
    
    
    
    375
    
    
    
    227
    
    
    
    184Capital Expenditures
    
    2004
    
    $
    72
    
    
    $
    42
    
    
    $
    30
    
    
    $
    5
    
    
    $
    7(millions)
    
    2003
    
    
    51
    
    
    
    23
    
    
    
    28
    
    
    
    6
    
    
    
    5
 2004Barricks Total Production (ounces)
    
    
    4,957,889Barricks Total Cash Cost (per ounce)
    
    $
    212Barricks Total Mineral Reserves (ounces)
    
    
    89,056,000
 22




---



##### 



OPERATIONS REVIEW North
    
    
    SouthAmerica
    
    
    America
    
    
    Africa
    
    
    AustraliaHolt-Hemlo
    
    
    McDermott
    
    
    Pierina
    
    
    Bulyanhulu
    
    
    Kalgoorlie
    
    
    Plutonic
    
    
    Darlot
    
    
    LawlersFor year ending December 31
    
    
    
    
    Mine
    
    
    Mine
    
    
    Mine
    
    
    Mine
    
    
    Mine
    
    
    Mine
    
    
    Mine
    
    

    MineOperational StatisticsTons Mined
    
    2004
    
    
    4,715
    
    
    
    380
    
    
    
    40,225
    
    
    
    1,118
    
    
    
    45,459
    
    
    
    13,722
    
    
    
    896
    
    
    
    3,365(000s)
    
    2003
    
    
    4,178
    
    
    
    557
    
    
    
    39,501
    
    
    
    945
    
    
    
    48,677
    
    
    
    14,180
    
    
    
    876
    
    
    
    1,152Tons Processed
    
    2004
    
    
    2,019
    
    
    
    394
    
    
    
    16,746
    
    
    
    1,123
    
    
    
    7,142
    
    
    
    2,662
    
    
    
    861
    
    
    
    866(000s)
    
    2003
    
    
    1,971
    
    
    
    559
    
    
    
    15,839
    
    
    
    980
    
    
    
    7,171
    
    
    
    3,010
    
    
    
    879
    
    
    
    806Grade Processed
    
    2004
    
    
    0.13
    
    
    
    0.15
    
    
    
    0.03
    
    
    
    0.35
    
    
    
    0.07
    
    
    
    0.13
    
    
    
    0.17
    
    
    
    0.13(ounces per ton)
    
    2003
    
    
    0.14
    
    
    
    0.17
    
    
    
    0.07
    
    
    
    0.36
    
    
    
    0.07
    
    
    
    0.12
    
    
    
    0.18
    
    
    
    0.13Recovery Rate
    
    2004
    
    
    94.0
    
    
    
    93.1
    
    
    
    
    
    
    
    88.4
    
    
    
    86.6
    
    
    
    90.0
    
    
    
    95.8
    
    
    
    96.1(percent)
    
    2003
    
    
    95.0
    
    
    
    94.3
    
    
    
    
    
    
    
    88.1
    
    
    
    85.8
    
    
    
    89.9
    
    
    
    96.9
    
    
    
    95.8Gold Production
    
    2004
    
    
    247
    
    
    
    55
    
    
    
    646
    
    
    
    350
    
    
    
    444
    
    
    
    304
    
    
    
    140
    
    
    
    110(000s of ounces)
    
    2003
    
    
    268
    
    
    
    90
    
    
    
    912
    
    
    
    314
    
    
    
    436
    
    
    
    334
    
    
    
    155
    
    
    
    99Mineral Reserves*
    
    2004
    
    
    1,260
    
    
    
    
    
    
    
    2,508
    
    
    
    10,596
    
    
    
    5,181
    
    
    
    2,512
    
    
    
    1,048
    
    
    
    405(000s of ounces)
    
    2003
    
    
    1,744
    
    
    
    55
    
    
    
    2,768
    
    
    
    10,907
    
    
    
    5,894
    
    
    
    2,646
    
    
    
    1,135
    
    
    
    402Financial StatisticsProduction costs per ounceCash Operating Costs
    
    2004
    
    $
    231
    
    
    $
    197
    
    
    $
    106
    
    
    $
    270
    
    
    $
    223
    
    
    $
    214
    
    
    $
    203
    
    
    $
    2382003
    
    
    218
    
    
    
    239
    
    
    
    83
    
    
    
    235
    
    
    
    201
    
    
    
    185
    
    
    
    156
    
    
    
    241Royalties and
    
    2004
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    8
    
    
    
    9
    
    
    
    7
    
    
    
    8Production Taxes
    
    2003
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    8
    
    
    
    8
    
    
    
    8
    
    
    
    8Total Cash Costs
    
    2004
    
    $
    240
    
    
    $
    197
    
    
    $
    106
    
    
    $
    283
    
    
    $
    231
    
    
    $
    223
    
    
    $
    210
    
    
    $
    2462003
    
    
    226
    
    
    
    239
    
    
    
    83
    
    
    
    246
    
    
    
    209
    
    
    
    193
    
    
    
    164
    
    
    
    249Amortization
    
    2004
    
    
    50
    
    
    
    114
    
    
    
    165
    
    
    
    99
    
    
    
    44
    
    
    
    34
    
    
    
    53
    
    
    
    532003
    
    
    40
    
    
    
    131
    
    
    
    182
    
    
    
    123
    
    
    
    48
    
    
    
    31
    
    
    
    52
    
    
    
    42Total Production Costs
    
    2004
    
    $
    290
    
    
    $
    311
    
    
    $
    271
    
    
    $
    382
    
    
    $
    275
    
    
    $
    257
    
    
    $
    263
    
    
    $
    2992003
    
    
    266
    
    
    
    370
    
    
    
    265
    
    
    
    369
    
    
    
    257
    
    
    
    224
    
    
    
    216
    
    
    
    291Capital Expenditures
    
    2004
    
    $
    8
    
    
    
    
    
    
    $
    8
    

    
    $
    46
    
    
    $
    10
    
    
    $
    15
    
    
    $
    7
    
    
    $
    5(millions)
    
    2003
    
    
    10
    
    
    
    
    
    
    
    17
    
    
    
    36
    
    
    
    14
    
    
    
    44
    
    
    
    7
    
    
    
    14
 * For reserve table see page 126. 23




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##### 



OPERATIONS REVIEW Barricks Portfolio of Properties North America 
 Barricks North America region consists of the Goldstrike, Round Mountain and
Marigold mines in the US, plus the Hemlo and Eskay Creek mines in Canada. East Archimedes
in Nevada is a new development project which is expected to contribute to production in
mid-2007. This region contains proven and probable gold reserves representing 27% of our
reserve base, or 24.3 million ounces. In 2004, North America produced 2.96 million ounces of gold at average total cash costs of
$222 per ounce. At the Companys North American operations, production is projected to decline slightly in
2005, primarily as a result of processing lower-grade ore at Eskay Creek and the depletion
of reserves at Holt-McDermott in 2004. In 2005, the region is expected to produce about
2.8 million ounces at an average total cash cost of about $245 per ounce. South America 
 South America consists of the Pierina Mine and three significant development
projects: Lagunas Norte and Veladero, which are expected to contribute to production in
the second half of 2005, and Pascua-Lama, which is expected to come onstream in 2009. (See
Development Projects, page 11.)The region contains 47% of the Companys overall proven
and probable gold reserves, or 42.1 million ounces. The Pierina mine produced about 646,000 ounces at an average total cash cost of $106 per ounce. In 2005, South American production will increase by about 90% to about 1.2 million ounces
of gold, as Lagunas Norte and Veladero commence production in the second half of the year.
Total cash costs are expected to be about $133 per ounce. Australia/Africa 
 Barricks Australia/Africa region consists of the Kalgoorlie, Plutonic, Darlot and
Lawlers mines in Australia, and Bulyanhulu and the recently producing Tulawaka mine in
Tanzania. One new development project, Cowal in Australia, is projected to commence
production in early 2006. The region contains 26% of the Companys overall proven and
probable gold reserves, or 22.6 million ounces. In 2004, Australia/Africa production reached 1.35 million ounces of gold at an average
total cash cost of $241 per ounce. In the Australia/Africa region for 2005, Barricks six operations are expecting collective
production of about 1.4 million ounces of gold, at increased total cash costs of about
$257 per ounce. 24




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##### 



Managements
Discussion and Analysis (MD&A) 
 Contents Core Business
    
    pg.26Executive Overview and 2005 Outlook
    
    pg.26Vision and Strategy
    
    pg.28Capability to Deliver Results
    
    pg.29Impact of Key Economic Trends
    
    pg.30Results
    
    pg.35Overview of 2004 versus 2003
    
    pg.35Consolidated Gold
Production and Sales
    
    pg.36Results of Operating Segments
    
    pg.38Other Costs and Expenses
    
    pg.45Cash Flow
    
    pg.48Overview of 2003 versus 2002
    
    pg.49Balance Sheet
    
    pg.50Quarterly Information
    
    pg.52Off-Balance Sheet Arrangements
    
    pg.53Liquidity
    
    pg.57Canadian Supplement
    
    pg.60Critical Accounting Policies
and Estimates
    
    pg.60Non-GAAP Performance Measures
    
    pg.67Cautionary Statement on
Forward-Looking Information
    
    pg.71Glossary of Technical Terms
    
    pg.72
 This MD&A has been prepared as of February 9,
2005, and is intended to supplement and
complement our audited financial statements and
notes thereto for the year ended December 31,
2004 prepared in accordance with United States
generally accepted accounting principles, or US
GAAP (collectively, our Financial Statements).
As required by Canadian Securities Authorities, a
reconciliation of our US GAAP Financial
Statements to Canadian GAAP is included in note
25 to the Financial Statements. You are
encouraged to review our Financial Statements in
conjunction with your review of this MD&A.
Additional information relating to the Company,
including our Annual Information Form, is
available on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov. For an explanation of terminology
used in this MD&A that is unique to the mining
industry, readers should refer to the
glossary on pages 72 and 73. All dollar amounts
in this MD&A are in US dollars, unless otherwise
specified. Unless otherwise indicated, the
financial information in this MD&A has been
prepared in accordance with US GAAP. For the purposes of preparing this MD&A, we
consider the materiality of information.
Information is considered material if: (i) such
information results in, and would reasonably be
expected to result in, a significant change in
the market price or value of Barrick Gold
Corporations shares; or (ii) there is a
substantial likelihood that a reasonable investor
would consider it important in making an
investment decision, or if it would significantly
alter the total mix of information available to
investors. Materiality is evaluated by reference
to all relevant circumstances, including
potential market sensitivity. 25 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Core Business Barrick Gold Corporation (Barrick) is one
of the worlds largest gold producers in terms of
market capitalization, annual gold production and
gold reserves. Our operations are concentrated in
three regions: North America, Australia/Africa
and South America. Over the next two years, after production begins
at four of our development projects, we are
targeting our annual gold production to grow to
6.87.0 million ounces, with South America
contributing an increasing proportion of our
production. To grow our business, we are also
exploring for gold in areas of the world outside
of our three regions, particularly in Russia and
Central Asia. Ounces Produced by Region in 2004 (PIE CHART) We generate revenue and cash flow from the
production and sale of gold in both bullion and
concentrate form. We sell our gold production
through three primary distribution channels: gold
bullion is sold in either the gold spot market or
under gold sales contracts between Barrick and
various third parties, and gold concentrate is
sold to independent smelting companies. Selling
prices reflect the market price for gold at the
time an agreement is reached on pricing. Executive Overview and 2005 Outlook Our share price appreciated by 6.65% in
2004, outperforming senior gold producers Newmont
Mining Corporation, Placer Dome Inc., Anglogold
Ashanti Limited and Gold Fields Limited, while
the spot gold price appreciated by 5.54% over the
same period. In 2004, we produced 4.96 million ounces of gold
at an average total cash cost of $2121per ounce, achieving our original guidance
for the year. Higher gold production at
Goldstrike Open Pit, Goldstrike Underground and
Pierina more than offset lower production at the
Plutonic, Round Mountain, Darlot and Eskay Creek
mine sites. Despite an environment of rising commodity prices, appreciation of
currencies against the US dollar, and increased
royalty and mining tax payments driven by higher
market gold prices, we met our original total
cash costs per ounce guidance. Our currency and
commodity hedge programs enabled us to mitigate
the impact of commodity prices and currency
exchange rates on total cash costs per ounce and
operating cash flow. We had earnings of $248 million ($0.46 per share)
and generated operating cash flow of $506 million
($0.95 per share) in 2004. Our 2004 earnings and
operating cash flow included an after-tax
opportunity cost of $89 million ($0.17 per share)
due to the voluntary reduction of our fixed-price
gold sales contracts, with deliveries into
contracts at prices below the prevailing market
gold price, and corresponding lower revenues from
gold sales. Earnings in 2004 also included tax
credits totaling $227 million relating to the
resolution of a Peruvian tax assessment and a
change in tax status   1.
    Total cash costs per ounce is a non-GAAP performance measure that is used throughout this
MD&A. For more information see pages 67 to 70. 26 BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS in Australia; as well as impairment charges
recorded against long-lived assets of $139
million pre-tax. In 2004, we exceeded our target
(of 1.5 million ounces) for reducing our
fixed-price gold sales contracts with a reduction
of 2 million ounces. At year-end, we had proven and probable reserves
of 89.1 million ounces of gold2, based
on a $375 gold price, after producing 5.5 million
contained ounces. Reserve increases in 2004 were
due to exploration projects at operating mines
and development projects, and a lower cut-off
grade as a result of a higher gold price
assumption in 2004. We continue to effectively support and shape our
growth profile, including a focus on Russia and
Central Asia. We made steady progress on the
construction of four new mines, with three of
them planned to enter production in 2005.
Construction is proceeding on schedule for
Lagunas Norte in Peru, Veladero in Argentina,
Tulawaka in Tanzania, and Cowal in Australia. We
are making progress in planning for our
Pascua-Lama Project, which straddles the Chilean
and Argentine border, our fifth development
project, and East Archimedes which is located in
Nevada, our sixth development project. We have the capital resources to fund our
development projects without the need for any
equity dilution. During the year, we entered into
a nine-year commitment in Argentina for $250
million in Veladero project financing and
completed a $750 million public debenture
offering. We also continued to optimize our
capital structure through a share buyback
program. At the same time, we have the gold
mining industrys only A-rated balance sheet, as
rated by Standard & Poors. During 2004, we implemented a number of
initiatives to strengthen our organization,
including making changes to the composition of
our Board of Directors and governance practices
as part of a commitment towards improved
corporate governance. An organizational redesign
was fully implemented in 2004. The new
organizational design consolidated life-of-mine
accountabilities under our Chief Operating Officer and established regional
business units to add greater value to the global
enterprise. We expect 2005 gold production to be between
5.45.5 million ounces at an average total cash
cost of $220$230 per ounce, and we remain
committed to our 40% targeted growth plan and
gold production target for 2007 of 6.87.0
million ounces, at total cash costs slightly
above $200 per
ounce.3 The first and
second quarters of 2005 are expected to have
lower production and higher cash costs, with the
second half of the year improving as Lagunas
Norte and Veladero come on stream. For the year, amortization is expected to be
about $475$485 million, and administration
expense is expected to be approximately $90
million, including an estimated $15 million in
costs on adoption of new accounting rules that
require the expensing of stock options beginning
in the second half of 2005. Exploration,
development and business development expense is
expected to be approximately $150 million, with
the possibility that positive results could lead
to additional exploration spending. Capital
expenditures for 2005 are anticipated to be
approximately $743 million for development
excluding capitalized interest of $103 million
and $245 million for sustaining capital.   2.
    For a breakdown of reserves by category
and additional information relating to reserves,
see page 127 of this Annual Report.  3.
    See page 36 for further
information on forward-looking
estimates of gold production and total
cash costs per ounce. 27 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Vision and Strategy Our vision is to be the worlds best gold
company by finding, developing and producing
quality reserves in a profitable and socially
responsible manner. The overriding goal of our strategy is to create
value for our shareholders. To achieve this, cash
flow from our mines is consistently reinvested in
exploration, development projects and other
strategic investments to work towards sustainable
growth in production and cash flow. It can take a
number of years for a project to move from the
exploration stage through
to mine construction and production. Our business
strategy reflects this long lead time, but
shorter-term priorities are also set for current
areas of focus. We use strategic relationships to share risk and
expertise. Examples include joint venture
arrangements for the Hemlo, Round Mountain and
Kalgoorlie mines, and also for exploration
programs in certain areas. We have investments in
Highland Gold Mining PLC (Highland Gold) and
Celtic Resources Holdings PLC (Celtic
Resources), as well as strategic alliances with
both companies, as part of our plan to develop a
business unit in Russia and Central Asia. Long-termStrategy Elements
    
    
    
    Focus Areas
    
    
    
    MeasuresGrowth in reserves
    
    >
    
    Growth at existing mine sites by finding new
    
    >
    
    Additions to reservesand production
    
    
    
    resources and converting to reserves.
    
    
    
    and resources.>
    
    Growth through successful exploration focused
    
    >
    
    Consistent investment inprincipally in key exploration districts (Goldstrike,
    
    
    
    exploration and development.Frontera, Lake Victoria, Alto Chicama) and
    
    >
    
    Growth in annualin Russia/Central Asia.
    
    
    
    gold production.>
    
    Execute the development and construction
    
    >
    
    Size of gold reserves.of Veladero, Lagunas Norte, Tulawaka, Cowal,
    
    >
    
    Construction progressPascua-Lama and East Archimedes.
    
    
    
    versus schedules.>
    
    Develop a business unit in Russia/Central Asia
    
    >
    
    Actual construction costs.through investments in, and strategic alliances
    
    >
    
    Status of regulatorywith Highland Gold and Celtic Resources.
    
    
    
    requirements.Operational excellence
    
    >
    
    Control costs.
    
    >
    
    Total cash costs per ounce.1  Global supply chain management.
    
    >
    
    Amortization per ounce.1  Continuous improvement initiatives.
    
    >
    
    Ore throughput.  Currency, interest rate and
    
    >
    
    Equipment utilizationfuel/propane hedge programs.
    
    
    
    statistics.>
    
    Optimize productivity through
    
    >
    
    Liquidity  operating cashcontinuous improvement initiatives.
    
    
    
    flow and credit rating.>
    
    Effective assessment and management of risk.
    
    >
    
    Key balance sheet ratios.>
    
    Effective capital allocation and management.>
    
    Sourcing of funding for capital needs.Strengthen
    
    >
    
    Workforce  identify and develop talent.
    
    >
    
    Talent review andthe organization
    
    >
    
    Leadership development and succession planning.
    
    
    
    performance management.>
    
    Adopt best practices in corporate governance,
    
    >
    
    Compliance withincluding strengthening internal controls.
    
    
    
    Sarbanes-Oxley Act.Responsible mining
    
    >
    
    Reinforce health and safety culture.
    
    >
    
    Safety leadership and>
    
    Enhance environmental performance, including use
of innovative technology to protect the environment.
    
    >
    
    other training initiatives.
Medical aid injury frequency.>
    
    Maintain positive community and
government relations.
    
    >
    
    Environmental performance.
   1.
    Total cash costs per ounce and amortization per ounce are non-GAAP performance measures.
For more information, see pages 67 to 70. 28 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Capability to Deliver Results Resources and processes provide us with the
capability to execute our strategy and deliver
results. Our critical resources and processes are
as follows: Critical Non-Capital Resources and
Processes Experienced Management Team
and Skilled Workforce We have an experienced management team that
has a proven track record in the mining industry.
Our management team is critical to the
achievement of our strategic goals, and we are
focused on retaining and developing key members.
The team is focused on the execution of our
strategy and business plan. Strong leadership and
governance are critical to the successful
implementation of our core strategy. We are
focusing on leadership development for key
members of executive-level and senior mine
management. A skilled workforce is one of our most
significant non-capital resources. Competition
for appropriately trained and skilled employees
is high in the mining industry. Employee
retention, the ability to recruit skilled
employees, and labor relations have a significant
impact on the effectiveness of our workforce, and
ultimately the efficiency and effectiveness of
our operations. We maintain training programs to
develop the skills that certain employees need to
fulfill their roles and responsibilities. The
remote nature of many mine sites can present a
challenge to us in maintaining an appropriately
skilled workforce. Priorities for our Human
Resources group include strengthening our
workforce and developing leadership and
succession capabilities by focusing on attracting
and retaining the best people, as well as
enhancing the process for identifying and
developing the leadership pool. We are
implementing Human Resources systems solutions to
enhance our ability to analyze and compare labor
costs, productivity and other key statistics to
better manage the effect our workforce has on our
mining operations. Health and Safety As part of our commitment to corporate
responsibility, we focus on continuously
improving health and safety programs, systems and
resources to help control workplace hazards.
Continuous monitoring and integration of health
and safety into decision-making enables us to
operate effectively, while also focusing on
health and safety. Key areas of focus include
safety leadership through training and risk
management practices; designing and enhancing
processes and programs to ensure safety
requirements are met; and communicating a safety
culture as part of Company and personal core
values. Environmental We are subject to extensive laws and
regulations governing the protection of the
environment, endangered and protected species,
waste disposal and worker safety. We incur
significant expenditures each year to comply with
such laws and regulations. We seek to
continuously implement operational improvements
to enhance environmental performance. We also
integrate environmental evaluation, planning, and
design into the development stage of new projects
to ensure environmental matters are identified
and managed at an early stage. Cost Control Successful cost control depends upon our
ability to obtain and maintain equipment,
consumables and supplies as required by our
operations at competitive prices. Through a
culture of continuous improvement, we are also
focusing on identifying and implementing steps to
make our operations more effective and efficient. Our Supply Chain group is focusing on improving
long-term cost controls and sourcing strategies
for major consumables and supplies used in our
mining activities through global commodity
purchasing teams. They are also focusing on
knowledge sharing across our global business and
implementing best practices in procurement. We
are developing strategies to help us analyze and
source consumables and supplies at the lowest
cost over the life of a mine, as well as
long-term alliances with suppliers. 29 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Maintenance is a significant component of
our operating costs. Our Global Maintenance team
is working to reduce maintenance costs and
increase equipment utilization through an
internal maintenance community. Key areas of
focus include setting standards for maintenance
to optimize usage of mine equipment and enable
cost-effective purchasing of mine equipment. They
are implementing a global maintenance system to
facilitate sharing of best practices and tracking
of capital equipment statistics such as
utilization, availability and useful lives. Technology Our Information Technology group monitors
significant risks, such as security, the risk of
failure of critical systems, risks relating to
the implementation of new applications, and the
potential impact of a systems failure. They are
implementing strategies to manage these risks,
including ongoing enhancements to security;
monitoring of operating procedures; the
effectiveness of system controls to safeguard
data; evaluating technology resources; and
maintaining disaster recovery plans. Other areas
of focus include reducing technology diversity
through standardizing systems solutions, and
ongoing analysis of business needs and the
potential benefits that can be gained from new
applications. Internal Controls We maintain a system of internal controls
designed to safeguard assets and ensure financial
information is reliable. We undertake ongoing
evaluations of the effectiveness of internal
controls and implement control enhancements,
where appropriate, to improve the effectiveness
of controls. In 2004 and 2003, we focused on the
design, testing and assessment of the
effectiveness of internal controls to enable us
to meet the certification and attestation
requirements of the Sarbanes-Oxley Act. We
presently file management certifications annually
under Section 302 and Section 906 and expect to
comply with the reporting requirements of Section
404 as required by law. We also maintain a system of disclosure controls
and procedures designed to ensure the
reliability, completeness and timeliness of the
information we disclose in this MD&A and other
public disclosure documents. Critical Capital Resources
and Processes We expect to fund capital requirements of
about $2.5 billion over the next four years to
finish construction activities at our development
projects and for a power plant to supply our
Goldstrike mine. Adequate funding is in place or
available for all our development projects. We
plan to put in place project financing for a
portion of the expected construction cost of
Pascua-Lama, however, if we are unable to do so
because of unforeseen political or other
challenges, we expect to be able to fund the
capital required through a combination of
existing capital resources and future operating
cash flow. We may also invest capital in Russia and Central
Asia in 2005 to exercise certain rights we hold
through agreements with Highland Gold and Celtic
Resources to acquire interests in various mineral
properties, and also to acquire future common
shares of Celtic. These rights are described in
note 10 to the Financial Statements. We expect
that any capital required will be funded from a
combination of our existing cash position and
operating cash flow in 2005. Impact of Key Economic Trends 1. Higher Market Gold Prices Gold Prices(Dollars per Ounce) (LINE GRAPH) 30 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Market gold prices are subject to volatile price
movements over short periods of time, and are affected by
numerous industry and macroeconomic factors that are beyond
our control. The US dollar gold price has increased over
the past few years, mainly due to the weakening of the US
dollar against most major currencies, a decline in gold
supply and an increase in demand for gold. The gold price
over the last few years has had a high correlation with the
US dollar, and we expect this correlation to continue. With global financial markets experiencing significant
volatility, political and security issues in a state of
uncertainty, and with the US dollar  the secure
investment of choice globally  coming under pressure, the
global investment community has reawakened to the potential
for gold as an alternative investment vehicle. The past few
years have seen a resurgence in gold as an investment
vehicle, and we believe the prospects for gold to
experience further investment interest are good,
particularly in light of expected global economic/political
uncertainties going forward. We believe that the
introduction of more readily accessible and more liquid
gold investment vehicles (such as gold exchange traded
funds  ETFs) will further enhance golds appeal to
investors. Our revenues are significantly impacted by the market price
of gold. We have historically used fixed-price gold sales
contracts to provide protection in periods of low market
gold prices, but since 2001 we have been focusing on
reducing the level of outstanding fixed-price gold sales
contracts. In 2004, we reduced our fixed-price gold sales
contracts by 2 million ounces. The terms of our fixed-price
gold sales contracts enable us to deliver gold whenever we
choose over the primarily ten-year term of the contracts.
Our fixed-price gold sales contracts have allowed us to
benefit from higher market gold prices, while the
flexibility implicit in contract terms allows us to reduce
the outstanding sales contracts over time. Over the last three years, our realized gold sales prices
have largely tracked the rising market gold price. Periods
when our average realized price was below average market
prices were primarily caused by us voluntarily choosing to
deliver into gold sales contracts at prices lower than
prevailing market prices to reduce outstanding gold sales
contracts. We view the outlook for market gold prices to be
positive due to our view of a declining US dollar and the
present supply/demand fundamentals. In the future, we
expect to be able to benefit from higher gold prices. The
flexibility under our fixed-price gold sales contracts will
enable us to deliver gold at market prices, however, if we
choose to deliver a portion of our production under gold
sales contracts, the prices for those deliveries may be
below prevailing market prices. 2. Higher Market Silver Prices Spot Silver Prices(Dollars per Ounce) (LINE GRAPH) Market silver prices are subject to volatile price
movements over short periods of time, and are affected by
numerous industry and macroeconomic factors that are beyond
our control. Market silver prices have increased since late
2003 mainly due to increasing investment and industrial
demand, along with higher world economic growth in 2004.
Market prices fluctuated in 2004 as higher prices caused
demand from jewelry and silverware fabrication to decrease.
An expected decline in the use of silver for photographic
film due to increases in digital photography may negatively
impact market prices, but this trend has been partly offset
by increased demand for photographic film in developing
countries. 31 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Market silver prices impact the value of silver
produced as a by-product at some of our mines. When the
silver price increases, by-product credits increase and our
total cash costs per ounce decrease. In the past, we have
used silver sales contracts to sell a portion of our annual
silver production, which has helped to mitigate the impact
of volatility in market prices, and we may use such
contracts in the future. The flexibility under our silver
sales contracts allows us to benefit from higher market
silver prices by choosing to deliver silver production into
the silver spot market. If we choose to deliver a portion
of our silver production under silver sales contracts, the
prices for those deliveries may be below prevailing market
prices. 3. Weakening of the US dollar Against Major
Currencies AUD$ Spot and Average Monthly Hedge Rates(A$:US$ exchange rate) (LINE GRAPH) CAD$ Spot and Average Monthly Hedge Rates(C$:US$ exchange rate) (LINE GRAPH) The US dollar significantly depreciated against many
major currencies in 2003 and 2004. The weakening of the US
dollar was largely due to a record US trade deficit and low
interest rates that, after taking into account inflation,
provided negative real returns. As these conditions remain,
and as the United States seeks to improve the
competitiveness of its exports, further devaluation of the
US dollar may occur. Results of our mining operations in Australia and Canada,
reported in US dollars, are affected by exchange rates
between the Australian and Canadian dollar and the US
dollar, because a portion of our annual expenditures are
based in local currencies. A weaker US dollar causes costs
reported in US dollars to increase, because local currency
denominated expenditures have become more expensive in US
dollars. We have a currency hedge position as part of our
strategy to control costs by mitigating the impact of a
weaker US dollar on Canadian and Australian dollar-based
expenditures. Over the last three years, our currency hedge
position has provided benefits to us in the form of hedge
gains when contract exchange rates are compared to
prevailing market exchange rates as follows: 2004  $96
million; 2003  $58 million; 2002  $7 million. These gains
are included in our operating costs. At December 31, 2004, we had hedged local currency-based
expenditures for about the next three years at average
exchange rates that are more favorable than market rates in
early 2005. The average rates for currency contracts
designated against operating costs over the next three
years are $0.64 for Australian dollar contracts and $0.72
for Canadian dollar contracts. Further details of our
currency hedge position are included in note 16 to the
Financial Statements. Beyond three years, most of our local
currency denominated costs are subject to market currency
exchange rates. If the trend of a weakening US dollar
continues, we do not expect that this will significantly
impact our results of 32 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS operations over the next three years because of the
protection we have under our currency hedge position.
Beyond the next three years, our results could be affected,
depending upon whether we add to our currency hedge
positions in the future. 4. Higher Energy Prices Crude Oil Market Price(Dollars per Barrel) (LINE GRAPH) Diesel Fuel and Propane Prices of commodities, such as diesel fuel and
propane, are subject to volatile price movements over short
periods of time and are affected by factors that are beyond
our control. Annually, we consume about 1.31.7 million
barrels of diesel fuel and 2025 million gallons of propane
at our mines. The cost of these commodities affects our
costs to produce gold. Crude oil is refined into diesel fuel that is used by us at
our mines. Due mainly to global supply shortages and a
weakening US dollar, crude oil prices rose in 2004, with a
corresponding rise in diesel fuel prices. To control costs
by mitigating the impact of rising diesel fuel prices, we
put in place a fuel hedge position of 2.4 million barrels,
a portion of estimated future diesel fuel consumption over
the next three years with an average cap price of $39 per
barrel and participation to an average floor price of $29
per barrel on about half the position. In 2004, we realized
benefits in the form of hedge gains totaling $4 million
when contract prices were compared to market prices. If the
trend of increasing diesel fuel prices continues, this
could impact future gold production costs, albeit mitigated
by our present fuel hedge position. We also have a propane
hedge position of 29 million gallons at an average price of
$0.79 per gallon, that will help to control the cost of a
portion of propane consumption at our mining operations
over the next two years, and mitigate the impact of
volatility in propane prices. Electricity Electricity prices have risen in recent years as a
result of diesel fuel price increases and natural gas
demand, as well as excess demand for electricity. Annually
we consume about 1.31.5 billion kilowatts of electricity
at our mines. Fluctuations in electricity prices or in
electricity supply impact costs to produce gold. To control
electricity costs, we are building a 115-megawatt natural
gas-fired power plant in Nevada that will supply our
Goldstrike mine, and reduce the mines dependence on the
regulated utility in Nevada. The sourcing of electricity
from this power plant is expected to reduce total cash
costs by an average of about $10 per ounce at Goldstrike
over the remaining life of the mine, compared to recent
costs of obtaining power from the regulated power utility.
The plant is targeted to begin operating in fourth quarter
2005. We are also entering into long-term power supply
arrangements for some mines; building powerlines to link
into power grids; actively reviewing alternative sources of
supply of electricity; and looking at other options across
many of our larger mines and development projects. 33 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS 5. Other Inflationary Cost Pressures The mining industry has been experiencing significant
inflationary cost pressures with increasing costs of labor
and prices of consumables such as steel, concrete and
tires. The cost of consumables such as steel and concrete
mainly impacts mine construction costs. The costs of tires
mainly impacts cash production costs. For steel in
particular, world demand in excess of supply caused steel
prices to increase significantly in 2004. We are directly
and indirectly impacted by rising steel prices through the
cost of new mine equipment and grinding media, as well as
structural steel used in mine construction. We are focusing
on supply chain management and continuous improvement
initiatives to mitigate the impact of higher steel prices,
including controlling usage and extending the life of plant
and equipment, where possible. 6. Declining US dollar interest rates Interest Rate % (LINE GRAPH) US dollar interest rates have been relatively low by
historic standards over the past three years due mainly to
ongoing weak economic conditions; easy monetary policies;
low inflation expectations; and increasing demand for
low-risk investments. This lower interest-rate environment
has enabled us to secure new sources of financing in 2004
at relatively attractive interest rates. Volatility in interest rates mainly affects interest
receipts on our cash balances ($1,398 million outstanding
at the end of 2004), and interest payments on variable-rate
long-term debt ($411 million outstanding at the end of
2004). Based on the relative amounts of variable-rate
financial assets and liabilities at the end of 2004,
declining interest rates would have a negative impact on
our results. In the future we expect these relative amounts
to change as we invest cash in our development projects.
The amount of cash balances may decrease from levels at
December 31, 2004, subject to the amount of operating cash
flow we generate in the future, as well as other sources of
and uses for cash. In response to the volatility in
interest rates, we have used interest rate swaps to alter
the relative amounts of variable-rate financial assets and
liabilities and to mitigate the overall impact of changes
in interest rates. Management of interest-rate risk takes
into account the term structure of variable-rate financial
assets and liabilities. On $300 million of our cash
balances, we have fixed the interest rate through 2008 at
3.3%. On our Bulyanhulu project financing, we have fixed
the Libor-based rate for the remaining term of the debt at
4.45%. These interest rate swaps have provided benefits to
us in the form of hedge gains, when rates under the swaps
are compared to market interest rates, totaling $16 million
in 2004, $13 million in 2003 and $6 million in 2002. In the
future we may alter the notional amounts of interest rate
swaps outstanding, as the relative amounts of variable-rate
assets and liabilities change, to attempt to manage our
exposure to interest rates. Interest rates have historically been correlated with
forward gold prices compared to current market prices. In
periods of higher interest rates, forward gold prices have
generally been higher. Consequently in periods of higher
interest rates we have been able to secure more favorable
future prices under fixed-price gold sales contracts. 34 BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS Results Selected Annual Information
 For the years ended December 31($ millions, except per shareand per ounce data in dollars)
    
    Targets for 20041
    
    
    2004
    
    
    2003
    
    
    2002Gold production (000s oz)
    
    
    4,9005,000
    
    
    
    4,958
    
    
    
    5,510
    
    
    
    5,695Gold sales(000s oz)
    
    
    
    
    
    
    4,936
    
    
    
    5,554
    
    
    
    5,805$ millions
    
    
    
    
    
    $
    1,932
    
    
    $
    2,035
    
    
    $
    1,967Market gold price3
    
    
    
    
    
    
    409
    
    
    
    363
    
    
    
    310Realized gold price3
    
    
    
    
    
    
    391
    
    
    
    366
    
    
    
    339Total cash costs3,4
    
    $
    205215
    
    
    
    212
    
    
    
    189
    
    
    
    177Amortization
    
    
    480490
    
    
    
    452
    
    
    
    522
    
    
    
    519Net income
    
    
    
    
    
    
    248
    
    
    
    200
    
    
    
    193Net income per shareBasic
    
    
    
    
    
    
    0.47
    
    
    
    0.37
    
    
    
    0.36Diluted
    
    
    
    
    
    
    0.46
    
    
    
    0.37
    
    
    
    0.36Dividends per share
    
    
    
    
    
    
    0.22
    
    
    
    0.22
    
    
    
    0.22Cash inflow (outflow)Operating activities
    
    
    
    
    
    
    506
    
    
    
    519
    
    
    
    588Capital expenditures
    
    
    (900
    )2
    
    
    (824
    )
    
    
    (322
    )
    
    
    (228
    )Financing activities
    
    
    
    
    
    
    741
    
    
    
    (266
    )
    
    
    (61
    )Total assets
    
    
    
    
    
    
    6,274
    
    
    
    5,358
    
    
    
    5,261Total long-term financial liabilities
    
    
    
    
    
    $
    1,707
    
    
    $
    789
    
    
    $
    819Gold reserves (millions of contained oz)
    
    
    
    
    
    
    89.1
    
    
    
    85.9
    
    
    
    86.9Fixed-price gold sales contracts (millions of oz)
    
    
    
    
    
    
    13.5
    
    
    
    15.5
    
    
    
    18.1
   1.
    As disclosed in the 2003 Annual Report.2.
    As disclosed in the second quarter 2004 report.3.
    Per ounce weighted average.4.
    For an explanation of the use of non-GAAP performance measures, refer to pages 67 to 70
of Managements Discussion and Analysis. Overview of 2004 Versus 2003 Earnings In 2004, higher cash production costs were offset by
higher gold selling prices, but earnings were impacted by
lower gold sales volumes. Based on the difference between
average realized gold prices and average total production
costs per ounce, the impact of lower sales volumes was to
decrease pre-tax earnings by about $54 million. As expected, gold production in 2004 was lower than 2003,
and total cash costs per ounce were higher, mainly due to
the expected mining of lower ore grades in 2004. Higher
spot gold prices enabled us to realize higher selling
prices for our gold production, and mitigate the impact on
revenue of 11% lower sales volumes. We sold about 59% of
our production into the spot market, and 41% into our gold
sales contracts at prices lower than prevailing market
prices. By voluntarily delivering into some of our gold
sales contracts, we reduced our fixed-price gold sales
contracts by 2 million ounces, and we accepted an $89
million opportunity cost, compared to delivering all of our
production at market prices, with corresponding lower
revenues from gold sales. 35 BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS Earnings in 2004 benefited from $25 million lower
pre-tax interest expense, a $203 million income tax
recovery, and pre-tax gains on sale of assets totaling $34
million, partly offset by pre-tax impairment charges
totaling $139 million on long-lived assets. Interest
expense decreased by $25 million mainly due to amounts
capitalized at development projects in 2004. The $203
million income tax recovery in 2004 included a credit of
$141 million following the resolution of a tax assessment
in Peru, and a credit of $81 million due to a change in tax
status in Australia following the adoption of certain
aspects of new tax legislation. Earnings in 2003 included a
$60 million post-tax non-hedge derivative gain (2004  $9
million post-tax) and deferred tax credits totaling $62
million, partly offset by post-tax charges of $11 million
on settlement of the Inmet litigation and $17 million for
the cumulative effect of accounting changes. Special Items  Effect on earnings increase (decrease) ($ millions)
 2004
    
    
    2003
    
    
    2002For the years ended December 31
    
    Pre-tax
    
    
    Post-Tax
    
    
    Pre-tax
    
    
    Post-Tax
    
    
    Pre-tax
    
    
    Post-TaxNon-hedge derivative gains (losses)
    
    $
    5
    
    
    $
    9
    
    
    $
    71
    
    
    $
    60
    
    
    $
    (6
    )
    
    $
    6Inmet litigation costs
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    (11
    )
    
    
    
    
    
    
    Gains on asset sales
    
    
    34
    
    
    
    28
    
    
    
    34
    
    
    
    27
    
    
    
    8
    
    
    
    5Impairment charges on long-lived assets
    
    
    (139
    )
    
    
    (96
    )
    
    
    (5
    )
    
    
    (3
    )
    
    
    (11
    )
    
    
    (11
    )Impairment charges on investments
    
    
    (5
    )
    
    
    (5
    )
    
    
    (11
    )
    
    
    (11
    )
    
    
    
    
    
    
    Changes in asset retirement obligation cost estimates
    
    
    (22
    )
    
    
    (17
    )
    
    
    (10
    )
    
    
    (10
    )
    
    
    
    
    
    
    Cumulative effect of accounting changes
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    (17
    )
    
    
    
    
    
    
    Resolution of Peruvian tax assessmentOutcome of tax uncertainties
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reversal of other accrued costs
    
    
    21
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred tax creditsChange in Australian tax status
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Release of valuation allowances/outcome of
uncertainties
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    22Total
    
    
    (106
    )
    
    
    161
    
    
    
    46
    
    
    
    97
    
    
    
    (9
    )
    
    
    22
 Cash Flow Our closing cash position at the end of 2004 increased
by $428 million to $1,398 million. Operating cash flow
decreased slightly in 2004 mainly due to the lower gold
sales volumes and increases in supplies inventory at our
development projects, partly offset by lower payments for
income taxes. Capital expenditures increased by $502
million to $824 million mainly due to construction activity
at our development projects. We received $974 million from
new financing put in place primarily to fund construction
at our development projects; we paid dividends totaling
$118 million and we spent $95 million on our share buyback
program. Consolidated Gold Production and Sales Gold production and production costs By replacing gold reserves depleted by production year
over year, we can maintain production levels over the long
term. If depletion of reserves exceeded discoveries over
the long term, then we may not be able to sustain gold
production levels. Reserves can be replaced by expanding
known orebodies or by locating new deposits. Once a site
with gold mineralization is discovered, it may take several
years from the initial phases of drilling until production
is possible, during which time the economic feasibility of
production may change. Substantial expenditures are
required to establish 36
BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS proven and probable reserves and to construct mining
and processing facilities. Given that gold exploration is
speculative in nature, some exploration projects may prove
unsuccessful. Our financial performance is affected by our ability to
achieve targets for production volumes and total cash
costs. We prepare estimates of future production and total
cash costs of production for our operations. These
estimates are based on mine plans that reflect the expected
method by which we will mine reserves at each mine, and the
expected costs associated with the plans. Actual gold
production and total cash costs may vary from these
estimates for a number of reasons, including if the volume
of ore mined and ore grade differs from estimates, which
could occur because of changing mining rates; ore dilution;
metallurgical and other ore characteristics; and short-term
mining conditions that require different sequential
development of ore bodies or mining in different areas of
the mine. Mining rates are impacted by various risks and
hazards inherent at each operation, including natural
phenomena, such as inclement weather conditions, floods,
and earthquakes; and unexpected labor shortages or strikes.
Total cash costs per ounce are also affected by changing
waste-to-ore stripping ratios, ore metallurgy that impacts
gold recovery rates, labor costs, the cost of mining
supplies and services, and foreign currency exchange rates.
In the normal course of our operations, we attempt to
manage each of these risks to mitigate, where possible, the
effect they have on our operating results. In 2004, production from our portfolio of mines was in line
with plan. As expected, production in 2004 was 10% lower
than in 2003 primarily as a result of mining lower-grade
ore at Goldstrike Open Pit, Pierina and Eskay Creek, partly
offset by higher production at Bulyanhulu. Ounces sold
decreased by 11% compared to 2003, consistent with the
lower production levels. As our development projects
commence production beginning in 2005, we are targeting
annual gold production to rise to between 6.8 and 7.0
million ounces by 2007 at total cash costs slightly above
$200 per ounce. In 2005, we expect to produce about 5.45.5
million ounces at total cash costs of between $220 and $230
per ounce. Our Pierina and Eskay Creek mines produced about 17 million
ounces of silver by-products in 2004. The incidental
revenue from sales of silver is classified as a component
of our reported total cash costs per ounce statistics,
which is one of the key performance measures that we use to
manage our business. At December 31, 2004, the silver
content in our gold reserves was about 911 million ounces.
After production begins at Pascua-Lama, we expect that our
annual silver production will increase significantly. Consolidated Total Cash Costs Per Ounce
 For the years ended December 31(in dollars per ounce)
    
    Target for 2004
    
    
    2004
    
    
    2003
    
    
    2002Cost of sales1
    
    
    
    
    
    $
    248
    
    
    $
    210
    
    
    $
    191Currency hedge gains
    
    
    
    
    
    
    (19
    )
    
    
    (12
    )
    
    
    (1
    )By-product credits
    
    
    
    
    
    
    (30
    )
    
    
    (21
    )
    
    
    (20
    )Cash operating costs
    
    
    
    
    
    
    199
    
    
    
    177
    
    
    
    170Royalties/mining taxes
    
    
    
    
    
    
    13
    
    
    
    12
    
    
    
    7Total cash costs2
    
    $
    205215
    
    
    $
    212
    
    
    $
    189
    
    
    $
    177
   1.
    At market currency exchange rates.2.
    For an explanation of the use of non-GAAP performance measures, refer to pages 67 to 70
of Managements Discussion and Analysis. 37
BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS Total cash costs for 2004 were in line with the
original full-year guidance. As expected, total cash costs
in 2004 were higher than in 2003, primarily due to
processing lower-grade ore at Goldstrike Open Pit, Round
Mountain and Pierina, combined with the effect of changes
in average currency hedge rates on total cash costs at our
Australian mines. Revenue from gold sales We realized an average selling price of $391 per ounce
for our gold production in 2004, compared to $366 per ounce
in 2003, when average market gold prices were lower. Our
average realized price in 2004 reflects delivery of 59% of
ounces sold into the spot market at market prices, and 41%
into gold sales contracts at selling prices below
prevailing market prices. We exceeded our target for
reducing our fixed-price gold sales contracts by 0.5
million ounces in 2004, ending the year with a 2 million
ounce reduction. The price realized for gold sales in 2005
and beyond will depend upon spot market conditions and the
selling prices of any gold sales contracts into which we
voluntarily deliver, which could be below prevailing spot
market prices. Results of Operating Segments In our Financial Statements we present a measure of
historical segment income that reflects gold sales at
average consolidated realized gold prices, less segment
operating costs and amortization of segment property, plant
and equipment. Our segments include: producing mines,
development projects and our corporate exploration group.
For each segment, factors influencing consolidated realized
gold prices apply equally to the segments, and therefore
the factors have not been repeated in the discussion of
individual segment results. We monitor segment operating
costs using total cash costs per ounce statistics that
represent segment operating costs divided by ounces of gold
sold in each period. The discussion of results for each
segment focuses on this statistic in explaining changes in
segment operating costs. We also discuss significant
variances from prior public guidance for gold production
and total cash costs per ounce statistics for each segment. Conducting mining activities in countries outside North
America subjects us to various risks and uncertainties that
arise from carrying on business in foreign countries
including: uncertain political and economic environments;
war and civil disturbances; changes in laws or fiscal
policies; interpretation of foreign taxation legislation;
and tax implications on repatriation of foreign earnings.
We monitor these risks on an ongoing basis and mitigate
their effects where possible, but events or changes in
circumstances could materially impact our results and
financial condition. For development projects, we prepare estimates of capital
expenditures; reserves and costs to produce reserves. We
also assess the likelihood of obtaining key governmental
permits, land rights and other government approvals.
Estimates of capital expenditures are based on studies
completed for each project, which also include estimates of
annual production and production costs. Adverse changes in
any of the key assumptions in these studies or other
factors could affect estimated capital expenditures,
production levels and production costs, and also the
economic feasibility of a project. We take steps to
mitigate potentially adverse effects of changes in
assumptions or other factors. Prior to the commencement of
production, the segment results for development projects
reflect expensed mine development and mine start-up costs. North America In 2004, production was at the low end of the original
guidance for the year and total cash costs were better than the original guidance for
the year. Total cash costs per ounce reflected lower costs
than plan at the Goldstrike Open Pit and Eskay Creek,
partly offset by higher costs at Round Mountain and Hemlo.
Total cash costs for the North America region in 2004 were
not significantly affected by the impact of a weakening US
dollar on our Canadian mines or by rising fuel prices,
because we mitigated these exposures through our currency 38 BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS and fuel hedge programs as part of our focus on
controlling costs. The region produced 8% less gold in 2004 compared with 2003
mainly because of the expected mining of lower-grade ore at
the Goldstrike Open Pit and Eskay Creek. Compared to 2003,
total cash costs per ounce were 6% higher in 2004, as a
result of the processing of lower-grade ore. In 2005, gold production from the North America region is
expected to decline by 5% to about 2.8 million ounces due
to the processing of lower-grade ore at Eskay Creek and
following the depletion of reserves at Holt-McDermott in
2004. Total cash costs for the region are expected to
increase by 10% to about $245 per ounce, mainly due to the
processing of lower-grade ore at Round Mountain and Eskay
Creek, as well as slightly higher costs at Goldstrike. Goldstrike, United States Segment income decreased by $1 million in 2004 from
2003 levels, mainly due to 14% lower gold sales volumes and
5% higher total cash costs per ounce, partly offset by 7%
higher realized gold prices and 7% lower amortization
expense. Gold production at the open pit was slightly higher than
plan in 2004, and total cash costs per ounce were slightly
lower than plan. With the planned mining of lower-grade ore
in 2004, partly offset by better gold recovery rates,
open-pit production was 11% lower and total cash costs per
ounce were 6% higher than in 2003. Revenues decreased by
8%, with a 17% decrease in ounces sold, due to the lower
gold production levels in 2004, partly offset by a 7%
increase in realized gold prices. At the underground mine, production was 5% below the low
end of the original range of guidance due to lower than
expected availability of the Rodeo backfill raise, changes
to mine sequencing, and higher maintenance costs due to
unexpected repairs to electrical transformers. Total cash
costs per ounce were at the high end of the original range
of guidance for 2004 due to the lower production volumes
and higher backfill haulage costs. Production was slightly
higher than 2003 and total cash costs per ounce were
similar to 2003, mainly due to better gold recovery rates
and processing of slightly higher-grade ore in 2004. Amortization expense decreased by $11 million in 2004
mainly due to the effect of lower gold sales volumes,
combined with the impact of reserve increases at the
beginning of 2004 that caused a $15 million decrease in
amortization expense. In 2004, the Nevada Public Utilities Commission approved
our proposal to build a 115-megawatt natural gas-fired
power plant in Nevada to supply our Goldstrike mine. The
plant is targeted to commence operations in fourth quarter
2005. Highlights include:  >
    The construction permit for the foundation and buried services was received in fourth
quarter 2004.  >
    Engineering work for the project is substantially complete and site preparation
commenced in fourth quarter 2004. Construction of the power plant was subcontracted to a
third-party contractor, and $18 million was spent on construction in 2004.  >
    We expect to file an application for a building construction permit in first quarter
2005.  >
    The natural gas supplier to the power plant is applying for permits to enable the
construction of a short extension from an existing gas pipeline to the power plant site. Eskay Creek, Canada Segment income decreased by $13 million in 2004,
mainly due to 18% lower gold sales volumes and 9% higher amortization expense,
partly offset by 40% lower total cash costs per ounce and
7% higher realized gold prices. Revenues decreased by 14%,
with an 18% decrease in ounces sold, due to the lower gold
production levels in 2004, partly offset by a 7% increase
in realized gold prices. Production for 2004 was slightly lower than plan due to
lower than expected ore grades and unscheduled backfill
plant maintenance. Total cash costs per ounce were better
than plan, mainly due 39 BARRICK Annual Report 2004




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MANAGEMENTS DISCUSSION AND ANALYSIS to higher by-product credits caused by higher silver
prices, partly offset by the impact of processing
lower-grade ore and higher maintenance costs. Compared to
2003, as expected, production decreased by 18% because of a
4% decline in quantity of ore processed, and an 18% decline
in ore grade. Total cash costs per ounce were 40% lower
than 2003 mainly due to higher by-product credits in 2004
caused by higher silver prices, partly offset by the impact
of lower ore grades. Amortization expense increased by $4 million in 2004 mainly
due to the impact of downward revisions to reserve
estimates in 2004 that increased amortization rates, partly
offset by the effect of lower gold sales volumes. In fourth quarter 2004, the Eskay Creek mine was tested for
impairment effective December 31, 2004. An impairment
charge of $58 million was recorded, which is not included
in the measure of segment income. For further details see
page 64. Round Mountain (50% owned), United States Segment income decreased by $5 million in 2004, mainly
due to 28% higher total cash costs, partly offset by 7%
higher realized gold prices. Revenues increased by 6%
mainly due to 7% higher realized gold prices. Production was 4% higher than the high end of the original
range of guidance for 2004, but at slightly higher total
cash costs per ounce. Production was positively impacted by
the continuing recovery of gold from leach pads where ore
was placed in prior years. Higher total cash costs per
ounce were mainly due to higher royalty costs, caused by
higher market gold prices, as well as higher purchase costs
and consumption of both cyanide and lime. Compared to 2003,
gold production was 3% lower due to an expected decline in
ore grades partly offset by an increase in quantities of
ore processed. Total cash costs per ounce increased by 28%
over 2003 as a result of mining lower-grade ore in 2004,
higher royalties, and higher purchase costs and consumption
of both cyanide and lime. Higher recovery rates of gold
from leach pads in 2003 also contributed to the year on
year change in total cash costs per ounce. Amortization expense decreased by $3 million mainly due to
slightly lower gold sales volumes combined with the effect
of reserve increases at the beginning of 2004 on
amortization rates. Hemlo (50% owned), Canada Segment income decreased by $3 million in 2004, mainly
due to 10% lower gold sales volumes, combined with 6%
higher total cash costs per ounce, partly offset by 7%
higher realized gold prices. Revenues decreased by $5
million as 10% lower gold sales volumes were partly offset
by 7% higher realized gold prices. In 2004, production was 10% lower than plan and total cash
costs per ounce were 13% higher than plan primarily because
ground stability issues caused mining to occur in
lower-grade areas of the mine. A decline in ore grades in
2004 was the primary reason for the lower gold production
and higher total cash costs per ounce compared with 2003. East Archimedes, United States In September 2004, a decision was made to proceed with
the East Archimedes project at the Ruby Hill mine site in
Nevada. The project is an open-pit, heap leach operation
exploiting the East Archimedes deposit, a deeper
continuation of the ore mined previously at Ruby Hill.
Construction capital is estimated at about $75 million over an expected two-year construction phase
that begins once permitting is secured. The mining fleet
has been ordered and permitting work is ongoing. The
project has an expected life-of-mine strip ratio of 9:1 and
assumes an average mining rate of 100,000 tons per day. The
first gold pour is targeted for mid-2007. 40 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS South America In 2004, all production was from the Pierina mine.
Lagunas Norte and Veladero are expected to begin production
and contribute to the South America regions results in the
second half of 2005. In 2005, we expect production to
increase by about 90% to about 1.2 million ounces, mainly
due to the production start-up at Lagunas Norte and
Veladero. Total cash costs are expected to increase by 25%
to about $133 per ounce, mainly due to higher costs at
Pierina following an increase in the stripping ratio from
60:1 to 86:1 and the impact of new production from Veladero
and Lagunas Norte. The higher stripping ratio at Pierina
mainly reflects the updating of the mine plan to
incorporate additions to reserves at the end of 2004. Pierina, Peru Segment income decreased by $15 million in 2004 mainly
due to 29% lower gold sales volumes, combined with 28%
higher total cash costs per ounce, partly offset by 7%
higher realized gold prices and lower amortization rates.
Revenues decreased by $81 million as 29% lower gold sales
volumes were partly offset by 7% higher realized gold
prices. In 2004, production was slightly higher than plan, however
total cash costs per ounce were 6% higher than the upper
end of the range of guidance for the year. The ability to
access higher-grade ore at the mine was delayed due to a
change in the mining plan to adjust for minor pit slope
instability in the west pit wall. Higher fuel prices and
lower by-product credits, due to lower quantities of silver
contained in the ore processed in 2004, as well as
processing of lower-grade ore, all contributed to higher
total cash costs per ounce. Compared to 2003, production
was 29% lower and total cash costs per ounce were 28%
higher, due to the expected mining of lower-grade ore.
Higher labor costs in 2004 also contributed to the increase
in total cash costs over 2003. Amortization expense decreased by $59 million mainly due to
the lower gold sales volumes, combined with the effect of
reserve increases at the beginning of the year that lowered
amortization rates and caused amortization expense to
decrease in 2004 by $9 million. Lagunas Norte, Peru In 2004, the segment loss of $12 million represents
expensed mine development costs prior to May 1, 2004 when
the project achieved the criteria to classify
mineralization as a reserve for US reporting purposes,
together with $3 million of expensed mine start-up costs.
In 2003, the segment loss of $29 million represented
expensed mine development costs for a full year. The project remains on schedule for its first gold pour in
the third quarter of 2005. The first three full years of
production at Lagunas Norte are now expected to average
approximately 800,000 ounces of gold annually at total cash
costs of about $155 per ounce. The projects reserves
increased by 2.0 million ounces, or 28%, to 9.1 million
ounces at year-end 2004. Higher gold prices have allowed us
to bring more ounces into production in the first three
full years, but due to the lower ore grades associated with
these ounces, our total cash costs per ounce have also
increased. Highlights include:  >
    The Lagunas Norte/Alto Chicama Legal Stability Agreement between Barrick and the
Peruvian Government was executed in January 2005. This agreement will provide greater
certainty over the foreign exchange and fiscal administrative regime for 15 years,
including real estate taxes, custom duties, VAT and excise taxes.  >
    Construction of the overall project was about 70% complete at the end of 2004, with
about 4,000 workers on-site.  >
    Construction costs of $182 million were spent in 2004, of which $40 million relates to
the purchase of the mine fleet, main auxiliary mine equipment and other mine equipment.  >
    Approval of the Environmental Impact Statement and principal construction permit was received in first quarter 2004.  >
    Overliner material is being placed on the leach pad.  >
    The power line was completed and energized in January 2005. 41 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Veladero, Argentina In 2004, the segment loss of $5 million represents
expensed mine start-up costs. In 2003, the segment loss of
$18 million represented expensed mine development costs
prior to October 1, 2003 when the project achieved the
criteria to classify mineralization as a reserve for US
reporting purposes. The project remains on schedule for its first gold pour in
the fourth quarter of 2005. The first three full years of
production at Veladero are now expected to average
approximately 700,000 ounces of gold annually at total cash
costs of about $2001per ounce. The projects
reserves increased by 1.7 million ounces, or 16%, to 12.8
million ounces at year-end 2004. Higher gold prices have
allowed us to bring more ounces into production in the
first three full years, but due to the lower ore grades
associated with these ounces, our total cash costs per
ounce have also increased. During 2004, we revised our
construction capital estimate upwards to about $540 million
from our previous estimate of $475 million due to a number
of factors including: increases in prices for commodities,
such as fuel, concrete and steel; exchange rate variations;
higher labor costs; increased winter operations costs; and
some preliminary changes to the scope of the project.
Estimated future total cash costs are also being affected
by similar cost pressures. We are evaluating a number of
alternatives to control the cost increases, which may
require some additional capital investment. Highlights
include:  >
    Construction costs of $284 million were spent in 2004 and the project is about 65% complete.  >
    Internal mine road construction is complete.  >
    Work on the truck shop facility was complete in December 2004.  >
    Steel erection on the secondary crusher is progressing on schedule and the main crusher
components have been installed. Construction of the other plant facilities is well
advanced.  >
    The assay lab was commissioned in fourth quarter 2004.  >
    Construction of the valley-fill heap leach facility embankment began in 2004 and was complete in February 2005.  >
    Pre-stripping activities have steadily improved in fourth quarter 2004 due to
improvements in equipment availability, blasting techniques and the use of experienced
shovel operators brought in to assist with mining activities and to train others. Pascua-Lama, Chile/Argentina In 2004, we made a decision to proceed with the
development of the Pascua-Lama project in Chile/Argentina.
The development is contingent on obtaining the necessary
permits, approvals and fiscal regimes. Pascua-Lama is a
large, low total cash cost, long-life asset that is
expected to contribute to our production, cash flow and
earnings for many years. We believe that few undeveloped
gold deposits exist in the world that are of comparable
size and quality to Pascua-Lama. Pascua-Lama is also
expected to increase our leverage to silver. Furthermore,
development of the Pascua-Lama project, combined with
Veladero and the large associated land holdings with
regional exploration potential, presents an opportunity to
develop the area as one large gold district. Annual production is estimated between 750,000-775,000
ounces of gold and about 30 million ounces of silver over
the first ten years at estimated total cash costs of about
$1301401per ounce. The projects gold reserves
increased by 0.8 million ounces, or 5%, to 17.6 million
ounces at year-end 2004. Pre-production construction costs
are estimated at about $1.41.5 billion, excluding
capitalized interest. A further $0.3 billion of capital is
expected to be spent in the three years after production
startup for a plant expansion and flotation circuit to
increase capacity from 33,000 to 44,000 metric tons per
day. The permitting phase of the Pascua-Lama project is
expected to be completed by the end of 2005. An expected
three-year construction phase will begin once permitting
has been completed and other fiscal and taxation matters
have been finalized, with production targeted to commence
in 2009.   1.
    
    Subject to exchange rate fluctuations and applicable export duties. 42 BARRICK Annual Report 2004




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS In 2004, the segment loss of $4 million represents
expensed mine start-up costs. In 2003, all project costs
incurred were capitalized, resulting in no segment income
or loss. We incurred capital expenditures of $35 million in
2004. Recent focus has been on community/government relations,
permitting, protocol implementation and tax stability. A
mining protocol for the project, which straddles the border
of Chile and Argentina, was signed by both governments. The
protocol provides the framework for resolving certain
issues such as border crossings by personnel and materials.
Environmental impact assessments were filed by the end of
2004 and approval is sought by the end of 2005. Australia /Africa Gold production in 2004 was slightly higher than plan
mainly due to the mining of higher-grade ore at Kalgoorlie,
partly offset by slightly lower production than plan at
Plutonic and Bulyanhulu. Total cash costs per ounce were 3%
higher than the upper end of the range of original guidance
for the year mainly due to higher costs at Plutonic and
Bulyanhulu. Changes in market currency exchange rates in
2004 did not significantly impact total cash costs per
ounce because we mitigated this exposure through our
currency hedge program. In 2004, gold production was 1% higher than 2003 as higher
production at Kalgoorlie and Bulyanhulu was partly offset
by lower production at Plutonic. Total cash costs per ounce
were 14% higher than 2003 mainly because of the processing
of lower-grade ore at Plutonic, combined with the effect of
increases in average Australian dollar currency hedge
rates. The average rates of currency hedge contracts vary
year on year, which impacts reported total cash costs per
ounce. The average exchange rate of hedge contracts in 2004
was $0.58 compared to $0.55 in 2003, which caused total
cash costs per ounce to increase slightly in 2004. In 2005, production from the Australia/Africa region is
expected to increase by 7% to about 1.4 million ounces,
mainly due to the production start-up at Tulawaka in first
quarter 2005. Total cash costs per ounce are expected to
increase by 7% to about $257 per ounce, mainly due to a 5%
increase in the average exchange rate of Australian
currency hedge contracts designated for 2005, but the
average exchange rate remains significantly better than
current spot exchange rates. Kalgoorlie (50% owned), Australia Segment income increased by $10 million in 2004,
mainly due to the combined effect of 12% higher gold sales
volumes and 7% higher realized gold prices, partly offset
by 11% higher total cash costs per ounce. Production was higher than plan in 2004 due to
better-than-expected ore grades and gold recovery rates.
Total cash costs per ounce were at the low end of the range
of the guidance for the year as better ore grades and
recovery rates were partly offset by higher than expected
maintenance costs. Gold production was consistent with 2003
as ore tons processed and ore grades were similar to 2003.
Total cash costs per ounce were 11% higher than 2003
primarily due to higher maintenance and labor costs, higher
fuel prices, and the year on year effect of average
exchange rates of currency hedge contracts. Plutonic, Australia Segment income decreased by $6 million in 2004 as 4%
lower gold sales volumes, combined with 16% higher total
cash costs per ounce, were partly offset by 7% higher
realized gold prices. Revenues were higher in 2004 as 7%
higher realized gold prices were partly offset by 4% lower
gold sales volumes. Production in 2004 was slightly lower than plan and total
cash costs per ounce were 14% higher than the upper end of
the range of guidance for the year primarily due to the
mining of greater quantities of lower-grade open-pit ore.
Temporary problems with ground conditions restricted mining 43 BARRICK Annual Report 2004




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS of higher-grade ore in the Timor underground area for
part of the year, and consequently the mine processed more
open-pit ore than planned. Compared with 2003, gold
production was 9% lower mainly due to a 12% decrease in ore
tons processed. In 2003, ore tons processed were higher
because a secondary mill was operating but this mill ceased
operating in mid-2004. Total cash costs per ounce were 16%
higher than 2003 mainly due to the combined effect of
higher fuel, haulage and maintenance costs and the year on
year effect of average rates of currency hedge contracts. Bulyanhulu, Tanzania Segment income was $6 million higher in 2004 as 14%
higher gold sales volumes, combined with 7% higher realized
gold prices, were partly offset by 15% higher total cash
costs per ounce. Revenues were 24% higher in 2004
reflecting the higher gold sales volumes and realized gold
prices. Gold production in 2004 was slightly lower than plan and
total cash costs per ounce were 9% higher than the upper
end of the range of guidance for the year. Both production
and total cash costs per ounce were impacted by higher ore
dilution, which caused an 8% decline in the grade of ore
processed compared with plan. Compared with 2003, gold
production was 12% higher mainly due to a 15% increase in
the tons of ore processed due to improved mill performance.
Total cash costs per ounce were 15% higher than 2003 due to
higher costs of mine site administration and underground
maintenance, partly offset by higher copper byproduct
credits due to higher market copper prices. Cowal, Australia In 2004, the segment loss of $1 million represents
expensed mine start-up costs. In 2003, all project costs
incurred were capitalized, resulting in no segment income
or loss. The Cowal project in Australia is progressing well and
production is expected to commence in first quarter 2006.
The first full three years of production at Cowal are
expected to be approximately 230,000 ounces of gold
annually at total cash costs of about $2401per
ounce. During 2004, we revised our construction capital
estimate up to approximately $305 million due to factors
including increases in commodity and consumable prices, and
the very competitive construction labor market in
Australia. Expected total cash costs per ounce are also
being affected by similar cost pressures. Highlights
include:  >
    Capital expenditures were $73 million, slightly higher than plan as expenditures,
originally expected to occur in 2006, were brought forward to 2005 to realize construction
efficiencies.  >
    The pipeline for water supply is complete.  >
    Bulk excavation for the primary crusher is substantially complete.  >
    Drilling of pit dewatering bores is complete and the design of additional bores for water supply is underway.  >
    Purchase orders have been placed for major mining equipment items.  >
    The construction contract for the electricity transmission line was awarded to a contractor.
The contractor started construction on permitted sections in early 2005 and the timing of
completion of the entire line is dependent upon receipt of the remaining permits.  >
    Earthworks is progressing with the northern tailings facility 80% complete and the
tailings return pipeline substantially complete.  >
    The principal authorizations necessary for construction of Cowal have been obtained or
are in process, with the additional required sectoral permits expected in due course. Tulawaka (70% owned), Tanzania In 2004, development costs were capitalized from
January 1, 2004, when the project achieved the criteria to
classify mineralization as a reserve for US reporting
purposes, resulting in no segment income or loss. In 2003,
all mine development costs were expensed as incurred. The Tulawaka project is on schedule for its first gold pour
in first quarter 2005. Our economic share under the terms
of the joint venture of the   1.
    
    Subject to exchange rate fluctuations. 44 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS first full three years of production at Tulawaka is
expected to average about 90,000 ounces of gold annually at
total cash costs of approximately $180 per ounce.
Highlights include:  >
    Construction capital of $48 million (100% basis) was spent in 2004.  >
    Earthworks and site preparation were near completion at the end of 2004. Other Costs and Expenses Exploration, Development and Business Development Expense
 For the years endedDecember 31 ($ millions)
    
    2004
    
    
    2003
    
    
    2002Exploration costsNorth America
    
    $
    30
    
    
    $
    22
    
    
    $
    16Australia/Africa
    
    
    40
    
    
    
    22
    
    
    
    15South America
    
    
    20
    
    
    
    19
    
    
    
    7Russia/Central Asia
    
    
    5
    
    
    
    4
    
    
    
    4Other countries
    
    
    1
    
    
    
    
    
    
    
    96
    
    
    
    67
    
    
    
    42Mine development costsVeladero
    
    
    
    
    
    
    18
    
    
    
    20Lagunas Norte
    
    
    9
    
    
    
    29
    
    
    
    29Other projects
    
    
    5
    
    
    
    6
    
    
    
    314
    
    
    
    53
    
    
    
    52Mine start-up costsVeladero
    
    
    5
    
    
    
    
    
    
    
    Lagunas Norte
    
    
    3
    
    
    
    
    
    
    
    Cowal
    
    
    1
    
    
    
    
    
    
    
    Pascua-Lama
    
    
    4
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    Business development/other
    
    
    18
    
    
    
    17
    
    
    
    10$
    141
    
    
    $
    137
    
    
    $
    104
  >
    The mining contract has been awarded to an external contractor.>
    Process plant construction is well underway with the completion of power plant
installation and commissioning, substantial completion of the SAG mill, concrete and
structured steel installation and other site infrastructure buildings.>
    Plant handover is expected in first quarter 2005. In 2004, we spent more than both plan and the prior year on
our exploration program as part of our strategy to grow our
reserves. Higher activity at Goldstrike, Eskay Creek and
Round Mountain led to an increase in expenditures for North
America. Higher activity in Tanzania, primarily at the
Buzwagi project, led to the increase in Australia/Africa. Development costs are expensed until mineralization is
classified as proven and probable reserves for US reporting
purposes. At Lagunas Norte, we expensed development costs
until May 1, 2004, and at Veladero, we expensed development
costs until October 1, 2003, which are the dates when the
projects achieved the criteria to classify mineralization
as a reserve for US reporting purposes. In 2005, we expect to spend $150 million on exploration,
development and business development. Our exploration
expense reflects our planned funding of our various
exploration projects. We may spend more or less on these
projects depending on the results of ongoing exploration
activities, and we may also fund further exploration
projects in addition to the presently planned projects for
2005. 45 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Other Income Statement Variances 
 For the years ended December 31($ millions, except per ounce
    
    
    
    
    
    
    
    
    
    %data and percentages)
    
    2004
    
    
    2003
    
    
    change
    
    
    CommentsAmortizationAbsolute amount
    
    $
    452
    
    
    $
    522
    
    
    
    (13
    )%
    
    11% lower sales volumes, combined with lower amortizationrates per ounce. For 2005, amortization expense will reflectan expected 810% increase in gold sales volumes and afurther expected decline in rates per ounce.Per ounce (dollars)1
    
    
    86
    
    
    
    90
    
    
    
    (4
    )%
    
    Reserve increases effective January 1, 2004 caused rates perounce to decrease. For 2005, rates per ounce are expected todecrease to between         $80 and $85 due to reserve additions atthe end of 2004 and the effect of an impairment charge recordedat Eskay Creek in 2004.Administration
    
    
    71
    
    
    
    73
    
    
    
    (3
    )%
    
    Severance costs of $9 million were incurred in 2003. Higherregulatory compliance costs impacted 2004. Costs in 2005 willincrease due to the expensing of stock options in the second halfof the year, which is estimated to add about $15 million to costs.Interest income
    
    
    25
    
    
    
    31
    
    
    
    (19
    )%
    
    The decrease in 2004 is due to lower average cash balancesin 2004 compared to 2003. In 2005, interest income is expectedto increase due to higher expected average cash balances.Interest costsIncurred
    
    
    60
    
    
    
    49
    
    
    
    22
    %
    
    The impact of new financings in second half of 2004 causedan increase over 2003. Interest incurred is expected to increaseto between $115 to $120 million in 2005 due to new financingput in place in 2004.Capitalized
    
    
    (41
    )
    
    
    (5
    )
    
    
    720
    %
    
    Higher amounts were capitalized at development projects dueto construction costs capitalized in 2004, and capitalization atPascua-Lama from July 1, 2004. In 2005, we expect to capitalizeabout $103 million at our development projects.Expensed
    
    
    19
    
    
    
    44
    
    
    
    (57
    )%
   1.
    For an explanation of the use of non-GAAP performance measures, refer to pages 67 to 70 of Managements
Discussion and Analysis. Other (Income) Expense 
 For the years ended December 31($ millions)
    
    2004
    
    
    2003
    
    
    CommentsNon-hedge derivative gains
    
    $
    (5
    )
    
    $
    (71
    )
    
    Gains in 2003 included $32 million on gold lease rate swaps(2004       $16 million); and           $18 million on currency hedgecontracts that became ineffective for hedge accounting purposes.Impairment chargeEskay Creek
    
    
    58
    
    
    
    
    
    
    See page 64.Peruvian exploration
properties
    
    
    67
    
    
    
    
    
    
    See page 64.Gains on asset sales
    
    
    (34
    )
    
    
    (34
    )Environmental
remediation costs
    
    
    43
    
    
    
    55Litigation costs
    
    
    
    
    
    
    16
    
    
    Costs in 2003 relate to the settlement of the Inmet litigation.(Gains) losses
    
    
    (1
    )
    
    
    7
    
    
    Losses in 2003 mainly related to investments underon investments
    
    
    
    
    
    
    
    
    
    a deferred compensation plan.Other items
    
    
    30
    
    
    
    23$
    158
    
    
    $
    (4
    )
 46 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Income Taxes 
 For the years ended December 31($ millions, except percentages)
    
    2004
    
    
    2003Income tax
    
    
    
    
    
    
    
    
    
    
    Income taxEffective income tax rates on
    
    Pre-tax
    
    
    Effective
    
    
    expense
    
    
    Pre-tax
    
    
    Effective
    
    
    expenseelements of income
    
    income
    
    
    tax rate
    
    
    (recovery)
    
    
    income
    
    
    tax rate
    
    
    (recovery)Net income excluding elements below
    
    $
    118
    
    
    
    28
    %
    
    $
    33
    
    
    $
    116
    
    
    
    20
    %
    
    $
    23Deliveries into gold sales
contracts1
    
    
    (89
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-hedge derivative gains (losses)
    
    
    (5
    )
    
    
    (80
    %)
    
    
    (4
    )
    
    
    71
    
    
    
    15
    %
    
    
    11Other items
    
    
    21
    
    
    
    30
    %
    
    
    6
    
    
    
    35
    
    
    
    34
    %
    
    
    1245
    
    
    
    78
    %
    
    
    35
    
    
    
    222
    
    
    
    21
    %
    
    
    46Tax only items:Change in Australian tax status
    
    
    
    
    
    
    (180
    %)
    
    
    (81
    )
    
    
    
    
    
    
    
    
    
    
    Outcome of tax uncertainties
    
    
    
    
    
    
    (313
    %)
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    Release of deferred tax valuation allowances
recorded in prior years
    
    
    
    
    
    
    (11
    %)
    
    
    (5
    )
    
    
    
    
    
    
    (17
    %)
    
    
    (36
    )Other items
    
    
    
    
    
    
    (25
    %)
    
    
    (11
    )
    
    
    
    
    
    
    (2
    %)
    
    
    (5
    )$
    45
    
    
    
    (451
    %)
    
    $
    (203
    )
    
    $
    222
    
    
    
    2
    %
    
    $
    5
   1.
    Impact of deliveries in a low tax-rate jurisdiction at contract prices below prevailing
market prices. Our income tax expense or recovery is a
function of an underlying effective tax rate
applied to income plus the effect of other items
that we track separately. The underlying
effective rate increased to 28% in 2004
reflecting the higher market gold price
environment, with an average market gold price of
$409 per ounce. In 2005, we expect our underlying
effective tax rate to decrease to about 22% due
to a change in the geographic mix of gold
production and therefore taxable income by
jurisdiction. As gold prices increase, this
underlying tax rate also increases, reaching a
high of about 25% with market gold prices at or
above $475 per ounce. The underlying rate
excludes deferred tax credits from changes in
valuation allowances; taxes on non-hedge
derivative gains and losses; and the impact of
deliveries into gold sales contracts in a low tax
rate jurisdiction. Deliveries into gold sales
contracts in a low tax rate jurisdiction can
distort the overall effective tax rate if market
gold prices differ from the contract prices, but
do not affect the absolute amount of income tax
expense. We record deferred tax charges or credits if
changes in facts or circumstances affect the
estimated tax
basis of assets and therefore the amount of
deferred tax assets or liabilities or because of
changes in
valuation allowances reflecting changing
expectations in our ability to realize deferred
tax assets. In 2004, we recorded a credit of $141
million on final resolution of a Peruvian tax
assessment in our favor. We also recorded credits
of $81 million due to a change in tax status in
Australia following an election that resulted in
a revaluation of assets for tax purposes; and
also an election to file tax returns from 2004
onwards in US dollars, rather than Australian
dollars. As well, $5 million of valuation
allowance was released in Australia in 2004. The interpretation of tax regulations and
legislation and their application to our business
is complex and subject to change. We have
significant amounts of deferred tax assets,
including tax loss carry forwards, and also
deferred tax liabilities. Potential changes to
any of these amounts, as well as our ability to
realize deferred tax assets, could significantly
affect net income or cash flow in future periods.
For more information on tax valuation allowances,
see page 66. 47 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Cash Flow Cash Flow Components (BAR CHART) Operating Activities Operating cash flow decreased by $13 million in 2004 to $506 million. The key factors that
contributed to the year over year decrease are summarized in the table below. Key Factors Affecting Operating Cash Flow  
 For the years ended December 31
    
    
    
    
    
    
    
    
    
    Impact on($ millions, except
    
    
    
    
    
    
    
    
    
    operatingper ounce data)
    
    2004
    
    
    2003
    
    
    cash flow
    
    
    CommentsGold sales volumes (000s oz)
    
    
    4,936
    
    
    
    5,554
    
    
    $
    (109
    )Realized gold prices ($/oz)
    
    $
    391
    
    
    $
    366
    
    
    
    123Total cash costs ($/oz)1
    
    
    212
    
    
    
    189
    
    
    
    (114
    )Sub-total
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    Refer to pages 36 to 38 for explanations of changesin gold production and sales.Income tax payments
    
    
    45
    
    
    
    111
    
    
    
    66
    
    
    Payments in 2005 are expected to be similar to 2004.Non-cash working capital
    
    
    141
    
    
    
    34
    
    
    
    (107
    )
    
    Increases in inventory primarily
reflect supplies required to support construction at development
projects. Inventory is expected to increase again in 2005 at
development projects reflecting higher ore in process and in
stockpiles. Tax recoverable increased in 2004 for goods and services
tax on supplies and material used in construction at development
projects. Amounts are expected to be recovered after production begins.Cost of Inmet settlement
    
    
    
    
    
    
    86
    
    
    
    86
    
    
    Settlement reached in 2003.Interest expense
    
    
    19
    
    
    
    44
    
    
    
    25
    
    
    Increase in amounts capitalized to developmentprojects in 2004.Effect of other factors
    
    
    
    
    
    
    
    
    
    
    17Total
    
    
    
    
    
    
    
    
    
    $
    (13
    )
   1. Total cash costs per ounce is a non-GAAP performance measure. For more information, see pages
67 to 70. 48 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Investing Activities 
 For the yearsended December 31($ millions)
    
    2005E
    
    
    2004
    
    
    2003
    
    
    $ change
    
    
    CommentsGrowth capital expenditures 1Veladero
    
    $
    208
    
    
    $
    284
    
    
    $
    68
    
    
    $
    216
    
    
    Full year of construction activity in 2004.Lagunas Norte
    
    
    147
    
    
    
    182
    
    
    
    4
    
    
    
    178
    
    
    Construction started in Q2, 2004.Tulawaka
    
    
    3
    
    
    
    48
    
    
    
    1
    
    
    
    47
    
    
    Construction started in Q1, 2004.Cowal
    
    
    268
    
    
    
    73
    
    
    
    24
    
    
    
    49
    
    
    Construction started in Q1, 2004.Pascua-Lama
    
    
    93
    
    
    
    35
    
    
    
    9
    
    
    
    26
    
    
    Increased development activity andcapitalization of interest from Q3, 2004.Nevada Power Plant
    
    
    84
    
    
    
    18
    
    
    
    
    
    
    
    18
    
    
    Construction started in Q4, 2004.East Archimedes
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Construction expected to start in 2005.Sub-total
    
    
    846
    
    
    
    640
    
    
    
    106
    
    
    
    534Sustaining capital expendituresNorth America
    
    
    
    
    
    
    86
    
    
    
    80
    
    
    
    6Australia/Africa
    
    
    
    
    
    
    83
    
    
    
    115
    
    
    
    (32
    )
    
    2003 was higher due to a transition toowner mining at Plutonic that resulted inequipment purchases.South America
    
    
    
    
    
    
    8
    
    
    
    17
    
    
    
    (9
    )Other
    
    
    
    
    
    
    7
    
    
    
    4
    
    
    
    3Sub-total
    
    
    245
    
    
    
    184
    
    
    
    216
    
    
    
    (32
    )
    
    The increase in 2005 mainly
reflects capital planned for 2004 at Goldstrike that was deferred into 2005, and sustaining capital at Lagunas
Norte after production begins.Total
    
    $
    1,091
    
    
    $
    824
    
    
    $
    322
    
    
    $
    502
   1.
    Includes construction costs and capitalized interest. We plan to fund the expected capital
expenditures for 2005 from a combination of our
$1,398 million cash position at the end of 2004,
and operating cash flow that we expect to
generate in 2005. Financing Activities The most significant financing cash flows in
2004 were $974 million on issue of new long-term
debt obligations, $49 million received on the
exercise of employee stock options, dividend
payments totaling $118 million, and $95 million
spent repurchasing 4 million common shares under
our share buyback program. We also made scheduled
payments under our long-term debt obligations
totaling $41 million in 2004. Overview of 2003 Versus 2002 Earnings Earnings in 2003 were slightly higher than
in 2002. We benefited from higher spot gold
prices, which enabled us to realize a $27 per
ounce higher selling price for our gold
production (an increase in revenue of $150
million in comparison to 2002). In a higher spot
gold price environment, we pay higher royalties,
production taxes and income taxes. Royalties and
production taxes increased by $5 per ounce, or
$23 million, over the prior year, and our
underlying effective income tax rate increased
from 3% in 2002 to 20% in 2003, or an increase of
$38 million. 49 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS As a result of the closure of five mines in
2002 on depletion of their reserves, we produced
and sold 3% fewer ounces in 2003 compared to the
prior year. These five closed mines generated a
profit contribution, before tax, of $42 million
in 2002. Excluding the closed mines, cash operating costs
per ounce excluding royalties and production
taxes were $7 per ounce higher in 2003, mainly
due to higher costs at Goldstrike Open Pit and
Bulyanhulu, which added $39 million to our cash
operating costs. We invested $33 million more in exploration, mine
development and business development in 2003
compared to 2002. Development costs are expensed
until mineralization is classified as proven and
probable reserves for US reporting purposes. In
2003, we expensed $53 million of development
costs, mainly at Veladero and Lagunas Norte,
compared with $52 million in 2002. A $25 million
increase in exploration costs to $67 million
accounts for most of the increase in exploration,
development and business development expense year
over year. Earnings in both 2003 and 2002 included various
items that significantly impacted the
comparability of our results year on year. In
2003, the major items included gains of $71
million on non-hedge derivatives and gains
totaling $34 million on the sale of various
assets, offset by a $19 million higher charge for
reclamation and closure costs following a change
in accounting policy for these types of costs. We recorded tax credits of $62 million in 2003.
We released valuation allowances totaling $15
million in Argentina following the decision to
begin construction at Veladero and the
classification of mineralization there as a
proven and probable reserve, $16 million in
Australia due to higher levels of taxable income
in a higher gold price environment, and $21
million in North America following a corporate
reorganization. In 2002, we recorded a credit of
$22 million due to the outcome of various tax
uncertainties. These credits were offset by
valuation allowances against unrecognized tax
losses. Cash Flow We generated $69 million less operating cash
flow in 2003 compared to 2002. Excluding the $86
million settlement of the Inmet litigation, our
operating cash
flow would have been $17 million higher in 2003
than 2002. Higher realized gold selling prices in
2003 were partly offset by higher total cash
costs per ounce and higher payments of income
taxes. Both our cash expenditures for investing and
financing activities increased in 2003 compared
to 2002. In part, this was a result of increased
capital spending with the construction start up
at Veladero, as well as $154 million spent on our
share buyback program. Balance Sheet Key Balance Sheet Ratios 
 Year ended December 31
    
    2004
    
    
    2003Non-cash working
capital ($ millions)1
    
    $
    141
    
    
    $
    34Net debt (cash) ($ millions)2
    
    $
    288
    
    
    $
    (210
    )Net debt:equity ratio3
    
    
    0.08:1
    
    
    
    (0.06:1
    )Current ratio4
    
    
    4.68:1
    
    
    
    3.75:1
   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. We regularly review our capital structure
with an overall goal of lowering our cost of
capital, while preserving the balance sheet
strength and flexibility that is important due to
the cyclical nature of commodity markets, and
ensuring that we have access to cash for
strategic purposes. Following a review of our
capital structure during 2003, we concluded that
a share buyback program was consistent with 50 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS this goal. In 2004, we repurchased 4 million
shares at a total cost of $95 million which was
in addition to repurchasing 9 million shares at a
total cost of $154 million in 2003. The combined
impact of new financing secured in 2004 to fund
our development projects, and activity under the
share buyback program in 2004, caused an increase
in our net debt:equity ratio at the end of 2004. Non-cash working capital increased in 2004 mainly
due to a build-up of supplies inventory at our
development projects to support normal operating
activities, combined with an increase in tax
recoverable that relates to goods and services
taxes on various elements of mine construction
costs that will be recoverable after production
begins. Our net cash position at the end of 2003 changed
to net debt at the end of 2004 mainly because our
investment in capital expenditures in 2004
exceeded operating cash flow. Shareholders Equity Outstanding Share Data As at February 9, 2005, 532.9 million of our
common shares, one special voting share and 1.4
million Exchangeable Shares not owned by Barrick
(exchangeable into 0.7 million of our common
shares) were issued and outstanding. As at
February 9, 2005, options to purchase 24.1
million common shares were outstanding under our
option plans, as well as options to purchase 1.3
million common shares under certain option plans
inherited by us in connection with prior
acquisitions. For further information regarding
the outstanding shares and stock options, please
refer to the Financial Statements and our 2005
Management Information Circular and Proxy
Statement. Dividend Policy In each of the last three years, we paid a
total cash dividend of $0.22 per share  $0.11 in
mid-June and $0.11 in mid-December. The amount
and timing of any dividends is within the
discretion of our Board of Directors. The Board
of Directors reviews the dividend policy
semi-annually based on the cash requirements of
our operating assets, exploration and
development activities, as well as potential
acquisitions, combined with our current and
projected financial position. Comprehensive Income Comprehensive income consists of net income
or loss, together with certain other economic
gains and losses that collectively are described
as other comprehensive income, and excluded
from the income statement. In 2004, the other comprehensive loss of $15
million mainly included gains of $147 million on
hedge contracts designated for future periods
caused primarily by changes in currency exchange
rates and fuel prices; offset by reclassification
adjustments totaling $132 million for gains on
hedge contracts designated for 2004 that were
transferred to earnings in 2004; and a $32
million decrease in the fair value of
investments. Included in other comprehensive income at
December 31, 2004 were unrealized pre-tax gains
on currency hedge contracts totaling $321
million, based on December 31, 2004 market
foreign exchange rates. The related hedge
contracts are designated against operating costs
and capital expenditures primarily over the next
three years, and are expected to help protect
against the impact of strengthening of the
Australian and Canadian dollar against the US
dollar. The hedge gains are expected to be
recorded in earnings at the same time as the
corresponding hedged operating costs and
amortization of capital expenditures are also
recorded in earnings. 51 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Quarterly Information ($ millions,
    
    2004
    
    
    2003except where indicated)
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Gold production (000s oz)
    
    
    1,169
    
    
    
    1,232
    
    
    
    1,279
    
    
    
    1,278
    
    
    
    1,301
    
    
    
    1,479
    
    
    
    1,467
    
    
    
    1,263Gold sales (000s oz)
    
    
    1,200
    
    
    
    1,267
    
    
    
    1,222
    
    
    
    1,247
    
    
    
    1,362
    
    
    
    1,505
    
    
    
    1,395
    
    
    
    1,292Gold sales
    
    $
    501
    
    
    $
    500
    
    
    $
    454
    
    
    $
    477
    
    
    $
    536
    
    
    $
    549
    
    
    $
    491
    
    
    $
    459Income (loss) before taxes
    
    
    (47
    )
    
    
    37
    
    
    
    15
    
    
    
    40
    
    
    
    73
    
    
    
    57
    
    
    
    44
    
    
    
    48Income tax recovery (expense)
    
    
    203
    
    
    
    (5
    )
    
    
    19
    
    
    
    (14
    )
    
    
    4
    
    
    
    (22
    )
    
    
    15
    
    
    
    (2
    )Net income
    
    
    156
    
    
    
    32
    
    
    
    34
    
    
    
    26
    
    
    
    77
    
    
    
    35
    
    
    
    59
    
    
    
    29Net income per share 
basic (dollars)
    
    
    0.30
    
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.05
    
    
    
    0.14
    
    
    
    0.07
    
    
    
    0.11
    
    
    
    0.05Per ounce statistics (dollars)Average spot gold price
    
    
    434
    
    
    
    401
    
    
    
    393
    
    
    
    408
    
    
    
    392
    
    
    
    364
    
    
    
    347
    
    
    
    352Average realized gold price
    
    
    417
    
    
    
    395
    
    
    
    372
    
    
    
    382
    
    
    
    394
    
    
    
    365
    
    
    
    352
    
    
    
    355Total cash costs per ounce1
    
    
    221
    
    
    
    218
    
    
    
    209
    
    
    
    199
    
    
    
    199
    
    
    
    180
    
    
    
    185
    
    
    
    194Cash inflow (outflow) fromOperating activities
    
    
    120
    
    
    
    152
    
    
    
    108
    
    
    
    126
    
    
    
    140
    
    
    
    187
    
    
    
    62
    
    
    
    130Investing activities
    
    
    (242
    )
    
    
    (219
    )
    
    
    (194
    )
    
    
    (164
    )
    
    
    (156
    )
    
    
    (58
    )
    
    
    (59
    )
    
    
    (61
    )Financing activities
    
    
    742
    
    
    
    154
    
    
    
    (73
    )
    
    
    (82
    )
    
    
    (54
    )
    
    
    (83
    )
    
    
    (130
    )
    
    
    1
   1.

    For an explanation of the use of non-GAAP performance measures, refer to pages 67 to 70. Our financial results for the last eight
quarters reflect the following general trends:
rising spot gold prices with a corresponding rise
in prices realized from gold sales; and declining
gold production, sales volumes, and rising total
cash costs per ounce as a number of our mines
were processing lower grade ore. These historic
trends are discussed elsewhere in this MD&A. The
quarterly trends are consistent with explanations
for annual trends over the last two years.
Beginning in the second half of 2005, we expect
that the historic trend in gold production, sales
volumes, and total cash costs per ounce will
reverse as our lower cost mines in development
begin production. Net income in each quarter also
reflects the timing of various special items that
are presented in the table on page 36. Fourth Quarter Results Revenue for fourth quarter 2004 was $501
million on gold sales of 1.2 million ounces,
compared to $536 million in revenue on gold sales
of 1.36 million ounces for the prior-year quarter. During the quarter, spot gold prices averaged $434 per ounce. We realized
an average price of $417 per ounce during the quarter compared to $394 per ounce in the prior-year quarter. For the quarter, we produced 1.17 million ounces
at total cash costs of $221 per ounce compared to
1.30 million ounces at total cash costs of $199
per ounce in the prior-year quarter. Earnings for fourth quarter 2004 were $156
million ($0.29 per share) as compared to earnings
of $77 million ($0.14 per share) in the
prior-year quarter. This increase in earnings
over the prior-year quarter reflects a $23 per
ounce higher realized gold price, a $141 million
tax recovery on final resolution of the Peruvian
tax assessment and a $48 million deferred tax
credit due to a change in tax status in
Australia. These increases were partly offset by
higher total cash costs, and an impairment charge
for certain long-lived assets of $131 million
pre-tax. 52 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Effect on earnings increase (decrease) 
 Three months ended December 31
    
    2004
    
    
    2003($ millions)
    
    Pre-tax
    
    
    Post-tax
    
    
    Pre-tax
    
    
    Post-taxNon-hedge derivative gains
    
    $
    6
    
    
    $
    6
    
    
    $
    46
    
    
    $
    37Gains on asset sales
    
    
    29
    
    
    
    24
    
    
    
    5
    
    
    
    3Litigation costs
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    (11
    )Impairment charges on long-lived assets
    
    
    (131
    )
    
    
    (91
    )
    
    
    (5
    )
    
    
    (3
    )Impairment charges on investments
    
    
    (4
    )
    
    
    (4
    )
    
    
    (4
    )
    
    
    (4
    )Change in asset retirement obligation estimates
    
    
    (19
    )
    
    
    (15
    )
    
    
    (6
    )
    
    
    (6
    )Resolution of Peruvian tax assessmentOutcome of tax uncertainties
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    Reversal of other accrued costs
    
    
    21
    
    
    
    15
    
    
    
    
    
    
    
    Deferred tax creditsChange in Australian tax status
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Total
    
    $
    (98
    )
    
    $
    124
    
    
    $
    20
    
    
    $
    57
 In the quarter, we generated operating cash
flow of $120 million as compared to operating
cash flow of $134 million in the prior-year
period. Lower operating cash flow in the quarter
primarily relates to
the combined effect of lower gold sales volumes
and higher total cash costs per ounce, partly
offset by higher realized gold prices. Off-Balance Sheet Arrangements Gold Sales Contracts We have historically used gold sales
contracts as a means of selling a portion of our
annual gold production. The contracting parties
are bullion-banking counterparties whose business
includes entering into contracts to purchase gold
from gold mining companies. Since 2001, we have
been focusing on reducing the level of
outstanding gold sales contracts. In 2004, spot
market sales made up the majority of our
consolidated gold sales. Allocation of Gold Sales Contracts to
SupportPascua-Lama Financing and Construction In July 2004, we announced a decision to
proceed with the Pascua-Lama project
(Pascua-Lama) subject to receiving required
permits and clarification of the applicable
fiscal regimes from the governments of Argentina
and Chile. We currently expect to put in place third-party
financing for up to $750 million of the expected
$1.4$1.5 billion initial construction cost of
Pascua-Lama. In anticipation of building
Pascua-Lama and in support of any related
financing, we allocated 6.5 million ounces of
existing fixed-price gold sales contracts
specifically to Pascua-Lama (the Pascua-Lama
Gold Sales Contracts) in fourth quarter 2004.
The allocation of these contracts will help
reduce gold price risk at Pascua-Lama and will
help secure the financing for its construction.
We expect the allocation of these contracts to
eliminate any requirement by lenders to add any
incremental gold sales contracts in the future to
support the financing of Pascua-Lama. 53 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Key
Aspects of Pascua-Lama Gold Sales Contracts(as of December 31, 2004)Expected delivery dates.1
    
    20092017, the term of the expected financing.Future estimated average realizable selling price.
    
    $372/oz.2Mark-to-market value at December 31, 2004.
    
    ($966) million.3
   1.
    
    The contract termination dates are 20142017 in most cases, but we expect to deliver Pascua-Lama
production against these contracts starting in 2009.2.
    
    Upon delivery of production from 20092017, the term of expected financing. Approximate
estimated value based on current market US dollar interest rates and an average lease rate
assumption of 1%.3.
    
    At a spot gold price of $436 per ounce and market interest rates. The allocation of 6.5 million ounces of gold
sales contracts to Pascua-Lama involves: i) the
identification of contracts, in quantities, and
for terms that mitigate gold price risk for
Pascua-Lama during the term of the expected
financing (contracts were chosen where the
existing termination dates are spread between
2009, the targeted first year of production, and
2017, the expected retirement of financing for
the project); ii) the segregation of these
contracts from the remaining non-Pascua-Lama gold
sales contracts (the Corporate Gold Sales
contracts); iii) the eventual settlement of
proceeds from these contracts for the benefit of
Pascua-Lama production. Barrick will continue to guarantee the
Pascua-Lama Gold Sales Contracts, and the
remaining Corporate Gold Sales Contracts. The
Barrick guarantee is a critical component in
allocating long-term contracts with termination
dates out to 20092017 to support the future
Pascua-Lama financing. Through allocation of these gold sales contracts
to Pascua-Lama, we significantly reduce capital
risk. It protects the gold price during the term
of the forecasted financing, while leaving the
remaining reserves fully levered to spot gold prices. The
contracts represent just over 35% of the 17.6
million ounces of gold reserves at Pascua-Lama,
and do not impact any of the 643 million ounces
of silver contained in gold reserves at
Pascua-Lama. These Pascua-Lama Gold Sales Contracts, while
allocated to Pascua production, retain all the
benefits of our gold sales Master Trading
Agreements (MTAs) and are not subject to
margining, downgrade or unilateral and discretionary right to break
provisions. Furthermore, as part of our MTAs,
these Pascua-Lama Gold Sales Contracts are not
subject to any provisions regarding any final
go-ahead decisions with Pascua-Lama construction,
or any possible delay or change in the
Pascua-Lama project. Corporate Gold Sales Contracts In addition to the gold sales contracts
allocated against Pascua-Lama, we have Corporate
Gold Sales Contracts, which at December 31, 2004
totaled 7.0 million ounces of fixed-price gold
sales contracts. This represents slightly over
one year of expected future gold production and
approximately 10% of our proven and probable
reserves, excluding Pascua-Lama. 54 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Key Aspects of Corporate Gold Sales Contracts(as
of December 31, 2004)Current termination date of contracts.
    
    2014 in most cases.Average estimated realizable selling price in 2014.
    
    $426/oz.1Mark-to-market value at December 31, 2004.
    
    ($949) million.2
   1.
    
    Approximate estimated value based on current market US dollar interest rates and an average
lease rate assumption of 1%. 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 $436 per ounce, and market interest rates. We have an obligation to deliver gold by the
termination date (currently 2014 in most cases).
However, because we typically fix the price of
gold under our gold sales contracts to a date
that is earlier than the termination date of the
contract (referred to as the interim
price-setting date), the actual realized price
on the contract termination date depends upon the
actual gold market forward premium (contango)
between the interim price-setting date and the
termination date. Therefore, the $426/oz price
estimate could change over time due to a number
of factors, including but not limited to: US
dollar interest rates, gold lease rates, spot
gold prices, and extensions of the termination
date. This price, which is an average for the
total Corporate Gold Sales Contract position, is
not necessarily representative of the prices that
may be realized each quarter for actual
deliveries into gold sales contracts, in
particular if we choose to settle any gold sales
contract in advance of the termination date
(which we have the right to do at our
discretion). If we chose to accelerate gold
deliveries, this would likely lead to reduced
contango that would otherwise have built up over
time (and therefore a lower realized price). The gold market forward premium, or contango, is
typically closely correlated with the difference
between US dollar interest rates and gold lease
rates. An increase or decrease in US dollar
interest rates would generally lead to a
corresponding increase or decrease in contango, and therefore an increase
or decrease in the estimated future price of the
contract at the termination date. Furthermore,
the greater the time period between the interim price-setting
date and the termination date, the greater the
sensitivity of the final realized price to US
dollar interest rates. A short-term spike in gold lease rates would not
have a material negative impact on us because we
are not significantly exposed under our
fixed-price 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).
Gold lease rates have historically tended to be
low, and any spikes short-lived, because of the
large amount of gold available for lending
relative to demand. In addition to the Corporate Gold Sales
Contracts, we also have floating spot-price gold
sales contracts under which we are committed to
deliver 0.5 million ounces of gold over the next
ten years at spot prices, less an average
fixed-price adjustment of $52 per ounce. These
floating spot-price contracts were previously
fixed-price contracts, for which, under the
price-setting mechanisms of the MTAs, we elected
to receive a price based on the market gold spot
price at the time of delivery adjusted by the
difference between the spot price and the
contract price at the time of such election. 55 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Fixed-price Silver Sales Contracts(as of December 31, 2004)Millions of silver ounces
    
    12.4Current termination date of silver sales contracts
    
    2014 in most cases.Average estimated realizable selling price at 2014 termination date
    
    $8.50/oz.1Mark-to-market value at December 31, 2004
    
    ($14) million.2
   1.
    
    Approximate estimated value based on current market US dollar interest rates and an average
lease rate assumption of 1%. 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 $6.82 per ounce. We also have floating spot-price silver
sales contracts under which we are committed to
deliver 12 million ounces of silver over the next
ten years at spot prices, less an average
fixed-price adjustment of $0.96 per ounce. These
floating spot-price contracts were previously
fixed-price contracts, for which, under the
price-setting mechanisms of the MTAs, we elected
to receive a price based on the market silver
spot price at the time of delivery adjusted by
the difference between the spot price and the
contract price at the time of such election. Key terms of Gold and Silver Sales Contracts
In all of our MTAs, which govern the terms
of gold and silver sales contracts with our 19
counterparties, the following applies:  >
    The counterparties do not have unilateral and discretionary right to break provisions.>
    There are no credit downgrade provisions.>
    We are not subject to any margin calls  regardless of the price of gold or silver.>
    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.>
    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 2014 in most
cases). The MTAs with our counterparties do provide for
early close out of certain transactions in the
event of a material adverse change in our ability
or that of our principal hedging subsidiarys
ability to perform our or its gold and silver
delivery and other obligations under the trading
agreements and related parent guarantees or a
lack of gold or silver market, and for customary
events of default such as covenant breaches,
insolvency or bankruptcy. The principal
financial covenants are:  >
    We must maintain a minimum consolidated net worth of at least $2 billion; currently,
it is $3.6 billion. The MTAs exclude unrealized mark-to-market valuations in the
calculation of consolidated net worth.>
    We must maintain a maximum long-term debt to consolidated net worth ratio of 2:1;
currently it is 0.51:1. In most cases, under the terms of the MTAs, the
period over which we are required to deliver gold
is extended annually by one year, or kept
evergreen, regardless of the intended delivery
dates, unless otherwise notified by the
counterparty. This means that, with each year
that passes, the termination date of most MTAs is
extended into the future by one year. 56 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS As spot gold prices increase or decrease,
the value of our gold mineral reserves and amount

of potential operating cash inflows generally
increases or decreases. The unrealized
mark-to-market loss on our fixed-price forward
gold sales contracts also increases or decreases.
The mark-to-market value represents the
cancellation value of these contracts based on
current market levels, and does not represent an
immediate economic obligation for payment by us.
Our obligations under the gold forward sales
contracts are to deliver an agreed upon quantity
of gold at a contracted price by the termination
date of the contracts (currently 2014 in most
cases). Gold sales contracts are not recorded on
our balance sheet. The economic impact of these
contracts is reflected in our Financial
Statements within gold sales based on selling
prices under the contracts at the time we record
revenue from the physical delivery of gold and
silver under the contracts. Change in the Fair Value
of Gold and Silver Sales
Contracts ($ millions)
    
    Gold1
    
    
    SilverUnrealized loss
at January 1, 2004
    
    $
    1,725
    
    
    $
    20Impact of change in spot price2
    
    
    288
    
    
    
    11Contango earned in the period
    
    
    (119
    )
    
    
    (1
    )Impact of change in valuation inputs3
    
    
    136
    
    
    
    2Mark-to-market impact of
deliveries into contracts
    
    
    (89
    )
    
    
    (6
    )Unrealized loss at
December 31, 2004
    
    $
    1,941
    
    
    $
    26
  1.
    Includes both the Pascua-Lama Gold Sales
Contracts and the Corporate Gold Sales
Contracts.2.
    From $415 per ounce to $436 per ounce for
gold, and $5.92 per ounce to $6.82 per ounce
for silver.3.

    Other than spot metal prices (i.e. interest
rates and gold and silver lease rates). Fair Value of Derivative Positions At December 31, 2004
    
    Unrealized($ millions)
    
    Gain/(Loss)Corporate Gold Sales Contracts
    
    $
    (949
    )Pascua-Lama Gold Sales Contracts
    
    
    (966
    )Floating Spot-Price Gold Sales Contracts
    
    
    (26
    )Silver Sales Contracts
    
    
    (14
    )Floating Spot-Price Silver Sales Contracts
    
    
    (12
    )Foreign currency contracts
    
    
    298Interest rate contracts
    
    
    45Fuel contracts
    
    
    4$
    (1,620
    )
 Liquidity Liquidity Management Liquidity is managed dynamically, and
factors that could impact liquidity are regularly
monitored. The primary factors that affect
liquidity include gold production levels,
realized gold sales prices, cash production costs, future capital expenditure
requirements, scheduled repayments of long-term
debt obligations, our credit capacity and
expected future debt market conditions. Working
capital requirements have not historically had a
material effect on liquidity. Counterparties to
the financial instruments and gold sales
contracts that we hold do not have unilateral and
discretionary rights to accelerate settlement of
financial instruments or gold sales contracts,
and we are not subject to any margin calls. We consider our liquidity profile to be sound, as
there are no reasonably foreseeable trends,
demands, commitments, events or circumstances
expected to prevent us from funding the capital
needed to implement our strategy. 57 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Capital Resources1($ millions)
    
    2004
    
    
    2003
    
    
    2002Opening capital resource
    
    $
    1,970
    
    
    $
    2,044
    
    
    $
    1,733New sourcesOperating cash flow
    
    
    506
    
    
    
    519
    
    
    
    588New financing facilities 2
    
    
    1,056
    
    
    
    
    
    
    
    3,532
    
    
    
    2,563
    
    
    
    2,321AllocationsGrowth capital3
    
    
    (640
    )
    
    
    (106
    )
    
    
    (29
    )Sustaining capital4
    
    
    (184
    )
    
    
    (216
    )
    
    
    (199
    )Dividends/share buyback
    
    
    (213
    )
    
    
    (272
    )
    
    
    (119
    )Other
    
    
    (19
    )
    
    
    1
    
    
    
    70Closing capital resources
    
    $
    2,476
    
    
    $
    1,970
    
    
    $
    2,044Components of closing
capital resourcesCash and equivalents
    
    $
    1,398
    
    
    $
    970
    
    
    $
    1,044Unutilized
credit facilities
    
    
    1,078
    
    
    
    1,000
    
    
    
    1,000Total
    
    $
    2,476
    
    
    $
    1,970
    
    
    $
    2,044
   1.
    Capital resources include cash balances and
sources of financing that have been arranged
but not utilized.2.

    Includes the $250 million Veladero
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.4.

    Sustaining capital represents capital
required at existing mining operations. Credit rating  Credit ratings at December 31, 2004,
from major rating agencies
  Standard and Poors
    
    AMoodys
    
    Baa1DBRS
    
    A
 Our ability to access unsecured debt markets
and the related cost of debt financing is, in
part, dependent upon maintaining an acceptable
credit rating. A deterioration in our credit
rating would not adversely affect existing debt
securities or the terms of gold sales contracts,
but could impact funding costs for any new debt
financing. The key factors that are important to
our credit rating include the following: our
market capitalization; the strength of our
balance sheet, including the amount of net debt
and our debt-to-equity ratio; our net cash flow,
including cash generated by operating activities
and expected capital expenditure requirements;
the quantity of our gold reserves; and our
geo-political risk profile. Contractual Obligations and Commitments Payments dueAt December 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2010 and($ millions)
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    thereafter
    
    
    TotalContractual obligations
Long-term debt (1)
    
    $
    31
    
    
    $
    58
    
    
    $
    580
    
    
    $
    72
    
    
    $
    17
    
    
    $
    903
    
    
    $
    1,661Asset retirement obligations (2)
    
    
    35
    
    
    
    28
    
    
    
    19
    
    
    
    42
    
    
    
    35
    
    
    
    208
    
    
    
    367Capital leasesA
    
    
    12
    
    
    
    15
    
    
    
    12
    
    
    
    11
    
    
    
    11
    
    
    
    
    
    
    
    61Operating leases
    
    
    16
    
    
    
    16
    
    
    
    16
    
    
    
    17
    
    
    
    5
    
    
    
    6
    
    
    
    76Post-retirement benefits
    
    
    16
    
    
    
    15
    
    
    
    16
    
    
    
    16
    
    
    
    16
    
    
    
    89
    
    
    
    168Other post-retirement benefits
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    9
    
    
    
    19Royalty arrangements (3)
    
    
    61
    
    
    
    66
    
    
    
    66
    
    
    
    67
    
    
    
    67
    
    
    
    510
    
    
    
    837Purchase obligations for
supplies and consumables
    
    
    11
    
    
    
    3
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    16Power contracts (4)
    
    
    6
    
    
    
    5
    
    
    
    1
    
    
    
    5
    
    
    
    2
    
    
    
    
    
    
    
    19Capital commitments (5)
    
    
    314
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    322Total
    
    
    504
    
    
    
    216
    
    
    
    713
    
    
    
    233
    
    
    
    155
    
    
    
    1,725
    
    
    
    3,546
   A.
    Includes the $56 million build to suit lease facility. 58 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Contractual Obligations and Commitments (1) 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 or for other customary events of default.
The Bulyanhulu and Veladero project financings
are secured by assets at the Bulyanhulu Mine and
Veladero project respectively. Other than this
security, we are not required to post any
collateral under any debt obligations. The terms
of our debt obligations would not be affected by
a deterioration in our credit rating. (2) Asset retirement obligations Amounts presented in the table represent the
discounted future payments for the expected cost
of asset retirement obligations. (3) Royalties Virtually all of the royalty arrangements
give rise to obligations as we produce gold. In
the event that we do not produce gold at our
mining properties, we have no payment obligation
to the royalty holders. The amounts disclosed are
based on expected future gold production, using a
$425 gold price assumption. The most significant
royalty agreements are disclosed in note 5 to our
Financial Statements. (4) Power contracts We enter into contracts to purchase power at
each of our operating mines. These contracts
provide for fixed prices, which, in certain
circumstances, are adjusted for inflation. Some
agreements obligate us to purchase fixed
quantities per hour, seven days a week, while
others are based on a percentage of actual
consumption. These contracts extend through
various dates in 2005 to 2009. In addition to the purchase obligations set out
in the table, we purchase about 1 billion
kilowatt-hours annually at market rates. Under
the terms of the Goldstrike Power contract, we purchase power
based on actual consumption; this contract has an exit fee that we will pay when we commence
commercial operation of our Nevada Power Plant
and leave the utility. (5) Capital commitments Purchase obligations for capital
expenditures include only those items where
binding commitments have been entered into.
Commitments at the end of 2004 mainly related to
construction at our development projects and also
the power plant in Nevada. Capital expenditures not yet committed We expect to incur about $2.5 billion to
complete the development/construction of our
present development projects over the next five
years (Veladero, Lagunas Norte, Tulawaka, Cowal,
Pascua-Lama and East Archimedes) and the Nevada
Power Plant, as well as an average of
approximately $175 million per year in sustaining
capital at our producing mines over the same time
period. A total of $322 million of these amounts
had been committed at the end of 2004, with the
remainder not yet committed. Payments to maintain land tenure and mineral property rights In the normal course of business, we are
required 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. If 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. The validity of mining claims
can be uncertain and may be contested. Although
we have attempted to acquire satisfactory title
to our properties, some risk exists that some
titles, particularly title to undeveloped
properties, may be defective. Contingencies  Litigation We are currently subject to various
litigation as disclosed in note 23 to the
Financial Statements, and we may be involved in
disputes with other parties in the future that
may result in litigation. If we are unable to
resolve these disputes favorably, it may have a
material adverse impact on our financial
condition, cash flow and results of operations. 59 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Canadian Supplement In note 25 to our Financial Statements we
have provided a reconciliation between Canadian
and US GAAP, including a description of the
significant measurement differences affecting our
balance sheet, income statement and statement of
cash flow. Under Canadian GAAP we incurred a loss of $102
million ($0.19 per share) compared to income of
$248 million ($0.46 per share). The principal
continuing reconciling differences that affect
earnings relate to the amortization of property,
plant and equipment under Canadian GAAP, as well
as the outcome of impairment assessments for
property, plant and equipment and goodwill and
the measurement of gains on sale of long-lived
assets. These differences primarily arise due to
differences in the carrying amounts of the assets
due to differences in historic accounting for
business combinations. In addition, the
measurement of amortization under Canadian GAAP
includes certain mineralization not classified as
a reserve under SEC rules. We expect to see
continuing differences in the measurement of
amortization and impairment of property, plant
and equipment and goodwill. In 2004, we adopted new accounting rules that
require the expensing of stock options under
Canadian GAAP, with retroactive restatement of
prior periods. Similar rules will become
effective for US GAAP in 2005, but we expect to
see continuing differences due to different
transition methods for these new rules between US
and Canadian GAAP. Certain mine development costs are expensed under
US GAAP, but capitalized for Canadian GAAP
purposes. These differences exist at development
projects where mineralization has not yet been
classified as a reserve under SEC rules. We
expect to see continuing differences in our
accounting for exploration and development
expenditures, where some expenditures qualify for
capitalization under Canadian GAAP, but are
expensed under US GAAP. The major expenditures in
2005 that will be affected by this difference in
accounting are expenditures on our Buzwagi
project, which will not qualify for
capitalization under US GAAP until mineralization
at the project qualifies as a reserve for US reporting purposes. Critical Accounting Policies and Estimates 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
conjunction with its review of this MD&A. The
accounting policies and methods we utilize
determine how we report our financial condition
and results of operations, and they may require
management to make estimates or rely on
assumptions about matters that are inherently
uncertain. Our financial condition and results of operations
are reported using accounting policies and
methods prescribed by US GAAP. In certain cases,
US GAAP allows accounting policies and methods to
be selected from two or more alternatives, any of
which might be reasonable yet result in our
reporting materially different amounts.
Management exercises judgment in selecting and
applying our accounting policies and methods to
ensure that, while US GAAP compliant, they
reflect our judgment of an appropriate manner in
which to record and report our financial
condition and results of operations. Accounting Policy Changes There were no changes in accounting policies
in 2004 that significantly impacted our financial
statements. As disclosed in note 2c to the
Financial Statements, in 2005 we are required to
adopt FAS 123R, Accounting for Stock-based
Compensation, and we may be required to change
our accounting policy for stripping costs once
the Emerging Issues Task Force has completed its
deliberations on EITF 04-6. 60 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Critical Accounting Estimates Certain accounting estimates have been
identified as being critical to the
presentation of our financial condition and
results of operations because they require
management to make particularly subjective and/or
complex judgments about matters that are
inherently uncertain; and there is a reasonable
likelihood that materially different amounts
could be reported under different conditions or
using different assumptions and estimates.
Critical accounting estimates include:  >
    Reserve estimates used to measure amortization of property, plant and equipment;>
    Stripping ratios used to measure amortization of capitalized mining costs;>
    Impairment assessments of long-lived assets;>
    The fair value of asset retirement obligations; and>
    The measurement of deferred income tax assets and liabilities and assessments of the
amounts of valuation allowances recorded. Reserve Estimates Used to Measure Amortization of Property,
Plant and Equipment We record amortization expense based on the
estimated useful economic lives of long-lived
assets. The estimate that most significantly
affects the measurement of amortization is
quantities of proven and probable gold reserves,
because we amortize a large portion of property,
plant and equipment using the units-of-production
method. Reserves are estimated in accordance with
the principles in Industry Guide No. 7, issued by
the SEC. The estimation of quantities of gold
reserves is complex, requiring significant
subjective assumptions that arise from the
evaluation of geological, geophysical,
engineering and economic data for a given ore
body. This data could change over time as a
result of numerous factors, including new
information gained from development activities,
evolving production history and a reassessment of
the viability of production under different
economic conditions. Changes in data and/or
assumptions could cause reserve estimates to
substantially change from period to period.
Because mineral reserves are estimates, there is a risk that
actual gold production could differ from expected
gold production from our reserves. Factors that
could cause actual gold production to differ
include adverse changes in gold or silver prices,
which could make the reserve uneconomic to mine;
and variations in actual ore grade and gold and silver recovery
rates from estimates. A key trend that could reasonably impact reserve
estimates is rising market gold prices. As market
gold prices rise, the gold price assumption used
in reserve estimation also rises. This assumption
is closely related to the trailing three-year
average market price. As this assumption rises,
this could result in an upward revision to
reserve estimates as material not previously
classified as a reserve becomes economic at
higher gold prices. Changes in reserve estimates
are generally calculated at the end of each year
and cause amortization expense to increase or
decrease prospectively. In general, amortization expense is more
significantly impacted by changes in reserve
estimates at underground mines than open-pit
mines due to the following factors:  >
    Underground development costs incurred to access ore at underground mines are
significant and amortized using the units-of-production method; and>
    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. The mines where amortization expense is most
sensitive to changes in reserve estimates are:
Pierina, Goldstrike Underground, Eskay Creek and
Bulyanhulu. These mines have significant carrying
amounts of property, plant and equipment that are
amortized using the units-of-production method
and make up a significant proportion of property,
plant and equipment at our operating mines. 61 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Impact of Historic Changes in Reserve Estimates on Amortization For the years endedDecember 31($ millions, except reservesin millions of contained oz)
    
    2004
    
    
    2003Reserves
    
    
    Amortization
    
    
    Reserves
    
    
    Amortizationincrease (decrease)1
    
    
    increase (decrease)
    
    
    increase (decrease)1
    
    
    increase (decrease)GoldstrikeUnderground
    
    
    0.2
    
    
    $
    (8
    )
    
    
    0.6
    
    
    $
    (10
    )Open Pit
    
    
    1.5
    
    
    
    (7
    )
    
    
    1.3
    
    
    
    (6
    )Plutonic
    
    
    0.5
    
    
    
    (2
    )
    
    
    1.3
    
    
    
    (4
    )Eskay Creek
    
    
    (0.1
    )
    
    
    4
    
    
    
    
    
    
    
    Kalgoorlie
    
    
    0.9
    
    
    
    (3
    )
    
    
    
    
    
    
    Pierina
    
    
    0.3
    
    
    
    (9
    )
    
    
    
    
    
    
    
   1.
    
    Each year we updated 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. Stripping Ratios Used to Measure Amortization of Capitalized Mining Costs Amortization of capitalized mining costs is
recorded in the cost of inventory produced using
a stripping ratio. The stripping ratio is
calculated as the total tons of ore and waste
that must be mined compared to recoverable proven
and probable gold reserves. Both reserve estimates and the estimated tons of
ore and waste that must be mined to produce
reserves are estimates that are highly uncertain.
The assumptions and uncertainty relating to
reserve estimates are described on page 61 under
Reserve
 Estimates Used to Measure Amortization of
Property, Plant and Equipment. The estimated
tons of ore and waste that must be mined to
produce reserves are calculated based on a mine
plan that contemplates a design for the open pit
relating to the mining of reserves. As reserve
estimates change, the design of the open pit also
changes, and both of these factors impact the
stripping ratio. Changes in this ratio affect the amortization of
capitalized mining costs to inventory, and
ultimately cost of sales when the inventory is
sold. In general, stripping ratios are higher at
open-pit mines where the ore body is deep below
the surface of the earth. Impact of Historic Changes in Stripping Ratios ($ millions, except ratios)
    
    Stripping ratio used in
    
    
    Amortization increase (decrease)12005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003GoldstrikeOpen Pit
    
    
    127:1
    
    
    
    109:1
    
    
    
    112:1
    
    
    $
    5
    
    
    $
    (1
    )
    
    $
    Pierina
    
    
    89:1
    
    
    
    60:1
    
    
    
    48:1
    
    
    
    20
    
    
    
    7
    
    
    
    
   1.
    
    Impact of the year on year change in the stripping ratio used to amortize capitalized mining
costs. Stripping ratios are updated annually at the
same time as reserve estimates are updated. At
the end of 2004, the stripping ratios for
Goldstrike Open-Pit and Pierina were updated to
reflect the updated reserves at the end of 2004. The amount presented
represents the estimated impact on annual
amortization caused by these changes, based on
production levels and sales volumes in 2004. 62 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Impairment Assessments of Operating
Mines, Development Projects and
Exploration Stage Properties We review and test the carrying amounts of
assets when events or changes in circumstances
suggest that the carrying amount may not be
recoverable. We group assets at the lowest level
for which identifiable cash flows are largely
independent of the cash flows of other assets and
liabilities. For operating mines and development
projects, all assets are included in one group.
If there are indications that an impairment may
have occurred, we prepare estimates of expected
future cash flows for each group of assets.
Expected future cash flows are based on a
probability-weighted approach applied to
potential outcomes. Estimates of expected future cash flow reflect:  >
    Estimated sales proceeds from the production and sale of recoverable ounces of gold
contained in proven and probable reserves;>
    Expected future commodity prices and currency exchange rates (considering historical
and current prices, price trends and related factors). In impairment assessments conducted
in 2004 we used an expected future market gold price of $400 per ounce, and an expected
future market US$:A$ exchange rate of $0.70 and US$:C$ exchange rate of $0.82;>
    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;>
    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; and>
    Environmental remediation costs excluded from the measurement of asset retirement
obligations. We record a reduction of a group of assets to
fair value as a charge to earnings if expected
future cash flows are less than the carrying
amount. We estimated fair value by discounting the
expected future cash flows using a discount
factor that reflects the risk-free rate of
interest for a term consistent with the period of
expected cash flows. Expected future cash flows are inherently
uncertain, and could materially change over time.
They are significantly affected by reserve
estimates, together with economic factors such as
gold and silver prices, and currency exchange
rates, estimates of costs to produce reserves and
future sustaining capital. The assessment and
measurement of impairment excludes the impact of
derivatives designated in a cash flow
hedge relationship for future cash flows arising
from operating mines and development projects. Because of the significant capital investment
that is required at many mines, if an impairment
occurs, it could materially impact earnings. Due
to the long-life nature of many mines, the
difference between total estimated undiscounted
net cash flows and fair value can be substantial.
An impairment is generally only recorded when the
carrying amount of a long-lived asset exceeds the
total estimated undiscounted net cash flows.
Therefore, although the value of a mine may
decline gradually over multiple reporting
periods, the application of impairment accounting
rules could lead to recognition of the full
amount of the decline in value in one period. Due
to the highly uncertain nature of future cash
flows, the determination of when to record an
impairment charge can be very subjective.
Management makes this determination using
available evidence taking into account current
expectations for each mining property. For acquired exploration-stage properties, the
purchase price is capitalized, but
post-acquisition exploration expenditures are
expensed. The future economic viability of
exploration stage properties largely depends upon
the outcome of exploration activity, which can
take a number of years to complete for large
properties. Management monitors the results of
exploration activity over time to assess whether
an impairment may have occurred. 63 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS The measurement of any impairment is made
more difficult because there is not an active
market for exploration properties, and because it
is not possible to use discounted cash flow
techniques due to the very limited information
that is available to accurately model future cash
flows. In general, if an impairment occurs at an
exploration stage property, it would probably
have minimal value and most of the acquisition
cost may have to be written down. Impairment charges are recorded in other income/
expense and impact earnings in the year they are
recorded. Prospectively, the impairment could
also impact the calculation of amortization of an
asset. In fourth quarter 2004, we performed
detailed impairment assessments for three groups
of assets: the Eskay Creek mine in North America;
various exploration-stage properties in Peru; and
the Cowal mine in Australia. For the Eskay Creek mine, the requirement to
complete an impairment test was due to the
following combination of factors: downward
revisions to reserves in 2004; the continued
weakening of the US dollar that impacts Canadian
dollar operating costs measured at market rates;
and upward revisions in asset retirement
obligations at the end of 2004. On completion of
this test, we concluded that the mine was
impaired at the end of 2004, and we recorded a
pre-tax impairment charge of $58 million. For a group of Peruvian exploration-stage
properties acquired as part of the Arequipa
acquisition in 1996, we completed an impairment
test in fourth quarter 2004 following the
finalization of the exploration program for the
year and based on an updated assessment of future
plans for the properties. On completion of this
test, we concluded that the properties were
impaired at the end of 2004 and we recorded a
pre-tax impairment charge of $67 million. For the Cowal development project, an impairment
test was completed following upward revisions to
estimated capital and operating costs for the
project; and the continued weakening of the US
dollar that impacts the amounts reported in US dollars for
Australian dollar expenditures, measured at
market prices. On completion of this test we
concluded that the mine was not impaired at the
end of 2004. We completed these impairment tests using a $400
average future gold price assumption. If a
significant adverse change in the market gold
price occurred that caused us to revise this
price assumption downwards, the amount by which
the Eskay Creek mine is impaired could increase
and the conclusion on the Cowal impairment test
could change, subject to the effect of changes in
other factors and assumptions. The revised gold
price assumption would have no impact on the
Peruvian exploration-stage properties because the
properties were fully written down at the end of
2004. Fair Value of Asset Retirement Obligations (AROs) AROs arise from the acquisition,
development, construction and normal operation of
mining property, plant and equipment, due to
government controls and regulations that protect
the environment on the closure and reclamation of
mining properties. We record the fair value of an
ARO in our Financial Statements when it is
incurred and capitalize this amount as an
increase in the carrying amount of the related
asset. At operating mines, the effect is recorded
as an adjustment to the corresponding asset
carrying amount and results in a prospective
increase or decrease in amortization expense. At
closed mines, the adjustment is charged directly
to earnings. The fair values of AROs are measured by
discounting the expected cash flows using a
discount factor that reflects the risk-free rate
of interest. We prepare estimates of the timing
and amounts of expected cash flows when an ARO is
incurred, which are updated to reflect changes in
facts and circumstances, or if we are required to
submit updated mine closure plans to regulatory
authorities. In the future, changes in
regulations or laws or enforcement could
adversely affect our operations; 64 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS and any instances of noncompliance with laws
or regulations that result in fines or
injunctions or delays in projects, or any
unforeseen environmental contamination at, or
related to, our mining properties could result in
us suffering significant costs. We mitigate these
risks through environmental and health and safety
programs under which we monitor compliance with
laws and regulations and take steps to reduce the
risk of environmental contamination occurring. We
maintain insurance for some environmental risks,
however, for some risks coverage cannot be
purchased at a reasonable cost. Our coverage may
not provide full recovery for all possible causes
of loss. The principal factors that can cause
expected cash flows to change are: the
construction of new processing facilities;
changes in the quantities of material in reserves
and a corresponding change in the life of mine
plan; changing ore characteristics that
ultimately impact the environment; changes in
water quality that impact the extent of water
treatment required; and changes in laws and
regulations governing the protection of the
environment. In general, as the end of the mine
life becomes nearer, the reliability of expected
cash flows increases, but earlier in the mine
life, the estimation of an ARO is inherently more
subjective. Significant judgments and estimates
are made when estimating the fair value of AROs.
Expected cash flows relating to AROs could occur
over periods up to 40 years and the assessment of
the extent of environmental remediation work is
highly subjective. Considering all of these
factors, the fair value of AROs can materially
change over time. In 2004, we recorded charges in AROs totaling $54
million, of which $32 million was recorded as an
adjustment to the corresponding asset and $22
million was recorded as a charge to earnings. The
$22 million charge to earnings mainly reflects
increases in the expected cost of water treatment
at certain closed mines. In 2003, we recorded
revisions to AROs totaling $10 million for
various closed mines that were charged to
earnings and mainly reflect increases in the
expected cost of water treatment. AROs at December 31, 2004 ($ millions)Operating mines
    
    $
    204Closed mines
    
    
    148Development projects
    
    
    15Total
    
    $
    367
 At our operating mines, it is reasonably
possible that circumstances could arise by the
end of the mine life that will require material
revisions to AROs. In particular, the extent of
water treatment can have a material effect on the
fair value of AROs, and the expected water
quality at the end of the mine life, which is the
primary driver of the extent of water treatment,
can change significantly. We periodically prepare
updated studies for certain mines, following
which it may be necessary to adjust the fair
value of AROs. At one closed mine, the principal uncertainty
that could impact the fair value of an ARO is the
manner in which a tailings facility will need to
be remediated. In measuring the ARO, we have
concluded that there are two possible methods
that could be used. We have recorded the ARO
using the more costly method, which we believe to
be the most probable, but it is reasonably
possible that a less costly method may ultimately
prove to be technically feasible, in which case
the ARO may decrease and any revision to the ARO
would be recorded in earnings in the period of
change. The period of time over which we have assumed
that water quality monitoring and treatment will
be required also have a significant impact on
AROs at closed mines. The amount of AROs recorded
reflects the expected cost taking into account
the probability of particular scenarios. The
difference between the upper end of the range of
these assumptions and the lower end of the range
is significant, and consequently changes in these
assumptions could have a material effect on the
fair value of AROs and future earnings in a
period of change. 65 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Deferred Tax Assets and Liabilities Measurement of Timing Differences We are periodically required to estimate the tax
basis of assets and liabilities. Where applicable
tax laws and regulations are either unclear or
subject to varying interpretations, it is
possible that changes in these estimates could
occur that materially affect the amounts of
deferred income tax assets and liabilities
recorded in our Financial Statements. Changes in
deferred tax assets and liabilities generally
have a direct impact on earnings in the period of
changes. The most significant such estimate is
the tax basis of certain Australian assets
following elections in 2004 under new tax regimes
in Australia. These elections resulted in the
revaluation of certain assets in Australia for
income tax purposes. Part of the revalued tax
basis of these assets was estimated based on a
valuation completed for tax purposes. This
valuation is under review by the Australian Tax
Office (ATO) and the amount finally accepted by
the ATO may differ from the assumption used to
measure deferred tax balances at the end of 2004. Valuation Allowances Each period, we evaluate the likelihood of
whether some portion or all of each deferred tax
asset will not be realized. This evaluation is
based on historic and future expected levels of
taxable income, the pattern and timing of
reversals of taxable temporary timing differences
that give rise to deferred tax liabilities, and
tax planning initiatives. Levels of future
taxable income are affected by, among other
things, market gold prices, production costs,
quantities of proven and probable gold reserves,
interest rates and foreign currency exchange
rates. If we determine that it is more likely
than not (a likelihood of more than 50%) that all
or some portion of a deferred tax asset will not
be realized, then we record a valuation allowance
against the amount we do not expect to realize.
Changes in valuation allowances are recorded as a
component of income tax expense or recovery for
each period. The most significant recent trend
impacting expected levels of future taxable
income and valuation allowances has been rising
gold prices. A continuation of this trend
could lead to the release of some of the
valuation allowances recorded, with a corresponding effect
on earnings in the period of release. We released valuation allowances totaling $5
million in 2004 and $62 million in 2003. In 2004,
the release was as a consequence of an election
to consolidate our Australian operations into one
tax group. The $62 million release in 2003 was
mainly a result of a corporate reorganization for
tax purposes in North America and the impact of
higher expected levels of taxable income in
Australia and Argentina caused by rising market
gold prices. A further continuation of the recent trend of
rising gold prices could lead to the release of
some portion or all of the valuation allowances
in the United States and Argentina. Valuation allowances at December 31 ($ millions)
    
    2004
    
    
    2003United States
    
    $
    189
    
    
    $
    181Chile
    
    
    141
    
    
    
    146Argentina
    
    
    75
    
    
    
    73Canada
    
    
    73
    
    
    
    72Tanzania
    
    
    89
    
    
    
    68Australia
    
    
    3
    
    
    
    8Other
    
    
    8
    
    
    
    6$
    578
    
    
    $
    554
 United States:most of the valuation
allowances relate to the full amount of
Alternative Minimum Tax credits, which have an
unlimited carry-forward period. Increasing levels
of future taxable income due to gold selling
prices and other factors and circumstances may
result in an adjustment to these valuation
allowances. Chile:valuation allowances relate to the full
amount of tax assets in subsidiaries that do not
have any present sources of income. In the event
that these subsidiaries have sources of income in
the future, we may release some or all of the
allowances. Argentina:a valuation allowance of $75 million
has been set up against certain deferred tax
assets in Argentina. Historically, we have had no
income 66 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS generating operations in Argentina, but following
the production start-up at Veladero in 2005, various
factors will affect future levels of taxable income in
Argentina, including the volume of gold produced
and sold, gold selling prices and costs incurred
to produce gold. It is reasonably possible that an
adjustment to a $34 million portion of this valuation
allowance that relates to Veladero will be made in
the near term. Canada:substantially all of the valuation allowances
relate to capital losses that will only be utilized if
any capital gains arise. Tanzania:considering the local fiscal regime applicable
to mining companies and expected levels of
future taxable income from the Bulyanhulu mine, a
valuation allowance exists against a portion of the
deferred tax assets. If we conclude that expected
levels of future taxable income from Bulyanhulu
will be higher, we may release some or all of the
valuation allowance. Non-GAAP Performance
Measures For the years ended December 31($ millions, exceptper ounce information)
    
    2004
    
    
    2003Total cash costs  per US GAAP1
    
    $
    1,062
    
    
    $
    1,065Accretion expense and reclamation
costs at the operating mines
    
    
    (18
    )
    
    
    (14
    )Total cash costs  per Gold Institute
Production Cost Standard
    
    $
    1,044
    
    
    $
    1,051Ounces sold
(thousands)
    
    
    4,936
    
    
    
    5,554Total cash costs per ounce
 per US GAAP (dollars)2
    
    $
    215
    
    
    $
    192Total cash costs per ounce 
per Gold Institute Production
Cost Standard (dollars)2
    
    $
    212
    
    
    $
    189
   1.
    Equal to cost of sales and other operating expenses
less accretion expense and reclamation costs at
non-operating mines.2.
    Per ounce weighted average. We have included total cash costs per ounce
data because these statistics are a key
performance measure that management uses to
monitor performance. We use these statistics to assess how well our
producing mines are performing compared to plan
and also to assess the overall effectiveness and
efficiency of our mining operations. We believe
that the inclusion of these statistics in MD&A
helps an investor to assess performance through
the eyes of management. We understand that certain investors
also use these statistics to assess our
performance. The inclusion of total cash costs
per ounce statistics enables investors to better
understand year on year changes in production
costs, which in turn affect profitability and the
ability to generate operating cash flow for use
in investing and other activities. We report
total cash costs per ounce data calculated in
accordance with The Gold Institute Production
Cost Standard (the Standard). Adoption of the
Standard is voluntary, but we understand that
most senior gold producers follow the Standard
when reporting cash cost per ounce data. The data
does not have a meaning prescribed by US GAAP and
therefore amounts presented may not be comparable
to data presented by gold producers who do not
follow the Standard. Total cash costs per ounce
are derived from amounts included in the
Statements of Income and 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 costs. A
US GAAP measure of costs per ounce has also been
presented as required by securities regulations
that govern non-GAAP performance measures.
Commentary within this Managements Discussion
and Analysis is focused on the total cash costs
measure as defined by the Standard. The 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 profit or cash flow from operations as
determined under GAAP. As can be seen from the
tables on pages 68 to 70 reconciling the GAAP and
non-GAAP measures, the GAAP and non-GAAP measures
are not significantly different. 67 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Reconciliation of Total Cash Costs per Ounce to Financial Statements Goldstrike 
    
    
    Goldstrike 
    
    
    Eskay
    
    
    RoundOpen pit
    
    
    Underground
    
    
    Creek2
    
    
    MountainFor the yearsended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Total cash production
costs  per US GAAP1
    
    $
    336.5
    
    
    $
    380.6
    
    
    $
    141.2
    
    
    $
    152.1
    
    
    $
    9.3
    
    
    $
    18.6
    
    
    $
    84.5
    
    
    $
    67.2Accretion expense and
reclamation costs at
operating mines
    
    
    (2.5
    )
    
    
    (2.5
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.3
    )
    
    
    (1.6
    )
    
    
    (1.6
    )Total cash production costs
per Gold Institute
Production Cost Standard
    
    $
    334.0
    
    
    $
    378.1
    
    
    $
    141.0
    
    
    $
    152.1
    
    
    $
    9.1
    
    
    $
    18.3
    
    
    $
    82.9
    
    
    $
    65.6Ounces sold
(thousands)
    
    
    1,352
    
    
    
    1,625
    
    
    
    554
    
    
    
    600
    
    
    
    290
    
    
    
    354
    
    
    
    375
    
    
    
    379Total cash costs per ounce sold
per US GAAP (dollars)3
    
    $
    249
    
    
    $
    234
    
    
    $
    256
    
    
    $
    253
    
    
    $
    32
    
    
    $
    53
    
    
    $
    225
    
    
    $
    177Total cash costs per ounce sold 
per Gold Institute Production
Cost Standard (dollars)4
    
    $
    247
    
    
    $
    233
    
    
    $
    255
    
    
    $
    253
    
    
    $
    31
    
    
    $
    52
    
    
    $
    221
    
    
    $
    173
 TotalHemlo
    
    
    Holt-McDermott
    
    
    Marigold
    
    
    North AmericaFor the yearsended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Total cash production
costs  per US GAAP1
    
    $
    57.6
    
    
    $
    60.4
    
    
    $
    12.3
    
    
    $
    20.9
    
    
    $
    9.1
    
    
    $
    8.1
    
    
    $
    650.5
    
    
    $
    707.9Accretion expense and
reclamation costs at
operating mines
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (4.9
    )
    
    
    (4.8
    )Total cash production costs
per Gold Institute
Production Cost Standard
    
    $
    57.4
    
    
    $
    60.2
    
    
    $
    12.2
    
    
    $
    20.8
    
    
    $
    9.0
    
    
    $
    8.0
    
    
    $
    645.6
    
    
    $
    703.1Ounces sold
(thousands)
    
    
    239
    
    
    
    266
    
    
    
    62
    
    
    
    87
    
    
    
    46
    
    
    
    47
    
    
    
    2,918
    
    
    
    3,358Total cash costs per ounce sold
per US GAAP (dollars)3
    
    $
    241
    
    
    $
    227
    
    
    $
    198
    
    
    $
    240
    
    
    $
    198
    
    
    $
    172
    
    
    $
    223
    
    
    $
    211Total cash costs per ounce sold 
per Gold Institute Production
Cost Standard (dollars)4
    
    $
    240
    
    
    $
    226
    
    
    $
    197
    
    
    $
    239
    
    
    $
    197
    
    
    $
    171
    
    
    $
    221
    
    
    $
    209
   1.
    Represents cost of sales and other operating costs (excluding amortization and accretion expense and reclamation
costs for non-operating mines).2.
    Eskay Creeks total cash costs in 2004 are impacted by higher silver prices which the Company treats as
a by-product. Total cash costs on a co-product basis are: 2004  gold $202 per ounce, silver $3.36 per ounce
(2003  gold $175 per ounce, silver $2.37 per ounce).3.
    Represents total cash production costs per US GAAP divided by ounces sold.4.
    Represents total cash production costs per Gold Institute Production Cost Standard divided by ounces sold. 68 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS TotalPierina
    
    
    South America
    
    
    Plutonic
    
    
    DarlotFor the yearsended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Total cash production
costs  per US GAAP1
    
    $
    72.2
    
    
    $
    78.9
    
    
    $
    72.2
    
    
    $
    78.9
    
    
    $
    69.2
    
    
    $
    62.6
    
    
    $
    30.0
    
    
    $
    25.4Accretion expense and
reclamation costs at
operating mines
    
    
    (3.5
    )
    
    
    (3.2
    )
    
    
    (3.5
    )
    
    
    (3.2
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    (0.1
    )
    
    
    (0.1
    )Total cash production costs
per Gold Institute
Production Cost Standard
    
    $
    68.7
    
    
    $
    75.7
    
    
    $
    68.7
    
    
    $
    75.7
    
    
    $
    69.1
    
    
    $
    62.4
    
    
    $
    29.9
    
    
    $
    25.3Ounces sold
(thousands)
    
    
    649
    
    
    
    911
    
    
    
    649
    
    
    
    911
    
    
    
    310
    
    
    
    324
    
    
    
    142
    
    
    
    154Total cash costs per ounce sold
per US GAAP (dollars)2
    
    $
    111
    
    
    $
    87
    
    
    $
    111
    
    
    $
    87
    
    
    $
    223
    
    
    $
    193
    
    
    $
    211
    
    
    $
    165Total cash costs per ounce sold 
per Gold Institute Production
Cost Standard (dollars)3
    
    $
    106
    
    
    $
    83
    
    
    $
    106
    
    
    $
    83
    
    
    $
    223
    
    
    $
    193
    
    
    $
    210
    
    
    $
    164
 TotalLawlers
    
    
    Kalgoorlie
    
    
    Bulyanhulu
    
    
    Australia/AfricaFor the yearsended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Total cash production
costs  per US GAAP1
    
    $
    28.3
    
    
    $
    23.8
    
    
    $
    108.5
    
    
    $
    88.1
    
    
    $
    103.2
    
    
    $
    77.1
    
    
    $
    339.2
    
    
    $
    277.0Accretion expense and
reclamation costs at
operating mines
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (1.5
    )
    
    
    (1.5
    )
    
    
    (7.5
    )
    
    
    (4.1
    )
    
    
    (9.3
    )
    
    
    (6.0
    )Total cash production costs
per Gold Institute
Production Cost Standard
    
    $
    28.2
    
    
    $
    23.7
    
    
    $
    107.0
    
    
    $
    86.6
    
    
    $
    95.7
    
    
    $
    73.0
    
    
    $
    329.9
    
    
    $
    271.0Ounces sold
(thousands)
    
    
    115
    
    
    
    95
    
    
    
    463
    
    
    
    415
    
    
    
    339
    
    
    
    297
    
    
    
    1,369
    
    
    
    1,285Total cash costs per ounce sold
per US GAAP (dollars)2
    
    $
    247
    
    
    $
    250
    
    
    $
    234
    
    
    $
    212
    
    
    $
    304
    
    
    $
    260
    
    
    $
    248
    
    
    $
    216Total cash costs per ounce sold 
per Gold Institute Production
Cost Standard (dollars)3
    
    $
    246
    
    
    $
    249
    
    
    $
    231
    
    
    $
    209
    
    
    $
    283
    
    
    $
    246
    
    
    $
    241
    
    
    $
    210
   1.
    Represents cost of sales and other operating costs (excluding amortization and accretion expense and reclamation
costs for non-operating mines).2.
    Represents total cash production costs per US GAAP divided by ounces sold.3.
    Represents total cash production costs per Gold Institute Production Cost Standard divided by ounces sold. 69 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Reconciliation of Amortization Costs per Ounce to Financial Statements For the years ended December 31
    
    2004
    
    
    2003
    
    
    2002Amortization expense per consolidated financial statements
    
    $
    452
    
    
    $
    522
    
    
    $
    519Amortization expense recorded on property,
plant and equipment not at operating mine sites
    
    
    (27
    )
    
    
    (25
    )
    
    
    (26
    )Amortization expense for per ounce calculation
    
    $
    425
    
    
    $
    497
    
    
    $
    493Ounces sold
(thousands)
    
    
    4,936
    
    
    
    5,554
    
    
    
    5,805Amortization
per ounce (dollars)
    
    $
    86
    
    
    $
    90
    
    
    $
    85
 70 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Cautionary Statement on Forward-Looking
Information Certain information contained or
incorporated by reference in this Annual Report
2004, including any information as to our future
financial or operating performance, constitutes
forward-looking statements. All statements,
other than statements of historical fact, are
forward-looking statements. The words believe,
expect, anticipate, contemplate, target,
plan, intends, continue, budget,
estimate, may, will, schedule and similar
expressions identify forward-looking statements.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions that,
while considered reasonable by us, are inherently
subject to significant business, economic and
competitive uncertainties and contingencies.
Known and unknown factors could cause actual
results to differ materially from those projected
in the forward-looking statements. Such factors
include, but are not limited to: fluctuations in
the currency markets (such as the Canadian and
Australian dollars versus the U.S. dollar);
fluctuations in the spot and forward price of
gold or certain other commodities (such as
silver, copper, diesel fuel and electricity);
changes in U.S. dollar interest rates or gold
lease rates that could impact the mark to market
value of outstanding derivative instruments and
ongoing payments/receipts under interest rate
swaps and variable rate debt obligations; risks
arising from holding derivative instruments (such
as credit risk, market liquidity risk and mark to
market risk); changes in national and local
government legislation, taxation, controls,
regulations and political or economic
developments in Canada, the United States,
Australia, Chile, Peru, Argentina, Tanzania,
Russia or Barbados or other countries in
which we do or may carry on business in the
future; business opportunities that may be
presented to, or pursued by, us; our ability to
successfully integrate acquisitions; operating or
technical difficulties in connection with mining
or development activities; the speculative nature
of gold exploration and development, including
the risks of obtaining necessary licenses and
permits; diminishing quantities or grades of
reserves; adverse changes in our credit rating;
and contests over title to properties,
particularly title to undeveloped properties. In
addition, there are risks and hazards associated
with
the business of gold exploration, development and
mining, including environmental hazards,
industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate
insurance, or inability to obtain insurance, to
cover these risks). Many of these uncertainties
and contingencies can affect our actual results
and could cause actual results to differ
materially from those expressed or implied in any
forward-looking statements made by, or on behalf
of, us. Readers are cautioned that
forward-looking statements are not guarantees of
future performance. All of the forward-looking
statements made in this Annual Report 2004 are
qualified by these cautionary statements.
Specific reference is made to Barricks most
recent Form 40-F/Annual Information Form on file
with the US Securities and Exchange Commission
and Canadian provincial securities regulatory
authorities for a discussion of some of the
factors underlying forward-looking statements. We disclaim any intention or obligation to update
or revise any forward-looking statements whether
as a result of new information, future events or
otherwise. 71 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS Glossary of Technical Terms AUTOCLAVE:Oxidation process in which
high temperatures and pressures are applied to
convert refractory sulphide mineralization into
amenable oxide ore. BACKFILL:Primarily waste sand or rock
used to support the roof or walls after removal
of ore from a stope. BY-PRODUCT:A secondary metal or mineral
product recovered in the milling process such as
copper and silver. CONCENTRATE:A very fine, powder-like
product containing the valuable ore mineral from
which most of the waste mineral has been
eliminated. CONTAINED OUNCES:Represents ounces in
the ground before reduction of ounces not able to
be recovered by the applicable metallurgical
process. CONTANGO:The positive difference
between the spot market gold price and the
forward market gold price. It is often expressed
as an interest rate quoted with reference to the
difference between inter-bank deposit rates and
gold lease rates. DEVELOPMENT:Work carried out for the
purpose of opening up a mineral deposit. In an
underground mine this includes shaft sinking,
crosscutting, drifting and raising. In an open
pit mine, development includes the removal of
overburden. DILUTION:The effect of waste or
low-grade ore which is unavoidably included in
the mined ore, lowering the recovered grade. DORÉ:Unrefined gold and silver bullion
bars usually consisting of approximately 90
percent precious metals that will be further
refined to almost pure metal. EXPLORATION:Prospecting, sampling,
mapping, diamond-drilling and other work involved
in searching for ore. GRADE:The amount of metal in each ton
of ore, expressed as troy ounces per ton or grams
per tonne for precious metals and as a percentage
for most other metals.
Cut-off grade:the minimum metal grade at which
an orebody can be economically mined (used in the
calculation of ore reserves).
Mill-head grade:metal content of mined ore going
into a mill for processing.
Recovered grade:actual metal content of ore
determined after processing.
Reserve grade:estimated metal content of an
ore-body, based on reserve calculations. HEAP LEACHING:A process whereby gold is
extracted by heaping broken ore on sloping
impermeable pads and continually applying to the
heaps a weak cyanide solution which dissolves the
contained gold. The gold-laden solution is then
collected for gold recovery. HEAP LEACH PAD:A large impermeable
foundation or pad used as a base for ore during
heap leaching. LIBOR:The London Inter-Bank Offered
Rate for deposits. MILL:A processing facility where ore is
finely ground and thereafter undergoes physical
or chemical treatment to extract the valuable
metals. MINERAL RESERVE:See page 125  Gold
Mineral Reserves and Mineral Resources. 72 BARRICK Annual Report 2004




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS MINERAL RESOURCE:See page 125  Gold
Mineral Reserves and Mineral Resources. MINING CLAIM:That portion of applicable
mineral lands that a party has staked or marked
out in accordance with applicable mining laws to
acquire the right to explore for and exploit the
minerals under the surface. MINING RATE:Tons of ore mined per day
or even specified time period. MINING SEQUENCE:Sequence by which ore
is extracted from the mine is based on the mine
plan. OPEN PIT:A mine where the minerals are
mined entirely from the surface. ORE:Rock, generally containing metallic
or non-metallic minerals, which can be mined and
processed at a profit. OREBODY:A sufficiently large amount of
ore that can be mined economically. OUNCES:Troy ounces of a fineness of
999.9 parts per 1,000 parts. RECLAMATION:The process by which lands
disturbed as a result of mining activity are
modified to support beneficial land use.
Reclamation activity may include the removal of
buildings, equipment, machinery and other
physical remnants of mining, closure of tailings
storage facilities, leach pads and other mine
features, and contouring, covering and
re-vegetation of waste rock and other disturbed
areas. RECLAMATION AND CLOSURE COSTS:The cost
of reclamation plus other costs, including
without limitation certain personnel costs,
insurance, property holding costs such as taxes,
rental and claim fees, and community programs
associated with closing an operating mine. RECOVERY RATE:A term used in process
metallurgy to indicate the proportion of valuable
material physically recovered in the processing
of ore. It is generally stated as a percentage of
the material recovered compared to the total
material originally present. REFINING:The final stage of metal
production in which impurities are removed from
the molten metal. ROASTING:The treatment of ore by heat
and air, or oxygen enriched air, in order to
remove sulphur, carbon, antimony or arsenic. STRIPPING:Removal of overburden or
waste rock overlying an ore body in preparation
for mining by open pit methods. Expressed as the
total number of tons mined or to be mined for
each ounce of gold. TAILINGS:The material that remains
after all economically and technically
recoverable precious
metals have been removed from the ore during
processing. 73 BARRICK Annual Report 2004




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##### 



Managements Responsibility Managements Responsibility for Financial Statements The accompanying consolidated financial statements have been prepared by and are the
responsibility of the Board of Directors and Management of the Company. The consolidated financial statements have been prepared in accordance with United States generally
accepted accounting principles and reflect Managements best estimates and judgements based on
currently available information. The Company has developed and maintains a system of internal
accounting controls in order to ensure, on a reasonable and cost effective basis, the reliability
of its financial information. The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered
Accountants. Their report outlines the scope of their examination and opinion on the consolidated
financial statements. /s/ Jamie C. SokalskyJamie C. Sokalsky
Executive Vice President
and Chief Financial Officer
Toronto, Canada
March 15, 2005 74 BARRICK Annual Report 2004




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##### 



Auditors Report To the Shareholders of Barrick Gold Corporation We have audited the consolidated balance sheets of Barrick Gold Corporation as at December 31,
2004 and 2003 and the consolidated statements of income, cash flows, shareholders equity and
comprehensive income for each of the years in the three-year period ended December 31, 2004. These
financial statements are the responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by Management, as well as
evaluating the overall financial statement presentation. We believe our audits provide a reasonable
basis for our opinion. In our opinion, these consolidated financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2004 and 2003 and the results of its
operations and its cash flows for each of the years in the three-year period ended December 31,
2004 in accordance with United States generally accepted accounting principles. As discussed in Note 2 to the consolidated financial statements, during 2003 the Company changed
its policy on accounting for amortization of underground development costs and for asset retirement
obligations, and during 2002 the Company changed its policy on deferred stripping costs. On March 15, 2005 we reported separately to the shareholders of Barrick Gold Corporation on the
financial statements for the same periods, prepared in accordance with Canadian generally accepted
accounting principles. /s/ PricewaterhouseCoopers LLPChartered Accountants
Toronto, Canada
March 15, 2005 75 BARRICK Annual Report 2004




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##### 



Financial
Statements Consolidated Statements of Income Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars,except per share data)
    
    2004
    
    
    
    2003
    
    
    2002Gold sales(notes 3 and 4)
    
    $
    1,932
    
    
    
    $
    2,035
    
    
    $
    1,967Costs and expensesCost of sales1(note 5)
    
    
    1,071
    
    
    
    
    1,072
    
    
    
    1,070Amortization (note 3)
    
    
    452
    
    
    
    
    522
    
    
    
    519Administration
    
    
    71
    
    
    
    
    73
    
    
    
    50Exploration, development and business development
    
    
    141
    
    
    
    
    137
    
    
    
    104Other (income) expense (note 6)
    
    
    158
    
    
    
    
    (4
    )
    
    
    161,893
    
    
    
    
    1,800
    
    
    
    1,759Interest income
    
    
    25
    
    
    
    
    31
    
    
    
    26Interest expense (note 16b)
    
    
    (19
    )
    
    
    
    (44
    )
    
    
    (57
    )Income before income taxes and other items
    
    
    45
    
    
    
    
    222
    
    
    
    177Income tax recovery (expense) (note 7)
    
    
    203
    
    
    
    
    (5
    )
    
    
    16Income before cumulative effect
of changes in accounting principles
    
    
    248
    
    
    
    
    217
    
    
    
    193Cumulative effect of changes in accounting principles (note 2b)
    
    
    
    
    
    
    
    (17
    )
    
    
    Net income for the year
    
    $
    248
    
    
    
    $
    200
    
    
    $
    193Earnings per share data(note 8)Income before cumulative effect
of changes in accounting principlesBasic
    
    $
    0.47
    
    
    
    $
    0.40
    
    
    $
    0.36Diluted
    
    $
    0.46
    
    
    
    $
    0.40
    
    
    $
    0.36Net incomeBasic
    
    $
    0.47
    
    
    
    $
    0.37
    
    
    $
    0.36Diluted
    
    $
    0.46
    
    
    
    $
    0.37
    
    
    $
    0.36
   1. Exclusive of
amortization (note 5).
 The accompanying notes are an integral part of these consolidated financial statements. 76 BARRICK Annual Report 2004




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##### 



FINANCIAL STATEMENTS Consolidated Statements of Cash Flow Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)2004
    
    
    
    2003
    
    
    2002Operating ActivitiesNet income
    
    $
    248
    
    
    
    $
    200
    
    
    $
    193Amortization
    
    
    452
    
    
    
    
    522
    
    
    
    519Deferred income taxes (note 18)
    
    
    (225
    )
    
    
    
    (49
    )
    
    
    (75
    )Inmet litigation settlement (note 6)
    
    
    
    
    
    
    
    (86
    )
    
    
    Gains on sale of long-lived assets (note 6)
    
    
    (34
    )
    
    
    
    (34
    )
    
    
    (4
    )Other items (note 9)
    
    
    65
    
    
    
    
    (34
    )
    
    
    (45
    )Net cash provided by operating activities
    
    
    506
    
    
    
    
    519
    
    
    
    588Investing ActivitiesProperty, plant and equipmentCapital expenditures (note 3)
    
    
    (824
    )
    
    
    
    (322
    )
    
    
    (228
    )Sales proceeds
    
    
    43
    
    
    
    
    40
    
    
    
    8Investments (note 10)Purchases
    
    
    (47
    )
    
    
    
    (60
    )
    
    
    Sales proceeds
    
    
    9
    
    
    
    
    8
    
    
    
    3Proceeds on maturity of term deposits
    
    
    
    
    
    
    
    
    
    
    
    159Net cash used in investing activities
    
    
    (819
    )
    
    
    
    (334
    )
    
    
    (58
    )Financing ActivitiesCapital stockProceeds from shares issued on exercise of stock options
    
    
    49
    
    
    
    
    29
    
    
    
    83Repurchased for cash (note 19a)
    
    
    (95
    )
    
    
    
    (154
    )
    
    
    Long-term debt (note 16b)Proceeds
    
    
    974
    
    
    
    
    
    
    
    
    Repayments
    
    
    (41
    )
    
    
    
    (23
    )
    
    
    (25
    )Dividends (note 19a)
    
    
    (118
    )
    
    
    
    (118
    )
    
    
    (119
    )Other items
    
    
    (28
    )
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    741
    
    
    
    
    (266
    )
    
    
    (61
    )Effect of exchange rate changes on cash and equivalents
    
    
    
    
    
    
    
    7
    
    
    
    1Net increase (decrease) in cash and equivalents
    
    
    428
    
    
    
    
    (81
    )
    
    
    469Cash and equivalents at beginning of year(note 16a)
    
    
    970
    
    
    
    
    1,044
    
    
    
    574Cash and equivalents at end of year(note 16a)
    
    $
    1,398
    
    
    
    $
    970
    
    
    $
    1,044
 The accompanying notes are an integral part of these consolidated financial statements. 77 BARRICK Annual Report 2004




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##### 



FINANCIAL STATEMENTS Consolidated Balance Sheets Barrick Gold CorporationAt December 31 (in millions of United States dollars) 2004
    
    
    
    2003AssetsCurrent assetsCash and equivalents (note 16a)
    
    $
    1,398
    
    
    
    $
    970Accounts receivable (note 11)
    
    
    58
    
    
    
    
    56Inventories (note 11)
    
    
    215
    
    
    
    
    164Other current assets (note 11)
    
    
    286
    
    
    
    
    1781,957
    
    
    
    
    1,368Investments (note 10)
    
    
    134
    
    
    
    
    130Property, plant and equipment (note 12)
    
    
    3,391
    
    
    
    
    3,128Capitalized mining costs (note 13)
    
    
    226
    
    
    
    
    235Other assets (note 14)
    
    
    566
    
    
    
    
    497Total assets
    
    $
    6,274
    
    
    
    $
    5,358Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    335
    
    
    
    $
    245Other current liabilities (note 15)
    
    
    83
    
    
    
    
    119418
    
    
    
    
    364Long-term debt (note 16b)
    
    
    1,655
    
    
    
    
    719Other long-term obligations (note 17)
    
    
    499
    
    
    
    
    464Deferred income tax liabilities (note 18)
    
    
    139
    
    
    
    
    317Total liabilities
    
    
    2,711
    
    
    
    
    1,864Shareholders equityCapital stock (note 19)
    
    
    4,129
    
    
    
    
    4,115Deficit
    
    
    (624
    )
    
    
    
    (694
    )Accumulated other comprehensive income (note 20)
    
    
    58
    
    
    
    
    73Total shareholders equity
    
    
    3,563
    
    
    
    
    3,494Contingencies and commitments (notes 12d, 16 and 23)Total liabilities and shareholders equity
    
    $
    6,274
    
    
    
    $
    5,358
 The accompanying notes are an integral part of these consolidated financial statements. Signed on behalf of the Board, /s/ Gregory C. Wilkins
    
    /s/ Howard L. BeckGregory C. Wilkins
    
    Howard L. BeckDirector
    
    Director
 78 BARRICK Annual Report 2004




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##### 



FINANCIAL STATEMENTS Consolidated Statements of Shareholders Equity Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars) 2004
    
    
    
    2003
    
    
    2002Common
shares (number in millions)At January 1
    
    
    535
    
    
    
    
    542
    
    
    
    536Issued on exercise of stock options (note 21a)
    
    
    3
    
    
    
    
    2
    
    
    
    6Repurchased (note 19a)
    
    
    (4
    )
    
    
    
    (9
    )
    
    
    At December 31
    
    
    534
    
    
    
    
    535
    
    
    
    542Common sharesAt January 1
    
    $
    4,115
    
    
    
    $
    4,148
    
    
    $
    4,062Issued on exercise of stock options (note 21a)
    
    
    49
    
    
    
    
    34
    
    
    
    86Repurchased (note 19a)
    
    
    (35
    )
    
    
    
    (67
    )
    
    
    At December 31
    
    $
    4,129
    
    
    
    $
    4,115
    
    
    $
    4,148DeficitAt January 1
    
    $
    (694
    )
    
    
    $
    (689
    )
    
    $
    (763
    )Net income
    
    
    248
    
    
    
    
    200
    
    
    
    193Adjustment on repurchase of common shares (note 19a)
    
    
    (60
    )
    
    
    
    (87
    )
    
    
    Dividends (note 19a)
    
    
    (118
    )
    
    
    
    (118
    )
    
    
    (119
    )At December 31
    
    $
    (624
    )
    
    
    $
    (694
    )
    
    $
    (689
    )Accumulated other comprehensive income (loss) (note 20)
    
    $
    58
    
    
    
    $
    73
    
    
    $
    (125
    )Total shareholders equity at December 31
    
    $
    3,563
    
    
    
    $
    3,494
    
    
    $
    3,334
 Consolidated Statements of Comprehensive Income 2004
    
    
    
    2003
    
    
    2002Net income
    
    $
    248
    
    
    
    $
    200
    
    
    $
    193Other comprehensive income (loss), net of tax (note 20)
    
    
    (15
    )
    
    
    
    198
    
    
    
    (18
    )Comprehensive income
    
    $
    233
    
    
    
    $
    398
    
    
    $
    175
 The accompanying notes are an integral part of these consolidated financial statements. 79 BARRICK Annual Report 2004




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##### 



Notes to Consolidated Financial Statements  Barrick Gold Corporation.Tabular dollar
amounts in millions of United States dollars,
unless otherwise shown. References to C$, A$ and
 are to Canadian dollars, Australian dollars and
Euros, respectively. 1. Nature of Operations Barrick Gold Corporation (Barrick or the
Company) engages in the production and sale of
gold from underground and open-pit mines,
including related activities such as exploration
and mine development. Our operations are mainly
located in North America, South America,
Australia and Africa. 2. Significant Accounting Policies a) Basis of presentation These financial statements are prepared under
United States generally accepted accounsting
principles (US GAAP). We also include financial
statements prepared under Canadian GAAP in our
Proxy Statement that we file with various
Canadian regulatory authorities. To ensure
comparability of financial information, certain
prior-year amounts have been reclassified to
conform with the current year presentation. Consolidation policy These financial statements reflect
consolidation of the accounts of Barrick and
other entities in which we have a controlling
financial interest. The usual condition for a
controlling financial interest is ownership of a
majority of the voting interests of an entity.
However, a controlling financial interest may
also exist in entities through arrangements that
do not involve voting interests, where the
entities are variable interest entities (VIEs)
under the principles of FIN 46R. Inter-company
balances and transactions are eliminated on
consolidation. A VIE is defined as an entity that by design either lacks
enough equity investment at risk to permit the entity to
finance its activities without additional subordinated
financial support from other parties; has equity owners
who are unable to make decisions about the entity; or has
equity owners that do not have the obligation to absorb
the entitys expected losses or the right to receive the
entitys expected residual returns. VIEs can arise from a
variety of entities or legal structures. FIN 46R requires a variable interest holder (i.e. a
counterparty to a VIE) to consolidate the VIE if that
party will absorb a majority of the expected losses of
the VIE, receive a majority of the residual returns of
the VIE, or both. This party is considered the primary
beneficiary of the entity. The determination of whether
a variable interest holder meets the criteria to be
considered the primary beneficiary of a VIE requires an
evaluation of all transactions by the entity. The
foundation for this evaluation is a calculation
prescribed by FIN 46R. We hold our interests in the Round Mountain, Hemlo,
Marigold and Kalgoorlie mines through unincorporated
joint ventures. Under long-standing practice for
extractive industries, we use the proportionate
consolidation method to account for our interests in
these unincorporated joint ventures. Our 70% interest in the Tulawaka development project is
held through an unincorporated joint venture. In years
prior to 2004 we used the proportionate consolidation
method to account for our interest. In 2004, we entered
into an agreement to finance the other joint venture
partners share of mine construction costs, which caused
us to reconsider whether this joint venture is a VIE. We
concluded that the joint venture is in fact a VIE, and
that Barrick is the primary beneficiary. From June 2004
onwards, we consolidated this joint venture using the
principles of FIN 46R. The creditors of this VIE have no
recourse to the general credit of Barrick. 80 BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Foreign currency translation In 2003, various changes in economic facts
and circumstances led us to conclude that the
functional currency of our Argentinean operations
is the United States dollar rather than the
Argentinean Peso. These changes included the
completion of the Veladero mine feasibility
study, the expected denomination of selling
prices for future gold production and the
occurrence of higher amounts of US dollar
expenditures. Following this change the functional currency of all our operations is the US dollar. We re-measure
non-US dollar balances as follows: >
    
    
    
    non-monetary assets and liabilities using historical rates;>
    
    
    
    monetary assets and liabilities using period-end exchange rates; and>
    
    
    
    income and expenses using average exchange rates, except for expenses related to
assets and liabilities re-measured at historical exchange rates.
 Gains and losses arising from re-measurement of
foreign currency balances and transactions are
recorded in earnings. Use of estimates The preparation of these financial statements requires us to make estimates and assumptions.
The most significant estimates and assumptions are quantities of proven and probable gold reserves;
expected value of mineral resources not considered proven and probable reserves; expected future
costs and expenses to produce proven and probable reserves; expected future commodity prices and
foreign currency exchange rates; and expected costs to meet asset retirement obligations. Critical
estimates and assumptions include: >
    
    
    
    decisions as to whether mine development costs should be capitalized or expensed;>
    
    
    
    assessments of whether groups of long-lived assets are impaired and the fair value of
those groups of assets that are the basis for measuring impairment charges;>
    
    
    
    assessments of our ability to realize the benefits of deferred income tax assets;>
    
    
    
    the useful lives of long-lived assets and the measurement of amortization recorded in
earnings; and>
    
    
    
    the fair value of asset retirement obligations.
 We regularly review estimates and assumptions that affect our financial statements; however, actual
outcomes could differ from estimates and assumptions. b) Accounting changes Effect of accounting changes on earnings  Earnings increase (decrease)For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Changes in accounting policiesCumulative effectAdoption of FAS 1431
(note 17a)
    
    $
    
    
    
    $
    4
    
    
    $
    Amortization of
underground development
costs2 (note 12a)
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (17
    )
    
    
    Pro forma effect(excluding tax effects)Adoption of FAS 1433
    
    
    
    
    
    
    
    
    
    
    (4
    )Total
    
    $
    
    
    
    $
    (17
    )
    
    $
    (4
    )
   1. On adoption of FAS 143 in first quarter
2003 (see note 17a), we recorded on our balance
sheet an increase in property, plant and
equipment of $39 million; an increase in other
long-term obligations of $32 million; and an
increase in deferred income tax liabilities of
$3 million; as well as a $4 million credit in
earnings for the cumulative effect of this
change.
 2.

On January 1, 2003, we changed our accounting
policy for amortization of underground mine
development costs to exclude estimates of future
underground development costs (see note 12a). On
adoption of this change, we decreased property,
plant and equipment by $19 million, and
increased deferred income tax liabilities by $2
million. We recorded in our income statement a
$21 million charge for the cumulative effect of
this accounting change. 3.
FAS 143 was followed in the preparation of
financial results for 2004 and 2003. For 2002,
because prior years were not restated, the
amount disclosed is the pro forma effect of
following FAS 143. 81 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Emerging Issues Task Force (EITF)
Issue No. 04-2: Whether Mineral Rights are
Tangible or Intangible Assets (EITF 04-2) EITF 04-2 was issued in 2004 and concludes
that mineral rights, which are defined as the
legal right to explore, extract and retain at
least a portion of the benefits from mineral
deposits, are tangible assets. EITF 04-2 was
effective in third quarter 2004, and had no
impact on the classification of such assets in
our financial statements. EITF Issue No. 04-3, Mining Assets:
Impairment and Business Combinations (EITF
04-3) EITF 04-3 was issued in 2004 and establishes
guidance for the inclusion of the expected value
of mineralization not considered proven and
probable reserves when allocating the purchase
price in a business combination and also when
testing a mining asset for impairment. The
principles of EITF 04-3 are required to be
adopted prospectively and were effective in
second quarter 2004. c) Accounting developments EITF Issue No. 03-1, The Meaning of
Other-Than-Temporary Impairment and Its
Application to Certain Investments (EITF 03-1) EITF 03-1 was issued in 2004 and establishes
guidance to be used in determining when an
investment is considered impaired, whether that
impairment is other than temporary, and the
measurement of an impairment loss. Under the
application of our previous accounting policy for
impairment of investments, an impairment on a
specific investment was recorded in earnings on
determination that the impairment was other than
temporary or after an investment had been
impaired for six months, whichever is the
earlier. Under EITF 03-1, there is no requirement
to automatically record an impairment loss in
earnings after a six-month period; instead the
recognition of impairment losses in earnings is
based on the assessment of whether the loss is
other than temporary. The adoption of the
measurement requirements of EITF 03-1 in third
quarter 2004 had no effect on impairment charges
recorded in earnings. EITF 03-1 also provides the guidance on accounting subsequent to the
recognition of an other-than-temporary impairment and requires certain
disclosures about impairment losses included in other comprehensive income
that have not been recorded in earnings. The measurement requirements of
EITF 03-1 were effective for the fiscal quarter ended September 30, 2004,
but the disclosure requirements are not effective until fiscal 2005. EITF Issue No. 04-6, Accounting for
Stripping Costs Incurred during Production
in the Mining Industry (EITF 04-6) In the mining industry, companies may be
required to remove overburden and other mine
waste materials to access mineral deposits. The
costs of removing overburden and waste materials
are often referred to as stripping
costs. During the development of a mine (before
production begins), it is generally accepted in
practice that stripping costs are capitalized as
part of the depreciable cost of building,
developing, and constructing the mine. Those
capitalized costs are typically amortized over
the productive life of the mine using the
units-of-production method. A mining company may
continue to remove overburden and waste
materials, and therefore incur stripping costs,
during the production phase of the mine.
Questions have been raised about the appropriate
accounting for stripping costs incurred during
the production phase, and diversity in practice
exists. In response to these questions, the EITF
has undertaken a project to develop an Abstract
to address the questions and clarify the
appropriate accounting treatment for stripping
costs under US GAAP. The EITF is in the process
of deliberating these questions and upon
completion of their deliberations they are
expected to issue EITF 04-6, which will represent
an authorative US GAAP pronouncement for
stripping costs. Our accounting policy for
stripping costs is disclosed in note 13. EITF
04-6 may require us to change our accounting
policy for stripping costs in future periods. FAS 123R, Accounting for
Stock-Based Compensation (FAS 123R) In December 2004, the FASB issued FAS 123R.
FAS 123R is applicable to transactions in which
an entity exchanges its equity instruments for
goods and services. 82 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS It focuses primarily on transactions in which an
entity obtains employee services in share-based
payment transactions. FAS 123R requires that the
fair value of such equity instruments is recorded
as an expense as services are performed. Prior to
FAS 123R, only certain pro forma disclosures of
accounting for these transactions at fair value
were required. FAS 123R will be effective for our
third quarter 2005 financial statements, and
permits varying transition methods including:
retroactive adjustment of prior periods as far
back as 1995 to give effect to the fair value
based method of accounting for awards granted in
those prior periods; retrospective application to
all interim periods in 2005; or prospective
application to future periods beginning in third
quarter 2005. We are presently evaluating the
effect of the varying methods of adopting FAS
123R. We expect to adopt FAS 123R using the
modified prospective method effective July 1,
2005. Under this method we will begin recording
stock option expense based on a similar method to
the one used for pro forma purposes that is
disclosed in note 21, starting in the third
quarter of 2005. FAS 151, Inventory Costs (FAS 151) FAS 151 was issued in November 2004 as an
amendment to ARB No. 43. FAS 151 specifies the
general principles applicable to the pricing and
allocation of certain costs to inventory. Under FAS 151, abnormal amounts of
idle facility expense, freight, handling costs
and wasted materials are recognized as current
period charges rather than capitalized to
inventory. FAS 151 also requires that the
allocation of fixed production overhead to the
cost of inventory be based on the normal capacity
of production facilities. FAS 151 will be
effective for inventory costs incurred beginning
in our 2006 fiscal year. We are presently
evaluating the impact of FAS 151 on our financial
statements. FAS 153, Exchanges of



 Non-Monetary Assets (FAS 153) FAS 153 was issued in December 2004 as an
amendment to APB Opinion No. 29. FAS 153 provides
guidance on the measurement of exchanges of
non-monetary assets, with exceptions for
exchanges that do not have commercial substance.
Under FAS 153, a non-monetary exchange has commercial substance if, as a
result of the exchange, the future cash flows of
an entity are expected to change significantly. Under FAS 153, a non-monetary exchange is
measured based on the fair values of the assets
exchanged. If fair value is not determinable, the
exchange lacks commercial substance or the
exchange is to facilitate sales to customers, a
non-monetary exchange is measured based on the
recorded amount of the non-monetary asset
relinquished. FAS 153 will be effective for
non-monetary exchanges that occur in fiscal
periods beginning after June 15, 2005. d) Other significant accounting policies Note
    
    
    PageSegment information
    
    
    3
    
    
    
    p.84Revenue and gold sales contracts
    
    
    4
    
    
    
    p.86Cost of sales
    
    
    5
    
    
    
    p.88Other (income) expense
    
    
    6
    
    
    
    p.89Income tax (recovery) expense
    
    
    7
    
    
    
    p.90Earnings per share
    
    
    8
    
    
    
    p.92Supplemental cash flow information
    
    
    9
    
    
    
    p.92Investments
    
    
    10
    
    
    
    p.93Accounts receivable, inventories
and other current assets
    
    
    11
    
    
    
    p.94Property, plant and equipment
    
    
    12
    
    
    
    p.95Capitalized mining costs
    
    
    13
    
    
    
    p.97Other assets
    
    
    14
    
    
    
    p.97Other current liabilities
    
    
    15
    
    
    
    p.97Financial instruments
    
    
    16
    
    
    
    p.97Other long-term obligations
    
    
    17
    
    
    
    p.107Deferred income taxes
    
    
    18
    
    
    
    p.107Capital stock
    
    
    19
    
    
    
    p.109Other comprehensive income (loss)
    
    
    20
    
    
    
    p.110Stock-based compensation
    
    
    21
    
    
    
    p.111Post-retirement benefits
    
    
    22
    
    
    
    p.113Contingencies, litigation and claims
    
    
    23
    
    
    
    p.115Joint ventures
    
    
    24
    
    
    
    p.117Differences from Canadian GAAP
    
    
    25
    
    
    
    p.117
 83 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Segment Information Our operations are managed on a regional
basis. Our three regional business units are
North America, Australia/Africa and South
America. Financial information for each of our
operating mines, development projects and our
exploration group is reviewed regularly by our
chief operating decision maker. Segment income for operating segments comprises
segment revenues less segment operating costs and
segment amortization in the format that internal
management reporting is presented to the chief
operating decision maker. For internal management
reporting purposes, we measure segment revenues
and income using the average consolidated
realized gold selling price for each period.
Segment operating costs represent our internal
presentation of costs incurred to produce gold at
each operating mine, and exclude the following
costs that we do not allocate to operating
segments: accretion expense; environmental
remediation costs at closed mines; regional
business unit overhead; amortization of corporate
assets; business development costs;
administration costs; other income/expense; and
the costs of financing their activities. Segment
operating costs for development projects and the
exploration group represent expensed exploration,
mine development and mine start-up costs. Income statement informationGold sales
    
    
    Segment operating costs
    
    
    Segment income (loss)For the years ended December 31
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002Goldstrike
    
    $
    745
    
    
    $
    813
    
    
    $
    678
    
    
    $
    475
    
    
    $
    531
    
    
    $
    436
    
    
    $
    121
    
    
    $
    122
    
    
    $
    95Round Mountain
    
    
    148
    
    
    
    139
    
    
    
    132
    
    
    
    83
    
    
    
    66
    
    
    
    73
    
    
    
    48
    
    
    
    53
    
    
    
    38Eskay Creek
    
    
    112
    
    
    
    130
    
    
    
    121
    
    
    
    9
    
    
    
    18
    
    
    
    14
    
    
    
    52
    
    
    
    65
    
    
    
    59Hemlo
    
    
    93
    
    
    
    98
    
    
    
    97
    
    
    
    57
    
    
    
    60
    
    
    
    64
    
    
    
    24
    
    
    
    27
    
    
    
    23Other operating segments
    
    
    42
    
    
    
    50
    
    
    
    177
    
    
    
    21
    
    
    
    29
    
    
    
    96
    
    
    
    11
    
    
    
    7
    
    
    
    56North America
    
    
    1,140
    
    
    
    1,230
    
    
    
    1,205
    
    
    
    645
    
    
    
    704
    
    
    
    683
    
    
    
    256
    
    
    
    274
    
    
    
    271Plutonic
    
    
    122
    
    
    
    120
    
    
    
    105
    
    
    
    69
    
    
    
    62
    
    
    
    57
    
    
    
    42
    
    
    
    48
    
    
    
    37Kalgoorlie
    
    
    183
    
    
    
    153
    
    
    
    124
    
    
    
    107
    
    
    
    87
    
    
    
    82
    
    
    
    56
    
    
    
    46
    
    
    
    23Cowal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    Bulyanhulu
    
    
    135
    
    
    
    109
    
    
    
    134
    
    
    
    96
    
    
    
    73
    
    
    
    78
    
    
    
    5
    
    
    
    (1
    )
    
    
    16Tulawaka
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    3
    
    
    
    
    
    
    
    (2
    )
    
    
    (3
    )Other operating segments
    
    
    101
    
    
    
    91
    
    
    
    89
    
    
    
    60
    
    
    
    53
    
    
    

    45
    
    
    
    27
    
    
    
    26
    
    
    
    33Australia/Africa
    
    
    541
    
    
    
    473
    
    
    
    452
    
    
    
    333
    
    
    
    277
    
    
    
    265
    
    
    
    129
    
    
    
    117
    
    
    
    106Pierina
    
    
    251
    
    
    
    332
    
    
    
    303
    
    
    
    69
    
    
    
    76
    
    
    
    72
    
    
    
    75
    
    
    
    90
    
    
    
    70Veladero
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    18
    
    
    
    20
    
    
    
    (5
    )
    
    
    (18
    )
    
    
    (20
    )Pascua-Lama
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    Lagunas Norte
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    29
    
    
    
    29
    
    
    
    (12
    )
    
    
    (29
    )
    
    
    (29
    )Other operating segments
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    3
    
    
    
    
    
    
    
    5
    
    
    
    (3
    )
    
    
    
    
    
    
    2South America
    
    
    251
    
    
    
    332
    
    
    
    310
    
    
    
    93
    
    
    
    123
    
    
    
    126
    
    
    
    51
    
    
    
    43
    
    
    
    23Exploration group
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96
    
    
    
    67
    
    
    
    42
    
    
    
    (96
    )
    
    
    (67
    )
    
    
    (42
    )Segment total
    
    $
    1,932
    
    
    $
    2,035
    
    
    $
    1,967
    
    
    $
    1,167
    
    
    $
    1,171
    
    
    $
    1,116
    
    
    $
    340
    
    
    $
    367
    
    
    $
    358
 84 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Geographic informationAssets
    
    
    Gold salesFor the years ended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    2002United States
    
    $
    1,976
    
    
    $
    1,835
    
    
    $
    911
    
    
    $
    970
    
    
    $
    906Canada
    
    
    492
    
    
    
    480
    
    
    
    229
    
    
    
    260
    
    
    
    299North America
    
    
    2,468
    
    
    
    2,315
    
    
    
    1,140
    
    
    
    1,230
    
    
    
    1,205Australia
    
    
    838
    
    
    
    552
    
    
    
    406
    
    
    
    364
    
    
    
    318Tanzania
    
    
    774
    
    
    
    707
    
    
    
    135
    
    
    
    109
    
    
    
    134Australia/Africa
    
    
    1,612
    
    
    
    1,259
    
    
    
    541
    
    
    
    473
    
    
    
    452Peru
    
    
    811
    
    
    
    757
    
    
    
    251
    
    
    
    332
    
    
    
    303Argentina
    
    
    645
    
    
    
    219
    
    
    
    
    
    
    
    
    
    
    
    Chile
    
    
    120
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    South America
    
    
    1,576
    
    
    
    1,066
    
    
    
    251
    
    
    
    332
    
    
    
    303Other
    
    
    618
    
    
    
    718
    
    
    
    
    
    
    
    
    
    
    
    7$
    6,274
    
    
    $
    5,358
    
    
    $
    1,932
    
    
    $
    2,035
    
    
    $
    1,967
 Reconciliation of segment incomeFor the years ended December 31
    
    2004
    
    
    2003
    
    
    2002Segment income
    
    $
    340
    
    
    $
    367
    
    
    $
    358Accretion expense at producing mines
    
    
    (11
    )
    
    
    (10
    )
    
    
    Environmental remediation costs
    
    
    
    
    
    
    
    
    
    
    (34
    )Other expenses at producing mines
    
    
    (16
    )
    
    
    (11
    )
    
    
    (14
    )Amortization of corporate assets
    
    
    (27
    )
    
    
    (25
    )
    
    
    (26
    )Business development costs
    
    
    (18
    )
    
    
    (17
    )
    
    
    (10
    )Administration
    
    
    (71
    )
    
    
    (73
    )
    
    
    (50
    )Interest income
    
    
    25
    
    
    
    31
    
    
    
    26Interest expense
    
    
    (19
    )
    
    
    (44
    )
    
    
    (57
    )Other income (expense)
    
    
    (158
    )
    
    
    4
    
    
    
    (16
    )Income before income taxes and other items
    
    $
    45
    
    
    $
    222
    
    
    $
    177
 85 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Asset informationSegment capitalSegment assets
    
    
    Amortization
    
    
    expendituresFor the years ended December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002Goldstrike
    
    $
    1,290
    
    
    $
    1,372
    
    
    $
    149
    
    
    $
    160
    
    
    $
    147
    
    
    $
    72
    
    
    $
    51
    
    
    $
    46Round Mountain
    
    
    67
    
    
    
    75
    
    
    
    17
    
    
    
    20
    
    
    
    21
    
    
    
    5
    
    
    
    6
    
    
    
    8Eskay Creek
    
    
    91
    
    
    
    203
    
    
    
    51
    
    
    
    47
    
    
    
    48
    
    
    
    7
    
    
    
    5
    
    
    
    8Hemlo
    
    
    63
    
    
    
    65
    
    
    
    12
    
    
    
    11
    
    
    
    10
    
    
    
    8
    
    
    
    10
    
    
    
    6Other operating segments
    
    
    28
    
    
    
    29
    
    
    
    10
    
    
    
    14
    
    
    
    25
    
    
    
    12
    
    
    
    8
    
    
    
    19North America
    
    
    1,539
    
    
    
    1,744
    
    
    
    239
    
    
    
    252
    
    
    
    251
    
    
    
    104
    
    
    
    80
    
    
    
    87Plutonic
    
    
    92
    
    
    
    84
    
    
    
    11
    
    
    
    10
    
    
    
    11
    
    
    
    15
    
    
    
    44
    
    
    
    20Kalgoorlie
    
    
    277
    
    
    
    250
    
    
    
    20
    
    
    
    20
    
    
    
    19
    
    
    
    10
    
    
    
    14
    
    
    
    14Cowal
    
    
    130
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    24
    
    
    
    13Bulyanhulu
    
    
    566
    
    
    
    539
    
    
    
    34
    
    
    
    37
    
    
    
    40
    
    
    
    46
    
    
    
    36
    
    
    
    56Tulawaka
    
    
    70
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    1
    
    
    
    Other operating segments
    
    
    89
    
    
    
    84
    
    
    
    14
    
    
    
    12
    
    
    
    11
    
    
    
    12
    
    
    
    21
    
    
    
    14Australia/Africa
    
    
    1,224
    
    
    
    1,028
    
    
    
    79
    
    
    
    79
    
    
    
    81
    
    
    
    204
    
    
    
    140
    
    
    
    117Pierina
    
    
    269
    
    
    
    434
    
    
    
    107
    
    
    
    166
    
    
    
    161
    
    
    
    8
    
    
    
    17
    
    
    
    5Veladero
    
    
    456
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    284
    
    
    
    68
    
    
    
    Pascua-Lama
    
    
    273
    
    
    
    236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    9
    
    
    
    11Lagunas Norte
    
    
    220
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    4
    
    
    
    5South America
    
    
    1,218
    
    
    
    767
    
    
    
    107
    
    
    
    166
    
    
    
    161
    
    
    
    509
    
    
    
    98
    
    
    
    21Segment total
    
    
    3,981
    
    
    
    3,539
    
    
    
    425
    
    
    
    497
    
    
    
    493
    
    
    
    817
    
    
    
    318
    
    
    
    225Cash and equivalents
    
    
    1,398
    
    
    
    970
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other items not allocated to segments
    
    
    895
    
    
    
    849
    
    
    
    27
    
    
    
    25
    
    
    
    26
    
    
    
    7
    
    
    
    4
    
    
    
    3Enterprise total
    
    $
    6,274
    
    
    $
    5,358
    
    
    $
    452
    
    
    $
    522
    
    
    $
    519
    
    
    $
    824
    
    
    $
    322
    
    
    $
    228
 4. Revenue and Gold Sales Contracts For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Gold bullion salesGold sales contracts
    
    $
    709
    
    
    $
    1,504
    
    
    $
    1,401Spot market sales
    
    
    1,111
    
    
    
    426
    
    
    
    4601,820
    
    
    
    1,930
    
    
    
    1,861Concentrate sales
    
    
    112
    
    
    
    105
    
    
    
    106$
    1,932
    
    
    $
    2,035
    
    
    $
    1,967
 We record revenue when the following conditions
are met: persuasive evidence of an arrangement
exists; delivery has occurred under the terms of
the arrangement; the price is fixed or
determinable; and collectability is reasonably
assured. Bullion sales We record revenue from gold and silver
bullion sales at the time of delivery and
transfer of title to the gold or silver to
counterparties. Incidental revenues from the sale
of by-products such as silver are classified
within cost of sales. 86 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2004, we had fixed-price gold
sales contracts with various counterparties for a
total of 13.5 million ounces of future gold
production and floating-price forward gold sales
contracts for 0.5 million ounces. In 2004, we
allocated 6.5 million ounces of fixed-price gold
sales contracts specifically to Pascua-Lama. The
allocation of these contracts will help reduce
gold price risk at Pascua-Lama and will help
secure financing for its construction. In
addition to the gold sales contracts allocated to
Pascua-Lama, we have 7.0 million ounces of
corporate gold sales contracts that we intend to
settle through delivery of future gold production
from our operating mines and development
projects, excluding Pascua-Lama. The terms of the
contracts
are governed by master trading agreements (MTAs)
that we have in place with the counterparties to
the contracts. The contracts have final delivery
dates primarily over the next 10 years, but we
have the right to settle these contracts at any
time over this period. Contract prices are
established at inception through to an interim
date. If we do not deliver at this interim date,
a new interim date is set. The price for the new
interim date is determined in accordance with the
MTAs which have contractually agreed price
adjustment mechanisms based on the market gold
price. The MTAs have both fixed and floating
price mechanisms. The fixed-price mechanism
represents the market price at the start date (or
previous interim date) of the contract plus a
premium based on the difference between the
forward price of gold and the current market
price. If at an interim date we opt for a
floating price, the floating price represents the
spot market price at the time of delivery of gold
plus or minus the difference between the
previously fixed price and the market gold price
at that interim date. The final realized selling
price under a contract primarily depends upon the
timing of the actual future delivery date, the
market price of gold at the start of the contract
and the actual amount of the premium of the
forward price of gold over the spot price of gold
for the periods that fixed selling prices are
set. The mark-to-market on the fixed-price gold
sales contracts (at December 31, 2004) was
negative $966 million for the Pascua-Lama Gold
Sales Contracts and negative $949 million for the
Corporate Gold Sales Contracts. The difference between the forward price of gold
and the current market price, referred to as
contango, can be expressed as a percentage that
is closely correlated to the difference between
US dollar interest rates and gold lease rates.
Historically short-term gold lease rates have
been lower than longer-term rates. We use gold
lease rate swaps to achieve a more economically
optimal term structure for gold lease rates
implicit in contango. Under the swaps we receive
a fixed gold lease rate, and pay a floating gold
lease rate, on a notional 2.1 million ounces of
gold spread from 2005 to 2013. The swaps are
associated with fixed-price gold sales contracts
with expected delivery dates beyond 2006. Lease
rate swaps are classified as non-hedge
derivatives (note 16c). Floating spot price sales contracts were
previously fixed-price forward sales contracts
for which, in accordance with the terms of our
MTAs, we have elected to receive floating spot
gold and silver prices, adjusted by the
difference between the spot price and the
contract price at the time of such election.
Floating prices were elected for these contracts
so that we could economically regain spot gold
price leverage under the terms of delivery into
these contracts. Furthermore, floating price
mechanisms were elected for these contracts at a
time when the then current market price was
higher than the fixed price in the contract. The
mark-to-market on these contracts (at December
31, 2004) was negative $25 million, which equates
to an average reduction to the future spot sales
price of approximately $52 per ounce, when we
deliver gold at spot prices against these
contracts. At December 31, 2004, one counterparty made up
11% of the ounces committed under gold bullion
sales contracts. 87 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Concentrate sales Our Eskay Creek and Bulyanhulu mines produce
gold in concentrate form. Our Pascua-Lama mine
will also produce gold in concentrate form. Under
the terms of our concentrate sales contracts with
independent smelting companies, gold sales prices
are set on a specified future date after shipment
based on market prices. We record revenues under
these contracts at the time of shipment, which is
when title passes to the smelting companies,
using forward market gold prices on the expected
date that final sales prices will be set.
Variations between the price recorded at the
shipment date and the actual final price set
under the smelting contracts are caused by
changes in market gold prices, and result in an
embedded derivative in the accounts receivable.
The embedded derivative is recorded at fair value
each period until final settlement occurs, with
changes in fair value classified as a component
of revenue. Impact of derivative
embedded in concentrate sales receivablesFor the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Gains included in revenue
    
    $
    
    
    
    $
    
    
    
    $
    1
 5. Cost of Sales For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Cost of goods sold1,3
    
    $
    1,136
    
    
    $
    1,110
    
    
    $
    1,133By-product revenues2
    
    
    (146
    )
    
    
    (114
    )
    
    
    (119
    )Royalty expense
    
    
    53
    
    
    
    50
    
    
    
    37Mining taxes
    
    
    12
    
    
    
    15
    
    
    
    5Other expenses at
producing mines4
    
    
    16
    
    
    
    11
    
    
    
    14$
    1,071
    
    
    $
    1,072
    
    
    $
    1,070
   1.
    
    The presentation of cost of goods sold
includes accretion expense at producing mines of
$11 million (2003  $10 million; 2002  $nil).
The cost of inventory sold in the period
reflects the components described in note 11,
except that for presentation purposes the
component of inventory cost relating to
amortization of property, plant and equipment
is classified in the income statement under
amortization. Some companies present this
amount under cost of sales. The amount
presented in amortization rather than cost of
sales is $425 million in 2004; $497 million in
2003 and $493 million in 2002.2.
    
    We use silver sales contracts to sell a
portion of silver produced as a by-product.
Silver sales contracts have similar delivery
terms and pricing mechanisms as gold sales
contracts. At December 31, 2004, we had
fixed-price commitments to deliver 12.4 million
ounces of silver at an average price of $5.50
per ounce and floating spot price sales
contracts for 12 million ounces over periods
primarily of up to 10 years.3.
    
    Cost of goods sold includes environmental remediation costs of $34 million in 2002.4.
    
    Includes the reversal of $15 million of accrued costs on resolution of the Peruvian tax
assessment (see note 7). Royalties Certain of our properties are subject to
royalty arrangements based on mineral production
at the properties. The most significant royalties
are at the Goldstrike and Bulyanhulu mines and
the Pascua-Lama and Veladero projects. The
primary type of royalty is a net smelter return
(NSR) royalty. Under this type of royalty we pay
the holder an amount calculated as the royalty
percentage multiplied by the value of gold
production at market gold prices less third-party
smelting, refining and transportation costs. Most
Goldstrike production is subject to an NSR or net
profits interest (NPI) royalty. The highest
Goldstrike royalties are a 5% NSR and a 6% NPI
royalty. Bulyanhulu is subject to an NSR-type
royalty of 3%. Pascua-Lama gold production from
the areas located in Chile is subject to a gross
proceeds sliding scale royalty, ranging from 1.5%
to 10%, and a 2% NSR on copper production. For
areas located in Argentina, Pascua-Lama is
subject to a 3% NSR on extraction of all gold,
silver and other ores. Production at Veladero is
subject to a 3.75% NSR on extraction of all gold,
silver and other ores. Royalty expense is recorded at the time of sale
of gold production, measured using the applicable
royalty percentage for NSR royalties or estimates
of NPI amounts. 88 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. Other (Income) Expense For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Non-hedge derivative
(gains) losses (note 16c)
    
    $
    (5
    )
    
    $
    (71
    )
    
    $
    6Gains
realized on sale of assets
    
    
    (34
    )
    
    
    (34
    )
    
    
    (4
    )Environmental remediation costs2
    
    
    43
    
    
    
    55
    
    
    
    Impairment of long-lived assetsEskay Creek
    
    
    58
    
    
    
    
    
    
    
    Peruvian
exploration properties
    
    
    67
    
    
    
    
    
    
    
    Other
    
    
    14
    
    
    
    5
    
    
    
    11Impairment charges on
investments (note 10)
    
    
    5
    
    
    
    11
    
    
    
    World Gold Council fees
    
    
    9
    
    
    
    10
    
    
    
    12Litigation costs
    
    
    
    
    
    
    16
    
    
    
    Currency translation
(gains) losses
    
    
    1
    
    
    
    (2
    )
    
    
    (1
    )Pension expense (note 22b)
    
    
    
    
    
    
    4
    
    
    
    2Other items1
    
    
    
    
    
    
    2
    
    
    
    (10
    )$
    158
    
    
    $
    (4
    )
    
    $
    16
   1.
    
    In 2004, includes the reversal of $6
million of accrued costs on resolution of the
Peruvian tax assessment (see note 7) and $4
million in severance costs related to the sale
of the Holt McDermott mine.2.
    
    Includes costs at development projects and closed mines. Gains realized on sale of assets In 2004 we sold various assets, including the
Holt McDermott mine in Canada and certain land
positions around our inactive mine sites in the
United States. These land positions were fully
amortized in prior years and
therefore any proceeds generate gains on sale,
before selling costs and taxes. Environmental remediation
costs at closed mines During the production phases of a mine, we
incur and expense the cost of various activities
connected with environmental aspects of normal
operations, including compliance with and
monitoring of environmental regulations; disposal
of hazardous waste produced from normal
operations; and operation of equipment designed
to reduce or eliminate environmental effects. In
limited circumstances, costs to acquire and install plant and equipment are capitalized during the
production phase of a mine if the costs are expected to mitigate risk or prevent future
environmental contamination from normal operations. When a contingent loss arises from the improper use of an asset, a loss accrual is recorded
if the loss is probable and reasonably estimable. Amounts recorded are measured on an
undiscounted basis, and adjusted as further information develops or if circumstances change. Recoveries of
environmental remediation costs from other parties are recorded as assets when receipt is deemed probable. Impairment of long-lived assets Eskay Creek The asset group that comprises the Eskay
Creek mine was tested for impairment effective
December 31, 2004. The principal factors that
caused us to test this asset group for impairment
included: downward revisions to proven and
probable reserves; the impact of the continued
strengthening of the C$ against the US$ and
upward revisions to expected asset retirement
costs in the fourth quarter of 2004. An
impairment charge of $58 million was recorded,
which represents the amount by which the carrying
amount of the asset group exceeds its estimated
fair value. Fair value was estimated using the
method described in note 12c. Peruvian exploration properties At the end of 2004, upon completion of the
exploration program for the year, we assessed the
results and updated our future plans for various
exploration properties in Peru that were
originally acquired through the Arequipa
acquisition in 1996. We concluded that the
results and future potential did not merit any
further investment for these properties. The
assets were tested for impairment, and an
impairment charge of $67 million was recorded
that reflects the amounts by which their carrying
amounts exceed their estimated fair values. The
fair value of this group of assets was judged to
be minimal due to the unfavorable results of
exploration work in the properties. 89
BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Litigation costs In November 2003, we paid Inmet C$111 million
(US$86 million), in full settlement of the Inmet
litigation. The settlement resulted in an expense
of US$14 million in fourth quarter 2003, combined
with post-judgment interest of $2 million in the
first nine months of 2003. 7. Income Tax (Recovery) Expense For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002CurrentCanada
    
    $
    19
    
    
    $
    40
    
    
    $
    44International
    
    
    24
    
    
    
    14
    
    
    
    15$
    43
    
    
    $
    54
    
    
    $
    59DeferredCanada
    
    $
    (26
    )
    
    $
    (32
    )
    
    $
    (45
    )International
    
    
    7
    
    
    
    45
    
    
    
    (8
    )$
    (19
    )
    
    $
    13
    
    
    $
    (53
    )Income tax expense
before elements below1
    
    $
    24
    
    
    $
    67
    
    
    $
    6Release of beginning of year
valuation allowances
    
    
    (5
    )
    
    
    (62
    )
    
    
    Outcome of
tax uncertainties
    
    
    (141
    )
    
    
    
    
    
    
    (22
    )Change in tax status
in Australia
    
    
    (81
    )
    
    
    
    
    
    
    Total (recovery) expense
    
    $
    (203
    )
    
    $
    5
    
    
    $
    (16
    )
   1.
    
    All amounts are deferred tax items except
for a $21 million portion of the $141 million
recovery on resolution of the Peruvian tax
assessment in 2004, which is a current tax item. Release of beginning of
year valuation allowances In 2004, we released valuation allowances
totaling $5 million in Australia following the
consolidated tax return election described above.
In 2003, we released valuation allowances
totaling $62 million, which mainly included: $21
million in North America following a corporate
reorganization of certain subsidiaries that
enabled us to utilize certain previously
unrecognized tax assets; $16 million in Australia realized in 2003
due to an increase in taxable income from higher
gold prices; and $15 million in Argentina after
the approval to begin construction of our new
Veladero mine and classification of
mineralization as a proven and probable reserve. Outcome of tax uncertainties Peruvian tax assessment On September 30, 2004, the Tax Court of Peru
issued a decision in our favor in the matter of
our appeal of a 2002 income tax assessment of $32
million, excluding interest and penalties. The
Peruvian tax agency, SUNAT, had until mid-January
2005 to appeal the decision. The 2002 income tax assessment related to a tax
audit of our Pierina Mine for the 1999 and 2000
fiscal years. The
assessment mainly related to the validity of a
revaluation of the Pierina mining concession,
which affects its tax basis. Under the valuation
proposed by SUNAT, the tax basis of the Pierina
mining concession would have changed from what we
previously assumed with a resulting increase in
current and deferred income taxes. The full life
of mine effect on our current and deferred income
tax liabilities, totaling $141 million, was
recorded at December 31, 2002, as were other
related costs of about $21 million for periods
through 2003. In January 2005, we received confirmation in
writing that there would be no appeal of the
September 30, 2004 Tax Court of Peru decision.
The confirmation concluded the administrative and
judicial appeals process with resolution in
Barricks favor. As a result, we recorded a $141
million reduction in current and deferred income
tax liabilities and a $21 million reduction in
other accrued costs in 2004; $15 million of which
is classified in other expenses at producing
mines within cost of sales and $6 million of
which is classified in other (income) expense. Other uncertainties In 2002, we recorded a credit of $22 million
reflecting the net impact of tax planning
completed in the period and the outcome of
certain tax uncertainties. 90 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Changes in tax status in Australia A new tax law has been enacted in Australia
that allows wholly owned groups of companies
resident in Australia to elect to be treated as a
single entity and to file consolidated tax
returns. This new regime is elective and the
election is irrevocable. Under certain
circumstances, the rules governing the election
allow for a choice to reset the tax cost basis of
certain assets within a consolidated group. This
election will be effective for us for the 2004
fiscal year. This election results in an
estimated upward revaluation of the tax basis of
our assets in Australia, by $110 million, with a
corresponding $33 million adjustment to deferred
taxes. In 2004, we filed an election to use US dollars
as the functional currency for Australian tax
calculations and tax returns, whereas previously
Australian dollars were used. Prior to this
election, the favorable impact of changes in the
tax basis of non-monetary assets caused by
changes in the US$:A$ exchange rate were not
recorded, as their realization was not certain.
The election in 2004 created certainty about the
realization of these favorable tax temporary
differences and resulted in our recognition of
these as deferred tax assets amounting to $48
million. The impact of the change in tax status
was to increase the amount of deductible
temporary differences relating to non-monetary assets by $160 million. Reconciliation to Canadian federal rateFor the years ended December 31
    
    2004
    
    
    2003
    
    
    2002At 38% statutory federal rate
    
    $
    17
    
    
    $
    84
    
    
    $
    67Increase (decrease) due to:Allowances and special tax deductions1
    
    
    (34
    )
    
    
    (17
    )
    
    
    (12
    )Impact of foreign tax rates2
    
    
    (5
    )
    
    
    (42
    )
    
    
    (67
    )Expenses not tax-deductible
    
    
    10
    
    
    
    11
    
    
    
    9Release of beginning of year valuation allowances
    
    
    (5
    )
    
    
    (62
    )
    
    
    Recognition of deferred tax assets3
    
    
    (81
    )
    
    
    
    
    
    
    Valuation allowances set up against current year tax losses
    
    
    29
    
    
    
    23
    
    
    
    3Outcome of tax uncertainties
    
    
    (141
    )
    
    
    
    
    
    
    (22
    )Withholding taxes on intercompany interest
    
    
    1
    
    
    
    1
    
    
    
    11Mining taxes
    
    
    5
    
    
    
    8
    
    
    
    3Other items
    
    
    1
    
    
    
    (1
    )
    
    
    (8
    )Income tax expense (recovery)
    
    $
    (203
    )
    
    $
    5
    
    
    $
    (16
    )
   1.
    
    We are able to claim certain allowances and tax deductions unique to extractive
industries that result in a lower effective tax rate.2.
    
    We operate in multiple foreign tax jurisdictions that have different tax rates than
the Canadian federal rate.3.
    
    In 2004, we recognized a $81 million deferred tax asset in Australia due to a change
in tax status. Income tax returns Our income tax returns for the major
jurisdictions where we operate have been fully
examined through the following years: Canada 
2000, United States  2001, and Peru  2000. American Jobs Creation Act of 2004 The American Jobs Creation Act of 2004 (the
Act) was signed into law on October 22, 2004.
The Act creates an elective incentive for U.S.
multinationals to repatriate accumulated earnings from controlled
foreign corporations. The repatriation incentive
is only available for 2004 or 2005. We are
currently evaluating the application of the
repatriation incentive; however, we cannot
complete our analysis until additional
legislation and/or IRS guidance is provided to
clarify key elements of the legislation. 91 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Earnings per Share For the years ended December 31($ millions, except shares in millions and per share amounts in dollars)
    
    2004
    
    
    2003
    
    
    2002Income available to common stockholdersBasic
    
    $
    248
    
    
    $
    200
    
    
    $
    193Effect of dilutive stock options
    
    
    
    
    
    
    
    
    
    
    Diluted
    
    $
    248
    
    
    $
    200
    
    
    $
    193Weighted average shares outstandingBasic
    
    
    533
    
    
    
    539
    
    
    
    541Effect of dilutive stock options
    
    
    1
    
    
    
    
    
    
    
    Diluted
    
    
    534
    
    
    
    539
    
    
    
    541Earnings per shareBasic
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.36Diluted
    
    $
    0.46
    
    
    $
    0.37
    
    
    $
    0.36
 9. Supplemental Cash Flow Information For the years ended December 31
    
    2004
    
    
    2003
    
    
    2002Income statement items:Currency translation losses
    
    $
    1
    
    
    $
    5
    
    
    $
    (Gains) losses on investments (note 10)
    
    
    (1
    )
    
    
    7
    
    
    
    3Accounting changes (note 2b)
    
    
    
    
    
    
    17
    
    
    
    Accretion expense (note 17a)
    
    
    18
    
    
    
    17
    
    
    
    Non-hedge derivative (gains) losses (note 16c)
    
    
    (5
    )
    
    
    (71
    )
    
    
    6Inmet litigation
    
    
    
    
    
    
    16
    
    
    
    Current income tax expense (note 7)
    
    
    22
    
    
    
    54
    
    
    
    59Impairment charges on long-lived assets (note 6)
    
    
    139
    
    
    
    5
    
    
    
    11Revisions to expected cost of AROs at closed mines (note 17a)
    
    
    22
    
    
    
    10
    
    
    
    Amortization of debt issue costs
    
    
    3
    
    
    
    1
    
    
    
    1Losses on write-down of inventory to market value (note 11)
    
    
    9
    
    
    
    3
    
    
    
    6Changes in:Accounts receivable
    
    
    (2
    )
    
    
    3
    
    
    
    (12
    )Inventories
    
    
    (51
    )
    
    
    (1
    )
    
    
    26Accounts payable
    
    
    4
    
    
    
    4
    
    
    
    (25
    )Capitalized mining costs
    
    
    9
    
    
    
    37
    
    
    
    29Other assets and liabilities
    
    
    (25
    )
    
    
    6
    
    
    
    (12
    )Cash payments:Merger and related costs
    
    
    
    
    
    
    
    
    
    
    (50
    )Asset retirement obligations
    
    
    (33
    )
    
    
    (40
    )
    
    
    (70
    )Current income taxes
    
    
    (45
    )
    
    
    (111
    )
    
    
    (52
    )Other items
    
    
    
    
    
    
    4
    
    
    
    35Other net operating activities
    
    $
    65
    
    
    $
    (34
    )
    
    $
    (45
    )Interest paid, net of amounts capitalized
    
    $
    19
    
    
    $
    44
    
    
    $
    57
 92 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Investments Available-for-sale securitiesAt December 31
    
    2004
    
    
    2003Gains
    
    
    
    
    
    
    GainsFair value
    
    
    in OCI
    
    
    Fair value
    
    
    in OCIBenefit plans:1Fixed-income securities
    
    $
    11
    
    
    $
    
    
    
    $
    6
    
    
    $
    Equity securities
    
    
    19
    
    
    
    10
    
    
    
    26
    
    
    
    8Strategic investments:Equity securities2
    
    
    104
    
    
    
    
    
    
    
    98
    
    
    
    30Total
    
    $
    134
    
    
    $
    10
    
    
    $
    130
    
    
    $
    38
   1.
    
    Under various benefit plans for certain former Homestake executives, a portfolio of
marketable fixed-income and equity securities are held in a rabbi trust that is used to fund
obligations under the plans.2.
    
    Other investments mainly include an investment in Highland Gold with a fair value of $75
million at December 31, 2004. Available-for-sale securities are recorded at
fair value with unrealized gains and losses
recorded in OCI. Realized gains and losses are
recorded in earnings when investments mature or
on sale, calculated using the average cost of
securities sold. We recognize in earnings any
unrealized declines in fair value judged to be
other than temporary (2004  $5 million; 2003 
$11 million; 2002  $nil). Total proceeds from
the sale of investments were $9 million in 2004
(2003  $8 million; 2002  $3 million). Gains (losses) on investments recorded in earnings For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Realized on saleGains
    
    $
    6
    
    
    $
    5
    
    
    $
    Losses
    
    
    
    
    
    
    (1
    )
    
    
    (3
    )Impairment charges
    
    
    (5
    )
    
    
    (11
    )
    
    
    $
    1
    
    
    $
    (7
    )
    
    $
    (3
    )
 Investment in Highland Gold Mining PLC
(Highland) In 2004, we acquired a further 9.3 million
common shares of Highland for $40 million in
cash. Combined with the purchase of 11.1 million
common shares for $46 million in October 2003, we
held a 14% interest in Highland common shares at
December 31, 2004. We have also formed a strategic partnership with
Highland under which:  >
    We have the right to participate on an exclusive basis for up to 50% on any
acquisition made by Highland in Russia; and a similar right extends to Highland for any
acquisition made by us in certain regions in Russia, excluding Irkutsk.>
    We have a right of first refusal with respect to third-party investment in Highlands
Mayskoye property in the Chutotka region, Russia, and plan to pursue discussions with
Highland on establishing a joint venture at Mayskoye. Investment in Celtic Resources Holdings
PLC (Celtic) On December 2, 2004, Barrick and Celtic
entered into a subscription agreement under which
we agreed to subscribe for 3,688,191 units of
Celtic for $7.562 per unit. Each unit consists of
one ordinary share of Celtic and one-half of one
share purchase warrant. Each whole warrant
entitles us to acquire one ordinary share of
Celtic for $7.562, expiring on December 31, 2005.
In the event that Celtic does not acquire 100% of
the license to the Nezhdaninskoye deposit before
June 1, 2005, the number of warrants will
automatically increase by 50%. Completion of the
subscription occurred on January 5, 2005 upon
which we held a 9% interest in Celtics
outstanding ordinary shares. 93 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In connection with the completion of the
subscription, Barrick and Celtic entered into the
following agreements:  >
    We have the pre-emptive right to subscribe for up to $75 million of Celtic shares at
$7.562 per share.>
    Nezhdaninskoye Right of First Refusal.Celtic has granted us the right of first
refusal on any proposed sale of its direct or indirect interest in Nezhdaninskoye.>
    Nezhdaninskoye Purchase Option.Celtic has granted us the right to indirectly
purchase 51% of its interest in Nezhdaninskoye for $195 million, exercisable for a period
of six months starting if and when Celtic indirectly acquires 100% of Nezhdaninskoye.>
    Kazakhstan Participation.Celtic has granted to us the right to acquire 50% of any
interest in any mineral property in Kazakhstan that Celtic acquires. We have 12 months to elect to participate in any such acquisitions by Celtic. To
participate, we must pay Celtic 50% of the cost to Celtic of its interest in the mineral
property. 11. Accounts Receivable, Inventories
and Other Current Assets At December 31
    
    2004
    
    
    2003Accounts receivableAmounts due from
concentrate sales
    
    $
    29
    
    
    $
    26Other
    
    
    29
    
    
    
    30$
    58
    
    
    $
    56InventoriesGold in process and
ore in stockpiles
    
    $
    198
    
    
    $
    163Mine operating supplies
    
    
    82
    
    
    
    58280
    
    
    
    221Non-current ore in stockpiles1
    
    
    (65
    )
    
    
    (57
    )$
    215
    
    
    $
    164Other current assetsDerivative assets (note 16c)
    
    $
    165
    
    
    $
    154Taxes recoverable
    
    
    104
    
    
    
    9Prepaid expenses
    
    
    17
    
    
    
    15$
    286
    
    
    $
    178
   1.
    Ore that we do not expect to process in
the next 12 months is classified in other assets
(note 14). Inventories Material extracted from our mines is
classified as either ore or waste. Ore represents
material that can be mined, processed into a
saleable form and sold at a profit. Ore, which
represents material included in proven and
probable reserves, is recorded as an asset that
is classified within inventory at the point it is
extracted from the mine. Ore is accumulated in
stockpiles that are subsequently processed into
gold in a saleable form under a mine plan that
takes into consideration optimal scheduling of
production of our reserves, present plant
capacity, and the market price of gold. We record gold in process and ore in stockpiles
at cost, less provisions required to reduce
inventory to market value. Costs capitalized to
inventory include direct and indirect materials
and consumables; direct labor; repairs and
maintenance; utilities; amortization of property,
plant and equipment; amortization of capitalized
mining costs; and local mine administrative
expenses. Costs are removed from inventory and
recorded in cost of sales based on the average
cost per ounce of gold in inventory. Average cost
is calculated based on the cost of inventory at
the beginning of a period, plus the cost of
inventory produced in a period. Significant ore in stockpilesAt December 31
    
    2004
    
    
    2003GoldstrikeOre that requires roasting
    
    $
    23
    
    
    $
    22Ore that requires autoclaving
    
    
    17
    
    
    
    19Kalgoorlie
    
    
    46
    
    
    
    32
 At Goldstrike, we expect to fully process the
autoclave stockpile by 2009 and the roaster
stockpile by 2016. At Kalgoorlie, we expect to
process the stockpile by 2017. Mine operating supplies are recorded at purchase
cost, less provisions to reduce slow-moving and
obsolete supplies to market value. Cost of sales includes losses recorded to reduce
inventory cost to market value as follows: 2004 
$9 million; 2003  $3 million; 2002  $6 million. 94 BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. Property, Plant and Equipment At December 31
    
    2004
    
    
    2003Acquired mineral properties
and capitalized mine
development costs
    
    $
    4,489
    
    
    $
    4,242Buildings, plant and equipment
    
    
    3,289
    
    
    
    2,8317,778
    
    
    
    7,073Accumulated amortization
    
    
    (4,387
    )
    
    
    (3,945
    )$
    3,391
    
    
    $
    3,128
 a) Acquired mineral properties
and capitalized mine development
costs Exploration and development stage properties We capitalize the cost of acquisition of land
and mineral rights. The cost is allocated between
proven and probable reserves and mineralization
not considered proven and probable reserves at
the date of acquisition, based on relative fair
values. If we later establish that some
mineralization meets the definition of proven and
probable gold reserves, we classify a portion of
the capitalized acquisition cost as relating to
reserves. After acquisition, various factors can affect the
recoverability of the capitalized cost of land
and mineral rights, particularly the results of
exploration drilling. The length of time between
the acquisition of land and mineral rights and
when we undertake exploration work varies based
on the prioritization of our exploration projects
and the size of our exploration budget. If we
conclude that the carrying amount of land and
mineral rights is impaired, we reduce this
carrying amount to estimated fair value through
an impairment charge. We capitalize costs incurred at development
projects that meet the definition of an asset
after mineralization is classified as proven and
probable gold reserves (as defined by United
States reporting standards). Before classifying
mineralization as proven and probable gold
reserves, costs incurred at development projects
are considered exploration costs, and are
expensed as incurred. Effective May 1, 2004, we
determined that mineralization at Lagunas Norte
met the definition of proven and probable
reserves for United States reporting purposes.
Following this determination, we began
capitalizing costs that meet the definition of an asset at
Lagunas Norte prospectively for future periods.
The cost of start-up activities at new mines such
as recruiting and training is expensed as
incurred. At December 31, 2004 the following assets were in
an exploration, development or construction stage
and amortization of the capitalized costs had not
yet begun. Carrying amount
    
    
    Targeted timingat December 31,
    
    
    of production2004
    
    
    start-upDevelopment stage projectsVeladero
    
    $
    362
    
    
    
    2005Lagunas Norte
    
    
    196
    
    
    
    2005Tulawaka
    
    
    70
    
    
    
    2005Cowal
    
    
    128
    
    
    
    2006Pascua-Lama
    
    
    230
    
    
    
    2009Buzwagi
    
    
    102
    
    
    
    Nevada Power Plant
    
    
    18
    
    
    
    2005Total
    
    $
    1,106
 Interest cost is considered an element of the
historical cost of an asset when a period of time
is necessary to prepare it for its intended use.
We capitalize interest costs to assets under
development or construction while activities are
in progress. We stop capitalizing interest costs
when construction of an asset is substantially
complete and it is ready for its intended use. We
measure the amount capitalized based on
cumulative capitalized costs, exclusive of the
impact, if any, of impairment charges on the
carrying amount of an asset. Producing mines We start amortizing capitalized mineral
property acquisition and mine development costs
when production begins. Amortization is
capitalized as a component of the cost of
inventory. Amortization is calculated using the
units-of-production method, where the numerator
is the number of ounces produced and the
denominator is the estimated recoverable ounces
of gold contained in proven and probable
reserves. During production at underground mines, we incur
development costs to build new shafts, drifts and
ramps that will enable us to physically access
ore underground. 95 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The time over which we will continue to incur
these costs depends on the mine life, and in some
cases could be up to 25 years. These underground
development costs are capitalized as incurred. In
years prior to 2003 we amortized the aggregate
total of historically capitalized costs, and
estimated costs that will be incurred to enable
access to the ore body over the remaining mine
life, using the units-of-production method. In
2003, we changed the method of amortizing these
costs to better attribute these costs to ounces
of gold produced, as well as to remove the
uncertainty inherent in using estimates of future
underground development costs in the measurement
of amortization. Under our revised method of measuring
amortization for underground development costs,
the cost incurred to access specific ore blocks
or areas of the mine, which only provides an
economic benefit over the period of mining that
ore block or area, is attributed to earnings
using the units-of-production method where the
denominator is estimated recoverable ounces of
gold contained in proven and probable reserves
within that ore block or area. If capitalized
costs provide an economic benefit over the entire
mine life, the costs are attributed to earnings
using the units-of-production method, where the
denominator is the estimated recoverable ounces
of gold contained in total accessible proven and
probable reserves. b) Buildings, plant and equipment We record buildings, plant and equipment at
cost. We capitalize costs that extend the
productive capacity or useful economic life of an
asset. Repairs and maintenance expenditures are
expensed as incurred. We amortize the cost less
estimated residual value, using the straight-line
method over the estimated useful economic life of
the asset. The longest estimated useful economic
life for buildings and equipment at ore
processing facilities is 25 years and for mining
equipment is 15 years. c) Impairment evaluations  operating mines
and development projects We review and test the carrying amounts of
assets when events or changes in circumstances
suggest that the carrying amount may not be recoverable. We group
assets at the lowest level for which identifiable
cash flows are largely independent of the cash
flows of other assets and liabilities. For
operating mines and development projects, all
assets are included in one group. If there are
indications that an impairment may have occurred,
we prepare estimates of expected future cash
flows for each group of assets. Expected future
cash flows are based on a probability-weighted
approach applied to potential outcomes. Estimates of expected future cash flow reflect:  >
    Estimated sales proceeds from the production and sale of recoverable ounces of gold
contained in proven and probable reserves;>
    Expected future commodity prices and currency exchange rates (considering historical
and current prices, price trends and related factors). In impairment assessments
conducted in 2004 we used an expected future market gold price of $400 per ounce, and an
expected future market A$:US$ exchange rate of $0.70 and C$:US$ exchange rate of $0.82;>
    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;>
    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; and>
    Environmental remediation costs excluded from the measurement of asset retirement
obligations. We record a reduction of a group of assets to
fair value as a
charge to earnings if expected future cash flows
are less than the carrying amount. We estimate
fair value by discounting the expected future
cash flows using a discount factor that reflects
the risk-free rate of interest for a term
consistent with the period of expected cash
flows. d) Capital commitments At December 31, 2004, we had capital
commitments of $322 million for 2005/2006 in
connection with construction at our development
projects and of a power plant in Nevada for the
Goldstrike mine. 96 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Capitalized Mining Costs We capitalize and amortize certain costs
relating to the removal of waste rock at open-pit
mines, commonly referred to as stripping costs.
We include in inventory, amortization of amounts
capitalized based on a stripping ratio using
the units-of-production method. This accounting method results in the smoothing
of these costs over the life of a mine. Instead
of capitalizing and amortizing these costs, some
mining companies capitalize them to inventory as
incurred, which may result in the reporting of
greater volatility in period-to-period results.
If we followed a policy of capitalizing these
costs to inventory as incurred, rather than using
our present policy, our reported cost of sales
would have been $9 million lower in 2004 (2003 
$37 million lower, 2002  $29 million lower). Stripping ratios1For the years ended
    
    Mine lifeDecember 31
    
    (years)2
    
    
    2004
    
    
    2003
    
    
    2002Goldstrike Open Pit
    
    
    14
    
    
    
    109:1
    
    
    
    112:1
    
    
    
    112:1Pierina
    
    
    4
    
    
    
    60:1
    
    
    
    48:1
    
    
    
    48:1
   1. The stripping ratio is calculated as
the ratio of total tons (ore and waste) of
material to be moved compared to total
recoverable proven and probable gold
reserves.
 2. Costs capitalized will be fully amortized by
the end of the mine lives. The carrying amount
of capitalized mining costs is grouped with
property, plant and equipment for impairment
evaluation purposes. 14. Other Assets At December 31
    
    2004
    
    
    2003Derivative assets (note 16c)
    
    $
    257
    
    
    $
    256Ore in stockpiles (note 11)
    
    
    65
    
    
    
    57Taxes recoverable
    
    
    50
    
    
    
    52Deferred income tax assets (note 18)
    
    
    97
    
    
    
    59Debt issue costs
    
    
    38
    
    
    
    11Deferred stock-based
compensation (note 21b)
    
    
    5
    
    
    
    6Other
    
    
    54
    
    
    
    56$
    566
    
    
    $
    497
 Debt issue costs Additions to debt issue costs in 2004
principally relate to new debt financings put in
place during the year. Amortization of debt issue
costs is calculated on a straight-line basis or
using the interest method over the term of each
debt obligation, and classified as a component of
interest cost. 15. Other Current Liabilities At December 31
    
    2004
    
    
    2003Asset retirement
obligations (note 17a)
    
    $
    33
    
    
    $
    36Current part of
long-term debt (note 16b)
    
    
    31
    
    
    
    41Derivative liabilities (note 16c)
    
    
    11
    
    
    
    3Post-retirement benefits (note 22)
    
    
    2
    
    
    
    5Deferred revenue
    
    
    5
    
    
    
    17Other
    
    
    1
    
    
    
    17$
    83
    
    
    $
    119
 16. Financial Instruments Financial instruments include cash; evidence
of ownership in an entity; or a contract that
imposes an obligation on one party and conveys a
right to a second entity to deliver/receive cash
or another financial instrument. Information on
certain types of financial instruments is
included in these financial statements as
follows: accounts receivable  note 11;
investments  note 10; restricted stock units 
note 21. a) Cash and equivalents Cash and equivalents include cash, term
deposits and treasury bills with original
maturities of less than 90 days. 97 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS b) Long-term debt For the years ended December 31At December 31
    
    
    2004
    
    
    2003
    
    
    2002Interest
    
    
    Effective
    
    
    Interest
    
    
    Effective
    
    
    Interest
    
    
    Effective2004
    
    
    2003
    
    
    cost
    
    
    rate1
    
    
    cost
    
    
    rate1
    
    
    cost
    
    
    rate17  1/2% debentures2
    
    $
    495
    
    
    $
    501
    
    
    $
    31
    
    
    
    6.1
    %
    
    $
    31
    
    
    
    6.1
    %
    
    $
    38
    
    
    
    5.7
    %5 4/5% notes3
    
    
    397
    
    
    
    
    
    
    
    3
    
    
    
    6.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4 7/8% notes4
    
    
    348
    
    
    
    
    
    
    
    2
    
    
    
    5.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Veladero financing5
    
    
    198
    
    
    
    
    
    
    
    4
    
    
    
    7.5
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Bulyanhulu financing6
    
    
    150
    
    
    
    174
    
    
    
    14
    
    
    
    8.0
    %
    
    
    15
    
    
    
    7.7
    %
    
    
    15
    
    
    
    7.2
    %Variable-rate bonds7
    
    
    63
    
    
    
    80
    
    
    
    1
    
    
    
    1.2
    %
    
    
    1
    
    
    
    1.1
    %
    
    
    1
    
    
    
    1.4
    %Capital leases
    
    
    5
    
    
    
    5
    
    
    
    
    
    
    
    7.8
    %
    
    
    
    
    
    
    8.2
    %
    
    
    1
    
    
    
    7.9
    %Construction debt under
build to suit lease8
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other interest
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    4
    
    
    
    1,686
    
    
    
    760
    
    
    
    60
    
    
    
    6.1
    %
    
    
    49
    
    
    
    6.3
    %
    
    
    59
    
    
    
    6.8
    %Less: current part/
interest capitalized
    
    
    (31
    )
    
    
    (41
    )
    
    
    (41
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (2
    )$
    1,655
    
    
    $
    719
    
    
    $
    19
    
    
    
    
    
    
    $
    44
    
    
    
    
    
    
    $
    57
   1. The effective rate includes the stated interest rate under the debt agreement, amortization
of debt issue costs, and the impact of interest rate contracts designated in a hedging relationship
with long-term debt.
 2. On April 22, 1997, we issued $500 million of debentures that mature on May 1, 2007. 3. On November 12, 2004, we issued $400 million of debentures that mature on November 15, 2034.
The debentures were issued at a $3 million discount. 4. On November 12, 2004, we issued $350 million of debentures that mature on November 15, 2014. The
debentures were issued at a $2 million discount. 5. One of our wholly owned subsidiaries, Minera Argentina Gold S.A. in Argentina has a
variable-rate limited recourse amortizing loan facility for $250 million. At December 31, 2004, a
total of $198 million had been drawn down under this facility. We have guaranteed the loan until
completion occurs, after which it will become non-recourse. The loan is insured for political risks
by branches of the Canadian and German governments. 6. One of our wholly owned subsidiaries, Kahama Mining Corporation Ltd. in Tanzania, has a
variable-rate non-recourse amortizing loan for $150 million. The loan is insured for political
risks equally by branches of the Canadian government and the World Bank. 7. Certain of our wholly owned subsidiaries have issued variable-rate, tax-exempt bonds of $25
million (due 2029) and $38 million (due 2032) for a total of $63 million. 8. One of our wholly owned subsidiaries, Minera Barrick Misquichilca, has entered into a $56
million build to suit lease facility to finance the construction of the leach pad and process
facilities at the Lagunas Norte project. The five year lease term begins on October 1, 2005.
Amounts reimbursed for construction costs at December 31, 2004 have been presented as construction
debt until the lease term begins. Obligations under the lease will be repayable in 20 equal
quarterly installments over the term of the lease. We also have a credit and guarantee agreement with a group of banks (the Lenders), which requires
the Lenders to make available to us a credit facility of up to $1 billion or the equivalent amount
in Canadian currency. The credit facility, which is unsecured, matures in April 2008 and has an
interest rate of LIBOR plus 0.27% to 0.35% when used, and an annual fee of 0.08%. We have not drawn
any amounts under the credit facility. 98 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Scheduled debt repayments1 2009 and2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    thereafter7 1/2% debentures
    
    $
    
    
    
    $
    
    
    
    $
    500
    
    
    $
    
    
    
    $
    5 4/5% notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4004 7/8 % notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350Veladero financing
    
    
    
    
    
    
    24
    
    
    
    46
    
    
    
    38
    
    
    
    90Bulyanhulu financing
    
    
    31
    
    
    
    34
    
    
    
    34
    
    
    
    34
    
    
    
    17Variable-rate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63$
    31
    
    
    $
    58
    
    
    $
    580
    
    
    $
    72
    
    
    $
    920
   1. Excludes capital leases and build to suit lease facility.
 Minimum payments under capital leases1 Years ending December 312005
    
    $
    122006
    
    
    152007
    
    
    122008
    
    
    112009
    
    
    11Capital lease obligations
    
    $
    61
   1. Includes the $56 million build to suit lease facility.
 c) Use of derivative instruments (derivatives) in risk management In the normal course of business, our assets, liabilities and forecasted transactions are
impacted by various market risks including: Item
    
    Impacted by> Cost of sales  Consumption of oil and propane
    
    > Prices of oil and propane Local currency denominated expenditures
    
    > Currency exchange rates  US dollar versus A$ and C$> Administration costs in local currencies
    
    > Currency exchange rates  US dollar versus A$ and C$> Capital expenditures in local currencies
    
    > Currency exchange rates  US dollar versus A$, C$ and > Interest earned on cash
    
    > US dollar interest rates> Interest payments on variable-rate debt
    
    > US dollar interest rates> Fair value of fixed-rate debt
    
    > US dollar interest rates
 Under our risk management policy we seek to
mitigate the impact of these market risks to
control costs and enable us to plan our business
with greater certainty. The timeframe and manner
in which we manage these risks varies for each
item based upon our assessment the risk and
available alternatives for mitigating risk. For
these particular risks, we believe that
derivatives are an effective means of managing
risk. The primary objective of the hedging elements of
our derivative positions is that changes in the
values of hedged items are offset by changes in
the values of derivatives. Most of the
derivatives we use meet the FAS 133 hedge
effectiveness criteria and are designated in a
hedge accounting relationship. Some of the
derivative positions are effective in achieving
our risk management objectives but they do not
meet the strict FAS 133 hedge effectiveness
criteria, and they are classified as non-hedge
derivatives. 99 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Our use of derivatives is based on
established practices and parameters, which are
subject to the oversight of the Finance Committee
of the Board of Directors. A Compliance Function
independent of the Corporate Treasury Group
monitors derivative transactions and has
responsibility for recording and accounting for
derivatives. Accounting policy for derivatives We record derivatives on the balance sheet at
fair value except for gold and silver sales
contracts, which are excluded from the scope of
FAS 133, because the obligations will be met by
physical delivery of our gold and silver
production and they meet the other requirements
set out in paragraph 10(b) of FAS 133. In
addition, our past sales practices, productive
capacity and delivery intentions are consistent
with the definition of a normal sales contract.
Accordingly, we have elected to designate our
gold and silver sales contracts as normal sales
contracts with the result that the principles of
FAS 133 are not applied to them. Instead we apply
revenue recognition accounting principles as
described in note 4. On the date we enter into a derivative that is
accounted for under FAS 133, we designate it as
either a hedging instrument or a non-hedge
derivative. A hedging instrument is designated in
either:  > a fair value hedge relationship with a recognized asset or liability; or> a cash flow hedge relationship with either a forecasted
transaction or the variable future cash flows arising from a recognized asset or
liability. At the inception of a hedge, we formally document
all relationships between hedging instruments and
hedged items, including the related
risk-management strategy. This documentation
includes linking all hedging instruments to
either specific assets and liabilities, specific
forecasted transactions or variable future cash
flows. It also includes the method of assessing
retrospective and prospective hedge
effectiveness. In cases where we
use regression analysis to assess prospective
effectiveness, we consider regression outputs for
the coefficient of determination (R-squared), the
slope coefficient and the t-statistic to assess
whether a hedge is expected to be highly
effective. Each period, using a dollar offset
approach, we retrospectively assess whether
hedging instruments have been highly effective in
offsetting changes in the fair value of hedged
items and we measure the amount of any hedge
ineffectiveness. We also assess each period
whether hedging instruments are expected to be
highly effective in the future. If a hedging
instrument is not expected to be highly
effective, we stop hedge accounting
prospectively. In this case accumulated gains or
losses remain in other comprehensive income
(OCI) until the hedged item


affects earnings. We also stop hedge accounting
prospectively if:  > a derivative is settled;> it is no longer highly probable that a forecasted transaction will occur; or> we de-designate a hedging relationship. If we conclude that it is probable that a
forecasted transaction will not occur in the
originally specified time frame, or within a
further two-month period, gains and losses
accumulated in OCI are immediately transferred to
earnings. In all situations when hedge accounting
stops, a derivative is classified as a non-hedge
derivative prospectively. Cash flows from
derivative transactions are included under
operating activities, except for derivatives
designated as a cash flow hedge of forecasted
capital expenditures, which are included under
investing activities. Changes in the fair value of derivatives each
period are recorded as follows:  > Fair value hedges: recorded in
earnings as well as changes in fair
value of the hedged item.> Cash flow hedges: recorded in
OCI until earnings are affected by the
hedged item, except for any hedge
ineffectiveness which is recorded in
earnings immediately.> Non-hedge derivatives: recorded in earnings. 100 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Summary of derivatives at December 31, 20041  Notional amount
    
    
    Accounting classificationby term to maturity
    
    
    by notional amountWithin
    
    
    2 to 5
    
    
    Over 5
    
    
    
    
    
    
    Cash flow
    
    
    Fair value
    
    
    Non-
    
    
    Fair1 year
    
    
    years
    
    
    years
    
    
    Total
    
    
    hedge
    
    
    hedge
    
    
    hedge
    
    
    valueUS dollar interest rate contractsReceive-fixed swaps (millions)
    
    $
    75
    
    
    $
    725
    
    
    $
    
    
    
    $
    800
    
    
    $
    300
    
    
    $
    500
    
    
    $
    
    
    
    
    (5
    )Pay-fixed swaps (millions)
    
    
    
    
    
    
    150
    
    
    
    125
    
    
    
    275
    
    
    
    150
    
    
    
    
    
    
    
    125
    
    
    
    (24
    )Net notional position
    
    $
    75
    
    
    $
    575
    
    
    $
    (125
    )
    
    $
    525
    
    
    $
    150
    
    
    $
    500
    
    
    $
    (125
    )
    
    $
    (29
    )Currency contractsC$:US $
contracts
(C$ millions)
    
    C$
    350
    
    
    C$
    600
    
    
    C$
    
    
    
    C$
    950
    
    
    C$
    935
    
    
    C$
    
    
    
    C$
    15
    
    
    $
    99A$:US $
contracts
(A$ millions)
    
    A$
    844
    
    
    A$
    1,291
    
    
    A$
    
    
    
    A$
    2,135
    
    
    A$
    2,125
    
    
    A$
    
    
    
    A$
    10
    
    
    $
    198:US$ contracts ( millions)
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    $
    1Commodity contractsFuel
(WTI)
(thousands of barrels)
    
    
    738
    
    
    
    1,618
    
    
    
    
    
    
    
    2,356
    
    
    
    1,946
    
    
    
    
    
    
    
    410
    
    
    $
    7Propane
contracts
(millions of gallons)
    
    
    11
    
    
    
    18
    
    
    
    
    
    
    
    29
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    $
    (3
    )
   1. Excludes normal sales contracts.
 US dollar interest rate contractsCash flow hedges  cash balances Receive-fixed swaps have been
designated against the first $300 million of our cash balances as a
hedge of the variability of forecasted interest
receipts on the balances caused by changes in
Libor. Prior to December 2004, prospective and
retrospective hedge effectiveness was assessed
using the hypothetical derivative method under
FAS 133. The prospective test involves comparing
the effect of a theoretical shift in the forward
interest rate curve on the fair value of both the
actual and hypothetical derivative. The
retrospective test
involves comparing the effect of actual changes
in interest rates in each period on the fair
value of both the actual and hypothetical
derivative using a dollar offset approach. In
December 2004, we de-designated these swaps and
immediately re-designated them in a new hedging
relationship in order to adopt a new method of
assessing prospective and retrospective
effectiveness. At the time of the redesignation
these swaps had a fair value near zero. From
December 2004 onwards, under
the new method, prospective and retrospective
hedge effectiveness is assessed using the change
in variable cash flows method. This involves a
comparison of the floating-rate leg of the swap
to the variable-rate cash flows from interest
receipts on cash. Each period the effective portion of changes in
the fair value of the swaps, which relates to
future interest receipts, is recorded in OCI.
Also, as interest is received and recorded in
earnings, an amount equal to the difference
between the fixed-rate interest earned on the
swaps and the variable-rate interest earned on
cash is recorded in earnings as a component of
interest income. Cash flow hedges  Bulyanhulu financing Pay-fixed swaps totaling $150 million have been
designated against the Bulyanhulu financing, as a
hedge of the variability in forecasted interest
payments caused by changes in Libor. We have
concluded that the hedges are 100% effective
under FAS 133, because the conditions of FAS 133
for the assumption of no hedge ineffectiveness
have been met. Changes in fair value of the
swaps, which relate to future interest payments,
are recorded 101 BARRICK Annual Report 2004






---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS in OCI. Also, as interest payments on the
financing are recorded in earnings, an amount
equal to the difference between the fixed-rate
interest paid on the swap and the variable-rate
interest paid on the financing is recorded in
earnings as a component of interest costs. Fair value hedges Receive-fixed swaps totaling $500 million have
been designated against the 7 1/2% debentures
as a hedge of the variability in the fair value
of the debentures caused by changes in Libor. We
have concluded that the hedges are 100% effective
under FAS 133, because the critical terms
(including: notional amount, maturity date,
interest payment and underlying interest rate 
i.e. Libor) of the swaps and the debentures are
the same. Changes in fair value of the swaps,
together with an equal corresponding change in
fair value of the debentures, caused by changes
in Libor, are recorded in earnings each period.
Also, as interest payments on the debentures are
recorded in earnings, an amount equal to the
difference between the fixed-rate interest
received under the swap less the variable-rate
interest paid under the swap is recorded in
earnings as a component of interest costs. Non-hedge contracts We use gold lease rate swaps as described in note
4. The valuation of gold lease rate swaps is
impacted by market US dollar interest rates. Our
non-hedge pay-fixed swap position mitigates the
impact of changes in US dollar interest rates on
the valuation of gold lease rate swaps. Currency contracts Cash flow hedges Currency contracts totaling C$935 million,
A$2,125 million and 26 million have been
designated against forecasted local currency
denominated expenditures as a hedge of the
variability of the US dollar amount of those
expenditures caused by changes in currency
exchange rates. Hedged items are identified as
the first stated quantity of dollars of
forecasted expenditures in a future month. For a
C$730 million and A$1,671 million portion of the
contracts, we have concluded that the
hedges are 100% effective under FAS 133 because
the critical terms (including: notional amount
and maturity date) of the hedged items and
currency contracts are the same. For 26 million,
and the remaining C$205 million and A$454 million
portions, prospective and retrospective hedge
effectiveness is assessed using the hypothetical
derivative method under FAS 133. The prospective
test involves comparing the effect of a
theoretical shift in forward exchange rates on
the fair value of both the actual and
hypothetical derivative. The retrospective test
involves comparing the effect of historic changes
in exchange rates
each period on the fair value of both the actual
and hypothetical derivative using a dollar offset
approach. The effective portion of changes in
fair value of the currency contracts is recorded
in OCI until the forecasted expenditure impacts
earnings. For expenditures capitalized to the
cost of inventory, this is upon sale of
inventory, and for capital expenditures, this is
when amortization of the capital assets is
recorded in earnings. If it is probable that a hedged item will no
longer occur, the accumulated gains or losses in
OCI for the associated currency contract are
reclassified to earnings immediately. The
identification of which currency contracts are
associated with these hedged items uses a
last-in, first-out (LIFO) approach, based on
the order in which currency contracts were
originally designated in a hedging relationship. Commodity contracts Cash flow hedges Commodity contracts totaling 1,946 thousand
barrels of diesel fuel and 29 million gallons of
propane have been designated against forecasted
purchases of the commodities for expected
consumption at our mining operations. The
contracts act as a hedge of the impact of
variability in market prices on the cost of
future commodity purchases. Hedged items are
identified as the first stated quantity in
millions of barrels/gallons of forecasted
purchases in a future month. Prospective 102 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and retrospective hedge effectiveness is
assessed using the hypothetical derivative method
under FAS 133. The prospective test is based on
regression analysis of the month-on-month change
in fair value of both the actual derivative and a
hypothetical derivative caused by actual historic
changes in commodity prices over the last three
years. The retrospective test involves comparing
the effect of historic changes in commodity
prices each period on the fair value of both the
actual and hypothetical derivative using a dollar
offset approach. The effective portion of changes
in fair value of the commodity contracts is
recorded in OCI until the forecasted transaction
impacts earnings. The cost of commodity
consumption is capitalized to the cost of
inventory, and therefore this is upon the sale of
inventory. If it is probable that a hedged item will no
longer occur, the accumulated gains or losses in
OCI for the associated commodity contract are
reclassified to earnings immediately. The
identification of which commodity contracts are
associated with these hedged items uses a LIFO
approach, based on the order in which commodity
contracts were originally designated in a hedging
relationship. Non-hedge contracts Non-hedge fuel contracts are used to mitigate the
risk of oil price changes on consumption at the
Pierina, Eskay Creek and Lagunas Norte mines. On
completion of regression analysis, we concluded
that the contracts do not meet the highly
effective criterion in FAS 133 due to currency
and basis differences between contract prices and
the prices charged to the mines by oil suppliers.
Despite not qualifying as an accounting hedge,
the contracts protect the Company to a

significant extent from the effects of oil price
changes. Derivative assets and liabilities 2004
    
    
    2003At January 1
    
    $
    337
    
    
    $
    29Derivatives settled
    
    
    (120
    )
    
    
    (91
    )Change in fair value of:Non-hedge derivatives
    
    
    3
    
    
    
    52Cash flow hedgesEffective portion
    
    
    147
    
    
    
    348Ineffective portion
    
    
    
    
    
    
    1Fair value hedges
    
    
    (8
    )
    
    
    (2
    )At December 31
    
    $
    359
    1
    
    $
    337
    1Classification:
    
    
    
    
    
    
    
    

Other current assets
    
    $
    165
    
    
    $
    154Other assets
    
    
    257
    
    
    
    256Other current liabilities
    
    
    (11
    )
    
    
    (3
    )Other long-term obligations
    
    
    (52
    )
    
    
    (70
    )$
    359
    
    
    $
    337
   1. Derivative assets and liabilities are
presented net and related amounts due to/from
counterparties if the conditions of FIN No. 39,
Offsetting of Amounts Related to Certain
Contracts, are met. Amounts receivable from
counterparties netted against derivative
liabilities totaled $16 million at December 31,
2004.
 Non-hedge derivative gains (losses)1 For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Non-hedge derivativesCommodity contracts
    
    $
    (9
    )
    
    $
    3
    
    
    $
    (2
    )Currency contracts
    
    
    (4
    )
    
    
    17
    
    
    
    8Interest rate contracts
    
    
    16
    
    
    
    32
    
    
    
    (12
    )3
    
    
    
    52
    
    
    
    (6
    )Hedge ineffectivenessOngoing hedge inefficiency
    
    
    
    
    
    
    1
    
    
    
    Due to changes in timing of
hedged items
    
    
    2
    
    
    
    18
    
    
    
    $
    5
    
    
    $
    71
    
    
    $
    (6
    )
   1. Non-hedge derivative gains (losses)
are classified as a component of other
(income) expense.
 103 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Cash Flow Hedge Gains (losses) in OCICommodity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest rateprice hedges
    
    
    Currency hedges
    
    
    hedgesOper-
    
    
    Admin-
    
    
    Capital
    
    
    
    
    
    
    Long-Gold/
    
    
    
    
    
    
    ating
    
    
    istration
    
    
    expen-
    
    
    Cash
    
    
    termSilver
    
    
    Fuel
    
    
    costs

    
    
    costs
    
    
    ditures
    
    
    balances
    
    
    debt
    
    
    TotalAt December 31, 2001
    
    $
    25
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    25Effective portion of change in
fair value of hedging instruments
    
    
    (4
    )
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    (17
    )
    
    
    49Transfers to earnings:On recording hedged items in earnings
    
    
    (12
    )
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    5
    
    
    
    (25
    )At December 31, 2002
    
    
    9
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    (12
    )
    
    
    49Effective portion of change in
fair value of hedging instruments
    
    
    4
    
    
    
    (1
    )
    
    
    251
    
    
    
    32
    
    
    
    54
    
    
    
    9
    
    
    
    (1
    )
    
    
    348Transfers to earnings:On recording hedged
items in earnings
    
    
    (13
    )
    
    
    
    
    
    
    (58
    )
    
    
    (7
    )
    
    
    
    
    
    
    (18
    )
    
    
    5
    
    
    
    (91
    )Hedge ineffectiveness due to
changes in timing of hedged items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )1
    
    
    
    
    
    
    
    
    
    
    (18
    )At December 31, 2003
    
    
    
    
    
    
    (1
    )
    
    
    219
    
    
    
    25
    
    
    
    36
    
    
    
    17
    
    
    
    (8
    )
    
    
    288Effective portion of change in
fair value of hedging instruments
    
    
    
    
    
    
    7
    
    
    
    117
    
    
    
    19
    
    
    
    19
    
    
    
    5
    
    
    
    (20
    )
    
    
    147Transfers to earnings:On recording hedged
items in earnings
    
    
    
    
    
    
    (4
    )
    
    
    (96
    )
    
    
    (11
    )
    
    
    (5
    )
    
    
    (19
    )
    
    
    3
    
    
    
    (132
    )Hedge ineffectiveness due to
changes in timing of hedged items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )1
    
    
    
    
    
    
    
    
    
    
    (2
    )At December 31, 2004
    
    $
    
    
    
    $
    2
    
    
    $
    240
    
    
    $
    33
    
    
    $
    48
    
    
    $
    3
    
    
    $
    (25
    )
    
    $
    301
    2
 Gold
    
    
    Cost of
    
    
    Cost of
    
    
    Admin-
    
    
    Amorti-
    
    
    Interest
    
    
    InterestHedge gains/losses classified within
    
    sales
    
    
    sales
    
    
    sales
    
    
    istration
    
    
    zation
    
    
    income
    
    
    costPortion of hedge gain (loss)
expected to affect 2005 earnings2
    
    $
    
    
    
    $
    3
    
    
    $
    110
    
    
    $
    18
    
    
    $
    2
    
    
    $
    7
    
    
    $
    (4
    )
    
    $
    136
   1. On determining that certain forecasted capital expenditures were no longer likely to occur
within two months of the originally specified time frame.
 2. Based on the fair value of hedge contracts at December 31, 2004. 104 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS d) Fair Value of Financial
Instruments Fair value is the value at which a financial
instrument could be closed out or sold in a
transaction with a willing and knowledgeable
counterparty over a period of time consistent
with our risk management or investment strategy.
Fair value is based on quoted market
prices, where available. If market quotes are not available, fair value is based
on internally developed models that use market-based or independent information
as inputs. These models could produce a fair value that may not be reflective of
future fair value. Fair value information At December 31
    
    2004
    
    
    2003Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    Estimatedamount
    
    
    fair value
    
    
    amount
    
    
    fair valueFinancial assetsCash and
equivalents1
    
    $
    1,398
    
    
    $
    1,398
    
    
    $
    970
    
    
    $
    970Accounts
receivable1
    
    
    58
    
    
    
    58
    
    
    
    56
    
    
    
    56Investments2
    
    
    134
    
    
    
    134
    
    
    
    130
    
    
    
    130Derivative
assets3
    
    
    422
    
    
    
    422
    
    
    
    410
    
    
    
    410$
    2,012
    
    
    $
    2,012
    
    
    $
    1,566
    
    
    $
    1,566Financial liabilitiesAccounts
payable1
    
    $
    335
    
    
    $
    335
    
    
    $
    245
    
    
    $
    245Long-term
debt4
    
    
    1,686
    
    
    
    1,731
    
    
    
    760
    
    
    
    841Derivative
liabilities3
    
    
    63
    
    
    
    63
    
    
    
    73
    
    
    
    73Restricted
stock
units5
    
    
    6
    
    
    
    6
    
    
    
    10
    
    
    
    10$
    2,090
    
    
    $
    2,135
    
    
    $
    1,088
    
    
    $
    1,169
   1.
    Recorded at cost. Fair value approximates the carrying amounts due to the short-term
nature and generally negligible credit losses.2.
    Recorded at fair value. Quoted market prices, when available, are used to determine fair value.
If quoted market prices are not available, then fair values are estimated by using quoted prices of
instruments with similar characteristics or discounted cash flows.3.
    Recorded at fair value using liquid market pricing based on exchange traded prices,
broker-dealer quotations or related input factors which assume all counterparties have the same
credit rating.4.
    Long-term debt is generally recorded at cost except for obligations that are designated in a
fair value hedge relationship, which are recorded at fair value in periods where a hedge
relationship exists. The fair value of long-term debt is based on current market interest rates,
adjusted for our credit quality.5.
    Recorded at fair value based on the period end market stock price. e) Credit risk Credit risk is the risk that a third party
might fail to fulfill its performance obligations
under the terms of a financial instrument. For
cash and equivalents and accounts receivable,
credit risk represents the carrying amount on the
balance sheet. For derivatives, when the fair value is positive,
this creates credit risk. When the fair value of
a derivative is negative, we assume no credit
risk. In cases where we have a legally
enforceable master netting agreement with a
counterparty, credit risk exposure represents the
net amount of the positive and negative fair
values for 105 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS similar types of derivatives. For a net
negative amount, we regard credit risk as being
zero. A net positive amount for a counterparty is
a reasonable measure of credit risk when there is
a legally enforceable master netting agreement.
We mitigate credit risk by: >
    
    entering into derivatives with high credit-quality counterparties;>
    
    limiting the amount of exposure to each counter-party; and>
    
    monitoring the financial condition
of counterparties.
 Credit quality of financial assets At December 31, 2004
    
    S&P credit ratingAA - or higher
    
    
    A - or higher
    
    
    B to BBB
    


    
    TotalCash and equivalents
    
    $
    744
    
    
    $
    654
    
    
    $
    
    
    
    $
    1,398Derivatives1
    
    
    303
    
    
    
    71
    
    
    
    
    
    
    
    374Accounts receivable
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    58$
    1,047
    
    
    $
    725
    
    
    $
    58
    
    
    $
    1,830Number of counterparties2
    
    
    14
    
    
    
    5
    
    
    
    Largest counterparty (%)
    
    
    31.5
    
    
    
    35.1
    
    
    
    
 Concentrations of credit risk At December 31, 2004United States
    
    
    Canada
    
    
    Other international
    
    
    TotalCash and equivalents
    
    $
    1,172
    
    
    $
    69
    
    
    $
    157
    
    
    $
    1,398Derivatives1
    
    
    145
    
    
    
    193
    
    
    
    36
    
    
    
    374Accounts receivable
    
    
    7
    
    
    
    22
    
    
    
    29
    
    
    
    58$
    1,324
    
    
    $
    284
    
    
    $
    222
    
    
    $
    1,830
   1.
    
    The amounts presented reflect the net credit exposure after considering the effect of master
netting agreements.2.
    
    For cash and equivalents and derivatives combined. f ) Risks relating to the use of derivatives By using derivatives, in addition to credit
risk, we are affected by market risk and market
liquidity risk. Market risk is the risk that the
fair value of a derivative might be adversely
affected by a change in commodity prices,
interest rates, gold lease rates, or currency
exchange rates, and that this in turn affects our
financial condition. We manage market risk by
establishing and monitoring parameters that limit
the types and degree of market risk that may be
undertaken. We mitigate this risk by establishing
trading agreements with counterparties under
which we are not required to post any collateral
or make any margin calls on
our derivatives. Our counterparties cannot
require settlement solely because of an adverse
change in the fair value of a derivative. Market liquidity risk is the risk that a
derivative cannot be eliminated quickly, by
either liquidating it or by establishing an
offsetting position. Under the terms of our
trading agreements, counterparties cannot require
us to immediately settle outstanding derivatives,
except upon the occurrence of customary events of
default such as covenant breaches, including
financial covenants, insolvency or bankruptcy. We
generally mitigate market liquidity risk by
spreading out the maturity of our derivatives
over time. 106 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17.Other Long-Term Obligations At December 31
    
    2004
    
    
    2003Asset retirement obligations
    
    $
    334
    
    
    $
    282Pension benefits (note 22)
    
    
    49
    
    
    
    48Post-retirement benefits (note 22)
    
    
    26
    
    
    
    26Derivative liabilities (note 16c)
    
    
    52
    
    
    
    70Restricted stock units (note 21b)
    
    
    6
    
    
    
    10Other
    
    
    32
    
    
    
    28$
    499
    
    
    $
    464
 a) Asset retirement obligations (AROs) 2004
    
    
    2003At January 1
    
    $
    318
    
    
    $
    334AROs incurred in the period
    
    
    14
    
    
    
    Impact of revisions to expected
cash flowsAdjustments to carrying
amount of assets
    
    
    32
    
    
    
    Charged to earnings
    
    
    22
    
    
    
    10SettlementsCash payments
    
    
    (33
    )
    
    
    (40
    )Settlement gains
    
    
    (4
    )
    
    
    (3
    )Accretion
    
    
    18
    
    
    
    17At December 31
    
    
    367
    
    
    
    318Current part
    
    
    (33
    )
    
    
    (36
    )$
    334
    
    
    $
    282
 In 2003 we adopted FAS 143 and changed our
accounting policy for reclamation and closure
costs. Previously we accrued estimated
reclamation and closure costs over the life of
our mines using the units-of-production method
based on the estimated recoverable ounces of gold
in proven and probable reserves. AROs arise from the acquisition, development,
construction and normal operation of mining
property, plant and equipment, due to government
controls and regulations that protect the
environment on the closure and reclamation of
mining properties. Under FAS 143 we record the
fair value of an ARO when it is incurred. At
operating mines the effect is recorded as an
adjustment to the corresponding asset carrying
amount. At closed mines, the adjustment is
charged directly to earnings. The fair value of
AROs are measured by discounting the expected
cash flows using a discount factor that
reflects the risk-free rate of interest. We
prepare estimates of timing and amount of
expected cash flows when an ARO is incurred,
which are updated to reflect changes in facts and
circumstances, or if we are required to submit
updated mine closure plans to regulatory
authorities. The principal factors that can cause
expected cash flows to change are: the
construction of new processing facilities;
changes in the
quantities of material in reserves and a
corresponding change in the life of mine plan;
changing ore characteristics can impact required
environmental protection measures and related
costs; changes in water quality that impact the
extent of water treatment required; and changes
in laws and regulations governing the protection
of the environment. In general, as the end of the
mine life becomes nearer, the reliability of
expected cash flows increases. AROs are adjusted
to reflect the passage of time (accretion)
calculated by applying the discount factor
implicit in the initial fair value measurement to
the beginning of period carrying amount of the
AROs. Accretion is recorded in earnings as an
operating expense. Upon settlement of an ARO we
record a gain or loss if the actual cost differs
from the carrying amount of the ARO. Settlement
gains are classified in other (income) expense.
Other environmental remediation costs that are
not AROs as defined by FAS 143 are expensed as
incurred (see note 6). The major parts of the carrying amount of AROs at
the end of 2004 relate to: tailing and heap leach
pad closure/rehabilitation  $69 million;
demolition of buildings/mine facilities  $29
million; ongoing water treatment  $93 million;
ongoing care and maintenance  $89 million; and other
activities  $87 million. 18.Deferred Income Taxes Recognition and measurement We record deferred income tax assets and
liabilities where temporary differences exist
between the carrying amounts of assets and
liabilities in our balance sheet and their tax
bases. The measurement and recognition of
deferred income tax assets and liabilities takes
into 107 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS account: enacted rates that will apply when
temporary differences reverse; interpretations of
relevant tax legislation; tax planning
strategies; estimates of the tax bases of assets
and liabilities; and the deductibility of
expenditures for income tax purposes. We
recognize the effect of changes in our assessment
of these estimates and factors when they occur.
Changes in deferred income tax assets,
liabilities and valuation allowances are
allocated between net income and other
comprehensive income based on the source of the
change. Deferred income taxes have not been provided on
the undistributed earnings of foreign
subsidiaries, which are considered to be
reinvested indefinitely outside Canada. The
determination of the unrecorded deferred income
tax liability is not considered practicable. Sources of deferred income tax assets and liabilities At December 31
    
    2004
    
    

20031Deferred tax assetsTax loss carry forwards
    
    $
    295
    
    
    $
    388Capital tax loss carry forwards
    
    
    48
    
    
    
    52Alternative minimum tax
(AMT) credits
    
    
    121
    
    
    
    120Foreign tax credits
    
    
    3
    
    
    
    3Asset retirement obligations
    
    
    106
    
    
    
    85Property, plant and equipment
    
    
    158
    
    
    
    129Post-retirement benefit obligations
    
    
    18
    
    
    
    21Other
    
    
    9
    
    
    
    40Gross deferred tax assets
    
    
    758
    
    
    
    838Valuation allowances
    
    
    (578
    )
    
    
    (554
    )Net deferred tax assets
    
    
    180
    
    
    
    284Deferred tax liabilitiesProperty, plant and equipment
    
    
    (127
    )
    
    
    (443
    )Derivatives
    
    
    (95
    )
    
    
    (99
    )$
    (42
    )
    
    $
    (258
    )Classification:Non-current assets (note 14)
    
    $
    97
    
    
    $
    59Non-current liabilities
    
    
    (139
    )
    
    
    (317
    )$
    (42
    )
    
    $
    (258
    )
   1.
    
    2003 deferred tax asset balances for
property, plant and equipment and other have
been restated with a corresponding restatement
of valuation allowances. Expiry dates of tax losses and AMT credits Noexpiry05
    
    
    06
    
    
    07
    
    
    08
    
    
    09+
    
    
    date
    
    
    TotalTax losses1Chile
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    670
    
    
    $
    670Tanzania
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152
    
    
    
    152U.S.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    
    
    
    
    224Other
    
    
    28
    
    
    
    23
    
    
    
    6
    
    
    
    14
    
    
    
    109
    
    
    
    24
    
    
    
    204$
    28
    
    
    $
    23
    
    
    $
    6
    
    
    $
    14
    
    
    $
    333
    
    
    $
    846
    
    
    $
    1,250AMT credits2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    121
    
    
    $
    121
   1.
    
    Represents the gross amount of tax loss
carry forwards translated at closing exchange
rates at December 31, 2004.2.
    
    Represents the amounts deductible against
future taxes payable in years when taxes
payable exceeds minimum tax as defined by
United States tax legislation. Valuation allowances We consider the need to record a valuation
allowance against deferred tax assets on a
country-by-country basis, taking into account the
effects of local tax law. A valuation allowance
is not recorded when we conclude that sufficient
positive evidence exists to demonstrate that it
is more likely than not that a deferred tax asset
will be realized. The main factors considered
are: >
    
    historic and expected future levels of future taxable income;>
    
    opportunities to implement tax plans that affect whether tax assets can be realized; and>
    
    the nature, amount and expected timing of reversal of taxable temporary differences.
 Levels of future taxable income are mainly
affected by: market gold and silver prices;
forecasted future costs and expenses to produce
gold reserves; quantities of proven and probable
gold reserves; market interest rates and foreign
currency exchange rates. If these factors or
other circumstances change, we record an
adjustment to the valuation allowances to reflect
our latest assessment of the amount of deferred
tax assets that will more likely than not be
realized. A valuation allowance of $34 million has been set
up against certain deferred tax assets in
Argentina. Historically, we have had no income
generating 108 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS operations in Argentina, but following the
production start-up at Veladero in 2005, various factors will affect
future levels of taxable income in Argentina, including the volume of
gold produced and sold, gold selling prices and costs incurred to
produce gold. It is reasonably possible that an adjustment will be
made to this valuation allowance in the near term.
A valuation allowance of $189 million has been set up against certain deferred
tax assets in the United States. A majority of this valuation allowance relates to
AMT credits which have an unlimited carry forward period. Increasing levels of future
taxable income due to gold selling prices and other factors and circumstances may result
in an adjustment to this valuation allowance. Source of changes in deferred tax balances For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Temporary differencesProperty, plant
and equipment
    
    $
    (86
    )
    
    $
    26
    
    
    $
    (30
    )Asset retirement obligations
    
    
    (21
    )
    
    
    (2
    )
    
    
    4Tax loss carry forwards
    
    
    93
    
    
    
    (10
    )
    
    
    (22
    )Derivatives
    
    
    (4
    )
    
    
    82
    
    
    
    13Other
    
    
    (5
    )
    
    
    4
    
    
    
    (5
    )$
    (23
    )
    
    $
    100
    
    
    $
    (40
    )Adjustment to deferred
tax balances due to
change in tax status1
    
    
    (81
    )
    
    
    
    
    
    
    Release of beginning of year
valuation allowances
    
    
    (5
    )
    
    
    (62
    )
    
    
    Outcome of tax uncertainties
    
    
    (120
    )
    
    
    
    
    
    
    (22
    )$
    (229
    )
    
    $
    38
    
    
    $
    (62
    )Intraperiod allocation to:Income before
income taxes
    
    $
    (225
    )
    
    $
    (49
    )
    
    $
    (75
    )Cumulative
accounting changes
    
    
    
    
    
    
    5
    
    
    
    OCI
    
    
    (4
    )
    
    
    82
    
    
    
    17Balance sheet reclassifications
    
    
    13
    
    
    
    23
    
    
    
    (17
    )$
    (216
    )
    
    $
    61
    
    
    $
    (75
    )
   1.
    
    Relates to change in tax status in Australia (note 7). 19.Capital Stock a) Common shares Our authorized capital stock includes an
unlimited number of common shares (issued
533,575,185 shares); 9,764,929 First preferred
shares, Series A (issued nil); 9,047,619 Series B
(issued nil); 1 Series C special voting share
(issued 1); and 14,726,854 Second preferred
shares Series A (issued nil). During 2004, we repurchased 4.47 million common
shares (2003: 8.75 million) for $95 million
(2003: $154 million), at an average cost of
$21.20 per share (2003: $17.56). This resulted in
a reduction of common share capital by $35
million (2003: $67 million) and a $60 million
charge (being the difference between the
repurchase cost and the average historic book
value of shares repurchased) to retained earnings
(2003: $87 million). In 2004, we declared and paid dividends in US
dollars totaling $0.22 per share (2003  $0.22
per share, 2002   $0.22 per share). b) Exchangeable Shares In connection with a 1998 acquisition,
Barrick Gold Inc. (BGI), issued 11.1 million
BGI exchangeable shares, which are each
exchangeable for 0.53 of a Barrick common share
at any time at the option of the holder, and have
essentially the same voting, dividend (payable in
Canadian dollars), and other rights as 0.53 of a
Barrick common share. BGI is a subsidiary that
holds our interest in the Hemlo and Eskay Creek
Mines. At December 31, 2004,
1.4 million (2003  1.5
million) BGI exchangeable shares were
outstanding, which are equivalent to 0.7 million
Barrick common shares (2003  0.8 million common
shares). The equivalent common share amounts are
reflected in the number of common shares
outstanding. At any time on or after December 31, 2008, or
when fewer than 1.4 million BGI exchangeable
shares are outstanding, we have the right to
require the exchange of each outstanding BGI
exchangeable share for 0.53 of a 109 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Barrick common share. While there are
exchangeable shares outstanding, we are required
to present summary consolidated financial
information relating to BGI. Summarized financial information for BGI For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Total revenues
and other income
    
    $
    216
    
    
    $
    226
    
    
    $
    203Less: costs and expenses
    
    
    287
    
    
    
    238
    
    
    
    191Income (loss) before taxes
    
    $
    (71
    )
    
    $
    (12
    )
    
    $
    12Net loss
    
    $
    (41
    )
    
    $
    (31
    )
    
    $
    (1
    )
 At December 31
    
    2004
    
    
    2003AssetsCurrent assets
    
    $
    67
    
    
    $
    81Non-current assets
    
    
    119
    
    
    
    236$
    186
    
    
    $
    317Liabilities and
shareholders equityOther current liabilities
    
    
    24
    
    
    
    20Intercompany notes payable
    
    
    395
    
    
    
    545Other long-term liabilities
    
    
    36
    
    
    
    9Deferred income taxes
    
    
    20
    
    
    
    67Shareholders equity
    
    
    (289
    )
    
    
    (324
    )$
    186
    
    
    $
    317
 20.Other Comprehensive Income (Loss) (OCI) 2004
    
    
    2003
    
    
    2002Accumulated OCI at January 1Cash flow hedge gains, net of tax of $99, $17, $nil
    
    $
    189
    
    
    $
    32
    
    
    $
    25Investments, net of tax of $nil,
$nil, $nil
    
    
    38
    
    
    
    (6
    )
    
    
    (4
    )Currency translation adjustments,
net of tax of $nil, $nil, $nil
    
    
    (147
    )
    
    
    (144
    )
    
    
    (123
    )Additional pension liability, net of tax of $nil, $nil, $nil
    
    
    (7
    )
    
    
    (7
    )
    
    
    (5
    )$
    73
    
    
    $
    (125
    )
    
    $
    (107
    )OCI for the year:Changes in fair value of cash flow
hedges
    
    
    147
    
    
    
    348
    
    
    
    49Changes in fair value of investments
    
    
    (27
    )
    
    
    37
    
    
    
    (5
    )Currency translation adjustments
    
    
    1
    
    
    
    (3
    )
    
    
    (21
    )Adjustments to pension liability
    
    
    (5
    )
    
    
    
    
    
    
    (2
    )Less: reclassification adjustments for gains/losses
recorded in earningsTransfers of cash flow hedge gains to
earnings:On recording hedged items in earnings
    
    
    (132
    )
    
    
    (91
    )
    
    
    (25
    )Hedge ineffectiveness due to changes in timing of hedged items
    
    
    (2
    )
    
    
    (18
    )
    
    
    Investments:(Gains) losses realized on sale
    
    
    (6
    )
    
    
    (4
    )
    
    
    3Other than temporary impairment
charges
    
    
    5
    
    
    
    11
    
    
    
    OCI, before tax
    
    
    (19
    )
    
    
    280
    
    
    
    (1
    )Income tax recovery (expense)
related to OCI
    
    
    4
    
    
    
    (82
    )
    
    
    (17
    )Other comprehensive income (loss), net
of tax
    
    $
    (15
    )
    
    $
    198
    
    
    $
    (18
    )Accumulated OCI at December 31Cash flow hedge gains, net of tax of
$95, $99, $17
    
    
    206
    
    
    
    189
    
    
    
    32Investments, net of tax of $nil,
$nil, $nil
    
    
    10
    
    
    
    38
    
    
    
    (6
    )Currency translation adjustments,
net of tax of $nil, $nil, $nil
    
    
    (146
    )
    
    
    (147
    )
    
    
    (144
    )Additional pension liability, net of tax of $nil, $nil, $nil
    
    
    (12
    )
    
    
    (7
    )
    
    
    (7
    )$
    58
    
    
    $
    73
    
    
    $
    (125
    )
 110 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21.Stock-Based Compensation a) Stock options Employee stock option activity (number of shares in millions)2 2004
    
    
    2003
    
    
    2002Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageShares
    
    
    price
    
    
    Shares
    
    
    price
    
    
    Shares
    
    
    priceC$ optionsAt January 1
    
    
    22
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    19Granted
    
    
    1
    
    
    $
    28
    
    
    
    5
    
    
    $
    29
    
    
    
    6
    
    
    $
    25Exercised1
    
    
    (2
    )
    
    $
    25
    
    
    
    (1
    )
    
    $
    24
    
    
    
    (4
    )
    
    $
    25Cancelled/expired
    
    
    (2
    )
    
    $
    28
    
    
    
    (1
    )
    
    $
    28
    
    
    
    (2
    )
    
    $
    34At December 31
    
    
    19
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    19US $ optionsAt January 1
    
    
    2
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    6Granted
    
    
    5
    
    
    $
    24
    
    
    
    
    
    
    
    
    
    
    
    Exercised1
    
    
    (1
    )
    
    $
    15
    
    
    
    (1
    )
    
    $
    13
    
    
    
    (2
    )
    
    $
    12Cancelled/expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    $
    25At December 31
    
    
    6
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    3
   1.
    
    The exercise price of the options is the closing share price on the day before the grant
date. They vest evenly over four years, beginning in the year after granting, and are
exercisable over 7  10 years. At December 31, 2004,
13 million (2003  1 million, 2002 
5 million) common shares, in addition to those currently outstanding, were available for
granting options.2.
    
    We are also obliged to issue about
0.3 million common shares (2003  0.5 million common shares)
in connection with outstanding stock options assumed as part of a business combination in 1999.
These options have an average exercise price of C$20 (2003  C$20) and an average remaining term of
one year. Stock options outstanding (number of shares in millions) Outstanding
    
    
    ExercisableRange of
    
    
    
    
    
    Average
    
    
    Average life
    
    
    
    
    
    
    Averageexercise prices
    
    Shares
    
    
    price
    
    
    (years)
    
    
    Shares
    
    
    priceC$ options$22   $31
    
    
    17
    
    
    $
    27
    
    
    
    7
    
    
    
    10
    
    
    $
    26$32   $43
    
    
    2
    
    
    $
    39
    
    
    
    2
    
    
    
    2
    
    
    $
    3919
    
    
    
    

    
    
    
    6
    
    
    
    12US$ options$9  $18
    
    
    1
    
    
    $
    12
    
    
    
    5
    
    
    
    
    
    
    
    $22   $37
    
    
    5
    
    
    $
    24
    
    
    
    6
    
    
    
    1
    
    
    $
    306
    
    
    
    

    
    
    
    6
    
    
    
    1
 We record compensation cost for stock options
based on the excess of the market price of the
stock at the grant date of an award over the
exercise price. Historically, the exercise price for stock
options has equaled the market price of stock at
the grant date, resulting in no compensation
cost. 111 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Option information For the years ended December 31(per share and optionamounts in dollars)
    
    2004
    
    
    2003
    
    
    2002Fair value per option
    
    $
    6.87
    
    
    $
    8.50
    
    
    $
    6.40Valuation assumptions:Expected term (years)
    
    
    5
    
    
    
    6
    
    
    
    6Volatility
    
    
    30
    %
    
    
    40
    %
    
    
    40
    %Dividend yield
    
    
    1.0
    %
    
    
    1.0
    %
    
    
    1.4
    %Risk-free interest rate
    
    
    3.8
    %
    
    
    4.5
    %
    
    
    5.0
    %Pro forma effectsNet income, as reported
    
    $
    248
    
    
    $
    200
    
    
    $
    193Stock-option expense
    
    
    (29
    )
    
    
    (24
    )
    
    
    (21
    )Pro forma net income
    
    $
    219
    
    
    $
    176
    
    
    $
    172Net income per share:As reported - Basic
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.36As reported - Diluted
    
    $
    0.46
    
    
    $
    0.37
    
    
    $
    0.36Pro forma1
    
    $
    0.41
    
    
    $
    0.33
    
    
    $
    0.32
   1. Basic and
diluted.
 b) Restricted Stock Units (RSUs)
and Deferred Share Units (DSUs) Under our RSU Plan, selected employees are
granted RSUs, where each RSU has a value equal to
one Barrick common share. RSUs vest and will be

settled on the
third anniversary of the grant date. Additional
RSUs are credited to reflect dividends paid on
Barrick common shares. RSUs are recorded at fair
value on the grant date, with a corresponding
amount recorded as deferred compensation that is
amortized on a straight-line basis over
the vesting period. Changes in the fair value of
the RSUs are recorded, with a corresponding
adjustment to deferred compensation. Compensation
expense for 2004 was $4 million (2003 - $4
million). At December 31, 2004, the weighted
average remaining contractual life of RSUs was 2
years. Under our DSU plan, Directors receive 50% of
their basic annual retainer in the form of DSUs,
with the option to elect to receive 100% of such
retainer in DSUs. Each DSU has the same value as
one Barrick common share. DSUs must be retained
until the Director leaves the Board, at which
time the cash value of the DSUs will be paid out.
Additional DSUs are credited to reflect dividends
paid on Barrick common shares. DSUs are recorded
at fair value on the grant date and are adjusted
for changes in fair value. Directors fee expense
for DSUs for 2004 was $0.6 million (2003: $0.2
million). DSU and RSU activity Fair value
    
    
    
    
    
    
    Fair valueDSUs
    
    
    per unit
    
    
    RSUs
    
    
    per unit(in thousands)
    
    
    (in dollars)
    
    
    (in thousands)
    
    
    (in dollars)At December 31, 2001
    
    
    
    
    
    $
    
    
    
    
    515
    
    
    $
    16Canceled
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    20Dividends
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    17At December 31, 2002
    
    
    
    
    
    $
    
    
    
    
    489
    
    
    $
    15Canceled
    
    
    
    
    
    
    
    
    
    
    (171
    )
    
    
    17Granted
    
    
    8
    
    
    
    21
    
    
    
    130
    
    
    
    22Dividends
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    20At December 31, 2003
    
    
    8
    
    
    $
    23
    
    
    
    452
    
    
    $
    23Canceled
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    23Settled
    
    
    
    
    
    
    
    
    
    
    (293
    )
    
    
    25Granted
    
    
    23
    
    
    
    22
    
    
    
    131
    
    
    
    24Dividends
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    20At December 31, 2004
    
    
    31
    
    
    $
    24
    
    
    
    235
    
    
    $
    24
 112 BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 22. Post-Retirement Benefits a) Defined contribution pension plans Certain employees take part in defined
contribution employee benefit plans. We also have
a retirement plan for certain officers of the
Company, under which we contribute 15% of the
officers annual salary and bonus. Our share of
contributions to these plans, which is expensed
in the year it is earned by the employee, was $19
million in 2004, $16 million in 2003 and $13
million in 2002. b) Defined benefit pension plans We have one qualified defined benefit pension
plan that covers certain of our United States
employees and provides benefits based on
employees years of service. Our policy is to
fund the amounts necessary on an actuarial basis
to provide enough assets to meet the benefits
payable to plan members under the Employee
Retirement Income Security Act of 1974.
Independent trustees administer assets of the
plans, which are invested mainly in fixed-income
and equity securities. On December 31, 2004, the
qualified defined benefit plan was amended to
freeze benefit accruals for all employees,
resulting in a curtailment gain of $2 million. As well as the qualified plan, we have
nonqualified defined benefit pension plans
covering certain employees and former directors
of the Company. An irrevocable trust (rabbi
trust) was set up to fund these plans. The fair
value of assets held in this trust was $31
million in 2004 (2003  $32 million), and is
recorded in our consolidated balance sheet under
Investments. Actuarial gains and losses arise when the actual
return on plan assets differs from the expected
return on plan assets for a period, or when the
expected and actuarial accrued benefit
obligations differ at the end of the year. We
amortize actuarial gains and losses over the
average remaining life expectancy of plan
participants, in excess of a 10% corridor. Pension expense For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Return on plan assets
    
    $
    (11
    )
    
    $
    (11
    )
    
    $
    (17
    )Service cost
    
    
    
    
    
    
    
    
    
    
    3Interest cost
    
    
    12
    
    
    
    14
    
    
    
    16Actuarial gains (losses)
    
    
    1
    
    
    
    
    
    
    
    (1
    )Gain (loss) on
curtailment/settlement
    
    
    (2
    )
    
    
    1
    
    
    
    1$
    
    
    
    $
    4
    
    
    $
    2
 c) Pension plan information Fair value of plan assets For the years endedDecember 31
    
    2004
    
    
    2003Balance at January 1
    
    $
    166
    
    
    $
    170Actual return on plan assets
    
    
    14
    
    
    
    19Company contributions
    
    
    6
    
    
    
    8Benefits paid
    
    
    (16
    )
    
    
    (31
    )Balance at December 31
    
    $
    170
    
    
    $
    166
 At December 31
    
    
    
    
    
    
    2004
    
    
    
    
    
    2003Target

    
    Actual

    
    Actual
    
    
    ActualComposition of
plan assets:Equity securities
    
    
    50
    %
    
    
    46
    %
    
    $
    78
    
    
    $
    66Debt securities
    
    
    50
    %
    
    
    54
    %
    
    
    92
    
    
    
    100100
    %
    
    
    100
    %
    
    $
    170
    
    
    $
    166
 113

BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Projected benefit obligation (PBO)
 For the years endedDecember 31
    
    2004
    
    
    2003Balance at January 1
    
    $
    221
    
    
    $
    227Interest cost
    
    
    12
    
    
    
    14Actuarial losses
    
    
    3
    
    
    
    11Benefits paid
    
    
    (16
    )
    
    
    (31
    )Curtailments/settlements
    
    
    (2
    )
    
    
    Balance at December 31
    
    $
    218
    
    
    $
    221Funded status1
    
    $
    (48
    )
    
    $
    (55
    )Unrecognized actuarial losses
    
    
    11
    
    
    
    11Net benefit liability recorded
    
    $
    (37
    )
    
    $
    (44
    )ABO2,3
    
    $
    217
    
    
    $
    217
  1.
    Represents the fair value of plan assets
less projected benefit obligations. Plan assets
exclude investments held in a rabbi trust that
are recorded separately on our balance sheet
under Investments (fair value $31 million at
December 31, 2004). In the year ending December
31, 2005, we do not expect to make any further
contributions.2.
    For 2004 we used a measurement date of
December 31, 2004 to calculate accumulated
benefit obligations.3.
    Represents the ABO for all plans. The ABO for
plans where the PBO exceeds the fair value of
plan assets was $49 million (2003: $217
million). Investment strategy We employ a total return investment approach,
whereby a mix of equities and fixed-income
investments is used to maximize the long-term
return of plan assets. Risk is diversified
through a blend of equity and fixed-income
investments, and also across geography and market
capitalization in US large cap stocks, US small
cap stocks, and international securities.
Investment risk is measured and monitored on an
ongoing basis through annual liability
measurements, periodic asset/liability studies,
and quarterly investment portfolio reviews. Rate of return on plan assets In estimating the long-term rate of return
for plan assets, historical markets are studied
and long-term historical returns on equities and
fixed-income investments reflect the widely
accepted capital market principle that assets
with higher volatility generate a greater return
over the long run. Current market factors such as
inflation and interest rates are evaluated before
long-term capital market assumptions are
finalized. Expected future benefit payments For the years ending December 312005
    
    $
    162006
    
    
    152007
    
    
    162008
    
    
    162009
    
    
    162010  2014
    
    $
    89
 Total recorded benefit liability At December 31
    
    2004
    
    
    2003Current
    
    $
    
    
    
    $
    3Non-current
    
    
    37
    
    
    
    41Benefit plan liability
    
    $
    37
    
    
    $
    44Additional minimum liability (note 20)
    
    
    12
    
    
    
    7$
    49
    
    
    $
    51
 d) Actuarial assumptions  For the years endedDecember 31
    
    2004

    
    2003

    
    2002Discount rate1Benefit obligation
    
    
    5.50
    %
    
    
    6.25
    %
    
    
    6.50
    %Pension cost
    
    
    6.25
    %
    
    
    6.50
    %
    
    
    6.75
    %Return on plan assets1
    
    
    7.00
    %
    
    
    7.00
    %
    
    
    8.50
    %Wage increases
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %  1.
    Effect of a one-percent change: Discount
rate: $22 million change in ABO and change in
pension cost; Return on plan assets: $2 million
change in pension cost. e) Other post-retirement benefits We provide post-retirement medical, dental,
and life insurance benefits to certain employees.
We use the corridor approach in the accounting
for post-retirement benefits. Actuarial gains and
losses resulting from variances between actual
results and economic estimates or actuarial
assumptions are deferred and amortized over the
average remaining life expectancy of participants
when the net gains or losses exceed 10% of the
accumulated post-retirement benefit obligation.
In 2004, we recorded a benefit expense of $2
million (2003  $nil, 2002  $nil). 114

BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other post-retirement benefits expense For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Interest cost
    
    $
    2
    
    
    $
    1
    
    
    $
    2Prior service cost
    
    
    
    
    
    
    
    
    
    
    (1
    )Curtailments/settlements
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )$
    2
    
    
    $
    
    
    
    $
    
 Fair value of plan assets For the years endedDecember 31
    
    2004
    
    
    2003Balance at January 1
    
    $
    
    
    
    $
    Contributions
    
    
    2
    
    
    
    2Benefits paid
    
    
    (2
    )
    
    
    (2
    )Balance at December 31
    
    $
    
    
    
    $
    
 Accumulated post-retirement
benefit obligation (APBO) For the years endedDecember 31
    
    2004
    
    
    2003Balance at January 1
    
    $
    24
    
    
    $
    28Interest cost
    
    
    2
    
    
    
    1Actuarial losses
    
    
    5
    
    
    
    (3
    )Benefits paid
    
    
    (2
    )
    
    
    (2
    )Balance at December 31
    
    $
    29
    
    
    $
    24Funded status
    
    
    (29
    )
    
    
    (24
    )Unrecognized actuarial losses
    
    
    1
    
    
    
    (4
    )Net benefit liability recorded
    
    $
    (28
    )
    
    $
    (28
    )
 We have assumed a health care cost trend of 10%
in 2004, decreasing ratability to 5% in 2009 and
thereafter. The assumed health care cost trend
had a minimal effect on the amounts reported. A one percentage point change
in the assumed health care cost trend rate at
December 31, 2004 would have increased the
post-retirement obligation by $3 million or
decreased the post-retirement benefit obligation
by $2 million and would have had no significant
effect on the benefit expense for 2004. Expected future benefit payments For the years ending December 312005
    
    $
    22006
    
    
    22007
    
    
    22008
    
    
    22009
    
    
    22010  2014
    
    $
    9
 23. Contingencies, Litigation and Claims Certain conditions may exist as of the date
the financial statements are issued, which may
result in a loss to the Company but which will
only be resolved when one or more future events
occur or fail to occur. In assessing loss
contingencies related to legal proceedings that
are pending against us or unasserted claims that
may result in such proceedings, the Company and
its legal counsel evaluate the perceived merits
of any legal proceedings or unasserted claims as
well as the perceived merits of the amount of
relief sought or expected to be sought. If the assessment of a contingency suggests that
a loss is probable, and the amount can be
reliably estimated, then a loss is recorded. When
a contingent loss is not probable but is
reasonably possible, or is probable but the
amount of loss cannot be reliably estimated, then
details of the contingent loss are disclosed.
Loss contingencies considered remote are
generally not disclosed unless they involve
guarantees, in which case we disclose the nature
of the guarantee. Legal fees incurred in
connection with pending legal proceedings are
expensed as incurred. Bre-X Minerals In 1998, we were added as a defendant in a
class action lawsuit initiated against Bre-X
Minerals Ltd., and certain others in the United
States District Court for the Eastern District of
Texas, Texarkana Division. The class action
alleges, among other things, that statements made
by us in connection with our efforts to secure
the right to develop and operate the Busang gold
deposit in East Kalimantan, Indonesia were
materially false and 115
BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS misleading and omitted to state material
facts relating to the preliminary due diligence
investigation undertaken by us in late 1996. On March 31, 2003, the Court denied all of the
Plaintiffs motions to certify the case as a
class action. The Plaintiffs have not filed an
interlocutory appeal of the Courts decision
denying class certification to the Fifth Circuit
Court of Appeals. On June 2, 2003, the Plaintiffs
submitted a proposed Trial and Case Management
Plan, suggesting that the Plan would cure the
defects in the Plaintiffs motions to certify the
class. The Court has taken no action with respect
to the proposed Trial and Case Management Plan.
The Plaintiffs case against the Defendants may
now proceed in due course, but not on behalf of a
class of Plaintiffs but only with respect to the
specific claims of the Plaintiffs named in the
lawsuit. Having failed to certify the case as a
class action, we believe that the likelihood of
any of the named Defendants succeeding against
Barrick with respect to their claims for
securities fraud is remote. The amount of
potential loss, if any, which we may incur
arising out of the Plaintiffs claims is not
determinable. Blanchard complaint On January 7, 2003, we were served with a
Complaint for Injunctive Relief by Blanchard and
Company, Inc. (Blanchard), and Herbert Davies
(Davies). The complaint, which is pending in
the U.S. District Court for the Eastern District
of Louisiana, also names J.P. Morgan Chase &
Company (J.P. Morgan) as a defendant, along
with an unspecified number of additional
defendants to be named later. The complaint,
which has been amended several times, alleges
that we and bullion banks with whom we entered
into spot deferred gold sales contracts have
manipulated the price of gold, in violation of
U.S. anti-trust laws and the Louisiana Unfair
Trade Practices and Consumer Protection Law.
Blanchard and Davies both allege that they have
been injured as a seller of gold due to reduced
interest in gold as an investment. The complaint
seeks damages and an injunction terminating
certain of our trading agreements with J.P.
Morgan and other bullion banks. In September 2003
the Court issued an Order granting in part and denying in part Barricks motions to
dismiss this action. Discovery has commenced in
the case and a trial date has been tentatively
set for July 2005. We intend to defend the action
vigorously. McKenzie complaint On September 21, 2004, a putative class
action complaint was filed in the U.S. District
Court for the Eastern District of Louisiana
against Barrick and J.P. Morgan. The plaintiffs,
Dr. Gregg McKenzie and others are alleged
purchasers of gold and gold derivatives. The
complaint alleges violations of the U.S. anti-trust laws
and also of the Commodity Exchange Act, based
upon the same conduct as alleged in the Blanchard
complaint. The complaint seeks damages and an
injunction terminating certain of our trading
agreements with J.P. Morgan. On December 17,
2004, a second and substantially identical
complaint was filed in the same court against the
same defendants. Barrick has not yet been served
with this second complaint. Barrick intends to
defend both actions vigorously. Wagner complaint On June 12, 2003, a complaint was filed
against Barrick and several of its current or
former officers in the U.S. District Court for
the Southern District of New York. The complaint
is on behalf of Barrick shareholders who
purchased Barrick shares between February 14,
2002 and September 26, 2002. It alleges that
Barrick and the individual defendants violated
U.S. securities laws by making false and
misleading statements concerning Barricks
projected operating results and earnings in 2002.
The complaint seeks an unspecified amount of
damages. Other parties on behalf of the same
proposed class of Barrick shareholders filed
several other complaints, making the same basic
allegations against the same defendants. In
September 2003, the cases were consolidated into
a single action in the Southern District of New
York. The plaintiffs filed a Consolidated and/or
Amended Complaint on November 5, 2003. On January
14, 2004 Barrick filed a motion to dismiss the
complaint. On September 29, 2004, the Court
issued an order granting in part and denying in
part Barricks motion to dismiss the action. The
Court granted the 116

BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS plaintiffs leave to file a Second Amended
Complaint, which was filed on October 20, 2004.
The plaintiffs filed a Third Amended Complaint on
January 6, 2005. We intend to defend the action
vigorously. Wilcox complaint On September 8, 2004, two of our U.S.
subsidiaries, Homestake Mining Company of
California (Home-stake California) and
Homestake Mining Company (Homestake) were
served with a First Amended Complaint by persons
alleging to be current or former residents of a
rural area near the former Grants Uranium Mill.
The Complaint, which was filed in the U.S.
District Court for the District of New Mexico,
identifies 26 plaintiffs. Homestake and Homestake
California, along with an unspecified number of
unidentified defendants, are named as defendants.
The plaintiffs allege that they have suffered a
variety of physical, emotional and financial
injuries as a result of exposure to radioactive
and other hazardous substances. The Complaint
seeks an unspecified amount of damages. A motion to dismiss the claim
was filed with the Court, but the Court has not
yet ruled on the motion. We intend to defend the
action vigorously. 24. Joint Ventures Our major interests in joint ventures are a
50% interest in the Kalgoorlie Mine in Australia;
a 50% interest in the Round Mountain Mine in the
United States; and a 50% interest in the Hemlo
Mine in Canada. Summary financial information (100%) Income statement and cash flow information For the years endedDecember 31
    
    2004
    
    
    2003
    
    
    2002Revenues
    
    $
    889
    
    
    $
    775
    
    
    $
    650Costs and expenses
    
    
    663
    
    
    
    638
    
    
    
    582Net income
    
    $
    226
    
    
    $
    137
    
    
    $
    68Operating activities1
    
    $
    291
    
    
    $
    127
    
    
    $
    175Investing activities1
    
    $
    (46
    )
    
    $
    (60
    )
    
    $
    (54
    )Financing activities1
    
    $
    
    
    
    $
    
    
    
    $
    
   1.
    Net cash inflow (outflow). Balance sheet information At December 31
    
    2004
    
    
    2003AssetsInventories
    
    $
    102
    
    
    $
    99Property, plant and equipment
    
    
    506
    
    
    
    543Other assets
    
    
    93
    
    
    
    64$
    701
    
    
    $
    706LiabilitiesCurrent liabilities
    
    $
    87
    
    
    $
    77Long-term obligations
    
    
    110
    
    
    
    104$
    197
    
    
    $
    181
 25. Differences from Canadian Generally Accepted Accounting Principles These consolidated financial statements have
been prepared in accordance with US GAAP. A
reconciliation of our income statement and
balance sheet between US GAAP and Canadian GAAP
is presented below together with a description of
the significant measurement differences affecting
these financial statements. a) Business combinations The acquisitions of Sutton Resources Ltd.
(Sutton) and Homestake Mining Company
(Homestake), which were accounted for using the
pooling-of-interests method under US GAAP, were
accounted for as a purchase under Canadian GAAP.
Under US GAAP, the assets, liabilities and
shareholders equity of Sutton and Homestake were
combined with the Companys own recorded amounts.
Comparative figures were restated for all periods
presented prior to the acquisitions to include
the combined statements of income, cash flow and
balance sheets of the merged entities adjusted to
conform to our US GAAP accounting policies. Under
Canadian GAAP, rules which existed at the time of
the Sutton and Homestake acquisitions prior to
the effective date of CICA 1581, Business
Combinations, allowed for two possible accounting
methods, the purchase method or the
pooling-of-interests method. The selection of the
method of accounting used for business
combinations under the previous rules depended
upon whether or not 117
BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS one of the combining companies could be
identified as an acquirer. In situations where
voting shares were issued or exchanged to effect
the combination, factors relating to control over
the resultant combined company were considered.
Under these previous rules, due to the fact that
the Barrick shareholders (as a group) held more
than 50% of the voting shares of the combined
company after the acquisitions of Sutton and
Homestake, Barrick was identified as the
acquirer, thereby requiring the purchase method
to be used under Canadian GAAP. The application
of the purchase method under Canadian GAAP
required that identifiable assets and liabilities
of the acquired entity be recorded at fair values
at the date of acquisition, with any excess
purchase price allocated to goodwill. This
resulted in certain assets and liabilities being
recorded at different carrying amounts under
Canadian GAAP compared with US GAAP. These
differences arise because their fair values at
the date of acquisition differed from historic
cost, which is the basis of accounting under the
pooling-of-interests method under US GAAP. The
assets and liabilities most significantly
affected are: property, plant and equipment,
inventories, and goodwill. b) Exploration and development expenditures For Canadian GAAP purposes, we capitalize
mine development costs on our properties after
proven and probable reserves have been found as
well as on some properties where we have found
non-reserve material that does not meet all the
criteria required for classification as proven or
probable reserves. The determination as to
whether the existence of non-reserve material
should result in the capitalization of mine
development costs is based on various factors,
including: the existence and nature of known
mineralization; the location of the property (for example, whether the presence of existing mines
and ore bodies in the immediate vicinity
increases the likelihood of development of a mine
on the property); whether the ore body is an
extension of an existing producing ore body on an
adjacent property; the results of recent drilling
on the property; and the existence of a
feasibility study or other analysis to
demonstrate that mineralization is expected to be
commercially recoverable. Under US GAAP, exploration and development expenditures
incurred on properties where mineralization has
not been classified as a proven and probable
reserve under SEC rules are expensed as incurred.
Accordingly, certain expenditures are capitalized
for Canadian GAAP purposes but expensed under US
GAAP. c) Amortization of property, plant and equipment Under Canadian GAAP, amortization of
property, plant and equipment using the
units-of-production method is calculated using
proven and probable mineral reserves and
non-reserve material (when sufficient objective
evidence exists to support a conclusion that it
is probable the non-reserve material will be
produced). For US GAAP purposes, amortization is
calculated for historical capitalized costs
incurred to access specific ore blocks or areas
using only proven and probable reserves within
the specific block or area; infrastructure and
other common costs which have a useful life over
the entire mine are amortized over total
accessible proven and probable reserves of the
mine. These different methods result in a
different rate of amortization for Canadian GAAP
compared to US GAAP. In addition, a difference in the amount of
amortization expense results where differences
exist in the carrying amounts of property, plant
and equipment between US GAAP and Canadian GAAP,
due to the historic effects of the application of
GAAP to these items (for example, arising from
differences in business combinations accounting,
capitalization of exploration expenditures, and
accounting for asset retirement obligations). d) Goodwill Under Canadian GAAP, on the acquisition of
Home-stake, goodwill was identified and was
allocated to reporting units by preparing
estimates of the fair value of each reporting
unit and comparing this amount to the fair value
of assets and liabilities in the reporting unit. Under Canadian GAAP, we test goodwill for
impairment annually in the fourth quarter of our
fiscal year, however, if there is indication of
an impairment in goodwill during the year, we
will do an assessment at that time. This
impairment assessment involves estimat- 118

BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ing the fair value of each reporting unit
that includes goodwill. We compare this fair
value to the total carrying amount of the
reporting unit (including goodwill). If the fair
value exceeds this carrying amount, we consider
that goodwill is not impaired. If the fair value
is less than this carrying amount, then we
estimate the fair values of all identifiable
assets and liabilities in the reporting unit, and
compare this net fair value of assets less
liabilities to the estimated fair value of the
entire reporting unit. The difference represents
the fair value of goodwill, and if necessary, we
reduce the carrying amount of goodwill to this
fair value. e) Future income taxes Under US GAAP, acquisitions occurring prior
to January 1, 2000 have been accounted for by
grossing up assets and deferred tax liabilities
for the underlying tax effect of treating the
purchase consideration allocated to assets
acquired that is not tax deductible as a
temporary taxable difference. Under the
transition provisions of CICA 3465, that was
adopted effective January 1, 2000, the recorded
amounts of assets acquired were not restated to
reflect differences in their carrying amounts at
acquisition for tax and accounting purposes.
Consequently, under Canadian GAAP, property,
plant and equipment was $190 million lower and
future income tax liabilities were $94 million
higher than the amounts recorded under US GAAP. Where assets and liabilities are recorded at
different carrying amounts for US GAAP and
Canadian GAAP, due to differences in the
accounting policies that affect these assets and
liabilities, a difference also arises in the
amount of temporary differences that give rise to
deferred tax assets and liabilities.
Consequently, the amounts of deferred tax assets
and liabilities recorded under US GAAP differ
from the amounts of future income taxes recorded
under Canadian GAAP. f) Impairment evaluations for long-lived assets Under US GAAP, financing costs are excluded
from the evaluation of long-lived assets for
impairment purposes. Under Canadian GAAP, in
years 2003 and prior, financing costs were included in impairment
evaluations, but where an asset was impaired, the
asset was reduced to its net recoverable amount,
calculated as the estimated future undiscounted
net cash flow expected to be generated by the
asset. Under US GAAP, if assets are impaired, a
reduction in the carrying amount to estimated
fair value is required. Fair value is estimated
by discounting the expected future net cash flows
using a discount factor. The adoption of CICA
3063 under Canadian GAAP on January 1, 2004
conformed the measurement of impairment with US
GAAP prospectively for future periods. g) Investments Under US GAAP available for sale securities
are recorded at fair value, with unrealized gains
or losses included in other comprehensive income.
Under Canadian GAAP, the concept of comprehensive
income does not exist and these investments are
recorded at cost. h) Derivatives Under Canadian GAAP, derivatives that qualify
for hedge accounting treatment are recognized on
the balance sheet only to the extent that cash
has been paid or received together with
adjustments necessary to offset recognized gains
or losses arising on the hedged items. Under US
GAAP, such derivatives are recognized on the
balance sheet at fair value with a corresponding
charge or credit recorded in other comprehensive
income. i) Minimum pension liability Under US GAAP, if the accumulated pension
plan benefit obligation exceeds the market value
of plan assets, a minimum pension liability for
the excess is recognized to the extent that the
liability recorded in the balance sheet is less
than the minimum liability. Any portion of this
additional liability that relates to unrecognized
prior service cost is recognized as an intangible
asset while the remainder is charged to
comprehensive income. Canadian GAAP does not
require us to record a minimum liability and does
not have the concept of comprehensive income. 119
BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS j) Asset retirement obligations Under US GAAP, FAS 143 was adopted effective
January 1, 2003 relating to asset retirement
obligations. Under Canadian GAAP, a similar
standard was effective for our 2004 fiscal year,
CICA 3110  Asset Retirement Obligations. CICA
3110 required retroactive restatement of
financial statements for prior periods, and
accordingly comparative information for Canadian
GAAP now reflects the requirements of CICA 3110.
Both of these standards are established for the
recognition and measurement of liabilities for
legal obligations associated with the retirement
of a long-lived asset that result from its
acquisition, construction, development or normal
operation. Under US GAAP, the effect of the
adoption of FAS 143 was recorded in the income
statement for the three months ended March 31,
2003. Under Canadian GAAP, the cumulative effect
was recorded as an adjustment to the opening
retained earnings for the earliest period presented. Due to the
difference in timing of adoption of FAS 143 and
CICA 3110, the amount of amortization and
accretion recorded differ under US and Canadian
GAAP. k) Foreign currency Under US GAAP, translation adjustments that
arise on the translation of financial statements
of entities whose functional currency is not the
US dollar are reported as a component of
comprehensive income. Under Canadian GAAP, the
concept of comprehensive income does not exist
and these translation adjustments are reported as
a separate component of shareholders equity,
called cumulative translation adjustments. l) Revenue Under Canadian GAAP purchase accounting
rules, Homestake gold sales contracts existing at
the date of acquisition were recorded at fair
value and any previous deferred revenue balances
eliminated. As these contracts are delivered
into, the revenue recorded under Canadian GAAP is
reduced to the extent of the original fair value
adjustment. Under US GAAP pooling rules, existing
Homestake deferred revenue balances were carried
forward and recorded in the period of delivery.
Differences between Canadian and US GAAP revenue
arise from these different business combination
accounting practices. m) Stock-based compensation Under US GAAP, through the end of 2004 we
continued to account for stock-based compensation
using the intrinsic value method under APB 25.
Under Canadian GAAP, effective January 1, 2004,
CICA 3870, Stock-Based Compensation and Other
Stock-Based Payments became effective, and
required us to record a compensation expense in
our income statement based on the fair value of
options granted. We elected to adopt CICA 3870
retroactively with restatement of prior periods
to include an expense of the type that was
previously included under the pro forma note
disclosure. The cumulative amount of compensation
expense under Canadian GAAP was recorded within
contributed surplus in the balance sheet. The
adoption of FAS 123R under US GAAP in 2005 will
conform the accounting treatment with Canadian
GAAP for future stock option grants, but some
differences will remain between US and Canadian
GAAP for stock option grants in 2004 and prior
years due to the differing transition rules under
CICA 3870 and FAS 123R. 120 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS n) Consolidated Balance Sheets For the years ended December 31
    
    
    
    
    
    2004
    
    2003Canadian
    
    
    
    
    
    
    
    
    
    
    CanadianNotes
    
    
    US GAAP
    
    
    Adjustments
    
    
    GAAP
    
    
    US GAAP
    
    
    Adjustments
    
    
    GAAPAssetsCurrent assetsCash and equivalents
    
    
    
    
    
    $
    1,398
    
    
    $
    
    
    
    $
    1,398
    
    
    $
    970
    
    
    $
    
    
    
    $
    970Accounts receivable
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    58
    
    
    
    56
    
    
    
    
    
    
    
    56Inventories
    
    
    a
    
    
    
    215
    
    
    
    2
    
    
    
    217
    
    
    
    164
    
    
    
    3
    
    
    
    167Other current assets
    
    
    h, l
    
    
    
    286
    
    
    
    (105
    )
    
    
    181
    
    
    
    178
    
    


    
    (112
    )
    
    
    661,957
    
    
    
    (103
    )
    
    
    1,854
    
    
    
    1,368
    
    
    
    (109
    )
    
    
    1,259Investments
    
    
    g
    
    
    
    134
    
    
    
    (10
    )
    
    
    124
    
    
    
    130
    
    
    
    (38
    )
    
    
    92Property, plant
and equipment
    
    
    a, b, c, f, j
    
    
    
    3,391
    
    
    
    1,138
    
    
    
    4,529
    
    
    
    3,128
    
    
    
    1,331
    
    
    
    4,459Capitalized mining costs, net
    
    
    
    
    
    
    226
    
    
    
    
    
    
    
    226
    
    
    
    235
    
    
    
    
    
    
    
    235Goodwill
    
    
    a, d
    
    
    
    
    
    
    
    868
    
    
    
    868
    
    
    
    
    
    
    
    1,081
    
    
    
    1,081Other assets
    
    
    a, e, h, l
    
    
    
    566
    
    
    
    (333
    )
    
    
    233
    
    
    
    497
    
    
    
    (284
    )
    
    
    213Total assets
    
    
    
    
    
    $
    6,274
    
    
    $
    1,560
    
    
    $
    7,834
    
    
    $
    5,358
    
    
    $
    1,981
    
    
    $
    7,339Liabilities and Shareholders EquityAccounts payable
    
    
    
    
    
    $
    335
    
    
    $
    
    
    
    $
    335
    
    
    $
    245
    
    
    $
    
    
    
    $
    245Other current liabilities
    
    
    h, j
    
    
    
    83
    
    
    
    (11
    )
    
    
    72
    
    
    
    119
    
    
    
    14
    
    
    
    133418
    
    
    
    (11
    )
    
    
    407
    
    
    
    364
    
    
    
    14
    
    
    
    378Long-term debt
    
    
    h
    
    
    
    1,655
    
    
    
    5
    
    
    
    1,660
    
    
    
    719
    
    
    
    (1
    )
    
    
    718Other long-term obligations
    
    
    h, i, j
    
    
    
    499
    
    
    
    (28
    )
    
    
    471
    
    
    
    464
    
    
    
    (30
    )
    
    
    434Deferred/Future income tax liabilities
    
    
    e
    
    
    
    139
    
    
    
    (34
    )
    
    
    105
    
    
    
    317
    
    
    
    59
    
    
    
    376Total liabilities
    
    
    
    
    
    
    2,711
    
    
    
    (68
    )
    
    
    2,643
    
    
    
    1,864
    
    
    
    42
    
    
    
    1,906Capital stock
    
    
    a
    
    
    
    4,129
    
    
    
    859
    
    
    
    4,988
    
    
    
    4,115
    
    
    
    861
    
    
    
    4,976Retained earnings (deficit)
    
    
    a
    
    
    
    (624
    )
    
    
    819
    
    
    
    195
    
    
    
    (694
    )
    
    
    1,162
    
    
    
    468Accumulated other
comprehensive
income (loss)
    
    
    g, h, i, k
    
    
    
    58
    
    
    
    (58
    )
    
    
    
    
    
    
    73
    
    
    
    (73
    )
    
    
    Contributed surplus
    
    
    m
    
    
    
    
    
    
    
    31
    
    
    
    31
    
    
    
    
    
    
    
    13
    
    
    
    13Cumulative translation adjustments
    
    
    k
    
    
    
    
    
    
    
    (23
    )
    
    
    (23
    )
    
    
    
    
    
    
    (24
    )
    
    
    (24
    )Total shareholders equity
    
    
    
    
    
    
    3,563
    
    
    
    1,628
    
    
    
    5,191
    
    
    
    3,494
    
    
    
    1,939
    
    
    
    5,433Total liabilities and
shareholders equity
    
    
    
    
    
    $
    6,274
    
    
    $
    1,560
    
    
    $
    7,834
    
    
    $
    5,358
    
    
    $
    1,981
    
    
    $
    7,339
   1.
    Effective January 1, 2004, we adopted CICA 3870 and CICA 3110 and changed our accounting
policies for stock options and asset retirement obligations. These pronouncements were adopted
retroactively with restatement of prior periods. 121
BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS o) Reconciliation of shareholders equity At December 31, 2004Retained
    
    
    Other
    
    
    CumulativeCapital
    
    
    earnings
    
    
    comprehensive
    
    
    translationNotes
    
    
    stock
    
    
    (deficit)
    
    
    income
    
    
    adjustmentsBalance per US GAAP
    
    
    
    
    
    $
    4,129
    
    
    $
    (624
    )
    
    $
    58
    
    
    $
    Adjustments (net of tax effects):Valuation of equity issued in business combinations1
    
    
    
    
    
    
    (293
    )Cumulative effect of differences in accounting policiesAmortization of property, plant and equipment
    
    
    c
    
    
    
    
    
    
    
    183Exploration and development costs
    
    
    b
    
    
    
    
    
    
    
    159Provisions for mining assets in 2000 and 19972
    
    
    
    
    
    
    
    
    
    
    683Investments
    
    
    g
    
    
    
    
    
    
    
    
    
    
    
    (10
    )Derivatives accounted for as cash flow hedges
    
    
    h
    
    
    
    
    
    
    
    
    
    
    
    (206
    )Non-hedge derivative adjustments
    
    
    
    
    
    
    
    
    
    
    (25
    )Minimum pension liability
    
    
    i
    
    
    
    
    
    
    
    
    
    
    
    12Asset retirement obligations
    
    
    j
    
    
    
    
    
    
    
    (5
    )Interest capitalization
    
    
    p2
    
    
    
    
    
    
    
    8Stock-based compensation expense
    
    
    m
    
    
    
    
    
    
    
    (35
    )Classification of exchangeable shares
    
    
    
    
    
    
    (11
    )Other
    
    
    
    
    
    
    (1
    )
    
    
    1Cumulative effect of differences in accounting for
business combinations under the pooling-of-
interests versus the purchase methodExcess of fair value of shareholders equity
over historic book value
    
    
    a
    
    
    
    1,185
    
    
    
    
    
    
    
    122
    
    
    
    1Deficit of Sutton and Homestake at acquisition
    
    
    a
    
    
    
    
    
    
    
    749Amortization of property, plant and equipment
    
    
    c
    
    
    
    
    
    
    
    (111
    )Deferred revenue
    
    
    l
    
    
    
    
    
    
    
    (23
    )Gains on asset sales
    
    
    a
    
    
    
    
    
    
    
    (40
    )Merger related costs
    
    
    
    
    
    
    
    
    
    
    19Impairment of long-lived assets
    
    
    p7, p8
    
    
    
    
    
    
    
    (107
    )Homestake inventory
    
    
    a
    
    
    
    
    
    
    
    (23
    )Impairment of goodwill
    
    
    d
    
    
    
    
    
    
    
    (232
    )Effect of different book values of capital stock
on common share repurchases
    
    
    
    
    
    
    (21
    )
    
    
    21Deferred income taxesEffect of difference in timing of adoption of
CICA 3465 versus FAS 109
    
    
    e
    
    
    
    
    
    
    
    (284
    )Effect on deferred tax assets and liabilities
of temporary differences for US GAAP and
Canadian GAAP purposes
    
    
    e
    
    
    
    
    
    
    
    16Tax valuation allowances
    
    
    p3
    
    
    
    
    
    
    
    (135
    )Reclassification of translation adjustments
    
    
    k
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    (24
    )Balance per Canadian GAAP
    
    
    
    
    
    $
    4,988
    
    
    $
    195
    
    
    $
    
    
    
    $
    (23
    )
   1.
 In determining the value of the shares exchanged in acquisitions, for accounting purposes
under US GAAP we used the unadjusted quoted market prices of our shares. For Canadian GAAP
purposes, the value was adjusted by a 5% to 20% discount reflecting the fact that the market value
for a large block of common shares is less than our quoted share price. The recognition of this
discount to the value of common shares issued for Canadian GAAP purposes resulted in a reduction in
the value of the shares for accounting purposes and cost of acquisitions by $293 million.2. The impact of applying US GAAP in calculating the provisions for mining assets in 2000 and 1997
was to reduce property, plant and equipment by $780 million offset by future income taxes of $97
million for a net reduction in shareholders equity of $683 million. 122 BARRICK Annual Report 2004




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS p) Reconciliation of consolidated net income For the years ended December 31
    
    Notes
    
    
    2004
    
    
    2003
    
    
    2002Net income  US GAAP
    
    
    
    
    
    $
    248
    
    
    $
    200
    
    
    $
    193Amortization of property, plant and equipment
    
    
    c
    
    
    
    (16
    )
    
    
    4
    
    
    
    28Exploration and development expenditures
    
    
    b
    
    
    
    25
    
    
    
    53
    
    
    
    52Asset retirement obligations
    
    
    j
    
    
    
    1
    
    
    
    10
    
    
    
    (9
    )Cumulative effect of accounting changes under US GAAP
    
    
    c, j
    
    
    
    
    
    
    
    17
    
    
    
    Gains on asset sales1
    
    
    a
    
    
    
    (32
    )
    
    
    (10
    )
    
    
    Interest capitalized2
    
    
    
    
    
    
    4
    
    
    
    9
    
    
    
    Release of deferred income tax valuation allowances3
    
    
    a, e
    
    
    
    (29
    )
    
    
    (87
    )
    
    
    (19
    )Future income tax expense4
    
    
    e
    
    
    
    60
    
    
    
    10
    
    
    
    15Deferred revenue
    
    
    l
    
    
    
    
    
    
    
    (29
    )
    
    
    (20
    )Non-hedge derivative adjustments5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26
    )Homestake inventory6
    
    
    a
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (21
    )Impairment of goodwill7
    
    
    d
    
    
    
    (184
    )
    
    
    (48
    )
    
    
    Impairment of long-lived assets8
    
    
    
    
    
    
    (160
    )
    
    
    
    
    
    
    Stock-based compensation expense9
    
    
    
    
    
    
    (21
    )
    
    
    (12
    )
    
    
    (2
    )Other items
    
    
    
    
    
    
    3
    
    
    
    2
    
    
    
    11Net income
(loss)  Canadian GAAP
    
    
    
    
    
    $
    (102
    )
    
    $
    117
    
    
    $
    202Net income (loss) per share (dollars)Basic and fully diluted
    
    
    
    
    
    $
    (0.19
    )
    
    $
    0.22
    
    
    $
    0.37
   1. The gains on sale under Canadian GAAP are different from US GAAP due to the fact that the
carrying amount of assets sold was higher under Canadian GAAP.2. Under Canadian GAAP the Lagunas Norte and Veladero projects met the criteria for interest
capitalization earlier than under US GAAP.3. In 2004, a release of valuation allowance of $29 million was recorded as a reduction of goodwill
under Canadian GAAP, but this amount was recorded in earnings under US GAAP. In 2003, under
Canadian GAAP, differences in the carrying amount of certain assets recorded at fair value at the
acquisition of Homestake resulted in valuation allowances totaling $23 million not being
historically required under Canadian GAAP. The remaining amount in 2003 relates to a release of
valuation allowances under US GAAP totaling $118 million that has been recorded as a reduction of
goodwill and other intangible assets under Canadian GAAP, offset by the release of certain
valuation allowances to earnings under Canadian GAAP totaling $54 million.4. The adjustment to future tax expense reflects the reversal of temporary differences under
Canadian GAAP caused by other adjustments that were made to reconcile US GAAP net income to
Canadian GAAP net income. The adjustment also reflects other differences in accounting for
income taxes as described in note 25e.5. Certain derivatives classified as non-hedge derivatives under US GAAP were accounted for
under Canadian GAAP as either hedge derivatives; or recorded at cost with gains and losses
recorded either at maturity or when losses were determined to be other than temporary.6. Certain ore in stockpile and in process inventory held by Homestake, which was adjusted
to fair value at the date of acquisition, caused an adjustment to cost of sales when the
inventory was processed and sold.7. In 2004, an impairment charge of $184 million (2003  $48 million) was recorded against
goodwill that arose in the Homestake merger under Canadian GAAP.8. Various exploration properties in Peru were written down by $67 million under US GAAP in 2004
on completion of an impairment test. The carrying amount of these properties was $nil under
Canadian GAAP due to historic differences in the purchase accounting treatment between US and
Canadian GAAP when the properties were originally acquired in 1996. Under Canadian GAAP,
impairment charges totaling $227 million were recorded against the carrying amount of the
Cowal development project and various Australian exploration-stage properties acquired in the
Homestake merger whose carrying amounts are higher than US GAAP because they were recorded at
fair value at the date of acquistition.9. Under Canadian GAAP a new accounting standard was adopted in 2004 that requires the expensing
of stock options. The new Canadian GAAP accounting standard was adopted retroactively with restatement of prior
periods. Under US GAAP, the adoption of FAS 123R in 2005 will conform the accounting treatment of
stock options, although due to differing transitional rules under US GAAP some differences from
Canadian GAAP will remain. 123 BARRICK Annual Report 2004




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS q) Consolidated statements of cash flow under Canadian GAAP Exploration and development expenditures that were capitalized under Canadian GAAP, but
expensed under US GAAP, were $25 million in 2004 (2003  $53 million; 2002  $52 million). This
represents the differences in cash flows from operating and investing activities between US GAAP
and Canadian GAAP. For the years ended December 31
    
    2004
    
    
    2003
    
    
    2002Activities:Operating
    
    $
    535
    
    
    $
    581
    
    
    $
    651Investing
    
    
    (848
    )
    
    
    (396
    )
    
    
    (121
    )Financing
    
    
    741
    
    
    
    (266
    )
    
    
    (61
    )Effect of foreign exchange rate changes on cash
    
    
    
    
    
    
    7
    
    
    
    1Cash and equivalents at beginning of period
    
    
    970
    
    
    
    1,044
    
    
    
    574Cash and equivalents at end of period
    
    $
    1,398
    
    
    $
    970
    
    
    $
    1,044
 124 BARRICK Annual Report 2004




---



##### 



Gold Mineral Reserves
and Mineral Resources  The table on the next page sets forth Barricks interest in the total proven and probable gold
mineral reserves at each property. For further details of proven and probable mineral reserves and
measured, indicated and inferred mineral resources by category, see pages 127 and 128. The Company has carefully prepared and verified the mineral reserve and mineral resource figures
and believes that its method of estimating mineral reserves has been verified by mining experience.
These figures are estimates, however, and no assurance can be given that the indicated quantities
of gold will be produced. Gold price fluctuations may render mineral reserves containing relatively
lower grades of gold mineralization uneconomic. Moreover, short-term operating factors relating to
the mineral reserves, such as the need for orderly development of ore bodies or the processing of
new or different ore grades, could affect the Companys profitability in any particular accounting
period. Definitions A mineral resourceis a
concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on
the Earths crust in such form and quantity and
of such a grade or quality that it has reasonable
prospects for economic extraction. The location,
quantity, grade, geological characteristics and
continuity of a mineral resource are known,
estimated or interpreted from specific geological
evidence and knowledge. Mineral resources are
sub-divided, in order of increasing geological
confidence, into inferred, indicated and measured
categories. An inferred mineral resourceis that
part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of
geological evidence, limited sampling and
reasonably assumed but not verified geological
and grade continuity. The estimate is based on
limited information and sampling gathered through
appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill
holes. An indicated mineral resourceis that
part of a mineral resource for which quantity,
grade or quality, densities, shape and physical
characteristics can be estimated with a level of
confidence sufficient to allow the appropriate
application of technical and economic parameters,
to support mine planning and evaluation of the
economic viability of the deposit. The estimate
is based on detailed and reliable exploration and
testing information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade
continuity to be reasonably assumed. A measured mineral resourceis that
part of a mineral resource for which quantity,
grade or quality, densities, shape and physical
characteristics are so well established that they
can be estimated with confidence sufficient to
allow the appropriate application of technical
and economic parameters, to support production
planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed
and reliable exploration, sampling and testing
information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are
spaced closely enough to confirm both geological
and grade continuity. Mineral resources, which are not mineral
reserves, do not have demonstrated economic
viability. A mineral reserveis the economically
mineable part of a measured or indicated mineral
resource demonstrated by at least a preliminary
feasibility study. This study must include
adequate information on mining, processing,
metallurgical, economic and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified. A mineral reserve includes diluting
materials and allowances for losses that may
occur when the material is mined. Mineral
reserves are sub-divided in order of increasing
confidence into probable mineral reserves and
proven mineral reserves. A probable mineral reserveis the
economically mineable part of an indicated and,
in some circumstances, a measured mineral
resource demonstrated by at least a preliminary
feasibility study. This study must include
adequate information on mining, processing,
metallurgical, economic and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified. A proven mineral reserveis the
economically mineable part of a measured mineral
resource demonstrated by at least a preliminary
feasibility study. This study must include
adequate information on mining, processing,
metallurgical, economic and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified. 125 BARRICK Annual Report 2004




---



##### 



MINERAL RESERVES AND MINERAL RESOURCES Summary Gold Mineral Reserves
and Mineral ResourcesFor the years ended December 31 2004
    
    
    
    
    
    
    
    
    
    
    
    2003Tons
    
    
    Grade
    
    
    Ounces
    
    
    
    Tons
    
    
    Grade
    
    
    OuncesBased on attributable ounces
    
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)
    
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)North AmericaGoldstrike Open Pit
    
    (proven and probable)
    
    
    123,334
    
    
    
    0.131
    
    
    
    16,188
    
    
    
    
    109,742
    
    
    
    0.143
    
    
    
    15,685(mineral resource)
    
    
    22,318
    
    
    
    0.050
    
    
    
    1,107
    
    
    
    
    37,403
    
    
    
    0.061
    
    
    
    2,264Goldstrike Underground
    
    (proven and probable)
    
    
    7,575
    
    
    
    0.392
    
    
    
    2,970
    
    
    
    
    9,177
    
    
    
    0.377
    
    
    
    3,460(mineral resource)
    
    
    6,268
    
    
    
    0.379
    
    
    
    2,373
    
    
    
    
    5,841
    
    
    
    0.426
    
    
    
    2,489Goldstrike Property Total
    
    (proven and probable)
    
    
    130,909
    
    
    
    0.146
    
    
    
    19,158
    
    
    
    
    118,919
    
    
    
    0.161
    
    
    
    19,145(mineral resource)
    
    
    28,586
    
    
    
    0.122
    
    
    
    3,480
    
    
    
    
    43,244
    
    
    
    0.110
    
    
    
    4,753Round Mountain (50%)
    
    (proven and probable)
    
    
    86,983
    
    
    
    0.018
    
    
    
    1,538
    
    
    
    
    89,852
    
    
    
    0.018
    
    
    
    1,583(mineral resource)
    
    
    45,364
    
    
    
    0.015
    
    
    
    666
    
    
    
    
    37,770
    
    
    
    0.017
    
    
    
    645East Archimedes
    
    (proven and probable)
    
    
    17,093
    
    
    
    0.059
    
    
    
    1,011
    
    
    
    
    
    
    
    
    
    
    
    
    (mineral resource)
    
    
    3,049
    
    
    
    0.061
    
    
    
    187
    
    
    
    
    15,632
    
    
    
    0.050
    
    
    
    786Hemlo (50%)
    
    (proven and probable)
    
    
    13,946
    
    
    
    0.090
    
    
    
    1,260
    
    
    
    
    17,557
    
    
    
    0.099
    
    
    
    1,744(mineral resource)
    
    
    5,251
    
    
    
    0.113
    
    
    
    594
    
    
    
    
    3,017
    
    
    
    0.090
    
    
    
    271Eskay Creek
    
    (proven and probable)
    
    
    485
    
    
    
    1.058
    
    
    
    513
    
    
    
    
    927
    
    
    
    1.015
    
    
    
    941(mineral resource)
    
    
    476
    
    
    
    0.538
    

    
    
    256
    
    
    
    
    422
    
    
    
    0.287
    
    
    
    121Marigold (33%)
    
    (proven and probable)
    
    
    32,244
    
    
    
    0.023
    
    
    
    744
    
    
    
    
    31,089
    
    
    
    0.024
    
    
    
    737(mineral resource)
    
    
    17,768
    
    
    
    0.022
    
    
    
    387
    
    
    
    
    13,334
    
    
    
    0.020
    
    
    
    268Holt-McDermott
    
    (proven and probable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    340
    
    
    
    0.162
    
    
    
    55(mineral resource)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    452
    
    
    
    0.195
    
    
    
    88South AmericaPascua-Lama
    
    (proven and probable)
    
    
    360,759
    
    
    
    0.049
    
    
    
    17,615
    
    
    
    
    296,411
    
    
    
    0.057
    
    
    
    16,862(mineral resource)
    
    
    43,468
    
    
    
    0.064
    
    
    
    2,797
    
    
    
    
    115,845
    
    
    
    0.030
    
    
    
    3,487Veladero
    
    (proven and probable)
    
    
    396,517
    
    
    
    0.032
    
    
    
    12,849
    
    
    
    
    317,187
    
    
    

    0.035
    
    
    
    11,115(mineral resource)
    
    
    21,804
    
    
    
    0.021
    
    
    
    449
    
    
    
    
    67,715
    
    
    
    0.023
    
    
    
    1,540Lagunas Norte
    
    (proven and probable)
    
    
    229,449
    
    
    
    0.040
    
    
    
    9,123
    
    
    
    
    159,250
    
    
    
    0.045
    
    
    
    7,155(mineral resource)
    
    
    16,153
    
    
    
    0.024
    
    
    
    395
    
    
    
    
    25,751
    
    
    
    0.067
    
    
    
    1,735Pierina
    
    (proven and probable)
    
    
    65,026
    
    
    
    0.039
    
    
    
    2,508
    
    
    
    
    61,393
    
    
    
    0.045
    
    
    
    2,768(mineral resource)
    
    
    15,363
    
    
    
    0.022
    
    
    
    341
    
    
    
    
    25,421
    
    
    
    0.016
    
    
    
    419Australia/AfricaKalgoorlie (50%)
    
    (proven and probable)
    
    
    87,894
    
    
    
    0.059
    
    
    
    5,181
    
    
    
    
    97,047
    
    
    
    0.061
    
    
    
    5,894(mineral resource)
    
    
    12,798
    
    
    
    0.068
    
    
    
    866
    
    
    
    
    44,584
    
    
    
    0.058
    
    
    
    2,580Plutonic
    
    (proven and probable)
    
    
    18,291
    
    
    
    0.137
    
    
    
    2,512
    
    
    
    
    20,635
    
    
    
    0.128
    
    
    
    2,646(mineral resource)
    
    
    13,203
    
    
    
    0.158
    
    
    
    2,085
    
    
    
    
    13,395
    
    
    
    0.147
    
    
    
    1,967Cowal
    
    (proven and probable)
    
    
    63,600
    
    
    
    0.039
    
    
    
    2,495
    
    
    
    
    63,600
    
    
    
    0.039
    
    
    
    2,495(mineral resource)
    
    
    47,534
    
    
    
    0.034
    
    
    
    1,596
    
    
    
    
    47,534
    
    
    
    0.034
    
    
    
    1,596Lawlers
    
    (proven and probable)
    
    
    3,222
    
    
    
    0.126
    
    
    
    405
    
    
    
    
    3,234
    
    
    
    0.124
    
    
    
    402(mineral resource)
    
    
    4,824
    
    
    
    0.159
    
    
    
    765
    
    
    
    
    8,777
    
    
    
    0.129
    
    
    
    1,136Darlot
    
    (proven and probable)
    
    
    7,142
    
    
    
    0.147
    
    
    
    1,048
    
    
    
    
    7,627
    
    
    
    0.149
    
    
    
    1,135(mineral resource)
    
    
    3,984
    
    
    
    0.119
    
    
    
    473
    
    
    
    
    4,194
    
    
    
    0.130
    
    
    
    546Bulyanhulu
    
    (proven and probable)
    
    
    23,913
    
    
    
    0.443
    
    
    
    10,596
    
    
    
    
    27,882
    
    
    
    0.391
    
    
    
    10,907(mineral resource)
    
    
    4,253
    
    
    
    0.546
    
    
    
    2,321
    
    
    
    
    4,300
    
    
    
    0.440
    
    
    
    1,894Tulawaka (70%)
    
    (proven and probable)
    
    
    1,077
    
    
    
    0.355
    
    
    
    382
    
    
    
    
    1,093
    
    
    
    0.337
    
    
    
    368(mineral resource)
    
    
    584
    
    
    
    0.068
    
    
    
    40
    
    
    
    
    680
    
    
    
    0.066
    
    
    
    45Buzwagi
    
    (proven and probable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (mineral resource)
    
    
    27,127
    
    
    
    0.074
    
    
    
    2,016
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    (proven and probable)
    
    
    287
    
    
    
    0.411
    
    
    
    118
    
    
    
    
    
    
    
    
    
    
    
    
    (mineral resource)
    
    
    4,702
    
    
    
    0.158
    
    
    
    744
    
    
    
    
    4,722
    
    
    
    0.170
    
    
    
    812Total
    
    (proven and probable)
    
    
    1,538,837
    
    
    
    0.058
    
    
    
    89,056
    
    
    
    
    1,314,043
    
    
    
    0.065
    
    
    
    85,952(mineral resource)
    
    
    316,291
    
    
    
    0.065
    
    
    
    20,458
    
    
    
    
    476,839
    
    
    
    0.052
    
    
    
    24,689
 126 BARRICK Annual Report 2004




---



##### 



MINERAL RESERVES AND MINERAL RESOURCES Gold Mineral Reserves1As at December 31, 2004 Proven
    
    
    Probable
    
    
    TotalBased on
    
    Tons
    
    
    Grade
    
    
    Ounces
    
    
    Tons
    
    
    Grade
    
    
    Ounces
    
    
    Tons
    
    
    Grade
    
    
    Ouncesattributable ounces
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)North AmericaGoldstrike Open Pit
    
    
    66,943
    
    
    
    0.121
    
    
    
    8,077
    
    
    
    56,391
    
    
    
    0.144
    
    
    
    8,111
    
    
    
    123,334
    
    
    
    0.131
    
    
    
    16,188Goldstrike Underground
    
    
    2,871
    
    
    
    0.494
    
    
    
    1,419
    
    
    
    4,704
    
    
    
    0.330
    
    
    
    1,551
    
    
    
    7,575
    
    
    
    0.392
    
    
    
    2,970Goldstrike Property Total
    
    
    69,814
    
    
    
    0.136
    
    
    
    9,496
    
    
    
    61,095
    
    
    
    0.158
    
    
    
    9,662
    
    
    
    130,909
    
    
    
    0.146
    
    
    
    19,158Round Mountain (50%)
    
    
    50,123
    
    
    
    0.017
    
    
    
    831
    
    
    
    36,860
    
    
    
    0.019
    
    
    
    707
    
    
    
    86,983
    
    
    
    0.018
    
    
    
    1,538East Archimedes
    
    
    7,363
    
    
    
    0.061
    
    
    
    446
    
    
    
    9,730
    
    
    
    0.058
    
    
    
    565
    
    
    
    17,093
    
    
    
    0.059
    
    
    
    1,011Hemlo (50%)
    
    
    8,611
    
    
    
    0.103
    
    
    
    885
    
    
    
    5,335
    
    
    
    0.070
    
    
    
    375
    
    
    
    13,946
    
    
    
    0.090
    
    
    
    1,260Eskay Creek
    
    
    233
    
    
    
    1.124
    
    
    
    262
    
    
    
    252
    
    
    
    0.996
    
    
    
    251
    
    
    
    485
    
    
    
    1.058
    
    
    
    513Marigold (33%)
    
    
    17,777
    
    
    
    0.024
    
    
    
    421
    
    
    
    14,467
    
    
    
    0.022
    
    
    
    323
    
    
    
    32,244
    
    
    
    0.023
    
    
    
    744South AmericaPascua-Lama
    
    
    35,124
    
    
    
    0.058
    
    
    
    2,035
    
    
    
    325,635
    
    
    
    0.048
    
    
    
    15,580
    
    
    
    360,759
    
    
    
    0.049
    
    
    
    17,615Veladero
    
    
    21,306
    
    
    
    0.038
    
    
    
    799
    
    
    
    375,211
    
    
    
    0.032
    
    
    
    12,050
    
    
    
    396,517
    
    
    
    0.032
    
    
    
    12,849Lagunas Norte
    
    
    4,644
    
    
    
    0.044
    
    
    
    206
    
    
    
    224,805
    
    
    
    0.040
    
    
    
    8,917
    
    
    
    229,449
    
    
    
    0.040
    
    
    
    9,123Pierina
    
    
    26,234
    
    
    
    0.055
    
    
    
    1,446
    
    
    
    38,792
    
    
    
    0.027
    
    
    
    1,062
    
    
    
    65,026
    
    
    
    0.039
    
    
    
    2,508Australia/AfricaKalgoorlie (50%)
    
    
    48,079
    
    
    
    0.055
    
    
    
    2,621
    
    
    
    39,815
    
    
    
    0.064
    
    
    
    2,560
    
    
    
    87,894
    
    
    
    0.059
    
    
    
    5,181Plutonic
    
    
    358
    
    
    
    0.025
    
    
    
    9
    
    
    
    17,933
    
    
    
    0.140
    
    
    
    2,503
    
    
    
    18,291
    
    
    
    0.137
    
    
    
    2,512Cowal
    
    
    5,191
    
    
    
    0.046
    
    
    
    238
    
    
    
    58,409
    
    
    
    0.039
    
    
    
    2,257
    
    
    
    63,600
    
    
    
    0.039
    
    
    
    2,495Lawlers
    
    
    1,082
    
    
    
    0.124
    
    
    
    134
    
    
    
    2,140
    
    
    
    0.127
    
    
    
    271
    
    
    
    3,222
    
    
    
    0.126
    
    
    
    405Darlot
    
    
    2,798
    
    
    
    0.120
    
    
    
    337
    
    
    
    4,344
    
    
    
    0.164
    
    
    
    711
    
    
    
    7,142
    
    
    
    0.147
    
    
    
    1,048Bulyanhulu
    
    
    1,915
    
    
    
    0.401
    
    
    
    767
    
    
    
    21,998
    
    
    
    0.447
    
    
    
    9,829
    
    
    
    23,913
    
    
    
    0.443
    
    
    
    10,596Tulawaka (70%)
    
    
    22
    
    
    
    0.273
    
    
    
    6
    
    
    
    1,055
    
    
    
    0.356
    
    
    
    376
    
    
    
    1,077
    
    
    
    0.355
    
    
    
    382Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    287
    
    
    
    0.411
    
    
    
    118
    
    
    
    287
    
    
    
    0.411
    
    
    
    118Total
    
    
    300,674
    
    
    
    0.070
    
    
    
    20,939
    
    
    
    1,238,163
    
    
    
    0.055
    
    
    
    68,117
    
    
    
    1,538,837
    
    
    
    0.058
    
    
    
    89,056
   1. Mineral reserves (reserves) have been calculated as at December 31, 2004 in accordance
with National Instrument 43-101, as required by Canadian securities regulatory authorities and, for
the United States, in accordance with Industry Guide 7 (under the Securities Exchange Act of 1934)
as interpreted by the Staff of the U.S. Securities and Exchange Commission. Calculations have been
prepared by employees of Barrick under the supervision of René L. Marion, P.Eng., Vice-President,
Technical Services of Barrick. Except as noted below, reserves have been calculated using an
assumed gold price of US$375 per ounce, a silver price of US$5.50 per ounce and an exchange rate of
$1.45 C$/US$. Reserves at the Australian properties assumed a gold price of A$560 per ounce.
Reserves at the Hemlo property assumed a gold price of US$350 per ounce and an exchange rate of
$1.35 C$/US$. Reserves at Round Mountain are based on pit designs consistent with a gold price of
US$375 per ounce. Reserves at the Marigold property assumed a gold price of US$350 per ounce.
Reserve calculations incorporate current and/or expected mine plans and cost levels at each
property. Cost estimates at each Australian property assumed an exchange rate of $0.70 US$/A$.
Varying cut-off grades have been used depending on the mine and type of ore contained in the
reserves. Barricks normal data verification procedures have been employed in connection with the
calculations. For a more detailed description of the methods used in calculating Barricks reserves
and resources, see Barricks most recent Annual Information Form/Form 40-F on file with Canadian
provincial securities regulatory authorities and the U.S. Securities
and Exchange Commission.
 127 BARRICK Annual Report 2004




---



##### 



MINERAL RESERVES AND MINERAL RESOURCES Gold Mineral Resources1As at December 31, 2004 Measured (M)
    
    
    Indicated (I)
    
    
    (M) + (I)
    
    
    InferredBased on
    
    Tons
    
    
    Grade
    
    
    Ounces
    
    
    Tons
    
    
    Grade
    
    
    Ounces
    
    
    Ounces
    
    
    Tons
    
    
    Grade
    
    
    Ouncesattributable ounces
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)
    
    
    (000s)
    
    
    (000s)
    
    
    (oz/ton)
    
    
    (000s)North AmericaGoldstrike Open Pit
    
    
    12,119
    
    
    
    0.054
    
    
    
    651
    
    
    
    10,199
    
    
    
    0.045
    
    
    
    456
    
    
    
    1,107
    
    
    
    722
    
    
    
    0.073
    
    
    
    53Goldstrike
Underground
    
    
    2,114
    
    
    
    0.361
    
    
    
    764
    
    
    
    4,154
    
    
    
    0.387
    
    
    
    1,609
    
    
    
    2,373
    
    
    
    6,899
    
    
    
    0.346
    
    
    
    2,388Goldstrike
Property Total
    
    
    14,233
    
    
    
    0.099
    
    
    
    1,415
    
    
    
    14,353
    
    
    
    0.144
    
    
    
    2,065
    
    
    
    3,480
    
    
    
    7,621
    
    
    
    0.320
    
    
    
    2,441Round Mountain (50%)
    
    
    21,734
    
    
    
    0.013
    
    
    
    272
    
    
    
    23,630
    
    
    
    0.017
    
    
    
    394
    
    
    
    666
    
    
    
    43,171
    
    
    
    0.013
    
    
    
    562East Archimedes
    
    
    979
    
    
    
    0.063
    
    
    
    62
    
    
    
    2,070
    
    
    
    0.060
    
    
    
    125
    
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    Hemlo (50%)
    
    
    1,800
    
    
    
    0.091
    
    
    
    163
    
    
    
    3,451
    
    
    
    0.125
    
    
    
    431
    
    
    
    594
    
    
    
    4,233
    
    
    
    0.144
    
    
    
    608Eskay Creek
    
    
    156
    
    
    
    0.558
    
    
    
    87
    
    
    
    320
    
    
    
    0.528
    
    
    
    169
    
    
    
    256
    
    
    
    280
    
    
    
    0.496
    
    
    
    139Marigold (33%)
    
    
    7,500
    
    
    
    0.021
    
    
    
    154
    
    
    
    10,268
    
    
    
    0.023
    
    
    
    233
    
    
    
    387
    
    
    
    61,477
    
    
    
    0.014
    
    
    
    859South AmericaPascua-Lama
    
    
    5,724
    
    
    
    0.058
    
    
    
    333
    
    
    
    37,744
    
    
    
    0.065
    
    
    
    2,464
    
    
    
    2,797
    
    
    
    36,728
    
    
    
    0.044
    
    
    
    1,613Veladero
    
    
    1,092
    
    
    
    0.020
    
    
    
    22
    
    
    
    20,712
    
    
    
    0.021
    
    
    
    427
    
    
    
    449
    
    
    
    63,110
    
    
    
    0.017
    
    
    
    1,045Lagunas Norte
    
    
    277
    
    
    
    0.025
    
    
    
    7
    
    
    
    15,876
    
    
    
    0.024
    
    
    
    388
    
    
    
    395
    
    
    
    9,718
    
    
    
    0.022
    
    
    
    215Pierina
    
    
    4,305
    
    
    
    0.030
    
    
    
    128
    
    
    
    11,058
    
    
    
    0.019
    
    
    
    213
    
    
    
    341
    
    
    
    101
    
    
    
    0.010
    
    
    
    1Australia/AfricaKalgoorlie (50%)
    
    
    3,907
    
    
    
    0.066
    
    
    
    258
    
    
    
    8,891
    
    
    
    0.068
    
    
    
    608
    
    
    
    866
    
    
    
    588
    
    
    
    0.056
    
    
    
    33Plutonic
    
    
    349
    
    
    
    0.221
    
    
    
    77
    
    
    
    12,854
    
    
    
    0.156
    
    
    
    2,008
    
    
    
    2,085
    
    
    
    10,349
    
    
    
    0.192
    
    
    
    1,988Cowal
    
    
    2,594
    
    
    
    0.038
    
    
    
    98
    
    
    
    44,940
    
    
    
    0.033
    
    
    
    1,498
    
    
    
    1,596
    
    
    
    31,053
    
    
    
    0.033
    
    
    
    1,011Lawlers
    
    
    244
    
    
    
    0.098
    
    
    
    24
    
    
    
    4,580
    
    
    
    0.162
    
    
    
    741
    
    
    
    765
    
    
    
    1,114
    
    
    
    0.139
    
    
    
    155Darlot
    
    
    1,089
    
    
    
    0.148
    
    
    
    161
    
    
    
    2,895
    
    
    
    0.108
    
    
    
    312
    
    
    
    473
    
    
    
    127
    
    
    
    0.213
    
    
    
    27Bulyanhulu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,253
    
    
    
    0.546
    
    
    
    2,321
    
    
    
    2,321
    
    
    
    4,303
    
    
    
    0.587
    
    
    
    2,526Tulawaka (70%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    584
    
    
    
    0.068
    
    
    
    40
    
    
    
    40
    
    
    
    161
    
    
    
    0.075
    
    
    
    12Buzwagi
    
    
    69
    
    
    
    0.072
    
    
    
    5
    
    
    
    27,058
    
    
    
    0.074
    
    
    
    2,011
    
    
    
    2,016
    
    
    
    804
    
    
    
    0.056
    
    
    
    45Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,702
    
    
    
    0.158
    
    
    
    744
    
    
    
    744
    
    
    
    4,802
    
    
    
    0.139
    
    
    
    669Total
    
    
    66,052
    
    
    
    0.049
    
    
    
    3,266
    
    
    
    250,239
    
    
    
    0.069
    
    
    
    17,192
    
    
    
    20,458
    
    
    
    279,740
    
    
    
    0.050
    
    
    
    13,949
   1. Resources which are
not reserves do not have demonstrated economic viability.
 128 BARRICK Annual Report 2004




---



##### 



MINERAL RESERVES AND MINERAL RESOURCES Contained Silver Within Reported Gold Reserves1For the year ended December 31, 2004 AssumedMetal Prices
    
    
    Proven
    
    
    
    Probable
    
    
    
    TotalGold ($US/oz) $ 375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ProcessSilver ($US/oz) $5.50
    
    
    Tons
    
    
    
    Grade
    
    
    
    Ounces
    
    
    
    Tons
    
    
    
    Grade
    
    
    
    Ounces
    
    
    
    Tons
    
    
    
    Grade
    
    
    
    Ounces
    
    
    
    RecoveryCopper ($US/lb) $0.90
    
    
    (000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)
    
    
    
    (000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)
    
    
    
    (000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)
    
    
    
    %AfricaBulyanhulu
    
    
    
    1,915
    
    
    
    
    0.30
    
    
    
    
    566
    
    
    
    
    21,998
    
    
    
    
    0.35
    
    
    
    
    7,668
    
    
    
    
    23,913
    
    
    
    
    0.34
    
    
    
    
    8,234
    
    
    
    
    65.0
    %North AmericaEskay Creek
    
    
    
    189
    
    
    
    
    67.93
    
    
    
    
    12,838
    
    
    
    
    295
    
    
    
    
    34.72
    
    
    
    
    10,241
    
    
    
    
    484
    
    
    
    
    47.68
    
    
    
    
    23,079
    
    
    
    
    91.4
    %South AmericaLagunas Norte
    
    
    
    4,644
    
    
    
    
    0.11
    
    
    
    
    514
    
    
    
    
    224,805
    
    
    
    
    0.10
    
    
    
    
    22,704
    
    
    
    
    229,449
    
    
    
    
    0.10
    
    
    
    
    23,218
    
    
    
    
    22.3
    %Pascua-Lama
    
    
    
    35,124
    
    
    
    
    1.93
    
    
    
    
    67,693
    
    
    
    
    325,635
    
    
    
    
    1.77
    
    
    
    
    575,492
    
    
    
    
    360,759
    
    
    
    
    1.78
    
    
    
    
    643,185
    
    
    
    
    77.8
    %Pierina
    
    
    
    26,234
    
    
    
    
    0.24
    
    
    
    
    6,223
    
    
    
    
    38,792
    
    
    
    
    0.16
    
    
    
    
    6,335
    
    
    
    
    65,026
    
    
    
    
    0.19
    
    
    
    
    12,558
    
    
    
    
    32.7
    %Veladero
    
    
    
    21,306
    
    
    
    
    0.54
    
    
    
    
    11,538
    
    
    
    
    375,211
    
    
    
    
    0.50
    
    
    
    
    188,785
    
    
    
    
    396,517
    
    
    
    
    0.51
    
    
    
    
    200,323
    
    
    
    
    6.8
    %Total
    
    
    
    89,412
    
    
    
    
    1.11
    
    
    
    
    99,372
    
    
    
    
    986,736
    
    
    
    
    0.82
    
    
    
    
    811,225
    
    
    
    
    1,076,148
    
    
    
    
    0.85
    
    
    
    
    910,597
    
    
    
    
    60.4
    %
   1. Silver is accounted for as a by-product credit against reported or projected gold production
costs.
 Contained Silver Within Reported Gold ResourcesFor the year ended December 31, 2004 Measured (M)
    
    
    
    Indicated (I)
    
    
    
    Total (M) + (I)Tons
    
    
    
    Grade
    
    
    
    Ounces
    
    
    
    Tons
    
    
    
    Grade
    
    
    
    Ounces
    
    
    
    Tons
    
    
    
    Grade
    
    
    
    Ounces(000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)
    
    
    
    (000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)
    
    
    
    (000s)
    
    
    
    (oz/ton)
    
    
    
    (000s)AfricaBulyanhulu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,253
    
    
    
    
    0.342
    
    
    
    
    1,454
    
    
    
    
    4,253
    
    
    
    
    0.342
    
    
    
    
    1,454North AmericaEskay Creek
    
    
    
    156
    
    
    
    
    22.346
    
    
    
    
    3,486
    
    
    
    
    320
    
    
    
    
    17.641
    
    
    
    
    5,645
    
    
    
    
    476
    
    
    
    
    19.183
    
    
    
    
    9,131South AmericaLagunas Norte
    
    
    
    277
    
    
    
    
    0.155
    
    
    
    
    43
    
    
    
    
    15,876
    
    
    
    
    0.124
    
    
    
    
    1,971
    
    
    
    
    16,153
    
    
    
    
    0.125
    
    
    
    
    2,014Pascua-Lama
    
    
    
    5,724
    
    
    
    
    1.548
    
    
    
    
    8,862
    
    
    
    
    37,744
    
    
    
    
    1.498
    
    
    
    
    56,543
    
    
    
    
    43,468
    
    
    
    
    1.505
    
    
    
    
    65,405Pierina
    
    
    
    4,305
    
    
    
    
    0.206
    
    
    
    
    886
    
    
    
    
    11,058
    
    
    
    
    0.019
    
    
    
    
    213
    
    
    
    
    15,363
    
    
    
    
    0.072
    
    
    
    
    1,099Veladero
    
    
    
    1,092
    
    
    
    
    0.392
    
    
    
    
    428
    
    
    
    
    20,712
    
    
    
    
    0.364
    
    
    
    
    7,531
    
    
    
    
    21,804
    
    
    
    
    0.365
    
    
    
    
    7,959Total
    
    
    
    11,554
    
    
    
    
    1.186
    
    
    
    
    13,705
    
    
    
    
    89,963
    
    
    
    
    0.815
    
    
    
    
    73,357
    
    
    
    
    101,517
    
    
    
    
    0.858
    
    
    
    
    87,062
 129 BARRICK Annual Report 2004




---



##### 



Supplemental
Information 
 5-Year Historical Review1 (US GAAP basis, unless otherwise indicated)
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Operating results(in millions)Gold sales
    
    $
    1,932
    
    
    $
    2,035
    
    
    $
    1,967
    
    
    $
    1,989
    
    
    $
    1,936Net income (loss)
    
    
    248
    
    
    
    200
    
    
    
    193
    
    
    
    96
    
    
    
    (1,189
    )Operating cash flow
    
    
    506
    
    
    
    519
    
    
    
    588
    
    
    
    588
    
    
    
    842Capital expenditures
    
    
    824
    
    
    
    322
    
    
    
    228
    
    
    
    474
    
    
    
    612Per share dataNet income (loss)
    
    $
    0.46
    
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.18
    
    
    $
    (2.22
    )Cash dividends
    
    
    0.22
    
    
    
    0.22
    
    
    
    0.22
    
    
    
    0.22
    
    
    
    0.22Operating cash flow
    
    
    0.95
    
    
    
    0.97
    
    
    
    1.09
    
    
    
    1.10
    
    
    
    1.57Book value
    
    
    6.67
    
    
    
    6.53
    
    
    
    6.15
    
    
    
    5.96
    
    
    
    5.95Financial position(in millions)Cash and equivalents
    
    $
    1,398
    
    
    $
    970
    
    
    $
    1,044
    
    
    $
    779
    
    
    $
    822Total assets
    
    
    6,274
    
    
    
    5,358
    
    
    
    5,261
    
    
    
    5,202
    
    
    
    5,393Working capital
    
    
    1,539
    
    
    
    1,004
    
    
    
    839
    
    
    
    579
    
    
    
    576Long-term debt2
    
    
    1,655
    
    
    
    719
    
    
    
    761
    
    
    
    793
    
    
    
    901Shareholders equity
    
    
    3,563
    
    
    
    3,494
    
    
    
    3,334
    
    
    
    3,192
    
    
    
    3,190Operational statistics(unaudited)Gold production (thousands of ounces)
    
    
    4,958
    
    
    
    5,510
    
    
    
    5,695
    
    
    
    6,124
    
    
    
    5,950Total cash costs per ounce
    
    $
    212
    
    
    $
    189
    
    
    $
    177
    
    
    $
    162
    
    
    $
    155Average realized gold price per ounce
    
    $
    391
    
    
    $
    366
    
    
    $
    339
    
    
    $
    317
    
    
    $
    334Average spot gold price per ounce
    
    $
    409
    
    
    $
    363
    
    
    $
    310
    
    
    $
    271
    
    
    $
    279Gold reserves (proven and probable)
(thousands of ounces)3
    
    
    89,056
    
    
    
    85,952
    
    
    
    86,927
    
    
    
    82,272
    
    
    
    79,300OtherNet debt to total capitalization4
    
    
    5
    %
    
    
    (6
    %)
    
    
    (7
    %)
    
    
    1
    %
    
    
    2
    %Shares outstanding (millions)
    
    
    534
    
    
    
    535
    
    
    
    542
    
    
    
    536
    
    
    
    536
   1. Information for all years has been derived from audited financial statements, except as
indicated.2. Long-term debt excludes current portion of $31 million in 2004, $41 million in 2003, $20
million in 2002, $9 million in 2001 and $3 million in 2000.3. Reserves calculated in accordance with National Instrument 43-101, as required by Canadian
securities regulatory authorities.4. Net debt to total capitalization is the ratio of debt less cash and equivalents to debt plus
shareholders equity. 130 BARRICK Annual Report 2004




---



##### 



Corporate Governance and
Committees of the Board 
 Corporate Governance Over the past several years, there has been
an increased focus on corporate governance in
both the United States and Canada. Among other
regulatory initiatives, the New York Stock
Exchange added corporate governance standards to
its listing rules. Although, as a regulatory
matter, the vast majority of the NYSE corporate
governance standards are not directly applicable
to Barrick as a Canadian company, Barrick has
implemented a number of structures and procedures
to comply with the NYSE standards. There are no
significant differences between Barricks
corporate governance practices and the NYSE
standards applicable to U.S. companies. The Board of Directors has approved a set of
Corporate Governance Guidelines to promote the
effective functioning of the Board of Directors
and its Committees and to set forth a common set
of expectations as to how the Board should manage
its affairs and perform its responsibilities.
Barrick has also adopted a Code of Business
Conduct and Ethics that is applicable to all
directors, officers and employees of Barrick. In
conjunction with the adoption of the Code,
Barrick established a toll-free compliance
hotline to allow for anonymous reporting of any
suspected Code violations, including concerns
regarding accounting, internal accounting
controls or other auditing matters. A copy of the
Corporate Governance Guidelines, the Code of
Business Conduct and Ethics and the mandates of
each of the Committees of the Board, including
the Audit Committee, the Compensation Committee
and the Corporate Governance and Nominating
Committee, is posted on Barricks website at
www.barrick.com and is available in print from
the Company to any shareholder upon request. Committees of the Board Corporate Governance andNominating Committee(M.A. Cohen, P.C. Godsoe, A.A. MacNaughton) Assists the Board in establishing Barricks
corporate governance policies and practices. The
Committee also identifies individuals qualified
to become members of the Board, and reviews the
composition and functioning of the Board and its
Committees. Audit Committee(H.L. Beck, P.A. Crossgrove, S.J. Shapiro) Reviews the Companys financial statements and
managements discussion and analysis of financial
and operating results, and assists the Board in
its oversight of the integrity of Barricks
financial statements and other relevant public
disclosures, the Companys compliance with legal
and regulatory requirements relating to financial
reporting, the
external auditors qualifications and
independence, and the performance of the internal
and external auditors. Compensation Committee(A.A. MacNaughton, M.A. Cohen, P.A.
Crossgrove, J.L. Rotman) Assists the Board in monitoring, reviewing and
approving Barricks compensation policies and
practices, and
administering Barricks share compensation plans.
The Committee is responsible for reviewing and
recommending director and senior management
compensation and for succession planning with
respect to senior executives. Executive Committee(G.C. Wilkins, A.A. MacNaughton, B. Mulroney, P. Munk) Exercises all the powers of the Board (except
those powers specifically reserved by law to the
Board of Directors) in the management and
direction of business during intervals between
meetings of the Board of Directors. Environmental, Occupational, Health and
Safety Committee(P.A. Crossgrove, M.A. Cohen, J.E. Thompson) Reviews environmental and occupational health and
safety policies and programs, oversees the
Companys environmental and occupational health
and safety performance, and monitors current and
future regulatory issues. Finance Committee(C.W.D. Birchall, A.A.
MacNaughton, A. Munk, G.C. Wilkins) Reviews the Companys investment strategies,
hedging program and general debt and equity
structure. 131 BARRICK Annual Report 2004




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##### 



Board of
Directors 
 Howard L. Beck, Q.C.
Toronto, Ontario
Corporate Director Mr. Beck was a founding
Partner of the law firm
Davies, Ward & Beck. He has
been on the Barrick Board
since 1984. C. William D. Birchall
Nassau, Bahamas Chief
Executive Officer,
ABX Financeco Inc. Mr. Birchall has had a long
association with Barrick as one
of the original Board members
of the Company. Gustavo Cisneros
Caracas, Venezuela
Chairman and Chief Executive Officer,
Cisneros Group of Companies Mr. Cisneros became a
Director of Barrick in
September 2003. Marshall A. Cohen, O.C.
Toronto, Ontario Counsel, Cassels Brock & Blackwell LLP Mr. Cohen served the
Government of Canada for 15
years in a number of senior
positions including Deputy
Minister of Finance. He has
been a Director of Barrick
since 1988. Peter A. Crossgrove
Toronto, Ontario
Chairman, Masonite
International Corporation. Mr. Crossgrove has been
involved in a number of
mining companies. He has
been a Director of Barrick
since 1993. Peter C. Godsoe, O.C.
Toronto, Ontario
Corporate Director Mr. Godsoe was the Chairman
and Chief Executive Officer
of The Bank of Nova Scotia
from 1995 to 2003. Mr. Godsoe
became a Director of Barrick
in February 2004. Angus A. MacNaughton
Danville, California
President, Genstar
Investment Corporation Mr. MacNaughton has been a
member of the Board since
1986. The Right Honourable
Brian Mulroney, P.C., LL.D.
Montreal, Quebec
Senior Partner,
Ogilvy Renault Mr. Mulroney was Prime
Minister of Canada from 1984
to 1993. He joined the
Barrick Board in 1993 and is
Chairman of the Companys
International Advisory
Board. Anthony Munk
Toronto, Ontario
Managing Director,
Onex Investment Corp. Mr. Munk became a member of
the Board of Directors in
1996. He is a Partner of
Onex Corporation, a
diversified manufacturing
and service company. Peter Munk, O.C.
Toronto, Ontario
Chairman,
Barrick Gold Corporation Mr. Munk is the founder and
Chairman of the Board of
Barrick Gold Corporation. He
is also the founder and
Chairman of Trizec
Properties, Inc. Joseph L. Rotman, O.C.
Toronto, Ontario
Chairman and Chief Executive Officer,
Roy-L Capital Corporation Mr. Rotman has been a
Director of Barrick since
its inception. Stephen J. Shapiro
Houston, Texas
Executive Vice President and
Chief Financial Officer,
Burlington Resources, Inc. Mr. Shapiro became a
Director of Barrick in
September 2004. Jack E. Thompson
Alamo, California
Vice Chairman,
Barrick Gold Corporation Mr. Thompson was appointed to
the Board in December 2001
upon the completion of the
Companys merger with
Homestake Mining Company.
Prior to that time, Mr.
Thompson was Chairman and
Chief Executive Officer of
Homestake. Gregory C. Wilkins
Toronto, Ontario
President and Chief Executive Officer,
Barrick Gold Corporation Mr. Wilkins was Executive Vice
President and Chief Financial
Officer of Barrick until his
appointment at Horsham
(subsequently TrizecHahn
Corporation) in September
1993. He has been a member of
the Board since 1991. 132 BARRICK Annual Report 2004




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##### 



Senior Officers and
International Advisory Board 
 Senior Officers Peter Munk
Chairman Gregory C. Wilkins
President and
Chief Executive Officer Tye W. Burt
Vice Chairman and
Executive Director,
Corporate Development Alexander J. Davidson
Executive Vice President,
Exploration Patrick J. Garver
Executive Vice President
and General Counsel Peter J. Kinver
Executive Vice President
and Chief Operating Officer Jamie C. Sokalsky
Excutive Vice Presidentand Chief
Financial Officer Gordon F. Fife
Senior Vice President,
Organizational Effectiveness International Advisory Board The International Advisory Board was established to provide
advice to Barricks Board of Directors and management as the Company
expands internationally. Chairman
The Right Honourable
Brian Mulroney
Former Prime Minister of Canada Members
Gustavo Cisneros
Venezuela
Chairman and Chief Executive Officer, Cisneros Group of Companies Secretary William S. Cohen
United States
Chairman and Chief Executive Officer, The Cohen Group The Honourable
Paul G. Desmarais, Sr.
Canada
Director and Chairman of Executive Committee, Power Corporation of Canada Vernon E. Jordan, Jr.
United States
Senior Managing Director,
Lazard Freres & Co., LLC and of Counsel to Akin, Gump, Strauss, Hauer & Feld, LLP Peter Munk
Canada
Chairman, Barrick Gold
Corporation and Chairman, Trizec Properties, Inc. Lord Charles Powell of
Bayswater KCMG
United Kingdom
Chairman, Sagitta
Asset Management Limited Karl Otto Pöhl
Germany Senior
Partner,
Sal. Oppenheim Jr. & Cie. The Honorable Andrew Young
United States
Chairman,
GoodWorks International 133 BARRICK Annual Report 2004




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##### 



Shareholder
Information  Shares traded on five
major international stock exchanges
> New York
> Toronto
> Paris
> Swiss
> London Ticker Symbol
ABX (New York, Toronto, Paris, Swiss)
BGD (London) Number of Registered Shareholders
17,598 Index Listings
> S&P Global 1200 Index
> S&P/TSX 60 Index
> S&P/TSX Composite Index
> S&P/TSX Capped Materials Index
> S&P/TSX Capped Gold Index
> FT of London Gold Index
> Philadelphia Gold/Silver Index 2004 Dividend Per Share
US$0.22 Common Shares(millions)Outstanding at December 31, 2004
    
    
    533
    *Weighted average 2004Basic
    
    
    534
    *Fully diluted
    
    
    533
    *
 The Companys shares were split on a two-for-one basis in 1987, 1989 and 1993. *Includes shares issuable upon conversion of Barrick Gold Inc. exchangeable shares. Volume of Shares Traded(millions)
    
    2004
    
    
    2003TSX
    
    
    409
    
    
    
    495NYSE
    
    
    441
    
    
    
    521Closing Price of SharesDecember 31, 2004TSX
    
    
    
    
    
    
    C$29.00NYSE
    
    
    
    
    
    
    US$24.22
 Share Trading InformationShare VolumeToronto Stock Exchange
    
    (millions)
    
    
    High
    
    
    LowQuarter
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003First
    
    
    124
    
    
    
    147
    
    
    
    C$31.45
    
    
    
    C$26.48
    
    
    
    C$25.52
    
    
    
    C$20.90Second
    
    
    103
    
    
    
    111
    
    
    
    31.82
    
    
    
    25.43
    
    
    
    25.06
    
    
    
    21.34Third
    
    
    84
    
    
    
    119
    
    
    
    27.76
    
    
    
    28.95
    
    
    
    24.10
    
    
    
    23.31Fourth
    
    
    98
    
    
    
    118
    
    
    
    30.22
    
    
    
    30.29
    
    
    
    25.41
    
    
    
    24.39409
    
    
    
    495
 Share VolumeNew York Stock Exchange
    
    (millions)
    
    
    High
    
    
    LowQuarter
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003First
    
    
    137
    
    
    
    143
    
    
    
    US$23.89
    
    
    
    US$17.43
    
    
    
    US$19.15
    
    
    
    US$14.11Second
    
    
    115
    
    
    
    115
    
    
    
    24.15
    
    
    
    18.97
    
    
    
    18.07
    
    
    
    14.61Third
    
    
    75
    
    
    
    135
    
    
    
    21.15
    
    
    
    21.13
    
    
    
    18.14
    
    
    
    16.67Fourth
    
    
    114
    
    
    
    128
    
    
    
    25.52
    
    
    
    23.15
    
    
    
    20.17
    
    
    
    18.35441
    
    
    
    521
 134 BARRICK Annual Report 2004




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SHAREHOLDER INFORMATION Dividend Payments In 2004, the Company paid a cash dividend
of $0.22 per share  $0.11 on June 15 and $0.11
on December 15. A cash dividend of $0.22 per
share was paid in 2003  $0.11 on June 16 and
$0.11 on December 15. Dividend Policy The Board of Directors reviews the dividend
policy semi-annually based on the cash
requirements of the Companys operating assets,
exploration and development activities, as well
as potential acquisitions, combined with the
current and projected financial position of the
Company. Form 40-F Annual Report on Form 40-F is filed with
the United States Securities and Exchange
Commission. This report will be made available
to shareholders, without charge, upon written
request to the Secretary of the Company at the
Corporate Office. Other Language Reports French and Spanish versions of this annual
report are available from Investor Relations at
the Corporate Office. Shareholder Contacts Shareholders are welcome to contact the
Company for information or questions concerning
their shares. For general information on the
Company, contact the Investor Relations
Department. For information on such matters as share
transfers, dividend cheques and change of
address, inquiries should be directed to the
Transfer Agents. Transfer Agents and
Registrars
CIBC Mellon Trust Company
P.O. Box 7010
Adelaide Street Postal Station
Toronto, Ontario M5C 2W9
Telephone: (416) 643-5500
Toll-free within the United States and Canada:
1-800-387-0825
Fax: (416) 643-5660
Email: inquiries@cibcmellon.com
Web site: www.cibcmellon.com Mellon Investor Services, L.L.C.
P.O. Box 3315
South Hackensack, New Jersey 07606
Telephone: (201) 329-8660
Toll-free within the United States and Canada:
1-888-835-2788
Email: shrrelations@mellon.com
Web site: www.mellon-investor.com Annual Meeting The Annual Meeting of Shareholders will be
held on Thursday, April 28, 2005 at 10:00 a.m.
in the John Bassett Theatre, Metro Toronto
Convention Centre, Toronto, Ontario. 135 BARRICK Annual Report 2004




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CorporateInformation  Corporate Office Barrick Gold Corporation
BCE Place
Canada Trust Tower
161 Bay Street, Suite 3700
P.O. Box 212
Toronto, Canada M5J 2S1
Telephone: (416) 861-9911
Fax: (416) 861-2492 Barrick Russia Holdings Inc.
Ed Verona
Vice President &
Chief Representative
Moscow Representative Office
4 Romanov Pereulok
125009
Moscow, Russia
Telephone: (7-095) 981-3434
Fax: (7-095) 981-3435 Mining Operations North America Operations Gregory Lang
 United States Operations Goldstrike Property
P.O. Box 29
Elko, Nevada U.S.A. 89803Mike Feehan
General Manager
Telephone: (775) 778-8380
Fax: (775) 738-7685 Round Mountain Gold
P.O. Box 480
Round Mountain
Nevada U.S.A. 89045Mike Iannacchione
General Manager
Telephone: (775) 377-2366
Fax: (775) 377-3240 Canada Operations Eskay Creek
No.1 Airport Way
P.O. Box 3908
Smithers, B.C.
Canada V0J 2N0John Kinyon
General Manager
Telephone: (604) 515-5227
Fax: (604) 515-5241 Hemlo Operations
P.O. Bag 500
Marathon, Ontario
Canada P0T 2E0Vern Baker
General Manager
Telephone: (807) 238-1100
Fax: (807) 238-1050 South America Operations Chile/Argentina Operations John McDonough
Vice President
Av. Ricardo Lyon 222
Piso 11. Providencia
Santiago, Chile
Telephone: (56-2) 340-2022
Fax: (56-2) 233-0188 Argentina Veladero Project
Villagra 531 Oeste
San Juan, Argentina 5402CPIGeorge Bee
General Manager
Telephone: 54 (264) 429 8105
Fax: 54 (264) 429 8135 Peru Operations Igor Gonzales
Regional Vice President  Peru
Victor Andres Belaunde 171
2° Piso
San Isidro
Lima 27, Peru
Telephone: (51-1) 275-0600
Fax: (51-1) 275-0249 Pierina Mine
Urb. La Alborada
Calle 8 s/n Tarica
Huaraz, PeruDarrell Wagner
General Manager
Telephone: (51-1) 275-0600
Fax: (51-1) 275-3733 Lagunas Norte Project
Pasaje Los Delfines 159
3erPiso
Urb. Las Gardenias, Surco
Lima 33, PeruAugusto Chung
General Manager
Telephone: (51-44) 88-1100
Fax: (51-44) 23-1992 Australia/Africa Operations John Shipp
Vice President
10th Floor
2 Mill Street
Perth WA 6000 Australia
Telephone: (61-8) 9212-5736
Fax: (61-8) 9322-5700 Australia Operations Kalgoorlie Consolidated Gold Mines (KCGM)
Black Street
Kalgoorlie WA 6430
AustraliaCobb Johnstone
General Manager
Telephone: (61-8) 9022-1801
Fax: (61-8) 9022-1119 Plutonic Gold Mine
PMB 46
Meekatharra WA 6642
AustraliaMark Le Messurier
Resident Manager
Telephone: (61-8) 9981-0100
Fax: (61-8) 9981-0101 Darlot Gold Mine
P.O. Box 127
Leonora WA 6438 AustraliaRichard Hay
Resident Manager
Telephone: (61-8) 9080-3413
Fax: (61-8) 9080-3440 Cowal Gold Project
P.O. Box 210
West Wyalong
NSW 2671 AustraliaRichard Weston
General Manager
Telephone: (61-2) 6975-4700
Fax: (61-2) 6975-4740 Lawlers Gold Mine
PMB 47
Leinster WA 6437 AustraliaDavid Collopy
General Manager
Telephone: (61-8) 9981-0148
Fax: (61-8) 9037-8899 East Africa Operations Bulyanhulu Mine
Mrikao Street, Plot No. 847
Msasani Peninsula
P.O. Box 1081
Dar es Salaam, TanzaniaGrant Pierce
Executive General Manager
Telephone: (255-22) 260-0604
Fax: (255-22) 260-0210 Tulawaka Mine
P.O. Box 1081
Dar es Salaam, TanzaniaDave Anthony
General Manager
Telephone: (61-8) 9360-4444
Fax: (61-8) 9360-4422 Corporate Data Auditors PricewaterhouseCoopers LLP
Toronto, Canada Investor Relations Contacts:Darren Blasutti
Vice President,
Investor Relations
Telephone: (416) 307-7341
Fax: (416) 861-0727
Email: dblasutti@barrick.com Kathy Sipos
Director, Investor Relations
Telephone: (416) 307-7441
Email: ksipos@barrick.com Mary Ellen Thorburn
Director, Investor Relations
Telephone: (416) 307-7363
Email: mthorburn@barrick.com Toll-free number within 
 136 BARRICK Annual Report 2004




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© Copyright 2005 Barrick Gold Corporation Concept and Design: Genesis Inc. Typesetting: Moveable
Inc. Printing: Bowne of Canada, Ltd. Forward-Looking Statements Certain information contained or incorporated by reference in this Annual Report 2004,
including any information as to our future financial or operating performance, constitutes
forward-looking statements. All statements, other than statements of historical fact, are
forward-looking statements. The words believe, expect, anticipate, contemplate, target,
plan, intends, continue, budget, estimate, may, will, schedule and similar
expressions identify forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered reasonable by us, are inherently
subject to significant business, economic and competitive uncertainties and contingencies. Known
and unknown factors could cause actual results to differ materially from those projected in the
forward-looking statements. Such factors include, but are not limited to: fluctuations in the
currency markets (such as the Canadian and Australian dollars versus the US dollar); fluctuations
in the spot and forward price of gold or certain other commodities (such as silver, copper, diesel
fuel and electricity); changes in US dollar interest rates or gold lease rates that could impact
the mark-to-market value of outstanding derivative instruments and ongoing payments/ receipts under
interest rate swaps and variable rate debt obligations; risks arising from holding derivative
instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in
national and local government legislation, taxation, controls, regulations and political or
economic developments in Canada, the United States, Australia, Chile, Peru, Argentina, Tanzania,
Russia or Barbados or other countries in which we do or may carry on business in the future;
business opportunities that may be presented to, or pursued by, us; our ability to successfully
integrate acquisitions; operating or technical difficulties in connection with mining or
development activities; the speculative nature of gold exploration and development, including the
risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves;
adverse changes in our credit rating; and contests over title to properties, particularly title to
undeveloped properties. In addition, there are risks and hazards associated with the business of
gold exploration, development and mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the
risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of
these uncertainties and contingencies can affect our actual results and could cause actual results
to differ materially from those expressed or implied in any forward-looking statements made by, or
on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of
future performance. All of the forward-looking statements made in this Annual Report 2004 are
qualified by these cautionary statements. Specific reference is made to Barricks most recent Form
40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian
provincial securities regulatory authorities for a discussion of some of the factors underlying
forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements whether
as a result of new information, future events or otherwise.




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##### 



(BARRICK LOGO) Barrick is one of the worlds largest gold mining companies,
with operating and development properties in the US, Canada,
Australia, Peru, Chile, Argentina and Tanzania. Our vision is to be the worlds best gold mining company
by finding, developing and producing quality reserves
in a profitable and socially responsible manner. Barrick shares are traded on the Toronto, New York,
London and Swiss stock exchanges and the Paris Bourse. You can contact us toll-free within
Canada and the United States: 800-720-7415
email us at: investor@barrick.com
visit our investor relations website: www.barrick.com