Nevada Is Cornerstone Of Barrick Gold’s Success

TORONTO - Barrick Gold Corporation reported first quarter net earnings of $88 million. Adjusted net earnings were $238 million. Operating cash flow and adjusted operating cash flow was $585 million.

"Barrick is a considerably different company today than it was a year ago - leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of $833 per ounce, $100 per ounce below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results," said Jamie Sokalsky , Barrick's President and CEO. "We continue to focus on assets that can generate the most attractive risk-adjusted returns and free cash flow for Barrick and its shareholders, and we are decisively addressing our under-performing operations. It's clear that Barrick's optimized portfolio continues to deliver solid results, and we are pursuing a number of opportunities in Nevada to unlock further value from our high quality asset base."

Operational Excellence is a Top Priority maintaining 2014 gold production guidance and all-in sustaining cost (AISC) guidance, the lowest costs among the senior peer group; Five core mines produced 0.94 million ounces of gold at an average AISC of $672 per ounce. These mines are expected to contribute about 60 percent of total production in 2014 at an average AISC of $750-$800 per ounce; On track to achieve run rate for targeted $500 million in annual savings by the end of 2014.

Nevada is a cornerstone of Barrick's success, and a number of growth opportunities are under consideration. The Goldrush project near the Cortez mine is in the pre-feasibility stage and the study remains on schedule for completion in mid-2015. The company is evaluating a number of development options, including underground mining or a combination of both underground and open pit mining. Recent drilling has encountered deep, very high grade mineralization, including an intersection of 103 feet averaging 0.725 ounces per ton, which continues to expand the size and grade potential to the north. Barrick is assessing the feasibility of an exploration decline to better define the existing resource and test for additional mineralization beyond the northern extent of the deposit.

At Cortez Hills, drilling in the Lower Zone is in the final stages of a program to upgrade and expand the resource base. The Lower Zone is characterized by strong and continuous ore zones. Following completion of the scoping study, a pre-feasibility study to evaluate deeper mining below the currently permitted level is expected to be completed by late 2015. Below this level, the Lower Zone is mostly oxide and higher grade than the zones above. Drilling has yet to determine the limits of the Lower Zone and further drilling is planned for the second quarter. Results to date have met or exceeded expectations.

Turquoise Ridge contains over 6.7 million ounces (100 percent basis) in reserves at an average grade of 0.51 ounces per ton, the highest reserve grade deposit in the company's operating portfolio. This exceptional reserve base provides an excellent opportunity to both accelerate and expand production, but the operation is currently restricted by haulage and ventilation constraints. One option being considered is an additional shaft to reduce haulage distances. This could increase production by 75 percent for five to eight years. A pre-feasibility study on this scenario is expected to be completed in late 2014.

The Cortez District continues to yield promising exploration opportunities beyond Goldrush. Barrick has earned a 70 percent interest in the Spring Valley project approximately 60 miles west of Cortez by conducting exploration drilling and scoping activities. The project has advanced to the pre-feasibility stage and could potentially be a new stand-alone gold mine. The company also recently secured the last remaining block of prospective land in the Cortez District. In addition, it has the option to attain a 75 percent interest in the Gold Ridge project, located just north of the Pipeline deposit at Cortez, by completing a scoping study. This is an earlier stage opportunity in a key district which has encouraging geological characteristics.

Cortez is one of the lowest costs, long-life gold assets in the world and is located in the stable and prospective jurisdiction of Nevada. The mine produced 0.23 million ounces at AISC of $648 per ounce in the first quarter on lower grades and recoveries. Production in 2014 is forecast at 0.925-0.975 million ounces. AISC are expected to be $750-$780 per ounce, reflecting lower production and higher sustaining capital related to waste stripping for the next phase of the Cortez Hills open pit.

Goldstrike produced 0.26 million ounces in the first quarter at AISC of $755 per ounce, reflecting higher than anticipated open pit and underground grades. The autoclave facility is undergoing modifications that will enable Goldstrike to accelerate the cash flow from about 4.0 million stockpiled ounces through the addition of a thiosulfate process. The modified autoclaves are forecast to contribute an average of 0.350-0.450 million ounces of annual production at a similar AISC to the overall operation in the first full five years following implementation of this process. First production is on track for the fourth quarter of 2014. Production at Goldstrike in 2014 is anticipated to be 0.865-0.915 million ounces at AISC of $920-$950 per ounce. In 2015, production is expected to exceed 1.0 million ounces.