Barrick Produced 1.90 Million Ounces Of Gold In Q3, 2009

 

TORONTO, ON - Barrick Gold reported Q3 2009 production of 1.90 million ounces at total cash costs of $456 per ounce was on plan, primarily as a result of strong operating performance from North America and South America. The Company is on track with its full year production guidance of 7.2-7.6 million ounces of gold at total cash costs of $450-$475 per ounce or net cash costs of $360-$385 per ounce.

The North America region continued to perform well, with production of 0.71 million ounces at total cash costs of $518 per ounce meeting plan. The result was significantly driven by Goldstrike, which produced 0.34 million ounces at total cash costs of $495 per ounce. Mining from the open pit transitioned at the end of the quarter into a waste stripping phase which is expected to continue for the balance of the year. Production at Cortez increased to 0.14 million ounces at total cash costs of $554 per ounce as a result of higher grades which are expected to continue in Q4.

Barrick's three world-class projects in construction remain on schedule and in line with their respective pre-production capital budgets. Together with Buzwagi, they are expected to collectively contribute about 2.6 million ounces(3) of lower cost average annual production once at full capacity. Production is expected to increase to 7.7-8.1 million ounces in 2010 with new production from Cortez Hills(4).

Overall construction of the Cortez Hills project in Nevada is approximately 85% complete and in line with its $500 million capital budget. Production continues to be anticipated in Q1 2010. The Cortez property is expected to contribute approximately one million ounces per year at total cash costs of $350-$400 per ounce in the first full five years once Cortez Hills is in operation.

The Pueblo Viejo project in the Dominican Republic is progressing well and is in line with its pre-production capital budget of approximately $2.7 billion (100% basis)(5), with approximately 60% of the capital committed. First gold continues to be expected in Q4 2011. Site demolition is now complete and earthworks are about 80% complete. Autoclave construction and steel erection on the autoclave building is well advanced and the first of the mills have arrived in the Dominican Republic. Barrick's 60% share of annual gold production in the first full five years of operation is anticipated to be 600,000-650,000 ounces per year at total cash costs of about $275-$300 per ounce. Pueblo Viejo is a long life asset with an expected mine life of more than 25 years.

Pascua-Lama has recently entered construction, with the project team mobilizing to site and beginning work on installation of construction infrastructure. Orders have been placed for long lead time items including mills, the Chilean camp, and mining and earthworks equipment. Pascua-Lama is expected to produce about 750,000-800,000 ounces of gold and 35 million ounces of silver annually in its first full five years at anticipated total cash costs of $20-$50 per ounce(6), making it one of the lowest cost gold mines in the world. Commissioning is expected in late 2012 and initial production in the first quarter of 2013.

A draft feasibility study on the Cerro Casale project in Chile was completed during the quarter. Barrick and its joint venture partner Kinross Gold Corporation continue to study various options to further optimize the project and expect to report results of this work with Q4 disclosure in February, 2010.

Barrick recently entered into an agreement to acquire Xstrata Plc's 70% interest in the El Morro project for $465 million in cash. El Morro is expected to add another large, high quality gold-copper resource to Barrick's portfolio in Chile, an attractive country for mine development. El Morro is located between Pascua-Lama and Cerro Casale in the Atacama Region of Chile, where the Company will look to capture potential construction and future operating synergies. The Company's immediate focus will be on optimizing the current feasibility study and exploring the associated 800 square kilometer land position. As reported by Xstrata, total measured and indicated gold and copper resources are approximately 8.3 million ounces and 6.3 billion pounds (100% basis), respectively (7). The other 30% interest in El Morro is owned indirectly by New Gold Inc. which holds a right of first refusal to purchase Xstrata's interest and has until January 11, 2010 to exercise this right. Barrick's agreement to purchase Xstrata's interest is subject to the expiration or waiver of the New Gold right of first refusal and other customary closing conditions. The transaction is expected to close prior to January 30, 2010.

The South America business unit met plan with production of 0.51 million ounces at total cash costs of $247 per ounce. The Lagunas Norte mine had a strong Q3 with production of 0.30 million ounces at total cash costs of $128 per ounce on higher grades and tons processed compared to each of the prior two quarters. Veladero's production of 0.13 million ounces at total cash costs of $502 per ounce benefited from access to higher grade areas in the latter part of the quarter, which is expected to continue into Q4. The commissioning of the crusher expansion is now in the ramp-up phase and is designed to increase processing capacity from 50,000 to 85,000 tons per day.

The Australia Pacific region produced 0.46 million ounces at total cash costs of $585 per ounce. Porgera, the region's largest operation, produced 0.12 million ounces at total cash costs of $583 per ounce. Higher production and lower total cash costs are expected at Porgera in Q4.

Production from the African business unit was 0.21 million ounces at total cash costs of $477 per ounce with a strong contribution from the new Buzwagi mine, which produced 87,000 ounces at total cash costs of $315 per ounce. The flotation plant was commissioned during Q3 and processing is expected to transition from oxide to sulfide ore in Q4. Buzwagi is anticipated to produce about 200,000 ounces of gold at total cash costs of about $335 per ounce in 2009.

The Company is on track with its full year copper production guidance of 375-400 million pounds and is expecting to come in at the low end of its total cash costs guidance of $1.25-$1.35 per pound. Q3 copper production of 104 million pounds was on plan and total cash costs of $1.05 per pound were better than plan. The Company again benefited from its copper hedge position, realizing $2.90 per pound, 9% higher than the average spot price.

The company’s address is 161 Bay Street, Suite 3700, Toronto M5J 2S1, 416-861-9911, fax: 416-861-2492.