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SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
FORM 40-F
o
Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
or
ý
Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For Fiscal year ended: December 31, 2007	 	Commission File number: No. 1-9059	
 	
BARRICK GOLD CORPORATION
 (Exact name of registrant as specified in its charter)

Ontario 
(Province or other jurisdiction of
incorporation or organization)	 	1041 
(Primary standard industrial
classification code number,
if applicable)	 	Not Applicable 
(I.R.S. employer
identification number, if applicable)	

Brookfield Place
TD Canada Trust Tower
Suite 3700
161 Bay Street, P.O. Box 212
Toronto, Canada M5J 2S1
(800) 720-7415 
(Address and telephone number of registrant's principal executive office)	

Barrick Goldstrike Mines Inc.
P.O. Box 29, Elko, Nevada 89803
(702) 738-8043
 (Name, address and telephone number of agent for service in the United States)	
 	
Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	 	Name of each exchange on which registered:	
Common Shares	 	New York Stock Exchange	
 	
 	 	Securities registered or to be registered pursuant to Section 12(g) of the Act:	 	None	 	 	
 	 	Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:	 	None	 	 	
 	
For annual reports, indicate by check mark the information filed with this form:
ý         Annual Information Form                                                   ý         Audited Annual Financial Statements
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:
Common Shares 869,886,631
Indicate by check mark whether the registrant by filing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number assigned to the registrant in connection with such rule.

Yes	 	o	 	No	 	ý	
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13(d) or 15(d) of the Exchange Act during the proceeding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements in the past 90 days.

Yes	 	ý	 	No	 	o	

 CONTROLS AND PROCEDURES
        The disclosure provided under "Controls and Procedures" on page 92 of Exhibit 99.1, Barrick's Annual Information Form, is incorporated by reference herein.

 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
        Barrick's "Management's Report on Internal Control Over Financial Reporting" on page 77 of Exhibit 99.2, is incorporated by reference herein.

 ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
        The disclosure provided under "Independent Auditors' Report" on pages 78 through 79 of Exhibit 99.3, Barrick's Comparative Audited Consolidated Financial Statements, is incorporated by reference herein.

 AUDIT COMMITTEE
        The disclosure provided under "Composition of the Audit Committee" on pages 89 through 90 of Exhibit 99.1, Barrick's Annual Information Form, is incorporated by reference herein. Barrick has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended.

 CODE OF ETHICS
        Barrick has adopted a code of ethics entitled, "Barrick Gold Corporation Code of Business Conduct and Ethics". The Code of Business Conduct and Ethics applies to all directors, officers and employees of Barrick, including Barrick's principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct and Ethics is available at Barrick's Internet website, www.barrick.com, in the Company — Corporate Governance section and is available in print to any shareholder upon written request to the Secretary of Barrick.

 PRINCIPAL ACCOUNTANT FEES AND SERVICES
        The disclosure provided under "External Auditor Service Fees" on pages 91 through 92 of Exhibit 99.1, Barrick's Annual Information Form, is incorporated by reference herein.

 AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
        The disclosure provided under "Audit Committee Pre-Approval Policies and Procedures" on page 91 of Exhibit 99.1, Barrick's Annual Information Form, is incorporated by reference herein. No audit-related fees, tax fees or other non-audit fees were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Regulation S-X.

 OFF-BALANCE SHEET ARRANGEMENTS
        The disclosure provided under "Off-Balance Sheet Arrangements" on pages 57 to 60 of Exhibit 99.4, Management's Discussion and Analysis of Financial and Operating Results, is incorporated by reference herein.

 CONTRACTUAL OBLIGATIONS
        The disclosure provided under "Contractual Obligations and Commitments" on page 54 of Exhibit 99.4, Management's Discussion and Analysis of Financial and Operating Results, is incorporated by reference herein.
1

 UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
A.    Undertaking
        The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
B.    Consent to Service of Process
        The Registrant has previously filed with the Commission a Form F-X in connection with the Common Shares.
2

 INCORPORATION BY REFERENCE
        The Registrant's annual report on Form 40-F is incorporated by reference in the Registrant's registration statements on Form F-3 (No. 333-14148) and Form F-9 (Nos. 333-120133 and 333-106592) and Form S-8 (File Nos. 333-121500, 333-131715 and 333-135769) and in the registration statements on Form F-9 of Barrick Gold Finance Company (No. 333-120133-01) and Barrick Gold Inc. (Nos. 333-120133-02 and 333-106592-01).
3

 SIGNATURES
        Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

 	 	BARRICK GOLD CORPORATION	

 	

 	

 	
 	
By:	
 	
/s/   SYBIL E. VEENMAN       
	
 	 	 	 	Name:	Sybil E. Veenman	
 	 	 	 	Title:	Vice President, Assistant General
Counsel and Secretary	

 	
Dated: March 27, 2008	
4

 EXHIBIT INDEX

Exhibits
	 	Description
	
  99.1	 	Annual Information Form dated as of March 27, 2008	

  99.2	
 	
Management's Report on Internal Control Over Financial Reporting	

  99.3	
 	
Barrick Gold Corporation's Comparative Audited Consolidated Financial Statements prepared in accordance with U.S. generally accepted accounting principles ("US GAAP"), including the Notes thereto, as at December 31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005, together with the Independent Auditors' report thereon	

  99.4	
 	
Barrick Gold Corporation's Management's Discussion and Analysis (US GAAP) for the year ended December 31, 2007	

  99.5	
 	
Consent of PricewaterhouseCoopers LLP	

  99.6	
 	
Consent of PricewaterhouseCoopers LLP	

  99.7	
 	
Certification of Gregory C. Wilkins required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of Sarbanes-Oxley Act of 2002	

  99.8	
 	
Certification of Jamie C. Sokalsky required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of Sarbanes-Oxley Act of 2002	

99.9	
 	
Certification of Gregory C. Wilkins pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of Sarbanes-Oxley Act of 2002	

99.10	
 	
Certification of Jamie C. Sokalsky pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of Sarbanes-Oxley Act of 2002	
5

QuickLinks
CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
AUDIT COMMITTEE
CODE OF ETHICS
PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
OFF-BALANCE SHEET ARRANGEMENTS
CONTRACTUAL OBLIGATIONS
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
INCORPORATION BY REFERENCE
SIGNATURES
EXHIBIT INDEX

Exhibit 99.1

 
 
BARRICK GOLD CORPORATION
Brookfield Place
TD Canada Trust Tower, Suite 3700
P.O. Box 212
161 Bay Street
Toronto, Ontario
M5J 2S1

ANNUAL INFORMATION FORM
 
For the year ended December 31, 2007
 
Dated as of March 27, 2008

 
BARRICK GOLD CORPORATION
ANNUAL INFORMATION FORM

TABLE OF CONTENTS

GLOSSARY OF TERMS	3	
 	 	
FORWARD-LOOKING INFORMATION	7	
 	 	
SCIENTIFIC AND TECHNICAL INFORMATION	8	
 	 	
GENERAL INFORMATION	8	
 	 	
Incorporation	8	
Subsidiaries	9	
Areas of Interest	9	
General Development of the Business	9	
Transactions	12	
 	 	
NARRATIVE DESCRIPTION OF THE BUSINESS	16	
 	 	
Regional Business Units	16	
North America	16	
Australia Pacific	17	
Africa	17	
South America	17	
Production	17	
Mineral Reserves and Mineral Resources	18	
Marketing and Distribution	28	
Employees and Labor Relations	29	
Competition	30	
 	 	
MATERIAL PROPERTIES	30	
 	 	
Goldstrike Property	30	
Lagunas Norte Mine	36	
Veladero Mine	40	
Zaldívar Mine	45	
 	 	
EXPLORATION, DEVELOPMENT AND BUSINESS DEVELOPMENT	49	
 	 	
ENVIRONMENT AND CLOSURE	52	
 	 	
FINANCIAL RISK-MANAGEMENT	54	
 	 	
LEGAL MATTERS	57	
 	 	
Government Controls and Regulations	57	
 
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Legal Proceedings	59	
 	 	
RISK FACTORS	62	
 	 	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	71	
 	 	
CONSOLIDATED FINANCIAL STATEMENTS	71	
 	 	
CAPITAL STRUCTURE	71	
 	 	
RATINGS	74	
 	 	
MARKET FOR SECURITIES	76	
 	 	
MATERIAL CONTRACTS	76	
 	 	
TRANSFER AGENTS AND REGISTRARS	77	
 	 	
DIVIDEND POLICY	77	
 	 	
DIRECTORS AND OFFICERS OF THE COMPANY	78	
 	 	
AUDIT COMMITTEE	85	
 	 	
Audit Committee Mandate	85	
Purpose	85	
Committee Responsibilities	85	
Powers	88	
Composition	89	
Meetings	89	
Composition of the Audit Committee	89	
Participation on Other Audit Committees	91	
Audit Committee Pre-Approval Policies and Procedures	91	
External Auditor Service Fees	91	
 	 	
CONTROLS AND PROCEDURES	92	
 	 	
NON-GAAP FINANCIAL MEASURES	92	
 	 	
Total Cash Costs	92	
Realized Price	95	
 	 	
ADDITIONAL INFORMATION	96	
 
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GLOSSARY OF TERMS
 
Assay
 Analysis to determine the amount or proportion of the element of interest contained within a sample.
 
Autoclave system
Oxidation process in which high temperatures and pressures are applied within a pressurized closed vessel to convert refractory sulphide mineralization into amenable oxide ore.
 
Ball mill
A horizontal rotating steel cylinder which grinds ore to fine particles. The grinding is carried out by the pounding and rolling of a charge of steel balls carried within the cylinder.
 
By-product
A secondary metal or mineral product that is recovered along with the primary metal or mineral product during the ore concentration process.
 
Carbonaceous
Containing carbon or coal, especially shale or other rock containing small particles of carbon distributed throughout the mass.
 
Carbon-in-leach (C-I-L)
A process step wherein granular activated carbon particles much larger than the ground ore particles are introduced into the ore pulp. Cyanide leaching and precious metals adsorption onto the activated carbon occurs simultaneously. The loaded activated carbon is mechanically screened to separate it from the barren pulp, processed to remove the precious metals and finally prepared for reuse.
 
Concentrate
A processing product containing the valuable ore mineral from which most of the waste mineral has been eliminated.
 
Contained ounces
Represents total ounces in a mineral reserve before reduction to account for 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.
 
Crushing
Breaking of ore from the size delivered from the mine into smaller and more uniform fragments to be then fed to grinding mills or to a leach pad.
 
Cut-off grade
The minimum metal grade at which material can be economically mined and processed (used in the calculation of ore reserves).
 
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 and/ or waste rock.
 
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Dilution
Sub-economic material that is unavoidably included with the mined ore, lowering the mined grade.
 
Doré
Unrefined gold and silver bullion bars usually consisting of approximately 90% precious metals that will be further refined to almost pure metal.
 
Drift
A horizontal tunnel generally driven within or alongside an orebody and aligned parallel to the long dimension of the ore.
 
Drift-and-fill
A method of underground mining used for flat-lying mineralization or where ground conditions are less competent.
 
Drilling
Core: a drilling method that uses a rotating barrel and an annular-shaped, diamond-impregnated rock-cutting bit to produce cylindrical rock cores and lift such cores to the surface, where they may be collected, examined and assayed.
 
Reverse circulation: a drilling method that uses a rotating cutting bit within a double-walled drill pipe and produces rock chips rather than core. Air or water is circulated down to the bit between the inner and outer wall of the drill pipe. The chips are forced to surface through the centre of the drill pipe and are collected, examined and assayed.
 
Conventional rotary:  a drilling method that produces rock chips similar to reverse circulation except that the sample is collected using a single-walled drill pipe. Air or water circulates down through the center of the drill pipe and returns chips to the surface around the outside of the pipe.
 
In-fill: The collection of additional samples between existing samples, used to provide greater geological detail and to provide more closely-spaced assay data.
 
Exploration
Prospecting, sampling, mapping, diamond-drilling and other work involved in locating the presence of economic deposits and establishing their nature, shape and grade.
 
Flotation
A process by which some mineral particles are induced to become attached to bubbles and float, and other particles to sink, so that the valuable minerals are concentrated and separated from the uneconomic gangue or waste.
 
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.
 
Grinding (Milling)
 Powdering or pulverising of ore, by pressure or abrasion, to liberate valuable minerals for further metallurgical processing.
 
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.
 
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Lode
A mineral deposit, consisting of a zone of veins, veinlets or disseminations, in consolidated rock as opposed to a placer deposit.
 
Long-hole open stoping
A method of underground mining involving the drilling of holes up to 30 meters or longer into an ore bearing zone and then blasting a slice of rock which falls into an open space. The broken rock is extracted and the resulting open chamber may or may not be filled with supporting material.
 
Metric conversion

Troy ounces	×	31.10348	=	Grams	
Troy ounces per short ton	×	34.28600	=	Grams per tonne	
Pounds	×	0.00045	=	Tonnes	
Tons	×	0.90718	=	Tonnes	
Feet	×	0.30480	=	Meters	
Miles	×	1.60930	=	Kilometers	
Acres	×	0.40468	=	Hectares	
Fahrenheit	(°F-32) × 5 ¸ 9	=	Celsius	
 
Mill
A processing facility where ore is finely ground and thereafter undergoes physical or chemical treatment to extract the valuable metals. Also the device used to perform grinding (milling).
 
Mineral reserve
See “Narrative Description of the Business – Gold Mineral Reserves and Mineral Resources”.
 
Mineral resource
See “Narrative Description of the Business – 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.
 
Net profits interest royalty
A royalty based on the profit remaining after recapture of certain operating, capital and other costs.
 
Net smelter return royalty
A royalty based on a percentage of valuable minerals produced with settlement made either in kind or in currency based on the spot sale proceeds received less all of the offsite smelting, refining and transportation costs associated with the purification of the economic metals.
 
Open pit mine
A mine where materials are removed entirely from a working that is open to 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 is contiguous and can be mined economically.
 
Oxide ore
Mineralized rock in which some of the original minerals have been oxidized. Oxidation tends to make the ore more amenable to cyanide solutions so that minute particles of gold will be readily dissolved.
 
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Qualified Person
See “Scientific and Technical Information”.
 
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.
 
Refractory material
Mineralized material in which the metal is not amenable to recovery by conventional cyanide methods without any pre-treatment. The refractory nature can be due to either silica or sulphide encapsulation of the metal or the presence of naturally occurring carbons or other constituents that reduce gold recovery.
 
Roasting
The treatment of sulphide ore by heat and air, or oxygen enriched air, in order to oxidize sulphides and remove other elements (carbon, antimony or arsenic).
 
Shaft
A vertical passageway to an underground mine for ventilation, moving personnel, equipment, supplies and material including ore and waste rock.
 
Tailings
The material that remains after all economically and technically recoverable precious metals have been removed from the ore during processing.
 
Tailings storage facility
A natural or man-made confined area suitable for depositing the material that remains after the treatment of ore.
 
Tons
Short tons (2,000 pounds).
 
Total cash costs
See “Non-GAAP Financial Measures - Total Cash Costs”.
 
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REPORTING CURRENCY, FINANCIAL AND RESERVE INFORMATION
 
All currency amounts in this Annual Information Form are expressed in United States dollars, unless otherwise indicated. References to “C$” are to Canadian dollars. References to “A$” are to Australian dollars. For Canadian dollars to U.S. dollars, the average exchange rate for 2007 and the exchange rate at December 31, 2007 were one Canadian dollar per 0.9304 and 1.0120 U.S. dollars, respectively. For Australian dollars to U.S. dollars, the average exchange rate for 2007 and the exchange rate at December 31, 2007 were one Australian dollar per 0.8389 and 0.8816 U.S. dollars, respectively.
 
Barrick Gold Corporation (“Barrick” or the “Company”) prepares its financial statements in accordance with the United States generally accepted accounting principles (“U.S. GAAP”). Accordingly, unless otherwise indicated, financial information in this Annual Information Form is presented in accordance with U.S. GAAP. The consolidated financial statements of the Company for the year ended December 31, 2007 (the “Consolidated Financial Statements”) are incorporated by reference in this Annual Information Form. The Consolidated Financial Statements are available electronically from the Canadian System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and from the U.S. Securities and Exchange Commission’s (the “SEC”) Electronic Document Gathering and Retrieval System (“EDGAR”) at www.sec.gov.
 
Mineral reserves have been calculated in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934), as interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve.  For U.S. reporting purposes, as at December 31, 2007, the mineralization at the Pueblo Viejo project was classified as mineralized material.  In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the SEC. Investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, investors are cautioned not to assume that any part or all of Barrick’s mineral resources constitute or will be converted into reserves.
 
FORWARD-LOOKING INFORMATION
 
Certain information contained or incorporated by reference in this Annual Information Form, including any information as to our strategy, plans or 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, copper or certain other commodities (such as silver, 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, Dominican Republic, Australia, Papua New Guinea, Chile, Peru, Argentina, Tanzania, South Africa, Pakistan, 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; employee relations; availability and increasing costs associated with mining inputs and labor; the speculative nature of mineral exploration and development, including the risks of
 
7

 
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 mineral 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 Information Form are qualified by these cautionary statements. Specific reference is made to “Narrative Description of the Business –Mineral Reserves and Mineral Resources” and “Risk Factors” and to the “Management’s Discussion and Analysis of Financial and Operating Results for the year ended December 31, 2007” incorporated by reference herein for a discussion of some of the factors underlying forward-looking statements.
 
The Company may, from time to time, make oral forward-looking statements. The Company advises that the above paragraph and the risk factors described in this Annual Information Form and in the Company’s other documents filed with the Canadian securities commissions and the SEC should be read for a description of certain factors that could cause the actual results of the Company to materially differ from those in the oral forward-looking statements. The Company disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
 
SCIENTIFIC AND TECHNICAL INFORMATION
 
Unless otherwise indicated, scientific or technical information in this Annual Information Form relating to mineral reserves or mineral resources is based on information prepared by employees of Barrick, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of, or has been reviewed by, Jacques McMullen, Senior Vice President, Technical Services of Barrick, Rick Allan, Senior Director, Mining of Barrick, and Rick Sims, Senior Director, Resources and Reserves of Barrick.
 
Scientific or technical information in this Annual Information Form relating to the geology of particular properties, and the exploration programs described in this Annual Information Form, are prepared and/or designed and carried out under the supervision of Robert Krcmarov, Vice President, Global Exploration of Barrick.
 
Each of Messrs. McMullen, Allan, Sims and Krcmarov is a “Qualified Person” as defined in National Instrument 43-101. A “Qualified Person” means an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these, has experience relevant to the subject matter of the mineral project, and is a member in good standing of a professional association.
 
GENERAL INFORMATION
 
Incorporation
 
Barrick is a corporation governed by the Business Corporations Act (Ontario) resulting from the amalgamation, effective July 14, 1984 under the laws of the Province of Ontario, of Camflo Mines Limited, Bob-Clare Investments Limited and the former Barrick Resources Corporation. By articles of amendment effective December 9, 1985, the Company changed its name to American Barrick Resources Corporation. Effective January 1, 1995, as a result of an amalgamation with a wholly-owned subsidiary, the Company changed its name from American Barrick Resources Corporation to Barrick Gold Corporation. On December 7, 2001, in connection with its acquisition of Homestake Mining Company (“Homestake”), the Company amended its articles to create a special voting share, which has special voting rights designed to permit holders of Barrick Gold Inc. (formerly Homestake Canada Inc.) (“BGI”) exchangeable shares to vote as a single class with the holders of Barrick common shares. In connection with its acquisition of Placer Dome Inc. (“Placer Dome”), Barrick amalgamated with Placer Dome pursuant to articles of
 
8

 
amalgamation dated May 9, 2006 (see “– Transactions”). Barrick’s head and registered office is located at Brookfield Place, TD Canada Trust Tower, 161 Bay Street, Suite 3700, Toronto, Ontario, M5J 2S1.
 
Subsidiaries
 
A significant portion of Barrick’s business is carried on through its subsidiaries. A chart showing Barrick’s mines, projects, related operating subsidiaries, other significant subsidiaries and certain associated subsidiaries as at March 27, 2008 and their respective locations or jurisdictions of incorporation, as applicable, is set out at the end of this “General Information” section. All subsidiaries, mines and projects referred to in the chart are 100% owned unless otherwise noted.
 
Areas of Interest
 
A map showing Barrick’s mining operations and projects as at March 27, 2008 is set out at the end of this “General Information” section.
 
General Development of the Business
 
Barrick entered the gold mining business in 1983 and is now the largest gold mining company in the world in terms of production, reserves and market capitalization. The Company has operating mines or projects in Canada, the United States, Dominican Republic, Australia, Papua New Guinea, Peru, Chile, Argentina, Pakistan, Russia, South Africa and Tanzania. The Company’s principal products and sources of earnings are gold and copper.
 
During its first ten years, Barrick focused on acquiring and developing properties in North America, notably the Company’s flagship Goldstrike property on the Carlin Trend in Nevada. Since 1994, Barrick has strategically expanded beyond its North American base to ensure growth in reserves and production, and now also operates in South America, Africa, Australia, Papua New Guinea, Pakistan and Russia.
 
Barrick has employed a growth strategy that involves acquisitions, a district development program and exploration. In 2006, Barrick completed the acquisition of Placer Dome, which included 12 mines and 4 significant projects.  In connection with the acquisition of Placer Dome, Barrick completed the sale to Goldcorp Inc. of all of Placer Dome’s Canadian properties and operations, including all historic mining, reclamation and exploration properties, Placer Dome’s interest in the La Coipa mine in Chile, and a 40% interest in the Pueblo Viejo project.  Barrick sold its interest in the South Deep mine, acquired in connection with the Placer Dome acquisition, in late 2006. For details of Barrick’s more recent acquisitions, see “–Transactions”.
 
Barrick’s exploration strategy includes both its district development program and its early stage exploration program.  The district development program involves focusing exploration on and around existing properties. Through this program, the Company discovered and brought into production the Goldstrike Underground mine and related mineral deposits on the Goldstrike property and added additional resources at several of its operations. In the years leading up to 2003, exploration spending across the mining industry, particularly among junior companies, was in a state of general decline. During this same period, Barrick increased its exploration activities and engaged in early stage exploration in four major areas: Peru, Tanzania, Australia and Chile/Argentina. This program resulted in the grassroots discovery of the Lagunas Norte deposit in the Alto Chicama District in Peru in 2002. Barrick’s exploration program continues to focus both on areas around our existing mines and early stage exploration activities in the United States, Canada, Peru, Tanzania, Australia, Argentina, Chile, Papua New Guinea, Russia, Pakistan and South Africa. For additional information regarding Barrick’s exploration programs, see “Exploration, Development and Business Development”.
 
Through a combination of acquisitions and its exploration program, Barrick has a project pipeline consisting of ten projects at varying stages of development.  The successful development of Barrick’s projects is expected to have a significant impact on Barrick’s future operations.  Reflecting higher activity at its Reko Diq, Kabanga, Sedibelo, Cerro Casale and Kainantu projects, Barrick expects its 2008 project development expenses to increase from 2007.
 
9

As a result of the continued development of its projects, in particular, at Pueblo Viejo, Buzwagi and Cortez Hills, Barrick expects 2008 capital expenditures to increase significantly from 2007.  For 2008, subject to permitting and other matters, the timing of which is not in Barrick’s control, Barrick expects to spend $1.5 - $1.7 billion on capital expenditures for its projects.  For additional information regarding Barrick’s projects, see “Exploration, Development and Business Development”.
 
In 2005, overall gold production increased from 2004 levels as Barrick’s Lagunas Norte and Veladero mines commenced operations in the second half of 2005. In 2006, with its acquisition of Placer Dome, Barrick produced 8.64 million ounces of gold and 367 million pounds of copper.  Prior to 2006, Barrick did not produce a significant amount of copper.  In 2007, Barrick’s production was 8.06 million ounces of gold and 402 million pounds of copper, with total cash costs of $350 per ounce and $0.83 per pound, respectively.  The processing of lower average ore grades and higher waste stripping contributed to the decrease in 2007 gold production from 2006 (see also “Narrative Description of the Business – Production”).
 
The following table summarizes Barrick’s interest in its producing mines and its share of gold production from these mines:

Gold Mines	 	Ownership(1)	 	2007	 	2006(5)	 	
 	 	 	 	(thousands
of ounces)	 	(thousands
of ounces)	 	
North America	 	 	 	 	 	 	 	
Goldstrike Property, Nevada	 	 	 	 	 	 	 	
Goldstrike Open Pit	 	100	%	1,216	 	1,388	 	
Goldstrike Underground	 	100	%	413	 	477	 	
Goldstrike Property total	 	 	 	1,629	 	1,865	 	
Eskay Creek Mine, British Columbia	 	100	%	68	 	113	 	
Round Mountain Mine, Nevada (2)	 	50	%	289	 	340	 	
Hemlo Property, Ontario (2)	 	50	%	169	 	205	 	
Marigold Mine, Nevada (2)	 	33	%	47	 	50	 	
Bald Mountain Mine, Nevada	 	100	%	123	 	273	 	
Cortez Mine, Nevada (2, 9)	 	60	%	323	 	253	 	
Turquoise Ridge Mine, Nevada (2)	 	75	%	184	 	180	 	
Golden Sunlight Mine, Montana	 	100	%	198	 	93	 	
Ruby Hill Mine, Nevada (6)	 	100	%	154	 	—	 	
Storm Mine, Nevada (2, 7)	 	60	%	17	 	—	 	
 	 	 	 	3,201	 	3,372	 	
 
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South America	 	 	 	 	 	 	 	
Veladero Mine, Argentina	 	100	%	473	 	511	 	
Pierina Mine, Peru	 	100	%	520	 	509	 	
Lagunas Norte Mine, Peru	 	100	%	1,086	 	1,084	 	
 	 	 	 	2,079	 	2,104	 	
Australia Pacific	 	 	 	 	 	 	 	
Plutonic Mine, Western Australia	 	100	%	208	 	237	 	
Darlot Mine, Western Australia	 	100	%	120	 	137	 	
Lawlers Mine, Western Australia	 	100	%	115	 	110	 	
Kalgoorlie Mine, Western Australia (2)	 	50	%	304	 	338	 	
Granny Smith Mine, Western Australia	 	100	%	175	 	295	 	
Kanowna Mine, Western Australia	 	100	%	362	 	477	 	
Osborne Mine, Queensland, Australia	 	100	%	42	 	30	 	
Henty Mine, Tasmania	 	100	%	70	 	68	 	
Cowal Mine, Central New South Wales, Australia  (3)	 	100	%	240	 	122	 	
Porgera Mine, Papua New Guinea (2,8)	 	95	%	487	 	406	 	
 	 	 	 	2,123	 	2,220	 	
Africa	 	 	 	 	 	 	 	
Bulyanhulu Mine, Tanzania	 	100	%	243	 	330	 	
Tulawaka Mine, Tanzania (2)	 	70	%	125	 	98	 	
North Mara Mine, Tanzania	 	100	%	237	 	362	 	
South Deep Mine, South Africa (2, 4)	 	50	%	—	 	124	 	
 	 	 	 	605	 	914	 	
Other	 	 	 	52	 	33	 	
Company Total	 	 	 	8,060	 	8,643	 	

(1)	 	Barrick’s interest is subject to royalty obligations at certain mines.	
(2)	 	Barrick’s proportional share.	
(3)	 	The Cowal mine commenced production in May 2006.	
(4)	 	Barrick sold its interest in the South Deep mine in December 2006.	
(5)	 	Barrick’s share of the acquired Placer Dome mines production reflects the results from January 20, 2006.	
(6)	 	The Ruby Hill mine commenced production in February 2007.	
(7)	 	The Storm mine commenced production in April 2007.	
(8)	 	Barrick increased its interest in the Porgera mine from 75% to 95% in August 2007.	
(9)	 	Barrick increased its interest in the Cortez mine from 60% to 100% in March 2008.	
 
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The following table summarizes Barrick’s interest in its principal producing copper mines and its share of copper production from these mines:

Copper Mines	 	Ownership	 	2007	 	2006(1)	 	
 	 	 	 	(millions of
pounds)	 	(millions of
pounds)	 	
Zaldívar Mine, Chile	 	100	%	315	 	308	 	
Osborne Mine, Queensland, Australia	 	100	%	87	 	59	 	
Company Total	 	 	 	402	 	367	 	

(1)                    Barrick’s share of the acquired Placer Dome mines production reflects the results from January 20, 2006.
 
See Note 4 “Segment Information” to the Consolidated Financial Statements and Management’s Discussion and Analysis for the year ended December 31, 2007 (the “Management’s Discussion and Analysis”) for further information on the Company’s operating and geographic segments.
 
2008 gold production is targeted at approximately 7.6 to 8.1 million ounces at expected average total cash costs of $390 to $415 per ounce.  Lower gold production is expected in North America as a result of lower production at Golden Sunlight and Ruby Hill and the end of production from Eskay Creek, while production in South America, Australia and Africa is expected to be similar to 2007 levels.  A continuing trend of industry wide cost pressures from factors such as higher labor costs, higher energy costs and commodity prices, higher gold price related costs and a weakening U.S. dollar in addition to the effects, particular to the Company, of lower by-product silver credits due to the closure of Barrick’s Eskay Creek mine, are contributing to higher expected 2008 total cash costs per ounce.  2008 copper production is targeted at approximately 380 to 400 million pounds at expected total cash costs of approximately $1.15 to $1.25 per pound.  Copper cash costs are expected to be higher than 2007 due principally to higher energy and higher acid costs.
 
At December 31, 2007, proven and probable mineral reserves for Barrick were 124.6 million ounces of gold, with mineral resources of 50.6 million ounces of measured and indicated gold and 31.9 million ounces of inferred gold. Barrick also had proven and probable mineral reserves of 6.2 billion pounds of copper, with mineral resources of 5.4 billion pounds of measured and indicated copper and 15.4 billion pounds of inferred copper. For a breakdown of Barrick’s reserves and resources by category, see “Narrative Description of the Business – Mineral Reserves and Mineral Resources”.
 
Transactions
 
Acquisition of Additional 20% Interest in Porgera Mine
 
In August 2007, Barrick acquired an additional 20% interest in the Porgera mine in Papua New Guinea from Emperor Mines Limited, for cash consideration of $259 million.  Following this transaction Barrick’s interest in the Porgera mine increased from 75% to 95%.  The Government of Papua New Guinea holds the remaining 5% undivided interest in the Porgera mine.   Barrick has entered into a call option deed regarding the possible sale of up to a 5% interest to the Government of Papua New Guinea, for the proportionate acquisition cost paid by Barrick. The call option deed expires in 2008.
 
Acquisition of Arizona Star Resource Corp.
 
In October 2007, Barrick commenced an offer to acquire the shares of Arizona Star Resource Corp. (“Arizona Star”).  Barrick concluded its offer for Arizona Star in December 2007, acquiring an approximate 94% interest in Arizona Star for cash consideration of approximately $730 million.  In March 2008, Barrick acquired the remaining shares of Arizona Star by way of a compulsory acquisition.  Arizona Star owns a 51% interest in the Cerro Casale deposit in the Maricunga district of Region III in Chile.  Kinross Gold Corporation (“Kinross”) owns the remaining 49% of the Cerro Casale deposit.
 
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Acquisition of Kainantu Mineral Property and Papua New Guinea Exploration Properties
 
In December 2007, Barrick completed the acquisition of the Kainantu mineral property and over 2,900 square kilometres of exploration licenses in Papua New Guinea from Highlands Pacific Limited for approximately $135 million in cash (net of $7 million held back pending renewal of certain exploration licenses).
 
Acquisition of Additional 40% Interest in Cortez Property
 
In March  2008, Barrick acquired an additional 40% interest in the Cortez property from Kennecott Explorations (Australia) Ltd., a subsidiary of Rio Tinto plc, for consideration of $1.695 billion in cash, a further $50 million payable if and when an additional 12 million ounces of contained gold resources are added to Barrick’s December 31, 2007 reserve statement for Cortez, and a sliding scale royalty payable to Rio Tinto on 40% of all Cortez production in excess of 15 million ounces on and after January 1, 2008.  This acquisition consolidates 100% ownership for Barrick of the existing Cortez mine and the Cortez Hills development project plus any future potential from the property.
 
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NARRATIVE DESCRIPTION OF THE BUSINESS
 
Barrick is engaged the production and sale of gold, as well as related activities such as exploration and mine development.  Barrick also produces some copper and holds interests in a platinum group metals development project and a nickel development project, both located in Africa, and a platinum group metals project located in Russia.   Unless otherwise specified, the description of Barrick’s business, including products, principal markets, distribution methods, employees and labor relations contained in this AIF, applies to each of its regional business units (“RBU”) (as described below) and Barrick as a whole.
 
Regional Business Units
 
Barrick has four RBUs: North America, South America, Australia Pacific, and Africa.  This structure reflects how Barrick manages its business and how it classifies its operations for planning and measuring performance. Set out below is a brief description of the mines and projects of each RBU.  Each region receives direction from Barrick’s corporate office, but has responsibility for all aspects of its business, such as strategy and sustainability of mining operations, including exploration, production and closure.  In 2007, recognizing the importance of its project pipeline to its long-term strategy of growing its business, Barrick expanded the capacity of the group responsible for the development and construction of the projects through the addition of experienced staff with the necessary specialized skill set associated with project management.  Efforts in this regard will continue in 2008 with a number of positions identified to be added to enhance Barrick’s capacity to deliver on the significant project pipeline in the coming years (for additional information regarding Barrick’s projects, see “Exploration, Development and Business Development”) .  For details regarding 2007 production for the mines in each RBU, see “General Information – General Development of the Business”.  For additional details regarding each RBUs reserves and resources, see “ – Mineral Reserves and Resources”.   See also Note 4 “Segment Information” to the Consolidated Financial Statements and Management’s Discussion and Analysis for the year ended December 31, 2007 (the “Management’s Discussion and Analysis”) for further financial and other information on the Company’s operating and geographic segments.
 
North America
 
Barrick’s North American operations consist of its Goldstrike property (a material property for the purposes of this AIF, see “Material Properties – Goldstrike Property”), its Cortez property (consisting of the Cortez mine and Cortez Hills project), its 50% interest in the Round Mountain mine, its Ruby Hill mine, its Eskay Creek mine, its 50% interest in the Hemlo property, its 33% interest in the Marigold mine, its Bald Mountain mine, its Golden Sunlight mine and its 75% interest in the Turquoise Ridge mine. Barrick’s North American projects are its 50% interest in the Donlin Creek project and its 60% interest in the Pueblo Viejo project.  In March 2008, Barrick acquired the remaining 40% of the Cortez property (including the Cortez Hills project) (see “General Information – Transactions – Acquisition of Additional 40% Interest in Cortez Property”) .  In 2007, the region produced approximately 3.2 million ounces at total cash costs of $370 per ounce. In 2008, the region is expected to produce 3.0 to 3.15 million ounces at total cash costs of $450 to $465 per ounce.  Production is expected to be lower than 2007 primarily due to the mining of lower-grade ore.  Total cash costs per ounce are expected to be higher in 2008 due to the impact of lower production; lower silver credits due to the closure of Eskay Creek; increased labor rates; higher energy costs mainly due to higher oil prices; and higher royalties and production taxes as a result of higher gold prices.
 
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Australia Pacific
 
Barrick’s Australia Pacific operations consist of its Cowal mine, its 50% interest in the Kalgoorlie mine, its operating mines located in the Yilgarn District in Western Australia (Plutonic, Darlot and Lawlers), its Granny Smith mine, its Henty mine, its Kanowna mine and its Osborne mine as well as its 95% interest in the Porgera mine and its Kainantu property, which are in Papua New Guinea.  During 2007, Barrick acquired an additional 20% interest in the Porgera mine and acquired the Kainantu mineral property and over 2,900 square kilometres of exploration licenses in Papua New Guinea (see “General Information – Transactions”).  In 2007, the region produced approximately 2.1 million ounces at total cash costs of $452 per ounce.  In 2008, the region is expected to produce 1.975 to 2.15 million ounces of gold at total cash costs of $450 to $475 per ounce.  Total cash costs per ounce are expected to be higher in 2008 due to higher currency hedge rates, higher oil prices, labor rate increases and higher royalty costs.
 
Africa
 
Barrick’s African operations are its Bulyanhulu mine, its 70% interest in the Tulawaka mine and its North Mara mine, each in Tanzania.  Barrick’s African projects are its Buzwagi and Kabanga projects, located in Tanzania, and its Sedibelo project, located in South Africa.  The Buzwagi project was approved for construction on August 1, 2007, and is expected to begin production in mid-2009 (see “Exploration Development and Business Development”).  In 2007, Sedibelo’s pre-feasibility was completed and Acceptance of the Mining Rights application was received from the Department of Minerals and Energy (see “Exploration Development and Business Development”).  The region produced approximately 600,000 ounces of gold in 2007 at total cash costs of $408 per ounce.  In 2008, the region is expected to produce 0.625 to 0.7 million ounces of gold at total cash costs of $380 to $400 per ounce.  Production is expected to increase primarily at Bulyanhulu, reflecting the expected resolution of labor issues, improved equipment availability, and higher ore grades. Total cash costs per ounce are expected to be lower in 2008, reflecting the increase in production levels.
 
South America
 
The South American RBU’s Lagunas Norte mine in Peru, Veladero mine in Argentina, and its Zaldívar copper mine in Chile are each material properties for the purposes of this AIF (see “Material Properties – Lagunas Norte, - Veladero, and - Zaldívar”) . Its other operation consists of its Pierina mine in Peru. Barrick’s South American development projects consists of the Pascua-Lama project in Chile and Argentina and its Cerro Casale project in Chile, which was acquired in connection with Barrick’s acquisition of Arizona Star (see “General Information – Transactions”) .   In 2007, the region produced approximately 2.1 million ounces of gold, at total cash costs of $197 per ounce, and 315 million pounds of copper at total cash costs of $0.70 per pound.  In 2008, the South American RBU is expected to produce 1.95 to 2.05 million ounces of gold at total cash costs of $250 to $270 per ounce.  Production is expected to remain consistent with 2007, as higher production at Veladero is expected to be offset by lower production at Pierina.  Total cash costs per ounce are expected to be higher in 2008, mainly due to higher energy costs, labor rates and other cost increases.
 
Production
 
For the year-ended December 31, 2007, Barrick produced 8.06 million ounces of gold at average total cash costs of $350 per ounce and 402 million pounds of copper at average total cash costs of $0.83 per pound. Barrick’s 2008 gold production is targeted at approximately 7.6 to 8.1 million ounces at expected average total cash costs of $390 to $415 per ounce.  Lower gold production is expected in North America as a result of lower production at Golden Sunlight and Ruby Hill and the end of production from Eskay Creek, while production in South America, Australia and Africa is expected to be similar to 2007 levels. 
 
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A continuing trend of industry wide cost pressures from factors such as higher labor costs, higher energy costs and commodity prices, higher gold price related costs and a weakening U.S. dollar in addition to the effects, particular to the Company, of lower by-product silver credits due to the closure of Barrick’s Eskay Creek mine, are contributing to higher expected 2008 total cash costs per ounce.  2008 copper production is targeted at approximately 380 to 400 million pounds at expected total cash costs of approximately $1.15 to $1.25 per pound.  Copper cash costs are expected to be higher due principally to higher energy and higher acid costs.   See “Forward-Looking Information”.
 
Mineral Reserves and Mineral Resources
 
At December 31, 2007, Barrick’s total proven and probable gold mineral reserves were 124.6 million ounces. In aggregate, Barrick increased its total reserves from year-end 2006 by approximately 1.5 million ounces.  This increase in gold reserves is a combination of Barrick acquiring approximately 1.2 million contained ounces of gold reserves in connection with its acquisition of an additional 20% in its Porgera mine; adding approximately 9.8 million contained ounces of gold reserves (primarily attributable to additional reserves at Pueblo Viejo, Pascua Lama, Buzwagi; and Bulyanhulu; and producing 8.06 million ounces of gold (9.5 million contained ounces) (see “- Reconciliation of Mineral Reserves”).  At December 31, 2007, Barrick’s total proven and probable copper mineral reserves were 6.2 billion pounds. During 2007, Barrick produced 402 million pounds of copper (500 million contained pounds) .  Barrick’s 2007 reserves and resources do not include its recently acquired interest in the Cerro Casale deposit due to insufficient time, after its acquisition in December 2007, to complete the work necessary to incorporate this deposit in year-end results (see “General Information – Transactions”).  In March 2008, Barrick acquired the remaining 40% interest in the Cortez property (see “General Information – Transactions”).  Barrick’s 2007 reserves and resources do not include the addition of approximately 4.6 million ounces of gold reserves and 1.4 million ounces of gold resources acquired with the remaining Cortez interest.
 
Except as noted below, 2007 reserves have been calculated using an assumed gold price of $575 (A$750) per ounce , an assumed silver price of $ 10.75 per ounce, an assumed copper price of $ 2.00 per pound and exchange rates of $ 1.15 C$/U.S.$ and $ 0.77 U.S.$/A$. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property.
 
Unless otherwise noted, Barrick’s reserves and resources have been calculated as at December 31, 2007 in accordance with definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum and incorporated into National Instrument 43-101 (see “Definitions” below). Calculations have been prepared by employees of Barrick, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of Jacques McMullen, Senior Vice President, Technical Services, Rick Allan, Senior Director, Mining, and Rick Sims, Senior Director, Resources and Reserves.  Such calculations incorporate then current and/or expected mine plans and cost levels at each property. Varying cut-off grades have been used depending on the mine, methods of extraction and type of ore contained in the reserves. Mineral resource metal grades and material densities have been estimated using industry-standard methods appropriate for each mineral project with support of various commercially available mining software packages. For the cut-off grades used in the calculation of reserves, see “ – Notes to the Reserves, Resources and Reconciliation Tables”. Barrick’s normal data verification procedures have been employed in connection with the calculations. Sampling, analytical and test data underlying the stated mineral resources and reserves have been verified by Mr. McMullen, Mr. Allan and/or Mr. Sims, employees under their supervision, and/or independent Qualified Persons. Verification procedures include industry-standard quality control practices. For details of data verification and quality control practices at each material property, see “Principal Regions”.
 
Barrick reports its reserves in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities and, for United States reporting purposes, Industry Guide 7 under the
 
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Securities Exchange Act of 1934, which (as interpreted by the Staff of the SEC) applies different standards in order to classify mineralization as a reserve (see Note 7 of the “– Notes to the Mineral Reserves, Resources and Reconciliation Tables”).  For U.S. reporting purposes, as at December 31, 2007, the mineralization at the Pueblo Viejo project was classified as mineralized material.  In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the SEC. Investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, investors are cautioned not to assume that any part or all of Barrick’s mineral resources constitute or will be converted into reserves.
 
Although the Company has carefully prepared and verified the mineral reserve figures presented below and elsewhere in this Annual Information Form, such figures are estimates, which are, in part, based on forward-looking information, and no assurance can be given that the indicated level of mineral will be produced. Estimated reserves may have to be recalculated based on actual production experience. Market price fluctuations of gold, copper and silver, as well as increased production costs or reduced recovery rates, may render the present proven and probable reserves unprofitable to develop at a particular site or sites. See “Risk Factors” and “Forward-Looking Information” for additional details concerning factors and risks that could cause actual results to differ from those set out below.
 
Definitions
 
A mineral resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals 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 resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and 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 resource is 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 resource is 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
 
19

techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
 
A mineral reserve is 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 reserve is 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 reserve is 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 is justified.
 
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GOLD MINERAL RESERVES (1), (3), (4), (7), (10), (11)

 	 	PROVEN	 	PROBABLE	 	TOTAL	 	
As at December 31, 2007	 	Tons	 	Grade  (8)	 	Contained ozs  (9)	 	Tons	 	Grade  (8)	 	Contained ozs  (9)	 	Tons	 	Grade  (8)	 	Contained ozs  (9)	 	
Based on attributable ounces	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Goldstrike Open Pit	 	64,828	 	0.119	 	7,734	 	30,086	 	0.148	 	4,460	 	94,914	 	0.128	 	12,194	 	
Goldstrike Underground	 	2,623	 	0.493	 	1,293	 	4,800	 	0.293	 	1,407	 	7,423	 	0.364	 	2,700	 	
Goldstrike Property Total	 	67,451	 	0.134	 	9,027	 	34,886	 	0.168	 	5,867	 	102,337	 	0.146	 	14,894	 	
Pueblo Viejo (60%) (7)	 	7,233	 	0.105	 	757	 	121,892	 	0.094	 	11,501	 	129,125	 	0.095	 	12,258	 	
Cortez (60%) (12)	 	9,342	 	0.127	 	1,186	 	77,115	 	0.074	 	5,698	 	86,457	 	0.080	 	6,884	 	
Bald Mountain	 	73,449	 	0.025	 	1,827	 	54,644	 	0.023	 	1,232	 	128,093	 	0.024	 	3,059	 	
Turquoise Ridge (75%)	 	6,239	 	0.477	 	2,978	 	2,190	 	0.402	 	880	 	8,429	 	0.458	 	3,858	 	
Round Mountain (50%)	 	30,846	 	0.022	 	672	 	47,271	 	0.016	 	770	 	78,117	 	0.018	 	1,442	 	
Ruby Hill	 	18,325	 	0.050	 	916	 	438	 	0.032	 	14	 	18,763	 	0.050	 	930	 	
Hemlo (50%)	 	5,771	 	0.079	 	456	 	1,648	 	0.107	 	177	 	7,419	 	0.085	 	633	 	
Marigold (33%)	 	14,767	 	0.021	 	311	 	16,339	 	0.020	 	320	 	31,106	 	0.020	 	631	 	
Golden Sunlight	 	2,495	 	0.056	 	140	 	—	 	—	 	—	 	2,495	 	0.056	 	140	 	
Eskay Creek	 	35	 	0.457	 	16	 	—	 	—	 	—	 	35	 	0.457	 	16	 	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pascua-Lama	 	42,947	 	0.049	 	2,113	 	401,663	 	0.039	 	15,865	 	444,610	 	0.040	 	17,978	 	
Veladero	 	30,352	 	0.030	 	910	 	358,093	 	0.030	 	10,750	 	388,445	 	0.030	 	11,660	 	
Lagunas Norte	 	12,043	 	0.051	 	618	 	210,133	 	0.039	 	8,115	 	222,176	 	0.039	 	8,733	 	
Pierina	 	14,681	 	0.029	 	432	 	25,427	 	0.025	 	641	 	40,108	 	0.027	 	1,073	 	
AUSTRALIA PACIFIC	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Porgera (95%) (14)	 	56,639	 	0.099	 	5,611	 	22,421	 	0.117	 	2,628	 	79,060	 	0.104	 	8,239	 	
Kalgoorlie (50%)	 	45,859	 	0.052	 	2,399	 	33,553	 	0.065	 	2,190	 	79,412	 	0.058	 	4,589	 	
Cowal	 	8,061	 	0.025	 	204	 	73,402	 	0.036	 	2,672	 	81,463	 	0.035	 	2,876	 	
Plutonic	 	374	 	0.158	 	59	 	11,737	 	0.150	 	1,765	 	12,111	 	0.151	 	1,824	 	
Kanowna	 	4,303	 	0.184	 	792	 	4,571	 	0.159	 	727	 	8,874	 	0.171	 	1,519	 	
Darlot	 	2,228	 	0.124	 	276	 	2,980	 	0.127	 	379	 	5,208	 	0.126	 	655	 	
Granny Smith	 	1,116	 	0.108	 	121	 	2,333	 	0.144	 	337	 	3,449	 	0.133	 	458	 	
Lawlers	 	644	 	0.085	 	55	 	2,555	 	0.138	 	352	 	3,199	 	0.127	 	407	 	
Henty	 	—	 	—	 	—	 	626	 	0.236	 	148	 	626	 	0.236	 	148	 	
Osborne	 	1,755	 	0.024	 	42	 	2,426	 	0.016	 	40	 	4,181	 	0.020	 	82	 	
AFRICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bulyanhulu	 	1,299	 	0.396	 	515	 	34,753	 	0.332	 	11,528	 	36,052	 	0.334	 	12,043	 	
North Mara	 	22,828	 	0.100	 	2,289	 	13,633	 	0.096	 	1,305	 	36,461	 	0.099	 	3,594	 	
Buzwagi	 	144	 	0.056	 	8	 	72,543	 	0.049	 	3,585	 	72,687	 	0.049	 	3,593	 	
Tulawaka (70%)	 	300	 	0.100	 	30	 	439	 	0.449	 	197	 	739	 	0.307	 	227	 	
OTHER	 	—	 	—	 	—	 	346	 	0.419	 	145	 	346	 	0.419	 	145	 	
TOTAL	 	481,526	 	0.072	 	34,760	 	1,630,057	 	0.055	 	89,828	 	2,111,583	 	0.059	 	124,588	 	
 
COPPER MINERAL RESERVES (1), (3), (4), (7), (11)

 	 	PROVEN	 	PROBABLE	 	TOTAL	 	
 	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	
Based on attributable pounds	 	(000’s)	 	%	 	(millions)	 	(000’s)	 	%	 	(millions)	 	(000’s)	 	%	 	(millions)	 	
Zaldívar	 	221,808	 	0.566	 	2,510	 	328,001	 	0.537	 	3,521	 	549,809	 	0.548	 	6,031	 	
Osborne	 	1,755	 	2.128	 	75	 	2,426	 	2.019	 	98	 	4,181	 	2.065	 	173	 	
TOTAL	 	223,563	 	0.578	 	2,585	 	330,427	 	0.548	 	3,618	 	553,990	 	0.560	 	6,203	 	
 
See “ - Notes to the Mineral Reserves, Resources and Reconciliation Tables.”
 
21

 
GOLD MINERAL RESOURCES (1), (2), (3), (5)

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
As at December 31, 2007	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	
Based on attributable ounces	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Goldstrike Open Pit	 	20,561	 	0.052	 	1,072	 	13,971	 	0.051	 	716	 	1,788	 	5,014	 	0.064	 	321	 	
Goldstrike Underground	 	893	 	0.431	 	385	 	3,236	 	0.301	 	974	 	1,359	 	2,747	 	0.371	 	1,020	 	
Goldstrike Property Total	 	21,454	 	0.068	 	1,457	 	17,207	 	0.098	 	1,690	 	3,147	 	7,761	 	0.173	 	1,341	 	
Pueblo Viejo (60%)	 	1,407	 	0.063	 	89	 	40,267	 	0.064	 	2,566	 	2,655	 	7,728	 	0.062	 	476	 	
Cortez (60%) (12)	 	4,516	 	0.042	 	191	 	41,228	 	0.046	 	1,885	 	2,076	 	11,604	 	0.153	 	1,776	 	
Bald Mountain	 	13,000	 	0.025	 	331	 	23,493	 	0.023	 	530	 	861	 	24,648	 	0.017	 	411	 	
Turquoise Ridge (75%)	 	1,790	 	0.407	 	728	 	679	 	0.415	 	282	 	1,010	 	1,500	 	0.440	 	660	 	
Round Mountain (50%)	 	4,911	 	0.024	 	116	 	11,972	 	0.021	 	250	 	366	 	15,665	 	0.015	 	237	 	
Ruby Hill	 	3,067	 	0.071	 	217	 	135	 	0.207	 	28	 	245	 	6	 	0.333	 	2	 	
Hemlo (50%)	 	1,357	 	0.101	 	137	 	1,614	 	0.139	 	224	 	361	 	3,298	 	0.122	 	402	 	
Marigold (33%)	 	7,000	 	0.020	 	137	 	10,053	 	0.021	 	209	 	346	 	67,531	 	0.012	 	841	 	
Golden Sunlight	 	7,346	 	0.055	 	404	 	954	 	0.049	 	47	 	451	 	48	 	0.021	 	1	 	
South Arturo (60%)	 	—	 	—	 	—	 	10,757	 	0.070	 	752	 	752	 	367	 	0.022	 	8	 	
Donlin Creek (50%) (13)	 	2,378	 	0.071	 	169	 	202,491	 	0.072	 	14,499	 	14,668	 	25,609	 	0.068	 	1,729	 	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pascua-Lama	 	9,965	 	0.044	 	439	 	89,193	 	0.037	 	3,321	 	3,760	 	15,227	 	0.037	 	568	 	
Veladero	 	1,572	 	0.018	 	28	 	25,772	 	0.018	 	475	 	503	 	96,223	 	0.012	 	1,191	 	
Lagunas Norte	 	4,740	 	0.023	 	109	 	100,335	 	0.025	 	2,535	 	2,644	 	52,126	 	0.027	 	1,423	 	
Pierina	 	2,775	 	0.017	 	47	 	9,705	 	0.015	 	147	 	194	 	159	 	0.025	 	4	 	
AUSTRALIA PACIFIC	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Porgera (95%) (14)	 	33,500	 	0.082	 	2,747	 	23,110	 	0.063	 	1,452	 	4,199	 	10,645	 	0.093	 	993	 	
Kalgoorlie (50%)	 	1,655	 	0.055	 	91	 	1,180	 	0.071	 	84	 	175	 	1,212	 	0.173	 	210	 	
Cowal	 	—	 	—	 	—	 	23,076	 	0.035	 	819	 	819	 	9,821	 	0.029	 	281	 	
Plutonic	 	64	 	0.250	 	16	 	18,755	 	0.143	 	2,688	 	2,704	 	4,295	 	0.192	 	825	 	
Kanowna	 	2,496	 	0.149	 	373	 	1,822	 	0.167	 	304	 	677	 	7,515	 	0.118	 	887	 	
Darlot	 	460	 	0.126	 	58	 	3,071	 	0.120	 	370	 	428	 	222	 	0.180	 	40	 	
Granny Smith	 	560	 	0.186	 	104	 	2,475	 	0.147	 	365	 	469	 	8,003	 	0.222	 	1,775	 	
Lawlers	 	53	 	0.113	 	6	 	6,724	 	0.167	 	1,122	 	1,128	 	1,923	 	0.151	 	291	 	
Henty	 	—	 	—	 	—	 	79	 	0.165	 	13	 	13	 	73	 	0.247	 	18	 	
Osborne	 	1,425	 	0.025	 	36	 	2,177	 	0.028	 	61	 	97	 	4,760	 	0.019	 	89	 	
Reko Diq (37.5%)	 	69,757	 	0.010	 	679	 	375,074	 	0.008	 	3,062	 	3,741	 	1,417,219	 	0.007	 	10,490	 	
AFRICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bulyanhulu	 	—	 	—	 	—	 	1,516	 	0.427	 	647	 	647	 	10,253	 	0.459	 	4,704	 	
North Mara	 	6,534	 	0.062	 	402	 	6,003	 	0.066	 	399	 	801	 	1,416	 	0.069	 	98	 	
Buzwagi	 	56	 	0.036	 	2	 	19,937	 	0.030	 	606	 	608	 	947	 	0.045	 	43	 	
Tulawaka (70%)	 	—	 	—	 	—	 	178	 	0.281	 	50	 	50	 	53	 	0.245	 	13	 	
OTHER	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	370	 	0.295	 	109	 	
TOTAL	 	203,838	 	0.045	 	9,113	 	1,071,032	 	0.039	 	41,482	 	50,595	 	1,808,227	 	0.018	 	31,936	 	
 
COPPER MINERAL RESOURCES (1), (2), (3), (5)

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
As at December 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	
Based on attributable pounds	 	(000’s)	 	(%)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	
Zaldívar	 	27,104	 	0.477	 	258	 	71,247	 	0.431	 	614	 	873	 	176,453	 	0.510	 	1,801	 	
Osborne	 	1,425	 	2.214	 	63	 	2,177	 	1.782	 	78	 	141	 	4,760	 	1.440	 	137	 	
Reko Diq (37.5%)	 	69,757	 	0.528	 	737	 	375,074	 	0.480	 	3,601	 	4,337	 	1,417,219	 	0.474	 	13,427	 	
TOTAL	 	98,286	 	0.538	 	1,058	 	448,498	 	0.479	 	4,292	 	5,351	 	1,598,432	 	0.481	 	15,366	 	
 
See “ - Notes to the Mineral Reserves, Resources and Reconciliation Tables.”
 
22

 
CONTAINED SILVER WITHIN REPORTED GOLD RESERVES (A)

 	 	IN PROVEN GOLD RESERVES	 	IN PROBABLE GOLD RESERVES	 	TOTAL	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Process
recovery	 	
Based on attributable ounces	 	(000s)	 	(oz/ton)	 	(000s)	 	(000s)	 	(oz/ton)	 	(000s)	 	(000s)	 	(oz/ton)	 	(000s)	 	%	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pueblo Viejo (60%) (7)	 	7,233	 	0.67	 	4,828	 	121,892	 	0.54	 	65,551	 	129,125	 	0.55	 	70,379	 	86.6	%	
Eskay Creek	 	35	 	25.60	 	896	 	 	 	 	 	 	 	35	 	25.60	 	896	 	90.3	%	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pascua-Lama	 	42,947	 	1.77	 	76,100	 	401,663	 	1.63	 	655,277	 	444,610	 	1.64	 	731,377	 	78.5	%	
Lagunas Norte	 	12,043	 	0.11	 	1,377	 	210,133	 	0.10	 	21,007	 	222,176	 	0.10	 	22,384	 	18.8	%	
Veladero	 	30,352	 	0.42	 	12,656	 	358,093	 	0.50	 	178,413	 	388,445	 	0.49	 	191,069	 	7.0	%	
Pierina	 	14,681	 	0.25	 	3,598	 	25,427	 	0.20	 	5,088	 	40,108	 	0.22	 	8,686	 	40.0	%	
AFRICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bulyanhulu	 	1,296	 	0.23	 	300	 	34,753	 	0.25	 	8,832	 	36,049	 	0.25	 	9,132	 	65.0	%	
TOTAL	 	108,587	 	0.92	 	99,755	 	1,151,961	 	0.81	 	934,168	 	1,260,548	 	0.82	 	1,033,923	 	64.1	%	

(A)  Silver is accounted for as a by-product credit against reported or projected gold production costs.
 
CONTAINED COPPER WITHIN REPORTED GOLD RESERVES (A)

 	 	IN PROVEN GOLD RESERVES	 	IN PROBABLE GOLD RESERVES	 	TOTAL	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Process
recovery	 	
Based on attributable pounds	 	(000s)	 	(%)	 	(millions)	 	(000s)	 	(%)	 	(millions)	 	(000s)	 	(%)	 	(millions)	 	%	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pueblo Viejo (60%) (7)	 	7,233	 	0.125	 	18.0	 	121,892	 	0.097	 	236.1	 	129,125	 	0.098	 	254.2	 	88.0	%	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pascua-Lama	 	42,947	 	0.094	 	81.0	 	401,663	 	0.072	 	581.5	 	444,610	 	0.074	 	662.5	 	57.7	%	
AFRICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Buzwagi	 	144	 	0.148	 	0.4	 	72,543	 	0.121	 	174.9	 	72,687	 	0.121	 	175.3	 	77.6	%	
Bulyanhulu	 	1,296	 	0.441	 	11.4	 	34,753	 	0.611	 	424.7	 	36,049	 	0.605	 	436.1	 	85.0	%	
TOTAL	 	51,620	 	0.107	 	110.9	 	630,851	 	0.112	 	1,417.2	 	682,471	 	0.112	 	1,528.1	 	72.8	%	

(A)  Copper is accounted for as a by-product credit against reported or projected gold production costs.
 
CONTAINED ZINC WITHIN REPORTED GOLD RESERVES (A)

 	 	IN PROVEN GOLD RESERVES	 	IN PROBABLE GOLD RESERVES	 	TOTAL	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Process
recovery	 	
Based on attributable pounds	 	(000s)	 	(%)	 	(millions)	 	(000s)	 	(%)	 	(millions)	 	(000s)	 	(%)	 	(millions)	 	%	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pueblo Viejo (60%) (7)	 	7,233	 	0.794	 	114.9	 	121,892	 	0.623	 	1,518.1	 	129,125	 	0.632	 	1,633.0	 	83.2	%	

(A)  Zinc is accounted for as a by-product credit against reported or projected gold production costs.
 
23

 
CONTAINED SILVER WITHIN REPORTED GOLD RESOURCES

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Ounces (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	
Based on attributable ounces	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Eskay Creek	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Pueblo Viejo (60%)	 	1,407	 	0.40	 	567	 	40,267	 	0.36	 	14,303	 	14,870	 	7,728	 	0.46	 	3,548	 	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lagunas Norte	 	3,320	 	0.07	 	222	 	55,193	 	0.07	 	4,107	 	4,329	 	18,470	 	0.03	 	606	 	
Pascua–Lama	 	9,965	 	0.60	 	6,001	 	89,193	 	0.52	 	46,171	 	52,172	 	15,227	 	0.72	 	11,039	 	
Pierina	 	2,775	 	0.32	 	879	 	9,705	 	0.31	 	2,992	 	3,871	 	159	 	0.12	 	19	 	
Veladero	 	1,572	 	0.47	 	737	 	25,772	 	0.43	 	10,988	 	11,725	 	96,223	 	0.39	 	37,364	 	
AFRICA	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bulyanhulu	 	—	 	—	 	—	 	1,516	 	0.29	 	442	 	442	 	10,253	 	0.38	 	3,899	 	
TOTAL	 	19,039	 	0.44	 	8,406	 	221,646	 	0.36	 	79,003	 	87,409	 	148,060	 	0.38	 	56,475	 	
 
CONTAINED COPPER WITHIN REPORTED GOLD RESOURCES

 	 	 	 	 	 	 	 	 	 	
 	 	IN MEASURED (M) GOLD RESOURCES	 	IN INDICATED (I) GOLD RESOURCES	 	(M) + (I)	 	INFERRED	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	
Based on attributable pounds	 	(000’s)	 	(%)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	
NORTH AMERICA
 Pueblo Viejo (60%)	 	1,407	 	0.078	 	2.2	 	40,267	 	0.070	 	56.5	 	58.7	 	7,728	 	0.046	 	7.1	 	
SOUTH AMERICA
Pascua-Lama	 	9,965	 	0.064	 	12.8	 	89,193	 	0.063	 	112.8	 	125.6	 	15,227	 	0.029	 	8.9	 	
AFRICA
 Buzwagi	 	56	 	0.065	 	0.1	 	19,937	 	0.090	 	35.8	 	35.8	 	947	 	0.126	 	2.4	 	
TOTAL	 	11,428	 	0.066	 	15.1	 	149,397	 	0.069	 	205.1	 	220.1	 	23,902	 	0.039	 	18.4	 	
 
CONTAINED ZINC WITHIN REPORTED GOLD RESOURCES

 	 	IN MEASURED (M)	 	IN INDICATED (I) GOLD RESOURCES	 	(M) + (I)	 	IN INFERRED GOLD RESOURCES	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	
Based on attributable ounces	 	(000’s)	 	(%)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	
NORTH AMERICA
 Pueblo Viejo (60%)	 	1,407	 	0.574	 	16.2	 	40,267	 	0.409	 	329.5	 	345.6	 	7,728	 	0.258	 	39.8	 	
 
NICKEL MINERAL RESOURCES

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	Contained lbs (9)	 	Tons	 	Grade (8)	 	Contained lbs (9)	 	
Based on attributable ounces	 	(000’s)	 	(%)	 	(millions)	 	(000’s)	 	(%)	 	(millions)	 	(000’s)	 	(000’s)	 	(%)	 	(millions)	 	
AFRICA
Kabanga (50%)	 	—	 	—	 	—	 	5,131	 	2.350	 	241.2	 	241.2	 	21,385	 	2.800	 	1,197.5	 	
 
PLATINUM MINERAL RESOURCES

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Ounces (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	
Based on attributable ounces	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
RUSSIA
Fedorova (50%)	 	—	 	—	 	—	 	31,231	 	0.01	 	262	 	262	 	51,873	 	0.01	 	312	 	
 
PALLADIUM MINERAL RESOURCES

 	 	MEASURED (M)	 	INDICATED (I)	 	(M) + (I)	 	INFERRED	 	
For the year ended Dec. 31, 2007	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	Ounces (9)	 	Tons	 	Grade (8)	 	Contained ozs (9)	 	
Based on attributable ounces	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	(000’s)	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
RUSSIA
Fedorova (50%)	 	—	 	—	 	—	 	31,231	 	0.03	 	1,073	 	1,073	 	51,873	 	0.03	 	1,308	 	
 
See “ - Notes to the Mineral Reserves, Resources and Reconciliation Tables.”
 
24

 
Reconciliation of Mineral Reserves (1,7,10,11)
 Based on attributable ounces

Gold
Property (000’s of ounces)  (9)	 	Mineral Reserves
12/31/2006 (6)	 	Processed in
2007	 	Increase
(decrease)	 	Mineral Reserves
12/31/2007  (4)	 	
NORTH AMERICA	 	 	 	 	 	 	 	 	 	
Goldstrike Open Pit	 	13,122	 	1,424	 	496	 	12,194	 	
Goldstrike Underground	 	2,834	 	460	 	326	 	2,700	 	
Goldstrike Property Total	 	15,956	 	1,884	 	822	 	14,894	 	
Pueblo Viejo (60%)(7)	 	10,873	 	—	 	1,385	 	12,258	 	
Cortez (60%)(12)	 	6,691	 	484	 	677	 	6,884	 	
Bald Mountain	 	3,457	 	153	 	-245	 	3,059	 	
Turquoise Ridge (75%)	 	3,443	 	196	 	611	 	3,858	 	
Round Mountain (50%)	 	1,952	 	300	 	-210	 	1,442	 	
Ruby Hill	 	1,080	 	225	 	75	 	930	 	
Hemlo (50%)	 	718	 	179	 	94	 	633	 	
Marigold (33%)	 	708	 	48	 	-29	 	631	 	
Golden Sunlight	 	376	 	251	 	15	 	140	 	
Eskay Creek	 	103	 	86	 	-1	 	16	 	
South Arturo	 	—	 	—	 	—	 	—	 	
Donlin Creek (50%) (13)	 	—	 	—	 	—	 	—	 	
SOUTH AMERICA	 	 	 	 	 	 	 	 	 	
Pascua-Lama	 	16,988	 	—	 	990	 	17,978	 	
Veladero	 	11,368	 	529	 	821	 	11,660	 	
Lagunas Norte	 	8,804	 	1,368	 	1,297	 	8,733	 	
Pierina	 	1,209	 	607	 	471	 	1,073	 	
AUSTRALIA PACIFIC	 	 	 	 	 	 	 	 	 	
Porgera (95%) (14)	 	7,067	 	596	 	1,768	 	8,239	 	
Kalgoorlie (50%)	 	5,090	 	352	 	-149	 	4,589	 	
Cowal	 	3,187	 	299	 	-12	 	2,876	 	
Plutonic	 	2,247	 	231	 	-192	 	1,824	 	
Kanowna	 	1,924	 	397	 	-8	 	1,519	 	
Darlot	 	768	 	127	 	14	 	655	 	
Granny Smith	 	690	 	200	 	-32	 	458	 	
Lawlers	 	426	 	120	 	101	 	407	 	
Henty	 	197	 	77	 	28	 	148	 	
Osborne	 	155	 	53	 	-20	 	82	 	
Reko Diq (37.5%)	 	—	 	—	 	—	 	—	 	
AFRICA	 	 	 	 	 	 	 	 	 	
Bulyanhulu	 	11,185	 	295	 	1,153	 	12,043	 	
North Mara	 	3,276	 	275	 	593	 	3,594	 	
Buzwagi	 	2,640	 	—	 	953	 	3,593	 	
Tulawaka (70%)	 	330	 	133	 	30	 	227	 	
OTHER	 	158	 	20	 	7	 	145	 	
TOTAL	 	123,066	 	9,485	 	11,007	 	124,588	 	

Copper	 	Mineral Reserves	 	Processed in	 	Increase	 	Mineral Reserves	 	
Property(million pounds) (9)	 	12/31/2006 (6)	 	2007	 	(decrease)	 	12/31/2007 (4)	 	
Zaldivar	 	5,690	 	409	 	750	 	6,031	 	
Osbone	 	316	 	92	 	-51	 	173	 	
TOTAL	 	6,006	 	501	 	698	 	6,203	 	
 
25

 
Notes to the Mineral Reserves, Resources and Reconciliation Tables

(1)	 	Reflects Barrick’s ownership share where ownership interest is less than 100%.	
 	 	 	
(2)	 	These mineral resources are in addition to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability when calculated using mineral reserve assumptions.	
 	 	 	
(3)	 	Mineral reserves and resources have been calculated as at December 31, 2007.	
 	 	 	
(4)	 	Mineral reserves have been calculated as at December 31, 2007 using an assumed gold price of $575 (A$750) per ounce, an assumed silver price of $10.75 per ounce, an assumed copper price of $2.00 per pound and exchange rates of $1.15 C$/$U.S. and $0.77 $U.S./A$. These assumed metal prices reflect the approximate prior 3 year average spot price of such metals. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property.	
 	 	 	
(5)	 	Resources as at December 31, 2007 have been estimated using varying cut-off grades, depending on both the type of mine, its maturity and ore type at each property. An assumed gold price of $650 (A$ 845) per ounce, an assumed silver price of $11.50 per ounce and an assumed copper price of $2.25 per pound have been used in estimating resources.	
 	 	 	
(6)	 	Mineral reserves have been calculated as at December 31, 2006 using an assumed gold price of $475 (A$640) per ounce, a silver price of $8.50 per ounce, a copper price of $1.50 per pound and exchange rates of $1.21 C$/$U.S. and $0.74 $U.S./A$. Reserves at the Kalgoorlie property assumed a gold price of $500 (A$675) per ounce. Copper reserves at the Osborne property assumed a copper price of $1.75 per pound. Reserve calculations incorporate current and/or expected mine plans and cost levels at each property.	
 	 	 	
(7)	 	Mineral reserves have been calculated in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 (under the Securities Exchange Act of 1934), as interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve. For U.S. reporting purposes, as at December 31, 2007, the mineralization at the Pueblo Viejo project was classified as mineralized material. In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the SEC. Investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, investors are cautioned not to assume that any part or all of Barrick’s mineral resources constitute or will be converted into reserves.	
 	 	 	
(8)	 	Grade represents an average, weighted by reference to tons of ore type where several recovery processes apply.	
 	 	 	
(9)	 	Ounces or pounds, as applicable, estimated to be present in the tons of ore which would be mined and processed. Mill recovery rates have not been applied in calculating the contained ounces or pounds.	
 	 	 	
(10)	 	Reserves as at December 31, 2007 include stockpile material totaling approximately 86.9 million tons, containing approximately 5.7 million ounces. Properties at which stockpile material represents more than 5% of the reported reserves are as follows:	

26

 

 	 	 	 	 	 	Contained	 	
 	 	Tons	 	Grade	 	Ounces	 	
Property	 	(000’s)	 	(oz/ton)	 	(000’s)	 	
 	 	 	 	 	 	 	 	
Tulawaka	 	300	 	0.100	 	30	 	
Cowal	 	7,962	 	0.024	 	188	 	
Kalgoorlie	 	13,336	 	0.031	 	414	 	
Lawlers	 	505	 	0.073	 	37	 	
Porgera	 	25,107	 	0.071	 	1,781	 	
Eskay Creek	 	30	 	0.300	 	9	 	
Goldstrike	 	34,019	 	0.091	 	3,093	 	
Round Mountain	 	3,575	 	0.021	 	75	 	
Golden Sunlight	 	2,084	 	0.037	 	78	 	
 
(11)                         The metallurgical recovery applicable at each property and the cut-off grades used to determine reserves as at December 31, 2007 are as follows:

 	 	Metallurgical	 	 	 	
 	 	Recovery	 	Cut-off Grade	 	
Gold Mine	 	(%)	 	(oz/ton)	 	
 	 	 	 	 	 	
Goldstrike Property	 	 	 	 	 	
Open Pit	 	83.6	 	0.050-0.070	 	
Underground	 	90.0	 	0.218-0.259	 	
 	 	 	 	 	 	
Pueblo Viejo	 	92.8	 	0.057-0.108	 	
Cortez	 	80.3	 	0.005-0.271	 	
Bald Mountain	 	74.5	 	0.010-0.104	 	
Turquoise Ridge	 	92.0	 	0.320-0.363	 	
Round Mountain	 	88.7	 	0.007-0.028	 	
Ruby Hill	 	74.5	 	0.010-0.104	 	
Hemlo Property	 	 	 	 	 	
David Bell	 	93.9	 	0.205-0.245	 	
Williams	 	93.9	 	0.027-0.122	 	
Marigold	 	71.9	 	0.100-0.259	 	
Golden Sunlight	 	71.0	 	0.025-0.074	 	
Eskay Creek	 	79.2	 	0.292-1.044	 	
Pascua-Lama	 	82.1	 	0.025-0.094	 	
Veladero	 	73.9	 	0.012-0.020	 	
Lagunas Norte	 	65.6	 	0.011-0.022	 	
Pierina	 	83.3	 	0.010-0.011	 	
Porgera	 	83.3	 	0.038-0.131	 	
Kalgoorlie	 	85.3	 	0.026	 	
Cowal	 	79.5	 	0.015-0.017	 	
Plutonic	 	89.8	 	0.108	 	
Kanowna	 	91.3	 	0.019-0.216	 	
Darlot	 	96.5	 	0.058-0.118	 	
Granny Smith	 	90.3	 	0.124	 	
 
27

 

Lawlers	 	95.5	 	0.087-0.101	 	
Henty	 	92.9	 	0.164	 	
Osborne	 	76.4	 	0.036	 	
Bulyanhulu	 	92.0	 	0.219-0.241	 	
North Mara	 	83.5	 	0.032-0.039	 	
Buzwagi	 	93.8	 	0.015-0.018	 	
Tulawaka	 	94.5	 	0.056-0.158	 	

 	 	Metallurgical	 	 	 	
 	 	Recovery	 	Cut-off Grade	 	
Copper Mine	 	(%)	 	(%)	 	
Zaldívar	 	65.3	 	0.167	 	
Osborne	 	89.6	 	0.72 -1.25	 	

(12)	 	Barrick increased its interest in the Cortez mine from 60% to 100% in March 2008 (see “General Information - Transactions”).	
 	 	 	
(13)	 	In December 2007, Barrick increased its interest in the Donlin Creek project from 30% to 50%. 2007 resources for the Donlin Creek project reflect Barrick’s 50% interest. 2006 resources for the Donlin Creek project reflect Barrick’s 30% interest.	
 	 	 	
(14)	 	In August 2007, Barrick increased its interest in the Porgera mine from 75% to 95%. 2007 reserves and resources for the Porgera mine reflect Barrick’s 95% interest. 2006 reserves and resources for the Porgera mine reflect Barrick’s 75% interest.	
 
Marketing and Distribution
 
Gold
 
Gold can be readily sold on numerous markets throughout the world and it is not difficult to ascertain its market price at any particular time.  Benchmark prices are generally based on the London gold market quotations. Gold bullion is held as an asset class for a variety of reasons, including as a store of value and safeguard against the collapse of paper assets such as stocks, bonds and other financial instruments that are traded in fiat currencies not exchangeable into gold (at a fixed rate) under a “gold standard”, hedges against future inflation and portfolio diversification. Governments, central banks and other official institutions hold significant quantities of gold as a component of exchange reserves. Due to the size of the international bullion market and above ground stocks, individual gold producers or other market participants generally do not significantly influence pricing or total quantities offered and sold. Since there are a large number of available gold purchasers, Barrick is not dependent upon the sale of gold to any one customer.
 
Barrick’s gold is currently being refined to market delivery standards by several refiners throughout the world. The gold can be sold to various gold bullion dealers at market prices or delivered to meet commitments under gold sale contracts. Certain of Barrick’s operations also produce gold concentrate, which is sold to various smelters. The Company believes that, because of the availability of alternative smelters or refiners, no material adverse effect would result if the Company lost the services of any of its current smelters or refiners.
 
Product fabrication and bullion investment are two principal sources of gold demand. The introduction of more readily accessible and more liquid gold investment vehicles (such as gold exchange
 
28

 
traded funds) has further facilitated investment in gold. Within the fabrication category, there are a wide variety of end uses, the largest of which is the manufacture of jewelry. Other fabrication purposes include official coins, electronics, miscellaneous industrial and decorative uses, dentistry, medals and medallions.
 
Copper
 
Copper is a metal with inherent characteristics of excellent electrical conductivity, heat transfer and resistance to corrosion. Copper is used principally in telecommunications, automobiles, construction, and in consumer durables. Copper is traded on the London Metal Exchange (LME), the New York Commodity Exchange (COMEX) and the Shanghai Futures Exchange (SHFE).  The price of copper as reported on these exchanges is influenced by numerous factors, including (i) the worldwide balance of copper demand and supply, (ii) rates of global economic growth, trends in industrial production and conditions in the housing and automotive industries, all of which correlate with demand for copper, (iii) economic growth and political conditions in China, which has become the largest consumer of refined copper in the world, and other major developing economies, (iv) speculative investment positions in copper and copper futures, (v) the availability and cost of substitute materials and (vi) currency exchange fluctuations, including the relative strength of the U.S. dollar.
 
The copper market is volatile and cyclical.  During the past 15 years, COMEX prices per pound have ranged from a high of $4.076 to a low of 60.4 cents.  C opper prices traded in a range of $2.37 - $3.77 per pound in 2007, and averaged $3.23 per pound for the year.  In early 2007, prices declined on concerns about reduced demand from the U.S. and rising inventories.  However, continued strong demand from Asia supported prices and labor disruptions limited supply for short periods of time, resulting in price volatility.  Future copper prices are expected to be influenced by demand from Asia, global economic performance and production levels of mines and smelters.
 
Copper concentrates produced by the Osborne Mine are sold mainly to smelters in Japan and South Korea. At the Zaldívar Mine, copper cathode is sold to copper product manufacturers and copper traders in Europe, North America, South America and Asia, while concentrate is sold to a local smelter in Chile.
 
Employees and Labor Relations
 
As at December 31, 2007, excluding contractors, Barrick employed approximately 15,300 employees worldwide, as well as approximately 2,500 employees at operations jointly owned by Barrick, substantially all of whom are employed in the United States, Canada, Australia, Chile, Peru, Argentina, Papua New Guinea and Tanzania. Unions represent approximately 3,200 persons at the Company’s operations. Generally, management believes that labor relations at all locations are good.  However, in 2007, Barrick experienced labor disruptions at its Bulyanhulu mine, culminating in an illegal labor strike in the fourth quarter , resulting in the termination of 1,300 employees.  As a result of the reduced staff levels, the mine sequencing was revised, impacting the mine’s ability to access higher-grade areas and operate the plant at its full capacity.  The mine is in the process of increasing its staff levels in stages, and expects to return to normal production capacity in 2008.
 
Despite generally good labor relations, recent increased demand for skilled workers in the resource industry has led to high employee turnover at certain of Barrick’s operations. This competition for qualified employees may lead to workforce shortages.
 
29

Competition
 
The Company competes with other mining and exploration companies in connection with the acquisition of mining claims and leases and in connection with the recruitment and retention of qualified employees (see “ –Employees and Labor Relations”).
 
There is significant competition for mining claims and leases and, as a result, the Company may be unable to continue to acquire attractive assets on terms it considers acceptable.
 
MATERIAL PROPERTIES
 
For the purposes of this Annual Information Form, Barrick has identified its Goldstrike, Lagunas Norte, Veladero and Zaldívar mines as material properties. The following is a description of Barrick’s material properties.
 
Goldstrike Property
 
General Information
 
The Goldstrike property is located in Elko and Eureka Counties in north central Nevada, approximately 40 kilometers north of the town of Carlin, at an elevation of 1,700 meters in the hilly terrain of the Tuscarora Mountains. Access to the property is provided by certain access agreements with Newmont Mining Corporation that allow for the use of various roads in the area, and a right-of-way issued by the Bureau of Land Management. Such roads are accessed from Elko, Nevada by traveling west on U.S. Interstate 80 to Carlin, Nevada and then by approximately 40 kilometers of local roads north of Carlin. The Northern Nevada climate is fairly arid and has little impact on the mine’s operations.
 
PanCana Minerals Ltd. (“PanCana”) first mined the property for gold in 1976. In 1978, Western States Minerals Corporation (“WSMC”) became the operator in a 50/50 joint venture with PanCana. Barrick acquired a 50% interest and assumed management of the Goldstrike property on December 31, 1986 with the acquisition of WSMC’s 50% interest in the property.  It completed the acquisition of 100% ownership of the property pursuant to a plan of arrangement entered into with PanCana in January 1987. At the time of acquisition, mining operations on the property were concentrated on various shallow oxide deposits. The principal known deposit was the Post surface oxide deposit, which then contained approximately half a million ounces of gold. The property was operated as an open pit, heap leach operation. Reserves for the Post deposit were delineated during 1986 and mining of the Post deposit commenced in 1987. Following acquisition, two sulphide ore zones were identified (the Betze and Deep Post deposits). During the first two years after acquisition, a carbon-in-leach mill and ancillary facilities, as well as a crushing and agglomeration plant designed to improve recoveries from low grade oxide ore, were constructed. In January 1989, Barrick announced the four-year Betze Development Plan to develop the Post oxide and Betze sulphide reserves. The plan, which called for the development of a large open pit and the expansion of the milling facilities, was completed in 1993 with the commissioning of the final three of the total of six autoclaves. The Goldstrike Underground mine (Meikle deposit), which was discovered in 1989, commenced production in 1996. During 2000, the Company completed construction of a roaster facility for the treatment of carbonaceous ore on the property. The roaster increased the property’s processing capacity by approximately 16,000 tons per day. In 2001, an intensive development program to bring the Rodeo deposit, part of the Goldstrike Underground mine, into production was completed and a new ball mill was added to increase autoclave recovery.  A total of approximately 1,600 employees work at the Goldstrike Open Pit and Goldstrike Underground mines.
 
30

 
As of December 31, 2007, the Goldstrike property comprised approximately 4,197 hectares of surface rights ownership/control (3,420 hectares private and 778 hectares public), and approximately 3,535 hectares of mineral rights ownership/control (2,741 hectares private and 794 hectares public).   These rights are owned or controlled through various forms of patents issued by the United States of America and by ownership of unpatented mining and millsite claims that are held subject to the paramount title of the United States of America.    Patenting is the process that transfers fee simple title from the federal government to the applicant. The Goldstrike property includes a total of 298 unpatented mining and millsite claims to control the public acreage.  The Goldstrike Open Pit and Goldstrike Underground mines and the majority of the beneficiation and processing facilities at the Goldstrike property are situated on land owned by Barrick.
 
Geology
 
The property is located on the Carlin trend, one of North America’s most prolific gold producing areas. The area of the Goldstrike property consists of folded and faulted Paleozoic sedimentary rocks, which were intruded by the diorite to granodiorite Goldstrike stock of the Jurassic Age. Mesozoic folding and thrust faults form important structural traps for the mineralization in the Betze-Post pit. Tertiary faulting developed ranges and basins, which were subsequently filled with volcanic and sedimentary rocks during the Tertiary time. The gold mineralization occurred at the onset of Tertiary volcanism, approximately 39 million years ago.
 
The major gold deposits – Post Oxide, Betze, Rodeo and Meikle – are all hosted in sedimentary rocks of the Silurian to Devonian ages. The Post Oxide orebody occurs in the siliceous siltstones, mudstones, argillites and minor limestones of the Rodeo Creek Formation. Betze and Rodeo are found in the silty limestones and debris flows of the Popovich Formation. The Meikle deposit occurs in hydrothermal and solution collapse breccias in the Bootstrap Limestone of the Roberts Mountains Formation.  The gold at Goldstrike was carried into the various orebodies by hot hydrothermal fluids, and deposited with very fine pyrite and silica. Over time, the pyrite oxidized, freeing the gold and making its extraction relatively easy, as in the Post Oxide deposit. In the deeper deposits – Betze, Rodeo and Meikle – the gold is still locked up with the iron sulphide and an additional processing step (autoclaving or roasting) is required to free the gold.
 
Processing
 
The property has two processing facilities: an autoclave installation, which is used to treat the property’s non-carbonaceous sulphide (refractory) ore; and the roaster, which is used to treat the property’s carbonaceous ore (whose active carbon content responds poorly to autoclaving). The combined design capacity of these two facilities is approximately 33,000 to 35,000 tons per day. These process facilities treat the ore from both the Goldstrike Open Pit and Goldstrike Underground mines. Gold contained in recovered ore is processed into doré on-site and shipped to outside refineries for processing into gold bullion.  All operations permits have been obtained and are in good standing. In December 2005, Barrick began operating a 115 megawatt natural gas-fired power plant that provides a significant portion of Goldstrike’s power requirements. In 2007, a modified pressure technology was successfully tested that will extend the life of the Goldstrike autoclaves by allowing them to process ore that would have previously been treated at the roaster facility.
 
The State of Nevada imposes a 5% net proceeds tax on the value of all minerals severed in the State.   This tax is calculated and paid based on a prescribed net income formula which is different from book income.
 
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Environment
 
The Goldstrike property operating facilities have been designed to mitigate environmental impacts.  The operations have processes, procedures or facilities in place to manage substances that have the potential to be harmful to the environment.  In order to prevent and control spills and protect water quality, the mine utilizes multiple levels of spill containment procedures and routine inspection and monitoring of its facilities.  The mine has installed air pollution control devices on its facilities consistent with and, in some cases, exceeding legal requirements.  The mine also has various programs to reuse and conserve water at its operations.  In order to mitigate the impact of dust produced by its operations, the mine uses several different dust suppression techniques.  In 2007, all activities at the Goldstrike property were, and continue to be, in compliance in all material respects with applicable corporate standards and environmental regulations.  The mine’s operations are compliant with the requirements of the International Cyanide Management Code.
 
At December 31, 2007, the recorded amount of estimated future reclamation and closure costs that were also asset retirement obligations, as defined in FAS 143 (as described in note 21 to the Consolidated Financial Statements), for the property was $98 million.  In connection with the reclamation of the mine area, Barrick has provided the financial security as required by governmental authorities.  Major expenditure items covered by the asset retirement obligation are long term care and monitoring, surface contouring, waste dump closure and process facility demolition.  See “Environment and Closure”.
 
Exploration
 
In 2007, the exploration and development drilling program focused on the Banshee underground reserve delineation and Deep North Post resource delineation projects with positive results.  A total of 20,774 meters of underground and surface drilling were completed in 2007.  In 2008, the exploration group expects to focus on the East Banshee reserve delineation and Deep North Post and West Pit resource delineation drilling programs.  New drill targets are expected to be generated by continued relogging and remodeling of the geology across the property.
 
Goldstrike Open Pit Mine
 
The Goldstrike Open Pit mine is an open pit truck-and-shovel operation, using standard, proven equipment. It produced 1,215,446 ounces of gold in 2007 at average total cash costs of $355 per ounce. Based on existing reserves and production capacity, the expected remaining mine life is approximately 8 years.
 
Geology
 
The gold mineralization at Goldstrike Open Pit is controlled by favorable stratigraphy, structural complexities in the form of faults and folds, and the contact of the Goldstrike intrusive. The deposit represents many styles of mineralization occurring within numerous rock types and alteration assemblages.  The favored host for gold mineralization is the Popovich Limestone followed by the Rodeo Creek unit, Goldstrike sill complex and Roberts Mountains Formation.  Some ore occurs below sills, which act as dams to the ascending hydrothermal fluids. Alteration is characterized by decalcification of limestone, silicification of all rock types and clay development in structurally disturbed areas. Overall, the Betze-Post ore zones extend for 1,829 meters in a northwest direction and average 183 to 244 meters in width and 122 to 183 meters in thickness.
 
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Drilling and Analysis
 
More than 6,500 drill holes have been completed within and around the Betze-Post deposit.  Approximately 69% of the total drill holes are reverse circulation and rotary drill holes and the remaining are diamond core holes.  Drill spacing through the Betze, West Betze and Screamer deposits is approximately 53 meters and at Post is 46 meters.  Drill spacing in the North Screamer and West Barrel deposits is approximately 30 meters.  Almost all of the total drill hole footage has been sampled on 1.5 meter intervals and assayed for gold by the fire assay method with cyanide AA finish.  All assaying is checked and verified under a comprehensive, multi-level quality assurance and quality control program that includes external laboratory check assays.
 
Drill samples collected for use in the geologic modeling and mineral resource estimation are under the direct supervision of the geology department at Goldstrike.  Sample preparation and analyses are conducted by the Barrick Goldstrike lab and by independent laboratories.  Procedures are employed to ensure security of samples during their delivery from the drill rig to the laboratory.  All drill hole collar, survey and assay information used in modeling and resource estimation are manually verified and approved by geologic staff prior to entry into the mine-wide database.
 
The quality assurance procedures and assay protocols used in connection with drilling and sampling on the Goldstrike property conform to industry accepted quality control methods.
 
Royalties
 
Most of the property comprising the Goldstrike Open Pit mine is subject to net smelter return and net profits interest royalties payable on the valuable minerals produced from the property. The maximum third party royalties payable on the Betze deposit are a 4% net smelter return and a 6% net profits interest.
 
Production Information
 
The following table summarizes certain production and financial information for the Goldstrike Open Pit mine for the periods indicated:

 	 	Year ended
December 31, 2007	 	Year ended
December 31, 2006	 	
Tons mined (000’s)	 	136,868	 	131,229	 	
Tons of ore processed (000’s)	 	10,546	 	10,507	 	
Average grade processed (ounces per ton)	 	0.135	 	0.152	 	
Recovery rate (%)	 	85.5	 	86.9	 	
Ounces of gold produced (000’s)	 	1,215	 	1,388	 	
Average total cash costs per ounce(1)	 	$	355	 	$	289	 	

(1)           For an explanation of total cash costs per ounce, refer to “Non-GAAP Financial Measures - Total Cash Costs”.
 
Goldstrike Underground Mine
 
The Goldstrike Underground mine includes two major orebodies: Meikle and Rodeo. The Meikle orebody, located 1.6 kilometers north of the Goldstrike Open Pit mine, is a high grade orebody which was discovered in 1989 and started production in 1996.  The Meikle orebody incorporates 5 mineralized zones: the Main Meikle, Meikle Extension, South Meikle, Griffin, and West Griffin. The Rodeo orebody, located 0.5 kilometers northwest of the Goldstrike Open Pit mine, is a moderate grade orebody discovered in 1988 and brought into production in 2002.  The Rodeo orebody includes four mineralized zones: Upper Rodeo, Lower Rodeo, West Rodeo, and Barrel. The Meikle and Rodeo orebodies are interconnected by
 
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two haulage drifts and can be accessed from two shafts and by a decline at the bottom of the Goldstrike Open Pit mine.
 
Two different underground mining methods are used at Goldstrike Underground mine, long-hole open stoping and drift-and-fill (used for flat-lying mineralization or where ground conditions are less competent).  Goldstrike Underground mine is a trackless operation. Based on existing reserves and production capacity, the expected remaining mine life is 9 years.
 
The underground mine, which originally produced at a rate of approximately 2,000 tons of ore per day, averaged 3,562 tons per day in 2007 and 3,889 tons per day in 2006. Goldstrike Underground produced 413,186 ounces of gold in 2007 at average total cash costs of $431 per ounce.
 
Geology
 
Carbonate breccias and limestones of the Devonian Popovich Formation and various intrusive rocks host the orebodies that comprise the Goldstrike Underground mine. In contrast to the Goldstrike Open Pit area, the overlying mudstones and argillites of the Devonian Rodeo Creek Member are generally unmineralized. Gold-bearing fluids have ascended faults and fractures and have deposited gold and other minerals, such as pyrite and barite, in permeable horizons in the breccias and limestones. These breccias were formed by a combination of collapse, tectonic and hydrothermal processes, and display excellent continuity of grade both down dip and along strike. The fluids have been focused below a steep dipping monzonite porphyry dyke and the overlying relatively impermeable Rodeo Creek Member. Since silicification is the dominant alteration, the bulk of the ore is quite hard and competent.
 
Drilling and Analysis
 
Underground drilling at the Meikle deposit (Meikle, South Meikle, Griffin, Extension and West Griffin) commenced in 1995 and a total of 404,463 meters in 6,855 underground holes had been completed in and around the deposit as of December 31, 2007.  A total of 338 surface holes, for 157,608 meters, have been drilled in and around the Meikle deposit.  Additional Banshee drilling commenced in 2007.  An additional 7 surface holes were drilled, for a total of 83 surface holes and 43,615 meters.  Underground drilling of 86 holes for 15,031 meters was completed in Banshee in 2007.
 
Underground drilling commenced at the Rodeo deposit (Rodeo, West Rodeo, and Barrel) in 1998 and, as of December 31, 2007, a total of 3,157 underground holes totaling 205,376 meters had been drilled in and around the deposit.  A total of 230 surface holes, for 104,943 meters, have been drilled in and around the Rodeo deposit.  Underground drilling commenced at the North Post deposit (North Post and Deep North Post) in 2005 and a total of 16,685 meters in 61 underground core holes have been drilled as of December 31, 2007.  There are an additional 142 North Post surface holes for 53,201 meters.
 
A majority of the underground drilling is reverse-circulation, with approximately 44% of Meikle and 61% of Rodeo definition drilling being done by underground reverse-circulation methods. Drill spacing through the Meikle deposit is 8 to 26 meters.  Some of the wider-spaced core holes are sampled on six meter intervals (chip samples) and 1.5 meter whole or split core in mineralized intervals. All samples are fire-assayed with an atomic absorption spectrometer finish followed by a gravimetric finish for samples with AuFA greater than 0.438 ounces of gold per ton. Most sampling and assaying is done on-site with both internal check assays and external check assays performed by independent laboratories.
 
Drill samples collected for use in the geologic modeling and mineral resource estimation are under the direct supervision of the geology department at Goldstrike.  Sample preparation and analyses are conducted by the Barrick Goldstrike lab and by independent laboratories.  Procedures are employed to
 
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ensure security of samples during their delivery from the drill rig to the laboratory.  All drill hole collar, survey and assay information used in modeling and resource estimation are manually verified and approved by geologic staff prior to entry into the mine databases.
 
The quality assurance procedures and assay protocols followed by Barrick in connection with drilling and sampling on the Goldstrike property conform to industry accepted quality control methods.
 
Royalties
 
The maximum royalties payable on the Meikle deposit are a 4% net smelter return and a 5% net profits interest.
 
Production Information
 
The following table summarizes certain production and financial information for the Goldstrike Underground mine for the periods indicated:

 	 	Year ended
December 31, 2007	 	Year ended
December 31, 2006	 	
Tons mined (000’s)	 	1,300	 	1,420	 	
Tons of ore processed (000’s)	 	1,298	 	1,425	 	
Average grade processed (ounces per ton)	 	0.354	 	0.373	 	
Recovery rate (%)	 	90.0	 	89.8	 	
Ounces of gold produced (000’s)	 	413	 	477	 	
Average total cash costs per ounce(1)	 	$	431	 	$	351	 	

(1)   For an explanation of total cash costs per ounce, refer to “Non-GAAP Financial Measures - Total Cash Costs”.
 
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Lagunas Norte Mine
 
General Information
 
The Lagunas Norte mine is an open pit, heap leaching operation.  The mine is in the Alto Chicama mining district and is 140 kilometers east of the coastal city of Trujillo, Peru, and 175 kilometers north of Barrick’s Pierina mine.  The property is located on the western flank of the Peruvian Andes and is at an elevation of 4,000 to 4,260 meters above sea level.  The area is considered to have a mountain climate.  Generally, the climate of the area does not impact on the mine’s operations.  Vegetation consists of small shrubs and grasses.  The property is accessible year round by road from both Trujillo and Huamachuco, Peru.
 
The Alto Chicama region has been actively mined for coal since the 19th century, principally for domestic consumption. In 1990, Minero Peru S.A. (CENTROMIN Peru S.A. (“Centromin”)), the State mining company, constructed a camp to re-evaluate the previous coal operations. The Alto Chicama region hosts a low grade anthracite coal deposit, but it was not developed due to the availability of
 
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cheaper sources of energy elsewhere.  Centromin conducted field surveys in 1999 and concluded there was potential for other mineralization on the property, including gold.
 
The Alto Chicama mining district encompasses four concessions or mining rights totaling 20,322 hectares. In 2002, Barrick acquired the three primary mining concessions, encompassing 18,550 hectares, from Centromin pursuant to an international bid process. In 2005, these three concessions were consolidated into a single mining concession called “Acumulacion Alto Chicama”.  Three additional mining concessions, encompassing 1,772 hectares, were subsequently acquired directly by Barrick.  The mining rights have no expiry date as long as the annual land payments (currently $3.00 per hectare) are made.
 
Peruvian authority approval of both the mine’s Environmental Impact Study (“EIS”) and principal construction permit were received in April 2004.  Barrick commenced construction of the mine facilities in April 2004. In June 2005, Barrick obtained approval from the Peruvian authorities in respect of mine production start-up.  Total capital construction cost for the mine was $323 million. All material permits to conduct the operation of the Lagunas Norte mine have been obtained and are in good standing.  The mine has approximately 515 employees.
 
On December 29, 2004, Barrick entered into a Legal Stability Agreement with the Peruvian government. The Legal Stability Agreement provides increased certainty with respect to foreign exchange and the fiscal and administrative regime for 15 years.  The 15 year period commenced as of January 1, 2006.
 
Geology
 
The regional geology of the Alto Chicama area is dominated by a thick sequence of Mesozoic marine clastic and carbonate sedimentary rocks and andesitic and dacitic volcanic rocks of the Tertiary Calipuy Group.  The Mesozoic sequence is unconformably overlain by the Tertiary Calipuy volcanic rocks and cut by numerous small intrusive bodies. The Mesozoic sequence has been affected by at least one and probably two stages of compressive deformation during Andean orogenesis.
 
The Lagunas Norte mineralization occurs on the 185 square kilometer Alto Chicama property. The mineralization is of the high sulphidation type. It is disseminated and hosted in variably brecciated sedimentary rocks as well as in volcanic breccias and tuffs. The mineralization outcrops and has been defined by drilling over an area of 1,000 meters long by 2,000 meters with up to 300 meters depth.
 
Mining and Processing
 
The orebody is being mined as an open pit, truck-and-shovel operation, at an average mining rate of 80,000 tonnes per day. Ore is crushed and then transported via truck to the leach pad.  Run-of-mine ore is trucked directly to the leach pad. Gold and silver recovered from the leached ore is smelted into doré on-site and shipped to an outside refinery for processing into bullion. Power is provided by a utility company through a 138 kilovolt line connected to the Trujillo Norte substation, located in the costal city of Trujillo, approximately 95 kilometers from the mine. The East waste dump and leach pad facilities are contained within one valley, limiting potential environmental impacts. The effects of the operation on surface water and ground water resources are carefully monitored and controlled to ensure that residents downstream of the site are not adversely affected.  Barrick has obtained property rights for the surface land required for the operation of the Lagunas Norte mine.  Based on existing reserves and production capacity, the expected mine life is 9 years.
 
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Mining activity was focused on developing Phase 1 of the orebody, which is a high grade and low strip area of the mine site located directly north of the crusher.  During 2007, some mining of Phase 2 of the orebody (located at the north-central area of the orebody) was undertaken.
 
During the first half of 2008, Phase 1 and Phase 2 of the orebody will continue to be mined, targeting relatively high grade materials. However, during the second half of the year, accelerated mining in the higher grade Phase 2 is planned.
 
Environment
 
Lagunas Norte’s operating facilities were designed to mitigate environmental impacts. The operation facilities are managed with procedures in place to manage hazardous substances potentially harmful to the environment.  In order to prevent and control spills and protect water quality, the site uses multiple levels of spill containment, infrastructure and procedures as well as field controls like daily inspections and water, air and emissions monitoring.  The site also has many programs to reuse and conserve water in all its processes.  In order to mitigate the impact generated by dust, the site uses several different dust suppression techniques. In 2007, all activities at Lagunas Norte were and continue to be in compliance with applicable corporate standards and environmental regulations.
 
In 2007, Lagunas Norte obtained International Cyanide Code Management Certification and ISO 14001 recertification with full compliance in both audits. At December 31, 2007, the recorded amount of estimated future reclamation and closure costs that were also asset retirement obligations, as defined in FAS 143 (as described in note 21 to the Consolidated Financial Statements), for the property was $55 million.  See “Environment and Closure”.
 
Exploration, Drilling and Analysis
 
As of December 31, 2007, 1,023 exploration and definition holes had been drilled, totaling 185,391 meters of drilling. Drilling of Lagunas Norte has been completed on average to 62 meter centers.  Drill hole collars have been surveyed, and down-hole Sperry Sun surveys conducted on the holes, with data collected approximately every 50 meters and down hole Maxibor II surveys conducted on the holes of 2007 drilling campaign, with data collected approximately every 3 meters.  Core is placed in metal trays at the drill site and transported to the core facility.  Geological logs of all core are then compiled on handheld computers, using standardized rock codes and descriptive information developed by Barrick geologists.  Data recorded on the handheld computers are downloaded to the main server at the end of every shift, reviewed, field checked if necessary, and then incorporated into the main database.  Generally, sample lengths vary from 0.3 meters to 4.0 meters.  A total of 138,647 samples have been taken during these drill programs.  The average sample length is 1.3 meters.  During the exploration and definition stages of the drilling, all samples were prepared on-site and fire assayed at an independent laboratory in Lima, Peru.  The on-site laboratory performs all required analysis, employing industry standard quality assurance and quality control procedures, including the insertion of standards, duplicates and check assays, controls which have been employed since early exploration.
 
In 2007, additional drilling of twin diamond drill holes and reverse circulation drill holes was undertaken in Lagunas Norte. The results of this drilling allowed verification of ore grade values collected during the original diamond drilling program and provide a basis for further geological model development. This program will continue in 2008.  Other projects and opportunities in the Alto Chicama district are being evaluated.
 
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Royalties
 
 Under the terms of the agreement with Centromin, Barrick paid Centromin an advance contractual royalty of $2 million, which was credited against Centromin’s retained net smelter royalty of 2.51% in 2005.  In December 2006, Centromin transferred all of its rights and obligations with respect to the mine to Activos Mineros S.A.C, a State mining company.
 
Financing
 
Minera Barrick Misquichilca S.A. (“MBM”), a wholly-owned subsidiary of Barrick, has established a number of capital lease programs with certain financial institutions to partially finance the construction of certain assets at Lagunas Norte.  At December 31, 2007, the aggregate amount outstanding under these capital lease programs was $64.9 million. The effective interest rate in 2007 for the aggregate capital leases was LIBOR + 2.5%.
 
In November 2004, MBM filed an initial shelf prospectus relating to up to $150 million aggregate principal amount of bonds with CONASEV, the National Supervisory Commission of Companies and Securities in Peru.  As at December 31, 2007, MBM has issued $100 million aggregate principal amount of bonds. MBM used all the proceeds from the bond issuance for mine development and general corporate purposes.  The effective interest rate in 2007 for the first bond issuance of $50 million was LIBOR + 1.72% and the effective interest rate in 2007 for the second bond issuance of $50 million was LIBOR + 1.5%.
 
Production Information
 
The following table summarizes certain production and financial information for the Lagunas Norte mine for the periods indicated:

 	 	Year ended
December 31, 2007	 	Year ended
December 31, 2006	 	
Tons mined (000’s)	 	25,437	 	27,353	 	
Tons of ore processed (000’s)	 	21,706	 	21,437	 	
Average grade processed (ounces per ton)	 	0.063	 	0.066	 	
Ounces of gold produced (000’s)	 	1,086	 	1,084	 	
Average total cash costs per ounce(1)	 	$	105	 	$	100	 	

(1)   For an explanation of total cash costs per ounce, refer to “Non-GAAP Financial Measures - Total Cash Costs”.
 
The following diagram sets out the design and layout of the Lagunas Norte mine.
 
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Veladero Mine
 
General Information
 
The Veladero mine is an open pit mine using heap leaching. The Veladero mine includes the mining of gold and silver from two open pits: the Filo Federico pit and the Amable pit.  Full construction of the mine commenced in the fourth quarter of 2003 and the first gold pour occurred in September 2005.  The Veladero property is located entirely in San Juan Province, Argentina, immediately to the south of the Pascua-Lama property, approximately 370 kilometers by road northwest of the city of San Juan.  The mine site is located at elevations of between 4,000 and 4,850 meters above sea level.  The area is considered to have a sub-arid, sub-polar, mountain climate. During the winter months, extreme weather may create a challenging operating environment.  Recognizing this issue, the potential impact of possible extreme weather conditions, to the extent possible, has been incorporated into the mine’s operating plan.  Access to the property is via a combination of public highways and an upgraded private gravel road.
 
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The Veladero mine is a combination of two properties: (i) the Veladero mining group, consisting of eight mining concessions owned by the Provincial Mining Exploration and Exploitation Institute (“IPEEM”) and operated by Minera Argentina Gold S.A. (“MAGSA”), a subsidiary of Barrick in Argentina, pursuant to the provisions of the provincial law which governs the functioning of IPEEM, and by virtue of the contract between IPEEM and Barrick, and, ii) the Mina Ursulina Sur mining concession owned and controlled by MAGSA.  These two properties cover an area of approximately 12,350 hectares.  Barrick exercised its option to enter into an exploitation contract with IPEEM in July 2003, in accordance with the terms of the previous exploration contract.
 
Barrick has obtained all necessary surface rights for the mine’s operation.  Barrick has an undivided 90% interest in “Campos Las Taguas”, which encompasses the surface property affected by Veladero’s mining facilities.  With respect to the 10% interest of “Campos Las Taguas” owned by third parties, Barrick and IPEEM have obtained all necessary easements for access over surface property.  Certain other mine related facilities are located in Campo Colangui, also owned by Barrick.
 
The Veladero mine received environmental impact study (EIS) approval in November 2003 from the Mining Authority of the San Juan Province. All the key additional permits for the mine’s operation, such as water concessions, construction permits for civil and hydraulic works, fuel storage permits, explosives and hazardous substances handling permits, have been obtained.
 
The principal m ine commissioning activities were completed during the fourth quarter of 2005 and construction activities were completed in the first quarter of 2006.
 
Barrick implemented a comprehensive recruitment and training program for personnel required for the operation prioritizing the local labor market.  As at December 31, 2007, the mine had approximately 840 employees.
 
Geology
 
The Veladero deposit is an oxidized, high sulfidation gold-silver deposit hosted by volcaniclastic sediments, tuffs, and volcanic breccias related to a Miocene diatreme-dome complex. Disseminated precious metals mineralization forms a broad, 3-kilometer long tabular blanket localized between the 4,000 and 4,350 meter elevations.  The mineralized envelope encompassing greater than 0.4 grams per tonne gold is oriented along a 345°-trending regional structural corridor.  Higher grade zones within this envelope occupy northeast-striking faults and fracture zones.  Hydrothermal alteration is typical of high sulfidation gold deposits, with a silicified core grading outward into advanced argillic alteration, then into peripheral argillic and propylitic alteration haloes.  Gold occurs as fine native grains, and is dominantly associated with silicification and with iron oxide or iron sulfate fracture coatings.  Silver mineralization is distinct from gold, and occurs as a broader, more diffuse envelope, probably representing a separate mineralizing event.  Copper and other base metals are insignificant, and sulphide mineralization is negligible.  Principal controls on gold mineralization are structures, brecciation, alteration, host rocks, and elevation.
 
The Veladero deposit comprises three main orebodies: Amable in the south; Cuatro Esquinas in the center; and Filo Federico in the north.  Much of the Veladero deposit is covered by up to 170 meters of overburden. The current gold reserve identified in the Veladero mine is 11.7 million ounces.
 
A variety of volcanic explosion breccias and tuffs are the principal host rocks at the two northern orebodies, where alteration consists of intense silicification.  The Amable orebody is hosted within bedded pyroclastic breccias and tuffs, which are affected by silicification and advanced argillic alteration.
 
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Mining and Processing
 
The Veladero mine is an open pit mine with a valley-fill heap leach operation and two-stage crushing process.  Recovered gold is smelted into doré on-site and shipped to an outside refinery for processing into bullion. Construction of a four kilometer overland conveyor belt is expected to be commissioned in 2008. An engineering study considering the addition of a second primary crusher is underway, which would increase capacity from approximately 45,000 tpd to approximately 85,000 tpd.   On the basis of a positive recommendation such facility could be operational in 2009. Based on existing reserves and production capacity, the expected mine life is approximately 14 years.
 
Environment
 
In November 2005, Barrick submitted the first biannual update of the Veladero EIS (the “EIS Update”) to the San Juan mining authority.  The EIS Update outlines the mine’s environmental management results for the 2003-2005 period, updates information related to the mine’s environmental management plan and the production plan and sets out the mine’s planned increase in processing capacity. This biannual update was approved in April 2007 and most of the additional permits required for the execution of the current production plan have been obtained.
 
In November 2007, Barrick submitted a second biannual update of the Veladero EIS to the San Juan mining authority. This new document outlines the mine´s environmental management results for the 2005-2007 period.
 
Veladero’s operating facilities have been designed to mitigate environmental impacts.  The operations have processes, procedures or facilities in place to manage substances that have the potential to be harmful to the environment.  In order to prevent and control spills and protect water quality, the mine utilizes multiple levels of spill containment procedures and routine inspection and monitoring of its facilities.  The mine also has various programs to reuse and conserve water at its operations.  In order to mitigate the impact of dust produced by its operations, the mine uses several different dust suppression techniques.   In 2007, all activities at Veladero continued to be in compliance in all material respects with applicable corporate standards and environmental regulations.
 
In August 2007, Barrick obtained the ISO 14001 certification for the entire Veladero operation, and in November 2007, the Veladero operation obtained the International Cyanide Management Code certification.
 
At December 31, 2007, the recorded amount of estimated future reclamation and closure costs that were also asset retirement obligations, as defined in FAS 143 (as described in note 21 to the Consolidated Financial Statements), for the property was $17 million.
 
Exploration, Drilling and Analysis
 
During 2007, sixty-two reverse circulation drill holes were performed reaching a total of 7,806 meters in the Amable Pit, Agostina and Zone 593 areas.  One reverse-circulation drill hole was performed in Pampa de Rulo totaling 235 meters and additional reverse circulation drilling is planned to be undertaken in this area to test potential mineralization.
 
During 2007, a drilling program was carried out at the Amable Pit as part of the planned in-fill program aiming principally to increase reserves and block category upgrade.  Simultaneously, the infill program was also used to investigate gold grade variability at the bottom of phase 1 of the pit, which was depleted in early 2007.
 
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The 2008 exploration plan includes testing of the Pampa de Rulo area, the high grade zones in phase 2 of the Federico pit and the Dos Lagunas exploration target.
 
At December 31, 2007, the Veladero database included 910 reverse circulation drill holes totaling 231,921 meters; 146 diamond core drill holes totaling 30,857 meters; and 5,150 meters of channel samples from two declines which total 1,147 meters in length.  Drill spacing within mineralized zones varies from 30 meters to 100 meters, and averages approximately 35 meters.
 
Sampling has been done with reverse circulation and core drill holes. Reverse circulation samples were collected on 1 meter intervals.
 
Rock chip samples are delivered by mine personnel to the ALS Chemex sample preparation facility at the mine, where the lab assumes sample custody.  Veladero’s standard assay protocol for rock chips involves initial assaying for gold by fire assay fusion of a 50 gram pulp and analysis by atomic absorption. Analytical results are received from the lab in an electronic format and are entered into the database without external manipulation.
 
Veladero’s quality assurance and quality control program utilizes field blanks to monitor contamination, pulp standards to monitor accuracy, and field duplicates, preparation duplicates and pulp duplicates to monitor precision.  Quality control samples are included with sample submittals from reverse circulation chips, drill core, and chip or channel sampling.  A detailed quality control report is prepared at least annually, or after each major sampling program is completed.  External quality assurance and quality control reviews have been conducted periodically. All of these reviews concluded that Veladero’s quality assurance and quality control procedures meet or exceed industry standards.
 
Royalties
 
Pursuant to legislation passed by the government of the Province of San Juan, all gold and silver, among other ores, extracted from the property within the Province of San Juan are subject to a royalty, payable to the government of the Province of San Juan, of 3% of the value of the ore at the “mine mouth”. Under the terms of the exploitation contract between Barrick and IPEEM, a 0.75% “mine mouth” royalty on the minerals produced from the Veladero property is payable to IPEEM.  This agreement also provides for the payment of a 0.75% “mine mouth” royalty on the minerals produced from the Mina Ursulina Sur, on which the Filo Norte deposit is situated (see “Legal Matters – Government Controls and Regulations”).
 
Production Information
 
The following table summarizes certain production and financial information for the Veladero mine for the periods indicated:

 	 	Year ended
December 31, 2007	 	Year ended
December 31, 2006	 	
Tons mined (000’s)	 	69,426	 	81,996	 	
Tons of ore processed (000’s)	 	17,787	 	15,070	 	
Average grade processed (ounces per ton)	 	0.030	 	0.059	 	
Ounces of gold produced (000’s)	 	473	 	511	 	
Average total cash costs per ounce(1)	 	$	346	 	$	168	 	

(1)   For an explanation of total cash costs per ounce, refer to “Non-GAAP Financial Measures - Total Cash Costs”.
 
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Financing
 
During 2004, MAGSA secured a variable rate, limited recourse $250 million loan facility for Veladero. As at December 31, 2007, MAGSA had drawn down the entire facility. Barrick has guaranteed the loan until the mine has achieved specified operational and technical requirements, after which it will become non-recourse.  This facility is insured for political risks by branches of the Canadian government and German government. Substantially all the assets of MAGSA, including the Veladero property and related assets, have been pledged as security under the loan. The effective interest rate for 2007 was approximately 10.2%.
 
The following diagram sets out the current mine facilities and planned expansion:

 
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Zaldívar Mine
 
General Information
 
Zaldívar is an open pit heap leach copper mine located in northern Chile.  The mine is located in the Andean Precordillera in Region II of northern Chile, approximately 1,400 kilometers north of Santiago and 175 kilometers southeast of the port city of Antofagasta.  The site is accessible by highway from the port of Antofagasta.  The Antofagasta-Salta railway and an airstrip constructed by Zaldívar and maintained by both Zaldívar and Minera Escondida Limitada also service the site.  Zaldívar employed approximately 750 employees and approximately 1,280 contractors at December 31, 2007.
 
The climate is characterized by very low relative humidity and practically no precipitation and has little impact on the mine’s operations.  The surface topography lies at an average elevation of 3,300 meters above mean sea level.  There is little or no vegetation.  The property is within a 1,240-hectare claim area covered by 247 exploitation concessions.  Exploitation concessions are registered in the Conservador de Minas (Mining Property Registrar) and Sernageomin (National Service of Geology and Mines).  Environmental permit(s) are issued and registered with the Conama (National Environmental Commission).
 
In 1979, the initial declaration or statement of discovery (manifestacion minera) was presented to the First Civil Court of Antofagasta by Mr. Pedro Buttazzoni Alvarez.  In 1981, Mr. Buttazzoni, through his company Sociedad Contractual Minera Varillas (“SCMV”), formed the company Sociedad Legal Minera Zaldívar 262 de Zaldívar. Shareholders in this new company were: SCMV, 88.33%, and Minera Utah de Chile Inc. and Getty Mining (Chile) Inc. jointly holding the other 11.67%.  In 1989, as a result of various transactions during the previous eight years, SCMV held 51% and Minera Escondida Limitada owned the other 49%. In March 1989, the mining rights were sold to Sociedad Minera La Cascada Limitada (“SMCL-Pudahuel”).  In that same year, a sales contract was executed between SMCL-Pudahuel and Outokumpu Resources (Services) Limited (“Outokumpu”). The mining claims were then transferred to Minera Outokumpu Chile Limitada in November 1989.  Outokumpu announced the formation of a 50/50 joint venture with Placer Dome in December 1992, at which time a joint venture company, Compañía Minera Zaldívar (“CMZ”), was formed.  Commercial production began in November 1995, after completion of construction at a cost of $574 million.  Placer Dome acquired the remaining 50% interest in CMZ from Outokumpu effective December 13, 1999 at a cost of $251 million.  Barrick acquired Zaldívar in connection with its acquisition of Placer Dome in March 2006. Based on existing reserves and production capacity, the expected mine life is approximately 17 years.
 
Geology
 
The Zaldívar porphyry copper deposit is situated on the western margin of the Atacama Plateau in northern Chile. The deposit is part of a large Tertiary porphyry copper system which includes the Escondida porphyry copper deposit. This porphyry complex occurs within the large West Fissure structural system which controls most of the large porphyry copper deposits in Chile.  The Zaldívar porphyry system is at the intersection of the West Fissure and a series of Northwest and Northeast striking faults. The deposit is generally centered on a Northeast striking granodiorite porphyry body that intrudes andesites and rhyolites, and cuts across the north-south striking Portezuelo fault.  Although the geology and the Zaldívar mineral deposit are generally continuous from east to west, the orebody was arbitrarily divided into two zones: the Main zone (area east of 93,000E) and the Pinta Verde zone (area west of 93000E).
 
The Zaldívar orebody contains both sulphide and oxide copper mineralization. The majority of the copper occurs in a blanket of oxide and secondary sulphide ore which overlays deeper primary sulphide
 
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mineralization of lower grade.  The economically important mineralization types are secondary sulphide (chalcocite), oxide (brochantite and chrysocolla) and a mixed mineralization type of combined sulphide and oxide copper minerals. Primary sulphide mineralization consists of pyrite, chalcopyrite, bornite and molybdenite.
 
In the Main zone orebody, to the east of the Portezuelo fault, rhyolite is the host rock and secondary sulphide mineralization is dominant (85% to 90%) with the balance of the copper present as oxide minerals. West of the fault, andesite and granodiorite are the host rocks and the copper is present as a mixture of both oxide and secondary sulphide minerals.
 
Mining and Processing
 
The open pit contemplates mining the remaining mineral reserves in six stages, referred to as Stage 6 through to Stage 11.  During 2007, ore production came from Stages 5 and 8 of the Main zone.  Conventional methods of open pit mining are used.  During 2007, Zaldívar focused on improving operational efficiencies and reliability of key process equipment such as the bucket wheel excavator for rehandling the spent ore and the Rahco stacker.
 
Pure cathode copper is produced by three stages of crushing and stacking of ore, followed by heap leaching and bacterial activity to remove the copper from the ore into solution.  Run of mine dump leach material is placed on the old sulphide ore pad, and is also leached.  A solvent extraction and electrowinning process then removes the copper from solution and produces the cathode copper.  The electrowinning plant has been modified to produce 331 million pounds (150,000 tonnes) of cathode copper per year, 20% over the original design capacity.  A flotation plant is also used to recover copper, in the form of copper concentrate, contained in the fine fraction of the crushed ore.
 
Copper recoveries and leaching kinetics have improved for sulphide ores by more than 20% in the last 8 years and leach cycle times are currently 365 days. Notwithstanding these improvements, declining head grades mean that more material must be placed on the leach pads and more capital investment is required to sustain current copper production rates. Zaldívar will concentrate on improving leaching kinetics and accelerating the oxidation of sulphide ores to minimize future capital requirements and maximize cathode production.
 
Process water is being supplied from ground water at Negrillar, 120 kilometers east of Zaldívar. Water is drawn from six production wells and pumped along the 120-kilometer route to a fresh water pond located near the tertiary crushing facility at the plant site. Zaldívar receives power from the SING, the regional electricity grid system, and purchases electricity from one of the electrical utilities operating on the SING system. A 230 kilometer transmission line was constructed in conjunction with Minera Escondida Limitada between the Zaldívar and Escondida plant sites and the SING system substation at El Crucero.  In addition, Gener, a power supplier, constructed a link from its power line that crosses the Andes from Salta to the Zaldívar sub-station. In 2007, Zaldivar renewed contracts for both the supply of power and acid.  The terms of these new contracts will result in increased costs for the mine.  All operations permits have been obtained and are in good standing.
 
On December 14, 2004, the Chilean government presented a new mining sector specific tax project to the Chamber of Deputies proposing a 5% tax on operating profits derived from the sale of mineral products. The proposed 5% tax became law during 2005.  Companies protected from income tax increases under Chile’s DL 600 foreign investment law, which was the case for CMZ, which holds the Zaldívar mine, had the option to either wait for their DL 600 contract to expire, after which their investment would be subject to the new tax, or renounce their status under the existing DL 600 regime, before November 30, 2005, and face a reduced 4% tax in return for a 12 year mining tax
 
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invariability clause.  Pursuant to the provisions of this new tax, the 4% tax is effectively reduced to 2% for 2006 and 2007.  The new tax honors all existing contracts between mining companies and the state, which are protected under Chile’s DL 600 foreign investment law, and would not be applied to such companies while their current tax contracts remain in force.
 
  In November 2005, CMZ opted out of its existing DL 600 regime and entered into the new DL 600 regime, the terms of which include the 4% tax and a 12 year tax invariability clause.
 
Environment
 
Zaldívar operates in an environmentally responsible manner to mitigate environmental impacts. This is largely due to the heap leaching process that operates entirely as a closed circuit with no discharge to the environment. There are programs that continuously monitor the process and surrounding areas, including leak detection wells to detect any potential circuit failures.
 
In 2007, all activities at Zaldívar were, and continue to be, in compliance in all material respects with applicable corporate standards and environmental regulations.  Management is not aware of any proposed changes to these standards or regulations that would materially affect the operations or the approved closure plan. Zaldívar’s ISO 14001 certification was renewed in September 2006 and will be in effect for a three-year term, subject to successful annual audits over the period.
 
At December 31, 2007, the recorded amount of estimated future reclamation and closure costs that were also asset retirement obligations, as defined in FAS 143 (as described in Note 21 to the Consolidated Financial Statements), for the property was $30 million.
 
Exploration, Drilling and Analysis
 
The Zaldívar orebody has been extensively drilled.  Reverse circulation drilling has been done in order to develop a geological model. For exploration holes, whole core samples are taken at every 2 meter down-the-hole interval.  All holes are logged for lithology, alteration, mineralization and structure.  A total of 67 reverse circulation holes for 15,151 meters and 59 diamond holes for 42,995 meters were drilled in 2007.
 
Sampling and analysis of diamond and reverse circulation drill holes and blast holes comply with industry standards.  Blank sample protocols are used in the normal row of samples sent to the Zaldívar laboratory.  Controls exist on biases and the product is checked with the security sampling curves.  As well, external laboratories have been used to verify results.  Databases generated with these results are thoroughly reviewed and cross checked before being used in the mineral resource/mineral reserve estimation processes. Regular internal auditing of the mineral reserve and mineral resource estimation processes and procedures are conducted.
 
Special field controllers ensure that the samples collected for modeling and mineral resource estimation have been delivered under secure conditions to the laboratory.
 
Royalties
 
The Zaldívar mine is not subject to any royalties.
 
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Production Information
 
The following table summarizes certain production and financial information for the Zaldívar mine for the periods indicated:

 	 	Year ended
December 31, 2007	 	Year ended
December 31, 2006( 1)	 	
Tons mined (000’s)	 	81,337	 	82,678	 	
Tons of ore processed (000’s)	 	36,808	 	26,404	 	
Average grade processed (% of TCu)	 	0.62	 	0.92	 	
Pounds of copper produced (000,000’s)	 	315	 	308	 	
Average total cash costs per pound(2)	 	$	0.70	 	$	0.62	 	

(1)         Barrick’s share of the acquired Placer Dome mines’ production and costs per ounce/pound reflect the results from January 20, 2006.
(2)         For an explanation of total cash costs per pound, refer to “Non-GAAP Financial Measures - Total Cash Costs”.
 
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EXPLORATION, DEVELOPMENT AND BUSINESS DEVELOPMENT
 
Barrick has historically grown its reserve base through a combination of acquisitions and an exploration strategy that includes a district development program, which focuses on exploration in and around its operating properties, as well as an early-stage exploration program. Barrick believes there is a higher probability of finding new mineral reserves around existing mines. Once found, these new reserves can be developed more quickly and profitably due to existing infrastructure. However, the low gold price environment and consequent lack of exploration investment that existed in prior years required that major mining companies undertake more early stage exploration than in the past.  There were fewer new discoveries to buy or joint ventures to fund.  Barrick is currently engaged in both a district development in and early stage exploration in each of its RBUs as well as early-stage exploration in certain other countries where is does not currently have operations.
 
Exploration is directed from Barrick’s head office in Toronto and is conducted through its RBUs and exploration offices around the world.  Barrick utilizes state-of-the-art technology to explore deeper and in a more effective manner. At Goldstrike, Barrick uses new deep-penetrating geophysical techniques and geological modeling to locate and define new targets. These new techniques can also be applied in Tanzania, Papua New Guinea and Australia.
 
The Company’s strategy is to maintain a geographic mix of projects at different stages in the exploration and development sequence.  In 2007, Barrick spent $367 million on its exploration, development and business development activities (2006 – $290 million). Of the $179 million spent on exploration in 2007, approximately $70 million was spent in North America, approximately $40 million was spent in South America, approximately $46 million was spent in the Australia Pacific region and, approximately $15 million was spent in Africa.  Development expenditures in 2007 totaled approximately $166 million. Business development costs in 2007 totaled approximately $22 million.
 
Barrick’s strategy for 2008 will focus on the replacement of production through a combination of exploration, corporate development and project development. In addition, the strategy will be balanced by the search for new giant gold deposits. In 2008, Barrick expects to spend approximately $200 million on exploration weighted towards near-term discovery around its existing operations while still maintaining a balanced portfolio in order to generate projects for the future.   In 2008, Barrick expects to expense project costs of $370 million to continue to advance its project pipeline.  As a result of the continued development of its more advanced projects, in particular, Pueblo Viejo, Buzwagi and Cortez Hills, Barrick expects 2008 capital expenditures to increase significantly from 2007.  For 2008, Barrick expects to spend $1.5 - $1.7 billion on capital expenditures for its projects.  Certain of Barrick’s current projects, which are at various stages of development, are described below.
 
The Buzwagi project is located within the highly prospective Lake Victoria Greenstone Belt in Tanzania on excellent terrain, which is relatively flat, open land.  This is expected to simplify project execution.  Buzwagi’s proximity to Barrick’s other operations in the area (Bulyanhulu and Tulawaka) is expected to benefit its operations due to shared infrastructure, training and employee development.  In addition, Buzwagi has the best access to infrastructure of all Barrick’s Tanzanian properties.  A paved road connects the site to a rail line that passes only 40 kilometers from the property.  In 2007, the project’s Mine Development Agreement and Environmental Impact Assessment (“EIA”) were approved by the Tanzanian government.   In August 2007, Barrick commenced construction, which, at year-end, was approximately 30% complete.  Pre-production capital cost is estimated at $400 million (excluding capitalized interest).
 
Cortez Hills is currently in the permitting stage.  The project involves the development of two adjacent deposits - Cortez Hills and Pediment – within the Cortez Joint Venture area of interest.  The
 
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project will be developed as two open pits with part of the deposit potentially to be mined by underground mining methods. In 2007, Barrick substantially completed the detailed engineering for the project and spent approximately $88 million (100% basis) on mining equipment and engineering for project infrastructure.  In 2008, the Cortez Hills Lower Zone was discovered and Barrick plans to commence underground drifting to infill the deposit to a resource category.  The project construction budget is $480 million to $500 million (100% basis and excluding capitalized interest).  Construction activities are expected to last 15 months and will commence once the Environmental Impact Study Record of Decision is obtained, which is anticipated in the second half of 2008.  For details regarding Barrick’s acquisition of the remaining 40% of Cortez Hills, see “General Information – Transactions - Acquisition of Additional 40% Interest in Cortez Property”.
 
In May 2006, a shareholders’ agreement with Goldcorp was finalized, which established Barrick as the 60% owner and operator of the Pueblo Viejo project.  The Pueblo Viejo project is located in the Dominican Republic, 15 kilometers southwest of the provincial capital of Cotui and approximately 100 kilometers northwest of the national capital, Santo Domingo. In February 2008, Barrick submitted a feasibility study and provided a project notice to the Government of the Dominican Republic that it plans to proceed with development of the Pueblo Viejo project.  Since March 2006, Barrick has updated capital costs estimates, re-evaluated the process flowsheet, worked on optimizing the project and carried out an exploration program.  Barrick’s review has resulted in: a new silver process that is expected to increase silver recovery from 5% to 84%; the inclusion of a copper recovery circuit; and the potential inclusion of a zinc recovery process.  In 2007, exploration drilling resulted in a new discovery at Monte Oculto and a significant resource increase.  The project has substantial power requirements due to high levels of sulphur contained in the ore and Barrick is investigating options for the sourcing of power.  Activities relating to government and community relations and environmental permitting for the mine are ongoing.
 
Barrick spent $69 million in 2007 (100% basis) relating to the update the Pueblo Viejo project’s feasibility study, commencement of basic and detail design and engineering, exploration programs for ore reserves and limestone deposits, community development programs and sourcing of electric power and location of power transmission lines.  The construction period to first gold production is expected to be about three and a half years from project decision.
 
In 2007, Barrick increased the Pueblo Viejo project’s pre-production capital cost estimate of $2.1 billion to $2.3 billion (excluding capitalized interest) to approximately $2.7 billion.  This increase in the capital cost estimate primarily reflects an increase in throughput rate to 24,000 tonnes per day from the previous rate of 18,000 tonnes per day. Barrick expects that this increase will have the effect of increasing its share of gold production in the first full five years of production to approximately 600,000 ounces per year from 465,000 to 480,000 ounces per year.  Barrick’s 2008 objectives include commencing detailed engineering; continuing negotiations with the Government of the Dominican Republic regarding outstanding project matters ; commencing construction activities; continuing exploration outside of the current pit limits; continuing work on the zinc recovery feasibility study; developing a power strategy; and continuing to expand the project’s community development programs.
 
The Pascua-Lama property is located in the Frontera District in Chile’s Region III and Argentina’s San Juan Province. It straddles the Chile-Argentina border and is approximately 150 kilometers southeast of the city of Vallenar, Chile, 380 kilometers by road northwest of the city of San Juan, Argentina and approximately 10 kilometers from the Veladero mine. The total project area consists of approximately 45,500 hectares in Chile and Argentina.  Access to the property is pursuant to a combination of public highways and private roads from both Vallenar, Chile and San Juan, Argentina.
 
The Pascua-Lama project has been designed as an open pit mine, centered at an elevation of 4,800 meters. The project will produce both oxide and sulphide ores. The Pascua-Lama project has received
 
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EIA approval from appropriate authorities in Chile and Environmental Impact Statement (“EIS”) approval from the San Juan, Argentina, provincial environmental regulatory authority.  Having obtained approval of the EIS, Barrick will also need to obtain various sectoral permits for the construction and operation of the project.
 
In 2006, the project’s feasibility study was updated, including capital and operating costs, from those estimates that were previously completed in June 2004. Barrick currently expects that its 2007 cost of construction estimate of $2.3 billion to $2.4 billion, excluding capitalized interest, will increase by approximately 15% primarily due to inflationary pressures and currency impacts .   Based on the 2006 feasibility study update, initial annual gold production in the first five years at Pascua-Lama is expected to be between 750,000 to 775,000 ounces.   In 200 8 , Barrick will continue its efforts with respect to community/government relations, permitting, protocol implementation and tax stability.  Commencing project construction is contingent on the resolution of certain external issues such as permitting, protocol implementation and the governments of Chile and Argentina resolving certain remaining regulatory, fiscal, taxation and royalty matters.  The timing of resolution of these matters, royalties, rising costs of materials and currency fluctuations are largely beyond Barrick’s control and may impact on the timing and the cost of development and operation of the project.
 
In 2007, through its acquisition of Arizona Star, Barrick acquired a 51% interest in the Cerro Casale deposit in the Maricunga district of Region III in Chile (see “General Information – Transactions”).  Kinross owns the remaining 49% of the Cerro Casale deposit.  In late 2007, Kinross notified Arizona Star that it intends to revoke the suspension of the operation of a transfer covenant which, if it were operative and effective, could require Arizona Star to transfer 2% of its interest in the Cerro Casale deposit to Kinross.  Barrick and Kinross are in the process of negotiating a more definitive shareholder’s agreement that will govern the joint venture.
 
The Donlin Creek project is a large refractory gold deposit in Southwestern Alaska, under lease from two Alaskan Native corporations until 2015 and for so long thereafter as mining operations are carried out on the property.  In October 2007, Barrick notified its joint venture partner, NovaGold Resources Alaska Inc. (“NovaGold”), that it had completed work on the feasibility study for the project.  In December 2007, Barrick entered into an agreement with NovaGold to form a jointly owned limited liability company on a 50/50 basis to advance the project, with a NovaGold appointee positioned as the initial General Manager.  Work completed in 2007 included more than 70 thousand meters of drilling (primarily infill) and collection of additional environmental baseline data, in addition to a wide range of engineering work completed in support of the feasibility study.  Work in the first half of 2008 will focus on completing a series of optimizing studies for power supply, logistics, processing and production levels, and further exploration activities.  Data from the 2007 drilling program will continue to be integrated into a final feasibility study.
 
In 2006, Barrick acquired a 50% interest in Atacama Copper Pty Ltd., which has a 75% interest in the Reko Diq project in Pakistan and associated mineral interests.  Reko Diq is a large copper-gold porphyry mineral resource located in southwest Pakistan in the province of Balochistan.  In 2007, the project’s drill program continued, with a feasibility study scheduled for completion in early 2009.  A total of approximately 101,000 meters have been drilled to date resulting in a resource which is nearly double the previously stated resource.  Results continue to confirm the project’s district exploration potential.
 
Sedibelo is a large platinum deposit in South Africa.  The Sedibelo platinum project is located in northern South Africa within the Western Limb of the prolific Bushveld Igneous Complex (“Bushveld”).  The Bushveld is the source of 80% of the world’s platinum reserves and 70% of the world’s platinum production.  As operator of the project, Barrick has the right to earn a 10% interest in the project on completion of a feasibility study and earn an additional 40% interest in the project once a decision to
 
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construct a mine has been made.  Funding of exploration, the feasibility study and during the construction of the mine will be shared 50% by Barrick and its partner, the Bakgatla Bakgafela Tribe.  In April 2007, acceptance of the project’s Mining Rights application was received from the South African Department of Minerals and Energy, with approval of the Mining Rights application expected in April 2008.  In September 2007, Barrick completed a pre-feasibility study for the project.  Study work and exploration drilling in support of a final feasibility study have commenced, with completion expected in the second quarter of 2008.
 
On December 15, 2006, Barrick completed its transaction with Highland Gold Mining Ltd. (“Highland”) to transfer ownership of certain companies holding Russian and Kyrgyz licenses in return for 34.3 million Highland common shares.  In effect, Barrick contributed its 50% interest in the Taseevskoye deposit, as well as other exploration properties in Russia and Central Asia, to Highland, thereby consolidating ownership of these properties under one company.  As part of the transaction, Barrick has seconded several of its employees to Highland and has received two additional seats on Highland’s board of directors.  As a result of various share issuances by Highland during 2007 and early 2008, Barrick’s equity ownership interest in Highland has been reduced to 20.3%.
 
Fedorova is a palladium and platinum project with nickel, copper and gold by-products located in the Kola Peninsula of the Russian Federation.  Barrick owns 50% (with an earn-in right to 79%) of Fedorova and is the operator.  Fedorova is a large near surface PGM (platinum group metals) deposit.  In 2007, Barrick spent $30 million towards the completion of a feasibility study, including approximately 60,000 meters of drilling.
 
Barrick is party to a joint-venture agreement with Xstrata Plc (“Xstrata”) with respect to the Kabanga nickel deposit and related concession in Tanzania.  Xstrata is the operator of the joint venture and the project is currently in the pre-feasibility stage.  Kabanga, which is one of the largest undeveloped nickel sulphide deposits in the world, is located in northwest Tanzania.  The property is approximately 385 kilometers from Bulyanhulu and approximately 200 kilometers west of Tulawaka.  The main Kabanga prospecting license was successfully extended to June 30, 2009, securing tenure beyond the anticipated mining license application in early 2009.  During the three-year feasibility work plan, Xstrata is expected to fund the first $145 million to maintain its 50% share in the project. Approximately $112 million has been incurred as at the end of February 2008. The pre-feasibility study for the project is due to be completed at the end of 2008 with the execution phase of the project expected to commence in 2009. After the $145 million is spent by Xstrata, funding will be shared equally by Barrick and Xstrata.
 
ENVIRONMENT AND CLOSURE
 
The Company’s mining, exploration and development activities are subject to various levels of federal, provincial or state, and local laws and regulations relating to protection of the environment, including requirements for closure and reclamation of mining properties (see “Legal Matters - Government Controls and Regulations”).
 
Barrick has a policy of conducting environmental audits of its operations to assess the operations’ compliance with applicable laws, regulations, permit requirements, policies, guidelines, procedures and adopted codes of practice, and their performance in reducing risk and managing liabilities.  The Company’s policy is to perform environmental audits on a regular and scheduled basis.  In practice, this typically results in environmental audits at each operating mine every second year and at least once every five years for other properties. A committee of Barrick’s Board of Directors reviews the Company’s environmental policies and programs and oversees Barrick’s environmental performance.
 
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In 2005, Barrick became a signatory to the United Nations (“UN”) Global Compact, which represents the world’s largest voluntary corporate citizenship initiative.  Among its principles, the UN Global Compact encourages businesses to support a precautionary approach to environmental challenges, undertake initiatives to promote greater environmental responsibility, and encourage the development and diffusion of environmentally friendly technologies.
 
To provide further guidance toward achieving its environmental objectives, Barrick developed an Environmental Management System Standard (“EMSS”) in 2005.  Each mine will be required to become compliant with certain designated elements of the EMSS in each of 2008, 2009 and 2010, by which time full compliance must be achieved.  Most Barrick mines are already substantially compliant with the EMSS by virtue of their existing systems. For example, Zaldívar, Lagunas Norte, Veladero and Pierina are ISO 14001 certified.  Similarly, Goldstrike has an extensive environmental management system that is based on its many comprehensive permits.
 
Each year, Barrick issues a Responsibility Report that outlines its environmental, health and safety and social responsibility performance for the year.
 
During 2007, all of the Company’s operations were in compliance in all material respects with applicable corporate standards and environmental regulations and there were no material notices of violations, fines or convictions relating to environmental matters at any of the Company’s operations.
 
As part of Barrick’s goal to minimize the impact on the environment, it develops closure and reclamation plans as part of its initial project planning and design.  If it acquires a property that lacks a closure plan, Barrick requires preparation of a closure plan.  The Company periodically reviews and updates closure plans to account for additional knowledge of a property or for changes in applicable laws or regulations. The Company has estimated future site reclamation and closure obligations, which it believes will meet current regulatory requirements. See Notes 2 and 21 of the Notes to the Consolidated Financial Statements.
 
The Company’s operating facilities have been designed to mitigate environmental impacts.  The operations have processes, procedures or facilities in place to manage substances that have the potential to be harmful to the environment.  In order to prevent and control spills and protect water quality, Barrick utilizes multiple levels of spill containment procedures and routine inspection and monitoring of its facilities.  The Company also has various programs to reuse and conserve water at its operations.  In order to mitigate the impact of dust produced by its operations, Barrick uses several different dust suppression techniques at its properties.  The Company also installs air pollution controls on air pollution point sources, such as roaster and autoclave stacks, that meet or exceed applicable legal standards.  The Company has also implemented safeguards at its properties that are designed to protect wildlife in the surrounding areas.  Such safeguards include fencing and netting or other coverings of ponds and tanks, bird hazing techniques, such as mechanized scarecrows or noisemakers, and the establishment of alternate water sources and habitats for wildlife.
 
Certain of the Company’s operating properties handle ore or rock which has the potential to be acid generating, and hence has the potential to contaminate water by the leaching of metals and salts. Other operating properties lack acid generating potential, but still present the potential for leaching of certain salts, such as sulfates, or metalloids, such as arsenic, by water that might run off of the property.  The Company has implemented programs to manage the handling of ore and rock to reduce the potential for contamination of surface or groundwater by either acid or neutral drainage. Such procedures include segregation of rock with potential for leaching, containment systems for the collection and treatment of drainage and reclamation and closure steps designed to minimize water infiltration and oxygen flux.  Where necessary, the Company installs and operates water treatment facilities to manage drainage.
 
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Most of the Company’s operating properties use cyanide.  Those facilities are designed and constructed to prevent process solutions from being released to surface water or groundwater.  Typically, those facilities include leak detection systems and have the ability to collect and treat seepage that may occur.  The tailings storage facilities are typically fenced and process ponds are typically netted or other procedures implemented to deter access.  In September 2005, the Company became a signatory to the International Cyanide Management Code (“Code”), which is administered by the International Cyanide Management Institute (the “ICMI”).  The ICMI is an independent body that was established by a multi-stakeholder group under the auspice of the United Nations Environmental Programme. The Code established operating standards for manufacturers, transporters and mines and provides for third-party certification of facilities’ compliance with the Code.  Under the Code, each of the mines that use cyanide must receive a third party certification inspection by September 2008.  The Company listed all of its mines that use cyanide for Code certification.  Placer Dome also became a signatory to the Code in 2005.   All former Placer sites, except Golden Sunlight and Henty, which have limited mine life, have been designated for Code certification.  Barrick’s Goldstrike, Bald Mountain, Ruby Hill, Cortez, Pierina, Lagunas Norte, Veladero, and Cowal Mines and the Marigold and Round Mountain Joint Ventures have been certified.  While the Company believes that most of its remaining operations that use cyanide are already substantially in compliance with the Code, it will incur expenses achieving full Code compliance at the remaining operations.
 
Certain of the Company’s operations sell the mercury captured by their air pollution control devices.  The Company is committed to the operation of state-of-the-art controls on all sources of mercury emissions.  Site specific management procedures for mercury handling, monitoring and transportation exist at each of the operations that produce mercury as a co-product. Further, employees receive training in the safe use and proper management of cyanide, mercury and other hazardous materials.  The facilities have instituted handling and shipping procedures designed to minimize the risk of spills.  All of the mercury is sold to licensed facilities in the United States.
 
FINANCIAL RISK-MANAGEMENT
 
Forward Sales Program
 
The Company has operations in eight principal countries which produce gold and/or copper, as well as other minerals such as silver. The Company’s activities expose it to a variety of market risks, including risks related to the effects of changes in gold and copper prices and the price of certain other metals. This financial exposure is monitored and managed by the Company as an integral part of its overall risk-management program. The Company’s risk-management program has historically focused on the unpredictability of commodity and financial markets and used financial instruments and forward sales contracts to mitigate significant, unanticipated earnings and cash flow fluctuations that may arise from volatility in commodity prices. Price fluctuations in gold and other metals could cause actual cash inflows from the sale of production to differ from anticipated cash inflows.
 
For most of Barrick’s history, gold forward sales were a significant element in providing the Company the relatively stable revenue that helped fuel its growth. In 2002, Barrick began to take steps to simplify and reduce the size of its gold forward sales program. With the Company’s positive outlook for the gold price, continued low historical interest rates (which may lead to lower forward sales price premiums) and Barrick’s strong financial position, the Company has been managing the program down to a lower percentage of overall gold reserves. In late 2003, Barrick adopted a “no-new-hedge” gold policy such that it will not add new ounces to its gold forward sales program and will pursue opportunities to reduce its gold forward sales position.
 
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Barrick’s gold and silver forward sales contracts represent agreements to sell gold and silver on a delivery date in the future. Barrick delivers actual physical production to satisfy the obligations under these contracts. Barrick may, at its discretion, choose to deliver gold production against any gold forward sales contract in advance of the contract’s termination date.
 
The rights and obligations under Barrick’s gold forward sales contracts are set out in master trading agreements executed with various counterparties. The selling price under a contract is based on the forward price of gold at the future delivery date, which Barrick believes is essentially a function of the spot gold price on the date the contract is entered into plus a premium (commonly referred to as “contango”) through the future delivery date. Generally, though not always, the future price for the sale of gold under the contract is higher than the spot gold price at the time the contract is entered into.  In some cases, the “premium” can be reduced or become negative (known as “backwardation”) where there is a lack of liquidity in the gold leasing market, but, historically, this occurrence has been relatively uncommon and short-lived.   The premium can also be reduced or become negative due to factors including lower interest rates, higher gold lease rates, credit risk affecting the counterparties, relating to both the counterparties and Barrick’s credit quality, and the economic impact on the counterparties associated with funding a negative mark-to-market position on outstanding contracts.
 
Barrick diversifies its gold forward sales contracts across a number of counterparties, limits exposure to individual counterparties and regularly monitors its counterparties’ credit ratings. Barrick spreads out the delivery dates under such contracts so as to have more production than is required to be delivered into such contracts at any given time. To date, all counterparties have fully performed their obligations under such arrangements.
 
Depending on market conditions and other factors, Barrick may choose to deliver a portion of its gold production into its gold forward sales program at prices that are below the spot price. There can be no assurance that Barrick will be able to achieve in the future realized prices for gold that exceed the spot price as a result of its gold forward sales program. If Barrick chooses to deliver a portion of its gold production into its Project Gold Sales Contracts (defined below) at prices that are below the prevailing spot price, it would incur an opportunity loss on those contracts.
 
For a summary of the Company’s future gold sale and delivery commitments and associated risks, see Notes 5 and 20 of the Notes to the Consolidated Financial Statements for the year ended December 31, 2007, pages 38 and 57 to 60 of the Company’s Annual Report – Financial Report 2007 to Shareholders for the year ended December 31, 2007 and “Risk Factors”.
 
Project Gold Sales Contracts
 
In anticipation of building its projects, as at December 31, 2007, the Company had allocated 9.5 million ounces of gold forward sales contracts (including 1.7 million ounces of floating spot-price gold forward sales contracts) specifically to its projects’ future gold production (“Project Gold Sales Contracts”). The Company allocated these contracts as part of a strategy to help reduce gold price risk at its projects and provide price support for any future financing.  As at December 31, 2007, the negative mark-to-market value of the Project Gold Sales Contracts was approximately $4.6 billion, based on a gold price of $834 per ounce.
 
Corporate Gold Sales Contracts
 
In early 2007, the Company made the voluntary decision to eliminate its remaining gold forward sales contracts not specifically allocated to its projects’ future gold production (“Corporate Gold Sales Contracts”).  During the first half of 2007, Barrick eliminated its remaining Corporate Gold Sales
 
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Contracts by delivering 2.5 million ounces of its gold production, at an average price of $404 per ounce, into its Corporate Gold Sales Contracts.  The elimination of the Corporate Gold Sales Contracts resulted in a reduction to Barrick’s pre-tax income and cash flow of $636 million, in the first half of 2007. Its remaining gold production was delivered into the spot market. In 2007, the Company realized an average price of $619 per ounce compared with the average London P.M. Fix for the year of $695 per ounce. In comparison, for 2006, the Company realized an average gold price of $543 per ounce compared with the average London P.M. Fix for the year of $604 per ounce.
 
Copper Sales
 
In early October 2006, Barrick issued $1 billion of copper-linked notes (the “Notes”) comprised of $400 million of 5.75% notes due 2016 and $600 million of 6.35% notes due 2036.  During the first three years of these Notes, the original $1 billion of funding is to be repaid in the dollar equivalent of approximately 324 million pounds of copper.  The terms of the Notes result in an embedded fixed-price forward copper sales contract. Under the terms of the Notes, as at December 31, 2007, Barrick will receive $3.08 per pound for a total of 156 million pounds of copper sales in the period 2008 to 2009, including 103 million pounds in 2008.     In February 2007, Barrick entered into a call option transaction whereby it is able to participate in stronger copper prices of up to $3.58 per pound, while maintaining a floor price of $3.08 per pound, on the remaining 156 million pounds of copper (as at the date of the transaction) in the Notes.
 
During 2007, Barrick added 392 million pounds of copper collar contracts.  120 million pounds of copper under such contracts related to 2007, with the remaining 272 million pounds of copper under such contracts providing an average floor price of $3.00 and an average cap price of $3.92 for copper sales in 2008.  207 million pounds of the collars are designated against copper cathode sales at the Zaldívar mine and 65 million pounds are designated against copper concentrate sales at the Osborne mine.
 
  Currency, Interest Rate and Other Commodity Hedge Programs
 
The Company also monitors and manages exposures related to currencies, interest rates and other commodity prices. Currency risk mainly arises on non-U.S. dollar cash expenditures at the Company’s Australian, Canadian, South American and Papua New Guinean mines that are denominated in local currencies. Interest rate risk mainly relates to interest income receipts on cash balances and interest payments on variable-rate debt obligations. Commodity price risk arises in respect of commodities such as copper produced at the Zaldívar and Osborne mines, nickel, platinum and palladium at certain of is projects, and the costs of electricity, acid, diesel fuel, natural gas and other inputs consumed at each of the Company’s operations. The Company mainly uses forward exchange contracts, interest rate swaps and forward commodity contracts to mitigate the impact of volatility in currency exchange rates, interest rates and commodity prices on its business.
 
Barrick continues to enter into other financial and commodity instruments to mitigate the effect of other risks that are inherent in its business, and also to take advantage of opportunities to secure attractive pricing for currencies, interest rates and other commodities.  For a summary of the derivative instruments used in the Company’s currency, interest rate and commodity hedge programs, see Note 20 of the Notes to the Consolidated Financial Statements.
 
Oversight and Control Over Risk-Management Activities
 
The Company’s financial risk-management activities are subject to the management, direction, and control of its Finance Committee as part of that Committee’s oversight of the Company’s investment activities and treasury function. The Finance Committee, which is comprised of four members of the
 
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Company’s Board of Directors, including the Company’s Chief Executive Officer, reports to the Board of Directors on the scope of the Company’s risk-management strategy (including the gold forward sales hedge program) and other activities. The Finance Committee approves corporate policy that defines the Company’s risk-management objectives and philosophy relating to financial risk-management activities and provides guidance for financial instrument usage. The Finance Committee also approves hedging strategies that are developed by management through its analysis of risk exposures to which the Company is subject, and commodity, foreign exchange and interest rate market analysis from internal and industry sources. The resulting hedging strategies are then incorporated into the Company’s overall risk-management strategies.
 
Responsibility for the implementation of gold sales, hedging and risk-management strategies is delegated to the Company’s treasury function. A report on Barrick’s gold sales and hedge position, detailing the size of the hedge position by contract type, diversification of the position among counterparties and each counterparty’s recent credit rating and the latest fair value of each group of contracts, is prepared bi-monthly and distributed to the Chief Financial Officer and the Chairman of the Finance Committee. The Finance Committee and the Board of Directors also receive a report on Barrick’s hedging and overall risk-management position at each of their regularly scheduled meetings.
 
Barrick maintains a separate compliance function to independently monitor and record gold sales and hedging activities and achieve segregation of duties of personnel responsible for entering into hedging transactions from personnel responsible for recording and reporting transactions. In addition, the treasurer regularly monitors gold sales and hedging transactions entered into by the treasury group. All confirmations and settlements of transactions are processed and checked independently of the treasury group. Responsibility for entering into gold sales and hedging transactions is limited to a small group of experienced treasury personnel. Summaries of each individual transaction, setting out the terms of the transactions and the identity of the individual executing each transaction, are generated by the treasury group and delivered to the compliance function on a daily basis. New transaction confirmations from counterparties are received directly by the compliance function and checked against the documentation generated by the treasury group. Barrick has not entered into gold delivery commitments that are not covered by scheduled production.
 
LEGAL MATTERS
 
Government Controls and Regulations
 
The Company’s business is subject to various levels of government controls and regulations, which are supplemented and revised from time to time.
 
In the U.S., certain of Barrick’s mineral reserves and operations occur on unpatented lode mining claims and mill sites that are on federal lands that are subject to federal mining and other public land laws. Changes in such laws or regulations promulgated under such laws could affect mine development and expansion and significantly increase regulatory obligations and compliance costs with respect to exploration, mine development, mine operations and closure and could prevent or delay certain operations by the Company.
 
During 2007, the U.S. House of Representatives passed a bill that would amend the General Mining Act of 1872 in the United States.  As passed by the House, the bill would impose royalties of 4-8% on production from unpatented mining claims, as well as impose additional, potentially significant, costs and risks on mining companies seeking to operate on such claims.  No similar bill has been introduced in the
 
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Senate.  Consequently, the prospects for a revision of the General Mining Act of 1872 in this session of Congress remain uncertain.
 
In 2002, as an emergency measure, Argentina adopted a 5% export duty on certain mineral products, including gold.  At the time the duty was described as “temporary.”  Veladero’s export of gold dore is currently subject to this duty.  The Argentinean government has recently extended the application of this duty to additional mines and increased the rate to 10% for certain minerals other than gold.  It appears possible that the Argentinean government will attempt to further increase the export duty rates or otherwise impose additional taxes or burdens on the Company’s mineral production as additional revenue enhancement measures.  Should export duties continue to be in place at the time that the Company commences production from Pascua-Lama, it is possible that such production will be subjected to such duties.
 
In 2007, the Argentinean government issued rules to regulate the environmental damage insurance requirement set forth in the National General Environmental Law, which applies to mining activities. Until this regulatory process, required for insurance implementation, has been completed, Barrick cannot assess the impact on its operations.
 
The State of Nevada adopted new regulations governing mercury air emissions from precious metal mining operations in 2005. The Company believes that it will be able to comply with these regulations. Barrick expects that these regulations will likely impose additional capital and operating costs at its operations in Nevada.
 
In August 2006, Barrick, along with other mining companies, entered into negotiations with the Peruvian government regarding making a voluntary contribution to the government.  In February 2007, Barrick entered into an agreement with the Peruvian government setting out the terms of its contribution in respect of the Pierina and Lagunas Norte mines.  The total term of the agreement is five years.  Contributions will be held in trust and used by the Company for the purpose of promoting well-being, social development and improving the living conditions of people and communities located mainly in the areas of the Company’s mines.  In 2007, based on the 2006 profits of both mines, Barrick contributed approximately $7.9 million.
 
In 2006, Barrick entered into a three-year agreement with the Tanzanian government to restructure its Mine Development Agreements (“MDAs”) in respect of its Bulyanhulu, Tulawaka and North Mara mines.  Under the amended MDAs, commencing December 31, 2006, until such time that any of its three operating mines are in a tax paying position, Barrick will make annual payments of $7 million to the Tanzanian government.
 
Barrick is unable to predict what additional legislation or revisions may be proposed that might affect its business or when any such proposals, if enacted, might become effective. Such changes, however, could require increased capital and operating expenditures and could prevent or delay certain operations by the Company.
 
The various levels of government controls and regulations address, among other things, the environmental impact of mining and mineral processing operations. With respect to the regulation of mining and processing, legislation and regulations in various jurisdictions establish performance standards, air and water quality emission standards and other design or operational requirements for various components of operations, including health and safety standards. Legislation and regulations also establish requirements for decommissioning, reclamation and rehabilitation of mining properties following the cessation of operations, and may require that some former mining properties be managed for long periods of time. In addition, in certain jurisdictions, the Company is subject to foreign investment
 
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controls and regulations governing its ability to remit earnings abroad.
 
The Company believes that it is in substantial compliance with all material current government controls and regulations at each of its properties.
 
Legal Proceedings
 
Set out below is a summary of potentially material legal proceedings to which Barrick is a party.
 
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 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 Third Amended Complaint on January 6, 2005.  On May 23, 2005, Barrick filed a motion to dismiss part of the Third Amended Complaint.  On January 31, 2006, the Court issued an order granting in part and denying in part Barrick’s motion to dismiss.  Both parties moved for reconsideration of a portion of the Court’s January 31, 2006 Order. On December 12, 2006, the Court issued its order denying both parties’ motions for reconsideration.  On February 15, 2008, the Court issued an order granting the plaintiffs’ motion for class certification.  Discovery is ongoing.  Barrick intends to defend the action vigorously.  No amounts have been accrued for any potential loss under this complaint.
 
Marinduque Complaint
 
Placer Dome has been named the sole defendant in a Complaint filed on October 4, 2005 by the Provincial Government of Marinduque, an island province of the Philippines (“Province”), with the District Court in Clark County, Nevada.  The action was removed to the Nevada Federal District Court on motion of Placer Dome. The Complaint asserts that Placer Dome is responsible for alleged environmental degradation with consequent economic damages and impacts to the environment in the vicinity of the Marcopper mine that was owned and operated by Marcopper Mining Corporation (“Marcopper”).  Placer Dome indirectly owned a minority shareholding of 39.9% in Marcopper until the divestiture of its shareholding in 1997.  The Province seeks “to recover damages for injuries to the natural, ecological and wildlife resources within its territory”, but “does not seek to recover damages for individual injuries sustained by its citizens either to their persons or their property”. In addition to damages for injury to natural resources, the Province seeks compensation for the costs of restoring the environment, an order directing Placer Dome to undertake and complete “the remediation, environmental cleanup, and balancing of the ecology of the affected areas,” and payment of the costs of environmental monitoring. The Complaint addresses the discharge of mine tailings into Calancan Bay, the 1993 Maguila-guila dam breach, the 1996 Boac river tailings spill, and alleged past and continuing damage from acid rock drainage.
 
At the time of the amalgamation of Placer Dome and Barrick, a variety of motions were pending before the District Court, including motions to dismiss the action for lack of personal jurisdiction and for forum non conveniens (improper choice of forum).  However, on June 29, 2006, the Province filed a Motion to join Barrick as an additional named Defendant and for leave to file a Third Amended Complaint.  The Court granted that motion on March 2, 2007.  On March 6, 2007, the Court issued an
 
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order setting a briefing schedule on the Company’s motion to dismiss on grounds of forum non conveniens .   Briefing was completed on May 21, 2007, and on June 7, 2007, the Court issued an order granting the Company’s motion to dismiss.  On June 25, 2007, the Province filed a motion requesting the Court to reconsider its order dismissing the action.  The Company opposed the motion for reconsideration.  On July 6, 2007, the Province filed a Notice of Appeal to the U.S. Court of Appeal’s Ninth Circuit from the order on the motion to dismiss.  On August 8, 2007, the Ninth Circuit issued an order holding the appeal in abeyance pending the District Court’s resolution of the motion for reconsideration.  On January 16, 2008, the District Court issued an order denying the Province’s motion for reconsideration.  Following the District Court order, the Province has filed an amended Notice of Appeal.  Barrick will challenge the claims of the Province on various grounds and otherwise vigorously defend the action.  No amounts have been accrued for any potential loss under this complaint.
 
Calancan Bay Complaint
 
On July 23, 2004, a complaint was filed against Marcopper and Placer Dome in the Regional Trial Court of Boac, on the Philippine island of Marinduque, on behalf of a putative class of fishermen who reside in the communities around Calancan Bay, in northern Marinduque.  The complaint alleges injuries to health and economic damages to the local fisheries resulting from the disposal of mine tailings from the Marcopper mine.  The total amount of damages claimed is approximately $900 million.
 
On October 16, 2006, the Court granted the plaintiffs’ application for indigent status, allowing the case to proceed without payment of filing fees.  On January 17, 2007, the Court issued a summons to Marcopper and Placer Dome.  To date, Barrick is not aware of any attempts to serve the summons on Placer Dome, nor does it believe that Placer Dome is properly amenable to service in the Philippines.  If service is attempted, the Company intends to defend the action vigorously.  No amounts have been accrued for any potential loss under this complaint.
 
Pakistani Constitutional Litigation
 
On November 28, 2006, a Constitutional Petition was filed in the High Court of Balochistan by three Pakistan citizens against: Barrick, the governments of Balochistan and Pakistan, the Balochistan Development Authority (“BDA”), Tethyan Copper Company (“TCC”), Antofagasta Plc (“Antofagasta”), Muslim Lakhani and BHP (Pakistan) Pvt Limited (“BHP”).
 
The Petition alleged, among other things, that the entry by the BDA into the 1993 Joint Venture Agreement (“JVA”) with BHP to facilitate the exploration of the Reko Diq area and the grant of related exploration licenses were illegal and that the subsequent transfer of the interests of BHP in the JVA and the licenses to TCC was also illegal and should therefore be set aside.  Barrick currently indirectly holds 50% of the shares of TCC, with Antofagasta indirectly holding the remaining 50%.
 
On June 26, 2007, the High Court of Balochistan dismissed the Petition against Barrick and the other respondents in its entirety.  On August 23, 2007, the petitioners filed a Civil Petition for Leave to Appeal in the Supreme Court of Pakistan.  The Supreme Court of Pakistan has not yet considered the Civil Petition for Leave to Appeal.  Barrick intends to defend this action vigorously.  No amounts have been accrued for any potential loss under this complaint.
 
NovaGold Litigation
 
On August 24, 2006, during the pendency of Barrick’s unsolicited bid for NovaGold Resources Inc. (“NovaGold”), NovaGold filed a complaint against Barrick in the United States District Court for the District of Alaska.  The complaint was amended on several occasions with the most recent amendment
 
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having been filed in January 2007.  The complaint, as amended, sought a declaration that Barrick will be unable to satisfy the requirements of the Mining Venture Agreement between NovaGold and Barrick which would allow Barrick to increase its interest in the Donlin Creek joint venture from 30% to 70%.  NovaGold also asserted that Barrick breached its fiduciary and contractual duties to NovaGold, including its duty of good faith and fair dealing, by misusing confidential information of NovaGold regarding NovaGold’s Galore Creek project in British Columbia.  NovaGold sought declaratory relief, an injunction and an unspecified amount of damages.  Barrick’s Motion to Dismiss NovaGold’s amended complaint was heard on February 9, 2007.  On July 17, 2007, the Court issued its order granting the Motion to Dismiss with respect to all claims.  On August 28, 2007, NovaGold filed a notice of appeal as to a portion of the district court’s order granting Barrick’s motion to dismiss.
 
On August 11, 2006, NovaGold filed a complaint against Barrick in the Supreme Court of British Columbia.  The complaint asserted that in the course of discussions with NovaGold of a potential joint venture for the development of the Galore Creek project, Barrick misused confidential information of NovaGold regarding that project to, among other things, wrongfully acquire Pioneer Metals Corporation (“Pioneer”), a company that holds mining claims adjacent to NovaGold’s project, and now a wholly-owned subsidiary of Barrick.  NovaGold asserted that Barrick breached fiduciary duties owed to NovaGold, intentionally and wrongfully interfered with NovaGold’s interests and has been unjustly enriched.  NovaGold sought a constructive trust over the shares in Pioneer acquired by Barrick and an accounting for any profits of Barrick’s conduct, as well as an unspecified amount of damages.
 
On December 3, 2007 Barrick and NovaGold announced that a global settlement of all disputes between them had been reached including the transfer to Galore Creek Mining Corporation (owned equally through a partnership between NovaGold and Teck Cominco Limited) of the Grace claims adjacent to Galore Creek. In addition, Barrick and NovaGold restructured the Donlin Creek joint venture to form a limited liability company, Donlin Creek LLC, jointly owned by Barrick and NovaGold.  As part of the restructuring, NovaGold has agreed to reimburse Barrick over time for approximately $63.5 million, representing 50% of Barrick’s approximately $127 million of expenditures at the Donlin Creek project accumulated from April 1, 2006 to November 30, 2007. As a result of this global settlement, all pending legal actions between Barrick and NovaGold have been dismissed.
 
SUNAT Tax Assessment
 
In September 2004, the Tax Court of Peru issued a decision in Barrick’s favor in the matter of its appeal of a 2002 income tax assessment for an amount of $32 million, excluding interest and penalties.  The assessment mainly related to the validity of a revaluation of the Pierina mining concession, which affected its tax basis for the years 1999 and 2000.  In January 2005, Barrick received written confirmation that there would be no appeal of the September 2004 Tax Court of Peru decision.  The confirmation concluded the administrative and judicial appeals process with resolution in Barrick’s favor.
 
Notwithstanding the favorable Tax Court decision received in September 2004, on an audit concluded in 2005, SUNAT reassessed Barrick on the same issue for tax years 2001 to 2003.  On October 19, 2007, SUNAT confirmed their reassessment. The tax assessment is for $49 million of tax, plus interest and penalties of $116 million.  Barrick filed an appeal to the Tax Court of Peru within the statutory period.  Barrick believes that the audit reassessment has no merit, that it will prevail in court again, and accordingly no liability has been recorded for this reassessment.
 
General
 
Barrick and its subsidiaries are, from time to time, involved in various claims, legal proceedings and complaints arising in the ordinary course of business. Barrick is also subject to reassessment for income
 
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and mining taxes for certain years. Barrick does not believe that adverse decisions in any pending or threatened proceedings related to any potential tax assessments or other matters, or any amount which it may be required to pay by reason thereof, will have a material adverse effect on the financial condition or future results of operations of Barrick.
 
RISK FACTORS
 
The risks described below are not the only ones facing Barrick.  Additional risks not currently known to Barrick, or that Barrick currently deems immaterial, may also impair Barrick’s operations.
 
Metal price volatility
 
Barrick’s business is strongly affected by the world market price of gold and copper. If the world market price of gold or copper were to drop and the prices realized by Barrick on gold or copper sales were to decrease significantly and remain at such a level for any substantial period, Barrick’s profitability and cash flow would be negatively affected.
 
Gold and copper prices can be subject to volatile price movements, which can be material and can occur over short periods of time and are affected by numerous factors, all of which are beyond Barrick’s control. Based on current estimates of Barrick’s 2008 production and sales, the approximate sensitivity of its income from continuing operations before income tax, royalties and other items to a 10% change in metal prices from 2007 average spot rates is $560 million for gold and $130 million for copper. The factors that may affect the price of gold include industry factors such as: industrial and jewelry demand; the level of demand for gold as an investment; central bank lending, sales and purchases of gold; speculative trading; and costs of and levels of global gold production by producers of gold. Gold prices may also be affected by macroeconomic factors, including: expectations of the future rate of inflation; the strength of, and confidence in, the U.S. dollar, the currency in which the price of gold is generally quoted, and other currencies; interest rates; and global or regional, political or economic uncertainties.  Factors tending to affect the price of copper include: global mine production; scrap recycling and inventory stocks; general economic conditions; industrial demand; speculative trading; and the relative strength of the U.S. dollar against other fiat currencies. In addition, certain of Barrick’s mineral projects include other minerals: nickel, platinum and palladium, silver and copper, each of which is subject to price volatility based on factors beyond Barrick’s control.
 
Depending on the market price of the relevant metal, Barrick may determine that it is not economically feasible to continue commercial production at some or all of its operations or the development of some or all of its current projects, as applicable, which could have an adverse impact on Barrick’s financial performance and results of operations.  In such a circumstance, Barrick may also curtail or suspend some or all of its exploration activities, with the result that depleted reserves are not replaced.  In addition, the market value of Barrick’s gold or copper inventory may be reduced and existing reserves may be reduced to the extent that ore cannot be mined and processed economically at the prevailing prices.
 
Replacement of depleted reserves
 
Barrick must continually replace reserves depleted by production to maintain production levels over the long term.  Reserves can be replaced by expanding known orebodies, locating new deposits or making acquisitions.  Exploration is highly speculative in nature. Barrick’s exploration projects involve many risks and are frequently unsuccessful.  Once a site with 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 proven and
 
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probable reserves and to construct mining and processing facilities. As a result, there is no assurance that current or future exploration programs will be successful.  There is a risk that depletion of reserves will not be offset by discoveries or acquisitions.  The mineral base of Barrick may decline if reserves are mined without adequate replacement and Barrick may not be able to sustain production beyond the current mine lives, based on current production rates.
 
Projects
 
Barrick’s ability to sustain or increase its present levels of gold and copper production is dependent in part on the success of its projects. There are many risks and unknowns inherent in all projects.   For example, the economic feasibility of projects is based upon many factors, including: the accuracy of reserve estimates; metallurgical recoveries with respect to gold, copper and by-products; capital and operating costs of such projects; and the future prices of the relevant minerals. Projects also require the successful completion of feasibility studies, the resolution of various fiscal, tax and royalty matters, the issuance of necessary governmental permits and the acquisition of satisfactory surface or other land rights.  It may also be necessary for Barrick to, among other things, find or generate suitable sources of power and water for a project, ensure that appropriate community infrastructure is developed by third parties to support the project and to secure appropriate financing to develop it.
 
Projects have no operating history upon which to base estimates of future cash flow.  The capital expenditures and time required to develop new mines or other projects are considerable and changes in costs or construction schedules can affect project economics.  Thus, it is possible that actual costs may increase significantly and economic returns may differ materially, from Barrick’s estimates or that Barrick could fail to obtain the satisfactory resolution of fiscal and tax matters or the governmental approvals necessary for the operation of a project, in which case, the project may not proceed, either on its original timing, or at all. It is not unusual in the mining industry for new mining operations to experience unexpected problems during the start-up phase, resulting in delays and requiring more capital than anticipated.
 
Mineral reserves and resources
 
Barrick’s mineral reserves and mineral resources are estimates, and no assurance can be given that the estimated reserves and resources are accurate or that the indicated level of gold, copper or any other mineral will be produced.  Such estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques.  Actual mineralization or formations may be different from those predicted.  Further, it may take many years from the initial phase of drilling before production is possible, and during that time the economic feasibility of exploiting a discovery may change.
 
The SEC does not permit mining companies in their filings with the SEC to disclose estimates other than mineral reserves.  However, because Barrick prepares this Annual Information Form in accordance with Canadian disclosure requirements, it contains resource estimates, which are required by National Instrument 43-101, as well.  Mineral resource estimates for properties that have not commenced production are based, in many instances, on limited and widely spaced drill hole information, which is not necessarily indicative of the conditions between and around drill holes.  Accordingly, such mineral resource estimates may require revision as more drilling information becomes available or as actual production experience is gained.  No assurance can be given that any part or all of Barrick’s mineral resources constitute or will be converted into reserves.
 
Market price fluctuations of gold, copper, silver and certain other metals, as well as increased production and capital costs or reduced recovery rates, may render Barrick’s proven and probable
 
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reserves unprofitable to develop at a particular site or sites for periods of time or may render mineral reserves containing relatively lower grade mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves, such as the need for the orderly development of orebodies or the processing of new or different ore grades, may cause mineral reserves to be reduced or Barrick to be unprofitable in any particular accounting period.  Estimated reserves may have to be recalculated based on actual production experience. Any of these factors may require Barrick to reduce its mineral reserves and resources, which could have a negative impact on Barrick’s financial results. Failure to obtain or maintain necessary permits or government approvals or changes to applicable legislation could also cause Barrick to reduce its reserves.  There is also no assurance that Barrick will achieve indicated levels of gold or copper recovery or obtain the prices assumed in determining such reserves.
 
Price volatility and availability of other commodities
 
The profitability of Barrick’s business is affected by the market prices of commodities produced as by-products at Barrick’s mines, such as silver, as well as the cost and availability of commodities which are consumed or otherwise used in connection with Barrick’s operations and projects, including, but not limited to, diesel fuel, natural gas, electricity, acid, steel, concrete and cyanide. Prices of such commodities can be subject to volatile price movements, which can be material and can occur over short periods of time, and are affected by factors that are beyond Barrick’s control. An increase in the cost, or decrease in the availability, of construction materials such as steel and concrete may affect the timing and cost of Barrick’s projects.  If Barrick’s proceeds from the sale of by-products were to decrease significantly, or the costs of certain commodities consumed or otherwise used in connection with Barrick’s operations and projects were to increase, or their availability to decrease, significantly, and remain at such levels for a substantial period of time, Barrick may determine that it is not economically feasible to continue commercial production at some or all of Barrick’s operations or the development of some or all of Barrick’s current projects, which could have an adverse impact on Barrick as described under “ – Metal price volatility” above.
 
Mining risks and insurance risks
 
 The mining industry is subject to significant risks and hazards, including environmental hazards, industrial accidents, unusual or unexpected geological conditions, labor force disruptions, unavailability of materials and equipment, weather conditions, pit wall failures, rock bursts, cave-ins, flooding, seismic activity, water conditions and gold bullion losses, most of which are beyond Barrick’s control. These risks and hazards could result in: damage to, or destruction of, mineral properties or producing facilities; personal injury or death; environmental damage; delays in mining; and monetary losses and possible legal liability.   As a result, production may fall below historic or estimated levels and Barrick may incur significant costs or experience significant delays that could have a material adverse effect on Barrick’s financial performance, liquidity and results of operation.
 
Barrick maintains insurance to cover some of these risks and hazards.  The insurance is maintained in amounts that are believed to be reasonable depending on the circumstances surrounding each identified risk.  No assurance can be given that such insurance will continue to be available, or that it will be available at economically feasible premiums, or that Barrick will maintain such insurance. Barrick’s property, liability and other insurance may not provide sufficient coverage for losses related to these or other risks or hazards. In addition, Barrick does not have coverage for certain environmental losses and other risks, as such coverage cannot be purchased at a commercially reasonable cost.  The lack of, or insufficiency of, insurance coverage could adversely affect Barrick’s cash flow and overall profitability.
 
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Production and cost estimates
 
Barrick prepares estimates of future production, cash costs and capital costs of production for particular operations. No assurance can be given that such estimates will be achieved. Failure to achieve production or cost estimates or material increases in costs could have an adverse impact on Barrick’s future cash flows, profitability, results of operations and financial condition.
 
Barrick’s actual production and costs may vary from estimates for a variety of reasons, including: actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the ore reserves, such as the need for sequential development of orebodies and the processing of new or different ore grades; revisions to mine plans; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods, and earthquakes; and unexpected labor shortages or strikes.  Costs of production may also be affected by a variety of factors, including: changing waste-to-ore ratios, ore grade metallurgy, labor costs, the cost of commodities, general inflationary pressures and currency exchange rates.
 
Environmental, health and safety regulations; permits
 
Barrick’s mining and processing operations and exploration activities are subject to extensive laws and regulations governing the protection of the environment, waste disposal, worker safety, mine development and protection of endangered and other special status species.  In addition, Barrick’s ability to successfully obtain key permits and approvals to explore for, develop and operate mines and to successfully operate in communities around the world will likely depend on its ability to develop, operate and close mines in a manner that is consistent with the creation of social and economic benefits in the surrounding communities.  Barrick’s ability to obtain permits and approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental events associated with Barrick’s activities or those of other mining companies affecting the environment, human health and safety or the surrounding communities.  Delays in obtaining or failure to obtain government permits and approvals may adversely affect Barrick’s operations, including its ability to explore or develop properties, commence production or continue operations.  Barrick has made, and expects to make in the future, significant expenditures to comply with such laws and regulations and, to the extent possible, create social and economic benefit in the surrounding communities. Future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have an adverse impact on Barrick’s financial condition or results of operations.
 
Failure to comply with applicable environmental and health and safety laws and regulations may result in injunctions, fines, suspension or revocation of permits and other penalties.  There can be no assurance that Barrick has been or will at all times be in full compliance with all such laws and regulations and with its environmental and health and safety permits or that Barrick has all required permits.  The costs and delays associated with compliance with these laws, regulations and permits could stop Barrick from proceeding with the development of a project or the operation or further development of a mine or increase the costs of development or production and may materially adversely affect Barrick’s business, results of operations or financial condition.  Barrick may also be held responsible for the costs of addressing contamination at the site of current or former activities or at third party sites.  Barrick could also be held liable for exposure to hazardous substances.  The costs associated with such responsibilities and liabilities may be significant.
 
In certain of the countries in which Barrick has operations, it is required to submit, for government approval, a reclamation plan for each of its mining sites that establishes Barrick’s obligation to reclaim property after minerals have been mined from the site. In some jurisdictions, bonds or other forms of financial assurances are required for security for these reclamation activities. Barrick may incur
 
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significant costs in connection with these reclamation activities, which may materially exceed the provisions Barrick has made for such reclamation.  In addition, the unknown nature of possible future additional regulatory requirements and the potential for additional reclamation activities create further uncertainties related to future reclamation costs, which may have a material adverse effect on Barrick’s financial condition, liquidity or results of operations.  Barrick is involved in various investigative and remedial actions.  There can be no assurance that the costs of such actions would not be material.  When a previously unrecognized reclamation liability becomes known or a previously estimated cost is increased, the amount of that liability or additional cost is expensed, which may materially reduce net income in that period.
 
Foreign investments and operations
 
Barrick conducts mining, development and exploration activities in many countries, including the United States, Canada, Australia, Argentina, Chile, Peru, Dominican Republic, Papua New Guinea, Pakistan, Russia, South Africa and Tanzania. Mining investments are subject to the risks normally associated with any conduct of business in foreign countries including: uncertain political and economic environments; war, terrorism and civil disturbances; changes in laws or policies of particular countries, including those relating to imports, exports, duties and currency; cancellation or renegotiation of contracts; royalty and tax increases or other claims by government entities, including retroactive claims; risk of loss due to disease and other potential endemic health issues; risk of expropriation and nationalization; delays in obtaining or the inability to obtain or maintain necessary governmental permits; currency fluctuations; restrictions on the ability of local operating companies to sell gold, copper or other minerals offshore for U.S. dollars, and on the ability of such companies to hold U.S. dollars or other foreign currencies in offshore bank accounts; import and export regulations, including restrictions on the export of gold, copper or other minerals; limitations on the repatriation of earnings; and increased financing costs.
 
These risks may limit or disrupt operating mines or projects, restrict the movement of funds, cause Barrick to have to expend more funds than previously expected or required, or result in the deprivation of contract rights or the taking of property by nationalization or expropriation without fair compensation, and may materially adversely affect Barrick’s financial position or results of operations.  Furthermore, in the event of a dispute arising from Barrick’s activities in Argentina, Chile, Peru, Dominican Republic, Papua New Guinea, Pakistan, Russia, South Africa or Tanzania, Barrick may be subject to the exclusive jurisdiction of courts outside North America and Australia, which could adversely affect the outcome of the dispute.
 
A number of economic and social issues exist that increase Barrick’s political and economic risk.  For example, infectious diseases (including malaria, HIV/AIDS and tuberculosis) are major health care issues in certain of the countries in which Barrick operates.  In Tanzania, Barrick has implemented infectious disease programs, including malaria control programs and tuberculosis and HIV/AIDS awareness and prevention programs for its employees, families and local communities at its Bulyanhulu mine, Tulawaka mine and North Mara mine.  It is not possible to determine with certainty the future costs that Barrick may incur in dealing with these issues at its operations in Tanzania and elsewhere, however, if the number of infections increases, costs associated with treatment and employee retraining may also increase, affecting profitability.
 
In Papua New Guinea, the location of the Porgera gold mine and where Barrick has access to over 5,300 square kilometers of exploration property, there is a greater level of political and economic risk compared to some other countries in which Barrick operates.  The Porgera mine’s infrastructure, including power, water and fuel, may be at risk of sabotage.  Porgera has extensive community relations
 
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and security groups to anticipate and manage social issues that may arise because of the evolving nature of its community.
 
The Porgera mine has, on a number of occasions, experienced delays in the granting of operating permits and licenses necessary for these businesses to conduct their lawful operations.  Although there has never been an interruption to operations due to an issue of this nature, if at any time in the future permits essential to lawful operations are not obtained or exemptions are not granted, there is a risk that the Porgera mine may not be able to operate for a period of time. Future government actions cannot be predicted, but may impact the operation and regulation of mines including Porgera.
 
Government regulation and changes in legislation
 
The Company’s business is subject to various levels of government controls and regulations, which are supplemented and revised from time to time.  Barrick is unable to predict what legislation or revisions may be proposed that might affect its business or when any such proposals, if enacted, might become effective. Such changes, however, could require increased capital and operating expenditures and could prevent or delay certain operations by the Company.  See “Legal Matters – Government Controls and Regulations”.
 
Currency fluctuations
 
Currency fluctuations may affect the costs Barrick incurs at its operations and may affect Barrick’s operating results and cash flows. Gold and copper are each sold throughout the world based principally on the U.S. dollar price, but a portion of Barrick’s operating expenses are incurred in local currencies, such as the Canadian dollar, Australian dollar, Chilean peso, Argentine peso, Papua New Guinean kina and South African rand. The appreciation of non-U.S. dollar currencies against the U.S. dollar can increase the costs of production at Barrick’s mines, making such mines less profitable. Barrick enters into currency hedging contracts to mitigate the impact on operating costs of the appreciation of certain non-U.S. dollar currencies against the U.S. dollar. This could result in Barrick failing to benefit to some degree if the U.S. dollar appreciates in value relative to non-U.S. dollar currencies.  These hedging activities do not cover all of Barrick’s future expected operating costs.   There can be no assurance that Barrick will continue the hedging activities that it currently undertakes.  See “ – Use of derivatives”.
 
Use of derivatives
 
Since 2001, Barrick has focused on reducing its outstanding gold forward sales contracts. During 2007, Barrick eliminated its Corporate Gold Sales Contracts.  Nonetheless, Barrick continues to use certain derivative products to manage the risks associated with gold price volatility (through its Project Gold Sales Contracts), copper and silver price volatility, changes in other commodity prices, interest rates, foreign currency exchange rates and energy prices.  The use of derivative instruments involves certain inherent risks including: (a) credit risk - the risk of that the creditworthiness of a counterparty may adversely affect its ability to perform its payment and other obligations under its agreement with Barrick or adversely affect the financial and other terms the counterparty is able to offer Barrick; (b) market liquidity risk – the risk that Barrick has entered into a derivative position that cannot be closed out quickly, by either liquidating such derivative instrument or by establishing an offsetting position; (c) unrealized mark-to-market risk – the risk that, in respect of certain derivative products, an adverse change in market prices for commodities, currencies or interest rates will result in Barrick incurring an unrealized mark-to-market loss in respect of such derivative products.
 
If mineral prices rise above the price at which future production has been committed under Barrick’s Project Gold Sales Contracts and other hedges, and Barrick delivers a portion of its production into those
 
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contracts of prices lower than prevailing prices, Barrick would have an opportunity loss.  However, if the price falls below that committed price, revenues would be protected to the extent of such committed production.
 
Liquidity and Level of indebtedness
 
As of December 31, 2007, Barrick had cash and cash equivalents of approximately $2.2 billion and capital leases and long-term debt of approximately $3.2 billion.  Although Barrick has been successful in repaying debt in the past, there can be no assurance that it can continue to do so.  Barrick’s level of indebtedness could have important consequences for its operations, including:
 
·                   Barrick may need to use a large portion of its cash flow to repay principal and pay interest on its debt, which will reduce the amount of funds available to finance its operations and other business activities; and
 
·                   Barrick’s debt level may limit its ability to pursue other business opportunities, borrow money for operations or capital expenditures in the future or implement its business strategy.
 
Barrick expects to obtain the funds to pay its expenses and to pay principal and interest on its debt in 2008 through a combination of its existing capital resources and its future cash flow from operations, as well as issuing new, unsecured debt and putting in place project financing for a portion of the expected construction cost of a number of its projects. Barrick’s ability to meet its payment obligations will depend on its future financial performance, which will be affected by financial, business, economic and other factors. Barrick will not be able to control many of these factors, such as economic conditions in the markets in which it operates. Barrick cannot be certain that its existing capital resources and future cash flow from operations will be sufficient to allow it to pay principal and interest on Barrick’s debt and meet its other obligations. If these amounts are insufficient or if there is a contravention of its debt covenants, Barrick may be required to refinance all or part of its existing debt, sell assets, borrow more money or issue additional equity.  The ability of Barrick to access the bank public debt or equity capital markets on an efficient basis may be constrained by the level of its unrealized mark-to-market position, the dislocation in the credit markets, capital and/or liquidity constraints in the banking markets and equity conditions at the time of issuance.
 
Interest rates and gold lease rates
 
A significant, prolonged decrease in interest rates could have a material adverse impact on the interest earned on Barrick’s cash balances.  A significant, prolonged decrease in interest rates and/or increase in gold prices, gold lease rates and credit risk affecting the counterparties, relating to both the counterparties’ and Barrick’s credit quality, and the economic impact on the counterparties associated with funding Project Gold Sales Contracts with negative mark-to-market balances could have a material adverse impact on the difference between the forward gold price over the current spot price (“contango”), and, ultimately, the realized price under gold forward sales contracts entered into by Barrick.   This may result in Barrick earning low levels of contango or the possibility of backwardation on its Project Gold Sales Contracts.  In addition, if a counterparty to a Project Gold Sales Contract is unable to conduct transactions in an accessible international bullion market due to causes beyond its control, including the inability of the counterparty to purchase gold in the open market or to fund any such purchase, and no commercially reasonable alternative means exist for the counterparty to enter into transactions having the same effect, the counterparty has no obligation to extend the scheduled delivery date of such contract and, depending on the circumstances, may result in early settlement of such contract.  A portion of the Project Gold Sales Contracts are floating spot-price gold contracts whose price will vary directly with the gold price.  In the event of a prolonged decrease in the gold price, these floating spot-price gold contracts may
 
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decrease in value.  The Company’s interest rate exposure mainly relates to the mark-to-market value of derivative instruments, the fair value and ongoing payments under gold lease rate and U.S. dollar interest-rate swaps and to the interest payments on Barrick’s variable-rate debt ($586 million at the end of 2007) and interest receipts on Barrick’s cash balances ($2.2 billion at the end of 2007).
 
Title to properties
 
The validity of mining claims, which constitute most of Barrick’s property holdings, can be uncertain and may be contested. Although Barrick has attempted to acquire satisfactory title to its properties, some risk exists that some titles, particularly title to undeveloped properties, may be defective.
 
Competition
 
Barrick competes with other mining companies and individuals for mining claims and leases on exploration properties and the acquisition of mining assets.  This competition may increase Barrick’s cost of acquiring suitable claims, properties and assets, should they become available to Barrick.  Barrick also competes with other mining companies to attract and retain key executives and employees.  There can be no assurance that Barrick will continue to be able to compete successfully with its competitors in acquiring such properties and assets or in attracting and retaining skilled and experienced employees.
 
Acquisitions and integration
 
From time to time, Barrick examines opportunities to acquire additional mining assets and businesses.  Any acquisition that Barrick may choose to complete may be of a significant size, may change the scale of Barrick’s business and operations, and may expose Barrick to new geographic, political, operating, financial and geological risks.  Barrick’s success in its acquisition activities depends on its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of Barrick.  Any acquisitions would be accompanied by risks.  For example, there may be a significant change in commodity prices after Barrick has committed to complete the transaction and established the purchase price or exchange ratio; a material orebody may prove to be below expectations; Barrick may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise, and maintaining uniform standards, policies and controls across the organization; the integration of the acquired business or assets may disrupt Barrick’s ongoing business and its relationships with employees, customers, suppliers and contractors; and the acquired business or assets may have unknown liabilities which may be significant.  In the event that Barrick chooses to raise debt capital to finance any such acquisition, Barrick’s leverage will be increased.  If Barrick chooses to use equity as consideration for such acquisition, existing shareholders may suffer dilution.  Alternatively, Barrick may choose to finance any such acquisition with its existing resources.  There can be no assurance that Barrick would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.
 
Employee relations
 
Barrick’s ability to achieve its future goals and objectives is dependent, in part, on maintaining good relations with its employees and mitigating the increasing rate of employee turnover being experienced by the mining industry.  A prolonged labor disruption at any of its material properties could have a material adverse impact on its operations as a whole. In 2007, employees at Barrick’s Bulyanhulu mine participated in an illegal strike (see “Narrative Description of the Business – Employees and Labor Relations”).
 
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Shortages of critical parts, equipment and skilled labor
 
The mining industry continues to be impacted by increased worldwide demand for critical resources such as input commodities, drilling equipment, tires and skilled labor.  These shortages may cause unanticipated cost increases and delays in delivery times, thereby impacting operating costs, capital expenditures and production schedules.
 
Joint ventures
 
Certain of the properties in which Barrick has an interest are operated though joint ventures with other mining companies.  Any failure of such other companies to meet their obligations to Barrick or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties.  In addition, Barrick may be unable to exert control over strategic decisions made in respect of such properties.
 
Litigation
 
Barrick is currently subject to litigation and may be involved in disputes with other parties in the future which may result in litigation.  The results of litigation cannot be predicted with certainty.  If Barrick is unable to resolve these disputes favourably, it may have a material adverse impact on Barrick’s financial performance, cash flow and results of operations.  See “Legal Matters – Legal Proceedings”.
 
Disclosure and Internal controls
 
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in reports filed with securities regulatory agencies is recorded, processed, summarized and reported on a timely basis and is accumulated and communicated to a company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Barrick has invested resources to document and analyze its system of disclosure controls and its internal control over financial reporting.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation.
 
Ability to support the carrying value of goodwill
 
As of December 31, 2007, the carrying value of Barrick’s goodwill was approximately $5.8 billion or 27% of Barrick’s total assets. Goodwill is allocated to reporting units representing individual mineral properties. Allocating goodwill to individual mineral properties, which by their very nature have a limited useful life, will result in future goodwill impairment charges by the end of the mine life. Barrick evaluates, on at least an annual basis, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable.  This evaluation involves a comparison of the estimated fair value of Barrick’s reporting units to their carrying values.  Gold mining companies typically trade at a market capitalization that is based on a multiple of net asset value (“NAV”), whereby NAV represents a discounted cash flow valuation based on projected future cash flows. For goodwill impairment testing purposes, Barrick estimates the fair value of a gold property by applying a multiple to the reporting unit’s NAV, which is calculated based on projected cash flows from its most recent life of mine plan. For copper properties, the estimated fair value is based on their NAV and no multiple is applied. The process for determining these fair values is subjective and
 
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requires management to make estimates and assumptions including, but not limited to, projected future revenues (based on estimates of production and long-term metals prices), operating expenses, capital expenditures, remaining economic life of individual mineral properties, discount rates and NAV multiples. These estimates and assumptions are subject to change in the future due to uncertain competitive and market conditions or changes in business strategies.  The timing and amount of future goodwill impairment charges is difficult to determine and will be dependent on a multitude of factors that impact valuations of mineral properties, including changes in observed market multiples for valuation purposes, changes in geo-political risk and country specific discount rates, changes in market gold prices and total cash costs, success in finding new reserves, future exploration potential and future capital requirements.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Reference is made to the Management’s Discussion and Analysis of Financial and Operating Results of the Company (U.S. GAAP) for the year ended December 31, 2007 which is incorporated by reference into this Annual Information Form and is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov as an exhibit to Barrick’s Form 40-F.
 
CONSOLIDATED FINANCIAL STATEMENTS
 
Reference is made to the Company’s Consolidated Financial Statements for the year ended December 31, 2007 (U.S. GAAP) which is incorporated by reference into this Annual Information Form and is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov as an exhibit to Barrick’s Form 40-F.
 
CAPITAL STRUCTURE
 
Set forth below is a description of Barrick’s share capital. The following statements are brief summaries of, and are subject to the provisions of, the articles of amalgamation and by-laws of Barrick and the relevant provisions of the Business Corporations Act (Ontario).
 
General
 
Barrick’s authorized share capital consists of an unlimited number of Barrick common shares, an unlimited number of first preferred shares issuable in series and an unlimited number of second preferred shares issuable in series.
 
Common Shares
 
The holders of Barrick common shares are entitled to one vote for each share on all matters submitted to a vote of shareholders and do not have cumulative voting rights. The holders of Barrick common shares are entitled to receive dividends if, as and when declared by the Board of Directors of Barrick in respect of the Barrick common shares. Subject to the prior rights of the holders, if any, of the first preferred shares and second preferred shares then outstanding and of the shares then outstanding of any other class ranking senior to the Barrick common shares, the holders of Barrick common shares are entitled to share ratably in any distribution of the assets of Barrick upon liquidation, dissolution or winding-up, after satisfaction of all debts and other liabilities.
 
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The rights, preferences and privileges of holders of Barrick common shares are subject to the rights of the holders of shares of any series of first preferred shares (the “First Preferred Shares”) or second preferred shares (the “Second Preferred Shares”) or any other class ranking senior to the Barrick common shares that Barrick may issue in the future.
 
There are no limitations contained in the articles or by-laws of Barrick or the Business Corporations Act (Ontario) on the ability of a person who is not a Canadian resident to hold Barrick common shares or exercise the voting rights associated with Barrick common shares.
 
Preferred Shares
 
First Preferred Shares and Second Preferred Shares may be issued from time to time in series. The Board of Directors of the Company determines by resolution the designation, rights, privileges, restrictions and conditions to be attached to each such series.
 
The Company is entitled to redeem all or any part of the First Preferred Shares or Second Preferred Shares of any series on payment for each share of the amount equal to the result obtained when the stated capital account for the series is divided by the number of issued and outstanding shares of such series together with such premium, if any, as may be determined by the Board of Directors in connection with its determination of the designation, rights, privileges, restrictions and conditions to be attached to the applicable series, and all declared and unpaid dividends thereon. The Company is also entitled to purchase for cancellation all or any part of the First Preferred Shares of any series.
 
The First Preferred Shares and the Second Preferred Shares of each series are entitled to a preference over the common shares of the Company and any other shares ranking junior to the First Preferred Shares or Second Preferred Shares, as the case may be, with respect to the payment of dividends and the distribution of assets in the event of a liquidation, dissolution or winding-up of the Company. Any series of First Preferred Shares or Second Preferred Shares may also be given such other preferences over the common shares and any other shares ranking junior to the First Preferred Shares or Second Preferred Shares, as the case may be, as may be determined. In the event of a liquidation, dissolution or winding-up of the Company, the holders of the First Preferred Shares are entitled to receive, in the aggregate, the amount of the stated capital account of the First Preferred Shares plus all declared and unpaid dividends plus, if the liquidation, dissolution or winding-up is voluntary, any premium to which the shares would be entitled on a redemption, before any amount is paid or property or assets are distributed to the holders of common shares or any other shares ranking junior to the First Preferred Shares. After payment of such amount, the holders of the First Preferred Shares are not entitled to share in any further distribution of the property or assets of the Company. In the event of a liquidation, dissolution or winding-up of the Company, the holders of the Second Preferred Shares are entitled to receive, in the aggregate, the amount of the stated capital account of the Second Preferred Shares plus all declared and unpaid dividends plus, if the liquidation, dissolution or winding-up is voluntary, any premium to which the shares would be entitled on a redemption, before any amount is paid or property or assets are distributed to the holders of common shares or any other shares ranking junior to the Second Preferred Shares. After payment of such amount, the holders of the Second Preferred Shares are not entitled to share in any further distribution of the property or assets of the Company.
 
The holders of First Preferred Shares and Second Preferred Shares are entitled to receive fixed, non-cumulative preferential quarterly cash dividends at such rate and on such dates as may be determined by the Board of Directors in connection with its determination of the designation, rights, privileges, restrictions and conditions to be attached to the applicable series.
 
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The approval of the holders of the First Preferred Shares or the Second Preferred Shares is required to delete or vary any right, privilege, restriction or condition attaching to the First Preferred Shares or Second Preferred Shares, as the case may be, as a class and any other matter requiring the approval or consent of the holders of the First Preferred Shares or the Second Preferred Shares, as the case may be, as a class.
 
The first series of First Preferred Shares is designated as “$0.114 Non-cumulative Redeemable Convertible First Preferred Shares, Series A” (the “First Preferred Shares, Series A”), consisting of 10,000,000 First Preferred Shares. In addition to the rights, privileges, restrictions and conditions attached to the First Preferred Shares as a class, the First Preferred Shares, Series A are entitled to fixed non-cumulative preferential cash dividends of C$0.114 per year, payable quarterly and can be converted into common shares on a one for one basis (subject to adjustment) if called for redemption. The redemption price for the First Preferred Shares, Series A is initially C$1.90 per share, but it may change if the Company gives notice that it has determined that the market price of the First Preferred Shares, Series A is a stipulated price. On or after the day that is 30 days after such notice is given, a holder of First Preferred Shares, Series A can require the Company to redeem his or her First Preferred Shares, Series A. The approval of the holders of the First Preferred Shares, Series A is required in respect of certain changes to the provisions relating to the First Preferred Shares or the First Preferred Shares, Series A. As of March  27, 2008 there were no First Preferred Shares, Series A issued and outstanding.
 
The second series of First Preferred Shares is designated as “$0.126 Non-cumulative Redeemable Convertible First Preferred Shares, Series B” (the “First Preferred Shares, Series B”), consisting of 10,000,000 First Preferred Shares. In addition to the rights, privileges, restrictions and conditions attached to the First Preferred Shares as a class, the First Preferred Shares, Series B are entitled to fixed non-cumulative preferential cash dividends of C$0.126 per year, payable quarterly and can be converted into common shares on a one for one basis (subject to adjustment) if called for redemption. The redemption price for each First Preferred Share, Series B is its stated capital (being C$2.10 per share) plus a premium of C$0.2625 per share, together with all declared and unpaid dividends. The approval of the holders of the First Preferred Shares, Series B is required in respect of certain changes to the provisions relating to the First Preferred Shares or the First Preferred Shares, Series B. No class of shares may be created or issued ranking as to capital or dividends prior to or on parity with the First Preferred Shares except with the prior approval of the holders of the First Preferred Shares, Series B. As of March  27, 2008 there were no First Preferred Shares, Series B issued and outstanding.
 
The third series of First Preferred Shares is designated as “First Preferred Shares, Series C Special Voting Share” (the “Special Voting Share”), consisting of one Special Voting Share. The Special Voting Share was issued to effect the assumption by Barrick of the BGI exchangeable share structure in connection with the acquisition of Homestake. In connection with a prior merger transaction, BGI, a subsidiary of Homestake, issued a class of exchangeable shares to investors resident in Canada and, to a lesser extent, the United States that allowed the holders of those shares to exchange their shares for shares of Homestake on a share-for-share basis. On the completion of the acquisition of Homestake by Barrick, those holders became entitled to exchange their BGI exchangeable shares for Barrick common shares on the basis of 0.53 Barrick common shares for each BGI exchangeable share.
 
In addition to the rights, privileges, restrictions and conditions attached to the First Preferred Shares as a class, e xcept as otherwise required by applicable law, the holder of record of the Special Voting Share has a number of votes equal to the number of BGI exchangeable shares outstanding from time to time, which are not owned by Barrick or its subsidiaries or affiliates, multiplied by 0.53. The holder of the Special Voting Share will vote together with the holders of Barrick common shares as a single class on all matters submitted to a vote of the holders of the Barrick common shares, except as may be required by applicable law. The holder of the Special Voting Share is entitled to receive, in any distribution of
 
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property or assets of Barrick upon any liquidation, dissolution or winding-up of Barrick, an amount equal to the stated capital of the share plus all declared and unpaid dividends on the share, before any amount is paid or distributed in respect of the Barrick common shares or any other Barrick shares ranking junior to the Special Voting Share. The holder of the Special Voting Share is entitled to receive a dividend of C$0.04 per year. At such time as no BGI exchangeable shares (other than BGI exchangeable shares owned by Barrick or any subsidiary or affiliate of Barrick) are outstanding and there are no shares, securities, debt obligations, options or other agreements that could give rise to the issuance of any BGI exchangeable shares to any person (other than to Barrick or any subsidiary or affiliate of Barrick), the Special Voting Share will be redeemed by Barrick for C$1.00 plus all declared and unpaid dividends. As of March  27, 2008 there was one Special Voting Share issued and outstanding.
 
The first series of Second Preferred Shares is designated as “$0.222 Non-cumulative Redeemable Convertible Second Preferred Shares, Series A” (the “Second Preferred Shares, Series A”), consisting of 15,000,000 Second Preferred Shares. In addition to the rights, privileges, restrictions and conditions attached to the Second Preferred Shares as a class, the Second Preferred Shares, Series A are entitled to fixed non-cumulative preferential cash dividends of C$0.222 per year, payable quarterly and can be converted into common shares on a one for one basis (subject to adjustment) if called for redemption. The redemption price for each Second Preferred Share, Series A is C$2.43 per share, together with all declared and unpaid dividends. A holder of Second Preferred Shares, Series A can require the Company to redeem his or her Second Preferred Shares, Series A at the redemption price. The approval of the holders of the Second Preferred Shares, Series A is required in respect of certain changes to the provisions relating to the Second Preferred Shares or the Second Preferred Shares, Series A. No class of shares may be created or issued ranking as to capital or dividends prior to or on parity with the Second Preferred Shares (with the exception of the First Preferred Shares) except with the prior approval of the holders of the Second Preferred Shares, Series A. As of March  27, 2008 there were no Second Preferred Shares, Series A issued and outstanding.
 
RATINGS
 
The following table sets out the ratings of Barrick’s corporate debt by the rating agencies indicated as at March 27, 2008:

 	 	Rating Agency	 	
 	 	Moody’s Investors
Service	 	Standard & Poor’s
Ratings Services	 	DBRS	 	
Senior Unsecured Debt	 	Baa1	 	A-	 	A	 	
 	 	 	 	 	 	 	 	
Municipal bonds, due 2029 (1)	 	Aaa/VMIG1	 	AAA/A-1+	 	Not Rated	 	
 	 	 	 	 	 	 	 	
Municipal bonds, due 2032 (1)	 	Aaa/P-1	 	Not Rated	 	Not Rated	 	

(1)           Barrick, through two wholly-owned subsidiaries, issued a total of $63 million of tax exempt, variable rate, solid waste disposal bonds. The bonds are guaranteed by Barrick and no principal payments are required until cancellation, redemption or maturity.
A portion of such bonds mature in 2029, with the remainder maturing in 2032.
 
Moody’s Investors Service (“Moody’s”) credit ratings for long-term debt are on a rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities rated. According to Moody’s, a rating of Baa is the fourth highest of nine major categories. Moody’s applies numerical modifiers 1, 2 and 3 in each generic rating classification from Aa to Caa in its corporate bond rating system. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category,
 
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the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
 
In the case of variable rate demand obligations (“VRDOs”), a two-component rating system is assigned by Moody’s, a long or short-term rating and a demand obligation rating. The first element represents Moody’s evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody’s evaluation of the degree of risk associated with the ability to receive purchase price upon demand, using a variable municipal investment grade rating. Moody’s credit ratings for long-term aspect of VRDOs are on a rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities rated. According to Moody’s, a rating of Aaa is the highest of nine major categories.  Moody’s credit ratings for the short-term or demand aspect of VRDOs are on a rating scale that ranges from VMIG 1 to SG, which represents the range from highest to lowest quality of such securities rated. According to Moody’s, a rating of VMIG 1 is the highest of four categories.
 
Moody’s also uses credit ratings for the short-term or demand aspect of VRDOs on a rating scale that ranges from P-1 to NP, which represents the range from highest to lowest quality of such securities rated. According to Moody’s, a rating of P-1 is the highest of four categories.
 
Standard & Poor’s Ratings Services (“S&P”) credit ratings for long-term debt are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to S&P, the AAA rating is the highest and the A rating is the third highest of ten major categories. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories.
 
S&P assigns a dual rating to debt issues that have a put option or demand feature as part of their structure. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. S&P’s long-term debt rating symbols are used for bonds to denote the long-term maturity and its short-term debt (including commercial paper) rating symbols are used for the put option. According to S&P, the AAA rating is the highest of ten major categories. S&P’s credit ratings for short-term debt are on a rating scale that ranges from A-1 to D, which represents the range from highest to lowest quality of such securities rated. According to S&P, the A-1 rating is the highest of six major categories. Within the A-1 category, certain obligations are designated with a plus (+) sign. This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong.
 
DBRS Limited (“DBRS”) credit ratings are on a long-term debt rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to DBRS, a rating of A by DBRS is in the middle of three subcategories within the third highest of ten major categories. The assignment of a “(high)”, “(middle)” or “(low)” modifier within each rating category indicates relative standing within such category. The “(high)”, “(middle)” and “(low)” grades are not used for the AAA category.
 
Barrick understands that the ratings are based on, among other things, information furnished to the above ratings agencies by Barrick and information obtained by the ratings agencies from publicly available sources. The credit ratings given to Barrick’s debt instruments by the rating agencies are not recommendations to buy, hold or sell such debt instruments since such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.
 
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MARKET FOR SECURITIES
 
Barrick’s common shares are listed and posted for trading on the Toronto Stock Exchange and the New York Stock Exchange under the symbol ABX. The following table outlines the closing share price trading range and volume of shares traded by month in 2007, based on trading information published by each Exchange.

 	 	Toronto Stock Exchange	 	New York Stock Exchange	 	
 	 	Share Price Trading
Range	 	 	 	Share Price Trading
Range	 	 	 	
2007	 	High	 	Low	 	Share Volume	 	High	 	Low	 	Share Volume	 	
 	 	(C$ per share)	 	(millions)	 	($ per share)	 	(millions)	 	
January	 	36.18	 	33.29	 	50.5	 	29.83	 	28.35	 	57.9	 	
February	 	37.25	 	34.92	 	50.6	 	32.11	 	29.91	 	54.9	 	
March	 	34.34	 	32.21	 	50.7	 	29.27	 	27.42	 	64.2	 	
April	 	33.98	 	31.15	 	37.6	 	29.67	 	28.11	 	51.4	 	
May	 	34.43	 	30.62	 	52.1	 	31.17	 	27.99	 	66.6	 	
June	 	31.80	 	29.97	 	53.8	 	29.75	 	28.17	 	62.1	 	
July	 	36.20	 	31.54	 	51.1	 	34.55	 	29.60	 	63.9	 	
August	 	36.03	 	32.39	 	63.8	 	34.29	 	30.10	 	58.9	 	
September	 	40.92	 	35.04	 	80.7	 	40.94	 	33.40	 	65.7	 	
October	 	42.03	 	39.19	 	75.0	 	44.13	 	39.25	 	60.5	 	
November	 	43.30	 	38.27	 	71.1	 	46.98	 	38.92	 	63.6	 	
December	 	42.03	 	37.40	 	45.5	 	42.88	 	37.39	 	46.3	 	
 
MATERIAL CONTRACTS
 
Set out below is a description of Barrick’s material contracts as at December 31, 2007.
 
On March 6, 2003, Placer Dome entered into an Indenture (the “Indenture”) with Deutsche Bank Trust Company Americas in connection with the issuance of senior debt securities.
 
On March 6, 2003, Placer Dome entered into a First Supplemental Indenture with Deutsche Bank Trust Company Americas in connection with the issuance and sale by Placer Dome of $200 million principal amount of 6.375% debentures on March 6, 2003. This First Supplemental Indenture, together with the original Indenture, sets out the terms and conditions pertaining to the $200 million principal amount 6.375% debentures.
 
On October 10, 2003, Placer Dome entered into a Second Supplemental Indenture with Deutsche Bank Trust Company Americas in connection with the issuance and sale by Placer Dome of $300 million principal amount of 6.45% debentures on October 10, 2003. This Second Supplemental Indenture, together with the original Indenture, sets out the terms and conditions pertaining to the $300 million principal amount 6.45% debentures.
 
On October 10, 2003, Placer Dome entered into a Third Supplemental Indenture with Deutsche Bank Trust Company Americas in connection with the issuance and sale by Placer Dome of $230 million principal amount of 2.75% convertible debentures on October 10, 2003. This Third Supplemental Indenture, together with the original Indenture, sets out the terms and conditions pertaining to the $230 million principal amount 2.75% convertible debentures.
 
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On November 12, 2004, Barrick entered into an Indenture with Barrick Gold Inc., Barrick Gold Finance Company and JPMorgan Chase Bank. Pursuant to such Indenture, (a) Barrick issued $200 million principal amount of 5.80% notes due 2034 (the “Barrick 2034 Notes”), (b) Barrick Gold Finance Company issued $200 million principal amount of 5.80% notes due 2034 (the “BGFC 2034 Notes”), and (c) Barrick Gold Finance Company issued $350 million principal amount of 4.875% notes due 2014 (the “2014 Notes”), all on November 12, 2004. The Indenture sets out the terms and conditions pertaining to the Barrick 2034 Notes, the BGFC 2034 Notes and the 2014 Notes. Each of the BGFC 2034 Notes and the 2014 Notes are unconditionally guaranteed by Barrick.
 
On October 12, 2006, Barrick International Bank Corp. (“BIBC”) issued an aggregate of $1 billion of copper-linked notes (the “Copper-Linked Notes”) comprised of $400 million of 5.75% notes due 2016 and $600 million of 6.35% notes due 2036 pursuant to an Indenture dated as of the same date among BIBC, as issuer, Barrick (HMC) Mining Company (“Barrick (HMC)”), as initial joint obligor, Barrick, as parent guarantor and The Bank of New York, as trustee.   The Indenture sets out the terms and conditions pertaining to the Copper-Linked Notes, which include an unconditional guarantee by Barrick.
 
On the same date, and as part of the same transaction, ABX Financing Company (“ABXFC”), a company incorporated for the purpose of acquiring the Copper-Linked Notes, issued an aggregate of $1 billion of notes (the “ABXFC Notes”) comprised of $400 million of 5.75% notes due 2016 and $600 million of 6.35% notes due 2036 pursuant to an Indenture dated as of the same date among ABXFC, as issuer, BIBC, Barrick (HMC) and Barrick as guarantors and The Bank of New York, as trustee.   The Indenture sets out the terms and conditions pertaining to the ABXFC Notes, which include an unconditional guarantee by Barrick, Barrick BIBC and Barrick (HMC).
 
On February 21, 2008, Barrick entered into an agreement with Kennecott Explorations (Australia) Ltd., a subsidiary of Rio Tinto plc, to acquire its 40% interest in the Cortez property for consideration of $1.695 billion in cash, due on closing, a further $50 million payable if and when an additional 12 million ounces of contained gold resources are added to Barrick’s December 31, 2007 reserve statement for Cortez, and a sliding scale royalty payable to Rio Tinto on 40% of all Cortez production in excess of 15 million ounces on and after January 1, 2008.  On March 5, 2008, Barrick completed the acquisition of the 40% interest in the Cortez property.  The acquisition consolidates 100% ownership for Barrick of the existing Cortez mine and the Cortez Hills development project plus any future potential from the property.
 
TRANSFER AGENTS AND REGISTRARS
 
Barrick’s transfer agent and registrar for its common shares is CIBC Mellon Trust Company, Toronto, Ontario. Barrick’s transfer agent and registrar for the BGI exchangeable shares is Computershare Trust Company of Canada, Toronto, Ontario.
 
DIVIDEND POLICY
 
In each of 2005 and 2006, Barrick paid a total cash dividend of $0.22 per common share – $0.11 in mid-June and $0.11 in mid-December.  In 2007, Barrick paid a total cash dividend of $0.30 per common share – $0.15 in mid-June and $0.15 in mid-December. The amount and timing of any dividends is within the discretion of Barrick’s Board of Directors. The Board of Directors reviews the dividend policy semi-annually based on the cash requirements of Barrick’s operating assets, exploration and development activities, as well as potential acquisitions, combined with the current and projected financial position of Barrick.
 
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DIRECTORS AND OFFICERS OF THE COMPANY
 
As of March 18, 2008, directors and executive officers of Barrick as a group beneficially own, directly or indirectly, or exercise control or direction over 3,192,025 common shares representing approximately 0.4% of the outstanding common shares of Barrick.
 
Directors of the Company
 
The following are the directors of the Company as at March 27, 2008:

Name (age) and municipality of
residence	 	Principal occupations during past 5 years	
Howard L. Beck ( 74 )
Toronto, Ontario
Canada	 	Mr. Beck is a corporate director. Mr. Beck is also a director of Cineplex Galaxy Income Fund. Mr. Beck holds an undergraduate degree and law degree from the University of British Columbia and a master’s degree in law from Columbia University. He was called to the bar of British Columbia and Ontario. He was appointed Queen’s Counsel in 1971.
 
Barrick Board Details:
· Director since 1984	
 	 	 	
C. William C. Birchall ( 65 )
Toronto, Ontario
Canada	 	Mr. Birchall was appointed as the Vice Chairman of Barrick in July 2005. From 2004 to March 2007, Mr. Birchall was the Chief Executive Officer of ABX Financeco Inc., a Barrick subsidiary. Mr. Birchall is also a director of Rogers Communications Inc. Mr. Birchall graduated from Merchant Taylor’s School. He is a Fellow of the United Kingdom Institute of Chartered Accountants.
 
Barrick Board Details:
· Vice Chairman since 2005 and Director since 1984	
 	 	 	
Donald J. Carty ( 61 )
Dallas, Texas
USA	 	Mr. Carty is Vice Chairman and Chief Financial Officer of Dell, Inc., a computer company. From 1998 to 2003, he was the Chairman and Chief Executive Officer of AMR Corp. and American Airlines. Mr. Carty is also the Chairman of Porter Aviation Holdings Inc., Porter Airlines Inc. and Virgin America Airlines. He is also a director of CHC Helicopter Corporation and Dell, Inc. He holds an undergraduate degree and an honorary doctor of laws from Queen’s University and a master’s degree in business administration from Harvard University. Mr. Carty is an Officer of the Order of Canada.
 
Barrick Board Details:
· Director since 2006	
 
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Name (age) and municipality of
residence	 	Principal occupations during past 5 years	
Gustavo Cisneros ( 62 )
Caracas, Venezuela	 	Mr. Cisneros is the Chairman and Chief Executive Officer of the Cisneros Group of Companies, a privately held media, entertainment, technology and consumer products organization. Mr. Cisneros is a member of Barrick’s International Advisory Board. He is a member of the advisory board of a number of organizations and universities, including the Council on Foreign Relations, The Americas Society, Columbia University and Harvard University. Mr. Cisneros holds an undergraduate degree from Babson College.
 
Barrick Board Details:
· Director since 2003	
 	 	 	
Marshall A. Cohen ( 72 )
Toronto, Ontario
Canada	 	Mr. Cohen is Counsel of the law firm Cassels, Brock & Blackwell LLP. He is also a director of American International Group, Inc., TD Ameritrade, and TriMas Corporation. Mr. Cohen holds an undergraduate degree from the University of Toronto, a law degree from Osgoode Hall Law School and a master’s degree in law from York University. Mr. Cohen is Chairman of the Board of Governors of York University and a honorary director or governor of a number of non- profit organizations, including the C.D. Howe Institute and Mount Sinai Hospital. Mr. Cohen is an Officer of the Order of Canada.
 
Barrick Board Details:
· Director since 1988	
 	 	 	
Peter A. Crossgrove ( 71 )
Toronto, Ontario
Canada	 	Mr. Crossgrove is a corporate director. Prior to May 2005, Mr. Crossgrove was the Chairman of Masonite International Corporation, a door manufacturing company. He is also a director of QLT Inc., Dundee REIT, Excellon Resources Inc., West Timmins Mining Inc. and Pelangio Mines Inc. Mr. Crossgrove is Chairman of the Canadian Association of Provincial Cancer Agencies and a director of the Canadian Partnership Against Cancer. He holds an undergraduate degree from McGill University and Concordia University and a master’s degree in business administration from the University of Western Ontario. Mr. Crossgrove is a recipient of the Queen’s Jubilee Medal and a Member of the Order of Canada.
 
Barrick Board Details:
· Director since 1993	
 
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Name (age) and municipality of
residence	 	Principal occupations during past 5 years	
Robert M. Franklin ( 61 )
Toronto, Ontario
Canada	 	Mr. Franklin is President of Signalta Capital Corporation, an investment company. From 1993 to January 2006, he was the Chairman of the Board of Placer Dome Inc. Mr. Franklin is also a director of Canadian Tire Corporation, Toromont Industries Ltd., First Uranium Corp. and Resolve Business Outsourcing Income Fund and he is a trustee of Stratos Global Corporation. He holds an undergraduate degree from Hillsdale College.
 
Barrick Board Details:
· Director since 2006	
 	 	 	
Peter C. Godsoe ( 69 )
Toronto, Ontario
Canada	 	Mr. Godsoe is a corporate director. Prior to March 2004, he was the Chairman of the Bank of Nova Scotia, a financial services company, and prior to December 2003, the Chairman and Chief Executive Officer of the Bank of Nova Scotia. Mr. Godsoe is also a director of Ingersoll-Rand Company, Lonmin PLC, Onex Corporation, Rogers Communications Inc. and Templeton Emerging Markets Investment Trust. In addition, he is a director of a number of non-profit organizations, including the Canadian Council of Christians and Jews, Mount Sinai Hospital and Atlantic Institute for Market Studies. Mr. Godsoe holds an undergraduate degree from the University of Toronto and a master’s degree in business administration from Harvard University. He is a chartered accountant and a Fellow of the Institute of Chartered Accountants in Ontario. Mr. Godsoe is a member of the Canadian Business Hall of Fame and an Officer of the Order of Canada.
 
Barrick Board Details:
· Director since 2004	
 	 	 	
J. Brett Harvey ( 57 )
Venetia, Pennsylvania
USA	 	Mr. Harvey is President, Chief Executive Officer and a director of CONSOL Energy Inc., a coal, gas and energy services company. He is also a director of CNX Gas Corporation and Allegheny Technologies Inc. Mr. Harvey is a member of the National Executive Board of the Boy Scouts of America and serves on the board of directors or advisory council of a number of energy industry associations, including the U.S. National Mining Association, American Coalition for Clean Coal Electricity, Coal Based Generation Stakeholders and the Bituminous Coal Operators’ Association. Mr. Harvey holds an undergraduate degree from the University of Utah.
 
Barrick Board Details:
· Director since 2005	
 
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Name (age) and municipality of
residence	 	Principal occupations during past 5 years	
The Right Honourable Brian
Mulroney  ( 68 )
Montreal, Quebec
Canada	 	Mr. Mulroney is the Chairman of Barrick’s International Advisory Board and a Senior Partner of the law firm Ogilvy Renault. Mr. Mulroney was the Prime Minister of Canada from 1984 to 1993. He is a director of Archer Daniels Midland Company, The Blackstone Group, Independent News and Media, PLC, Quebecor Inc., Quebecor World Inc. and Wyndham Worldwide Corporation. Mr. Mulroney is a member of the international advisory council of a number of companies, including JP Morgan Chase & Co. and Independent News and Media, PLC. He holds an undergraduate degree from St. Francis Xavier University and a law degree from Université Laval. Mr. Mulroney is a Companion of the Order of Canada.
 
Barrick Board Details:
· Director since 1993	
 	 	 	
Anthony Munk ( 47 )
New York, New York
USA	 	Mr. Anthony Munk is Managing Director of Onex Corporation, a leading North American private equity firm. He also serves as a director of Cineplex Galaxy Income Fund and Husky Injection Molding Systems Ltd. He is a director of The Peter Munk Charitable Foundation and Vice Chairman of the Aurea Foundation. Mr. Munk holds an undergraduate degree from Queen’s University.
 
Barrick Board Details:
· Director since 1996	
 	 	 	
Peter Munk ( 80 )
Toronto, Ontario
Canada	 	Mr. Peter Munk is the Founder and Chairman of Barrick. On March 27, 2008, Mr. Munk was also appointed as acting Chief Executive Officer of Barrick during a medical leave of absence of Greg Wilkins. Prior to September 2006, he was also Chairman of Trizec Properties, Inc., a real estate investment trust, and Chairman and Chief Executive Officer of Trizec Canada Inc., a real estate company. Mr. Munk is the former Chair of the University of Toronto Crown Foundation and served as a Trustee of the University Health Network in Toronto. He holds an undergraduate degree and an honorary doctor of laws from the University of Toronto. Mr. Munk is a member of the Canadian Business Hall of Fame and the Canadian Mining Hall of Fame, a recipient of the Woodrow Wilson Award for Corporate Citizenship and an Officer of the Order of Canada.
 
Barrick Board Details:
· Chairman and Director since 1984	
 
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Name (age) and municipality of
residence	 	Principal occupations during past 5 years	
Steven J. Shapiro ( 55 )
Houston, Texas
USA	 	Mr. Shapiro is a corporate director. Prior to May 2006, he was Executive Vice President, Finance and Corporate Development, and a director of Burlington Resources, Inc., an oil and gas exploration and production company. Prior to April 2005, he was Executive Vice President and Chief Financial Officer of Burlington Resources, Inc. He is also a director of El Paso Corporation. He serves as chairman of the executive committee of the American Petroleum Institute’s general committee on finance. Mr. Shapiro holds an undergraduate degree from Union College and a master’s degree in business administration from Harvard University.
 
Barrick Board Details:
· Director since 2004	
 	 	 	
Gregory C. Wilkins ( 52 )
Toronto, Ontario
Canada	 	Mr. Wilkins is President and Chief Executive Officer of Barrick. On March 27, 2008, Mr. Wilkins commenced a medical leave of absence, during which time Mr. Peter Munk, the Chairman and Founder of Barrick, has been appointed as the acting Chief Executive Officer. Prior to February 2003, he was a corporate director. Prior to May 2002, Mr. Wilkins was the Vice Chairman of TrizecHahn Corporation, a real estate company, and prior to March 2001, he was the President and Chief Operating Officer of TrizecHahn Corporation. He is also a director of Magna International Inc. and Patheon Inc. and a member of the Cabinet for The Heart for University Health Network Campaign. Mr. Wilkins is a Chartered Accountant in Ontario and holds an undergraduate degree from Concordia University.
 
Barrick Board Details:
· President and Chief Executive Officer since 2003 and Director since 1991	
 
Committees of the Board
 
Corporate Governance and Nominating Committee
 
The Corporate Governance and Nominating Committee is comprised of M.A. Cohen, P.C. Godsoe, R.M. Franklin and S.J. Shapiro.
 
Audit Committee
 
The Audit Committee is comprised of S.J. Shapiro, D.J. Carty, J.W. Crow and P.A. Crossgrove.
 
Compensation Committee
 
The Compensation Committee is comprised of P.C. Godsoe, M.A. Cohen and J.B. Harvey.
 
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Environmental, Health and Safety Committee
 
The Environmental, Health and Safety Committee is comprised of P.A. Crossgrove, R.M. Franklin, J.B. Harvey and C.W.D. Birchall.
 
Finance Committee
 
The Finance Committee is comprised of C.W.D. Birchall, A. Munk, G.C. Wilkins and J.W. Crow.
 
International Advisory Board
 
The members of the Board that also sit on the International Advisory Board are B. Mulroney and G. Cisneros.
 
Executive Officers of the Company
 
In addition to Peter Munk, Gregory C. Wilkins and C. William C. Birchall, as set out above, the following are the executive officers of the Company as at March 27, 2008:

Name (age) and municipality of
residence	 	Office
(date became an Officer)	 	Principal occupations during
past 5 years	
Alexander J. Davidson (56)
 Toronto, Ontario
Canada	 	Executive Vice President, Exploration and Corporate Development (1993)	 	Executive Vice President, Exploration and Corporate Development of the Company; prior to March 2005, Executive Vice President, Exploration of the Company; prior to May 2003, Senior Vice President, Exploration of the Company.	
 	 	 	 	 	
Kelvin Dushnisky (44)
 Toronto, Ontario
Canada	 	Executive Vice President, Corporate Affairs (2007)	 	Executive Vice President, Corporate Affairs of the Company; prior to December 2007, Senior Vice President, Corporate Affairs of the Company; prior to September 2005, Vice President, Regulatory Affairs of the Company; prior to May 2003, Director, Regulatory Affairs of the Company.	
 	 	 	 	 	
Gordon Fife (49)
 Newmarket, Ontario
Canada	 	Executive Vice President, Organization Effectiveness (2002)	 	Executive Vice President, Organization Effectiveness of the Company; prior to May 2006, Senior Vice President, Organization Effectiveness of the Company; prior to February 2004, Vice President, Organizational Effectiveness of the Company.	
 	 	 	 	 	
Patrick J. Garver (56)
 Toronto, Ontario Canada	 	Executive Vice President and General Counsel (1993)	 	Executive Vice President and General Counsel of the Company.	
 
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Name (age) and municipality of
residence	 	Office
(date became an Officer)	 	Principal occupations during
past 5 years	
Peter J. Kinver (52)
Toronto, Ontario
Canada	 	Executive Vice President and Chief Operating Officer ( 2003)	 	Executive Vice President and Chief Operating Officer of the Company; prior to February 2004, Executive Vice President, Operations of the Company; prior to August 2003, Divisional Director, Western Division, Anglo American Platinum plc (platinum mining).	
 	 	 	 	 	
Jamie C. Sokalsky (50)
 Toronto, Ontario
Canada	 	Executive Vice President and Chief Financial Officer (1993)	 	Executive Vice President and Chief Financial Officer of the Company; prior to April 2004, Senior Vice President and Chief Financial Officer of the Company.	
 	 	 	 	 	
Vincent Borg (51)
 Toronto, Ontario
Canada	 	Senior Vice President, Corporate Communications (2008)	 	Senior Vice President, Corporate Communications of the Company; prior to February 2006, Vice President, Corporate Communications of the Company.	
 	 	 	 	 	
George Potter (51)
 Oakville, Ontario
Canada	 	Senior Vice President, Technical Services and Capital Projects (2008)	 	Senior Vice President, Technical Services and Capital Projects; prior to May 2006, Vice President Technical Services and Projects of the Company; prior to September 2005, Vice President, Capital Projects of the Company.	
 	 	 	 	 	
Gregory A. Lang (53)
Sandy, Utah
U.S.A.	 	President, North America (2001)	 	President, North America of the Company; prior to September 2005, Vice President North America Operations of the Company; prior to February 2004, Vice President, Australian Operations of the Company.	
 	 	 	 	 	
Igor Gonzales (53)
La Molina, Lima, Peru	 	President, South America (2004)	 	President, South America of the Company; prior to September 2005, Vice President, Peru of the Company; prior to February 2004, Vice President and General Manager, Pierina mine, of the Company.	
 
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Name (age) and municipality of
residence	 	Office
(date became an Officer)	 	Principal occupations during
past 5 years	
Joc O’Rourke (47)
 Perth, Australia	 	President, Australia-Pacific ( 2006)	 	President, Australia Pacific of the Company; prior to May 2006, Executive General Manager, Australia for Placer Dome; prior to January 2005, General Manager WA Operations, at Iluka Resources Limited; prior to August 2003, General Manager, Operations at Minara Resources Ltd.	
 
Mr. M.A. Cohen, a director of the Company, was a director of Haynes International, Inc. and Collins & Aikman Inc., each a company which during the past ten years has made a proposal under legislation relating to bankruptcy or insolvency or instituted an arrangement with creditors while Mr. Cohen was acting as a director for such company or within one year of Mr. Cohen resigning from the board of directors.  On March 29, 2004, Haynes International, Inc. and certain of its U.S. subsidiaries filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.  On May 17, 2005, Collins & Aikman Inc. and substantially all of its U.S. operating subsidiaries filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mr. Mulroney, a director of the Company, is a director of Quebecor World Inc., a company which during the past ten years has made a proposal under legislation relating to bankruptcy or insolvency or instituted an arrangement with creditors while Mr. Mulroney was acting as a director for such company.  On January 21, 2008, Quebecor World Inc. and substantially all of its U.S. operating subsidiaries filed a voluntary petition for creditor protection under the Canadian Companies’ Creditors Arrangement Act and Chapter 11 of the U.S. Bankruptcy Code.
 
AUDIT COMMITTEE
 
Audit Committee Mandate
 
Purpose
 
1.             The purpose of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) is to assist the Board in its oversight of: (i) the financial reporting process and the quality, transparency and integrity of the Company’s financial statements and other related public disclosures; (ii) the Company’s internal controls over financial reporting; (iii) the Company’s compliance with legal and regulatory requirements relevant to the financial statements and financial reporting; (v) the external auditors’ qualifications and independence; and (v) the performance of the internal audit function and the external auditors.
 
2.             The function of the Committee is oversight.  The members of the Committee are not full-time employees of the Company.  The Company’s management is responsible for the preparation of the Company’s financial statements in accordance with applicable accounting standards and applicable laws and regulations.  The Company’s external auditors are responsible for the audit or review, as applicable, of the Company’s financial statements in accordance with applicable auditing standards and laws and regulations.
 
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Committee Responsibilities
 
3.             The Committee’s responsibilities shall include:
 
                External Auditors
 
(a)                               retaining and terminating, and/or making recommendations to the Board of Directors and the shareholders with respect to the retention or termination of, an external auditing firm to conduct review engagements on a quarterly basis and an annual audit of the Company’s financial statements;
 
(b)                              communicating to the external auditors that they are ultimately accountable to the Board and the Committee as representatives of the shareholders;
 
(c)                               obtaining and reviewing an annual report prepared by the external auditors describing:  the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues;
 
(d)                              evaluating the independence of the external auditor and any potential conflicts of interest and (to assess the auditors’ independence) all relationships between the external auditors and the Company, including obtaining and reviewing an annual report prepared by the external auditors describing all relationships between the external auditors and the Company;
 
(e)                               approving, or recommending to the Board of Directors for approval, all audit engagement fees and terms, as well as all non-audit engagements of the external auditors prior to the commencement of the engagement;
 
(f)                                 reviewing with the external auditors the plan and scope of the quarterly review and annual audit engagements;
 
(g)                              setting hiring policies with respect to the employment of current or former employees of the external auditors;
 
                Financial Reporting
 
(h)                              reviewing, discussing and recommending to the Board for approval the annual audited financial statements and related “management’s discussion and analysis of financial and operating results” prior to filing with securities regulatory authorities and delivery to shareholders;
 
(i)                                  reviewing and discussing with the external auditors the results of their reviews and audit, any issues arising and management’s response, including any restrictions on the scope of the external auditors’ activities or requested information and any significant disagreements with management, and resolving any disputes;
 
(j)                                  reviewing, discussing and approving, or recommending to the Board for approval, the quarterly financial statements and quarterly “management’s discussion and analysis of
 
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financial and operating results” prior to filing with securities regulatory authorities and delivery to shareholders;
 
(k)                               reviewing and discussing with management and the external auditors the Company’s critical accounting policies and practices, material alternative accounting treatments, significant accounting and reporting judgments, material written communications between the external auditor and management (including management representation letters and any schedule of unadjusted differences) and significant adjustments resulting from the audit or review;
 
(l)                                  reviewing and discussing with management the Company’s earnings press releases, as well as type of financial information and earnings guidance (if any) provided to analysts and ratings agencies;
 
(m)                            reviewing and discussing such other relevant public disclosures containing financial information as the Committee may consider necessary or appropriate;
 
(n)                              reviewing and discussing with management the disclosure controls relating to the Company’s public disclosure of financial information, including information extracted or derived from the financial statements, and periodically assess the adequacy of such procedures;
 
                                            Internal Controls Over Financial Reporting
 
(o)                              reviewing and discussing with management, the external auditors and the head of internal audit the effectiveness of the Company’s internal controls over financial reporting, including reviewing and discussing any significant deficiencies in the design or operation of internal controls, and any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting;
 
(p)                              discussing the Company’s process with respect to risk assessment (including fraud risk), risk management and the Company’s major financial risks and financial reporting exposures, all as they relate to internal controls over financial reporting, and the steps management has taken to monitor and control such risks;
 
(q)                              reviewing and discussing with management the Company’s Code of Business Conduct and Ethics and anti-fraud program and the actions taken to monitor and enforce compliance;
 
(r)                                 establishing procedures for:
 
(i)                             the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters; and
 
(ii)                        the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting, internal controls or auditing matters;
 
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Internal Audit
 
(s)                               reviewing and discussing with management, the external auditors and the head of internal audit the responsibilities and effectiveness of the Company’s internal audit function, including reviewing the internal audit mandate, independence, organizational structure, internal audit plans and adequacy of resources, receiving periodic internal audit reports and meeting privately with the head of internal audit on a periodic basis;
 
(t)                                 approving in advance the retention and dismissal of the head of internal audit;
 
Other
 
(u)                              meeting separately, periodically, with each of management, the head of internal audit and the external auditors;
 
(v)                              reporting regularly to the Board;
 
(w)                            reviewing and assessing its mandate and recommending any proposed changes to the Corporate Governance and Nominating Committee of the Board on an annual basis; and
 
(x)                                evaluating the functioning of the Committee on an annual basis, including with reference to the discharge of its mandate, with the results to be reported to the Corporate Governance and Nominating Committee, which shall report to the Board.
 
Responsibilities of the Committee Chair
 
4.             The fundamental responsibility of the Committee Chair is to be responsible for the management and effective performance of the Committee and provide leadership to the Committee in fulfilling its mandate and any other matters delegated to it by the Board.  To that end, the Committee Chair’s responsibilities shall include:
 
(a)                                      working with the Chairman of the Board, the Chief Executive Officer and the Secretary to establish the frequency of Committee meetings and the agendas for meetings;
 
(b)                                     providing leadership to the Committee and presiding over Committee meetings;
 
(c)                                      facilitating the flow of information to and from the Committee and fostering an environment in which Committee members may ask questions and express their viewpoints;
 
(d)                                     reporting to the Board with respect to the significant activities of the Committee and any recommendations of the Committee;
 
(e)                                      leading the Committee in annually reviewing and assessing the adequacy of its mandate and evaluating its effectiveness in fulfilling its mandate; and
 
(f)                                        taking such other steps as are reasonably required to ensure that the Committee carries out its mandate.
 
Powers
 
5.             The Committee shall have the authority, including approval of fees and other retention terms, to obtain advice and assistance from outside legal, accounting or other advisors in its sole discretion, at the expense of the Company, which shall provide adequate funding for such purposes.  The Company shall
 
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also provide the Committee with adequate funding for the ordinary administrative expenses of the Committee.  The Committee shall have unrestricted access to information, management, the external auditors and the head of internal audit, including private meetings, as it considers necessary or appropriate to discharge its duties and responsibilities.  The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
 
Composition
 
6.             The Committee shall be appointed by the Board annually and shall be comprised of a minimum of three directors.  If an appointment of members of the Committee is not made as prescribed, the members shall continue as such until their successors are appointed.
 
7.             All of the members of the Committee shall be directors whom the Board has determined are independent, taking into account the applicable rules and regulations of securities regulatory authorities and/or stock exchanges.
 
8.             Each member of the Committee shall be “financially literate” and at least one member of the Committee shall have “accounting or related financial management expertise”(1). At least one member of the Committee shall be an “audit committee financial expert”, as defined in the applicable rules and regulations of securities regulatory authorities and/or stock exchanges.
 
9.             If a Committee member simultaneously serves on the audit committee of more than three public companies, the Board shall make a determination as to whether such service impairs the ability of such member to serve effectively on the Committee and disclose such determination in the Company’s annual proxy statement.
 
Meetings
 
10.           The Committee shall have a minimum of four meetings per year, to coincide with the Company’s financial reporting cycle.  Additional meetings will be scheduled as considered necessary or appropriate, including to consider specific matters at             the request of the external auditors or the head of internal audit.
 
11.           The time and place of the meetings of the Committee, the calling of meetings and the procedure in all things at such meetings shall be determined by the Chairman of the Committee.
 
Composition of the Audit Committee
 
The Audit Committee is comprised entirely of independent directors (S.J. Shapiro, D.J. Carty, J.W. Crow and P.A. Crossgrove). There were seven meetings of the Audit Committee during 2007. All of the

(1) For purposes of this mandate,  “financially literate” means the ability to read and understand a balance sheet, an income statement, a cash flow statement and the related notes that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, and “accounting or related financial management expertise” means the ability to analyze and interpret a full set of financial statements, including the related notes that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements.
 
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members of the Audit Committee attended all of the meetings held in 2007, with the exception of D.J. Carty who attended all but one meeting.
 
All of the members of the Audit Committee are financially literate and at least one member has accounting or related financial management expertise. Barrick’s Board of Directors has determined that S.J. Shapiro, a member of the Audit Committee, is an “audit committee financial expert” as defined by SEC rules and is independent, as that term is defined by the New York Stock Exchange’s corporate governance standards applicable to Barrick.
 
The rules adopted by the SEC indicate that the designation of Mr. Shapiro as an audit committee financial expert will not deem him to be an “expert” for any purpose or impose any duties, obligations or liability on Mr. Shapiro that are greater than those imposed on members of the Audit Committee and Barrick’s Board of Directors who do not carry this designation. Other members of the Audit Committee are also experienced audit committee members and may qualify as “audit committee financial experts”; however, the Board of Directors has only made the specific determination in respect of Mr. Shapiro.

Donald J. Carty , 61
Dallas, Texas, USA
	 	Mr. Carty is Vice Chairman and Chief Financial Officer of Dell, Inc., a computer company. From 1998 to 2003, he was the Chairman and Chief Executive Officer of AMR Corp. and American Airlines. Mr. Carty is also the Chairman of Porter Aviation Holdings Inc., Porter Airlines Inc. and Virgin America Airlines. Mr. Carty is also a director of CHC Helicopter Corporation and Dell, Inc. He holds an undergraduate degree and an honorary doctor of laws from Queen’s University and a master’s degree in business administration from Harvard University. Mr. Carty is an Officer of the Order of Canada.	
 	 	 	
Peter A. Crossgrove , 71
Toronto, Ontario, Canada
	 	Mr. Crossgrove is a corporate director. Prior to May 2005, Mr. Crossgrove was the Chairman of Masonite International Corporation, a door manufacturing company. He is also a director of QLT Inc., Dundee REIT, Excellon Resources Inc., West Timmins Mining Inc. and Pelangio Mines Inc. Mr. Crossgrove is a director of the Canadian Partnership Against Cancer. He holds an undergraduate degree from McGill University and Concordia University and a master’s degree in business administration from the University of Western Ontario. Mr. Crossgrove is a recipient of the Queen’s Jubilee Medal and an Officer of the Order of Canada.	
 	 	 	
John W. Crow , 71
Toronto, Ontario, Canada
	 	Mr. Crow is President of J&R Crow Inc., an economic and financial consulting firm. He is also a director of TriNorth Capital Inc., Lawrence Enterprise Fund and OFI Income Fund. He is the Chairman of Arts for Children of Toronto. Mr. Crow served as the Governor of the Bank of Canada from 1987 to 1994. Mr. Crow holds an undergraduate degree from Oxford University.	
 	 	 	
Steven J. Shapiro , 55
Houston, Texas, USA
	 	Mr. Shapiro is a corporate director. Prior to May 2006, he was Executive Vice President, Finance and Corporate Development, and a director of Burlington Resources, Inc., an oil and gas exploration and production company. Prior to April 2005, he was Executive Vice President and Chief Financial Officer of Burlington Resources, Inc. He is also a director of El Paso Corporation. He serves as chairman of the executive committee of the American Petroleum Institute’s general committee on finance. Mr. Shapiro holds an undergraduate degree from Union College and a master’s degree in business administration from Harvard University.	
 
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Participation on Other Audit Committees
 
The Company does not restrict the number of other audit committees on which members of its Audit Committee may serve. J.W. Crow, who will retire from the Board of Directors at Barrick’s upcoming Annual and Special Meeting of Shareholders, currently serves on the audit committees of four other public companies.   Barrick’s Board of Directors has determined that the service of J.W. Crow on the audit committees of such other companies does not impair his ability to effectively serve on the Audit Committee, particularly given his experience as a director of other public companies and the fact that he is retired from full-time employment.
 
Audit Committee Pre-Approval Policies and Procedures
 
Barrick’s Audit Committee has adopted a pre-approval policy with respect to permitted non-audit services. Under this policy, subject to certain conditions, specified audit-related services, tax- related non-audit services, audit services and certain permitted non-audit services may be presented to the Audit Committee for pre-approval as a category of services on an annual or project basis. On a quarterly basis, management of Barrick is required to update the Audit Committee in respect of the actual amount of fees in comparison to the pre-approved estimate. Following the annual pre-approval, on an interim basis, management of Barrick is permitted to approve statutory, compliance and subsidiary audits and additional audit-related services and specified non-audit services, provided that the estimated fees for such services fall within specified dollar limits.  Additional audit-related services and specified non-audit services that exceed the dollar thresholds and all additional non-audit services, including tax-related non-audit services, require the pre-approval of the Audit Committee (or if within a specified dollar threshold, the Committee Chairman).
 
External Auditor Service Fees
 
PricewaterhouseCoopers LLP are the auditors of Barrick’s Consolidated Financial Statements. The following PricewaterhouseCoopers LLP fees were incurred by Barrick in each of the years ended December 31, 2007 and 2006 for professional services rendered to Barrick:

Fees
(amount in millions)	 	2007	 	2006	 	
Audit Fees(1)	 	$	7.5	 	$	7.2	 	
Audit-Related Fees(2)	 	0.4	 	0.2	 	
Tax Fees(3)	 	1.1	 	1.7	 	
All Other Fees(4)	 	0.1	 	0.1	 	
 	 	 	 	 	 	
Total	 	$	9.1	 	$	9.2	 	

(1)           Audit Fees comprise professional services for the audit of Barrick’s annual financial statements, review of Barrick’s interim financial statements, and services normally provided in connection with Barrick’s statutory and regulatory filings.  The Audit Fees for 2007 have decreased by $0.8 million before the effect of foreign currency translation that increased the fees reported in U.S. dollars by $1.1 million.
 
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(2)	Audit-Related Fees comprise amounts paid for consultations on accounting developments and the accounting for potential corporate transactions.	
 	 	
(3)	Tax Fees comprise amounts paid for tax compliance and advisory services.	
 	 	
(4)	In 2007, Other Fees comprise amounts paid for accounting and internal audit software applications and accounting research services.	
 	 	
CONTROLS AND PROCEDURES
 
Disclosure controls and procedures are designed to ensure that information required to be disclosed by Barrick in reports filed with securities regulatory agencies is recorded, processed, summarized and reported on a timely basis and is accumulated and communicated to Barrick’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
 
An evaluation was carried out under the supervision of and with the participation of Barrick’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in rules adopted by the SEC) as of December 31, 2007. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2007 our disclosure controls and procedures were effective.
 
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Accordingly, Barrick’s management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that Barrick’s internal control over financial reporting will prevent or detect all error and all fraud.
 
There has been no change in Barrick’s internal control over financial reporting during the year ended December 31, 2007 that materially affected, or that is reasonably likely to materially affect, Barrick’s internal control over financial reporting.  For additional information, see Barrick’s “Management’s Report on Internal Control Over Financial Reporting” in its 2007 Annual Report.
 
Barrick will continue to periodically review its disclosure controls and procedures and internal control over financial reporting and may make modifications from time to time as considered necessary or desirable.
 
NON-GAAP FINANCIAL MEASURES
 
Total Cash Costs
 
Total cash costs per ounce are a non-GAAP financial measure.  Total cash costs per ounce include all costs absorbed into inventory, as well as royalties, by-product credits, production taxes and accretion expense, and exclude inventory purchase accounting adjustments and amortization.  The presentation of these statistics in this manner allows Barrick to monitor and manage those factors that impact production costs on a monthly basis.  Barrick calculates total cash costs based on its equity interest in production from its mines.  Total cash costs per ounce/pound are calculated by dividing the aggregate of these costs by gold ounces, copper pounds sold or ore tons mined.  Total cash costs and total cash costs per ounce/pound are calculated on a consistent basis for the periods presented.  In Barrick’s income statement, amortization is presented separately from cost of sales.  Some companies include amortization
 
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in cost of sales, which results in a different measurement of cost of sales in the income statement.  Barrick has provided the reconciliations set out below to illustrate the impact of excluding amortization and inventory purchase accounting adjustments from total cash costs per ounce/pound statistics.  Under purchase accounting rules, Barrick recorded the fair value of acquired work in progress and finished goods inventories as at the date of the Placer Dome acquisition.  As the acquired inventory is sold, any purchase accounting adjustments reflected in the carrying amount of inventory at acquisition, impacts cost of sales.  The method of valuing these inventories is based on estimated selling prices less costs to complete and a reasonable profit margin.  Consequently, the fair values do not necessarily reflect costs to produce consistent with ore mined and processed into gold and copper after the acquisition.
 
Management believes that using an equity interest presentation is a fairer, more accurate way to measure economic performance than using a consolidated basis.  For mines where Barrick holds less than a 100% share in the production, it excludes the economic share of gold production that flows to its partners who hold a non-controlling interest. Consequently, for the Tulawaka mine, although Barrick fully consolidated this mine in its Consolidated Financial Statements, its production and total cash cost statistics only reflect its equity share of the production.
 
In managing its mining operations, Barrick disaggregates cost of sales between amortization and the other components of cost of sales.  Barrick uses total cash costs per ounce/pound statistics as a key performance measure internally to monitor the performance of its regional business units.  Management uses these statistics to assess how well the Company’s regional business units are performing against internal plans, and also to assess the overall effectiveness and efficiency of the Company’s mining operations.  Management also use amortization costs per ounce/pound statistics to monitor business performance.  By disaggregating cost of sales into these two components and separately monitoring them, management is better able to identify and address key performance trends.  Management believes that the presentation of these statistics in this manner in this Annual Information Form enhances the ability of investors to assess the Company’s performance.  These statistics also enable investors to better understand year-over-year changes in cash production costs, which in turn affect Barrick’s profitability and ability to generate cash flow.
 
The principal limitation associated with total cash costs per ounce/pound statistics is that they do not reflect the total costs to produce gold/copper, which in turn impacts the earnings of Barrick.  Management believes that it has compensated for this limitation by highlighting the fact that total cash costs exclude amortization and inventory purchase accounting adjustments as well as providing details of the financial effect.  Management believes that the benefits of providing disaggregated information outweigh the limitation in the method of presentation of total cash costs per ounce/pound statistics.
 
Total cash costs per ounce/pound statistics are intended to provide additional information, do not have any standardized meaning prescribed by U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.  The measures are not necessarily indicative of operating profit or cash flow from operations as determined under U.S. GAAP.  Other companies may calculate these measures differently.
 
Illustration of Impact of Excluding Certain Costs from Total Cash Costs per Ounce/Pound
 
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 	 	For the years ended December 31	 	
($ millions, except per ounce/pound	 	Gold	 	Copper( 1)	 	
information in dollars)	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Cost of sales(2)	 	$	2,842	 	$	2,348	 	$	1,214	 	$	342	 	$	393	 	
Cost of sales at South Deep included in discontinued operations	 	—	 	101	 	—	 	—	 	—	 	
Cost of sales attributable to non-controlling interests(3)	 	(15	)	(63	)	(8	)	—	 	—	 	
Inventory purchase accounting adjustments included in cost of sales(4)	 	—	 	(11	)	—	 	(9	)	(97	)	
Cost of sales – equity basis	 	2,827	 	2,375	 	1,206	 	333	 	296	 	
Amortization at producing mines – consolidated	 	865	 	648	 	409	 	119	 	68	 	
Amortization at South Deep included in discontinued operations	 	—	 	18	 	—	 	—	 	—	 	
Amortization at producing mines attributable to non-controlling interests(3)	 	(6	)	(16	)	(5	)	—	 	—	 	
Amortization at producing mines – equity basis	 	859	 	650	 	404	 	119	 	68	 	
Inventory purchase accounting adjustments(4)	 	—	 	11	 	—	 	9	 	97	 	
Cost of sales including amortization and inventory purchase accounting adjustments – equity basis	 	$	3,686	 	$	3,036	 	$	1,610	 	$	461	 	$	461	 	

 	 	For the years ended December 31	 	
Total cash costs per ounce/pound	 	Gold	 	Copper(1)	 	
(Per ounce/pound information in dollars)	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Ounces/pounds sold – consolidated (thousands/millions)	 	8,108	 	8,566	 	5,333	 	401	 	376	 	
Sales attributable to non-controlling interests(3)	 	(53	)	(176	)	(13	)	—	 	—	 	
Ounces/pounds sold – equity basis	 	8,055	 	8,390	 	5,320	 	401	 	376	 	
Total cash costs per ounce/pound – equity basis	 	$	350	 	$	283	 	$	227	 	$	0.83	 	$	0.79	 	
Amortization per ounce/pound – equity basis	 	104	 	81	 	76	 	0.30	 	0.17	 	
Inventory purchase accounting adjustments per ounce/pound	 	—	 	1	 	—	 	0.02	 	0.26	 	
Cost of sales and amortization per ounce/pound attributable to non-controlling interests(3)	 	1	 	9	 	8	 	—	 	—	 	
Total costs per ounce/pound(5) – consolidated basis	 	$	455	 	$	374	 	$	311	 	$	1.15	 	$	1.22	 	

(1)	The 2005 comparative periods for copper have been omitted as Barrick did not produce any significant amounts of copper prior to the production from the copper mines acquired with Placer Dome.	
(2)	The aggregate amount of cost of sales for gold and copper is as per Barrick’s Consolidated Financial Statements.	
(3)	Relates to a 70% interest in Tulawaka and a 50% interest in South Deep prior to 2007.	
(4)	Based on Barrick’s equity interest.	
(5)	Includes amortization, amounts attributable to non-controlling interests and inventory purchase accounting adjustments.	
 
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Realized Price
 
Management uses a performance measure internally that represents revenues under U.S. GAAP, adjusted for unrealized gains and losses on non-hedge derivatives.  The use of this measure is intended to enable management to better understand the price realized each period for gold and copper sales.  Management believes that this measure better reflects Barrick’s performance in each period and is a better indication of its expected performance in future periods.  Changes in the unrealized mark-to-market value of non-hedge gold and copper derivatives occur each period due to changes in market factors such as spot and forward gold and copper prices.  The exclusion of such unrealized mark-to-market gains and losses from the presentation of this performance measure enables investors to understand performance based on the realized proceeds of selling gold and copper production.  Management includes such unrealized mark-to-market gains and losses in a list of “special items” that have affected its results.  These gains and losses relate to derivative instruments that mature in future periods, at which time the gains and losses will become realized. The amounts of these gains and losses reflect fair values based on market valuation assumptions at the end of each period and do not necessarily represent the amounts that will become realized on maturity.  Barrick’s realized price statistics, excluding unrealized mark-to-market value of non-hedge gold and copper derivatives, are intended to provide additional information, do not have any standardized meaning prescribed by U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.  The measures are not necessarily indicative of operating profit or cash flow from operations as determined under U.S.GAAP.  Other companies may calculate these measures differently. The following table reconciles these non-GAAP measures to the most directly comparable U.S. GAAP measure.
 
Illustration of Impact of Excluding Unrealized Gains and Losses on Non-Hedge Derivatives from Realized Prices

 	 	For the Years ended December 31	 	
 	 	Gold	 	Copper	 	
($ millions, except per ounce/pound data in dollars)	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Sales(1)	 	$5,027	 	$4,493	 	$2,348	 	$1,305	 	$1,137	 	
Sales attributable to non-controlling interests(2)	 	(38	)	52	 	(15	)	—	 	—	 	
Sales – equity basis	 	4,989	 	4,545	 	2,333	 	1,305	 	1,137	 	
Unrealized non-hedge gold/copper derivative (gains) losses	 	(2	)	7	 	—	 	(26	)	14	 	
Sales - equity basis, excluding non-hedge gold/copper derivative (gains) losses	 	4,987	 	4,552	 	2,333	 	1,279	 	1,151	 	
Sales (thousands of ounces/millions lbs)	 	8,055	 	8,390	 	5,320	 	401	 	376	 	
Realized gold/copper price per oz/lb (including unrealized non-hedge gold/copper derivative gains and losses)	 	619	 	542	 	439	 	3.25	 	3.02	 	
Unrealized non-hedge gold/copper derivative (gains) losses–per ounce/pound	 	—	 	1	 	—	 	(0.06	)	0.04	 	
Realized gold/copper price per oz/lb (excluding unrealized non-hedge gold/copper derivative gains and losses)	 	$	619	 	$	543	 	$	439	 	$	3.19	 	$	3.06	 	

(1)   As per Barrick’s income statement.
(2)   Gold sales include sales attributable to South Deep in 2006, included in discontinued operations.
 
95

 
ADDITIONAL INFORMATION
 
Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and options to purchase securities is contained in the Company’s Management Information Circular and Proxy Statement dated March 27, 2008. As well, additional financial information is provided in the Company’s 2007 Annual Report, in the Company’s Consolidated Financial Statements (as prepared under U.S. GAAP) and Management’s Discussion and Analysis of Financial and Operating Results for the year ended December 31, 2007 (as prepared under U.S. GAAP), each of which is available electronically from the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) (www.sedar.com) and from the SEC’s Electronic Document Gathering and Retrieval System (EDGAR) (www.sec.gov).  Additional Information relating to Barrick is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
 
96

 
Exhibit 99.2
 
Management’s Report on Internal Control
Over Financial Reporting
 
Barrick’s management is responsible for establishing and maintaining adequate internal control over financial reporting.
 
Barrick’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. Barrick’s management used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework to evaluate the effectiveness of Barrick’s internal control over financial reporting. Based on that evaluation, Barrick’s management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2007.
 
Based on Barrick management’s assessment, Barrick’s internal control over financial reporting is effective as of December 31, 2007.
 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, independent auditors, as stated in their report which is located on pages 78–80 of Barrick’s Financial Report 2007.
 
77

Exhibit 99.3
 
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 judgments 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.

	 	
Jamie C. Sokalsky	 	
Executive Vice President	 	
and Chief Financial Officer	 	
Toronto, Canada	 	
February 20, 2008	 	
 
76

Management’s Report on Internal Control
Over Financial Reporting
 
Barrick’s management is responsible for establishing and maintaining adequate internal control over financial reporting.
 
Barrick’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. Barrick’s management used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework to evaluate the effectiveness of Barrick’s internal control over financial reporting. Based on that evaluation, Barrick’s management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2007.
 
Based on Barrick management’s assessment, Barrick’s internal control over financial reporting is effective as of December 31, 2007.
 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, independent auditors, as stated in their report which is located on pages 78–80 of Barrick’s Financial Report 2007.
 
77

 
Independent
Auditors’ Report
 
Independent Auditors’ Report
 
To the Shareholders of
Barrick Gold Corporation
 
We have completed integrated audits of the consolidated financial statements and internal control over financial reporting of Barrick Gold Corporation (the “Company”) as at December 31, 2007 and 2006 and an audit of its 2005 consolidated financial statements. Our opinions, based on our audits, are presented below.
 
Consolidated financial statements
 
We have audited the accompanying consolidated balance sheets of Barrick Gold Corporation as at December 31, 2007 and December 31, 2006, and the related consolidated statements of income, cash flow, shareholders’ equity and comprehensive income for each of the years in the three year period ended December 31, 2007. 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 of the Company’s financial statements as at December 31, 2007 and December 31, 2006 and for each of the years then ended in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). We conducted our audit of the Company’s financial statements for the year ended December 31, 2005 in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. A financial statement audit also includes assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2007 and December 31, 2006 and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2007 in accordance with accounting principles generally accepted in the United States of America.
 
78

 
Internal control over financial reporting
 
We have also audited the Company’s internal control over financial reporting as at December 31, 2007, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included on page 77 of the 2007 Annual Report to Shareholders. Our responsibility is to express an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
 
We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exits, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as at December 31, 2007 based on criteria established in Internal Control – Integrated Framework issued by the COSO.

 
Chartered Accountants, Licensed Public Accountants
Toronto, Canada
February 20, 2008
 
79

 
Comments by Auditors for U.S. Readers on Canada-U.S. Reporting Differences
 
In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there is a change in accounting principles that has a material effect on the comparability of the Company’s financial statements, such as the changes described in Note 2e to these consolidated financial statements. Our report to the shareholders dated February 20, 2008 is expressed in accordance with Canadian reporting standards which do not require a reference to such a change in accounting principles in the Auditors’ report when the change is properly accounted for and adequately disclosed in the financial statements.

 
Chartered Accountants, Licensed Public Accountants
Toronto, Canada
February 20, 2008
 
80

 
Consolidated
Statements of Income

Barrick Gold Corporation	 	 	 	 	 	 	 	
For the years ended December 31 (in millions of United States dollars, except per share data)	 	2007	 	2006	 	2005	 	
Sales (notes 4 and 5)	 	$	6,332	 	$	5,630	 	$	2,348	 	
Costs and expenses	 	 	 	 	 	 	 	
Cost of sales(1)  (note 6)	 	3,184	 	2,741	 	1,198	 	
Amortization (note 4)	 	1,004	 	735	 	427	 	
Corporate administration	 	155	 	142	 	71	 	
Exploration (notes 4 and 7)	 	179	 	171	 	109	 	
Project development expense (note 7)	 	188	 	119	 	32	 	
Other expense (note 8a)	 	208	 	216	 	114	 	
Impairment charges (note 8b)	 	65	 	23	 	16	 	
 	 	4,983	 	4,147	 	1,967	 	
Interest income	 	141	 	110	 	38	 	
Interest expense (note 20b)	 	(113	)	(126	)	(3	)	
Other income (note 8c)	 	103	 	93	 	46	 	
 	 	131	 	77	 	81	 	
Income from continuing operations before income taxes and other items	 	1,480	 	1,560	 	462	 	
Income tax expense (note 9)	 	(341	)	(348	)	(60	)	
Non-controlling interests (note 2c)	 	14	 	1	 	(1	)	
Equity in investees (note 12)	 	(43	)	(4	)	(6	)	
Income from continuing operations	 	1,110	 	1,209	 	395	 	
Income from discontinued operations (note 3h)	 	9	 	297	 	—	 	
Income before cumulative effect of changes in accounting principles	 	1,119	 	1,506	 	395	 	
Cumulative effect of changes in accounting principles	 	—	 	—	 	6	 	
Net income for the year	 	$	1,119	 	$	1,506	 	$	401	 	
Earnings per share data (note 10)	 	 	 	 	 	 	 	
Income from continuing operations	 	 	 	 	 	 	 	
Basic	 	$	1.28	 	$	1.44	 	$	0.74	 	
Diluted	 	$	1.27	 	$	1.42	 	$	0.73	 	
Net income	 	 	 	 	 	 	 	
Basic	 	$	1.29	 	$	1.79	 	$	0.75	 	
Diluted	 	$	1.28	 	$	1.77	 	$	0.75	 	

(1)                      Exclusive of amortization (note 6).
 
The accompanying notes are an integral part of these consolidated financial statements.
 
81

 
Consolidated
Statements of Cash Flow

Barrick Gold Corporation	 	 	 	 	 	 	 	
For the years ended December 31 (in millions of United States dollars)	 	2007	 	2006	 	2005	 	
Operating Activities	 	 	 	 	 	 	 	
Net income	 	$	1,119	 	$	1,506	 	$	401	 	
Amortization (note 4)	 	1,004	 	735	 	427	 	
Income tax expense (notes 9 and 23)	 	341	 	348	 	60	 	
Gains on sale of investments (note 8c)	 	(71	)	(6	)	(17	)	
Revisions to AROs at closed mines (notes 8a and 21)	 	6	 	53	 	15	 	
Income taxes paid	 	(585	)	(280	)	(80	)	
Income from discontinued operations (note 3h)	 	(9	)	(297	)	—	 	
Other items (note 11a)	 	(73	)	63	 	(80	)	
Net cash provided by operating activities	 	1,732	 	2,122	 	726	 	
Investing Activities	 	 	 	 	 	 	 	
Property, plant and equipment	 	 	 	 	 	 	 	
Capital expenditures (note 4)	 	(1,046	)	(1,087	)	(1,104	)	
Sales proceeds	 	100	 	8	 	8	 	
Acquisitions, net of cash acquired of $13 million (2006: $1,108 million) (note 3)	 	(1,122	)	(208	)	—	 	
Investments (note 12)	 	 	 	 	 	 	 	
Purchases	 	(11	)	(369	)	(89	)	
Sales	 	625	 	46	 	10	 	
Reclassifications (note 12)	 	(66	)	—	 	—	 	
Other investing activities (note 11b)	 	(42	)	17	 	(5	)	
Net cash used in investing activities	 	(1,562	)	(1,593	)	(1,180	)	
Financing Activities	 	 	 	 	 	 	 	
Capital stock	 	 	 	 	 	 	 	
Proceeds on exercise of stock options	 	142	 	74	 	92	 	
Dividends (note 24a)	 	(261	)	(191	)	(118	)	
Long-term debt (note 20b)	 	 	 	 	 	 	 	
Proceeds	 	408	 	2,189	 	179	 	
Repayments	 	(1,128	)	(1,581	)	(59	)	
Settlement of derivative instruments acquired with Placer Dome	 	(197	)	(1,840	)	—	 	
Other financing activities	 	—	 	2	 	(1	)	
Net cash (used in) provided by financing activities	 	(1,036	)	(1,347	)	93	 	
Cash Flows of Discontinued Operations	 	 	 	 	 	 	 	
Operating activities	 	21	 	29	 	—	 	
Investing activities	 	—	 	2,788	 	—	 	
Financing activities	 	—	 	11	 	—	 	
 	 	21	 	2,828	 	—	 	
Effect of exchange rate changes on cash and equivalents	 	9	 	(4	)	—	 	
Net increase (decrease) in cash and equivalents	 	(836	)	2,006	 	(361	)	
Cash and equivalents at beginning of year (note 20a)	 	3,043	 	1,037	 	1,398	 	
Cash and equivalents at end of year (note 20a)	 	$	2,207	 	$	3,043	 	$	1,037	 	
 
The accompanying notes are an integral part of these consolidated financial statements.
 
82

 
Consolidated
Balance Sheets

Barrick Gold Corporation	 	 	 	 	 	
At December 31 (in millions of United States dollars)	 	2007	 	2006	 	
Assets	 	 	 	 	 	
Current assets	 	 	 	 	 	
Cash and equivalents (note 20a)	 	$	2,207	 	$	3,043	 	
Accounts receivable (note 14)	 	256	 	234	 	
Inventories (note 13)	 	1,118	 	931	 	
Other current assets (note 14)	 	707	 	588	 	
 	 	4,288	 	4,796	 	
Non-current assets	 	 	 	 	 	
Investments (note 12)	 	142	 	646	 	
Equity method investments (note 12)	 	1,074	 	327	 	
Property, plant and equipment (note 15)	 	8,596	 	8,390	 	
Intangible assets (note 16)	 	68	 	75	 	
Goodwill (note 17)	 	5,847	 	5,855	 	
Other assets (note 18)	 	1,936	 	1,421	 	
Total assets	 	$	21,951	 	$	21,510	 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	
Current liabilities	 	 	 	 	 	
Accounts payable	 	$	808	 	$	686	 	
Short-term debt (note 20b)	 	233	 	863	 	
Other current liabilities (note 19)	 	255	 	303	 	
 	 	1,296	 	1,852	 	
Non-current liabilities	 	 	 	 	 	
Long-term debt (note 20b)	 	3,153	 	3,244	 	
Asset retirement obligations (note 21)	 	892	 	843	 	
Deferred income tax liabilities (note 23)	 	841	 	798	 	
Other liabilities (note 22)	 	431	 	518	 	
Total liabilities	 	6,613	 	7,255	 	
Non-controlling interests	 	82	 	56	 	
Shareholders’ equity	 	 	 	 	 	
Capital stock (note 24)	 	13,273	 	13,106	 	
Retained earnings	 	1,832	 	974	 	
Accumulated other comprehensive income (note 25)	 	151	 	119	 	
Total shareholders’ equity	 	15,256	 	14,199	 	
Contingencies and commitments (notes 15 and 28)	 	 	 	 	 	
Total liabilities and shareholders’ equity	 	$	21,951	 	$	21,510	 	

The accompanying notes are an integral part of these consolidated financial statements.

Signed on behalf of the Board,	 	 	

Gregory C. Wilkins, Director	 	Steven J. Shapiro, Director	
 
83

 
Consolidated Statements
of Shareholders’ Equity

Barrick Gold Corporation 
For the years ended December 31 (in millions of United States dollars)	 	2007	 	2006	 	2005	 	
Common shares  (number in millions)	 	 	 	 	 	 	 	
At January 1	 	864	 	538	 	534	 	
Issued on exercise of stock options (note 26a)	 	6	 	3	 	4	 	
Issued on acquisition of Placer Dome	 	—	 	323	 	—	 	
At December 31	 	870	 	864	 	538	 	
Common shares	 	 	 	 	 	 	 	
At January 1	 	$	13,106	 	$	4,222	 	$	4,129	 	
Issued on exercise of stock options (note 26a)	 	142	 	74	 	93	 	
Issued on acquisition of Placer Dome (note 3g)	 	—	 	8,761	 	—	 	
Options issued on acquisition of Placer Dome (note 3g)	 	—	 	22	 	—	 	
Recognition of stock option expense (note 26a)	 	25	 	27	 	—	 	
At December 31	 	13,273	 	13,106	 	4,222	 	
Retained earnings (deficit)	 	 	 	 	 	 	 	
At January 1	 	974	 	(341	)	(624	)	
Net income	 	1,119	 	1,506	 	401	 	
Dividends (note 24a)	 	(261	)	(191	)	(118	)	
At December 31	 	1,832	 	974	 	(341	)	
Accumulated other comprehensive income (loss) (note 25)	 	151	 	119	 	(31	)	
Total shareholders’ equity at December 31	 	$	15,256	 	$	14,199	 	$	3,850	 	
 
Consolidated Statements
of Comprehensive Income

Barrick Gold Corporation
For the years ended December 31 (in millions of United States dollars)	 	2007	 	2006	 	2005	 	
Net income	 	$	 1,119	 	$	1,506	 	$	 401	 	
Other comprehensive income (loss), net of tax (note 25)	 	32	 	150	 	(100	)	
Comprehensive income	 	$	1,151	 	$	1,656	 	$	301	 	
 
The accompanying notes are an integral part of these consolidated financial statements.
 
84

 
Notes to Consolidated
Financial Statements
 
Barrick Gold Corporation. Tabular dollar amounts in millions of United States dollars, unless otherwise shown. References to C$, A$, ZAR, EUR, CLP, ARS, PGK and TZS are to Canadian dollars, Australian dollars, South African Rands, Euros, Chilean Pesos, Argentinean Pesos, Papua New Guinea Kina and Tanzanian Schillings respectively.
 
1  ·   Nature of Operations
 
Barrick Gold Corporation (“Barrick” or the “Company”) principally engages in the production and sale of gold, as well as related activities such as exploration and mine development. We also produce some copper and hold interests in a platinum group metals development project and a nickel development project, both located in Africa, and a platinum group metals project located in Russia. Our mining operations are concentrated in our four regional business units: North America, South America, Africa and Australia Pacific. We sell our gold production into the world market and we sell our copper production into the world market and to private customers.
 
2  ·  Significant Accounting Policies
 
a) Basis of Preparation
 
These consolidated financial statements have been prepared under United States generally accepted accounting principles (“US GAAP”). In 2007, we amended the income statement classification of certain income and expense items, including non-hedge derivative gains and losses (see note 2e), to provide enhanced disclosure of significant business activities and reflect the increasing significance of amounts spent on those activities. To ensure comparability of financial information, prior year amounts have been reclassified to reflect changes in the financial statement presentation.
 
b) Principles of Consolidation
 
These consolidated financial statements include the accounts of Barrick Gold Corporation and those entities we have the ability to control either through voting rights or means other than voting rights. FIN 46R provides guidance on the identification and reporting of entities controlled through means other than voting rights and defines such entities as variable interest entities (“VIEs”). We apply this guidance to all entities, including those in the development stage, except for unincorporated joint ventures, which are outside the scope of FIN 46R. For VIEs where we are the primary beneficiary, we consolidate the entity and record a non-controlling interest, measured initially at its estimated fair value, for the interest held by other entity owners. For VIEs where we are not the primary beneficiary we use the equity method of accounting.
 
For incorporated joint ventures (“JVs”) where we have the ability to exercise control, subject in some cases to protective rights held by our JV partners, we consolidate the JV and record a non-controlling interest for the interest held by our JV partner. For incorporated JVs where we do not have the ability to exercise control, we account for our investment using the equity method of accounting. For unincorporated JVs under which we hold an undivided interest in the assets and liabilities of the joint venture, we include our pro rata share of the assets and liabilities in our financial statements.
 
85

 
The following table illustrates our policy used to account for significant entities where we hold less than a 100% economic interest. We consolidate all other wholly owned entities.
 
Consolidation Method at December 31, 2007

 	 	Entity type at December 31, 2007	 	Economic Interest	 	Method	 	
North America	 	 	 	 	 	 	 	
Round Mountain Mine	 	Unincorporated JV	 	50%	 	Pro Rata	 	
Hemlo Property Mine	 	Unincorporated JV	 	50%	 	Pro Rata	 	
Marigold Mine	 	Unincorporated JV	 	33%	 	Pro Rata	 	
Cortez Mine(1)	 	Unincorporated JV	 	60%	 	Pro Rata	 	
Turquoise Ridge Mine	 	Unincorporated JV	 	75%	 	Pro Rata	 	
Pueblo Viejo Project	 	VIE	 	60%	 	Consolidation	 	
Donlin Creek Project(2)	 	VIE	 	50%	 	Equity Method	 	
South America	 	 	 	 	 	 	 	
Cerro Casale Project	 	VIE	 	51%	 	Equity Method	 	
Australia	 	 	 	 	 	 	 	
Kalgoorlie Mine	 	Unincorporated JV	 	50%	 	Pro Rata	 	
Porgera Mine(3)	 	Unincorporated JV	 	95%	 	Pro Rata	 	
Reko Diq Project(4)	 	VIE	 	37.5%	 	Equity Method	 	
Africa	 	 	 	 	 	 	 	
Tulawaka Mine	 	Corporate Joint Venture	 	70%	 	Consolidation	 	
Kabanga Project(5)	 	VIE	 	50%	 	Equity Method	 	
Sedibelo Project(6)	 	Not Applicable	 	50%	 	Consolidation	 	
Russia	 	 	 	 	 	 	 	
Fedorova Project(7)	 	VIE	 	50%	 	Consolidation	 	

(1)                    Including Cortez Hills Project.
 
(2)                    For the period from January 2006 until November 2007, we recorded our proportionate 70% share of project expenditures in project development expense based on the previous joint venture agreement. Effective in November 2007, a new agreement was reached with our partner which caused us to classify our interest as an equity method investment on a prospective basis (note 12).
 
(3)                    We hold an undivided interest in our share of assets and liabilities at the Porgera mine. In August 2007, we increased our ownership interest from 75% to 95% (note 3e).
 
(4)                    We hold a 50% interest in Atacama Copper, which has a 75% interest in the Reko Diq project. We use the equity method to account for our interest in Atacama Copper (note 12).
 
(5)                    In accordance with an agreement with our partner, in 2007 and 2006 our partner was responsible for funding 100% of exploration and project expenditures and we did not record any amounts for our economic interest in this period. After our partner has funded $145 million of exploration and project expenditures we will be responsible for funding our share of future expenditures. At December 31, 2007 our partner had spent $103 million of this funding commitment.
 
(6)                    Until completion of a bankable feasibility study (“BFS”), we are responsible for funding 100% of project expenditures at the Sedibelo project. In the year ended December 31, 2007, we recorded project development expenses totaling $22 million (2006: $10 million). On completion of a BFS, as part of our earn-in agreement, we are entitled to earn a 50% economic interest in the entity that owns the Sedibelo project and to recoup from our partner their 50% share of the costs to complete the BFS.
 
(7)                    In accordance with our agreement with minority shareholders, we have an earn-in option for an additional 29% interest in the entity that owns the rights to the Fedorova project (for a total 79% interest), provided that we deliver a BFS by January 1, 2009. We are responsible for funding 100% of project expenditures until the BFS is finalized, and therefore a non-controlling interest has not been recorded through December 31, 2007.
 
86

Entities Consolidated using the Pro Rata Method Income Statement and Cash Flow Information (100%)

For the years ended December 31	 	2007	 	2006	 	2005	 	
Revenues	 	$	2,076	 	$	1,776	 	$	1,009	 	
Costs and expenses	 	(1,665	)	(1,457	)	(796	)	
Net income	 	$	411	 	$	319	 	$	213	 	
Operating activities(1)	 	$	147	 	$	473	 	$	318	 	
Investing activities(1)	 	$	(139	)	$	(284	)	$	(75	)	
Financing activities(1),(2)	 	$	81	 	$	(185	)	$	(237	)	

(1)    Net cash inflow (outflow).
 
(2)    Includes cash flows between the joint ventures and joint venture partners.
 
Balance Sheet Information (100%)

At December 31	 	2007	 	2006	 	
Assets	 	 	 	 	 	
Inventories	 	$	430	 	$	365	 	
Property, plant and equipment	 	2,620	 	2,468	 	
Other assets	 	462	 	126	 	
 	 	$	3,512	 	$	2,959	 	
Liabilities	 	 	 	 	 	
Current liabilities	 	$	216	 	$	205	 	
Long-term obligations	 	267	 	202	 	
Deferred tax	 	47	 	42	 	
 	 	$	530	 	$	449	 	
 
Non-controlling Interests – Income Statement

For the years ended December 31	 	2007	 	2006	 	2005	 	
Pueblo Viejo project	 	$	30	 	$	9	 	$	—	 	
Tulawaka mine	 	(16	)	(8	)	(2	)	
Other	 	—	 	—	 	1	 	
 	 	$	14	 	$	1	 	$	(1	)	
 
c)               Foreign Currency Translation
 
The functional currency of all our operations is the US dollar. We translate non-US dollar balances into US dollars as follows:
 
·                  Property, plant and equipment, intangible assets and equity method investments using historical rates;
·                  Available-for-sale securities using closing rates with translation gains and losses recorded in other comprehensive income;
·                  Asset retirement obligations using historical rates;
·                  Long-term debt using closing rates;
·                  Deferred tax assets and liabilities using closing rates with translation gains and losses recorded in income tax expense;
·                  Other assets and liabilities using closing rates with translation gains and losses recorded in other income/ expense; and
·                  Income and expenses using average exchange rates, except for expenses that relate to non-monetary assets and liabilities measured at historical rates, which are translated using the same historical rate as the associated non-monetary assets and liabilities.
 
d)               Use of Estimates
 
The preparation of these financial statements requires us to make estimates and assumptions. The most significant ones are: quantities of proven and probable mineral reserves; fair values of acquired assets and liabilities under business combinations, including the value of mineralized material beyond proven and probable mineral reserves; future costs and expenses to produce proven and probable mineral reserves; future commodity prices for gold, copper, silver and other products; the future cost of asset retirement obligations; amounts and likelihood of contingencies; the fair values of reporting units that include goodwill; and uncertain tax positions. Using these and other estimates and assumptions, we make various decisions in preparing the financial statements including:
 
·                  The treatment of expenditures at mineral properties prior to when production begins as either an asset or an expense (note 15);
·                  Whether tangible and intangible long-lived assets are impaired, and if so, estimates of the fair value of those assets and any corresponding impairment charge (note 15);
·                  Our ability to realize deferred income tax assets and amounts recorded for any corresponding valuation allowances (note 23);
·                  The useful lives of tangible and intangible long-lived assets and the measurement of amortization (note 15);
·                  The fair value of asset retirement obligations (note 21);
·                  Whether to record a liability for loss contingencies and the amount of any liability (notes 15 and 28);
·                  Whether investments are other than temporarily impaired (note 12);
·                  The amount of income tax expense (note 9);
·                  Allocations of the purchase price in business combinations to assets and liabilities acquired, including goodwill (notes 3 and 17);
·                  Whether any impairments of goodwill have occurred and if so the amounts of impairment charges (note 17);
·                  Transfers of value beyond proven and probable reserves to amortized assets (note 15);
·                  Amounts recorded for uncertain tax positions (note 23), and
·                  The timing and amounts recorded of proceeds for insurable losses under insurance claims (note 15).
 
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As the estimation process is inherently uncertain, actual future outcomes could differ from present estimates and assumptions, potentially having material future effects on our financial statements.
 
e)               Accounting Changes
 
Accounting Changes Implemented in 2007
 
FSP AUG AIR-1 – Accounting for Planned Major Maintenance Activities (FSP AIR-1)
 
On January 1, 2007, we adopted FSP AIR-1 which amends guidance from the AICPA Industry Audit Guide, Audits of Airlines (“Airline Guide”) with respect to planned major maintenance activities and makes this guidance applicable to entities in all industries. Of the three methods of accounting for planned major maintenance allowed by FSP AIR-1, we adopted the built-in overhaul method. The built-in overhaul method is based on segregation of plant and equipment costs into those that should be depreciated over the useful life of the asset and those that require overhaul at periodic intervals. The estimated cost of the overhaul component included in the purchase price of an asset is set up separately from the cost of the asset and is amortized to the expected date of the initial overhaul. The cost of the initial overhaul is then capitalized and amortized to the next overhaul, at which time the process is repeated. We adopted FSP AIR-1 on January 1, 2007. The implementation of this standard did not have a material impact on our Financial Statements.
 
FASB Interpretation No. 48 – Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (Accounting for Income Taxes) (FIN 48)
 
In June 2006, the Financial Accounting Standards Board (FASB) issued FIN 48 to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006.
 
We adopted the provisions of FIN 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. As a result of the implementation of FIN 48, no adjustment was required to the liability for unrecognized tax benefits.
 
Change in Financial Statement Presentation – Derivative Gains and Losses
 
In 2007, we made a change in the financial statement classification of changes in the fair value of derivative instruments that do not qualify for hedge accounting under FAS 133 (non-hedge derivatives), which was retroactively applied. Prior to this change, we recorded the change in fair value of all non-hedge derivative gains and losses as a component of other income, with the exception of changes in the fair value of embedded derivatives implicit in concentrate sales contracts, which were recorded as a component of revenue.
 
Beginning in 2007, we record changes in the fair value of non-hedge derivatives in a manner consistent with the intended purpose of the instrument as follows: gold and copper derivative instruments are recorded in revenue; silver and fuel derivative contracts are recorded in cost of sales; interest rate swaps are recorded in interest income or interest expense, depending on the intended purpose of the swap; and share purchase warrants are recorded in other income.
 
The impact of this change in accounting policy for prior periods was as follows:

 	 	Increase
(decrease)	 	
For the years ended December 31	 	2006	 	2005	 	
Gold revenue	 	$	8	 	$	(2	)	
Copper revenue	 	(14	)	—	 	
Cost of sales	 	5	 	(16	)	
Other expense	 	—	 	20	 	
Interest income	 	9	 	—	 	
Interest expense	 	—	 	(4	)	
Other income	 	2	 	2	 	

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Accounting Changes Implemented in 2006
 
FAS 123R, Accounting for Stock-Based Compensation
 
On January 1, 2006, we adopted FAS 123R. Prior to this date we applied FAS 123 and accounted for stock options under the intrinsic value method, recording compensation cost for stock options as the excess of the market price of the stock at the grant date of an award over the exercise price. Historically, the exercise price of stock options equaled the market price of the stock at the grant date resulting in no recorded compensation cost. We provided pro forma disclosure of the effect of expensing the fair value of stock options.
 
We adopted FAS 123R using the modified prospective method, which meant that financial statements for periods prior to adoption were not restated. From January 1, 2006 we recorded compensation expense for all new stock option grants based on the grant date fair value, amortized on a straight-line basis over the vesting period. We also recorded compensation expense for the unvested portion of stock option grants occurring prior to January 1, 2006, based on the grant date fair value that was previously estimated and used to provide for pro forma disclosures for financial statement periods prior to 2006, amortized on a straight-line basis over the remaining vesting period for those unvested stock options. Details of stock-based compensation expense are included in note 26.
 
The application of FAS 123R to Restricted Share Units (RSUs) and Deferred Share Units (DSUs) did not result in any significant change in the method of accounting for RSUs or DSUs.
 
FAS 151, Inventory Costs
 
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 was applicable prospectively from January 1, 2006 and we modified our inventory accounting policy consistent with its requirements. Under our modified accounting policy for inventory, production-type costs that are considered abnormal are excluded from inventory and charged directly to the cost of sales. Interruptions to normal activity levels at a mine could occur for a variety of reasons including equipment failures and major maintenance activities, strikes, power supply interruptions and adverse weather conditions. When such interruptions occur we evaluate the impact on the cost of inventory produced in the period, and to the extent the actual cost exceeds the cost based on normal capacity we expense any excess directly to cost of sales. The adoption of FAS 151 did not have any significant effect on our financial statements.
 
FAS 158, Employers’ Accounting for Defined Benefit Pension and Other Post-retirement Plans
 
In September 2006, the FASB issued FAS 158 that requires employers to fully recognize the obligations associated with single-employer defined benefit pension, retiree health care and other post-retirement plans in their financial statements. FAS 158 was developed to respond to concerns that past accounting standards needed to be revisited to improve the transparency and usefulness of the information reported. Under past accounting standards, the funded status of an the difference between the plan assets and obligations) was not completely reported in the balance sheet. Employers reported an asset or liability that differed from the funded status because previous accounting standards allowed employers to delay recognition of certain changes in plan assets and obligations that affected the costs of providing such benefits. Past standards only required an employer to disclose the funded status of its plans in the notes to the financial statements.
 
FAS 158 requires recognition of the funded status of a benefit plan on the balance sheet – measured as the difference between plan assets at fair value (with limited exceptions) and the benefit obligation, as at the fiscal year-end. For a pension plan, the benefit obligation is the projected benefit obligation; for any other post-retirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated post-retirement benefit obligation. FAS 158 also requires recognition, as a component of other comprehensive income, net of tax, of the gains or losses and prior service costs or credits that arise during the period but are not recorded as components of net periodic benefit cost. Amounts recorded in accumulated other comprehensive income are adjusted as they are subsequently recorded as components of net periodic cost. FAS 158 requires disclosure of information about certain effects of net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation.
 
We adopted the provisions of FAS 158 in 2006, as required, except for the requirement to measure the plan assets and benefit obligations at the fiscal year-end, which is effective in fiscal years ending after December 15, 2008. The adoption of FAS 158 did not significantly impact our financial statements.
 
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SEC Staff Accounting Bulletin No. 108 – Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108)
 
In September 2006, the SEC issued SAB 108, which was effective in fourth quarter 2006 for Barrick. SAB 108 addresses the multiple methods used to quantify financial statement misstatements and evaluate the accumulation of misstatements on the balance sheet. SAB 108 requires registrants to evaluate prior period misstatements using both a balance sheet approach (“the iron curtain method”) and an income statement approach (“the rollover method”). Barrick historically used the rollover method in quantifying potential financial statement misstatements. As required by SAB 108, we re-evaluated prior period immaterial errors using the iron curtain method. Based upon the result of our evaluation, we did not identify any material errors or misstatements that were previously deemed not material under the rollover approach.
 
Accounting Changes Implemented in 2005
 
EITF 04-6 Accounting for Stripping Costs Incurred During Production in the Mining Industry
 
In 2005, we adopted EITF 04-6 and changed our accounting policy for stripping costs incurred in the production phase. Prior to adopting EITF 04-6, we capitalized stripping costs incurred in the production phase, and we recorded amortization of the capitalized costs as a component of the cost of inventory produced each period. Under EITF 04-6, stripping costs are recorded directly as a component of the cost of inventory produced each period. Using an effective date of adoption of January 1, 2005, we recorded a decrease in capitalized mining costs of $226 million; an increase in the cost of inventory of $232 million; and a $6 million credit to earnings for the cumulative effect of this change. For 2005, the effect of adopting EITF 04-6 compared to the prior policy was an increase in net income of $44 million ($0.08 per share), excluding the cumulative effect on prior periods.
 
f) Accounting Developments
 
FAS 157, Fair Value Measurements (FAS 157)
 
In September 2006, the FASB issued FAS 157 that provides enhanced guidance for using fair value to measure assets and liabilities. FAS 157 is meant to ensure that the measurement of fair value is more comparable and consistent, and improve disclosure about fair value measures. As a result of FAS 157, there is now a common definition of fair value to be used throughout US GAAP. FAS 157 applies whenever US GAAP requires (or permits) measurement of assets or liabilities at fair value. FAS 157 does not address when the use of fair value measurements is required.
 
In December 2007 the FASB issued FSP FAS 157-b, which provided a one year deferral until January 1, 2009 for the implementation of FAS 157 for non-financial assets and liabilities. The deferral is intended to provide the FASB additional time to consider the effects of various implementation issues that have arisen, or that may arise, from the application of FAS 157. Barrick is required to implement FAS 157 for financial assets and liabilities that are carried at fair value effective January 1, 2008. We do not expect the adoption of FAS 157 to have any significant impact on valuations of investments or derivative instruments.
 
FAS 159 – The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159)
 
In February 2007 the FASB issued FAS 159, which allows an irrevocable option, Fair Value Option (FVO), to carry eligible financial assets and liabilities at fair value, with the election made on an instrument-by-instrument basis. Changes in fair value for these instruments would be recorded in earnings. The objective of FAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.
 
Under FAS 159 an entity must elect whether to use the FVO on the date an item is initially recognized, with limited exceptions. Since the FVO is an instrument by instrument election, companies may record identical financial assets and liabilities either at fair value or on another measurement basis permitted by US GAAP, such as amortized cost. One exception to the instrument-by-instrument guidance is that for investments that would otherwise fall under equity method accounting, the election must be made for all of the investor’s financial interests (equity and debt, including guarantees) in the same entity.
 
FAS 159 will be effective for Barrick beginning in first quarter 2008 and must be applied prospectively. Barrick will not adopt the FVO on its eligible financial instruments, which include available-for-sale securities, equity method investments and long-term debt, existing as at January 1, 2008.
 
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FAS 141(R), Business Combinations (FAS 141(R))
 
In December 2007 the FASB issued FAS 141(R), which will replace FAS 141 prospectively for business combinations consummated after the effective date of December 15, 2008. Early adoption is not permitted. Under FAS 141(R), business acquisitions will be accounted for under the “acquisition method”, compared to the “purchase method” mandated by FAS 141.
 
The more significant changes that will result from applying the acquisition method include: (i) the definition of a business is broadened to include development stage entities, and therefore more acquisitions will be accounted for as business combinations rather than asset acquisitions; (ii) the measurement date for equity interests issued by the acquirer is the acquisition date instead of a few days before and after terms are agreed to and announced, which may significantly change the amount recorded for the acquired business if share prices differ from the agreement and announcement date to the acquisition date; (iii) all future adjustments to income tax estimates will be recorded to income tax expense, whereas under FAS 141 certain changes in income tax estimates were recorded to goodwill; (iv) acquisition-related costs of the acquirer, including investment banking fees, legal fees, accounting fees, valuation fees, and other professional or consulting fees will be expensed as incurred, whereas under FAS 141 these costs are capitalized as part of the cost of the business combination; (v) the assets acquired and liabilities assumed are recorded at 100% of fair value even if less than 100% is obtained, whereas under FAS 141 only the controlling interest’s portion is recorded at fair value; and (vi) the non-controlling interest will be recorded at its share of fair value of net assets acquired, including its share of goodwill, whereas under FAS 141 the non-controlling interest is recorded at its share of carrying value of net assets acquired with no goodwill being allocated.
 
FAS 160, Non-controlling Interests in Consolidated Financial Statements (FAS 160)
 
In December 2007 the FASB issued FAS 160, which is effective for fiscal years beginning after December 15, 2008. Under FAS 160, non-controlling interests will be measured at 100% of the fair value of assets acquired and liabilities assumed. Under current standards, the non-controlling interest is measured at book value. For presentation and disclosure purposes, non-controlling interests will be classified as a separate component of shareholders’ equity. In addition, FAS 160 will change the manner in which increases/decreases in ownership percentages are accounted for. Changes in ownership percentages will be recorded as equity transactions and no gain or loss will be recognized as long as the parent retains control of the subsidiary. When a parent company deconsolidates a subsidiary but retains a non-controlling interest, the non-controlling interest is re-measured at fair value on the date control is lost and a gain or loss is recognized at that time. Under FAS 160, accumulated losses attributable to the non-controlling interests are no longer limited to the original carrying amount, and therefore non-controlling interests could have a negative carrying balance. The provisions of FAS 160 are to be applied prospectively with the exception of the presentation and disclosure provisions, which are to be applied for all prior periods presented in the financial statements. Early adoption is not permitted.
 
g) Other Notes to the Financial Statements

 	 	Note	 	Page	 	
Significant acquisitions and divestitures	 	3	 	92	 	
Segment information	 	4	 	95	 	
Revenue and gold sales contracts	 	5	 	97	 	
Cost of sales	 	6	 	99	 	
Exploration and project development expense	 	7	 	100	 	
Other (income) expense	 	8	 	100	 	
Income tax expense	 	9	 	101	 	
Earnings per share	 	10	 	102	 	
Cash flow – other items	 	11	 	103	 	
Investments	 	12	 	104	 	
Inventories	 	13	 	107	 	
Accounts receivable and other current assets	 	14	 	109	 	
Property, plant and equipment	 	15	 	109	 	
Intangible assets	 	16	 	111	 	
Goodwill	 	17	 	112	 	
Other assets	 	18	 	113	 	
Other current liabilities	 	19	 	113	 	
Financial instruments	 	20	 	113	 	
Asset retirement obligations	 	21	 	123	 	
Other non-current liabilities	 	22	 	124	 	
Deferred income taxes	 	23	 	124	 	
Capital stock	 	24	 	126	 	
Other comprehensive income (loss)	 	25	 	127	 	
Stock-based compensation	 	26	 	127	 	
Post-retirement benefits	 	27	 	131	 	
Litigation and claims	 	28	 	134	 	
 
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3 · Significant Acquisitions and Divestitures

For the years ended December 31	 	2007	 	2006	 	2005	 	
Cash paid on acquisition(1)	 	 	 	 	 	 	 	
Arizona Star	 	$	722	 	$	—	 	$	—	 	
Porgera (additional 20% interest)	 	259	 	—	 	—	 	
Kainantu	 	135	 	—	 	—	 	
Pioneer Metals	 	6	 	48	 	—	 	
Placer Dome	 	—	 	160	 	—	 	
 	 	$	1,122	 	$	208	 	$	—	 	
Cash proceeds on sale(1)	 	 	 	 	 	 	 	
Celtic(2)	 	21	 	—	 	—	 	
Paddington Mill(3)	 	30	 	—	 	—	 	
Grace Claim(3)	 	54	 	—	 	—	 	
 	 	$	105	 	$	—	 	$	—	 	
Cash proceeds on sale of
discontinued operations	 	 	 	 	 	 	 	
South Deep mine	 	$	—	 	$	1,209	 	$	—	 	
Operations sold to Goldcorp	 	—	 	1,619	 	—	 	
 	 	$	—	 	$	2,828	 	$	—	 	

(1)           All amounts are presented net of cash acquired/divested. Potential deferred tax adjustments may arise from these acquisitions.
 
(2)           Included within investment sales in the Consolidated Statement of Cash Flow.
 
(3)           Included within Property, Plant and Equipment sales in the Consolidated Statement of Cash flow.
 
a) Acquisition of 40% Interest in Cortez
 
In February 2008, our subsidiary, Barrick Gold Finance Inc., entered into a definitive purchase agreement with Kennecott Explorations (Australia) Ltd., a subsidiary of Rio Tinto plc (“Rio Tinto”) to acquire its 40% interest in the Cortez property for $1.695 billion in cash consideration, due on closing, with a further $50 million payable if and when we add an additional 12 million ounces of contained gold resources to our December 31, 2007 reserve statement for Cortez. A sliding scale royalty is payable to Rio Tinto on 40% of all production in excess of 15 million ounces on and after January 1, 2008. The acquisition will consolidate 100% ownership for Barrick of the existing Cortez mine and the Cortez Hills development project plus any future potential from the property. We expect to fund the purchase price through a combination of our existing cash balances and by drawing down our line of credit. The agreement is subject to the normal and customary closing conditions and is expected to close in the first quarter of 2008.
 
b) Acquisition of Arizona Star Resources Corporation (“Arizona Star”)
 
On December 19, 2007, we paid $722 million which reflects the purchase price net of cash acquired of $8 million, for 40.7 million common shares of Arizona Star. These shares represent 94% of the outstanding common shares of Arizona Star on a fully-diluted basis. It is our intention to acquire the remaining outstanding Arizona Star common shares by way of a compulsory acquisition. The Offer price for Arizona Star’s common shares was CDN$18.00. Arizona Star owns a 51% interest in the Cerro Casale deposit in the Maricunga district of Region III in Chile. The acquisition of Arizona Star has been accounted for as an asset purchase. The purchase price allocation will be finalized in 2008 with the determination of the deferred tax portion, if any.
 
Purchase Cost

Purchase cost per agreement	 	$	728	 	
Purchase price adjustments and transaction costs	 	2	 	
Less: cash acquired	 	(8	)	
 	 	$	722	 	
 
Preliminary Purchase Price Allocation

Equity investment in Cerro Casale project	 	$	732	 	
Total assets	 	732	 	
Accounts payable	 	8	 	
Non-controlling interest	 	2	 	
Total liabilities	 	10	 	
Net assets acquired	 	$	722	 	
 
c) Kainantu Acquisition
 
On December 12, 2007 we completed the acquisition of the Kainantu mineral property and various exploration licenses in Papua New Guinea from Highlands Pacific Limited for $135 million in cash, which reflects the purchase price, net of $7 million withheld pending certain permit renewals. The acquisition has been accounted for as a purchase of assets. The purchase price allocation will be finalized in 2008.
 
d) Sale of Paddington Mill
 
In 2007, we completed the sale of the Paddington mill and associated land tenements in Australia to Norton Goldfields Limited and the sale of certain land tenements to Apex Minerals for total proceeds of $32 million, $30 million in cash and $2 million in Apex Minerals NL shares, respectively. We recorded a gain of $8 million in other income on closing.
 
e) Porgera Mine Acquisition
 
In 2007, we completed the acquisition of an additional 20% interest in the Porgera mine in Papua New Guinea from Emperor Mines Limited, for cash consideration of $259 million. The acquisition has been accounted for as a business combination. Following this transaction our interest in the Porgera mine increased from 75% to 95%. The Government of Papua New Guinea holds the remaining 5% undivided interest in Porgera. We have entered into a call option deed regarding the possible sale of up to a 5% interest to the Government of Papua New Guinea, for the proportionate acquisition cost paid by Barrick.

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Purchase Cost	 	 	 	
Purchase cost agreement with Emperor Mines Limited	 	$	250	 	
Purchase price adjustments and transaction costs	 	14	 	
Less: cash acquired	 	(5	)	
 	 	$	259	 	

Summary Purchase Price Allocation	 	 	 	
Inventories	 	$	17	 	
Other current assets	 	2	 	
Property, plant and equipment	 	145	 	
Non-current ore in stockpiles	 	60	 	
Deferred tax assets	 	20	 	
Goodwill	 	34	 	
Total assets	 	278	 	
Current liabilities	 	11	 	
Asset retirement obligations	 	8	 	
Total liabilities	 	19	 	
Net assets acquired	 	$	259	 	
 
f)  Acquisition of Pioneer Metals Inc. (“Pioneer”)
 
In 2006, we acquired control of Pioneer through the acquisition of 59.2 million shares, representing approximately 91% of the outstanding shares of Pioneer, for cash consideration of $54 million. Pioneer had a portfolio of exploration properties and interests, including the Grace property which is adjacent to NovaGold Resources Inc.’s (“NovaGold”) Galore Creek project. In 2007, we acquired all of the remaining outstanding shares of Pioneer for cash consideration of $6 million and recorded purchase price adjustments totaling $3 million.

Purchase Cost	 	 	 	
Purchase cost	 	$	63	 	
Less: cash acquired	 	(9	)	
 	 	$	54	 	
 
The acquisition has been accounted for as a purchase of assets. The purchase price allocation was as follows:

Summary Purchase Price Allocation	 	 	 	
Property, plant and equipment	 	$	69	 	
Total assets	 	69	 	
Current liabilities	 	—	 	
Deferred tax liabilities	 	15	 	
Total liabilities	 	15	 	
Net assets acquired	 	$	54	 	
 
In third quarter 2007 we sold the Grace property to Nova-Gold for cash proceeds of $54 million. There was no after-tax gain or loss arising on closing.
 
g)  Acquisition of Placer Dome Inc. (“Placer Dome”)
 
In first quarter 2006 we acquired 100% of the outstanding common shares of Placer Dome. Placer Dome was one of the world’s largest gold mining companies. It had 12 mining operations based in North America, South America, Africa and Australia/Papua New Guinea, as well as four projects that are in various stages of exploration/development. Its most significant mines were Cortez in the United States, Zaldívar in Chile, Porgera in Papua New Guinea, North Mara in Tanzania and South Deep in South Africa. The most significant projects are Cortez Hills and Donlin Creek LLC (“Donlin Creek”) in the United States, and Pueblo Viejo in the Dominican Republic. The business combination between ourselves and Placer Dome was an opportunity to create a Canadian-based leader in the global gold mining industry, which strengthens our competitive position, including in respect of gold reserves, gold production, growth opportunities, and balance sheet strength.
 
Accounting for the Placer Dome Acquisition
 
The Placer Dome acquisition has been accounted for as a purchase business combination, with Barrick as the accounting acquirer. We acquired Placer Dome on January 20, 2006, with the results of operations of Placer Dome consolidated from January 20, 2006 onwards. The purchase cost was $10 billion and was funded through a combination of common shares issued, the drawdown of a $1 billion credit facility, and cash resources.

Value of 322.8 million Barrick common shares issued at $27.14 per share(1)	 	$	8,761	 	
Value of 2.7 million fully vested stock options	 	22	 	
Cash	 	1,239	 	
Transaction costs	 	32	 	
 	 	$	10,054	 	

(1)    The measurement of the common share component of the purchase consideration represents the average closing price on the New York Stock Exchange for the two days prior to and two days after the public announcement on December 22, 2005 of our final offer for Placer Dome.
 
In accordance with the purchase method of accounting, the purchase cost was allocated to the underlying assets acquired and liabilities assumed based primarily upon their estimated fair values at the date of acquisition. The estimated fair values were based on a combination of independent appraisals and internal estimates. The excess of purchase cost over the net identifiable tangible and intangible assets acquired represents goodwill. Goodwill arising on
 
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the acquisition of Placer Dome principally represents the ability for the company to continue as a going concern by finding new mineral reserves as well as the value of synergies that we expect to realize as a direct consequence of the acquisition of Placer Dome. Details of the allocation of goodwill arising on acquisition are included in note 17.
 
On the acquisition of Placer Dome in first quarter 2006, we completed a preliminary purchase price allocation for assets and liabilities acquired. Amortization expense for the first three quarters of 2006 was based on this preliminary purchase price allocation. In fourth quarter 2006, we completed final purchase price allocations and updated our calculations of amortization expense prospectively. The effect of the final purchase price allocation on the amount of amortization expense recorded in 2007 compared to amounts recorded in 2006 based on the preliminary allocation, was an increase of $189 million.
 
The principal valuation methods for major classes of assets and liabilities were:

Inventory	 	Finished goods and work in process valued at estimated selling prices less disposal costs, costs to complete and a reasonable profit allowance for the completing and selling effort.	
 	 	 	
Building and equipment	 	Reproduction and/or replacement cost or market value for current function and service potential, adjusted for physical, functional and economic obsolescence.	
 	 	 	
Proven and probable reserves and value beyond proven and probable reserves at producing mines	 	Multi-period excess earnings approach considering the prospective level of cash flows and fair value of other assets at each mine.	
 	 	 	
Development projects	 	Discounted future cash flows considering the prospective level of cash flows from future operations and necessary capital cost expenditures.	
 	 	 	
Exploration properties	 	Appraised values considering costs incurred, earn-in agreements and comparable market transactions, where applicable.	
 	 	 	
Long-term debt and derivative instruments	 	Estimated fair values consistent with the methods disclosed in note 20c.	
 	 	 	
Asset retirement obligations	 	Estimated fair values consistent with the methods disclosed in note 21.	

Final Summary Purchase Price Allocation	 	 	 	
Cash	 	$	1,102	 	
Inventories	 	428	 	
Other current assets	 	198	 	
Property, plant and equipment	 	 	 	
Buildings, plant and equipment	 	2,946	 	
Proven and probable reserves	 	1,571	 	
Value beyond proven and probable reserves	 	419	 	
Intangible assets	 	85	 	
Assets of discontinued operations(1)	 	1,744	 	
Deferred tax assets	 	93	 	
Other assets	 	254	 	
Goodwill	 	6,506	 	
Total assets	 	15,346	 	
Current liabilities	 	669	 	
Liabilities of discontinued operations(1)	 	107	 	
Derivative instrument liabilities	 	1,729	 	
Long-term debt	 	1,252	 	
Asset retirement obligations	 	387	 	
Deferred income tax liabilities	 	686	 	
Total liabilities	 	4,830	 	
Non-controlling interests	 	462	 	
Net assets acquired	 	$	10,054	 	

(1)    Includes operations that were sold to Goldcorp Inc.
 
At acquisition we recorded liabilities totaling $48 million that primarily relate to employee severance at Placer Dome offices that were closed during the year. All amounts were settled by the end of 2007.
 
h)  Discontinued Operations

Results of Discontinued Operations	 	 	 	 	 	 	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	
Gold sales	 	 	 	 	 	 	 	
South Deep operations	 	$	—	 	$	158	 	$	—	 	
Operations sold to Goldcorp	 	—	 	83	 	—	 	
 	 	$	—	 	$	241	 	$	—	 	
Income before tax	 	 	 	 	 	 	 	
South Deep	 	9	 	8	 	—	 	
Gain on sale of South Deep	 	—	 	288	 	—	 	
Operations sold to Goldcorp	 	—	 	1	 	—	 	
 	 	$	9	 	$	297	 	$	—	 	
 
South Deep
 
On December 1, 2006, we sold our 50% interest in the South Deep mine in South Africa to Gold Fields Limited (“Gold Fields”). The consideration on closing was $1,517 million, of which $1,209 million was received in cash and $308 million in Gold Fields shares. On closing we recorded a gain of $288 million, representing the consideration received less transaction costs and the carrying amount of
 
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net assets of South Deep, including goodwill relating to South Deep of $651 million.
 
The results of the operations of South Deep in 2006 are presented under “discontinued operations” in the income statement and cash flow statement. As required by accounting rules applicable to discontinued operations, amortization of property, plant and equipment at South Deep ceased on September 1, 2006, the date when they were classified as held for sale, and we allocated interest expense of $2 million to these discontinued operations.
 
In second quarter 2006, a loaded skip and 6.7 kilometers of rope fell 1.6 kilometers down the South Deep mine’s Twin Shaft complex during routine maintenance, causing extensive damage but no injuries. Repair costs for assets that were damaged were expensed as incurred. We were insured for property damage and a portion of business interruption losses. In fourth quarter 2006 we recorded a receivable for insurance recoveries of $12 million related to this incident. In second quarter 2007, a final settlement was reached with Gold Fields on the allocation of insurance proceeds and, as a result, we recorded further proceeds of $9 million within income from discontinued operations. During the third quarter, $21 million was received in cash and has been classified under Cash Flows of Discontinued Operations in our Consolidated Statement of Cash Flows.
 
Operations Sold to Goldcorp
 
In second quarter 2006, we sold all of Placer Dome’s Canadian properties and operations (other than Placer Dome’s office in Vancouver), including all mining, reclamation and exploration properties, Placer Dome’s interest in the La Coipa mine in Chile, 40% of Placer Dome’s interest in the Pueblo Viejo project in the Dominican Republic, certain related assets and, our share in Agua de la Falda S.A., which included our interest in the Jeronimo project, to Goldcorp Inc. (“Goldcorp”) (collectively, the “Operations sold to Goldcorp’’). Goldcorp is responsible for all liabilities relating solely to these properties and operations, including employment commitments and environmental, closure and reclamation liabilities.
 
The sales proceeds for the operations sold to Goldcorp were $1,641 million. The aggregate net amount of assets and liabilities of these operations were recorded in the purchase price allocation at $1,641 million based on the terms of the sale agreement with Goldcorp that was in place at the time we acquired Placer Dome.The results of the operations sold to Goldcorp were included under “discontinued operations” in the income statement and cash flow statement until closing. Interest expense of $21 million was allocated to the results from the operations sold to Goldcorp. No gain or loss arose on closing of the sale.
 
4  ·   Segment Information

Income Statement Information	 	Sales	 	Segment cost of sales	 	Segment income(1)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
Gold	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	2,001	 	$	1,791	 	$	1,247	 	$	1,194	 	$	1,052	 	$	693	 	$	493	 	$	492	 	$	341	 	
South America	 	1,306	 	1,131	 	506	 	408	 	311	 	137	 	664	 	693	 	268	 	
Australia Pacific	 	1,292	 	1,144	 	411	 	945	 	757	 	260	 	108	 	201	 	105	 	
Africa	 	428	 	427	 	184	 	295	 	228	 	108	 	55	 	111	 	27	 	
Copper	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
South America	 	1,065	 	955	 	—	 	233	 	283	 	—	 	752	 	621	 	—	 	
Australia Pacific	 	240	 	182	 	—	 	109	 	110	 	—	 	92	 	55	 	—	 	
 	 	$	6,332	 	$	5,630	 	$	2,348	 	$	3,184	 	$	2,741	 	$	1,198	 	$	2,164	 	$	2,173	 	$	741	 	

(1)           Segment income represents segment sales, less cost of sales and amortization.

Income Statement Information	 	Exploration(1)	 	Regional business unit costs(1)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
North America	 	$	70	 	$	64	 	$	34	 	$	27	 	$	32	 	$	16	 	
South America	 	40	 	22	 	19	 	23	 	19	 	6	 	
Australia Pacific	 	46	 	44	 	13	 	38	 	38	 	16	 	
Africa	 	15	 	22	 	34	 	11	 	1	 	—	 	
Other expenses outside reportable segments	 	8	 	19	 	9	 	—	 	—	 	—	 	
 	 	$	179	 	$	171	 	$	109	 	$	99	 	$	90	 	$	38	 	

(1)    Exploration and regional business unit costs are excluded from the measure of segment income but are reported separately by operating segment to the Chief Operating Decision Maker.
 
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Geographic Information	 	Long-lived assets(1)	 	Sales(2)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
North America	 	 	 	 	 	 	 	 	 	 	 	 	 	
United States	 	$	2,638	 	$	2,518	 	$	1,431	 	$	1,882	 	$	1,702	 	$	1,068	 	
Canada	 	1,528	 	976	 	313	 	119	 	89	 	179	 	
Dominican Republic	 	139	 	78	 	—	 	—	 	—	 	—	 	
South America	 	 	 	 	 	 	 	 	 	 	 	 	 	
Peru	 	392	 	492	 	540	 	1,033	 	878	 	506	 	
Chile	 	1,764	 	1,599	 	269	 	1,065	 	955	 	—	 	
Argentina	 	1,048	 	1,014	 	843	 	273	 	253	 	—	 	
Australia Pacific	 	 	 	 	 	 	 	 	 	 	 	 	 	
Australia	 	1,724	 	2,142	 	815	 	1,250	 	1,116	 	411	 	
Papua New Guinea	 	702	 	438	 	—	 	282	 	210	 	—	 	
Africa	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tanzania	 	1,336	 	993	 	669	 	428	 	427	 	184	 	
Other	 	477	 	534	 	301	 	—	 	—	 	—	 	
 	 	$	11,748	 	$	10,784	 	$	5,181	 	$	6,332	 	$	5,630	 	$	2,348	 	

(1)    Long-lived assets include property, plant and equipment and other tangible non-current assets.
 
(2)    Presented based on the location in which the sale originated.
 
Reconciliation of Segment Income to Income from Continuing
Operations Before Income Taxes and Other Items

For the years ended December 31	 	2007	 	2006	 	2005	 	
Segment income	 	$	2,164	 	$	2,173	 	$	741	 	
Amortization of corporate assets	 	(20	)	(19	)	(18	)	
Exploration	 	(179	)	(171	)	(109	)	
Project development expense	 	(188	)	(119	)	(32	)	
Corporate administration	 	(155	)	(142	)	(71	)	
Other expenses	 	(208	)	(216	)	(114	)	
Impairment charges(1)	 	(65	)	(23	)	(16	)	
Interest income	 	141	 	110	 	38	 	
Interest expense	 	(113	)	(126	)	(3	)	
Other income	 	103	 	93	 	46	 	
Income from continuing operations before income taxes and other items	 	$	1,480	 	$	1,560	 	$	462	 	

(1)    In 2007, impairment charges include $42 million of goodwill impairments in the North America region.
 
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Asset Information	 	Segment
long-lived assets	 	Amortization	 	Segment
capital expenditures(1)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
Gold	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	4,305	 	$	3,572	 	$	1,744	 	$	314	 	$	247	 	$	213	 	$	236	 	$	226	 	$	218	 	
South America	 	1,922	 	1,829	 	1,652	 	234	 	127	 	101	 	343	 	343	 	525	 	
Australia Pacific	 	2,310	 	2,434	 	815	 	239	 	186	 	46	 	208	 	313	 	308	 	
Africa	 	1,336	 	993	 	669	 	78	 	88	 	49	 	240	 	93	 	45	 	
Copper	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
South America	 	1,282	 	1,276	 	—	 	80	 	51	 	—	 	27	 	17	 	—	 	
Australia Pacific	 	116	 	146	 	—	 	39	 	17	 	—	 	11	 	22	 	—	 	
Segment total	 	11,271	 	10,250	 	4,880	 	984	 	716	 	409	 	1,065	 	1,014	 	1,096	 	
Cash and equivalents	 	2,207	 	3,043	 	1,037	 	—	 	—	 	—	 	—	 	—	 	—	 	
Other current assets	 	2,081	 	1,753	 	711	 	—	 	—	 	—	 	—	 	—	 	—	 	
Intangible assets	 	68	 	75	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Goodwill	 	5,847	 	5,855	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Other items not allocated to segments	 	477	 	534	 	301	 	20	 	19	 	18	 	25	 	17	 	8	 	
Enterprise total	 	$	21,951	 	$	21,510	 	$	6,929	 	$	1,004	 	$	735	 	$	427	 	$	1,090	 	$	1,031	 	$	1,104	 	

(1)                      Segment capital expenditures are presented on an accrual basis. Capital expenditures in the Consolidated Statements of Cash Flows are presented on a cash basis. In 2007, cash expenditures were $1,046 million (2006: $1,087 million; 2005: $1,104 million) and the increase in accrued expenditures were $44 million (2006: $(56) million; 2005: nil).
 
5  •  Revenue and Gold Sales Contracts

For the years ended December 31	 	2007	 	2006	 	2005	 	
Gold bullion sales(1)	 	 	 	 	 	 	 	
Spot market sales	 	$	3,823	 	$	3,957	 	$	1,938	 	
Gold sales contracts	 	1,026	 	369	 	300	 	
 	 	4,849	 	4,326	 	2,238	 	
Concentrate sales(2)	 	178	 	167	 	110	 	
 	 	$	5,027	 	$	4,493	 	$	2,348	 	
 	 	 	 	 	 	 	 	
Copper sales(1),(3)	 	 	 	 	 	 	 	
Copper cathode sales	 	$	1,063	 	$	937	 	$	—	 	
Concentrate sales	 	242	 	200	 	—	 	
 	 	$	1,305	 	$	1,137	 	$	—	 	

(1)        Revenues include amounts transferred from OCI to earnings for commodity cash flow hedges (see notes 20c and 25).
 
(2)        Gold sales include gains and losses on gold derivative contracts which have been economically offset, but not yet settled, and on embedded derivatives in smelting contracts: 2007: $4 million loss (2006: $4 million gain; 2005: $3 million gain).
 
(3)        Copper sales include gains and losses on economic copper hedges that do not qualify for hedge accounting treatment and on embedded derivatives in copper smelting contracts: 2007: $53 million gain (2006: $14 million loss; 2005: $nil).
 
Principal Products
 
All of our gold mining operations produce gold in doré form, except Eskay Creek, which produces gold concentrate and gold doré; Bulyanhulu which produces both gold doré and gold concentrate; and Osborne which produces a concentrate that contains both gold and copper. Gold doré is unrefined gold bullion bars usually consisting of 90% gold that is refined to pure gold bullion prior to sale to our customers. Gold concentrate is a processing product containing the valuable ore mineral (gold) from which most of the waste mineral has been eliminated, that undergoes a smelting process to convert it into gold bullion. Gold bullion is sold primarily in the London spot market or under gold sales contracts. Gold concentrate is sold to third-party smelters. At our Zaldívar mine we produce pure copper cathode, which consists of 99.9% copper, a form that is deliverable for sale in world metals exchanges.
 
Revenue Recognition
 
We record revenue when the following conditions are met: persuasive evidence of an arrangement exists; delivery and transfer of title (gold revenue only) have occurred under the terms of the arrangement; the price is fixed or determinable; and collectability is reasonably assured. Revenue in 2007 is presented net of direct sales taxes of $15 million (2006: $16 million; 2005: $nil).
 
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Gold Bullion Sales
 
We record revenue from gold and silver bullion sales at the time of physical delivery, which is also the date that title to the gold or silver passes. The sales price is fixed at the delivery date based on either the terms of gold sales contracts or the gold spot price. Incidental revenues from the sale of byproducts such as silver are classified within cost of sales.
 
Gold Sales Contracts
 
At December 31, 2006, we had 2.5 million ounces of Corporate Gold Sales Contracts. We delivered 2.5 million ounces into the Corporate Gold Sales Contracts at an average price of $404 per ounce in the first half of 2007. At December 31, 2007, there were no remaining Corporate Gold Sales Contracts. At December 31, 2007, we had Project Gold Sales Contracts with various customers for a total of 9.5 million ounces of future gold production of which 1.7 million ounces are at floating spot prices.
 
The terms of gold sales contracts are governed by master trading agreements (MTAs) that we have in place with customers. 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 adjusted based on 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.
 
Mark-to-Market Value

 	 	Total	 	At Dec. 31,	 	
 	 	ounces in	 	2007	 	
$	millions	 	millions	 	value(1)	 	
Project Gold Sales Contracts	 	9.5	 	$	(4,626	)	

(1)           At a spot gold price of $834 per ounce.
 
Concentrate Sales
 
Under the terms of concentrate sales contracts with independent smelting companies, gold and copper 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 also when title passes to the smelting companies, using forward market gold and copper prices on the expected date that final sales prices will be fixed. 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 and copper 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. The notional amount outstanding in accounts receivable is typically between ten and fifteen thousand ounces of gold and four and seven million pounds of copper.
 
Copper Cathode Sales
 
Under the terms of copper cathode sales contracts, copper sales prices are set on a specified future date based upon market commodity prices plus certain price adjustments. Revenue is recognized at the time of shipment when risk of loss passes to the customer, and collectability is reasonably assured. Revenue is measured using forward market prices on the expected date that final selling prices will be fixed. Variations occur between the price recorded on the date of revenue recognition and the actual final price under the terms of the contracts due to changes in market copper prices, which result in the existence of an embedded derivative in the accounts receivable. This embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as a component of revenue. The notional amount outstanding in accounts receivable is between twenty and thirty million pounds of copper.
 
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6.               Cost of Sales

 	 	Gold	 	Copper	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
Cost of goods sold(1)	 	$	2,757	 	$	2,294	 	$	1,249	 	$	337	 	$	390	 	$	—	 	
By-product revenues(2),(3)	 	(105	)	(123	)	(132	)	(2	)	(1	)	—	 	
Royalty expense	 	161	 	150	 	63	 	7	 	4	 	—	 	
Mining production taxes	 	29	 	27	 	18	 	—	 	—	 	—	 	
 	 	$	2,842	 	$	2,348	 	$	1,198	 	$	342	 	$	393	 	$	—	 	

(1)        Cost of goods sold includes accretion expense at producing mines of $40 million (2006: $31 million; 2005: $11 million). Cost of goods sold includes charges to reduce the cost of inventory to net realizable value as follows: $13 million in 2007; $28 million in 2006 and $15 million in 2005. The cost of inventory sold in the period reflects all components capitalized to inventory, 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 was $984 million in 2007; $716 million in 2006 and $409 million in 2005.
 
(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, 2007, we had sales contract commitments to deliver 18.2 million ounces of silver over periods up to 10 years. The mark-to-market on silver sales contracts at December 31, 2007 was negative $111 million (2006: negative $100 million; 2005: $52 million).
 
(3)        By-product credits include gains and losses on economic silver hedges that do not qualify for hedge accounting treatment: 2007: $nil (2006: $5 million loss; 2005: $nil).
 
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, Bulyanhulu and Veladero mines and the Pascua-Lama project. 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. Other types of royalties include:
 
·                              Net profits interest (NPI) royalty,
·                              Net smelter return sliding scale (NSRSS) royalty,
·                              Gross proceeds sliding scale (GPSS) royalty
·                              Gross smelter return (GSR) royalty,
·                              Net Value (NV) royalty, and a
·                              Land tenement (LT) royalty
 
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.

Producing mines	 	Type of royalty	
North America	 	 	
Goldstrike	 	0%–5% NSR, 0%–6% NPI	
Eskay Creek	 	1% NSR	
Williams	 	1.5% NSR, 0.5% NV, 1% NV	
David Bell	 	3% NSR	
Round Mountain	 	3.53%–6.35% NSRSS	
Bald Mountain	 	3.5%–4% NSR	
Ruby Hill	 	3% modified NSR	
Cortez	 	1.5% GSR	
Cortez – Pipeline/	 	 	
South Pipeline deposit	 	0.4%–5% GSR	
Cortez – portion of Pipeline/	 	 	
South Pipeline deposit	 	5% NV	
South America	 	 	
Veladero	 	3.75% modified NSR	
Lagunas Norte	 	2.51% NSR	
Australia	 	 	
Porgera	 	2% NSR	
Queensland and Western	 	 	
Australia production	 	2.5%–2.7% of gold revenue	
Africa	 	 	
Bulyanhulu	 	3% NSR	
North Mara	 	3% NSR	
North Mara – Gokona pit	 	3% NSR, 1.1% LT	
 
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7.               Exploration and Project Development Expense

For the years ended December 31	 	2007	 	2006	 	2005	 	
Exploration:	 	 	 	 	 	 	 	
Minesite exploration	 	$	63	 	$	54	 	$	27	 	
Projects	 	116	 	117	 	82	 	
 	 	$	179	 	$	171	 	$	109	 	
Project development expense:	 	 	 	 	 	 	 	
Pueblo Viejo(1)	 	67	 	25	 	—	 	
Donlin Creek(2)	 	32	 	37	 	—	 	
Sedibelo	 	22	 	10	 	—	 	
Fedorova	 	18	 	—	 	—	 	
Buzwagi	 	5	 	12	 	5	 	
Pascua-Lama	 	12	 	8	 	7	 	
Cowal(3)	 	—	 	1	 	9	 	
Other	 	32	 	26	 	11	 	
 	 	$	188	 	$	119	 	$	32	 	

(1)        Represents 100% of project expenditures. We record a non-controlling interest credit for our partner’s share of expenditures within “non-controlling interests” in the income statement.
 
(2)        Amounts for 2007 include a recovery of $64 million of cumulative project costs from our partner. See note 12 for further details.
 
(3)        The Cowal mine began production in second quarter 2006.
 
Accounting Policy
 
We capitalize costs incurred at 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 reserves, costs incurred at projects are considered project development expenses that are expensed as incurred. Project costs include: drilling costs; costs to prepare engineering scoping and feasibility studies; metallurgical testing; permitting; and sample mining. The cost of start-up activities at mines and projects such as recruiting and training are also expensed as incurred within project development expense. Drilling costs incurred at our operating mines are expensed as incurred as mine site exploration expense, unless we can conclude with a high degree of confidence, prior to the commencement of a drilling program, that the drilling costs will result in the conversion of a mineral resource into a proven and probable reserve. Our assessment of confidence is based on the following factors: results from previous drill programs; results from geological models; results from a mine scoping study confirming economic viability of the resource; and preliminary estimates of mine inventory, ore grade, cash flow and mine life. The costs of a drilling program that meets our highly confident threshold are capitalized as mine development costs.
 
The Pueblo Viejo, Donlin Creek, Sedibelo, and Fedorova projects are in various stages and none of the projects had met the criteria for cost capitalization at December 31, 2007. The Reko Diq project is owned through an equity investee and project expenses are included in “equity investees” in the income statement (see note 12).
 
Effective May 1, 2007, we determined that mineralization at Buzwagi 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 Buzwagi.
 
Funding of our partner’s share of ongoing project expenses for Donlin Creek, which is recoverable from the other partner, is shown under loans issued to joint venture partners under investing activities in the cash flow statement.
 
8  •   Other Expense
 
a)  Other Expenses

For the years ended December 31	 	2007	 	2006	 	2005	 	
Regional business unit costs(1)	 	$	99	 	$	90	 	$	38	 	
Community development costs(2)	 	28	 	15	 	—	 	
Environmental costs	 	15	 	11	 	17	 	
World Gold Council fees	 	12	 	13	 	10	 	
Changes in estimate of AROs at closed mines(3)	 	6	 	53	 	15	 	
Accretion expense at closed mines (note 21)	 	10	 	8	 	10	 	
Non-hedge derivative losses (note 20c)	 	8	 	—	 	12	 	
Currency translation losses	 	1	 	—	 	—	 	
Pension and other post-retirement benefit expense (notes 27b and 27e)(4)	 	5	 	3	 	8	 	
Other items	 	24	 	23	 	4	 	
 	 	$	208	 	$	216	 	$	114	 	

(1)        Relates to costs incurred at regional business unit offices.
 
(2)        In 2007, amounts relate to community programs in Peru, Tanzania and Papua New Guinea. In 2006, amounts related to community programs in Peru and Tanzania.
 
(3)        In 2006, amount relates to change in estimate of the ARO at the Nickel Plate property in British Columbia, Canada.
 
(4)        For the year ended December 31, 2007, $nil million of pension credit that relates to active employees at producing mines is included in cost of sales (2006: $4 million; 2005: $nil), and $nil million is included in corporate administration (2006: $2 million; 2005: $nil).
 
100

 
Environmental Costs
 
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.
 
b) Impairment Charges

For the years ended December 31	 	2007	 	2006	 	2005	 	
Impairment of goodwill (note 17)(1)	 	$	42	 	$	—	 	$	—	 	
Impairment charges on investments (note 12)(2)	 	23	 	6	 	16	 	
Impairment of long-lived assets(3)	 	—	 	17	 	—	 	
 	 	$	65	 	$	23	 	$	16	 	

(1)        In 2007, the carrying amounts of Eskay Creek and Golden Sunlight were tested for impairment as part of the annual goodwill impairment test. Impairment charges of $7 million and $35 million respectively, were recorded to reduce the carrying amount for goodwill to its implied fair value.
 
(2)        In 2007, we recorded an impairment charge on Asset Backed Commercial Paper of $20 million.
 
(3)        In 2006, the carrying amount of Cuerpo Sur, an extension of Pierina, was tested for impairment on completion of the annual life of mine planning process. An impairment charge of $17 million was recorded to reduce the carrying amount to the estimated fair value.
 
c)               Other Income

For the years ended December 31	 	2007	 	2006	 	2005	 	
Non-hedge derivative gains (note 20c)	 	$	—	 	$	2	 	$	—	 	
Currency translation gains	 	—	 	2	 	3	 	
Gains on sale of assets(1)	 	2	 	9	 	5	 	
Gains on sale of investments (note 12)	 	71	 	6	 	17	 	
Gain on vend-in to Highland Gold (note 12)	 	—	 	51	 	—	 	
Royalty income	 	17	 	10	 	6	 	
Sale of water rights	 	5	 	5	 	—	 	
Other	 	8	 	8	 	15	 	
 	 	$	103	 	$	93	 	$	46	 	

(1)                      In 2007, we sold certain properties in South America and Australia, including an $8 million gain on the sale of the Paddington Mill. In 2006, we sold certain properties in Canada and Chile. In 2005, we sold some land positions in Australia.
 
9  •   Income Tax Expense

For the years ended December 31	 	2007	 	2006	 	2005	 	
Current	 	 	 	 	 	 	 	
Canada	 	$	(3	)	$	13	 	$	(3	)	
International	 	518	 	444	 	93	 	
 	 	$	515	 	$	457	 	$	90	 	
Deferred	 	 	 	 	 	 	 	
Canada	 	$	19	 	$	(131	)	$	(6	)	
International	 	(25	)	46	 	(8	)	
 	 	$	(6	)	$	(85	)	$	(14	)	
Income tax expense before elements below	 	$	509	 	$	372	 	$	76	 	
Net currency translation gains on deferred tax balances	 	(76	)	(5	)	(11	)	
Canadian tax rate changes	 	64	 	12	 	—	 	
Change in tax status in Australia	 	—	 	(31	)	(5	)	
Release of end of year valuation allowances – Tanzania	 	(156	)	—	 	—	 	
Total expense	 	$	341	 	$	348	 	$	60	 	
 
Currency Translation
 
Deferred tax balances are subject to remeasurement for changes in currency exchange rates each period. The most significant balances are Canadian deferred tax assets with a carrying amount of approximately $439 million and Australian deferred tax liabilities with a carrying amount of approximately $95 million. In 2007, the appreciation of the Canadian and Australian dollar against the US dollar resulted in net translation gains arising totaling $76 million. These gains are included within deferred tax expense/recovery.
 
Canadian Tax Rate Changes
 
In the second and fourth quarters of 2007 and the second quarter of 2006, federal rate changes were enacted in Canada that lowered the applicable tax rate. The impact of this tax rate change was to reduce net deferred tax assets in Canada by $64 million in 2007 and $35 million in 2006 that was recorded as a component of deferred income tax expense. Also in second quarter 2006, on change of tax status of a Canadian subsidiary, we recorded a deferred income tax credit of $23 million to reflect the impact on the measurement of deferred income tax assets and liabilities.
 
101

 
Change in Tax Status in Australia
 
In first quarter 2006, an interpretative decision (“ID”) was issued by the Australia Tax Office that clarified the tax treatment of currency gains and losses on foreign denominated liabilities. Under certain conditions, for taxpayers who have made the functional currency election, and in respect of debt that existed at the time the election was made, the ID provided clarification that unrealized foreign exchange gains that currently exist on intercompany debt will not crystallize upon repayment of the debt. The effect of the ID was recorded as a $31 million reduction of deferred tax liabilities.
 
Release of Tanzanian Valuation Allowances
 
In 2007, we released $156 million of end of year deferred tax valuation allowances in Tanzania due to the impact of higher market gold prices.

Reconciliation to Canadian Statutory Rate
For the years ended December 31	 	2007	 	2006	 	2005	 	
At 36.12% (2006 36.12% and 2005: 38%) statutory rate	 	$	535	 	$	563	 	$	176	 	
Increase (decrease) due to:	 	 	 	 	 	 	 	
Allowances and special tax deductions(1)	 	(99	)	(55	)	(92	)	
Impact of foreign tax rates(2)	 	38	 	(131	)	(54	)	
Expenses not tax-deductible	 	63	 	20	 	9	 	
Net currency translation gains on deferred tax balances	 	(76	)	(5	)	(11	)	
Release of end of year valuation allowances – Tanzania	 	(156	)	—	 	—	 	
Release of valuation allowances – Other	 	(88	)	(53	)	(32	)	
Valuation allowances set up against current year tax losses	 	5	 	7	 	59	 	
Impact of changes in tax status in Australia	 	—	 	(31	)	(5	)	
Canadian tax rate changes	 	64	 	12	 	—	 	
Withholding taxes	 	17	 	19	 	8	 	
Mining taxes	 	19	 	9	 	1	 	
Other items	 	19	 	(7	)	1	 	
Income tax expense	 	$	341	 	$	348	 	$	60	 	

(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 tax rates different than the Canadian statutory rate. Additionally, we have reinvested earnings and cash flow generated by the Zaldívar mine in Chile to fund a portion of the construction cost of Pascua-Lama. The reinvestment of these earnings and cash flow resulted in a lower tax rate applied for the period. Amounts in 2007, included the impact of losses realized on deliveries into corporate gold sales contracts in a low tax jurisdiction.
 
10  •  Earnings per share

For the years ended December 31
 ($ millions, except shares in millions	 	2007	 	2006	 	2005	 	
and per share amounts in dollars)	 	Basic	 	Diluted	 	Basic	 	Diluted	 	Basic	 	Diluted	 	
Income from continuing operations	 	$	1,110	 	$	1,110	 	$	1,209	 	$	1,209	 	$	395	 	$	395	 	
Plus: interest on convertible debentures	 	—	 	2	 	—	 	4	 	—	 	—	 	
Income available to common shareholders and after assumed conversions	 	1,110	 	1,112	 	1,209	 	1,213	 	395	 	395	 	
Income from discontinued operations	 	9	 	9	 	297	 	297	 	—	 	—	 	
Income before cumulative effect of changes in accounting principles	 	1,119	 	1,121	 	1,506	 	1,510	 	395	 	395	 	
Cumulative effect of changes in accounting principles	 	—	 	—	 	—	 	—	 	6	 	6	 	
Net income	 	$	1,119	 	$	1,121	 	$	1,506	 	$	1,510	 	$	401	 	$	401	 	
Weighted average shares outstanding	 	867	 	867	 	842	 	842	 	536	 	536	 	
Effect of dilutive securities	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock options	 	—	 	3	 	—	 	4	 	—	 	2	 	
Convertible debentures	 	—	 	9	 	—	 	9	 	—	 	—	 	
 	 	867	 	879	 	842	 	855	 	536	 	538	 	
Earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	1.28	 	$	1.27	 	$	1.44	 	$	1.42	 	$	0.74	 	$	0.73	 	
Income before cumulative effect of changes in accounting principles	 	$	1.29	 	$	1.28	 	$	1.79	 	$	1.77	 	$	0.74	 	$	0.73	 	
Net income	 	$	1.29	 	$	1.28	 	$	1.79	 	$	1.77	 	$	0.75	 	$	0.75	 	
 
102

 
Earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if additional common shares are assumed to be issued under securities that entitle their holders to obtain common shares in the future. For stock options, the number of additional shares for inclusion in diluted earnings per share calculations is determined using the treasury stock method. Under this method, stock options, whose exercise price is less than the average market price of our common shares, are assumed to be exercised and the proceeds are used to repurchase common shares at the average market price for the period. The incremental number of common shares issued under stock options and repurchased from proceeds is included in the calculation of diluted earnings per share. For convertible debentures, the number of additional shares for inclusion in diluted earnings per share calculations is determined using the as if converted method. The incremental number of common shares issued is included in the number of weighted average shares outstanding and interest on the convertible debentures is excluded from the calculation of income.
 
11  •  Cash Flow – Other Items
 
a) Operating Cash Flows – Other Items

For the years ended December 31	 	2007	 	2006	 	2005	 	
Adjustments for non-cash income statement items:	 	 	 	 	 	 	 	
Currency translation (gains) losses (note 8a and 8c)	 	$	1	 	$	(2	)	$	(3	)	
Accretion expense (note 21)	 	50	 	39	 	21	 	
Cumulative accounting changes	 	—	 	—	 	(6	)	
Amortization of discount/premium on debt securities (note 20b)	 	(3	)	(12	)	—	 	
Amortization of debt issue costs (note 20b)	 	9	 	12	 	2	 	
Stock option expense (note 26)	 	25	 	27	 	—	 	
Non-hedge derivative gold options	 	30	 	14	 	—	 	
Hedge losses on acquired gold hedge position	 	2	 	165	 	—	 	
Gain on Highland vend-in (note 8c)	 	—	 	(51	)	—	 	
Gain on Kabanga transaction (note 8c)	 	—	 	—	 	(15	)	
Equity in investees (note 12)	 	43	 	4	 	6	 	
Gain on sale of long-lived assets (note 8c)	 	(2	)	(9	)	(5	)	
Impairment charges (notes 8b and 12)	 	65	 	23	 	16	 	
Losses on write-down of inventory (note 13)	 	13	 	28	 	15	 	
Non-controlling interests (note 2b)	 	(14	)	(1	)	1	 	
ARO reduction	 	(15	)	—	 	—	 	
Net changes in operating assets and liabilities	 	(244	)	(142	)	(82	)	
Settlement of AROs (note 21)	 	(33	)	(32	)	(30	)	
Other net operating activities	 	$	(73	)	$	63	 	$	(80	)	
Operating cash flow includes payments for:	 	 	 	 	 	 	 	
Pension plan contributions (note 27a)	 	$	49	 	$	36	 	$	20	 	
Interest (net of amounts capitalized)	 	$	236	 	$	211	 	$	108	 	
 
b) Investing Cash Flows – Other Items

For the years ended December 31	 	2007	 	2006	 	2005	 	
Loans to joint venture partners	 	$	(47	)	$	—	 	$	—	 	
Non-hedge derivative copper options	 	(23	)	—	 	—	 	
Decrease in restricted cash (note 14)	 	19	 	—	 	—	 	
Other	 	9	 	17	 	(5	)	
Other net investing activities	 	$	(42	)	$	17	 	$	(5	)	
 
c) Non-Cash Investing and Financing Activities
 
Donlin Creek
 
In 2007, we formed a limited liability company with NovaGold to advance the Donlin Creek project. We determined that we share joint control with NovaGold and we use the equity method of accounting for our investment in Donlin Creek. The initial cost of our investment is $64 million.
 
103

 
Placer Dome Acquisition
 
We purchased all of the common shares of Placer Dome in 2006 for $10,054 million (see note 3g). In conjunction with the acquisition, liabilities were assumed as follows:

Fair value of assets acquired(1)	 	$	 15,346	 	
Consideration paid	 	10,054	 	
Liabilities assumed(2)	 	$	4,830	 	

(1)        Includes cash of $1,102 million.
 
(2)        Includes debt obligations of $1,252 million (note 20b).
 
Vend-in of Assets to Highland Gold (“Highland”)
 
In 2006 we exchanged various interests in mineral properties for 34.3 million Highland shares with a value of $95 million at the time of closing of the transaction (see note 12).
 
Sale of South Deep
 
In 2006 we sold the South Deep mine to Gold Fields Limited (“Gold Fields”) for $1,517 million. The proceeds included 18.7 million Gold Fields common shares with a value of $308 million (see note 3h).
 
12  •  Investments

 	 	2007	 	2006	 	
 	 	 	 	Gains	 	 	 	Gains	 	
 	 	Fair	 	(losses)	 	Fair	 	(losses)	 	
At December 31	 	value	 	in OCI	 	value	 	in OCI	 	
Available-for-sale securities in an unrealized gain position	 	 	 	 	 	 	 	 	 	
Benefit plans:(1)	 	 	 	 	 	 	 	 	 	
Fixed-income securities	 	$	4	 	$	—	 	$	5	 	$	—	 	
Equity securities	 	14	 	1	 	16	 	2	 	
Other investments:	 	 	 	 	 	 	 	 	 	
NovaGold	 	—	 	—	 	231	 	13	 	
Gold Fields	 	—	 	—	 	314	 	6	 	
Other equity securities	 	73	 	41	 	77	 	33	 	
 	 	91	 	42	 	643	 	54	 	
Securities in an unrealized loss position	 	 	 	 	 	 	 	 	 	
Other equity securities(2)	 	5	 	(1	)	3	 	(1	)	
 	 	$	96	 	$	41	 	$	646	 	$	53	 	
Held-to-maturity securities	 	 	 	 	 	 	 	 	 	
Asset-Backed Commercial Paper	 	46	 	—	 	—	 	—	 	
 	 	$	142	 	$	41	 	$	646	 	$	53	 	

(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 equity securities in a loss position consist of investments in various junior mining companies.
 
Accounting Policy for Available-for-Sale Securities
 
Available-for-sale securities are recorded at fair value with unrealized gains and losses recorded in other comprehensive income (“OCI”). Realized gains and losses are recorded in earnings when investments mature or on sale, calculated using the average cost of securities sold. Investments in debt securities that we intend to hold to maturity are classified as held-to-maturity. Held-to-maturity investments are recorded at amortized cost. If the fair value of an investment declines below its carrying amount, we undertake an assessment of whether the impairment is other-than-temporary. We consider all relevant facts and circumstances in this assessment, particularly: the length of time and extent to which fair value has been less than the carrying amount; the financial condition and near-term prospects of the investee, including any specific events that have impacted its fair value; both positive and negative evidence that the carrying amount is recoverable within a reasonable period of time; and our ability and intent to hold the investment for a reasonable period of time sufficient for an expected recovery of the fair value up to or beyond the carrying amount. We record in earnings any unrealized declines in fair value judged to be other than temporary.
 
Available-for-Sale Securities Continuity

 	 	Goldfields	 	NovaGold	 	Other	 	Total	 	
January 1, 2005	 	$	—	 	$	—	 	$	61	 	$	61	 	
Purchases	 	—	 	—	 	31	 	31	 	
Sales proceeds	 	—	 	—	 	(10	)	(10	)	
Mark-to-market adjustments	 	—	 	—	 	(20	)	(20	)	
 	 	 	 	 	 	 	 	 	 	
January 1, 2006	 	—	 	—	 	62	 	62	 	
Purchases	 	—	 	218	 	27	 	245	 	
Received in consideration for sale of South Deep (note 3h)	 	308	 	—	 	—	 	308	 	
Sales proceeds	 	—	 	—	 	(46	)	(46	)	
Mark-to-market adjustments	 	6	 	13	 	58	 	77	 	
 	 	 	 	 	 	 	 	 	 	
January 1, 2007	 	314	 	231	 	101	 	646	 	
Purchases	 	—	 	—	 	11	 	11	 	
Sales proceeds	 	(356	)	(221	)	(48	)	(625	)	
Mark-to-market adjustments	 	42	 	(10	)	32	 	64	 	
December 31, 2007	 	$	—	 	$	—	 	$	96	 	$	96	 	
 
104

 
Gold Fields Limited (“Gold Fields”)
 
The investment in Gold Fields was acquired on December 1, 2006, as partial consideration for the sale of our interest in South Deep and was recorded net of an initial liquidity discount of $48 million to reflect a 120-day restriction on our ability to trade the shares. During 2007, we sold our entire position of 18.7 million shares for proceeds of $356 million and recorded a gain of $48 million.
 
NovaGold Resources Inc. (“NovaGold”)
 
During 2007, we sold our entire investment in NovaGold for proceeds of $221 million and we recorded a gain of $3 million on the sale.
 
Asset-Backed Commercial Paper (“ABCP”)
 
As at December 31, 2007, we held $66 million of Asset-Backed Commercial Paper (“ABCP”) which has matured, but for which no payment has been received. On August 16, 2007, it was announced that a group representing banks, asset providers and major investors had agreed to a standstill with regard to all non-bank sponsored ABCP (the “Montreal Proposal ABCP”).
 
On December 23, 2007, a tentative deal was reached between investors and banks to restructure the majority of the Montreal Proposal ABCP. It has been determined that our ABCP investments are ineligible for inclusion in the proposed Master Asset Partnerships. As with other ineligible Montreal Proposal ABCP, our investments will be restructured on an individual basis and will not be pooled with other Montreal Proposal ABCP assets. Our investments will maintain exposure to the existing underlying ineligible assets. New floating rate notes will be issued with maturities and interest rates based on the respective maturities and amounts available from the underlying investments. We have assessed the fair value of the ABCP considering the best available data regarding market conditions for such investments at December 31, 2007. We recorded an impairment of $20 million in 2007 on the ABCP investments.
 
Our ownership of ABCP investments is comprised of trust units which have underlying investments in various securities. The underlying investments are further represented by residential mortgage-backed securities, commercial mortgage-backed securities, other asset-backed securities and collateralized debt obligations. We have based the 30% impairment on our assessment of the inherent risks associated with the underlying investments. The 30% impairment is comprised of reductions for credit, liquidity and market risk of 5%, 20% and 5%, respectively. The impairment is further supported by an indicative value obtained from a third party. We believe that our valuation approximates fair value. The impairment of our ABCP investments has no effect on our investment strategy or covenant compliance.
 
There is currently no certainty regarding the outcome of the ABCP investments and therefore there is uncertainty in estimating the amount and timing of cash flows associated. This ABCP was classified under Other Investments at December 31, 2007, and as an investing activity in the Consolidated Statement of Cash Flow.
 
Equity Method Investment Continuity

 	 	Highland	 	Atacama	 	Cerro Casale	 	Donlin Creek	 	Other	 	Total	 	
At January 1, 2005	 	$	86	 	$	—	 	$	—	 	$	—	 	$	—	 	$	86	 	
Purchases	 	50	 	—	 	—	 	—	 	8	 	58	 	
Equity pick-up	 	(5	)	—	 	—	 	—	 	(1	)	(6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At January 1, 2006	 	131	 	—	 	—	 	—	 	7	 	138	 	
Purchases	 	—	 	123	 	—	 	—	 	1	 	124	 	
Vend-in	 	71	 	—	 	—	 	—	 	—	 	71	 	
Equity pick-up	 	(3	)	—	 	—	 	—	 	(1	)	(4	)	
Impairment charges	 	—	 	—	 	—	 	—	 	(2	)	(2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At January 1, 2007	 	199	 	123	 	—	 	—	 	5	 	327	 	
Acquired under Arizona Star acquisition	 	—	 	—	 	732	 	—	 	—	 	732	 	
Reclassifications	 	—	 	—	 	—	 	64	 	(4	)	60	 	
Equity pick-up	 	(30	)	(14	)	—	 	—	 	1	 	(43	)	
Impairment charges	 	—	 	—	 	—	 	—	 	(2	)	(2	)	
At December 31, 2007	 	$	169	 	$	109	 	$	732	 	$	64	 	$	—	 	$	1,074	 	
 
105

 
Accounting Policy for Equity Method Investments
 
Under the equity method, we record our equity share of the income or loss of equity investees each period. On acquisition of an equity investment, the underlying identifiable assets and liabilities of an equity investee are recorded at fair value and the income or loss of equity investees is based on these fair values. For an investment in a company that represents a business, if the cost of any equity investment exceeds the total amount of the fair value of identifiable assets and liabilities, any excess is accounted for in a manner similar to goodwill, with the exception that an annual goodwill impairment test is not required. Additional funding into an investee is recorded as an increase in the carrying value of the investment. The carrying amount of each investment in an equity investee is evaluated for impairment using the same method as an available-for-sale security.
 
Highland Gold Mining Ltd. (“Highland”)
 
We acquired 11 million common shares for cash of $50 million in 2005; and 34.3 million common shares as part of a vend-in transaction in 2006.
 
On November 17, 2006, we entered into an agreement with Highland to transfer ownership of certain companies holding Russian and Kyrgyz licenses in return for 34.3 million Highland common shares increasing our ownership of Highland from 20% to 34%. In effect, we contributed our 50% interest in the Taseevskoye deposit, as well as other exploration properties in Russia and Central Asia, to Highland, thereby consolidating ownership of these properties under one company. As part of the transaction, we seconded several of our employees to Highland, and received two additional Board seats. Completion of the transaction occurred on December 15, 2006. On closing, the fair value of Highland common shares exceeded the carrying amount of assets exchanged by $76 million. We recorded this difference as a gain of $51 million in other income to the extent of the ownership in Highland held by independent third parties, and the balance of $25 million as a reduction in the carrying amount of our investment in Highland. The Fedorova PGM deposit was not included in this transaction.
 
The difference between the cost of our investment in Highland and the underlying historic cost of net assets was $111 million at June 30, 2007.
 
During 2007, Highland announced the issue of 130.1 million new shares for $400 million. The equity was purchased by Millhouse LLC (“Millhouse”) in two tranches. The first tranche of 65 million shares was completed on December 11, 2007 giving Millhouse a 25% interest in Highland and reducing our position to 25.4%. The second tranche of 65 million shares was completed on January 16, 2008 giving Millhouse a 40% interest in Highland and further reducing our interest to 20.3%.
 
On completion of the first tranche, Millhouse is entitled to appoint 3 of 9 Directors to the Board. On completion of the second tranche, Millhouse is entitled to appoint the CEO of Highland who will not serve on the Board. Our ability to appoint Directors has been reduced from 3 to 2. We continue to account for the investment in Highland under the equity method of accounting.
 
Donlin Creek
 
In January 2006, as part of the acquisition of Placer Dome, we acquired an interest in the Donlin Creek project. Under a pre-existing joint venture agreement we held the right to earn a 70% interest in the project subject to meeting certain conditions under the agreement. In December 2007, we restructured our agreement with our joint venture partner and formed a limited liability company, Donlin Creek LLC, to advance the Donlin Creek project. Donlin Creek has a board of four directors, with two nominees selected by each company. All significant decisions related to Donlin Creek require the approval of both companies. We own 50% of the limited liability company.
 
We determined that Donlin Creek LLC is a VIE and consequently used the principles of FIN 46R to determine how to account for our ownership interest. We concluded that neither ourselves nor NovaGold are a primary beneficiary and neither ourselves nor NovaGold have the right to control Donlin Creek under the limited liability company agreement. We determined that we share joint control with NovaGold, and because Donlin Creek is a corporate joint venture we use the equity method of accounting for our investment in Donlin Creek. The initial cost of our investment in Donlin Creek is $64 million and represents the cost basis of assets transferred into the limited liability company. Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Donlin Creek, which totaled $64 million and accounts receivable from our partner totaling a further $64 million that are collateralized against NovaGold’s interest in the value of Donlin Creek as of December 31, 2007.
 
106

Atacama Copper Pty Limited (“Atacama Copper”)
 
In September 2006, we acquired a 50% interest in Atacama Copper. The other 50% interest in Atacama Copper is owned by Antofagasta plc. Atacama Copper is responsible for advancing the Reko Diq project. The Reko Diq project is located in Pakistan and comprises a variety of exploration licenses, an interest in some of which has been retained by the government of Balochistan.
 
We determined that Atacama Copper is a VIE and consequently we have used the principles of FIN 46R to determine how to account for our ownership interest. We concluded that neither ourselves nor Antofagasta are a primary beneficiary and consequently we evaluated whether either ourselves or Antofagasta have the right to control Atacama under the joint venture agreement. We determined that we share joint control with Antofagasta and because Atacama is a corporate joint venture we use the equity method of accounting for our investment. Our maximum exposure to loss in this entity is limited to our investment in Atacama, which totaled $109 million as of December 31, 2007, and amounts we will prospectively fund for Atacama’s interim exploration program.
 
Companía Minera Casale (“Cerro Casale”)
 
In December 2007, we acquired 94% of the common shares of Arizona Star. We have determined that Arizona Star’s interest in the entity that holds the Cerro Casale deposit is a VIE and consequently we have used the principles of FIN 46R to determine how to account for this ownership interest. We evaluated whether either ourselves or Kinross have the right to control Cerro Casale under the joint venture agreement and we determined that we share joint control with Kinross. Therefore, neither ourselves nor Kinross are a primary beneficiary and because Cerro Casale is a corporate joint venture, we use the equity method of accounting for Arizona Star’s investment in Cerro Casale. Our maximum exposure to loss in this entity is limited to our investment in Cerro Casale, which totaled $732 million as of December 31, 2007.
 
13 · Inventories

 	 	Gold	 	Copper	 	
At December 31	 	2007	 	2006	 	2007	 	2006	 	
Raw materials	 	 	 	 	 	 	 	 	 	
Ore in stockpiles	 	$	698	 	$	485	 	$	63	 	$	51	 	
Ore on leach pads	 	149	 	104	 	81	 	76	 	
Mine operating supplies	 	351	 	284	 	20	 	16	 	
Work in process	 	109	 	89	 	5	 	25	 	
Finished products	 	 	 	 	 	 	 	 	 	
Gold doré/bullion	 	87	 	98	 	—	 	—	 	
Copper cathode	 	—	 	—	 	9	 	12	 	
Copper concentrate	 	—	 	—	 	16	 	5	 	
Gold concentrate	 	40	 	54	 	—	 	—	 	
 	 	1,434	 	1,114	 	194	 	185	 	
Non-current ore in stockpiles(1)	 	(414	)	(298	)	(96	)	(70	)	
 	 	$	1,020	 	$	816	 	$	98	 	$	115	 	

(1)           Ore that we do not expect to process in the next 12 months.
 
Accounting Policy for Inventory
 
Material extracted from our mines is classified as either ore or waste. Ore represents material that we expect to be processed into a saleable form, and sold at a profit. Ore 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/copper 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/copper. Gold/copper in process represents gold/copper in the processing circuit that has not completed the production process, and is not yet in a saleable form.
 
Gold ore stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Copper ore stockpiles are measured estimating the number of tons added and removed from the stockpile. Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to a stockpile based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, depletion and amortization relating to mining operations, and removed at each stockpile’s average cost per recoverable unit.
 
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We record gold in process, gold doré and gold in concentrate form at average cost, less provisions required to reduce inventory to market value. 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. Costs capitalized to inventory include direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, plant and equipment; waste stripping costs; and local mine administrative expenses. Costs are removed from inventory and recorded in cost of sales and amortization expense based on the average cost per ounce of gold in inventory. Mine operating supplies are recorded at purchase cost.
 
We record provisions to reduce inventory to net realizable value, to reflect changes in economic factors that impact inventory value or to reflect present intentions for the use of slow moving and obsolete supplies inventory.

For the years ended December 31	 	2007	 	2006	 	2005	 	
Inventory impairment charges	 	$	13	 	$	28	 	$	15	 	

Heap Leach Inventory
 
The recovery of gold and copper from certain oxide ores is achieved through the heap leaching process. Our Pierina, Lagunas Norte, Veladero, Cortez, Bald Mountain, Round Mountain, Ruby Hill and Marigold mines all use a heap leaching process for gold and our Zaldívar mine uses a heap leaching process for copper. Under this method, ore is placed on leach pads where it is treated with a chemical solution, which dissolves the gold or copper contained in the ore. The resulting “pregnant” solution is further processed in a plant where the gold or copper is recovered. For accounting purposes, costs are added to ore on leach pads based on current mining and leaching costs, including applicable depreciation, depletion and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces or pounds are recovered based on the average cost per recoverable ounce of gold or pound of copper on the leach pad.
 
Estimates of recoverable gold or copper on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 35% and 95% of the ounces or pounds placed on the pads.
 
Although the quantities of recoverable gold or copper placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of gold or copper actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, our operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of gold or copper on our leach pads. At December 31, 2007, the weighted average cost per recoverable ounce of gold and recoverable pound of copper on leach pads was $287 per ounce and $0.39 per pound, respectively (2006: $180 per ounce of gold and $0.45 per pound of copper). Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis.
 
The ultimate recovery of gold or copper from a leach pad will not be known until the leaching process is concluded. Based on current mine plans, we expect to place the last ton of ore on our current leach pads at dates for gold ranging from 2013 to 2020 and for copper ranging from 2024 to 2029. Including the estimated time required for residual leaching, rinsing and reclamation activities, we expect that our leaching operations will terminate within a period of up to six years following the date that the last ton of ore is placed on the leach pad.
 
The current portion of ore inventory on leach pads is determined based on estimates of the quantities of gold or copper at each balance sheet date that we expect to recover during the next 12 months.
 
Ore in Stockpiles

At December 31	 	2007	 	2006	 	
Gold	 	 	 	 	 	
Goldstrike	 	 	 	 	 	
Ore that requires roasting	 	$	320	 	$	239	 	
Ore that requires autoclaving	 	67	 	84	 	
Kalgoorlie	 	75	 	58	 	
Porgera	 	88	 	17	 	
Cowal	 	36	 	9	 	
Veladero	 	23	 	9	 	
Cortez	 	19	 	3	 	
Turquoise Ridge	 	15	 	15	 	
Golden Sunlight	 	15	 	1	 	
Other	 	40	 	50	 	
Copper	 	 	 	 	 	
Zaldívar	 	63	 	51	 	
 	 	$	761	 	$	536	 	
 
At Goldstrike, we expect to fully process the ore in stockpiles by 2031. At Kalgoorlie, we expect to fully process the stockpile by 2018. At Porgera, we expect to fully process the stockpile by 2021. At Zaldívar, we expect to fully process the stockpile by 2029.
 
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14   ·  Accounts Receivable and Other Current Assets

At December 31	 	2007	 	2006	 	
Accounts receivable	 	 	 	 	 	
Amounts due from concentrate sales	 	$	19	 	$	24	 	
Amounts due from copper cathode sales	 	89	 	83	 	
Other receivables	 	148	 	127	 	
 	 	$	256	 	$	234	 	
Other current assets	 	 	 	 	 	
Derivative assets (note 20c)	 	$	334	 	$	 201	 	
Goods and services taxes recoverable	 	161	 	137	 	
Restricted cash	 	131	 	150	 	
Prepaid expenses	 	40	 	32	 	
Other	 	41	 	68	 	
 	 	$	707	 	$	588	 	
 
15  ·  Property, Plant and Equipment

At December 31	 	2007	 	2006	 	
Assets not subject to amortization	 	 	 	 	 	
Acquired mineral properties and capitalized mine development costs(1),(4)	 	$	 2,010	 	$	 1,856	 	
Assets subject to amortization	 	 	 	 	 	
Capitalized mineral property acquisition and mine development costs(4),(5)	 	6,297	 	6,436	 	
Buildings, plant and equipment(2),(5)	 	8,192	 	7,017	 	
 	 	16,499	 	15,309	 	
Accumulated amortization(3)	 	(7,903	)	(6,919	)	
 	 	$	 8,596	 	$	 8,390	 	

(1)              Assets in the exploration or development stage that are not subject to amortization.
 
(2)              Includes $146 million (2006: $131 million) of assets under capital leases.
 
(3)              Includes $66 million (2006: $41 million) of accumulated amortization for assets under capital leases.
 
(4)              Includes a $176 million reclassification from amortized assets to assets not subject to amortization for Cortez Hills. This reclassification has no impact on total property, plant & equipment and no impact on amortization expense.
 
(5)              Includes a $108 million reclassification in 2006 from Buildings, plant and equipment to Capitalized mine development costs. This classification has no impact on total property, plant and equipment and no impact on amortization expense.
 
a) Unamortized Assets
 
Acquired Mineral Properties and Capitalized Mine Development Costs

 	 	Carrying amount
at December 31,	 	Carrying amount
at December 31,	 	
 	 	2007	 	2006	 	
Exploration projects and other land positions	 	$	109	 	$	287	 	
Value beyond proven and probable reserves at producing mines	 	299	 	353	 	
Projects	 	 	 	 	 	
Ruby Hill	 	—	 	49	 	
Pascua-Lama	 	609	 	459	 	
Cortez Hills(1)	 	361	 	306	 	
Pueblo Viejo	 	157	 	152	 	
Sedibelo	 	81	 	76	 	
Donlin Creek(2)	 	—	 	66	 	
Buzwagi	 	224	 	108	 	
Punta Colorada Wind Farm	 	35	 	—	 	
Kainantu and PNG exploration licenses	 	135	 	—	 	
 	 	$	 2,010	 	$	 1,856	 	

(1)              $176 million and $48 million have been classified from acquired mineral properties and capitalized mine development costs and value beyond proven and probable reserves of producing mines, respectively, to the Cortez Hills development stage project for 2007 and 2006. This reclassification has no effect on the total property, plant and equipment balance and no effect on net income in either year.
 
(2)              See note 12 for further details.
 
Value beyond proven and probable reserves (“VBPP”)
 
At the end of each fiscal year, as part of our annual business cycle, we prepare estimates of proven and probable gold and copper mineral reserves for each mineral property. An amount is transferred out of VBPP into amortizable assets based on the quantity of resources converted into reserves. In 2007, we transferred $54 million from VBPP to amortizable assets (2006 and 2005: $nil).
 
Acquisitions
 
We capitalize the cost of acquisition of land and mineral rights. On acquiring a mineral property, we estimate the fair value of proven and probable reserves as well as the value beyond proven and probable reserves and we record these amounts as assets at the date of acquisition. At the time mineralized material is converted into proven and probable reserves, we classify the capitalized acquisition cost associated with those reserves as a component of acquired mineral properties, which are subject to amortization. When production begins, capitalized acquisition costs that are subject to amortization are amortized to operations using the units-of-production method.
 
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In 2007, amortization of property, plant and equipment began at our Ruby Hill mine after it moved from construction into the production phase. (2006: Cowal mine; 2005: Tulawaka, Lagunas Norte and Veladero mines). Amortization also began in 2005 at the Western 102 power plant in Nevada that was built to supply power for the Goldstrike mine as it moved from construction into the production phase.
 
Gold and Copper Mineral Reserves
 
At the end of each fiscal year, as part of our annual business cycle, we prepare estimates of proven and probable gold and copper mineral reserves for each mineral property, including the transfer of the values beyond proven and probable (“VBPP”) reserves to assets subject to amortization. We prospectively revise calculations of amortization of property, plant and equipment. The effect of changes in reserve estimates and transfers of VBPP reserves to assets subject to amortization on amortization expense for 2007 was an increase of $31 million (2006: $75 million decrease; 2005: $28 million decrease).
 
Interest Costs
 
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 also capitalize interest costs on the value assigned to projects acquired from third parties. We also capitalize interest costs on the carrying amount of eligible equity method investments.
 
b) Assets Subject to Amortization
 
Capitalized Mineral Property Acquisition and Mine Development Costs
 
We start amortizing capitalized mineral property acquisition and mine development costs when production begins. 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. 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. Costs incurred and capitalized to enable access to specific ore blocks or areas of the mine, and which only provide an economic benefit over the period of mining that ore block or area, are 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 underground development 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. At our Open Pit mining operations, costs of moving overburden waste materials are capitalized until the production stage has commenced.
 
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. Costs incurred that do not extend the productive capacity or useful economic life of an asset are considered repairs and maintenance and expensed as incurred. We amortize the capitalized cost of assets less any estimated residual value, using the straight-line method over the estimated useful economic life of the asset based on their expected use in our business. The longest estimated useful economic life for buildings and equipment at ore processing facilities is 25 years and for mining equipment is 15 years.
 
In the normal course of our business, we have entered into certain leasing arrangements whose conditions meet the criteria for the leases to be classified as capital leases. For capital leases, we record an asset and an obligation at an amount equal to the present value at the beginning of the lease term of minimum lease payments over the lease term. In the case of our capital leasing arrangements, there is transfer of ownership of the leased assets to us at the end of the lease term and therefore we amortize these assets on a basis consistent with our other owned assets.
 
c) Impairment Evaluations
 
Producing 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 related to a mine or project are included in one group. If there are indications that an impairment may have occurred at a particular mine site, we compare the sum of the undiscounted cash flows expected to be generated from that mine to its carrying amount. If the sum of undiscounted cash flows is less than the carrying amount, an impairment charge is recognized if the carrying amounts of the individual long-lived assets within the group exceed their fair values.
 
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Long-lived assets subject to potential impairment at operating mines and development projects include buildings, plant and equipment, and capitalized mineral property acquisition and mine development costs. For impairment assessment purposes, the estimated fair value of buildings, plant and equipment is based on a combination of current depreciated replacement cost and current market value. The estimated fair value of capitalized mineral property acquisition and mine development costs is based on a discounted cash flow model.
 
Exploration Projects
 
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 an impairment may exist, we compare the carrying amount to its fair value. The fair value for exploration projects is based on a discounted cash flow model. For projects that do not have reliable cash flow projections, a market approach is applied. In the event land and mineral rights are impaired, we reduce the carrying amount to estimated fair value and an impairment charge is recorded.
 
d) Capital Commitments
 
In addition to entering into various operational commitments in the normal course of business, we had commitments of approximately $159 million at December 31, 2007 for construction activities at our development projects.
 
e) Insurance
 
We purchase insurance coverage for certain insurable losses, subject to varying deductibles, at our mineral properties including losses such as property damage and business interruption. We record losses relating to insurable events as they occur. Proceeds receivable from insurance coverage are recorded at such time as receipt is probable and the amount receivable is fixed or determinable.
 
Insurance Proceeds

 	 	2007	 	2006	 	2005	 	
Cost of sales	 	$	16	 	$	—	 	$	 —	 	
Discontinued operations	 	21	 	12	 	—	 	
 	 	$	37	 	$	12	 	$	 —	 	
 
16 · Intangible Assets

 	 	2007	 	2006	 	
 	 	Gross carrying	 	Accumulated	 	Net carrying	 	Gross carrying	 	Accumulated	 	Net carrying	 	
For the years ended December 31	 	amount	 	amortization	 	amount	 	amount	 	amortization	 	amount	 	
Water rights(1)	 	$	28	 	$	—	 	$	28	 	$	28	 	$	—	 	$	28	 	
Technology(2)	 	17	 	—	 	17	 	17	 	—	 	17	 	
Supply contracts(3)	 	23	 	15	 	8	 	23	 	9	 	14	 	
Royalties(4)	 	17	 	2	 	15	 	17	 	1	 	16	 	
 	 	$	 85	 	$	 17	 	$	 68	 	$	 85	 	$	 10	 	$	 75	 	
Aggregate period amortization expense	 	$	 —	 	$	 7	 	$	 —	 	$	 —	 	$	 10	 	$	 —	 	
 	 	 	 	 	 	 	 	 	 	 	 	
For the years ended December 31	 	2008	 	2009	 	2010	 	2011	 	2012	 	
Estimated aggregate amortization expense	 	 	 	$	 5	 	$	 3	 	$	 1	 	$	 1	 	$	 1	 	

(1)         The water rights at Zaldívar are subject to annual impairment testing and will be amortized when we use them in the future.
 
(2)         The acquired technology will be used at the Pueblo Viejo project. The amount will be amortized using the units-of-production method over the estimated proven and probable reserves of the mine, with no assumed residual value.
 
(3)         Supply contracts are being amortized over the weighted average contract lives of 4–8 years, with no assumed residual value.
 
(4)         Royalties are being amortized using the units-of-production method over the total ounces subject to royalty payments under the agreement.
 
Supply Agreement with Yokohama Rubber Co. Ltd. (“Yokohama”)
 
In December 2007, we signed an agreement with Yokohama to secure the supply of tires. Under the agreement, in January 2008, we advanced Yokahama $35 million to fund expansion of their production facility and secure supply of tires for a 10-year period.
 
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17 · Goodwill

 	 	Gold	 	Copper	 	 	
 	 	North
America	 	Australia	 	South
America	 	Africa	 	Australia	 	South
America	 	Total	 	
Opening balance, January 1, 2006	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	
Additions(1)	 	2,423	 	1,811	 	441	 	1,024	 	64	 	743	 	6,506	 	
Disposals(2)	 	—	 	—	 	—	 	(651	)	—	 	—	 	(651	)	
Closing balance, December 31, 2006	 	$	 2,423	 	$	 1,811	 	$	 441	 	$	 373	 	$	 64	 	$	 743	 	$	 5,855	 	
Additions(3)	 	—	 	34	 	—	 	—	 	—	 	—	 	34	 	
Impairments(4)	 	(42	)	—	 	—	 	—	 	—	 	—	 	(42	)	
Closing balance, December 31, 2007	 	$	 2,381	 	$	 1,845	 	$	 441	 	$	 373	 	$	 64	 	$	 743	 	$	 5,847	 	

(1)         Represents goodwill acquired as a result of the acquisition of Placer Dome Inc. No portion of this goodwill is expected to be deductible for income tax purposes.
 
(2)         Represents goodwill associated with the sale of our 50% interest in the South Deep mine to Gold Fields Ltd.
 
(3)         Represents goodwill acquired as a result of the acquisition of an additional 20% interest in Porgera. This goodwill is expected to be deductible for income tax purposes. (note 3e).
 
(4)         Impairment charges recorded in the fourth quarter related to the Golden Sunlight ($35 million) and Eskay Creek ($7 million) mines, as a result of our annual goodwill impairment test. The goodwill impairment charges are primarily due to the short remaining lives of these mines.
 
Accounting Policy for Goodwill and Goodwill Impairment
 
Under the purchase method, the cost of business acquisitions is allocated to the assets acquired and liabilities assumed based on the estimated fair value at the date of acquisition. The excess of purchase cost over the net fair value of identified tangible and intangible assets and liabilities acquired represents goodwill that is allocated to reporting units. We believe that goodwill arises principally because of the following factors: (1) The going concern value implicit in our ability to sustain and/or grow our business by increasing reserves and resources through new discoveries; and (2) The ability to capture unique synergies that can be realized from managing a portfolio of both acquired and existing mines and mineral properties in our regional business units.
 
In 2006, we determined that goodwill should be allocated to reporting units that would either represent components (individual mineral properties) or aggregations of components up to a regional business unit level. As at December 31, 2006, the process of determining the appropriate level to allocate goodwill was ongoing. In fourth quarter 2006, we completed impairment tests of goodwill assuming both no aggregation of mineral properties, and aggregation of mineral properties up to the regional business unit level and determined that there were no impairments at that date under either methodology. In second quarter 2007, we determined that an individual mineral property that is an operating mine is a reporting unit for the purposes of allocating goodwill. On this basis, we allocated goodwill arising from the Placer Dome acquisition to both acquired and existing mineral properties.
 
Allocations for goodwill arising on the acquisition of Placer Dome were calculated by first comparing the fair value of acquired reporting units to the fair value of net identified assets allocated to the reporting units. Secondly, the fair value of estimated synergies arising on the combination between Barrick and Placer Dome was used to allocate goodwill both to reporting units acquired and existing Barrick reporting units expected to benefit from the combination.
 
On an annual basis in the fourth quarter of our fiscal year, we evaluate the carrying amount of goodwill assigned to reporting units for potential impairment. This impairment assessment involves estimating the fair value of each reporting unit that includes goodwill. We compare this fair value to the total carrying amount of each reporting unit (including goodwill). If the carrying amount exceeds this fair value, 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 implied fair value of the reporting unit’s goodwill, which is compared to its carrying amount. Any excess of the carrying value over the fair value is charged to earnings.
 
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Gold mining companies typically trade at a market capitalization that is based on a multiple of net asset value (“NAV”), whereby NAV represents a discounted cash flow valuation based on projected future cash flows. For goodwill impairment testing purposes, we estimate the fair value of a gold property by applying a multiple to the reporting units NAV. For a copper property, the estimated fair value is based on its NAV and no multiple is applied. The process for determining fair value is subjective and requires us to make numerous assumptions including, but not limited to, projected future revenues based on estimated production, long-term metal prices, operating expenses, capital expenditures, discount rates and NAV multiples. In particular, our assumptions with respect to long-term gold prices and the appropriate NAV multiple to apply have a significant impact on our estimate of fair value. In our 2007 annual goodwill impairment test we used a long-term gold price of $800 per ounce and NAV multiples ranging from 1.0 to 2.0, depending on each property’s geographic location and estimated remaining economic life. On completion of this test, we recorded a goodwill impairment charge of $35 million at our Golden Sunlight mine and $7 million at our Eskay Creek mine. The goodwill impairment charges at these mines are primarily a result of their short remaining lives.
 
18 · Other Assets

At December 31	 	2007	 	2006	 	
Non-current ore in stockpiles (note 13)	 	$	 510	 	$	 368	 	
Derivative assets (note 20c)	 	220	 	209	 	
Goods and services taxes recoverable	 	54	 	48	 	
Deferred income tax assets (note 23)	 	722	 	528	 	
Debt issue costs	 	27	 	36	 	
Deferred share-based compensation (note 26b)	 	75	 	36	 	
Notes receivable	 	97	 	65	 	
Deposits receivable	 	147	 	82	 	
Other	 	84	 	49	 	
 	 	$	 1,936	 	$	 1,421	 	
 
Debt Issue Costs
 
In 2007, no new debt financings were put into place and there were no additions to debt issue costs. Amortization of debt issue costs is calculated using the interest method over the term of each debt obligation, and classified as a component of interest cost (see note 20b).
 
19 · Other Current Liabilities

At December 31	 	2007	 	2006	 	
Asset retirement obligations (note 21)	 	$	 74	 	$	 50	 	
Derivative liabilities (note 20c)	 	100	 	82	 	
Post-retirement benefits (note 27)	 	11	 	11	 	
Deferred revenue	 	23	 	—	 	
Income taxes payable (note 9)	 	38	 	159	 	
Other	 	9	 	1	 	
 	 	$	 255	 	$	 303	 	
 
20 · 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 elsewhere in these financial statements as follows: accounts receivable – note 14; investments – note 12; restricted share units – note 26b.
 
a) Cash and Equivalents
 
Cash and equivalents include cash, term deposits and treasury bills with original maturities of less than 90 days. Cash and equivalents include $480 million (2006: $605 million) held in Argentinean and Chilean subsidiaries that have been designated for use in funding construction costs at our Pascua-Lama project.
 
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b)                          Long-Term Debt(6)

 	 	2007	 	2006	 	2005	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Assumed	 	 	 	 	 	 	 	 	 	
 	 	At	 	 	 	 	 	 	 	At	 	 	 	 	 	 	 	on acquisition of	 	At	 	 	 	 	 	 	 	
 	 	Dec. 31	 	Proceeds	 	Repayments	 	Amortization(5)	 	Dec. 31	 	Proceeds	 	Repayments	 	Amortization(5)	 	Placer Dome	 	Dec. 31	 	Proceeds	 	Repayments	 	Amortization(5)	 	
7.50% debentures(1)	 	$        —	 	$          —	 	$             500	 	$                      —	 	$      498	 	$          —	 	$               —	 	$                      —	 	$                      —	 	$      490	 	$          —	 	$               —	 	$                      —	 	
5.80%/4.875% notes	 	745	 	—	 	—	 	—	 	745	 	—	 	—	 	—	 	—	 	745	 	—	 	—	 	—	 	
Veladero financing	 	163	 	—	 	57	 	—	 	220	 	13	 	30	 	—	 	—	 	237	 	39	 	—	 	—	 	
Bulyanhulu financing	 	51	 	—	 	34	 	—	 	85	 	—	 	34	 	—	 	—	 	119	 	—	 	31	 	—	 	
Other debt(2)	 	923	 	—	 	101	 	—	 	1,024	 	50	 	—	 	6	 	867	 	113	 	50	 	—	 	—	 	
Copper-linked notes	 	515	 	—	 	393	 	—	 	908	 	995	 	87	 	—	 	—	 	—	 	—	 	—	 	—	 	
US dollar notes	 	480	 	393	 	—	 	—	 	87	 	87	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Senior convertible debentures	 	293	 	—	 	—	 	3	 	296	 	—	 	—	 	4	 	300	 	—	 	—	 	—	 	—	 	
Capital leases	 	85	 	15	 	24	 	—	 	94	 	7	 	16	 	—	 	6	 	97	 	90	 	28	 	—	 	
Series B Preferred Securities	 	—	 	—	 	—	 	—	 	—	 	—	 	77	 	2	 	79	 	—	 	—	 	—	 	—	 	
First credit facility(3)	 	—	 	—	 	—	 	—	 	—	 	1,000	 	1,000	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	3,255	 	408	 	1,109	 	3	 	3,957	 	2,152	 	1,244	 	12	 	1,252	 	1,801	 	179	 	59	 	—	 	
Less: current portion	 	(102	)	—	 	—	 	—	 	(713	)	—	 	—	 	—	 	—	 	(80	)	—	 	—	 	—	 	
 	 	$   3,153	 	$        408	 	$          1,109	 	$                        3	 	$   3,244	 	$     2,152	 	$          1,244	 	$                      12	 	$                 1,252	 	$   1,721	 	$        179	 	$               59	 	$                      —	 	
Short-term debt	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Demand financing facility	 	131	 	—	 	19	 	—	 	150	 	—	 	—	 	—	 	150	 	—	 	—	 	—	 	—	 	
Second credit facility(4)	 	—	 	—	 	—	 	—	 	—	 	37	 	337	 	—	 	300	 	—	 	—	 	—	 	—	 	
 	 	$      131	 	$          —	 	$               19	 	$                      —	 	$      150	 	$          37	 	$             337	 	$                      —	 	$                    450	 	$        —	 	$          —	 	$               —	 	$                      —	 	

(1)           During second quarter 2007, we repaid the $500 million 7.5% debentures from existing cash balances and proceeds from the sale of investments.
 
(2)           The debt has an aggregate principal amount of $923 million, of which $163 million is subject to floating interest rates and $760 million is subject to fixed interest rates ranging from 6.37% to 7.75%. The notes mature at various times between 2009 and 2035.
 
(3)           We 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 $1.5 billion or the equivalent amount in Canadian currency. The credit facility, which is unsecured, has an interest rate of Libor plus 0.25% to 0.35% on drawn down amounts, and a commitment rate of 0.07% to 0.08% on undrawn amounts. We increased the limit of this facility from $1 billion in August 2006. The facility currently matures in 2011.
 
(4)           During third quarter 2006, we terminated a second credit facility which consisted of unused bank lines of credit of $850 million with an international consortium of banks.
 
(5)           Amortization of debt discount/premium.
 
(6)           The agreements which govern our long-term debt each contain various provisions which are not summarized herein. In certain cases, these provisions allow Barrick to, at its option, redeem indebtedness prior to maturity at specified prices and also may permit redemption of debt by Barrick upon the occurrence of certain specified changes in tax legislation.
 
Veladero Financing
 
One of our wholly owned subsidiaries, Minera Argentina Gold S.A. in Argentina, has a limited recourse amortizing loan facility for $250 million, the majority of which has a variable interest rate. We have guaranteed the loan until completion occurs, after which it will become non-recourse to the parent company. As at December 31, 2007, completion as defined in the loan agreement has not occurred. The loan is insured for political risks by branches of the Canadian and German governments.
 
Copper-Linked Notes/US Dollar Notes
 
In October 2006, we issued $1,000 million of Copper-Linked Notes. During the first three years, the full $1,000 million obligation of these notes is to be repaid through the delivery of (the US dollar equivalent of) 324 million pounds of copper. At December 31, 2007, 156 million pounds of copper remained to be delivered (2008 – 103 million pounds; 2009 – 53 million pounds). Coincident with the repayment of (the US dollar equivalent of) 324 million pounds of copper, we will reborrow $1,000 million. Over the next two years,
 
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the total amount outstanding under these notes will continue to be $1,000 million, with a portion repayable in a copper-linked equivalent and a portion repayable in a fixed amount of US dollars at the maturity of the notes (2016 and 2036). As the copper-linked equivalent is repaid, the fixed US dollar obligation will increase. After 2009, only the fixed US dollar obligation will remain. The accounting principles applicable to these Copper-Linked Notes require separate accounting for the future delivery of copper (a fixed-price forward sales contract that meets the definition of a derivative that must be separately accounted for) and for the underlying bond (see note 20c).
 
Senior Convertible Debentures
 
The convertible senior debentures (the “Securities”) mature in 2023 and had an aggregate principal amount of $293 million outstanding as at the end of 2007. Holders of the Securities may, upon the occurrence of certain circumstances and within specified time periods, convert their Securities into common shares of Barrick. These circumstances are: if the closing price of our common shares exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter; if certain credit ratings assigned to the Securities fall below specified levels or if the Securities cease to be rated by specified rating agencies or such ratings are suspended or withdrawn; if for each of five consecutive trading days, the trading price per $1,000 principal amount of the Securities was less than 98% of the product of the closing price of our common shares and the then current conversion rate; if the Securities have been called for redemption provided that only such Securities called for redemption may be converted and upon the occurrence of specified corporate transactions. On December 31, 2007 the conversion rate per each $1,000 principal amount of Securities was 39.99 common shares and the effective conversion price was $25.01 per common share. The conversion rate is subject to adjustment in certain circumstances. As such, the effective conversion price may also change.
 
The Securities were convertible from October 1, 2007 through December 31, 2007. No holder of Securities converted during this period. However, had all the Securities been converted and settlement occurred on December 31, 2007, we would have issued approximately 9.2 million common shares with an aggregate fair value of approximately $ 386.7 million based on our closing share price on December 31, 2007. The Securities are also convertible from January 1, 2008 through March 31, 2008.
 
We may redeem the Securities at any time on or after October 20, 2010 and prior to maturity, in whole or in part, at a prescribed redemption price that varies depending upon the date of redemption from 100.825% to 100% of the principal amount, plus accrued and unpaid interest. The maximum amount we could be required to pay to redeem the securities is $232 million plus accrued interest. Holders of the Securities can require the repurchase of the Securities for 100% of their principal amount, plus accrued and unpaid interest, on October 15, 2013 and October 15, 2018. In addition, if specified designated events occur prior to maturity of the Securities, we will be required to offer to purchase all outstanding Securities at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. For accounting purposes the Securities are classified as a “conventional convertible debenture” and the conversion feature has not been bifurcated from the host instrument.
 
Series B Preferred Securities
 
On December 18, 2006, we redeemed all of the outstanding 8.5% Series B Preferred Securities due December 31, 2045 for total cash of $80 million. The redemption price was comprised of the outstanding principal amount of $77 million plus accrued and unpaid interest to December 17, 2006 of $3 million.
 
Demand Financing Facility
 
We have a demand financing facility that permits borrowings of up to $150 million. The terms of the facility require us to maintain cash on deposit with the lender as a compensating balance equal to the amount outstanding under the facility, which is restricted as to use. The net effective interest rate is 0.4% per annum. At December 31, 2007, $131 million had been drawn on the facility and an equal amount had been placed on deposit that is included in restricted cash (see note 14).
 
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 	 	For the years ended December 31	 	
 	 	2007	 	2006	 	2005	 	
 	 	Interest	 	Effective	 	Interest	 	Effective	 	Interest	 	Effective	 	
Interest	 	cost	 	rate(1)	 	cost	 	rate(1)	 	cost	 	rate(1)	 	
7.50% debentures	 	$	16	 	9.9	%	$	49	 	9.8	%	$	41	 	8.21	%	
5.80%/4.875% notes	 	41	 	5.6	%	41	 	5.5	%	42	 	5.6	%	
Veladero financing	 	21	 	10.2	%	25	 	10.2	%	20	 	8.6	%	
Bulyanhulu financing	 	5	 	6.2	%	6	 	5.5	%	10	 	7.5	%	
Other debt	 	60	 	6.1	%	53	 	5.4	%	3	 	4.1	%	
Copper-linked notes/US dollar notes	 	63	 	6.2	%	13	 	5.8	%	—	 	—	 	
Senior convertible debentures	 	2	 	0.8	%	6	 	2.0	%	—	 	—	 	
Capital leases	 	6	 	7.7	%	6	 	6.7	%	6	 	6.2	%	
Series B Preferred Securities	 	—	 	—	 	3	 	4.4	%	—	 	—	 	
Demand financing facility	 	13	 	8.9	%	12	 	8.8	%	—	 	—	 	
First credit facility	 	1	 	—	 	29	 	7.4	%	—	 	—	 	
Second credit facility	 	—	 	—	 	6	 	5.0	%	—	 	—	 	
Other interest	 	9	 	 	 	2	 	 	 	(1	)	 	 	
 	 	237	 	 	 	251	 	 	 	121	 	 	 	
Less: interest allocated to discontinued operations	 	—	 	 	 	(23	)	 	 	—	 	 	 	
Less: interest capitalized	 	(124	)	 	 	(102	)	 	 	(118	)	 	 	
 	 	$	113	 	 	 	$	126	 	 	 	$	3	 	 	 	
Cash interest paid	 	$	236	 	 	 	$	211	 	 	 	$	108	 	 	 	
Amortization of debt issue costs	 	9	 	 	 	12	 	 	 	2	 	 	 	
Amortization of premium	 	(3	)	 	 	(12	)	 	 	—	 	 	 	
Losses on interest rate hedges	 	4	 	 	 	12	 	 	 	5	 	 	 	
Increase (decrease) in interest accruals	 	(9	)	 	 	28	 	 	 	6	 	 	 	
Interest cost	 	$	237	 	 	 	$	251	 	 	 	$	121	 	 	 	

(1)         The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest rate contracts designated in a hedging relationship with long-term debt.
 
Scheduled Debt Repayments

 	 	 	 	 	 	 	 	 	 	2012 and	 	
 	 	2008	 	2009	 	2010	 	2011	 	thereafter	 	
5.80%/4.875% notes	 	$	 —	 	$	 —	 	$	 —	 	$	 —	 	$	 750	 	
Veladero financing	 	48	 	53	 	30	 	10	 	22	 	
Bulyanhulu financing	 	34	 	17	 	—	 	—	 	—	 	
Copper-linked notes/US dollar notes(1)	 	—	 	—	 	—	 	—	 	1,000	 	
Other debt	 	—	 	16	 	—	 	—	 	844	 	
Senior convertible debentures	 	—	 	—	 	—	 	—	 	230	 	
 	 	$	 82	 	$	 86	 	$	 30	 	$	 10	 	$	 2,846	 	
Minimum annual payments under capital leases	 	$	 21	 	$	 24	 	$	 20	 	$	 8	 	$	 6	 	

(1)           The Copper-linked notes/US dollar notes have scheduled repayments through the delivery of pre-determined amounts of copper (see Copper-Linked Notes/ US Dollar Notes).
 
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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	
·   Sales	 	·   Prices of gold and copper	
·   Cost of sales	 	 	
·   Consumption of diesel fuel and propane	 	·   Prices of diesel fuel, propane and natural gas	
·   Local currency denominated expenditures	 	·   Currency exchange rates – US dollar versus A$, C$, CLP, ARS, PGK and TZS	
·   By-product credits	 	·   Prices of silver and copper	
·   Administration, exploration and business development costs in local currencies	 	·   Currency exchange rates – US dollar versus A$, ZAR, CLP, ARS, PGK and C$	
·   Capital expenditures in local currencies	 	·   Currency exchange rates – US dollar versus A$, C$, CLP, ARS, PGK and EUR	
·   Interest earned on cash	 	·   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 provide certainty for a portion of our revenues and 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 of 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”. The change in fair value of these non-hedge derivatives is recorded in earnings, in a manner consistent with the derivative positions’ intended use.
 
Non-Hedge Derivative Gains/Losses

 	 	Income statement	
 	 	classification	
Gold contracts	 	Revenue	
Copper contracts	 	Revenue	
Silver contracts	 	Cost of sales	
Fuel contracts	 	Cost of sales	
Currency contracts	 	Other expense	
Interest rate swaps	 	Interest income/expense	
Share purchase warrants	 	Other income	
 
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Summary of Derivatives at December 31, 2007( 1)

 	 	Notional amount by term to maturity	 	Accounting
classification by
notional amount	 	Fair value	 	
 	 	Within	 	2 to 5	 	Over 5	 	 	 	Cash flow	 	Fair value	 	Non-	 	 	 	
 	 	1 year	 	years	 	years	 	Total	 	hedge	 	hedge	 	hedge	 	 	 	
US dollar interest rate contracts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Receive-fixed swaps (millions)	 	$	—	 	$	50	 	$	—	 	$	50	 	$	—	 	$	—	 	$	50	 	$	1	 	
Pay-fixed swaps (millions)	 	—	 	(125	)	—	 	(125	)	—	 	—	 	(125	)	(11	)	
Net swap position	 	$	—	 	$	(75	)	$	—	 	$	(75	)	$	—	 	$	—	 	$	(75	)	$	(10	)	
Currency contracts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
C$:US$contracts (C$millions)	 	C$	331	 	C$	219	 	C$	—	 	C$	550	 	C$	450	 	C$	—	 	C$	100	 	$	31	 	
A$:US$contracts (A$millions)	 	A$	1,379	 	A$	3,232	 	A$	—	 	A$	4,611	 	A$	4,518	 	A$	—	 	A$	93	 	210	 	
EUR:US$contracts (€millions)	 	€	4	 	€	—	 	€	—	 	€	4	 	€	1	 	€	—	 	€	3	 	—	 	
CLP:US$contracts (CLP billions)	 	CLP	42	 	CLP	—	 	CLP	—	 	CLP	42	 	CLP	42	 	CLP	—	 	CLP	—	 	—	 	
Commodity contracts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Copper call option spread contracts (millions of pounds)	 	103	 	53	 	—	 	156	 	—	 	—	 	156	 	$	25	 	
Copper sold forward contracts (millions of pounds)	 	100	 	72	 	—	 	172	 	172	 	—	 	—	 	—	 	
Copper collar contracts (millions of pounds)	 	299	 	—	 	—	 	299	 	272	 	—	 	27	 	49	 	
Diesel forward contracts (thousands of barrels)(2)	 	1,868	 	2,910	 	440	 	5,218	 	4,505	 	—	 	713	 	84	 	

(1)           Excludes gold sales contracts (see note 5), gold lease rate swaps (see note 5).
 
(2)           Diesel commodity contracts represent a combination of WTI, WTB, MOPS and JET hedge contracts and diesel price contracts based on the price of WTI, WTB, MOPS, and JET, respectively, plus a spread. WTI represents West Texas intermediate, WTB represents Water Borne, MOPS represents Mean of Platts Singapore, JET represents Jet Fuel.
 
US Dollar Interest Rate Contracts
 
Receive-fixed swaps totaling $300 million were closed out in third quarter 2007. They had been designated against the Copper-linked notes/US dollar notes, included in long-term debt, as a hedge of the variability in the fair value of the debentures caused by changes in LIBOR. For these hedges, prospective hedge effectiveness was assessed by comparing the effects of theoretical shifts in forward interest rates on the fair value of both the debt and the swaps. The retrospective assessment involved comparing the effect of changes in the underlying interest rate (i.e., LIBOR) on both the debt and the swaps.
 
In the second quarter, receive-fixed swaps totaling $500 million expired. These swaps were set up as fair value hedges of the $500 million 7.5% debentures which matured on May 1, 2007. Changes in fair value of the swaps, together with changes in fair value of the debentures caused by changes in LIBOR, were recorded in earnings each period. Also, as interest payments on the debentures are recorded in earnings, an amount equal to the net of the fixed-rate interest receivable and the variable-rate interest payable is recorded in earnings as a component of interest costs.
 
Currency Contracts
 
Cash Flow Hedges
 
Currency contracts totaling C$450 million, A$4,518 million, €1 million and CLP 42 billion 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 over the next four years. Hedged items are identified as the first stated quantity of dollars of forecasted expenditures in a future month. For a C$450 million, A$4,452 million, €1 million and CLP 42 billion 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 the remaining A$66 million, 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.
 
Non-hedge Contracts
 
On December 31, 2007, we had non-hedge Canadian currency contracts of $100M. We entered these contracts to hedge the purchase price of Arizona Star. The contracts qualified for hedge accounting treatment from the designation date to the
 
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acquisition date of December 20, 2007. After December 20, 2007, the contracts were no longer considered hedges under FAS 133, and all changes in fair value subsequent to that date were recorded in current period earnings. These non-hedge contracts matured at the end of January 2008.
 
During 2007, we entered into a series of A$ contracts as identified above. A$93 million contracts were not designated as hedges and are outstanding as of December 31, 2007.
 
Commodity Contracts
 
Cash Flow Hedges
 
Commodity contracts totaling 4,505 thousand barrels of diesel fuel 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 over the next seven years. Hedged items are identified as the first stated quantity in millions of barrels/gallons of forecasted purchases in a future month. Prospective 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.
 
The terms of a series of copper-linked notes resulted in an embedded fixed-price forward copper sales contract for 324 million pounds that meets the definition of a derivative and must be separately accounted for. At December 31, 2007, embedded fixed-price forward copper sales contracts for 156 million pounds were outstanding due to deliveries of copper totaling 168 million pounds. The resulting copper derivative has been designated against future copper cathode at the Zaldívar mine as a cash flow hedge of the variability in market prices of those future sales. Hedged items are identified as the first stated quantity of pounds of forecasted sales in a future month. Prospective hedge effectiveness is assessed on these hedges using a dollar offset method. The dollar offset assessment involves comparing the effect of theoretical shifts in forward copper prices on the fair value of both the actual hedging derivative and a hypothetical hedging derivative. The retrospective assessment involves comparing the effect of historic changes in copper 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 copper contracts is recorded in OCI until the forecasted copper sale impacts earnings.
 
During 2007 we added 392 million pounds of copper collar contracts which provide a floor price and a cap price for copper sales. 315 million pounds of the collars were designated against copper cathode sales at our Zaldívar mine and 77 million pounds are designated against copper concentrate sales at our Osborne mine. At December 31, 2007 we had 207 million pounds of copper collar contracts remaining at Zaldívar and 65 million pounds at Osborne.
 
For collars designated against copper cathode production, the hedged items are identified as the first stated quantity of pounds of forecasted sales in a future month. Prospective hedge effectiveness is assessed on these hedges using a dollar offset method. The dollar offset assessment involves comparing the effect of theoretical shifts in forward copper prices on the fair value of both the actual hedging derivative and a hypothetical hedging derivative. The retrospective assessment involves comparing the effect of historic changes in copper 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 copper contracts is recorded in OCI until the forecasted copper sale impacts earnings.
 
Concentrate sales at our Osborne mine contain both gold and copper, and as a result, are exposed to price changes of both commodities. Prospective hedge effectiveness is assessed using a regression method. The regression method involves comparing month-by-month changes in fair value of both the actual hedging derivative and a hypothetical derivative (derived from the price of concentrate) caused by actual historical changes in commodity prices over the last three years. The retrospective assessment involves comparing the effect of historic changes in copper 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 copper contracts is recorded in OCI until the forecasted copper sale impacts earnings. During 2007, we recorded ineffectiveness of $5 million on these hedges. The ineffectiveness was caused by changes in the price of gold impacting the hypothetical derivative, but not the hedging derivative. Prospective effectiveness tests indicate that these hedges are expected to be highly effective in the future.
 
Non-hedge Contracts
 
Non-hedge fuel contracts are used to mitigate the risk of oil price changes on other fuel consumption. 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
 
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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. Changes in fair value of non-hedge fuel contracts are recorded in current period cost of sales.
 
In first quarter 2007, we purchased and sold call options on 274 million pounds of copper over the next 2 1 / 2  years. These options, when combined with the aforementioned fixed-price forward copper sales contracts, economically lock in copper sales prices between $3.08/lb and $3.58/lb over a period of 2 1 / 2  years. years. At December 31, 2007, the notional amount of options outstanding had decreased to 156 million pounds due to expiry of options totaling 118 million pounds in 2007. These contracts do not meet the “highly effective” criterion for hedge accounting in FAS 133.We paid net option premiums of $23 million for these positions that were included under investing activities in the cash flow statement. Changes in fair value of these copper options are recorded in current period revenue.
 
During 2007, we entered into a series of copper collar contracts for 27 million pounds of copper that were not designated as hedges and were outstanding as of December 31, 2007.
 
Non-hedge Derivative Gains (Losses)

For the years ended December 31	 	2007	 	2006	 	2005	 	Income statement classification	 	
Commodity contracts	 	 	 	 	 	 	 	 	 	
Copper	 	$	48	 	$	(14	)	$	—	 	Revenue	 	
Gold	 	(8	)	7	 	(4	)	Revenue	 	
Silver	 	—	 	(5	)	—	 	Cost of sales	 	
Fuel	 	7	 	1	 	8	 	Cost of sales	 	
Currency contracts	 	(7	)	—	 	3	 	Other income/expense	 	
Interest rate contracts	 	(2	)	8	 	2	 	Interest income/expense	 	
Share purchase warrants	 	(1	)	—	 	(5	)	Other income/expense	 	
 	 	37	 	(3	)	4	 	 	 	
Hedge ineffectiveness	 	 	 	 	 	 	 	 	 	
Ongoing hedge inefficiency	 	4	 	3	 	1	 	Various	 	
Due to changes in timing of hedged items	 	—	 	—	 	1	 	Various	 	
 	 	$	41	 	$	—	 	$	6	 	 	 	
 
Derivative Assets and Liabilities

 	 	2007	 	2006	 	
At January 1	 	$	178	 	$	204	 	
Acquired with Placer Dome	 	—	 	(1,707	)	
Derivatives cash (inflow) outflow	 	 	 	 	 	
Operating activities	 	(309	)	(184	)	
Financing activities	 	197	 	1,840	 	
Investing activities	 	23	 	—	 	
Change in fair value of:	 	 	 	 	 	
Non-hedge derivatives	 	33	 	(3	)	
Cash flow hedges	 	 	 	 	 	
Effective portion	 	257	 	17	 	
Ineffective portion	 	9	 	3	 	
Share purchase warrants	 	(1	)	—	 	
Fair value hedges	 	2	 	8	 	
At December 31	 	$	389	 	$	178	 	
Classification:	 	 	 	 	 	
Other current assets	 	$	334	 	$	201	 	
Other assets	 	220	 	209	 	
Other current liabilities	 	(100	)	(82	)	
Other long-term obligations	 	(65	)	(150	)	
 	 	$	389	 	$	178	 	

(1)           Derivative assets and liabilities are presented net by offsetting 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 $5 million at December 31, 2007.
 
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Cash Flow Hedge Gains (Losses) in OCI

 	 	Commodity
price hedges	 	Currency hedges	 	Interest rate hedges	 	 	 	
 	 	Gold/
silver	 	Copper	 	Fuel	 	Operating
costs	 	Administration
costs	 	Capital
expenditures	 	Cash
balances	 	Long-term
debt	 	Total	 	
At December 31, 2004	 	$	—	 	$	—	 	$	2	 	$	240	 	$	33	 	$	48	 	$	3	 	$	(25	)	$	301	 	
Effective portion of change in fair value of hedging instruments	 	—	 	—	 	46	 	(38	)	13	 	(4	)	1	 	5	 	23	 	
Transfers to earnings:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
On recording hedged items in earnings	 	—	 	—	 	(10	)	(100	)	(16	)	(4	)	(6	)	2	 	(134	)	
Hedge ineffectiveness due to changes in timing of hedged items	 	—	 	—	 	—	 	—	 	—	 	(1	)(1)	—	 	—	 	(1	)	
At December 31, 2005	 	—	 	—	 	38	 	102	 	30	 	39	 	(2	)	(18	)	189	 	
Effective portion of change in fair value of hedging instruments	 	(148	)	29	 	(1	)	137	 	(2	)	4	 	(2	)	—	 	17	 	
Transfers to earnings:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
On recording hedged items in earnings	 	165	 	28	 	(16	)	(84	)	(14	)	(4	)(1)	1	 	1	 	77	 	
At December 31, 2006	 	$	17	 	$	57	 	$	21	 	$	155	 	$	14	 	$	39	 	$	(3	)	$	(17	)	$	283	 	
Effective portion of change in fair value of hedging instruments	 	—	 	(75	)	87	 	249	 	32	 	(35	)	—	 	(1	)	257	 	
Transfers to earnings:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
On recording hedged items in earnings	 	(2	)	32	 	(29	)	(166	)	(19	)	(5	)(1)	3	 	1	 	(185	)	
At December 31, 2007	 	$	15	 	$	14	 	$	79	 	$	238	 	$	27	 	$	(1	)	$	—	 	$	(17	)	$	355	 	

Hedge gains/losses classified within	 	Gold
sales	 	Copper
sales	 	Cost of
sales	 	Cost of
sales	 	Administration	 	Amortization	 	Interest
income	 	Interest
expense	 	 	 	
Portion of hedge gain (loss) expected to affect 2008 earnings(2)	 	$	2	 	$	24	 	$	27	 	$	141	 	$	18	 	$	—	 	$	—	 	$	(1	)	$	211	 	

(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, 2007.
 
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.
 
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Fair Value Information

 	 	2007	 	2006	 	
At December 31	 	Carrying
amount	 	Estimated
fair
value	 	Carrying
amount	 	Estimated
fair
value	 	
Financial assets	 	 	 	 	 	 	 	 	 	
Cash and equivalents(1)	 	$	2,207	 	$	2,207	 	$	3,043	 	$	3,043	 	
Accounts receivable(1)	 	256	 	256	 	234	 	234	 	
Available-for-sale securities(2)	 	96	 	96	 	646	 	646	 	
Equity-method investments(3)	 	1,074	 	1,113	 	204	 	212	 	
Derivative assets(4)	 	554	 	554	 	410	 	410	 	
Held-to-maturity securities(5)	 	46	 	46	 	—	 	—	 	
 	 	$	4,233	 	$	4,272	 	$	4,537	 	$	4,545	 	
Financial liabilities	 	 	 	 	 	 	 	 	 	
Accounts payable(1)	 	$	808	 	$	808	 	$	686	 	$	686	 	
Long-term debt(6)	 	3,255	 	3,151	 	3,957	 	3,897	 	
Derivative liabilities(4)	 	165	 	165	 	232	 	232	 	
Restricted share units(7)	 	100	 	100	 	42	 	42	 	
Deferred share units(7)	 	4	 	4	 	2	 	2	 	
 	 	$	4,332	 	$	4,228	 	$	4,919	 	$	4,859	 	

(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 are used to determine fair value.
 
(3)           Recorded at cost, adjusted for our share of income/loss and dividends of equity investees. Excludes the investment in Atacama Pty for which there is no readily determinable fair value.
 
(4)           Recorded at fair value based on internal valuation models that reflect forward market commodity prices, currency exchange rates and interest rates, and a discount factor that is based on market US dollar interest rates. If a forward market does not exist, we obtain broker-dealer quotations. Valuations assume all counterparties have an AA credit rating.
 
(5)           Includes ABCP.
 
(6)           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 calculated by discounting the future cash flows under a debt obligation by a discount factor that is based on US dollar market interest rates adjusted for our credit quality.
 
(7)           Recorded at fair value based on our period end closing market share 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, net of any overdraft positions.
 
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 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 counterparty; and
·       monitoring the financial condition of counterparties.
 
Location of credit risk is determined by physical location of the bank branch, customer or counterparty.
 
Credit Quality of Financial Assets

 	 	S&P Credit rating	 	
At December 31, 2007	 	AA– or
higher	 	A– or
higher	 	B to BBB	 	Total	 	
Cash and equivalents(1)	 	$	2,225	 	$	30	 	$	—	 	$	2,255	 	
Derivatives(2)	 	405	 	—	 	—	 	405	 	
Accounts receivable	 	—	 	—	 	256	 	256	 	
Other non-current assets(3)	 	42	 	3	 	1	 	46	 	
 	 	$	2,672	 	$	33	 	$	257	 	$	2,962	 	
Number of counterparties	 	22	 	3	 	 	 	 	 	
Largest counterparty (%)	 	31	%	96	%	 	 	 	 	
 
Concentrations of Credit Risk

 	 	 	 	 	 	Other	 	 	 	
At December 31, 2007	 	United
States	 	Canada	 	Inter-
national	 	Total	 	
Cash and equivalents(1)	 	$	1,831	 	$	103	 	$	321	 	$	2,255	 	
Derivatives(2)	 	151	 	139	 	115	 	405	 	
Accounts receivable	 	191	 	46	 	19	 	256	 	
Other non-current assets(3)	 	46	 	—	 	—	 	46	 	
 	 	$	2,219	 	$	288	 	$	455	 	$	2,962	 	

(1)           The amounts presented reflect the outstanding bank balance held with institutions as at December 31, 2007.
 
(2)           The amounts presented reflect the net credit exposure after considering the effect of master netting agreements.
 
(3)           Other non-current assets include ABCP.
 
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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.
 
21  ·  Asset Retirement Obligations

Asset Retirement Obligations (AROs)	 	2007	 	2006	 	
At January 1	 	$	893	 	$	446	 	
AROs acquired with Placer Dome	 	—	 	387	 	
AROs arising in the period	 	53	 	27	 	
Impact of revisions to expected cash flows	 	 	 	 	 	
Revisions to carrying amount of assets	 	—	 	(7	)	
Recorded in earnings(1)	 	6	 	53	 	
Settlements	 	 	 	 	 	
Cash payments	 	(33	)	(32	)	
Settlement gains	 	(3	)	(4	)	
AROs reclassified under “Liabilities of discontinued operations”	 	—	 	(16	)	
Accretion	 	50	 	39	 	
At December 31	 	966	 	893	 	
Current portion	 	(74	)	(50	)	
 	 	$	892	 	$	843	 	

(1)           In 2006, we recognized an increase of $37 million for a change in estimate of the ARO at the Nickel Plate property in British Columbia, Canada. The adjustment was made on receipt of an environmental study that indicated a requirement to treat ground water for an extended period of time. The increase was recorded as a component of other expense (note 8a).
 
Each period we assess cost estimates and other assumptions used in the valuation of AROs at each of our mineral properties to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the fair value of the ARO. For closed mines, any change in the fair value of AROs results in a corresponding charge or credit within other expense, whereas at operating mines the charge is recorded as an adjustment to the carrying amount of the corresponding asset. In 2007, we recorded adjustments of $53 million for changes in estimates of the AROs at our Hemlo, Cowal, Bulyanhulu, Lagunas Norte and Veladero operating mines. In 2007, charges of $ 6 million were recorded for changes in cost estimates for AROs at closed mines (2006: $53 million; 2005: $15 million expense).
 
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. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure/rehabilitation; demolition of buildings/mine facilities; ongoing water treatment; and ongoing care and maintenance of closed mines. The fair values of AROs are measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest. We prepare estimates of the timing and amount of expected cash flows when an ARO is incurred. We update expected cash flows to reflect changes in facts and circumstances. 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 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. When expected cash flows increase, the revised cash flows are discounted using a current discount factor whereas when expected cash flows decrease the reduced cash flows are discounted using a historic discount factor, and then in both cases any change in the fair value of the ARO is recorded. We record the fair value of an ARO when it is incurred. At producing mines AROs incurred and changes in the fair value of AROs are recorded as an adjustment to the corresponding asset carrying amounts. At closed mines, any adjustment to the fair value of an ARO is charged directly to earnings. AROs are
 
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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. For producing mines, accretion is recorded in the cost of goods sold each period. For development projects and closed mines, accretion is recorded in other 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/losses are recorded in other (income) expense. Other environmental remediation costs that are not AROs as defined by FAS 143 are expensed as incurred (see note 8a).
 
22  ·  Other Non-current Liabilities

At December 31	 	2007	 	2006	 	
Pension benefits (note 27)	 	$	87	 	$	85	 	
Other post-retirement benefits (note 27)	 	27	 	33	 	
Derivative liabilities (note 20c)	 	65	 	150	 	
Restricted share units (note 26b)	 	94	 	42	 	
Deferred revenue	 	88	 	136	 	
Other	 	70	 	72	 	
 	 	$	431	 	$	518	 	
 
23  ·  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 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	 	2007	 	2006	 	
Deferred tax assets	 	 	 	 	 	
Tax loss carry forwards	 	$	729	 	$	798	 	
Capital tax loss carry forwards	 	—	 	30	 	
Alternative minimum tax (“AMT”) credits	 	247	 	198	 	
Asset retirement obligations	 	342	 	303	 	
Property, plant and equipment	 	331	 	333	 	
Inventory	 	—	 	95	 	
Post-retirement benefit obligations	 	23	 	40	 	
Other	 	3	 	3	 	
 	 	1,675	 	1,800	 	
Valuation allowances	 	(419	)	(658	)	
 	 	1,256	 	1,142	 	
Deferred tax liabilities	 	 	 	 	 	
Property, plant and equipment	 	(1,243	)	(1,377	)	
Derivative instruments	 	(122	)	(9	)	
Other	 	(10	)	(26	)	
 	 	$	(119	)	$	(270	)	
Classification:	 	 	 	 	 	
Non-current assets (note 18)	 	$	722	 	$	528	 	
Non-current liabilities	 	(841	)	(798	)	
 	 	$	(119	)	$	(270	)	
 
Expiry Dates of Tax Losses and AMT Credits

 	 	 	 	 	 	 	 	 	 	 	 	No	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	expiry	 	 	 	
 	 	2008	 	2009	 	2010	 	2011	 	2012+	 	date	 	Total	 	
Tax losses(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Canada	 	$	3	 	$	5	 	$	—	 	$	—	 	$	1,583	 	$	—	 	$	1,591	 	
Australia	 	—	 	—	 	—	 	—	 	—	 	150	 	150	 	
Barbados	 	—	 	—	 	—	 	—	 	1,056	 	—	 	1,056	 	
Chile	 	—	 	—	 	—	 	—	 	—	 	679	 	679	 	
Tanzania	 	—	 	—	 	—	 	—	 	—	 	242	 	242	 	
U.S.	 	—	 	—	 	—	 	—	 	67	 	—	 	67	 	
Other	 	—	 	—	 	2	 	—	 	—	 	—	 	2	 	
 	 	$	3	 	$	5	 	$	2	 	$	—	 	$	2,706	 	$	1,071	 	$	3,787	 	
AMT credits(2)	 	—	 	—	 	—	 	—	 	—	 	$	247	 	$	247	 	

(1)           Represents the gross amount of tax loss carry forwards translated at closing exchange rates at December 31, 2007.
 
(2)           Represents the amounts deductible against future taxes payable in years when taxes payable exceed “minimum tax” as defined by United States tax legislation.
 
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Net Deferred Tax Assets

 	 	2007	 	2006	 	
Gross deferred tax assets	 	 	 	 	 	
Canada	 	$	494	 	$	487	 	
Chile	 	117	 	113	 	
Tanzania	 	197	 	217	 	
United States	 	225	 	247	 	
Other	 	108	 	122	 	
 	 	1,141	 	1,186	 	
Valuation allowances	 	 	 	 	 	
Canada	 	(55	)	(59	)	
Chile	 	(105	)	(110	)	
Tanzania	 	(30	)	(217	)	
United States	 	(190	)	(211	)	
Other	 	(39	)	(61	)	
 	 	$	(419	)	$	(658	)	
Non-current assets	 	$	722	 	$	528	 	
 
Valuation Allowances
 
We consider the need to record a valuation allowance against deferred tax assets, 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;
·                   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 valuation allowances to reflect our latest assessment of the amount of deferred tax assets that will more likely than not be realized.
 
A deferred income tax asset totaling $439 million has been recorded in Canada. This deferred tax asset primarily arose due to mark-to-market losses realized for acquired Placer Dome derivative instruments. Projections of various sources of income support the conclusion that the realizability of this deferred tax asset is more likely than not, and consequently no valuation allowance has been set up for this deferred tax asset.
 
A deferred tax asset of $167 million has been recorded in Tanzania following the release of tax valuation allowances totaling $189 million in 2007. The release of tax valuation allowances resulted from the impact of rising market gold prices on expectations of future taxable income and the ability to realize these tax assets.
 
A partial valuation allowance of $190 million has been set up against deferred tax assets in the United States at December 31, 2007. The majority of this valuation allowance relates to AMT credits in periods when partly due to low market gold prices, Barrick was an AMT tax payer in the United States. If market gold prices continue to rise, it is reasonably possible that some or all of these valuation allowances could be released in future periods.
 
A valuation allowance of $105 million exists as at December 31, 2007 against tax loss carry forwards in Chile that exist in entities that have no present sources of income.
 
Source of Changes in Deferred Tax Balances

For the years ended December 31	 	2007	 	2006	 	2005	 	
Temporary differences	 	 	 	 	 	 	 	
Property, plant and equipment	 	$	24	 	$	(1,111	)	$	30	 	
Asset retirement obligations	 	39	 	128	 	(69	)	
Tax loss carry forwards	 	(69	)	546	 	38	 	
Derivatives	 	(113	)	52	 	(34	)	
Other	 	9	 	(17	)	(3	)	
 	 	$	(110	)	$	(402	)	$	(38	)	
Net currency translation gains on deferred tax balances	 	76	 	5	 	11	 	
Canadian tax rate changes	 	(64	)	(12	)	—	 	
Adjustment to deferred tax balances due to change in tax status(1)	 	—	 	31	 	(5	)	
Release of end of year Tanzanian valuation allowances	 	156	 	—	 	—	 	
Release of other valuation allowances	 	88	 	53	 	(32	)	
 	 	$	146	 	$	(325	)	$	(64	)	
Intraperiod allocation to:	 	 	 	 	 	 	 	
Income from continuing operations before income taxes	 	$	174	 	$	109	 	$	(30	)	
Placer Dome acquisition (note 3g)	 	—	 	(432	)	—	 	
Porgera mine acquisition (note 3e)	 	20	 	—	 	—	 	
OCI (note 25)	 	(48	)	(2	)	(34	)	
Other	 	5	 	28	 	(5	)	
 	 	$	151	 	$	(297	)	$	(69	)	

(1)           Relates to changes in tax status in Australia (note 9).
 
Unrecognized Tax Benefits

Balance at January 1, 2007	 	20	 	
Additions based on tax positions related to the current year	 	1	 	
Additions for tax positions of prior years	 	—	 	
Reductions for tax positions of prior years	 	(2	)	
Settlements	 	(4	)	
Balance at December 31, 2007(1),(2)	 	15	 	

(1)           If recognized, the total amount of $15 million would be recognized as a benefit to income taxes on the income statement, and therefore would impact the reported effective tax rate.
 
(2)           Includes interest and penalties of $1 million.
 
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We expect the amount of unrecognized tax benefits to decrease within 12 months of the reporting date by approximately $2 to $3 million, related primarily to the expected settlement of Canadian income and mining tax assessments.
 
Tax Years Still Under Examination

Canada	 	2003–2007	 	
United States	 	2003–2007	 	
Peru	 	2004–2007	 	
Chile	 	2004–2007	 	
Argentina	 	2002–2007	 	
Australia	 	all years open	 	
Papua New Guinea	 	2002–2007	 	
Tanzania	 	all years open	 	
 
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 for an amount of $32 million, excluding interest and penalties. The assessment mainly related to the validity of a revaluation of the Pierina mining concession, which affected its tax basis for the years 1999 and 2000. The full life-of-mine effect on current and deferred income tax liabilities totaling $141 million was fully recorded at December 31, 2002, as well as other related costs of about $21 million.
 
In January 2005, we received written confirmation that there would be no appeal of the September 30, 2004 Tax Court of Peru decision. In December 2004, we recorded a $141 million reduction in current and deferred income tax liabilities and a $21 million reduction in other accrued costs. The confirmation concluded the administrative and judicial appeals process with resolution in Barrick’s favor.
 
Notwithstanding the favorable Tax Court decision we received in 2004 on the 1999 to 2000 revaluation matter, on an audit concluded in 2005, SUNAT has reassessed us on the same issue for tax years 2001 to 2003. On October 19, 2007, SUNAT confirmed their reassessment. The tax assessment is for $49 million of tax, plus interest and penalties of $116 million. We filed an appeal to the Tax Court of Peru within the statutory period. We believe that the audit reassessment has no merit, that we will prevail in court again, and accordingly no liability has been recorded for this reassessment.
 
24  ·  Capital Stock
 
a)               Common Shares
 
Our authorized capital stock includes an unlimited number of common shares (issued 869,886,631 common 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).
 
In 2007, we declared and paid dividends in US dollars totaling $0.30 per share ($261 million) (2006: $0.22 per share, $191 million; 2005: $0.22 per share, $118 million).
 
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, 2007, 1.4 million (2006 – 1.4 million) BGI exchangeable shares were outstanding, which are equivalent to 0.7 million Barrick common shares (2006 – 0.7 million common shares), and are reflected in the number of common shares outstanding. We have the right to require the exchange of each outstanding BGI exchangeable share for 0.53 of a 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 ended December 31	 	2007	 	2006	 	2005	 	
Total revenues and other income	 	$	213	 	$	233	 	$	181	 	
Less: costs and expenses(1)	 	202	 	215	 	186	 	
Income (loss) before taxes	 	$	11	 	$	18	 	$	(5	)	
Net income	 	$	22	 	$	33	 	$	21	 	

At December 31	 	2007	 	2006	 	
Assets	 	 	 	 	 	
Current assets	 	$	123	 	$	127	 	
Non-current assets	 	47	 	50	 	
 	 	$	170	 	$	177	 	
Liabilities and shareholders’ equity	 	 	 	 	 	
Liabilities	 	 	 	 	 	
Other current liabilities	 	22	 	25	 	
Intercompany notes payable	 	409	 	387	 	
Other long-term liabilities	 	109	 	80	 	
Shareholders’ equity	 	(370	)	(315	)	
 	 	$	170	 	$	177	 	

(1)   2006 includes a $37 million increase in the ARO at the Nickel Plate property (see note 21).
 
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25   •   Other Comprehensive Income (Loss) (“OCI”)

 	 	2007	 	2006	 	2005	 	
Accumulated OCI at January 1	 	 	 	 	 	 	 	
Cash flow hedge gains, net of tax of $60, $61, $95	 	$	223	 	$	128	 	$	206	 	
Investments, net of tax of $7, $nil, $nil	 	46	 	12	 	21	 	
Currency translation adjustments, net of tax of $nil, $nil, $nil	 	(143	)	(143	)	(146	)	
Pension plans and other post-retirement benefits, net of tax of $4, $nil, $nil	 	(7	)	(28	)	(12	)	
 	 	$	119	 	$	(31	)	$	69	 	
Other comprehensive income (loss) for the period:	 	 	 	 	 	 	 	
Changes in fair value of cash flow hedges	 	257	 	17	 	23	 	
Changes in fair value of investments	 	58	 	43	 	(8	)	
Currency translation adjustments	 	—	 	—	 	3	 	
Pension plans and other post-retirement benefits:	 	 	 	 	 	 	 	
Adjustments to minimum pension liability prior to adoption of FAS 158	 	—	 	15	 	(16	)	
FAS 158 adjustments (note 27c):	 	 	 	 	 	 	 	
Elimination of minimum pension liability	 	—	 	13	 	—	 	
Net actuarial gain (loss)	 	19	 	(9	)	—	 	
Transition obligation	 	1	 	(2	)	—	 	
Less: reclassification adjustments for gains/losses recorded in earnings:	 	 	 	 	 	 	 	
Transfers of cash flow hedge (gains) losses to earnings:	 	 	 	 	 	 	 	
On recording hedged items in earnings	 	(185	)	77	 	(134	)	
Hedge ineffectiveness due to changes in timing of hedged items	 	—	 	—	 	(1	)	
Investments:	 	 	 	 	 	 	 	
Other than temporary impairment charges	 	1	 	4	 	16	 	
Gains realized on sale	 	(71	)	(6	)	(17	)	
Other comprehensive income (loss), before tax	 	80	 	152	 	(134	)	
Income tax recovery (expense) related to OCI	 	(48	)	(2	)	34	 	
Other comprehensive income (loss), net of tax	 	$	32	 	$	150	 	$	(100	)	
Accumulated OCI at December 31	 	 	 	 	 	 	 	
Cash flow hedge gains, net of tax of $105, $60, $61	 	250	 	223	 	128	 	
Investments, net of tax of $4, $7, $nil	 	37	 	46	 	12	 	
Currency translation adjustments, net of tax of $nil, $nil, $nil	 	(143	)	(143	)	(143	)	
Pension plans and other post-retirement benefits, net of tax of $2, $4, $nil	 	7	 	(7	)	(28	)	
 	 	$	151	 	$	119	 	$	(31	)	
26   •   Stock-based Compensation
 
a)           Stock Options
 
In September 2006, the SEC released a letter on accounting for stock options. The letter addresses the determination of the grant date and measurement date for stock option awards. For Barrick, the stock option grant date is the date when the details of the award, including the number of options granted by individual and the exercise price, are approved. The application of the principles in the letter issued by the SEC did not change the date that has been historically determined as the measurement date for stock option grants.
 
Under Barrick’s stock option plan certain officers and key employees of the Corporation may purchase common shares at an exercise price that is equal to the closing share price on the day before the grant of the option. Stock options vest evenly over four years, beginning in the year after granting. Options granted in July 2004 and prior are exercisable over 10 years, whereas options granted since December 2004 are exercisable over 7 years. At December 31, 2007, 10 million (2006: 13 million; 2005: 12 million) common shares, in addition to those currently outstanding, were available for granting options. Stock options when exercised result in an increase to the number of common shares issued by Barrick.
 
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Compensation expense for stock options was $25 million in 2007 (2006: $27 million; 2005: $nil), and is presented as a component of cost of sales, corporate administration and other expense, consistent with the classification of other elements of compensation expense for those employees who had stock options. The recognition of compensation expense for stock options reduced earnings per share for 2007 by $0.03 per share (2006: $0.03 per share).
 
Total intrinsic value relating to options exercised in 2007 was $58 million (2006: $27 million; 2005: $22 million).
 
Employee Stock Option Activity (Number of Shares in Millions)

 	 	2007	 	2006	 	2005	 	
 	 	 	 	Average	 	 	 	Average	 	 	 	Average	 	
 	 	Shares	 	price	 	Shares	 	price	 	Shares	 	price	 	
C$ options	 	 	 	 	 	 	 	 	 	 	 	 	 	
At January 1	 	11.9	 	$	28	 	14.7	 	$	28	 	19.4	 	$	28	 	
Granted	 	—	 	$	—	 	—	 	$	—	 	—	 	$	—	 	
Issued on acquisition of Placer Dome	 	—	 	$	—	 	1.7	 	$	34	 	—	 	$	—	 	
Exercised	 	(3.9	)	$	28	 	(2.4	)	$	26	 	(3.8	)	$	25	 	
Forfeited	 	(0.1	)	$	29	 	(0.2	)	$	27	 	(0.8	)	$	27	 	
Cancelled/expired	 	(0.8	)	$	35	 	(1.9	)	$	40	 	(0.1	)	$	40	 	
At December 31	 	7.1	 	$	27	 	11.9	 	$	28	 	14.7	 	$	28	 	
US$ options	 	 	 	 	 	 	 	 	 	 	 	 	 	
At January 1	 	7.7	 	$	25	 	6.9	 	$	24	 	5.9	 	$	22	 	
Granted	 	1.4	 	$	40	 	1.1	 	$	30	 	2.1	 	$	25	 	
Issued on acquisition of Placer Dome	 	—	 	$	—	 	1.0	 	$	19	 	—	 	$	—	 	
Exercised	 	(1.7	)	$	23	 	(0.9	)	$	21	 	(0.3	)	$	15	 	
Forfeited	 	(0.3	)	$	25	 	(0.4	)	$	24	 	(0.4	)	$	28	 	
Cancelled/expired	 	(0.1	)	$	22	 	—	 	$	25	 	(0.4	)	$	26	 	
At December 31	 	7.0	 	$	28	 	7.7	 	$	25	 	6.9	 	$	24	 	
 
Stock Options Outstanding (Number of Shares in Millions)

 	 	Outstanding	 	Exercisable	 	
 	 	 	 	Average	 	Average	 	Intrinsic
value(1)	 	 	 	Average	 	Intrinsic
Value(1)	 	
Range of exercise prices	 	Shares	 	price	 	life (years)	 	($ millions)	 	Shares	 	price	 	($ millions)	 	
C $ options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
$ 22 – $ 27	 	3.2	 	$	24	 	4	 	$	57	 	3.2	 	$	24	 	$	57	 	
$ 28 – $ 31	 	3.8	 	$	29	 	4	 	47	 	3.7	 	$	29	 	46	 	
$ 32 – $ 43	 	0.1	 	$	32	 	4	 	1	 	0.1	 	$	32	 	1	 	
 	 	7.1	 	$	27	 	4	 	$	105	 	7.0	 	$	27	 	$	104	 	
US$ options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
$  9 – $ 19	 	0.2	 	$	13	 	5	 	$	5	 	0.2	 	$	13	 	$	5	 	
$ 20 – $ 27	 	4.3	 	$	24	 	4	 	77	 	2.8	 	$	24	 	51	 	
$ 28 – $ 41	 	2.5	 	$	35	 	8	 	16	 	0.3	 	$	30	 	4	 	
 	 	7.0	 	$	28	 	6	 	$	98	 	3.3	 	$	24	 	$	60	 	

(1)           Based on the closing market share price on December 31, 2007 of C$41.78 and US$42.05.
 
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Option Information

For the years ended December 31	 	 	 	 	 	 	 	 	 	
(per share and per option amounts in dollars)	 	2007	 	2006	 	2005	 	
Valuation assumptions	 	Lattice (1),(2)	 	Lattice (1),(2)	 	Black-Scholes	(1)	Lattice	(2)	
Expected term (years)	 	4.5–5	 	4.5–5	 	5	 	5	 	
Expected volatility(2)	 	30%–38	%	30%–38	%	23%–30	%	31%–38	%	
Weighted average expected volatility(2)	 	36.6	%	31.6	%	n/a	 	33.3	%	
Expected dividend yield	 	0.7%–0.9	%	0.7%–0.9	%	0.8%–1.0	%	0.9	%	
Risk-free interest rate(2)	 	3.2%–5.1	%	4.3%–5.1	%	3.8%–4.0	%	4.3%–4.5	%	
 	 	 	 	 	 	 	 	 	 	
Options granted (in millions)(3)	 	1.4	 	1.1	 	1.1	 	1.0	 	
Weighted average fair value per option	 	$	12.91	 	$	9.42	 	$	7.30	 	$	8.13	 	

(1)           Different assumptions were used for the multiple stock option grants during the year.
 
(2)           Stock option grants issued after September 30, 2005 were valued using the Lattice valuation model. The volatility and risk-free interest rate assumption varied over the expected term of these stock option grants.
 
(3)           Excludes 2.7 million fully vested options issued on the acquisition of Placer Dome.
 
We changed the model used to value stock option grants from the Black-Scholes model to the Lattice valuation model for stock options granted after September 30, 2005. We believe the Lattice valuation model provides a more representative fair value because it incorporates more attributes of stock options such as employee turnover and voluntary exercise patterns of option holders. For options granted before September 30, 2005, fair value was determined using the Black-Scholes method. The expected volatility assumptions have been developed taking into consideration both historical and implied volatility of our US dollar share price. The risk-free rate for periods within the contractual life of the option is based on the US Treasury yield curve in effect at the time of the grant.
 
We use the straight-line method for attributing stock option expense over the vesting period. Stock option expense incorporates an expected forfeiture rate. The expected forfeiture rate is estimated based on historical forfeiture rates and expectations of future forfeitures rates. We make adjustments if the actual forfeiture rate differs from the expected rate.
 
Under the Black-Scholes model the expected term assumption takes into consideration assumed rates of employee turnover and represents the estimated average length of time stock options remain outstanding before they are either exercised or forfeited. Under the Lattice valuation model, the expected term assumption is derived from the option valuation model and is in part based on historical data regarding the exercise behavior of option holders based on multiple share-price paths. The Lattice model also takes into consideration employee turnover and voluntary exercise patterns of option holders.
 
As at December 31, 2007, there was $33 million (2006: $39 million; 2005:$56 million) of total unrecognized compensation cost relating to unvested stock options. We expect to recognize this cost over a weighted average period of 2 years (2006: 2 years; 2005: 2 years).
 
For years prior to 2006, we utilized the intrinsic value method of accounting for stock options, which resulted in no compensation expense. If compensation expense had been determined in accordance with the fair value provisions of SFAS No. 123 pro-forma net income and net income per share would have been as follows:
 
Stock Option Expense

For the years ended December 31	 	 	 	
($ millions, except per share	 	 	 	
amounts in dollars)	 	2005	 	
Pro forma effects	 	 	 	
Net income, as reported	 	401	 	
Stock option expense	 	(26	)	
Pro forma net income	 	375	 	
Net income per share:	 	 	 	
As reported – basic	 	$	0.75	 	
As reported – diluted	 	$	0.75	 	
Pro forma(1)	 	$	0.70	 	

(1)           Basic and diluted.
 
129

 
b)                          Restricted Share 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 at the end of a three  year period and are settled in cash on the third anniversary of the grant date. Additional RSUs are credited to reflect dividends paid on Barrick common shares over the vesting period.
 
A liability for RSUs is recorded at fair value on the grant date, with a corresponding amount recorded as a deferred compensation asset that is amortized on a straight-line basis over the vesting period. Changes in the fair value of the RSU liability are recorded each period, with a corresponding adjustment to the deferred compensation asset. Compensation expense for RSUs incorporates an expected forfeiture rate. The expected forfeiture rate is estimated based on historical forfeiture rates and expectations of future forfeiture rates. We make adjustments if the actual forfeiture rate differs from the expected rate. At December 31, 2007, the weighted average remaining contractual life of RSUs was 2.5 years.
 
Compensation expense for RSUs was $16 million in 2007 (2006: $6 million; 2005: $2 million) and is presented as a component of cost of sales, corporate administration and other expense, consistent with the classification of other elements of compensation expense for those employees who had RSUs. As at December 31, 2007 there was $75 million of total unamortized compensation cost relating to unvested RSUs (2006: $36 million; 2005: $11 million).
 
Under our DSU plan, Directors must receive a specified portion 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. The fair value of amounts granted each period together with changes in fair value are expensed.
 
DSU and RSU Activity

 	 	 	 	Fair	 	 	 	Fair	 	
 	 	DSUs	 	value	 	RSUs	 	value	 	
 	 	(thousands)	 	(millions)	 	(thousands)	 	(millions)	 	
At December 31, 2004	 	31	 	$	0.7	 	235	 	$	5.6	 	
Settled for cash	 	(3	)	(0.1	)	—	 	—	 	
Forfeited	 	—	 	—	 	(38	)	(0.9	)	
Granted	 	19	 	0.5	 	415	 	11.1	 	
Converted to stock options	 	—	 	—	 	(3	)	(0.1	)	
Credits for dividends	 	—	 	—	 	2	 	0.1	 	
Change in value	 	—	 	0.3	 	—	 	0.6	 	
At December 31, 2005	 	47	 	$	1.4	 	611	 	$	16.4	 	
Settled for cash	 	—	 	—	 	(82	)	(2.5	)	
Forfeited	 	—	 	—	 	(58	)	(1.6	)	
Granted(1)	 	22	 	0.7	 	893	 	27	 	
Converted to stock options(1)	 	—	 	—	 	(18	)	(0.5	)	
Credits for dividends	 	—	 	—	 	8	 	0.2	 	
Change in value	 	—	 	—	 	—	 	2.6	 	
At December 31, 2006	 	69	 	$	2.1	 	1,354	 	$	41.6	 	
Settled for cash	 	(11	)	(0.3	)	(119	)	(4.9	)	
Forfeited	 	—	 	—	 	(38	)	(1.4	)	
Granted	 	42	 	1.4	 	1,174	 	47.5	 	
Credits for dividends	 	—	 	—	 	12	 	0.4	 	
Change in value	 	—	 	0.9	 	—	 	17.0	 	
At December 31, 2007	 	100	 	$	4.1	 	2,383	 	$	100.2	 	

(1)           In January 2006, under our RSU plan, 18,112 restricted share units were converted to 72,448 stock options.
 
c) Employee Share Purchase Plan
 
During the first quarter of 2008, Barrick is expected to launch an Employee Share Purchase Plan. This plan will enable Barrick employees to purchase Company shares through payroll deduction. Each year, employees may contribute 1%–6% of their combined base salary and annual bonus, and Barrick will match 50% of the contribution, up to a maximum of $5,000 per year.
 
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27   •   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 $49 million in 2007, $36 million in 2006 and $20 million in 2005.
 
b) Defined Benefit Pension Plans
 
We have qualified defined benefit pension plans that cover certain of our United States, Canadian and Australian employees and provide benefits based on employees’ years of service. Through the acquisition of Placer Dome, we acquired pension plans in the United States, Canada and Australia. Our policy is to fund the amounts necessary on an actuarial basis to provide enough assets to meet the benefits payable to plan members. Independent trustees administer assets of the plans, which are invested mainly in fixed-income and equity securities. On June 30, 2007, one of our qualified defined benefit plans in Canada was wound-up. No curtailment gain or loss resulted and the obligations of the plans are expected to be settled at the end of 2008. On November 30, 2007, one of our defined benefit plans in Australia was wound-up and on December 31, 2007, the other defined benefit plan in Australia was wound-up. No curtailment gain or loss resulted for either plan. In 2006, actuarial assumptions were amended for one of our qualified defined benefit plans in Canada and on June 30, 2006, one of our other plans in Canada was partially wound-up; no curtailment gain or loss resulted for either plan. Also in 2006, one of our qualified defined benefit plans was amended to freeze benefits in the United States accruals for all employees, resulting in a curtailment gain of $8 million.
 
As well as the qualified plans, we have non-qualified 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 $19 million in 2007 (2006: $21 million), and is recorded in our consolidated balance sheet under available-for-sale securities.
 
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 (Credit)

For the years ended December 31	 	2007	 	2006	 	2005	 	
Expected return on plan assets	 	$	(21	)	$	(20	)	$	(11	)	
Service cost	 	2	 	4	 	—	 	
Interest cost	 	21	 	22	 	12	 	
Actuarial losses	 	1	 	1	 	—	 	
Curtailment gains	 	—	 	(8	) 	—	 	
 	 	$	3	 	$	(1	)	$	1	 	
 
c) Pension Plan Information

Fair Value of Plan Assets	 	 	 	 	 	 	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	
Balance at January 1	 	$	301	 	$	166	 	$	170	 	
Increase for plans assumed on acquisition of Placer Dome	 	—	 	127	 	—	 	
Actual return on plan assets	 	31	 	35	 	10	 	
Company contributions	 	10	 	10	 	10	 	
Settlements	 	(14	)	—	 	—	 	
Benefits paid	 	(35	)	(37	)	(24	)	
Balance at December 31	 	$	293	 	$	301	 	$	166	 	

 	 	2007	 	2006	 	
At December 31	 	Target	 	Actual	 	Actual	 	Actual	 	
Composition of plan assets:	 	 	 	 	 	 	 	 	 	
Equity securities	 	60	%	45	%	$	130	 	$	180	 	
Debt securities	 	40	%	42	%	123	 	106	 	
Fixed income securities	 	 	 	12	%	35	 	—	 	
Real estate	 	 	 	—	 	—	 	9	 	
Other	 	 	 	2	%	5	 	6	 	
 	 	 	 	100	%	$	293	 	$	301	 	
 
Projected Benefit Obligation (PBO)

For the years ended December 31	 	2007	 	2006	 	
Balance at January 1	 	$	389	 	$	224	 	
Increase for plans assumed on acquisition of Placer Dome	 	—	 	191	 	
Service cost	 	2	 	4	 	
Interest cost	 	21	 	22	 	
Actuarial (gains) losses	 	1	 	(7	)	
Benefits paid	 	(35	)	(37	)	
Curtailments	 	(14	)	(8	)	
Balance at December 31	 	$	364	 	$	389	 	
Funded status(1)	 	$	(71	)	$	(88	)	
ABO (2),(3)	 	$	254	 	$	386	 	

(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 $19 million at December 31, 2007). In the year ending December 31, 2008, we do not expect to make any further contributions.
 
(2)           For 2007, we used a measurement date of December 31, 2007 to calculate accumulated benefit obligations.
 
(3)           Represents the accumulated benefit obligation (“ABO”) for all plans. The ABO for plans where the PBO exceeds the fair value of plan assets was $254 million (2006: $110 million).
 
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Pension Plan Assets/Liabilities

For the years ended December 31	 	2007	 	2006	 	
Non-current assets	 	$	25	 	$	5	 	
Current liabilities	 	(8	)	(8	)	
Non-current liabilities	 	(87	)	(85	)	
Other comprehensive income(1)	 	(8	)	6	 	
 	 	$	(78	)	$	(82	)	

(1)           Amounts represent actuarial (gains) losses.
 
The projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets at December 31, 2007 and 2006 were as follows:

For the years ended December 31	 	2007	 	2006	 	
Projected benefit obligation, end of year	 	$	329	 	$	111	 	
Fair value of plan assets, end of year	 	$	258	 	$	62	 	
 
The projected benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2007 and 2006 were as follows:

For the years ended December 31	 	2007	 	2006	 	
Projected benefit obligation, end of year	 	$	329	 	$	111	 	
Accumulated benefit obligation, end of year	 	$	330	 	$	110	 	
Fair value of plan assets, end of year	 	$	258	 	$	62	 	
 
Expected Future Benefit Payments

For the years ending December 31	 	 	 	
2008	 	$	61	 	
2009	 	24	 	
2010	 	31	 	
2011	 	24	 	
2012	 	24	 	
2013 – 2017	 	$	117	 	
 
d) Actuarial Assumptions

For the years ended December 31	 	2007	 	2006	 	2005	 	
Discount rate(1)	 	 	 	 	 	 	 	
Benefit obligation	 	4.50–6.30	%	4.40–5.90	%	5.50	%	
Pension cost	 	4.50–5.81	%	4.40–5.90	%	5.50	%	
Return on plan assets(1)	 	4.50–7.25	%	7.00–7.25	%	7.00	%	
Wage increases	 	3.50–5.00	%	3.5–5.00	%	5.00	%	

(1)           Effect of a one-percent change: Discount rate: $25 million decrease in ABO and $1 million increase in pension cost; Return on plan assets: $3 million decrease in pension cost.
 
Pension plan assets, which consist primarily of fixed-income and equity securities, are valued using current market quotations. Plan obligations and the annual pension expense are determined on an actuarial basis and are affected by numerous assumptions and estimates including the market value of plan assets, estimates of the expected return on plan assets, discount rates, future wage increases and other assumptions. The discount rate, assumed rate of return on plan assets and wage increases are the assumptions that generally have the most significant impact on our pension cost and obligation.
 
The discount rate for benefit obligation and pension cost purposes is the rate at which the pension obligation could be effectively settled. This rate was developed by matching the cash flows underlying the pension obligation with a spot rate curve based on the actual returns available on high-grade (Moody’s Aa) US corporate bonds. Bonds included in this analysis were restricted to those with a minimum outstanding balance of $50 million. Only non-callable bonds, or bonds with a make-whole provision, were included. Finally, outlying bonds (highest and lowest 10%) were discarded as being non-representative and likely to be subject to a change in investment grade. The resulting discount rate from this analysis was rounded to the nearest 25 basis points. The procedure was applied separately for pension and post-retirement plan purposes, and produced the same rate in each case.
 
The assumed rate of return on assets for pension cost purposes is the weighted average of expected long-term asset return assumptions. 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.
 
Wage increases reflect the best estimate of merit increases to be provided, consistent with assumed inflation rates.
 
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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.
 
Other Post-retirement Benefits Expense

For the years ended December 31	 	2007	 	2006	 	2005	 	
Interest cost	 	$	2	 	$	2	 	$	2	 	
Other	 	—	 	—	 	5	 	
 	 	$	2	 	$	2	 	$	7	 	
 
Fair Value of Plan Assets

For the years ended December 31	 	2007	 	2006	 	2005	 	
Balance at January 1	 	$	—	 	$	—	 	$	—	 	
Contributions	 	2	 	3	 	4	 	
Benefits paid	 	(2	)	(3	)	(4	)	
Balance at December 31	 	$	—	 	$	—	 	$	—	 	
 
Accumulated Post-retirement Benefit Obligation (APBO)

For the years ended December 31	 	2007	 	2006	 	2005	 	
Balance at January 1	 	$	37	 	$	39	 	$	29	 	
Interest cost	 	2	 	2	 	2	 	
Actuarial losses	 	(7	)	(1	)	11	 	
Benefits paid	 	(2	)	(3	)	(3	)	
Balance at December 31	 	$	30	 	$	37	 	$	39	 	
Funded status	 	(30	)	(37	)	(38	)	
Unrecognized net transition obligation	 	n/a	 	n/a	 	1	 	
Unrecognized actuarial losses	 	n/a	 	n/a	 	6	 	
Net benefit liability recorded	 	n/a	 	n/a	 	$	(31	)	
 
Other Post-retirement Assets/Liabilities

For the year ended December 31	 	2007	 	2006	 	
Current liability	 	$	(3	)	$	(3	)	
Non-current liability	 	(27	)	(33	)	
Accumulated other comprehensive income	 	(1	)	5	 	
 	 	$	(31	)	$	(31	)	
Amounts recognized in accumulated other comprehensive income consist of:(1)

For the year ended December 31	 	2007	 	2006	 	
Net actuarial loss (gain)	 	$	(2	)	$	3	 	
Transition obligation (asset)	 	1	 	2	 	
 	 	$	(1	) 	$	5	 	

(1)           The estimated amounts that will be amortized into net periodic benefit cost in 2008.
 
We have assumed a health care cost trend of 9% in 2008, decreasing ratability to 5% in 2010 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, 2007 would have had no significant effect on the post-retirement obligation and would have had no significant effect on the benefit expense for 2007.
 
Expected Future Benefit Payments

For the years ending December 31	 	 	 	
2008	 	$	3	 	
2009	 	3	 	
2010	 	3	 	
2011	 	3	 	
2012	 	3	 	
2013 – 2017	 	$	11	 	
 
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28 • 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.
 
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 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 Third Amended Complaint on January 6, 2005. On May 23, 2005, Barrick filed a motion to dismiss part of the Third Amended Complaint. On January 31, 2006, the Court issued an order granting in part and denying in part Barrick’s motion to dismiss. Both parties moved for reconsideration of a portion of the Court’s January 31, 2006 Order. On December 12, 2006, the Court issued its order denying both parties’ motions for reconsideration. On February 15, 2008, the Court issued an order granting the plaintiffs’ motion for class certification. Discovery is ongoing. We intend to defend the action vigorously. No amounts have been accrued for any potential loss under this complaint.
 
Marinduque Complaint
 
Placer Dome has been named the sole defendant in a Complaint filed on October 4, 2005, by the Provincial Government of Marinduque, an island province of the Philippines (“Province”), with the District Court in Clark County, Nevada. The action was removed to the Nevada Federal District Court on motion of Placer Dome. The Complaint asserts that Placer Dome is responsible for alleged environmental degradation with consequent economic damages and impacts to the environment in the vicinity of the Marcopper mine that was owned and operated by Marcopper Mining Corporation (“Marcopper”). Placer Dome indirectly owned a minority shareholding of 39.9% in Marcopper until the divestiture of its shareholding in 1997. The Province seeks “to recover damages for injuries to the natural, ecological and wildlife resources within its territory”, but “does not seek to recover damages for individual injuries sustained by its citizens either to their persons or their property”. In addition to damages for injury to natural resources, the Province seeks compensation for the costs of restoring the environment, an order directing Placer Dome to undertake and complete “the remediation, environmental cleanup, and balancing of the ecology of the affected areas,” and payment of the costs of environmental monitoring. The Complaint addresses the discharge of mine tailings into Calancan Bay, the 1993 Maguila-guila dam breach, the 1996 Boac river tailings spill, and alleged past and continuing damage from acid rock drainage.
 
At the time of the amalgamation of Placer Dome and Barrick Gold Corporation, a variety of motions were pending before the District Court, including motions to dismiss the action for lack of personal jurisdiction and for forum non conveniens (improper choice of forum). However, on June 29, 2006, the Province filed a Motion to join Barrick Gold Corporation as an additional named Defendant and for leave to file a Third Amended Complaint. The Court granted that motion on March 2, 2007. On March 6, 2007, the Court issued an order setting a briefing schedule on the Company’s motion to dismiss on grounds of forum non conveniens . Briefing was completed on May 21, 2007, and on June 7, 2007, the Court issued an order granting the Company’s motion to dismiss. On June 25, 2007, the Province filed a motion requesting the Court to reconsider its Order dismissing the action. The Company opposed the motion for reconsideration. On July 6, 2007, the Province filed a Notice of Appeal to the Ninth Circuit from the Order on the motion to dismiss. On August 8, 2007, the Ninth Circuit issued an order holding the appeal in abeyance pending the district court’s resolution of the motion for reconsideration.
 
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On January 16, 2008, the district court issued an order denying the Province’s motion for reconsideration. Following the district court order, the Province has filed an amended Notice of Appeal. We will challenge the claims of the Province on various grounds and otherwise vigorously defend the action. No amounts have been accrued for any potential loss under this complaint.
 
Calancan Bay (Philippines) Complaint
 
On July 23, 2004, a complaint was filed against Marcopper and Placer Dome Inc. (“PDI”) in the Regional Trial Court of Boac, on the Philippine island of Marinduque, on behalf of a putative class of fishermen who reside in the communities around Calancan Bay, in northern Marinduque. The complaint alleges injuries to health and economic damages to the local fisheries resulting from the disposal of mine tailings from the Marcopper mine. The total amount of damages claimed is approximately US$900 million.
 
On October 16, 2006, the court granted the plaintiffs’ application for indigent status, allowing the case to proceed without payment of filing fees. On January 17, 2007, the Court issued a summons to Marcopper and PDI. To date, we are unaware of any attempts to serve the summons on PDI, nor do we believe that PDI is properly amenable to service in the Philippines. If service is attempted, the Company intends to defend the action vigorously. No amounts have been accrued for any potential loss under this complaint.
 
Pakistani Constitutional Litigation
 
On November 28, 2006, a Constitutional Petition was filed in the High Court of Balochistan by three Pakistan citizens against: Barrick, the governments of Balochistan and Pakistan, the Balochistan Development Authority (“BDA”), Tethyan Copper Company (“ TCC”), Antofagasta Plc (“Antofagasta”), Muslim Lakhani and BHP (Pakistan) Pvt Limited (“BHP”).
 
The Petition alleged, among other things, that the entry by the BDA into the 1993 Joint Venture Agreement (“JVA”) with BHP to facilitate the exploration of the Reko Diq area and the grant of related exploration licenses were illegal and that the subsequent transfer of the interests of BHP in the JVA and the licenses to TCC was also illegal and should therefore be set aside. Barrick currently indirectly holds 50% of the shares of TCC, with Antofagasta indirectly holding the other 50%.
 
On June 26, 2007, the High Court of Balochistan dismissed the Petition against Barrick and the other respondents in its entirety. On August 23, 2007, the petitioners filed a Civil Petition for Leave to Appeal in the Supreme Court of Pakistan. The Supreme Court of Pakistan has not yet considered the Civil Petition for Leave to Appeal. Barrick intends to defend this action vigorously. No amounts have been accrued for any potential loss under this complaint.
 
NovaGold Litigation
 
On August 24, 2006, during the pendency of Barrick’s unsolicited bid for NovaGold Resources Inc., NovaGold filed a complaint against Barrick in the United States District Court for the District of Alaska. The complaint was amended on several occasions with the most recent amendment having been filed in January 2007. The complaint, as amended, sought a declaration that Barrick will be unable to satisfy the requirements of the Mining Venture Agreement between NovaGold and Barrick which would allow Barrick to increase its interest in the Donlin Creek joint venture from 30% to 70%. NovaGold also asserted that Barrick breached its fiduciary and contractual duties to NovaGold, including its duty of good faith and fair dealing, by misusing confidential information of NovaGold regarding NovaGold’s Galore Creek project in British Columbia. NovaGold sought declaratory relief, an injunction and an unspecified amount of damages. Barrick’s Motion to Dismiss NovaGold’s amended complaint was heard on February 9, 2007. On July 17, 2007 the Court issued its order granting the Motion to Dismiss with respect to all claims. On August 28, 2007, NovaGold filed a notice of appeal as to a portion of the district court’s order granting Barrick’s motion to dismiss.
 
On August 11, 2006, NovaGold filed a complaint against Barrick in the Supreme Court of British Columbia. The complaint asserted that in the course of discussions with NovaGold of a potential joint venture for the development of the Galore Creek project, Barrick misused confidential information of NovaGold regarding that project to, among other things, wrongfully acquire Pioneer Metals, a company that holds mining claims adjacent to NovaGold’s project. NovaGold asserted that Barrick breached fiduciary duties owed to NovaGold, intentionally and wrongfully interfered with NovaGold’s interests and has been unjustly enriched. NovaGold sought a constructive trust over the shares in Pioneer acquired by Barrick and an accounting for any profits of Barrick’s conduct, as well as an unspecified amount of damages.
 
On December 3, 2007 Barrick and NovaGold announced that a global settlement of all disputes between them had been reached. As a result of this settlement, all pending legal actions between Barrick and NovaGold have been dismissed.
 
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Exhibit 99.4
Management’s Discussion
and Analysis (“MD&A”)
 
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Barrick Gold Corporation (“Barrick”, “we”, “our” or the “Company”), our operations, financial performance and present and future business environment. This MD&A, which has been prepared as of February 21, 2008, should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2007. Unless otherwise indicated, all amounts are presented in US dollars.
 
For the purposes of preparing our MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances, including potential market sensitivity.
 
Continuous disclosure materials, including our most recent Form 40F/Annual Information Form, annual MD&A, audited consolidated financial statements, and Notice of Annual Meeting of Shareholders and Proxy Circular is available on our website at www.barrick.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. For an explanation of terminology unique to the mining industry, readers should refer to the glossary on pages 74 and 75.
 
Cautionary Statement on Forward-Looking Information
 
Certain information contained or incorporated by reference in this MD&A, 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”, “intend”, “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 Canadian and Australian dollars, South African rand, Chilean peso and Papua New Guinean kina versus US dollar); fluctuations in the spot and forward price of gold and copper or certain other commodities (such as silver, 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, Dominican Republic, Australia, Papua New Guinea, Chile, Peru, Argentina, South Africa, Tanzania, Russia, Pakistan 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; employee relations; availability and increased costs associated with mining inputs and
 
25

 
labor; litigation; the speculative nature of 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 exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion or copper cathode 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 MD&A 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 SEC 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, except to the extent required by applicable law.
 
Index

27	Core Business and Market Overview – Provides an overview of Barrick and outlines our core business, critical success factors and key performance indicators for our business, and market trends within the industry.	
 	 	
31	Enterprise Strategy and Our Ability to Deliver Results – Outlines our vision and strategy, our progress in relation to our 2007 strategic objectives and financial priorities, and details the visions and strategies of our operating departments along with their strengths, competencies and strategic goals.	
 	 	
36	2007 Financial Results – Provides a review of Barrick’s consolidated financial performance, including significant factors affecting income and cash flow. It also includes a review of our regional operating performance in 2007 along with an update on key projects.	
 	36 2007 Financial Overview	
 	38 Operational Overview – Gold	
 	40 Reserves	
 	40 Key Business Transactions	
 	41 Operating Segments Review	
 	 	
48	Review of Significant Operating Expenses – Provides analytics for variances for our significant operating expenditures.	
 	 	
50	Financial Outlook – Provides our 2008 forecast trends for key financial and operational performance measures, significant assumptions supporting our forecast, and economic sensitivities for some of these key assumptions.	
 	 	
52	Review of Quarterly Results – Provides a review of our consolidated financial performance in the fourth quarter, summarizes our results on a quarter by quarter basis, and includes an analysis of key factors impacting quarter to quarter performance.	
 	 	
54	Financial Condition Review – Reviews our cash flow, balance sheet, credit rating and our approach to managing our capital position and capital resources to support our business objectives. It also discusses our contractual obligations, off balance sheet arrangements and financial instruments as at the end of 2007.	
 	 	
61	Critical Accounting Policies and Estimates – Summarizes key changes in accounting policies in 2007 and for future periods and analyzes critical accounting estimates.	
 	 	
69	Non GAAP Operating Performance Measures – Includes various industry accepted measures in tabular format with reconciliation to the closest equivalent GAAP measure.	
 	 	
74	Glossary of Technical Terms – Explanation of terminology used in our MD&A that is unique to the mining industry.	
 
26

Core Business and Market Overview
 
Core Business
 
We are the world’s largest gold mining company in terms of market capitalization, annual gold production and gold reserves. We also hold interests in two copper mines and a number of copper projects, a nickel project and two platinum group metals projects. We presently generate revenue and cash flow from the production and sale of gold and copper. We sell our production in the world market through three primary distribution channels: gold bullion is sold in the gold spot market; gold and copper concentrate is sold to independent smelting companies; and copper cathode is sold under copper cathode sales contracts between ourselves and various third parties.
 
Barrick has grown through a combination of organic growth, with new mineral reserve discoveries, and also through acquisitions. In 2006, we acquired Placer Dome, one of the world’s largest gold mining companies. In 2007, we continued to expand the gold industry’s deepest project pipeline through the acquisition of a 51% interest in the Cerro Casale copper-gold deposit in Chile, through our acquisition of Arizona Star Resources Corp., and highly prospective exploration licenses and the Kainantu Gold mine from Highlands Pacific. We also increased our interest in the Porgera mine from 75% to 95%. In February 2008, we entered into a definitive agreement to increase our ownership in the Cortez mine and the Cortez Hills project from 60% to 100%.

 
Our project pipeline, funded mainly by reinvestment of cash flow from current operations into exploration and projects, is the key to our long term goal of increasing profitability and building shareholder value. Our profitability is dependent upon our ability to effectively manage and contain total cash costs both at our current operating mines and our next generation of mines. We expect that our next generation of mines, including Buzwagi, Cortez Hills, Pueblo Viejo and Pascua-Lama, should operate at lower average total cash costs than the average total cash costs of our current portfolio of operating mines. The projects in our pipeline are at various stages of development, ranging from scoping to feasibility to construction. We are confident that we have the managerial team and resources to successfully bring these projects into production. These projects will require substantial upfront capital that we expect to fund from a combination of operating cash flow and new financings. We expect the contribution from these new mines to improve our cash margins from gold, and thereby drive operating cash flow and long-term shareholder value.
 
In 2007, we saw expansion of gold cash margins as gold price increases more than offset cost increases. The gold mining industry is facing cost pressures from factors such as higher labor costs, higher energy costs and commodity prices, higher gold price related costs, and a weakening US dollar. We believe that we have been successful in mitigating the impact of cost pressures and we met our original guidance for total cash costs in 2007.
 
In fourth quarter 2007, higher market gold prices drove significantly higher earnings and operating cash flow. We believe that Barrick is well positioned to benefit from the present high gold price environment.
 
27

 
Market Overview
 
The success of a global mining company such as Barrick continues to be driven by global demand for the commodities we produce. In 2007, the trend of higher gold and silver prices continued for the quarter. Copper prices also remained at historically high levels.
 
Mineral Markets
 
Gold
 
The market price of gold is one of the most significant factors in determining the profitability of Barrick’s operations. The price of gold is subject to volatile price movements over short periods of time, and is affected by numerous industry and macroeconomic factors that are beyond our control. In 2007, gold prices ranged from $608 to $841 per ounce with an average market price of $695 per ounce and closed the year at $834 per ounce. In early 2008, the gold price has traded upwards at an all-time record high of over $900 per ounce.
 
The price of gold has traded strongly since the fall of 2007, largely in reaction to the economic uncertainty in response to the contraction of global credit markets, interest rate cuts, increased risk and volatility across asset classes, continued strong investment demand, inflation expectations and political unrest. Those trends and expected further US dollar depreciation are supportive of higher gold prices in 2008.
 
We believe the outlook for mine production from all gold mining companies in the medium to long term, which currently represents over 60% of total global supply, is one of gradual decline over the next 5–10 years. The primary drivers for the global decline are increased difficulty in permitting new projects, high capital costs, scarcity of experienced labor, and lack of new discoveries in the last decade. A decrease in global industry production should be positive for long-term gold prices.

 
With the elimination of our corporate gold sales contract position in the first half of 2007, our operating mines are selling all production at market gold prices.
 
28

 

Copper
 
LME copper prices traded in a range of $2.37 – $3.77 per pound in 2007, and averaged $3.23 per pound for the year. Our realized price of $3.19 in 2007 tracked LME spot prices. In early 2007, prices declined on concerns about reduced demand from the US and rising inventories. However, continued strong demand from Asia supported prices and labor disruptions limited supply for short periods of time, resulting in price volatility. Future copper prices are expected to be influenced by demand from Asia, global economic performance and production levels of mines and smelters. We are fully hedged for our 2008 copper production, with a weighted average floor price of $3.03/lb. 25% of our hedge contracts (approximately 100 million pounds) are capped at $3.50/lb, through our copper-denominated notes, whereas the balance (approximately 300 million pounds) has upside participation to an average price of $3.92/lb.
 
Currency Exchange Rates
 
Results of our mining operations outside the United States, reported in US dollars, are affected by currency exchange rates. The largest single exposure we have is to the Australian dollar. We also have significant exposure to the Canadian dollar through a combination of Canadian mine operating costs and corporate administration costs.

 
A weaker US dollar causes our costs reported in US dollars to increase, subject to protection we have put in place through our currency hedging program. In 2007, the Canadian dollar traded to its highest level against the US dollar in over 50 years due to high energy and base metals prices, investment flows from M&A activity and the continued out-performance of the Canadian economy relative to the US. The Australian dollar has also appreciated, largely due to higher commodity prices, strong economic performance and higher interest rates relative to the US.
 
About 60–65% of our consolidated production costs are denominated in US dollars and are not exposed to fluctuations in US dollar exchange rates. For the remaining portion, our currency hedge position has mitigated, to a significant extent, the effect of the weakening of the US dollar over the last few years on operating costs at our Australian and Canadian mines. 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: 2007 – $166 million; 2006 – $84 million; and 2005 – $100 million. These gains are recorded within our operating costs. We have also recorded hedge gains as an offset to corporate administration costs as follows: 2007 – $19 million; 2006 – $14 million; 2005 – $16 million.
 
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Our currency hedge position at the end of 2007 provides protection for a significant portion of our Canadian and Australian dollar-based costs. The average hedge rates vary depending on when the contracts were put in place. For hedges in place for future years, average hedge rates are higher than 2007 because some of the contracts were added over time as the US dollar weakened. We are fully hedged in 2008 for expected Australian and Canadian operating expenditures at rates of 0.78 and 0.86, respectively. In addition, we have fully hedged expected 2009 Australian and Canadian operating expenditures at rates of 0.78 and 0.93, respectively. We do not expect any further appreciation of either the Australian or Canadian dollars to have a significant impact on our 2008 or 2009 operating costs. Beyond the next two years, our Canadian dollar-based costs principally represent corporate administration costs at our head office, and the portion of the Australian dollar-based costs that remain unhedged is subject to market currency exchange rates. Further information on our currency hedge positions is included in note 20 to the Financial Statements.
 
Fuel

 
We consume on average about 3.5 million barrels of diesel fuel annually across all our mines. Diesel fuel is refined from crude oil and is therefore subject to the same price volatility affecting crude oil prices. With global demand remaining high in 2007, oil prices rose from $61 per barrel at the start of the year to a record high $99 per barrel in November 2007, closing at $96 per barrel at the end of the year. We have a fuel hedge position to mitigate rising oil prices and control the cost of fuel consumption totaling 5.2 million barrels, which represents about 48% of our total estimated consumption in 2008 and 24% of our total estimated consumption in each of the following five years. The fuel hedge contracts are primarily designated for our Nevada-based mines, and have an average price of $76 per barrel. In 2007, we realized benefits in the form of fuel hedge gains totaling $29 million (2006: $16 million; 2005: $10 million), when fuel hedge prices were compared to market prices. These gains are recorded in our operating costs.
 
Electricity
 
We purchase about 36 billion kilowatt hours (“kwh”) of electricity annually across all our mines. Electricity costs represent approximately 35% of our total energy spend to produce gold and copper. We typically buy electricity from regional power utilities, but at some mines we generate our own power. Fluctuations in electricity prices are generally caused by local economic and regulatory factors. Electricity prices have generally been rising in recent years due to increases in the price of diesel fuel, coal and natural gas, which are used by many power generators, as well as increasing demand for electricity. Based on estimates of our 2008 electricity requirements, a 10% increase in the price for electricity would result in an increase in our annual cost of electricity consumed of about $28 million, or $4 per ounce.
 
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US Dollar Interest Rates

 
As a result of the contraction of global credit markets, the US Federal Reserve reduced short-term US dollar interest rates in the latter half of 2007. The expected trend for 2008 is for further reductions to the short-term rate in order to help alleviate the sub-prime crisis and stimulate economic activity. Volatility in interest rates mainly affects interest receipts on our cash balances ($2.2 billion at the end of 2007), and interest payments on variable-rate debt (approximately $586 million at the end of 2007). The relative amounts of variable-rate financial assets and liabilities may change in the future, depending upon the amount of operating cash flow we generate, as well as amounts invested in capital expenditures.
 
Enterprise Strategy and our Ability to Deliver Results
 
Our Vision
 
To be the world’s best gold mining company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner.
 
Our Strategy
 
To increase total returns for Barrick shareholders, we reinvest cash flow from our mines in exploration and development projects to sustain and grow our business. We aim to increase earnings and operating cash flow, and to provide leverage to gold prices, through annual gold production and growing of our reserve/resource base. 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 by ensuring that we have a deep project pipeline combined with effective management of current operating mines.
 
In 2006, we set our 2007 strategic and financial performance targets. Our strategic targets focused on share price performance, creating a high performance organization, responsible mining, advancing our project pipeline, meeting our financial and operating targets focused on core areas of production, cost control, and increasing reserves. Our successes in each of these areas have laid the foundation for our 2008 key areas of focus: share price performance, responsible mining and operational excellence, further advancing our projects, building and maintaining a high performance organization.
 
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Key Strategic Performance

2007 Strategic Objectives	 	Performance	 	Key 2008 Strategic Objectives	
 	 	 	 	 	
Share Price Performance
·   Grow the business through a combination of opportunistic acquisitions, new deposit discoveries and replacement of reserves and resources
·   Advance project pipeline through achievement of milestones, prioritization and effective sequencing
·   Strong financial management, including hedge book management, balance sheet optimization and realizing Placer Dome acquisition synergies
·   Operational excellence focused on meeting production and cost targets, realizing savings from ongoing continuous improvement initiatives, and increased focus on R&D
·   Advance opportunities for vertical integration and effective consumables management
·   Effective capital management through prioritization, capital allocation and value measurement	 	·   Met original guidance for production and total cash costs
·   Key acquisitions with additional 20% of the Porgera mine, purchase of Highlands Pacific in Papua New Guinea and a 51% interest the in Cerro Casale copper-gold deposit in Chile through Arizona Star
·   Advanced our project pipeline with construction started at Buzwagi feasibility studies finalized for Donlin Creek and updated for Pueblo Viejo. Restructured our joint venture agreement for Donlin Creek
·   Made a new discovery, Monte Oculto, at Pueblo Viejo project in the Dominican Republic
·   Improved design and enhanced mineral recovery at our new projects
·   Launched Unlock the Value program
·   Placer Dome acquisition synergy targets met
·   The Barrick share price rose significantly through the end of 2007 and into early 2008, outperforming other senior gold producers	 	Operational Excellence
·   Meet guidance for production and total cash costs
·   Excellent financial management in areas of financial risk management, financial reporting, cost control and investor communications
Growth
·   Continue to focus on exploration to find new reserves and resources
·   Expanding the role of R&D to add value to our existing operations
·   Targeted acquisitions to strengthen operational base and complement pipeline
Capital Management and Projects
·   Effective capital allocation through prioritization and sequencing of projects
·   Projects built on-time and on-budget through Barrick Development System
·   Address long-term energy needs and explore alternative energy projects	
 	 	 	 	 	
High Performance Organization
·   Leadership development
·   Optimization of business processes such as planning, project management and risk management
·   Technology improvements to increase automation and control costs
·   Compliance with business code of conduct and applicable corporate governance legislation
 	 	·   Lower employee turnover rate in targeted locations
·   Launched the Powerful Leadership training program worldwide to improve leadership and culture
·   Launched Business Process Improvement program and commenced rollout of standardized technology solutions and business processes across the company
·   Conducted Ethics and Integrity seminars for leaders across the organization
·   Compliance with our Code of Business Conduct and Ethics, SOX and other regulations	 	High Performance Organization
·   Strengthen Leadership through sustained training and support for our people
·   Continue building culture focused on our values, innovation and open communication
·   Enhanced people management to be the employer of choice by attracting, motivating and retaining top people in competitive markets
·   Support the business by developing robust infrastructure, standardizing and streamlining business processes	
 	 	 	 	 	
Responsible Mining
·   Achieve safety and health performance targets
·   Effective government relations and community engagement
·   Environmental leadership through energy and conservation strategy	 	·   Improved our safety record with fewer lost-time and total incidents. No employee fatalities; however, we had two contractor fatalities
·   Over 21,000 people trained in Courageous Safety Leadership to date
·   Included in the annual Dow Jones Sustainability Index North America for the first time, ranking best-in-class for our ongoing commitment to sustainability
·   Lagunas Norte and Pierina certified under the International Cyanide Management Code joining Cowal, Goldstrike, Round Mountain and Marigold which are all certified. In January, Cortez and Bald Mountain mines in Nevada became the latest mines certified
·   Veladero achieved ISO 14001 certification for environmental management system. All of Barrick’s producing operations in South America now certified
·   Started alternative power projects in Tanzania, Chile and Argentina	 	Responsible Mining
·   Effective community and government relations that work to strengthen relationships with the communities around our operations
·   Environmental leadership on climate change, water management, energy management and International Cyanide Management Code implementation
Innovation
·   Focus on innovation, through R&D efforts, to increase recovery, improve ore characterization, reduce energy requirements and improve plant design
·   Using technology as an enabler to develop strategy, increase automation and remote management at our mines	
 
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Capability to Execute our Strategy
 
Our capability to execute our financial and operational strategy comes from the strength of our regional business unit structure, our experienced management team and a strong project pipeline that facilitates long-term sustainability of our business.
 
Regional Business Unit Structure
 
We manage our business using a regional business unit (“RBU”) structure. We have four RBUs: North America, South America, Australia Pacific and Africa. Each region receives direction from the Corporate Office, but has responsibility for all aspects of its business such as strategy and sustainability of its portfolio of operating mines, including exploration, production and closure. Each team is led by its own Regional President, with oversight by the Corporate Office. Each region has two overriding responsibilities: to optimize current assets and to grow its business.
 
Each RBU operates as a standalone business unit with a range of functional groups. Since their inception, the RBUs have added significant value to our business by realizing operational efficiencies in the region, allocating resources more effectively and understanding and better managing the local business environment, including labor, consumable costs and supply and government and community relations. In a period of inflationary cost pressures experienced by the mining industry, we believe that our RBU structure has allowed us to better deal with the challenges and issues impacting our industry.
 
Experienced Management Team and Skilled Workforce
 
We have an experienced management team with a proven track record in the mining industry. Strong leadership and governance are critical to the successful implementation of our core strategies. We continue to focus on leadership development for key members of our executive team, senior mine management and frontline management. A skilled workforce has a significant impact on the efficiency and effectiveness of our operations. The remote nature of many of our mine sites, as well as strong competition for human resources, presents challenges in maintaining a well-trained and skilled workforce. We continue to focus our efforts on employee retention, recruiting skilled employees and positive labor relations, including training programs, leadership development and succession planning. In 2007, using data from the global HR information system implemented in 2006 and growth projections for the next 5 years, we built a workforce plan to help us anticipate future recruiting and development needs.
 
Our Engineers-in-Training program continues to mature. The program is aimed at developing skilled personnel to mitigate the risk of future staff shortages. The program has grown to 150 globally (primarily in the Mining, Metallurgy & Geology disciplines) which is implemented regionally and managed by the Corporate office.
 
Advanced Exploration and Project Pipeline
 
Our pipeline of advanced exploration targets and projects represents a critical component of our long-term strategy of growing our business. We and others in the mining industry face the challenges associated with finding, acquiring and developing projects. An economic discovery is no longer a guarantee of a new mine, as considerable opposition to new mining projects can develop from institutional NGOs or unstable political climates. The development of a new mine requires successful permitting and government relations, community dialogue and engagement, and significant financial and human capital. In response to these challenges, we have a specialist group that manages our project pipeline and can draw on our considerable company-wide resources and experience to enhance our prospects for success; however, the time-line and cost of developing projects has increased significantly.
 
During 2007, the capacity of the organization to execute projects was expanded through the addition of experienced staff with the necessary specialized skill set associated with project management. Efforts in this regard will continue in 2008 with a number of positions identified to be added to enhance the Company’s capacity to deliver on the significant project pipeline in the coming years.
 
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Technology and Business Process
 
Progress was made during the year to standardize and improve technology solutions and business processes. Future benefits from standardization and expanded visibility should result in improved efficiency. We expect that these improvements will allow us to more easily identify value-creating opportunities in existing operating sites and projects through better information sharing and the ability to benchmark operating activities and implement best practices across our operations.
 
Technical innovation is also being pursued, utilizing our in-house Technology Center where we conduct some of our research and development (“R&D”) activities along with the development of other metallurgical optimization initiatives. Certain of our projects have realized benefits as a result of this R&D work, which has produced modified process designs that yield enhanced gold and metal by-product recoveries. The success of this program resulted in the decision to expand the facility as internal demand for support was beyond the capacity of the existing facility. Examples of the benefits realized from the work at the lab include changes in metallurgical process design at Pueblo Viejo and Donlin Creek which enhanced gold recoveries and/or non-gold revenue streams and reduced neutralization costs, which we expect will have a positive impact on project economics.
 
Our Information Management and Technology (IMT) group provides focused and responsive support to enable us to meet our current business objectives and long-term strategy elements. Our key areas of focus are the delivery of the technology solutions to support the benefits of business process reengineering and standardization; the use of established best practice technology solutions to automate business operations for increased safety, productivity and reduced costs; and an architected approach to the delivery of timely and accurate information to decision makers at all levels in the organization.
 
Supply Chain Management
 
In 2007, we continued our emphasis on cost control and supply security. Long-term contracts with guaranteed supply and defined costs were executed for critical supplies, including tires, and some other contracts were renegotiated to lower costs. Our continuing focus on commodity management has enabled us to better define our requirements and manage costs, both for ongoing operations and development projects.
 
On January 30, 2008, as part of this strategy, we announced a $200 million 10-year agreement with Yokohama Rubber Co. to secure a supply of tires, which are a critical component for mining and one of our largest single procurement expenses. Worldwide demand for tires, due to the expansion in the mining and construction industries, has resulted in rising prices and tire shortages. This agreement secures a supply of high quality tires for our operations at direct-from-manufacturer prices.
 
In 2008, we plan to extend our commodity team approach to key items that may not be in short supply, but which represent major elements of cost. A key component will be the use of our global buying power to attract competitive interest and obtain best value. Examination of low-cost country sources will continue, and these will be pursued where they represent lowest total cost of ownership – particularly to reduce capital costs at our projects.
 
Maintenance and Equipment Availability
 
Maintenance costs represent about 20% of our total cash costs and an effective maintenance program helps ensure a cost effective program with optimal equipment utilization. In 2007, our maintenance group focused on developing standardized policies, procedures and processes for asset management. The global enterprise asset management system (Oracle) continued to be rolled out with implementation occurring in Australia. Implementation will continue in Australia and Africa in 2008 and beyond.
 
Formal regional maintenance networks were developed and implemented and enabled the sharing and resolution of common issues and ideas. The networks are comprised of the senior maintenance leaders from each site in their respective region who meet regularly to discuss and agree on ways of improving maintenance productivity and performance.
 
Continuous Improvement
 
Our Continuous Improvement (“CI”) group’s vision is to achieve operational excellence and a company culture that engages every employee in improvement every day. We have a global network of Barrick employees across all sites that focus on CI in all key
 
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aspects of our business. Structured problem solving and planning methodologies are used extensively to help identify and execute improvement initiatives while fostering Company-wide learning through knowledge-sharing. Implementation of CI initiatives has led to significant value creation for Barrick in terms of cost mitigation, throughput increases and quality improvements.
 
A major focus for the global CI group in 2007 was the targeted identification of cash cost improvements to offset inflationary cost pressure, a key component of our share price performance objective. Further training and collaboration with key partners in supply chain allowed us to expand the depth and scope of our operations’ improvements. In sharing our continuous improvement tools, such as value stream mapping, we were able to reduce the cycle times by these selected supply partners as well as significantly improve their on-time delivery performance to our mine sites. A new Best Practices system was introduced to enable the evaluation and global sharing of best practices, allowing rapid adoption of business performance improvement ideas and methods that drive more value and learning throughout the organization.
 
Environmental, Health and Safety
 
Responsible mining is one of our key strategic objectives. It is integral to all our activities as we find, develop and produce gold on a global basis. Our Environmental, Health, Safety and Sustainability Executive Committee is responsible for monitoring and reviewing environmental, safety and health policies and programs, assessing performance and monitoring current and future regulatory issues.
 
As part of our commitment to responsible mining, we focus on continuously improving health and safety programs, systems and resources to help control workplace hazards and eliminate injuries. Continuous monitoring and integration of health and safety into decision-making enables us to operate effectively, while also focusing on health and safety. We introduced the Barrick Health System globally in 2007 and began site-level gap analysis against the Health System standards at our operations.
 
Courageous Safety Leadership training was first introduced to employees and contractors in 2004, and we have continued to provide this training annually. In 2007, we offered Courageous Safety Leadership refresher courses to all employees and most contractors, as well as one and two-day courses to new employees and contractors.
 
We are a charter signatory to the International Cyanide Management Code. In March 2006, our Cowal mine became the first facility in the world to obtain the International Cyanide Management Institute Certification. At the end of 2007, seven of our mines had been certified as Code compliant and the remaining mines which use cyanide are preparing for the certification process. We are a signatory to the UN Global Compact, which encourages businesses to support a precautionary approach to environmental challenges, undertake initiatives to promote greater environmental responsibility and encourage the development and diffusion of environmentally friendly technologies.
 
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2007 Financial Results
 
2007 Financial Overview
 
Summary of Key Financial Results

($ millions, except per share, per ounce/pound data in dollars)
For the years ended December 31	 	2007	 	2006	 	2005	 	
Net income	 	$	1,119	 	$	1,506	 	$	401	 	
Per share(1)	 	1.29	 	1.79	 	0.75	 	
Adjusted net income from continuing operations(2)	 	1,733	 	1,561	 	450	 	
Per share	 	2.00	 	1.86	 	0.84	 	
 	 	 	 	 	 	 	 	
EBITDA from continuing operations(3)	 	2,427	 	2,308	 	847	 	
Per share	 	2.80	 	2.74	 	1.58	 	
Adjusted EBITDA from continuing operations(3)	 	3,063	 	2,675	 	903	 	
Per share	 	3.53	 	3.18	 	1.68	 	
 	 	 	 	 	 	 	 	
Operating cash flow	 	1,732	 	2,122	 	726	 	
Per share	 	2.00	 	2.52	 	1.35	 	
Adjusted operating cash flow(4)	 	2,368	 	2,489	 	782	 	
Per share	 	2.73	 	2.96	 	1.45	 	
 	 	 	 	 	 	 	 	
Total assets	 	21,951	 	21,510	 	6,929	 	
Total liabilities	 	$	6,613	 	$	7,255	 	$	3,079	 	

(1)           Calculated using net income and weighted average number of shares outstanding.
 
(2)           Excluding the impact of deliveries into Corporate Gold Sales Contracts. Adjusted net income from continuing operations is an operating performance measure with no standardized meaning under GAAP. For further information, please see page 69.
 
(3)           Adjusted net income from continuing operations excluding income tax expense, interest expense, interest income and amortization. Adjusted EBITDA from continuing operations excludes the impact of deliveries into Corporate Gold Sales Contracts, and is an operating performance measure with no standardized meaning under GAAP. For further information, please see page 70.
 
(4)           Excluding the impact of deliveries into Corporate Gold Sales Contracts. Adjusted operating cash flow is an operating performance measure with no standardized meaning under GAAP. For further information, please see page 69.
 
Key Factors Affecting Adjusted Net Income from Continuing Operations(1)

 

(1)           Adjusted net income excludes the impact of deliveries into our Corporate Gold Sales Contracts.
 
In 2007, we reported net income of $1,119 million, compared to $1,506 million in 2006. Adjusted net income from continuing operations was $1,733 million, 11% higher than the prior year period, as higher per ounce margins on gold and copper and a year to date increase in copper sales volumes were partially offset by lower gold sales volumes, higher amortization and higher exploration and development costs.
 
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Special Items – Effect on Income Increase (Decrease)

 	 	Refer to	 	2007	 	2006	 	2005	 	
($ millions)	 	page	 	Pre-tax	 	Post-tax	 	Pre-tax	 	Post-tax	 	Pre-tax	 	Post-tax	 	
Gain on sale of South Deep	 	 	 	$	—	 	$	—	 	$	288	 	$	288	 	$	—	 	$	—	 	
Opportunity cost of deliveries into Corporate Gold Sales Contracts	 	38	 	(636	)	(623	)	(367	)	(352	)	(56	)	(55	)	
Tanzanian tax valuation allowance release	 	49	 	156	 	156	 	—	 	—	 	—	 	—	 	
Impact of change of enacted rates in Canada	 	50	 	(64	)	(64	)	(12	)	(12	)	—	 	—	 	
Impairment charges	 	49	 	(62	)	(59	)	(23	)	(18	)	(16	)	(16	)	
Highland equity gain/(loss)	 	 	 	(20	)	(20	)	51	 	51	 	—	 	—	 	
Gains on sale of Gold Fields and NovaGold shares	 	 	 	52	 	37	 	—	 	—	 	—	 	—	 	
Unrealized gold and copper non-hedge derivative gains	 	 	 	28	 	19	 	—	 	29	 	6	 	4	 	
Deferred tax credits	 	 	 	—	 	—	 	—	 	31	 	—	 	5	 	
Total	 	 	 	$	(546	)	$	(554	)	$	(63	)	$	17	 	$	(66	)	$	(62	)	
 
Summary of Key Operational Statistics

 	 	Gold	 	Copper(1)	 	
($ millions, except per share, per ounce/pound data in dollars)	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Production (‘000s oz/millions lbs)(1),(2)	 	8,060	 	8,643	 	5,460	 	402	 	367	 	
Reserves (millions of contained ounces/billions of contained
pounds)(3)	 	124.6	 	123.1	 	88.6	 	6.2	 	6.0	 	
Sales(4)	 	 	 	 	 	 	 	 	 	 	 	
’000s oz/millions lbs	 	8,055	 	8,390	 	5,320	 	401	 	376	 	
$ millions	 	$	5,027	 	$	4,493	 	$	2,348	 	$	1,305	 	$	1,137	 	
Market price(5)	 	695	 	604	 	444	 	3.23	 	3.05	 	
Realized price(5),(6)	 	619	 	543	 	439	 	3.19	 	3.06	 	
Total cash costs(5),(7)	 	350	 	283	 	224	 	0.83	 	0.79	 	
Amortization(5)	 	104	 	82	 	76	 	0.32	 	0.43	 	
Total production costs(5)	 	$	454	 	$	365	 	$	300	 	$	1.15	 	$	1.22	 	

(1)	 	The 2005 comparative period for copper has been omitted as we did not produce a significant amount of copper prior to the acquisition of Placer Dome.	
 	 	 	
(2)	 	Gold production reflects our equity share of production, including our equity share of production from the South Deep mine sold in 2006. Gold production also includes an additional 20% share of production from the Porgera mine from April 1, 2007 onwards.	
 	 	 	
(3)	 	Calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7, (under the Securities and Exchange Act of 1934), as interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes, Pueblo Viejo is classified as mineralized material. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144.	
 	 	 	
(4)	 	Gold sales ($millions) exclude the results of discontinued operations. Gold sales (‘000s oz) exclude the results of discontinued operations and reflect our equity share of sales.	
 	 	 	
(5)	 	Per ounce/pound weighted average. For further information, please see page 71.	
 	 	 	
(6)	 	Realized prices exclude unrealized non-hedge derivative gains and losses, and are an operating performance measure that is used throughout this MD&A. For more information see page 71.	
 	 	 	
(7)	 	Total cash costs per ounce/pound statistics exclude amortization and inventory purchase accounting adjustments. Total cash costs per ounce/pound is an operating performance measure that is used throughout this MD&A. For further information, please see pages 71 to 73.	
 
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Realized gold prices of $619 per ounce in 2007 were 14% higher than in 2006, principally due to higher market gold prices. Realized gold prices in 2007 reflect a reduction of $636 million (2006: $367 million), or $76 per ounce (2006: $44 per ounce), due to the voluntary delivery of 2.5 million ounces (2006: 1.2 million) into Corporate Gold Sales Contracts at average prices below the prevailing spot price, eliminating our Corporate Gold Sales Contracts. Our portfolio of operating mines is now fully leveraged to market gold prices.
 
Realized copper prices in 2007 were slightly higher than in 2006, with variability quarter to quarter reflecting the variability of market prices.
 
Cash margins for gold have been increasing over the past three years as higher market gold prices have more than offset increases in total cash costs. Assuming an average spot gold price of $900 dollars per ounce in 2008, we would expect to realize cash margins of about $500 per ounce.

 

(1)           Amounts represent cash margins on both spot price and realized price. Cash margins on spot prices reflect margins excluding deliveries to eliminate Corporate Gold Sales Contracts.
 
Cost of Sales/Total Cash Costs – Gold

 	 	in millions	 	per ounce	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
Cost of goods sold(1),(2),(3)	 	$	2,890	 	$	2,388	 	$	1,357	 	$	359	 	$	286	 	$	255	 	
Currency/commodity hedge gains	 	(195	)	(100	)	(126	)	(24	)	(12	)	(24	)	
By-product credits	 	(105	)	(123	)	(132	)	(13	)	(15	)	(25	)	
Royalties/production taxes	 	190	 	179	 	81	 	23	 	21	 	16	 	
Accretion/other costs	 	37	 	28	 	11	 	5	 	3	 	2	 	
Cost of sales/Total cash costs(1)	 	$	2,819	 	$	2,372	 	$	1,191	 	$	350	 	$	283	 	$	224	 	

(1)	 	Total cash costs and cost of sales both exclude amortization and inventory purchase accounting adjustments – see pages 71 to 73.	
 	 	 	
(2)	 	Excludes cost of sales related to discontinued operations and non-controlling interests.	
 	 	 	
(3)	 	At market currency exchange and commodity rates, adjusted for non-controlling interest – see pages 71 to 73.	
 
Total production costs in 2007 were $454 per ounce, an increase of $89 compared to the prior year period, due to higher cash costs and amortization expense.
 
Total cash costs per ounce for 2007 were up $67 per ounce compared to the prior year. Total cash costs were impacted by 22% lower average head grades and continued waste stripping activities, exchange rate fluctuations, inflationary pressures with respect to labor, oil and other consumables, and increases in royalties and production taxes and other gold price linked costs, the weaker US dollar and inflationary cost pressures.
 
2007 Operational Overview – Gold

For the years ended
December 31	 	2007	 	2006	 	% Change	 	2005	 	
Tons mined (000’s)	 	653	 	600	 	9	%	359	 	
Ore tons processed (000’s)	 	172	 	157	 	10	%	98	 	
Average grade (ozs/ton)	 	0.052	 	0.067	 	(22	)%	0.069	 	
Gold produced (000’s/oz)	 	8,060	 	8,643	 	(7	)%	5,460	 	
 
Gold Production in 2007 was 583 thousand ounces or 7% lower than in 2006, reflecting lower production in Africa, North America, and Australia.
 
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Tons Mined and Tons Processed

 

(1)           All amounts presented are based on equity production.
 
Total tons mined and tons processed were up 9% and 10%, respectively, compared to 2006. The higher tons mined and tons processed result from a combination of the start-up of Cowal in mid-2006 and Ruby Hill in early 2007, increased waste stripping activity at certain of our mines, mine sequencing, mine expansion and productivity improvements at our existing mines.
 
Average Mill Head Grades

 

(1)           All amounts presented based on equity production. Average mill head grades are expressed as the number of ounces of gold contained in a ton of ore processed. Reserve grade represents expected grade over the life of the mine and is calculated based on reserves reported at the end of the immediately preceding year.
 
Average mill head grades decreased by approximately 22% in 2007 compared to the prior year primarily due to mine sequencing that resulted in lower ore grades at certain of our mines. We were mining below our average reserve grade in 2007 and we expect average mill head grades to head back towards reserve grade over the next few years. We have taken advantage of the high gold price environment to process material that would otherwise be uneconomical in a lower gold price environment, earning an operational contribution from low-grade material that would otherwise be classified as waste, which has had an impact on average ore grades processed.
 
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Reserves (1)
 
At the end of 2007, we had proven and probable gold reserves of 124.6 million ounces, an increase of 1.5 million ounces from the prior year, based on a $575 per ounce gold price. We also increased gold mineral resources (measured and indicated) by 15.6 million ounces to 50.6 million ounces, and inferred resources by 7.0 million ounces to 31.9 million ounces, based on a $650 per ounce gold price. Reserves and resources do not include the Company’s recently acquired interest in Cerro Casale due to insufficient time, after our acquisition in December 2007, to complete the work necessary to incorporate this deposit in year-end results. Reserves and measured and indicated resources would increase by 4.6 million ounces and 1.4 million ounces respectively, on closing of the transaction to increase our ownership interest in Cortez from 60% to 100%.
 
We increased proven and probable copper reserves by 0.2 billion pounds to 6.2 billion pounds, with an additional 5.4 billion pounds of measured and indicated resources at year end.
 
Copper contained in our gold reserves at year end 2007 was 1.5 billion pounds. Silver contained in our gold reserves at year end 2007 was 1.0 billion ounces, primarily at the Pascua-Lama project, one of the largest silver deposits in the world, which contains 731 million ounces of silver contained in gold reserves.
 
Replacing gold and copper reserves depleted by production year over year is necessary in order to maintain production levels over the long term. If depletion of reserves exceeds discoveries over the long term, then we may not be able to sustain gold and copper production levels. Reserves can be replaced by expanding known ore bodies, acquiring mines or properties or discovering new deposits. Once a site with gold or copper mineralization is discovered, it takes 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 proven and probable reserves and to permit and construct mining and processing facilities.

(1)           For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144 of this Financial Report 2007.
 
Key Business Transactions
 
Acquisition of Arizona Star
 
In fourth quarter 2007, we acquired over 94% of the outstanding shares, on a fully diluted basis, of Arizona Star Resources Corp., which owns a 51% interest in the Cerro Casale deposit in the Maricunga district of Region III in Chile, for $722 million in cash. We expect to complete the acquisition in the first quarter 2008. Kinross Gold Corporation owns the remaining 49%. Cerro Casale is one of the the world’s largest undeveloped gold and copper deposits.
 
Acquisition of 40% Interest in Cortez
 
In February 2008, our subsidiary, Barrick Gold Finance Inc., entered into a definitive purchase agreement with Kennecott Explorations (Australia) Ltd., a subsidiary of Rio Tinto plc (“Rio Tinto”) to acquire its 40% interest in the Cortez property for $1.695 billion in cash consideration, due on closing, with a further $50 million payable if and when we add an additional 12 million ounces of contained gold resources to our December 31, 2007 reserve statement for Cortez. A sliding scale royalty is payable to Rio Tinto on 40% of all production in excess of 15 million ounces on and after January 1, 2008. The acquisition will consolidate 100% ownership for Barrick of the existing Cortez mine and the Cortez Hills development project plus any future potential from the property, which is located on one of the world’s most prospective gold trends. We expect to fund the purchase price through a combination of our existing cash balances and by drawing down our line of credit. The agreement is subject to the normal and customary closing conditions and is expected to close in the first quarter of 2008.
 
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Other Acquisitions
 
In fourth quarter 2007, we acquired over 2,900 square kilometers of highly prospective exploration licenses and the Kainantu gold mine in Papua New Guinea from Highlands Pacific Limited for $135 million in cash, net of $7 million held back pending renewal of exploration licenses. With this acquisition, we will have access to over 5,300 square kilometers of contiguous ground for exploration in one of the world’s most highly endowed gold and copper regions that includes our world class Porgera mine.
 
In third quarter 2007, we increased our interest in the Porgera mine from 75% to 95% for $259 million in cash. The Government of Papua New Guinea holds the remaining 5% interest.
 
Operating Segments Review
 
We report our results of operations using a geographical business unit approach: North America, South America, Australia Pacific and Africa. This structure reflects how we manage our business and how we classify our operations for planning and measuring performance.
 
In our Financial Statements, we present a measure of historical segment income that reflects gold sales and copper sales at average consolidated realized gold and copper prices, respectively, less segment expenses and amortization of segment property, plant and equipment. We monitor segment expenses using “total cash costs per ounce” statistics that represent segment cost of sales divided by ounces of gold, pounds of copper sold or tons processed in each period. The discussion of results for producing mines focuses on this statistic to explain changes in segment expenses.
 
Regional Production and Total Cash Costs

 	 	Production
(000’s ozs/millions lbs)	 	Total cash costs
($ per oz/lb)	 	
Year ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	2005	 	
Gold	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	3,201	 	3,372	 	2,863	 	$	370	 	$	314	 	$	244	 	
South America	 	2,079	 	2,104	 	1,234	 	197	 	149	 	126	 	
Australia Pacific	 	2,123	 	2,220	 	934	 	452	 	353	 	257	 	
Africa	 	605	 	914	 	398	 	408	 	315	 	336	 	
Other	 	52	 	33	 	31	 	491	 	481	 	300	 	
Total	 	8,060	 	8,643	 	5,460	 	350	 	283	 	224	 	
Copper(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	
South America	 	315	 	308	 	—	 	0.70	 	0.62	 	—	 	
Australia Pacific	 	87	 	59	 	—	 	1.37	 	1.53	 	—	 	
Total	 	402	 	367	 	—	 	$	0.83	 	$	0.79	 	$	—	 	

(1)           The 2005 comparative periods for copper have been omitted as we did not produce any significant amounts of copper prior to the acquisition of Placer Dome.
 
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North America
 
Key Operating Statistics

For the years ended
December 31	 	2007	 	2006	 	% Change	 	2005	 	
Tons mined (millions)	 	335	 	274	 	22	%	168	 	
Ore tons processed (millions)	 	76	 	69	 	10	%	50	 	
Average grade (ozs/ton)	 	0.040	 	0.045	 	(11	)%	0.045	 	
Gold produced (000’s/oz)	 	3,201	 	3,372	 	(5	)%	2,863	 	
Total cash costs (per oz)	 	$	370	 	$	314	 	18	%	$	244	 	

Producing Mines
 
Tons mined increased 22% in 2007 primarily due to higher waste stripping activities at Goldstrike, Bald Mountain and Cortez (41% of overall increase) and the production start-up at Ruby Hill (46% of overall increase). Tons processed increased by 10% due to higher processing rates at Cortez (63% of overall increase), due to mining areas of the pit that are yielding better ore grades and more ore tons than the prior year, and the production start-up of Ruby Hill (36% of overall increase). Average ore grades decreased by 11% mainly due to sequencing at Goldstrike and Bald Mountain.
 
At Goldstrike open pit, an extended period of overburden removal commenced to expand the pit running into mid-2008, during which time we will have limited ore production from the pit. During this period, Goldstrike will supplement mill feed with lower-grade stockpiled ore resulting in lower production levels. Production at Goldstrike underground was also impacted by a transition to zone mining in 2007. Production levels at Goldstrike are expected to increase in the second half of 2008 when higher-grade ore becomes accessible. At Eskay Creek, production levels continued to decline as the mine is reaching the end of its life.
 
Gold production levels for the region declined by 5% in 2007 as the 11% decline in the average ore grade more than offset the 10% increase in tons processed.
 
Total cash costs of $370 per ounce were 18% higher than the prior year reflecting waste removal costs at Ruby Hill ($7 per ounce); lower silver by-product credits mainly at Eskay Creek ($8 per ounce); lower overall production levels in 2007 ($19 per ounce); higher prices and consumption of input commodities used in the production process ($7 per ounce); and higher costs related to labor ($7 per ounce); and higher royalties and production taxes ($2 per ounce). The type of ore processed in 2007 at the Goldstrike autoclave required more consumables such as propane and acid to achieve optimal efficiency. This resulted in higher total cash costs of $17 dollars per ounce for Goldstrike autoclave when compared to the prior year. During 2007, a modified pressure technology was successfully tested that will extend the life of the Goldstrike autoclaves by allowing them to process ore that would have previously been treated at the roaster facility.
 
In 2008, we expect gold production of 3.0 to 3.15 million ounces at total cash costs of $450 to $465 per ounce. Production is expected to be lower than 2007 primarily due to the mining of lower-grade ore. Total cash costs per ounce are expected to be higher in 2008 due to the impact of lower production; lower silver credits due to the closure of Eskay Creek, increased labor rates; higher energy costs mainly due to higher oil prices; and higher royalties and production taxes as a result of higher gold prices.
 
Significant Projects
 
At the Cortez Hills project in Nevada, we spent $88 million in 2007 (100% basis) for open-pit mining equipment; engineering for the project infrastructure; installation of dewatering wells; ongoing construction of the underground pump station rock work; and completion of an additional 439 meters of the underground exploration decline. Total underground decline development of 4,854 meters has been completed to date. Engineering is approximately 90% complete, resulting in expected permitting during the second half of 2008. Pre-production capital costs are expected to remain in the range of our previous estimate of $480 to $500 million. Production in the first full five years is expected to be in the range of 950 thousand to 1 million ounces (includes Pipeline) at total cash costs of $280 to $290 per ounce. Barrick’s interest in proven
 
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and probable reserves at year-end 2007 for the Cortez property was 6.9 million ounces (60% basis).(1) On closing of the transaction to increase our interest to 100%, we will report an additional 4.6 million ounces of proven and probable reserves for a total of 11.5 million ounces.
 
At the Pueblo Viejo project (60% owned), we spent $69 million (100% basis) in 2007 to update the feasibility study, commencement of basic and detail design and engineering, exploration programs for ore reserves and limestone deposits, community development programs and sourcing of electric power and location of power transmission lines. We expect to be in a position to submit our feasibility study and project notice shortly. Pre-production capital is expected to be about $2.7 billion on a 100% basis (about $1.6 billion is Barrick’s share). The increase in capital from the earlier $2.1 to $2.3 billion estimate primarily reflects a scale up to a throughput rate of 24 thousand tonnes per day (tpd), up from the 18 thousand tpd described previously. This has had the effect of increasing our share of gold production in the first full five years of production to about 600 thousand ounces per year from 465 to 480 thousand ounces per year. Total cash costs are expected to be about $250 per ounce over this period and do not include the potential benefit of a circuit to recover zinc, which continues to be evaluated. The construction period to first gold production is expected to be about three and a half years from project decision. Our equity share of proven and probable gold resources at Pueblo Viejo increased by 1.4 million ounces in 2007 to 12.3 million ounces.(2)
 
At the Donlin Creek project, we advised our joint venture partner, NovaGold Resources Alaska Inc., in October 2007 that we had completed work on the feasibility study for the project. In December 2007, we entered into an agreement with NovaGold to form a jointly owned limited liability company on a 50/50 basis to advance the project, with a NovaGold appointee positioned as the initial General Manager. Work completed in 2007 included more than 70 thousand meters of drilling (primarily infill) and collection of additional environmental baseline data, in addition to a wide range of engineering work completed in support of the feasibility study. Work in the first half of 2008 will focus on completing a series of optimizing studies for power, logistics, processing and production levels, and will integrate all data from the 2007 program into a final feasibility study. measured and indicated gold resources increased by 8.7 million ounces in 2007 to 14.7 million ounces.(1)

(1)          For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144 of this Financial Report 2007.
 
(2)          Calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7, (under the Securities and Exchange Act of 1934), as interpreted by Staff of the SEC, applies different standards in order to classify mineralization as a reserve. Accordingly, for U.S. reporting purposes, Pueblo Viejo is classified as mineralized material. For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144.
 
South America
 
Key Operating Statistics

For the years ended
December 31	 	2007	 	2006	 	% Change	 	2005	 	
Tons mined (millions)	 	151	 	168	 	(10	)%	134	 	
Ore tons processed (millions)	 	59	 	53	 	11	%	35	 	
Average grade (ozs/ton)	 	0.042	 	0.054	 	(22	)%	0.048	 	
Gold produced (000’s/oz)	 	2,079	 	2,104	 	(1	)%	1,234	 	
Total cash costs (per oz)	 	$	197	 	$	149	 	32	%	$	126	 	

Producing Mines
 
Tons mined decreased by 10% in 2007, mainly due to Pierina (56% of overall decrease), where the mine plan was changed to solve a temporary problem of lack of waste dump capacity due to the fuel station relocation, and also at Veladero (32% of overall decrease), where low equipment availability temporarily limited production in 2007. Ore tons processed increased in 2007 by 11%, mainly at Veladero, as higher quantities of material were placed on the leach pad compared to the prior year. Average ore grade declined by 22% in 2007, primarily due to Veladero, where lower-grade zones were mined in 2007. Gold production levels in 2007 were similar to the prior years as the lower average ore grades were mostly offset by higher processing rates.
 
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Total cash costs per ounce increased by 32% to $197 dollars per ounce in 2007, largely due to higher costs at Veladero as mining transitioned to lower grade ore in the Filo Federico pit beginning in April 2007 and we began expensing waste stripping costs at Filo Federico ($33 an ounce); higher labor and maintenance costs ($7 an ounce); and higher costs for consumables used within the production process ($7 an ounce). Cost pressures were mitigated to a certain extent by operational improvements such as improved maintenance procedures, improved ore recoveries at Pierina, and lower reagent consumption and higher silver production at Lagunas Norte.
 
In 2008, we expect gold production of 1.95 to 2.05 million ounces at total cash costs of $250 to $270 per ounce. Production is expected to remain consistent with 2007, as higher production at Veladero is expected to be offset by lower production at Pierina. Total cash costs per ounce are expected to be higher in 2008, mainly due to higher energy costs, labor rates and other cost increases.
 
Significant Projects
 
The Pascua-Lama project is unique in that it is a bi-national project with a mineral deposit that spans the border between Argentina and Chile. It is located in the Frontera district within approximately 10 kilometers of our Veladero mine. The project is at an elevation of 3,800 to 5,200 meters. In February 2006, the Pascua-Lama project was granted approval by Chilean environmental regulatory authorities. In December 2006, the Province of San Juan, Argentina issued its Declaration of Environmental Impact Assessment which approved the environmental permit submission to Argentina. We have significantly advanced detailed engineering and have essentially completed submission of documentation to obtain the administrative and sectoral permit approvals that are required prior to initiating construction in either country. In addition, the governments of Chile and Argentina must resolve certain remaining fiscal matters, including taxation relating to the bi-national project. The start of construction is contingent upon receipt of sectoral permits and resolution of cross-border regulatory and fiscal tax and royalty items, the timing of which is largely beyond our control. The project team is using this period to advance detailed construction planning and activities as well as supplier and contractor selection through competitive bidding.
 
As at February 2007, pre-production capital costs were in the range of $2.3 to $2.4 billion and are currently expected to be approximately 15% higher than this estimate primarily due to inflationary pressures and currency impacts. Gold and silver productions are expected to be about 750–775 thousand ounces of gold and about 35 million ounces of silver per year over the first five years. Current silver prices are expected to have a positive impact on total cash costs for the project. An updated feasibility study will be prepared and the capital cost will be updated on the resolution of the cross-border regulatory, fiscal, tax and royalty items, and the granting of the remaining sectoral permits. Proven and probable gold reserves increased by 1.0 million ounces to 18.0 million ounces in 2007.(1)
 
Australia Pacific
 
Key Operating Statistics

For the years ended
December 31	 	2007	 	2006	 	% Change	 	2005	 	
Tons mined (millions)	 	144	 	137	 	5	%	167	 	
Ore tons processed (millions)	 	33	 	30	 	10	%	11	 	
Average grade (ozs/ton)	 	0.075	 	0.087	 	(14	)%	0.083	 	
Gold produced (000’s/oz)	 	2,123	 	2,220	 	(4	)%	934	 	
Total cash costs (per oz)	 	$	452	 	$	353	 	28	%	$	257	 	

Producing Mines
 
Tons mined increased by 5% in 2007 as Porgera production levels increased from mid-2007 onwards on completion of west wall remediation activities and a 20% increase in ownership (which represented 63% of the overall increase in tons mined). Production at Porgera in the early part of 2007 was impacted by the Hides Power station damage that occurred in December 2006; a 10 day shutdown of operations in second quarter 2007 due to a dispute with landowners, and a delay in completion of the west wall cutback delayed the start of full-scale mining in Stage 5. At Cowal, tons mined increased reflecting a full-year contribution from the mine that began production in 2006 (37% of the overall increase in tons mined). Tons mined decreased due to: the end of mining in the Lawlers Fairyland open pit in early 2007; the end of

(1)           For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144 of this Financial Report 2007.
 
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open pit mining and transition to underground mining at Granny Smith; and the sale of Paddington assets and the completion of open pit mining at Kanowna. Together, these decreases represented 87% of the offsetting overall decrease in total tons mined. Production in 2008 is expected to be similar to 2007 levels with increases at Porgera (due to a full year of production after completion of the West Wall remediation) and Granny Smith (due to an increase in tons from the underground as the number of working areas increases), offset by lower production at Cowal (due to a wall failure at our open pit).
 
Ore tons processed increased by 10%, mainly reflecting a full year’s contribution from the Cowal Mine. Mill feed at Lawlers, Granny Smith and Kanowna was maintained by processing low-grade stockpiles to compensate for the lower tons mined in 2007.
 
Average ore grades declined by 14% in 2007, mainly as a result of processing low-grade stockpiles at Granny Smith, Kalgoorlie and Plutonic. At Granny Smith, low-grade stockpiles were processed while mining transitioned from open-pit to underground. At Kalgoorlie, limited shovel availability early in the year led to the processing of more low-grade stockpiled ore. At Plutonic, lower average grades in 2007 resulted from poor equipment availability, temporary blockages of the Baltic paste fill line with a loss of flexibility in the underground mine, and stope sequencing issues. With the implementation of improvement programs, mining rates and shovel availability, we expect production at these mines to increase in 2008. At Cowal, production continued to improve in the latter half of 2007 due to grade improvements resulting from the conversion to sulfide material milling. The rise of ore tons processed also contributed to the decline in average ore grades. Gold production in 2007 decreased by 4% as the lower average ore grades were partly offset by higher ore processing rates.
 
Total cash costs at $452 per ounce in 2007 were 28% higher compared to the prior year, due to higher levels of expensed waste stripping activity at Porgera after the west wall remediation was completed mid-year and normal mining operations returned in the pit ($35 per ounce); higher currency exchange rates ($31 per ounce); higher labor costs ($29 per ounce); higher commodity prices ($17 per ounce); offset by lower administrative costs ($9 per ounce). The effective currency hedge rate for 2007 was 0.77 compared to 0.71 in the prior year. At the start of 2007, our currency hedging program provided protection for approximately 80% of our Australian dollar costs, but the remaining portion was subject to varying market rates. We added to our hedge position part way through the year, and as a result, were fully hedged for the latter part of 2007 and for 2008 at an average rate of 0.77 and 0.78, respectively. Low unemployment, particularly in Western Australia, continues to impact wage levels and the ability to attract and retain staff.
 
In 2008, we expect gold production of 1.975 to 2.15 million ounces at total cash costs of $450 to $475 per ounce. Total cash costs per ounce are expected to be higher in 2008 due to higher currency hedge rates, higher oil prices, labor rate increases and higher royalty costs.
 
Africa
 
Key Operating Statistics

For the years ended
December 31	 	2007	 	2006	 	% Change	 	2005	 	
Tons mined (millions)	 	23	 	21	 	10	%	8	 	
Ore tons processed (millions)	 	4	 	5	 	(20	)%	1	 	
Average grade (ozs/ton)	 	0.162	 	0.188	 	(14	)%	0.159	 	
Gold produced (000’s/oz)	 	605	 	914	 	(34	)%	398	 	
Total cash costs (per oz)	 	$	408	 	315	 	30	%	$	336	 	

Producing Mines
 
Tons mined increased by 10% in 2007, due mainly to North Mara, where low-grade areas were mined along with increased waste removal due to instability of the west wall, partly offset by the sale of South Deep.
 
Tons processed decreased by 20% in 2007 due to the sale of South Deep (40% of overall decrease) and lower processing rates across all other mines.
 
Average ore grades declined by 14% in 2007, mainly due to lower grades at North Mara after a revision to the mine plan resulting from pit wall instability experienced at Gokona Phase 1 pit during late 2006. Lower-grade areas of the pit were mined and processing of lower-grade ore stockpiles occurred while waste at the pit wall was removed. Mining was also affected by unfavorable drilling conditions, excess water in the pit, maintenance downtime on existing mining fleet,
 
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and continued low equipment availabilities during the year. Limited mining equipment availability resulted in delayed waste stripping, limiting access to the high-grade areas of the Gokona pit to the last two weeks of December. These access issues impacted ore grades as the limited ore from the Gokona pit was blended with lower grade stockpiles and ore from the Nyabigena pit. On January 1, 2008, a fire started in the engine of the primary excavator. This incident will have a negative impact on normal production capacity for the first half of 2008. An insurance claim for both physical damage and business interruption has been lodged with the insurers.
 
The combined effect of lower tons processed and lower average ore grades led to a 34% decrease in production in 2007 compared to the prior year. Production in 2007 was impacted by heavy rainfall in Tanzania in late 2006 and early 2007, which resulted in pit wall instability at both Tulawaka and North Mara, and required changes to the 2007 mine plan and production sequencing. At Tulawaka, the impact on production of the pit wall instability was mitigated as a result of mining in higher grade areas of the pit. Underground development commenced at Tulawaka during the third quarter 2007, with underground production expected to begin in early 2008.
 
At Bulyanhulu, production in 2007 was 26% lower than the prior year period due to lower mining rates caused by low equipment availability, mining in lower-grade areas of the mine, and labor disruptions. Ongoing labor disruptions experienced throughout the year escalated in the fourth quarter, as an illegal labor strike took place at the mine during late October, resulting in the termination of 1,300 employees. As a result of the reduced staff levels, the mine sequencing was revised, impacting our ability to access higher-grade areas and operate the plant at its full capacity. The mine is in the process of increasing its staff levels in stages, and expects to return to normal production capacity in early 2008.
 
Total cash costs per ounce for the region in 2007 were 30% higher than the prior year due to the lower production at North Mara and Bulyanhulu; higher waste mining at North Mara and Tulawaka; higher maintenance costs ($16 per ounce); and higher labor costs ($12 per ounce) as a result of costs relating to the labor strike at Bulyanhulu.
 
In 2008, we expect gold production of 0.625 to 0.7 million ounces at total cash costs of $380 to $400 per ounce. Production is expected to increase primarily at Bulyanhulu, reflecting the resolution of labor issues, improved equipment availability, and higher ore grades. Total cash costs per ounce are expected to be lower in 2008, reflecting the increase in production levels.
 
Significant Projects
 
The Buzwagi project was approved for construction on August 1, 2007, and is expected to begin production in mid-2009. We spent $112 million through the end of 2007 as all long lead items have been ordered. Initial capital costs are expected to be about $400 million, which is consistent with our previous guidance. Site access was achieved on August 20, 2007, with the civil and earthworks, security fencing, building and infrastructure and transport and logistics contractors mobilized on site. Buzwagi is expected to produce 250 to 260 thousand ounces per year at total cash costs of $270–280 per ounce in its first five years. Proven and probable gold reserves at Buzwagi grew by 1.0 million ounces in 2007 to 3.6 million ounces. (1)
 
Work on a pre-feasibility study for the Sedibelo platinum project in South Africa commenced in March 2006. Barrick has an earn-in right for a 50% interest. The pre-feasibility study was completed during September 2007 and cost $27 million. Acceptance of the Mining Rights application was received from the Department of Minerals and Energy (DME) in April 2007, and approval of the Mining Rights application is expected in April 2008. This acceptance signifies the start of an approval process during which technical, environmental and social issues are presented to the DME over a period extending into 2008. Study work and exploration drilling in support of a final feasibility study have commenced, with completion expected in the second quarter of 2008.

(1)           For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144 of this Financial Report 2007.
 
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At the Kabanga JV in Tanzania, operator Xstrata Plc is developing a pre-feasibility study on this world-class nickel sulfide deposit. Barrick’s share of measured and indicated resources totaled 0.2 billion pounds of nickel and its share of inferred resources totaled 1.2 billion pounds of nickel at year end 2007.(1)
 
Other Significant Projects
 
Fedorova is a platinum and palladium project with nickel, copper and gold by-products located in the Kola Peninsula of the Russian Federation. We hold a 50% interest in Fedorova (with an earn-in right to 79%), and we are also the operator. Fedorova is a large near surface PGM (platinum group metals) deposit. Fedorova Resources successfully passed an inspection by state regulators and was determined to be in compliance with all material aspects of its license and state requirements.
 
Reko Diq is a large copper-gold porphyry mineral resource on the Tethyan belt, located in southwest Pakistan in the province of Baluchistan. The Tethyan belt is a prospective ground for large copper-gold porphyries. At Reko Diq, the drill program continued in fourth quarter 2007 with a feasibility study scheduled for completion in early 2009. A total of 101 thousand meters have been drilled to date and results continue to confirm the project’s district exploration potential. At year-end 2007, Barrick’s share of measured and indicated gold resources totaled 3.7 million ounces and its share of measured and indicated copper resources were 4.3 billion pounds. Inferred gold resources grew 6.1 million ounces to 10.5 million ounces and inferred copper resources increased by 9.1 billion pounds to 13.4 billion pounds.(1)

(1)           For a breakdown of reserves and resources by category and additional information relating to reserves and resources, see pages 136 to 144 of this Financial Report 2007.
 
Copper
 
Copper Operational Performance

 
In 2007, Zaldívar produced 315 million pounds of copper at a total cash cost of $0.70 per pound. Production was temporarily lower in the fourth quarter due to shortages in the availability of acid, power restrictions associated with a November earthquake and lower production from the secondary leach pad. Total cash costs per pound in 2007 were impacted by the increased cost of fuel and acid, which can be expected to increase further in 2008, along with inflationary and exchange rate pressure on labor and consumables, and the availability of electricity.
 
At Osborne, production increased by 47% to 87 million pounds from 59 million in the prior year, at cash costs of $1.37 compared to $1.53 in the prior year. Production was positively impacted by the paste fill plant that enabled mining of high grade pillars and higher throughput due to the inclusion of ore from the open pit at Trekelano.
 
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Review of Significant Operating Expenses
 
Exploration Expense

($ millions)	 	2007	 	2006	 	2005	 	Comments on significant variances	 	
Exploration	 	 	 	 	 	 	 	 	 	
North America	 	$	70	 	$	64	 	$	34	 	No significant change from the prior year.	 	
South America	 	40	 	22	 	19	 	2007 vs. 2006 – Mainly due to higher activity in Lagunas Norte and Zaldívar.	 	
Australia Pacific	 	46	 	44	 	13	 	No significant change from the prior year.	 	
Africa	 	15	 	22	 	34	 	2007 vs. 2006 – Lower activity at Tulawaka and North Mara.	 	
Other	 	8	 	19	 	9	 	Lower activity due mainly to the sale of exploration properties to Highland, discontinuation of active exploration in China and Turkey.	 	
Total	 	$	179	 	$	171	 	$	109	 	 	 	
 
Project Development Expense

($ millions)	 	2007	 	2006	 	2005	 	Comments on significant variances	 	
Mine development	 	$	146	 	$	78	 	$	2	 	2007 vs. 2006 – Expenditures are higher as development activities increased at Pueblo Viejo (increase of $42 million), and Sedibelo (increase of $12 million), partially offset by Donlin Creek (decrease of $5 million).	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Business development/other	 	22	 	17	 	10	 	In 2007, expenditures were higher primarily as a result of energy feasibility studies. In 2006, expenditures were higher than 2005 due to an increase in research and development activity.	 	
 	 	 	 	 	 	 	 	 	 	
Non-capitalizable project costs	 	20	 	24	 	20	 	Non-capitalizable costs mainly represent items incurred in the development/construction phase that cannot be capitalized. 2007 vs. 2006 – Expenditures are lower due to additional spending at Pascua-Lama, offset by a decrease at Buzwagi where costs were capitalized starting in May 2007.	 	
Total	 	$	188	 	$	119	 	$	32	 	 	 	

Amortization Expense	

($ millions)	 	 	 	Increase (decrease)
due to	 	 	 	 	 	 	 	
For the years ended
December 31	 	2007
Amount	 	Sales
Volumes(1)	 	Other(2)	 	2006
Amount(3)	 	2005
Amount	 	Comments on other variances	 	
Gold mines	 	 	 	 	 	 	 	 	 	 	 	 	 	
North America	 	$	314	 	$	(3	)	$	70	 	$	247	 	$	213	 	Mainly due to the finalization of the Placer Dome purchase price allocation. Although there was a net increase in reserves for South America, reserves for Pierina and Veladero decreased resulting in a significant increase in amortization expense. Furthermore, we acquired an additional 20% interest in Porgera in August 2007, and Cowal in 2006.	 	
South America	 	234	 	(22	)	129	 	127	 	101	 			
Australia Pacific	 	239	 	(10	)	63	 	186	 	46	 			
Africa	 	78	 	9	 	(19	)	88	 	49	 			
Copper mines	 	 	 	 	 	 	 	 	 	 	 	 	 	
South America	 	80	 	3	 	26	 	51	 	—	 	Mainly due to the finalization of the purchase price allocation for long-lived assets acquired with Placer Dome, combined with a net increase in reserves.	 	
Australia Pacific	 	39	 	2	 	20	 	17	 	—	 			
Sub total	 	$	984	 	 	 	 	 	$	716	 	$	409	 	 	 	
Corporate assets	 	20	 	1	 	—	 	19	 	18	 	 	 	
Total	 	$	1,004	 	$	(20	)	$	289	 	$	735	 	$	427	 	 	 	

(1)    For explanation of changes in sales volumes refer to page 36.
 
(2)    Other includes increases/decreases in amortization expense due to additions/dispositions of property, plant and equipment, purchase accounting adjustments and the impact of historic changes in reserve estimates on amortization (refer to page 64).
 
(3)    On finalization of the Placer Dome purchase price allocation in 2007 certain amounts were reclassified for comparative purposes.
 
48

 
Amortization expense recorded in the first nine months of 2006 reflected preliminary purchase price allocations for the acquired Placer Dome mines. In fourth quarter 2006 valuations for the acquired mines were finalized, at which time amortization calculations were prospectively recorded to reflect adjustments to the preliminary allocation. On finalization of the purchase price allocation, consolidated average amortization rates increased by about $17 per ounce of gold and $0.13 per pound of copper due to the impact of final allocations.
 
Impairment Charges, Corporate Administration, Interest Income and Interest Expense

($ millions)	 	 	 	 	 	 	 	 	 	
For the years ended December 31	 	2007	 	2006(1)	 	2005	 	Comments on significant trends and variances	 	
Impairment charges(2)	 	$	65	 	$	23	 	$	16	 	Impairment charges increase in 2007 reflects goodwill impairment charges at our Golden Sunlight and Eskay Creek mines ($42 million) and write-down of Asset-Backed Commercial Paper (“ABCP”) ($20 million).	 	
Corporate administration	 	155	 	142	 	71	 	2007 vs. 2006 – Mainly due to the strengthening of the Canadian dollar vs. the US dollar as costs are primarily in Canadian dollars.	 	
Interest income	 	141	 	110	 	38	 	2007 vs. 2006 – Mainly due to higher average cash balances in 2007.	 	
Interest costs	 	 	 	 	 	 	 	 	 	
Total incurred	 	237	 	251	 	121	 	2007 vs. 2006 – Mainly due to a combination of factors: repayment of the $500 million, 7.5% debentures in second quarter 2007, termination of a second credit facility in third quarter 2006, and repayment of the first credit facility’s balance outstanding in October 2006 slightly offset by the $1,000 million of Copper-linked notes issued in October 2006.	 	
Capitalized	 	124	 	102	 	118	 	Amounts capitalized each period reflect the number of projects in our pipeline. Reko Diq was added in fourth quarter 2006 which caused an increase in 2007. Costs were capitalized at Cowal in 2005 until it began production in April 2006.	 	
Interest expense allocated to discontinued operations	 	—	 	23	 	—	 	Interest expense in 2006 related to South Deep.	 	
Expensed	 	$	113	 	$	126	 	$	3	 	 	 	

(1)    Increase in 2006 relates to the increase in scale of the Company after the acquisition of Placer Dome. 2006 and 2007 values are more indicative of full scale operations subsequent to the acquisition of Placer Dome.
 
(2)    As at December 31, 2007, we held $66 million of ABCPs which have matured, but for which no payment has been received. Our ownership of ABCP investments is comprised of trust units which have underlying investments in various securities. The underlying investments are further represented by residential mortgage backed securities, commercial mortgage backed securities, ‘other’ asset backed securities and collateralized debt obligations. We have assessed the fair value of the ABCP considering the best available data regarding market conditions for such investments at December 31, 2007. We recorded an impairment of $20 million in 2007 on the ABCP investments. We have based the 30% impairment on our assessment of the credit, liquidity and market risk of the underlying investments in addition to third party valuation information. We believe that the valuation provided approximates fair value. The impairment of our ABCP investments has no affect on our strategy or covenant compliance.
 
Income Tax

(percentages)
For the years ended December 31	 	2007	 	2006	 	2005	 	
Effective tax rate on ordinary income	 	25	%	20	%	13	%	
Deliveries into Corporate Gold Sales Contracts	 	7	%	4	%	3	%	
Net currency translation gains on deferred tax balances	 	(4	)%	(1	)%	(2	)%	
Canadian tax rate changes	 	3	%	1	%	—	 	
Release of Tanzanian valuation allowances	 	(8	)%	—	 	—	 	
Impact of change in Australian tax status	 	—	 	(2	)%	(1	)%	
Actual effective tax rate	 	23	%	22	%	13	%	
 
Our effective tax rate on ordinary income increased from 20% to 25% in 2007 primarily due to higher market gold prices, the impact of changes in the mix of production, and on the mix of taxable income in the various tax jurisdictions where we operate.
 
In 2007 we released valuation allowances totaling $156 million in Tanzania due to the impact of higher market gold prices on expected levels of taxable income in Tanzania.
 
49

 
Currency Translation
 
Deferred tax balances are subject to remeasurement for changes in currency exchange rates each period. The most significant balances are Canadian deferred tax assets with a carrying amount of approximately $439 million and Australian deferred tax liabilities with a carrying amount of approximately $95 million. In 2007, the appreciation of the Canadian and Australian dollar against the US dollar resulted in net translation gains totaling $76 million. These gains are included within the Canada and Australia deferred tax recovery.
 
Canadian Tax Rate Changes
 
In the second and fourth quarters of 2007 and the second quarter of 2006, federal rate changes were enacted in Canada that lowered the applicable tax rate. The impact of this tax rate change was to reduce net deferred tax assets in Canada by $64 million in 2007 and $35 million in 2006 which are recorded as a component of deferred income tax expense in the respective year. Also, in second quarter 2006, due to a change in the tax status of a Canadian subsidiary, we recorded a deferred income tax credit of $23 million to reflect the impact on the measurement of deferred income tax assets and liabilities.
 
Change in Tax Status in Australia
 
In first quarter 2006, an interpretative decision (“ID”) was issued by the Australia Tax Office that clarified the tax treatment of currency gains and losses on foreign denominated liabilities. Under certain conditions, for taxpayers who have made the functional currency election, and in respect of debt that existed at the time the election was made, the ID provided clarification that unrealized foreign exchange gains that currently exist on inter-company debt will not crystallize upon repayment of the debt. The effect of the ID was recorded as a $31 million reduction of deferred tax liabilities.
 
Financial Outlook
 
2008 Guidance

 	 	2007	 	2008	 	
 	 	Actual	 	Guidance	 	
Gold	 	 	 	 	 	
Production (millions of ounces)	 	8.1	 	7.6–8.1	 	
Total cash costs ($ per ounce)	 	$	350	 	$390–$415	 	
Amortization ($ per ounce)	 	$	104	 	$105	 	
Copper	 	 	 	 	 	
Production (millions of pounds)	 	402	 	380–400	 	
Total cash costs ($ per pound)	 	$	0.83	 	$1.15–$1.25	 	
Amortization ($ per pound)	 	$	0.32	 	$0.35	 	
Corporate administration expense	 	$	155	 	$160	 	
Exploration expense	 	$	179	 	$200	 	
Project expenses:	 	 	 	 	 	
Project development expense	 	$	188	 	$230	 	
Project expense included in equity pick-up	 	$	14	 	$140	 	
Other expenses	 	$	208	 	$200	 	
Interest income	 	$	141	 	$20	 	
Interest expense	 	$	113	 	$—	 	
Capital expenditures – sustaining	 	$	690	 	$600–$800	 	
Capital expenditures – projects	 	$	400	 	$1,500–$1,700	 	
Income tax rate	 	25	%	30	%	
 
Outlook Assumptions and Economic Sensitivity Analysis

 	 	2008	 	 	 	
 	 	Guidance	 	 	 	
Sensitivity	 	Assumption	 	Comments	 	
Market gold price impact on royalties and production taxes	 	$800/oz	 	A $25/oz increase in the market gold price causes a $1/oz increase in total cash costs.	 	
Crude oil price impact on cost of oil consumption	 	$90/bbl	 	A $5 increase per barrel causes a $2/oz direct increase in total cash costs per ounce.	 	
Electricity prices impact on cost of consumption	 	$ 280 million total spend	 	A 10% increase per kwh causes a $4/oz increase in total cash costs per ounce.	 	
 
50

 
2008 Guidance Analysis
 
Production
 
We prepare estimates of future production based on mine plans that reflect the expected method by which we will mine reserves at each mine. Actual gold and copper production 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; varying 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.
 
The Company expects 2008 gold production of about 7.6 to 8.1 million ounces and copper production of about 380 to 400 million pounds. Lower gold production is expected in North America as a result of lower production at Golden Sunlight and Ruby Hill and the end of production from Eskay Creek, while production in South America, Australia and Africa is expected to be similar to 2007 levels.
 
Total Cash Costs
 
We prepare estimates of total cash costs based on expected costs associated with mine plans that reflect the expected method by which we will mine reserves at each mine. Total cash costs per ounce/pound are also affected by ore metallurgy that impacts gold and copper recovery rates, labor costs, the cost of mining supplies and services, foreign currency exchange rates and stripping costs incurred during the production phase of the mine. 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.
 
Total cash costs are expected to be $390 to $415 per ounce for gold and $1.15 to $1.25 per pound for copper. Gold cash costs in 2008 are forecast to be higher than 2007 primarily due to higher energy costs, lower by-product silver credits from Eskay Creek, higher gold price related costs and some inflationary related increases. The Company has assumed an average WTI oil price of $90 per barrel in the 2008 guidance. This compares to an average price of $72 per barrel in 2007.

 
Total cash costs for copper are expected to be approximately $0.32 per pound higher than 2007, primarily as a result of increased costs for electricity and acid at Zaldívar.
 
Exploration and Project Development
 
Higher costs are expected in 2008 due to higher expenses for Pueblo Viejo as well as at Kainantu and Cerro Casale.
 
Interest Income and Interest Expense
 
We expect lower interest income in 2008 primarily due to lower market interest rates and lower average cash balances in 2008, after the acquisitions of Arizona Star; exploration licenses and the Kainantu gold mine from Highlands Pacific for cash consideration in fourth quarter 2007; and closing of the transaction to increase our ownership in Cortez to 100% in 2008. In 2008 we expect that all interest costs will be capitalized to projects.
 
51

 
Project Expenses
 
Project expenses are classified under a combination of project development expenses and equity method investments on our income statement. In aggregate, we expect to expense $370 million in 2008. The increase in our project expenses compared to 2007 reflects higher activity at our Reko Diq, Kabanga, Sedibelo, Cerro Casale and Kainantu projects in 2008.
 
The timing of the funding for project expenditures through equity method investments and the subsequent expense recognition vary. The funding is initially recorded as an increase in the carrying amount of our investment. Our share of expenses is recognized as amounts are spent on the projects through “equity in investees” in our consolidated statement of income. In 2008, we expect to recognize $140 million in expenses through equity in investees. Funding of a further $160 million will be reflected as an increase in the carrying amount of the investments in our consolidated balance sheet.
 
Capital Development Expenditures
 
Projects
 
We expect increased activity at our project sites particularly, Pueblo Viejo, Buzwagi, and Cortez Hills, resulting in increased expenditures in 2008.
 
Sustaining Capital
 
Capital expenditures at our existing operating mines are expected to increase in 2008 primarily in the Africa and Australia Pacific regions for various drill programs to convert resources to reserves, partially offset by lower expenditures in South America.
 
Income Tax Rate
 
Our expected tax rate excludes the impact of currency translation gains/losses and changes in tax valuation allowances. The higher expected rate in 2008 mainly reflects the impact of higher gold prices on the mix of taxable income in the various tax jurisdictions where we operate.
 
Review of Quarterly Results

Quarterly Information	 	2007	 	2006	 	
($ millions, except where indicated)	 	Q4	 	Q3	 	Q2	 	Q1	 	Q4	 	Q3	 	Q2	 	Q1	 	
Sales(1),(2)	 	$	1,917	 	$	1,684	 	$	1,642	 	$	1,089	 	$	1,348	 	$	1,562	 	$	1,532	 	$	1,188	 	
Net income	 	537	 	345	 	396	 	(159	)	418	 	405	 	459	 	224	 	
Per share(3)  (dollars)	 	0.62	 	0.40	 	0.45	 	(0.18	)	0.48	 	0.47	 	0.53	 	0.29	 	
Adjusted net income from continuing operations(4)	 	537	 	345	 	453	 	398	 	444	 	396	 	463	 	266	 	
Per share(3) – basic (dollars)	 	0.62	 	0.40	 	0.53	 	0.46	 	0.50	 	0.46	 	0.54	 	0.34	 	
EBITDA from continuing operations(5)	 	793	 	710	 	731	 	193	 	429	 	694	 	762	 	423	 	
Per share(3)  (dollars)	 	0.91	 	0.82	 	0.85	 	0.22	 	0.44	 	0.80	 	0.88	 	0.54	 	
Adjusted EBITDA from continuing operations(5)	 	793	 	710	 	803	 	757	 	756	 	694	 	762	 	463	 	
Per share(3)  (dollars)	 	0.91	 	0.82	 	0.93	 	0.87	 	0.88	 	0.80	 	0.88	 	0.62	 	
Operating cash flow	 	676	 	557	 	336	 	163	 	331	 	748	 	658	 	385	 	
Per share(3)  (dollars)	 	0.78	 	0.64	 	0.39	 	0.19	 	0.38	 	0.87	 	0.76	 	0.50	 	
Adjusted operating cash flow from continuing operations(6)	 	676	 	557	 	408	 	727	 	658	 	748	 	658	 	425	 	
Per share(3)  (dollars)	 	$	0.78	 	$	0.64	 	$	0.47	 	$	0.84	 	$	0.76	 	$	0.87	 	$	0.76	 	$	0.55	 	

(1)    Prior period sales figures were adjusted for the impact of a change in classification of non-hedge derivative gains and losses. See page 71 for details.
 
(2)    Adjusted for the impact of reclassifying sales from our South Deep mine to discontinued operations in third quarter 2006.
 
(3)    Calculated using net income and weighted average number of shares outstanding under the basic method of earnings per share.
 
(4)    Excluding the impact of deliveries into Corporate Gold Sales Contracts. Adjusted net income from continuing operations is an operating performance measure with no standardized meaning under GAAP. For further information, please see page 69.
 
(5)    EBITDA from continuing operations excluding income tax expense, interest expense, interest income and amortization. Adjusted EBITDA from continuing operations excludes the impact of deliveries into Corporate Gold Sales Contracts, and is an operating performance measure with no standardized meaning under GAAP.For further information see pages 69 to 70.
 
(6)    Excluding the impact of deliveries into Corporate Gold Sales Contracts. Adjusted operating cash flow is an operating performance measure with no standardized meaning under GAAP. For further information see page 69.
 
52

 
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, partly offset by higher total cash costs.
 
Fourth Quarter Results
 
Net income for fourth quarter 2007 was $537 million, $119 million higher than the prior year period, as higher per ounce margins on gold and copper sales volumes were partially offset by higher amortization and lower copper sales volumes. Fourth quarter 2006 net income was reduced by $312 million post-tax due to deliveries into Corporate Gold Sales Contracts.
 
In fourth quarter 2007, we produced 2.14 million ounces of gold and 101 million pounds of copper, compared to 2.44 million ounces and 110 million pounds in the same prior-year quarter. Gold production for fourth quarter was lower than the same prior-year period mainly due to lower production from Africa and South America.
 
Total cash costs for fourth quarter 2007 were $375 per ounce, an increase of $88 an ounce from the prior year. As expected, gold production and total cash costs per ounce in fourth quarter 2007 were impacted due to mine sequencing, waste stripping activities and inflationary pressures for items such as labor, energy, commodities, gold related costs and currency exchange rates.
 
In fourth quarter 2007, we generated adjusted operating cash flow of $676 million compared to $658 million in the same prior year quarter. The positive effects of higher realized gold and copper prices were partially offset by lower gold sales volumes and higher total cash costs.
 
Effect on Earnings Increase (Decrease)

 	 	Three months ended December 31	 	
 	 	2007	 	2006	 	
($ millions)	 	Pre-tax	 	Post-tax	 	Pre-tax	 	Post-tax	 	
Gain on sale of South Deep	 	$	—	 	$	—	 	$	288	 	$	288	 	
Cost of deliveries into fixed-price Corporate Gold Sales Contracts	 	—	 	—	 	(327	)	(312	)	
Tanzanian Tax Valuation	 	 	 	 	 	 	 	 	 	
Allowance release	 	156	 	156	 	—	 	—	 	
Impact of change in enacted rates in Canada	 	(60	)	(60	)	—	 	—	 	
Impairment charges	 	(59	)	(57	)	(23	)	(18	)	
Gain on Highland vend-in	 	—	 	—	 	51	 	51	 	
Unrealized gold and copper non-hedge derivative gains/(losses)	 	(3	)	(2	)	5	 	11	 	
Total	 	$	34	 	$	37	 	$	(6	)	$	20	 	
 
53

 
Financial Condition Review
 
The following section explains how we manage our liquidity and capital resources to carry out our strategy and deliver results. Liquidity is managed dynamically, and factors that could impact liquidity are regularly monitored. The primary factors that affect liquidity include production levels, realized sales prices, cash production costs, working capital requirements, future capital expenditure requirements, scheduled repayments of long-term debt obligations, our credit capacity and expected future debt market conditions. Counterparties to the financial instrument contracts do not have unilateral and discretionary rights to accelerate settlement of financial instruments, and we are not subject to any margin calls.
 
Liquidity risk arises from our general funding needs and in the management of our assets, liabilities and optimal capital structure. We manage liquidity risk to maintain sufficient liquid financial resources to fund our balance sheet and meet our project pipeline commitments and obligations in a cost-effective manner.
 
Contractual Obligations and Commitments

 	 	Payments due	 	 	 	
($ millions)	 	 	 	 	 	 	 	 	 	 	 	2013 and	 	 	 	
At December 31, 2007	 	2008	 	2009	 	2010	 	2011	 	2012	 	thereafter	 	Total	 	
Long-term debt(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Repayment of principal	 	$	101	 	$	105	 	$	49	 	$	29	 	$	92	 	$	2,809	 	$	3,185	 	
Interest	 	196	 	190	 	183	 	179	 	175	 	2,459	 	3,382	 	
Asset retirement obligations(2)	 	71	 	96	 	81	 	93	 	105	 	823	 	1,269	 	
Capital leases	 	21	 	24	 	20	 	8	 	3	 	3	 	79	 	
Operating leases	 	10	 	9	 	6	 	5	 	5	 	3	 	38	 	
Restricted share units	 	14	 	32	 	42	 	—	 	—	 	—	 	88	 	
Pension benefits	 	61	 	24	 	31	 	24	 	24	 	117	 	281	 	
Other post-retirement obligations	 	3	 	3	 	3	 	3	 	3	 	11	 	26	 	
Derivative liabilities(3)	 	101	 	27	 	25	 	9	 	3	 	—	 	165	 	
Purchase obligations for supplies and
consumables(4)	 	323	 	194	 	96	 	101	 	70	 	208	 	992	 	
Capital commitments(5)	 	263	 	4	 	—	 	—	 	—	 	—	 	267	 	
Social development costs	 	63	 	15	 	14	 	7	 	7	 	92	 	198	 	
Total	 	$	1,227	 	$	723	 	$	549	 	$	458	 	$	487	 	$	6,525	 	$	9,969	 	

(1)   Long-term Debt and Interest – Included in long-term debt is $131 million in financing related to North Mara that is payable on demand. 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 financings are collateralized by assets at the Bulyanhulu and Veladero mines, 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 deterioration in our credit rating. Projected interest payments on variable rate debt were based on interest rates in effect at December 31, 2007. Interest is calculated on our long-term debt obligations using both fixed and variable rates.
 
(2)   Asset Retirement Obligations – Amounts presented in the table represent the undiscounted future payments for the expected cost of asset retirement obligations.
 
(3)   Derivative Liabilities – Amounts presented in the table relate to hedge contracts disclosed under notes 2 and 20 to the Financial Statements. Payments related to derivative contracts cannot be reasonably estimated given variable market conditions.
 
(4)   Purchase Obligations for Supplies and Consumables – Primarily include commitments related to community development costs to be incurred at the Pascua-Lama project in Chile and Argentina.
 
(5)   Capital Commitments – Purchase obligations for capital expenditures include only those items where binding commitments have been entered into. Commitments at the end of 2008 mainly related to construction capital at our projects.
 
Capital Expenditures Not Yet Committed
 
We expect to incur capital expenditures during the next five years for both projects and producing mines. The projects are at various development stages, from primarily exploration or scoping study stage through to the construction execution stage. The ultimate decision to incur capital at each potential site is subject to positive results which allow the project to advance past decision hurdles. Primary and significant projects in Barrick’s portfolio at December 31, 2007 include Cortez Hills, Buzwagi, Pascua-Lama, Pueblo Viejo, Donlin Creek, Fedorova and Reko Diq (refer to pages 42 to 47 for further details).
 
54

 
Contingencies – Litigation
 
We are currently subject to various litigation as disclosed in note 28 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.
 
Sources and Uses of Cash
 
Our liquidity needs can be met through a variety of sources, including: cash generated from operations, short-term borrowings and the issuance of long-term debt.
 
Cash Inflow (Outflow)

($ millions)	 	 	 	 	 	 	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	
Operating activities	 	$	1,732	 	$	2,122	 	$	726	 	
Investing activities	 	(1,562	)	(1,593	)	(1,180	)	
Financing activities	 	(1,036	)	(1,347	)	93	 	
Change in cash and equivalents	 	$	(836	)	$	2,006	 	$	(361	)	
 
Operating cash flow decreased by $390 million in 2007 to $1,732 million compared to the prior year. Adjusted operating cash flow decreased by $121 million to $2,368 million compared to the $2,489 million recorded in 2006.

 

(1)    Operating cash flows adjusted for deliveries into Corporate Gold Sales Contracts.
 
Cash used in investing activities amounted to $1,562 million, primarily due to our ongoing acquisitions and capital expenditures to advance our project pipeline, partially offset by proceeds received from the sale of other investments. Significant investing activities in 2007 included the $722 million cash acquisition of Arizona Star, the $135 million cash acquisition of Kainantu, and the $259 million cash acquisition of an additional 20% interest in the Porgera mine. Capital expenditures, including capitalized interest, amounted to $1,046 million. We also realized $625 million in proceeds related to the sale of investments, the most significant being NovaGold ($221 million) and Gold Fields ($356 million).
 
Capital Expenditures

($ millions)	 	 	 	 	 	 	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	
Project capital expenditures	 	 	 	 	 	 	 	
Pascua-Lama	 	$	175	 	$	113	 	$	98	 	
Cowal	 	—	 	104	 	258	 	
Ruby Hill	 	—	 	29	 	35	 	
Cortez Hills	 	91	 	26	 	—	 	
Buzwagi	 	75	 	—	 	—	 	
Veladero	 	—	 	—	 	213	 	
Lagunas Norte	 	—	 	—	 	100	 	
Western 102 Power Plant	 	—	 	—	 	80	 	
Tulawaka	 	—	 	—	 	5	 	
Other	 	—	 	13	 	—	 	
Sub total	 	$	341	 	$	285	 	$	789	 	
Regional capital expenditures	 	 	 	 	 	 	 	
North America	 	$	156	 	$	202	 	$	103	 	
South America	 	197	 	248	 	114	 	
Australia Pacific	 	223	 	255	 	50	 	
Africa	 	112	 	85	 	40	 	
Other	 	17	 	12	 	8	 	
Sub total	 	705	 	802	 	315	 	
Total	 	$	1,046	 	$	1,087	 	$	1,104	 	
 
55

 
Cash used in financing activities for 2007 was $1,036 million, including repayment of $500 million of debentures that matured in 2007, $261 million of dividends paid, and $197 million to settle Placer Dome derivative positions, partially offset by $142 million in proceeds received on exercise of employee stock options.
 
Key Financial Ratios

 	 	 	 	 	 	%
inc./(dec.)	 	
(millions, except ratios and percentage amounts)	 	2007	 	2006	 	2005	 	
Non-cash working capital(1)	 	$	1,018	 	$	764	 	33	%	
Net debt(2)	 	$	1,179	 	$	1,064	 	11	%	
Net debt to equity ratio(3)	 	0.08:1	 	0.07:1	 	14	%	
Current ratio(4)	 	4.03:1	 	4.85:1	 	(17	)%	

(1)   Represents current assets, excluding cash and equivalents, less current liabilities, excluding short-term debt obligations.
 
(2)   Represents long-term and short-term debt less cash and equivalents.
 
(3)   Represents net debt divided by total shareholders’ equity.
 
(4)   Represents current assets divided by current liabilities, excluding short-term debt obligations.
 
Non-cash working capital increased in 2007 mainly due to increases in inventory and other current asset levels as compared to the prior year. Lower cash balances, partly offset by higher accounts payable at the close of 2007, caused our current ratio to decrease.
 
Through the combination of a strong balance sheet and positive operating cash flows, we have been able to secure financing, as required, to fund our capital projects and acquisitions. At current gold prices, we expect to continue to generate a significant amount of operating cash flow. We expect to use this cash flow predominantly to fund the capital requirements of our pipeline of projects.
 
Alternatives for sourcing our future capital needs include our significant cash position, unutilized credit facilities, future operating cash flow, project financings and public debt financings. These alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We expect that, absent a material adverse change in a combination of our sources of liquidity and/or a significant decline in gold and copper prices, present levels of liquidity will be adequate to meet our expected capital needs. If we are unable to access project financing due to unforeseen political or other problems, we expect that we will be able to access public debt markets as an alternative source of financing. Any additional indebtedness would increase our debt payment obligations, and may negatively impact our results of operations.
 
Capital Structure
 
Shareholders’ Equity

Outstanding Share Data	 	Shares outstanding	 	
As at February 7, 2008	 	No. of shares	 	
Common shares	 	870,465,549	 	
Special voting shares	 	1	 	
Exchangeable shares(1)	 	3,465,892	 	
Stock options	 	12,706,450	 	

(1)   Represents Barrick Gold Inc. (“BGI”) exchangeable shares. Each BGI share is exchangeable for 0.53 Barrick common shares. At January 17, 2008, these shares were convertible into approximately 1,836,923 Barrick common shares.
 
For further information regarding the outstanding shares and stock options, please refer to the Financial Statements and our 2007 Management Information Circular and Proxy Statement.
 
56

Dividend Policy
 
In 2007, we increased our annual dividend from $0.22 per common share to $0.30 per common share. The 36% increase in the dividend reflects our ability to generate substantial cash flows in the current strong gold price environment. With strong cash flow and an A-rated balance sheet, we have the financial resources to return additional value to shareholders and fund our project pipeline. 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” or “OCI”, and excluded from the income statement.
 
In 2007, other comprehensive income of $32 million, after-tax, mainly included: gains of $257 million on hedge contracts designated for future periods, caused primarily by changes in currency exchange rates, copper prices, gold prices and fuel prices; reclassification adjustments totaling $185 million for gains on hedge contracts designated for 2007 that were transferred to earnings in 2007; $71 million transferred to earnings related to gains recorded on the sale of NovaGold and Gold Fields’ shares, and $58 million recorded as a result of changes in the fair value of investments held during the year.
 
Included in accumulated other comprehensive income at December 31, 2007 were unrealized pre-tax gains on currency hedge contracts totaling $356 million, based on December 31, 2007 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 the 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.
 
Credit Rating

At February 21, 2008 from major rating agencies:	 	 	
Standard and Poor’s (“S&P”)	 	A–	
Moody’s	 	Baa1	
DBRS	 	A	
 
Through 2007, our ratings, as established by S&P, Moody’s and DBRS, have remained stable. Our ability to access unsecured debt markets and the related cost of debt financing is, in part, dependent upon maintaining an acceptable credit rating. Deterioration in our credit rating would not adversely affect existing debt securities, but could impact funding costs for any new debt financing. The key factors impacting 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 geopolitical risk profile.
 
Off Balance Sheet Arrangements
 
Financial Instruments
 
We use a mixture of cash and long-term debt to maintain an efficient capital structure and ensure adequate liquidity exists to meet the cash needs of our business. A discussion of our liquidity and capital structure can be found on pages 55 to 56. We use interest rate contracts to mitigate interest rate risk that is implicit in our cash balances and outstanding long-term debt. In the normal course of business, we are inherently exposed to currency and commodity price risk. We use currency and commodity hedging instruments to mitigate these inherent business risks. We also hold certain derivative instruments that do not qualify for hedge accounting treatment. These non-hedge derivatives are described in note 20 to our Financial Statements. For a discussion of certain risks and assumptions that relate to the use of derivatives, including market risk, market liquidity risk and credit risk, refer to notes 2 and 20 to our Financial Statements. For a discussion of the methods used to value financial instruments, as well as any significant assumptions, refer to note 20 to our Financial Statements.
 
57

 
Summary of Financial Instruments( 1)
 
As at and for the year ended December 31, 2007

Financial
Instrument	 	Principal/
Notional
Amount	 	Associated
Risks	 	Amounts
Recorded
in Earnings	 	Amounts
Recorded
in OCI	 	
Cash and equivalents	 	$	2,207 million	 	· Interest rate
· Credit	 	$	138 million	 	—	 	
Investments in available-for-sale securities	 	$	142 million	 	· Market	 	$	71 million	 	$	41 million	 	
Long-term debt	 	$	3,255 million	 	· Interest rate	 	$	113 million	 	—	 	
Hedging instruments – currency contracts	 	C $	450 million	 	· Market/Liquidity	 	$	190 million	 	$	264 million	 	
 	 	A$	4,518 million	 	 	 	 	 	 	 	 	 	
 	 	CLP	42 million	 	 	 	 	 	 	 	 	 	
Copper hedges	 	444 million lbs	 	· Market/Liquidity
· Credit	 	$	(32) million	 	$	14 million	 	
Acquired Placer Dome gold hedges	 	 	 	· Market/Liquidity
· Credit	 	$	2 million	 	$	15 million	 	
Hedging instruments – fuel and propane contracts	 	4.5 million bbls	 	· Market/Liquidity
· Credit	 	$	29 million	 	$	79 million	 	
Debt hedging instruments – interest rate contracts	 	—	 	· Market/Liquidity
· Credit	 	—	 	$	(17) million	 	
Cash hedging instruments – interest rate contracts	 	—	 	· Market/Liquidity
· Credit	 	$	(3) million	 	—	 	
Non-hedge derivatives	 	Various	 	· Market/Liquidity
· Credit	 	$	41 million	 	—	 	

(1)                    Refer to pages 58 to 59 for information on gold and silver sales contracts.
 
At December 31, 2006, Barrick’s Corporate Gold Sales Contracts totaled 2.5 million ounces. In 2007, we reduced the Corporate Gold Sales Contract book to zero.
 
Project Gold Sales Contracts
 
In anticipation of building our projects, and in support of any related financing, we have 9.5 million(1) ounces of existing gold sales contracts specifically allocated to these projects. The allocation of these contracts will help reduce gold price risk at the projects and are expected to help secure financing for construction. We expect that the allocation of these contracts will eliminate any requirement by lenders to add any incremental gold sales contracts in the future to support any financing requirements. The contracting parties are bullion banks whose business includes entering into contracts to purchase gold from mining companies. The terms of our gold and silver sales contracts enable us to deliver gold and silver whenever we choose over the primarily ten-year term of the contracts. The forward sales prices on our Project Gold Sales Contracts have not been fully fixed, and thus remain sensitive to long-term interest rates. As part of our Master Trading Agreements (“MTAs”), Project Gold Sales Contracts are not subject to any provisions regarding any financial go-ahead decisions with construction, or any possible delay or change in the project.

(1)                    Includes floating spot-price gold contracts under which we are committed to deliver 1.7 million ounces of gold at spot prices less an average fixed-price adjustment of $456 per ounce.
 
58

 
Key Aspects of Project Gold Sales Contracts

As of December 31, 2007	 	 	
Expected delivery dates(1)	 	2011–2019, the approximate terms of expected financing	
Future estimated average realizable selling price(2)	 	$435/ounce	
Mark-to-market value at December 31, 2007 (millions)(3)	 	$(4,626)	

(1)                    The contract termination dates are in 2017 in most cases, but we currently expect to deliver production against these contracts starting in 2011, subject to production commencing at certain projects which is dependant on the timing of receipt of approvals of the environmental impact assessments, as well as the resolution of other external issues, both of which are largely beyond our control.
 
(2)                    Upon delivery of production from 2011–2019, the term of expected financing. Approximate estimated value based on current market US dollar interest rates and on an average lease rate assumption of 0.75%.
 
(3)                    At a spot gold price of $834 per ounce and market interest rates. Based on closing spot price of $913 per ounce on February 15, 2008, the mark-to-market liability is $(5,095).
 
The allocation of gold sales contracts to projects involves: (i) the identification of contracts in quantities and for terms that mitigate gold price risk for the project during the term of the expected financing (contracts were chosen where the existing termination dates are spread between the targeted first year of production and the expected retirement of financing for the project); and (ii) the eventual settlement of proceeds from these contracts for the benefit of production.
 
Through allocation of these gold sales contracts to these projects, we 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.
 
Under the Project Gold Sales Contracts, we have an obligation to deliver gold by the termination date (currently 2017 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 $435/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 estimate, which is an average for the total Project Gold Sales Contract position, is not necessarily representative of the prices that may be realized 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 choose 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).
 
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 Project 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.
 
Fixed-Price Silver Sales Contracts

As of December 31, 2007	 	 	
Millions of silver ounces	 	10.5	
Current termination date of silver sales contracts	 	2017 in most cases	
Average estimated realizable selling price at 2017 termination date(1)	 	$9.04	
Mark-to-market value at December 31, 2007(2)	 	$(80)	

(1)                    Approximate estimated value based on current market contango of 2.50%. 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 $14.76 per ounce.
 
59

 
We also have floating spot-price silver sales contracts under which we are committed to deliver 7.65 million ounces of silver over the next ten years at spot prices, less an average fixed-price adjustment of $4.06 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 18 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 10 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 2017 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 our principal hedging subsidiary’s ability, to perform our or its gold and silver delivery and other obligations under the MTAs and related parent guarantees, 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; it was $15 billion at year end. 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 less than 2:1; we have consistently been below 1:1 for the entire year.
 
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.
 
As spot gold prices increase or decrease, the value of our gold mineral reserves and amount of potential operating cash inflows generally increase or decrease. The unrealized mark-to-market loss on our fixed-price 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 project gold sales contracts are to deliver an agreed upon quantity of gold at a contracted price by the termination date of the contracts (currently 2017 in most cases). Project 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.
 
Fair Value of Derivative Positions

As at December 31, 2007
($ millions)	 	Unrealized
Gain/(Loss)	 	
Project Gold Sales Contracts	 	$	(3,888	)	
Floating Spot-Price Gold Sales Contracts	 	(738	)	
Silver Sales Contracts	 	(80	)	
Floating Spot-Price Silver Sales Contracts	 	(31	)	
Foreign currency contracts	 	241	 	
Interest rate and gold lease contracts	 	(10	)	
Fuel contracts	 	84	 	
Copper contracts	 	74	 	
Total	 	$	(4,348	)	
 
60

 
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. We exercise 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.
 
Internal Control over Financial Reporting
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US GAAP.
 
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s Financial Statements. Due to its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may change.
 
Barrick’s annual management report on internal control over financial reporting and the integrated audit report of Barrick auditors for the year ended December 31, 2007 will be included in Barrick’s 2007 Annual Report and its 2007 Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities.
 
Accounting Policy Changes in 2007
 
This section includes a discussion of significant accounting changes that were adopted in our 2007 Financial Statements.
 
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (“FIN 48”)
 
In June 2006, the Financial Accounting Standards Board (FASB) issued FIN 48, to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes, by prescribing that a minimum recognition threshold tax position is required to be met before being recognized in the financial statements. FIN 48 also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, an adjustment to the liability for unrecognized tax benefits was not required; consequently there was no cumulative effect adjustment to the January 1, 2007 balance of retained earnings.
 
61

 
Future Accounting Policy Changes
 
This section includes a discussion of future accounting changes that may have a significant impact on our Financial Statements.
 
FAS 157, Fair Value Measurements (FAS 157)
 
In September 2006, the FASB issued FAS 157 that provides enhanced guidance for using fair value to measure assets and liabilities. FAS 157 is meant to ensure that the measurement of fair value is more comparable and consistent, and improve disclosure about fair value measures. As a result of FAS 157 there is now a common definition of fair value to be used throughout US GAAP. FAS 157 applies whenever US GAAP requires (or permits) measurement of assets or liabilities at fair value. FAS 157 does not address when the use of fair value measurements is required.
 
In December 2007, the FASB issued FSP FAS 157-b, which provided a one year deferral for the implementation of FAS 157 for non-financial assets and liabilities. The deferral is intended to provide the FASB additional time to consider the effects of various implementation issues that have arisen, or that may arise, from the application of FAS 157. Barrick is required to implement the FAS 157 for financial assets and liabilities that are carried at fair value effective January 1, 2008. We do not expect the adoption of FAS 157 to have any significant impact on valuations of investments or derivative instruments.
 
FAS 141(R), Business Combinations (FAS 141(R))
 
In December 2007, the FASB issued FAS 141(R), which will replace FAS 141 prospectively effective for business combinations consummated after the effective date of December 15, 2008. Early adoption is not permitted. Under FAS 141(R), business acquisitions will be accounted for under the “acquisition method”, compared to the “purchase method”mandated by FAS 141.
 
The more significant changes to Barrick’s accounting for business combinations that will result from applying the acquisition method include: (i) the definition of a business is broadened to include development stage entities, and therefore more acquisitions will be accounted for as business combinations rather than asset acquisitions; (ii) the measurement date for equity interests issued by the acquirer is the acquisition date instead of a few days before and after terms are agreed to and announced, which may significantly change the amount recorded for the acquired business if share prices differ from the agreement and announcement date to the acquisition date; (iii) all future adjustments to income tax estimates will be recorded to income tax expense, whereas under FAS 141 certain changes in income tax estimates were recorded to goodwill; (iv) acquisition-related costs of the acquirer, including investment banking fees, legal fees, accounting fees, valuation fees, and other professional or consulting fees will be expensed as incurred, whereas under FAS 141 these costs are capitalized as part of the business combination; (v) the assets acquired and liabilities assumed are recorded at 100% of fair value even if less than 100% is obtained, whereas under FAS 141 only the controlling interest’s portion is recorded at fair value; and (vi) the non-controlling interest will be recorded at its share of fair value of net assets acquired, including its share of goodwill, whereas under FAS 141 the non-controlling interest is recorded at its share of carrying value of net assets acquired with no goodwill being allocated.
 
FAS 160, Non-controlling Interests in Consolidated Financial Statements (FAS 160)
 
In December 2007, the FASB issued FAS 160, which is effective for fiscal years beginning after December 15, 2008. Under FAS 160, the non-controlling interest will be measured at 100% of the fair value of assets acquired and liabilities assumed. Under current standards, the non-controlling interest is measured at book value. For presentation and disclosure purposes, non-controlling interests will be classified as a separate component of shareholders’ equity. In addition, FAS 160 will change the manner in which increases/ decreases in ownership percentages are accounted for. Changes in ownership percentages will be recorded as equity transactions and no gain or loss will be recognized as long as the parent retains control of the subsidiary. When a parent company deconsolidates a subsidiary but retains a non-controlling interest, the non-controlling interest is re-measured at fair value on the date control is lost and a gain or loss is recognized at that time. Finally, under FAS 160, accumulated losses attributable to the non-controlling
 
62

 
interests are no longer limited to the original carrying amount, and therefore non-controlling interests could have a negative carrying balance. The provisions of FAS 160 are to be applied prospectively with the exception of the presentation and disclosure provisions, which are to be applied for all prior periods presented in the financial statements. Early adoption is not permitted.
 
Critical Accounting Estimates and Judgments
 
Certain accounting estimates have been identified as being “critical” to the presentation of our financial condition and results of operations because they require us to make subjective and/or complex judgments about matters that are inherently uncertain; or there is a reasonable likelihood that materially different amounts could be reported under different conditions or using different assumptions and estimates.
 
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. Changes in reserve estimates are generally calculated at the end of each year and cause amortization expense to increase or decrease prospectively. The estimate that most significantly affects the measurement of amortization is quantities of proven and probable gold and copper reserves, because we amortize a large portion of property, plant and equipment using the units-of-production method. The estimation of quantities of gold and copper reserves, in accordance with the principles in Industry Guide No. 7, issued by the US Securities and Exchange Commission (“SEC”) 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. Actual gold and copper production could differ from expected gold and copper production based on reserves, and an adverse change in gold or copper prices could make a reserve uneconomic to mine. Variations could also occur in actual ore grades and gold, silver and copper recovery rates from estimates.
 
A key trend that could reasonably impact reserve estimates is rising market mineral prices, because the mineral price assumption is closely related to the trailing three-year average market price. As this assumption rises, it could result in an upward revision to reserve estimates as material not previously classified as a reserve becomes economic at higher gold prices. Following the recent trend in market gold prices over the last three years, the mineral price assumption used to measure reserves has also been rising. The gold price assumption was $575 per ounce in 2007 (2006: $475 per ounce; 2005: $400 per ounce). The copper price assumption was $2.00 per pound in 2007 (2006: $1.75 for Osborne and $1.50 for all other copper reserves).
 
The impact of a change in reserve estimates is generally more significant for mines near the end of the mine life because the overall impact on amortization is spread over a shorter time period. Also, amortization expense is more significantly impacted by changes in reserve estimates at underground mines than open-pit mines due to the following factors: (1) underground development costs incurred to access ore at underground mines are significant and amortized using the units-of-production method; and (2) reserves at underground mines are often more sensitive to mineral 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.
 
63

 
Impact of Historic Changes in Reserve Estimates on Amortization

For the years ended December 31
($ millions, except reserves in millions of contained oz/pounds)	 	2007	 	2006	 	
		Reserves
increase
(decrease)(1)	 	Amortization
increase
(decrease)	 	Reserves
increase
(decrease)(1)	 	Amortization
increase
(decrease)	 	
Gold	 	 	 	 	 	 	 	 	 	
North America	 	5.0	 	$	3	 	1.7	 	$	(6	)	
South America	 	0.1	 	23	 	0.1	 	(35	)	
Australia Pacific	 	3.5	 	(2	)	0.6	 	(16	)	
Africa	 	0.5	 	(2	)	3.0	 	(18	)	
Total Gold	 	9.1	 	$	22	 	5.4	 	$	(75	)	
Copper	 	 	 	 	 	 	 	 	 	
Australia Pacific	 	89	 	(6	)	—	 	—	 	
South America	 	255	 	10	 	—	 	—	 	
Total Copper	 	344	 	$	4	 	—	 	$	—	 	

(1)                    Each year we update our reserve estimates as at the end of the year as part of our normal business cycle. Reserve changes presented were calculated at the beginning of the applicable fiscal year and are in millions of contained ounces.
 
Impairment Assessments of 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 related to a mine or project are included in one group. If there are indications that impairment may have occurred at a particular mine site, we compare the sum of the undiscounted cash flows expected to be generated from that mine or project to its carrying amount. If the sum of undiscounted cash flows is less than the carrying amount, an impairment loss is recognized if the carrying amount of the individual long-lived assets within the group exceeds their fair values.
 
Long-lived assets subject to potential impairment at operating mines and development projects include buildings, plant and equipment, and capitalized mineral property acquisition and mine development costs. For impairment assessment purposes, the estimated fair value of buildings, plant and equipment is based on a combination of current depreciated replacement cost and current market value. The estimated fair value of capitalized mineral property acquisition and mine development costs is based on a discounted cash flow model.
 
In fourth quarter 2007, Eskay Creek and Golden Sunlight were identified as having potential impairments. As a result, we compared the estimated fair value of the long-lived assets at Golden Sunlight and Eskay Creek to their carrying amount and determined that the fair value of the long-lived assets exceeded their carrying amounts.
 
Impairment Assessments of Exploration Projects
 
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 an impairment may exist, we compare the carrying amount to its fair value. The fair value for exploration projects is based on a discounted cash flow model. For projects that do not have reliable cash flow projections, a market approach is applied. In the event land and mineral rights are impaired, we reduce the carrying amount to the estimated fair value and an impairment loss is recognized.
 
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Accounting for Goodwill and Goodwill Impairment
 
We allocate goodwill arising from business combinations to reporting units acquired by preparing estimates of the fair value of the entire reporting unit and comparing this amount to the fair value of assets and liabilities (including intangibles) in the reporting unit. The difference represents the amount of goodwill allocated to each reporting unit. We believe that goodwill arises principally because of the following factors: (1) the going concern value implicit in the Company’s ability to sustain/grow its business by increasing reserves and resources through new discoveries whose potential value was not identified at the time of acquisition; and (2) the ability to capture unique synergies from a business combination that can be realized from managing a portfolio of mines and mineral properties in the same geographic region.
 
We test for impairment of goodwill on an annual basis and at any other time if events or a change in circumstances indicate that it is more likely than not that the fair value of a reporting unit has been reduced below its carrying amount. Circumstances that could trigger an impairment test include, but are not limited to: a significant adverse change in the business climate or legal factors; an adverse action or assessment by a regulator; the likelihood that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of; adverse results of testing for recoverability of a significant asset group within a reporting unit; and a significant change to the operating plans for the reporting unit. The impairment test for goodwill is a two-step process. Step one consists of a comparison of the fair value of a reporting unit to its carrying amount, including the allocated goodwill. If the carrying amount of the reporting unit exceeds the fair value, step two requires the fair value of the reporting unit to be allocated to the underlying assets and liabilities of that reporting unit, resulting in an implied fair value of goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, we record an impairment charge equal to the excess.
 
In 2006, we determined that goodwill should be allocated to reporting units that would either represent components (individual mineral properties) or aggregations of components up to a regional business unit level. As at December 31, 2006, the process of determining the appropriate level to allocate goodwill was ongoing. In fourth quarter 2006, we completed impairment tests of goodwill assuming both no aggregation of mineral properties, and aggregation of mineral properties up to the regional business unit level and determined that there was no impairment at that date under either scenario. In second quarter 2007, we determined that each individual mineral property, that is an operating mine, is a reporting unit for the purposes of allocating goodwill. On this basis, we allocated goodwill arising from the Placer Dome acquisition to both acquired and existing mineral properties. Future impairment testing will be completed at that level.
 
Goodwill was allocated to acquired mineral properties considering the values of mineral properties exclusive of synergies between Barrick and Placer Dome. In addition, synergy values were allocated to all mineral properties, both existing and acquired, expected to benefit from the combination of the two companies. Allocating goodwill to individual mineral properties, which by their very nature have a limited useful life, will result in future goodwill impairment charges by the end of the mine life. The timing and amount of future goodwill impairment charges is difficult to determine and will be dependent on a multitude of factors that impact valuations of mineral properties, including changes in observed market multiples for valuation purposes, changes in geopolitical risk and country specific discount rates, changes in market gold prices and total cash costs, success in finding new reserves, future exploration potential and future capital requirements.
 
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Gold mining companies typically trade at a market capitalization that is based on a multiple of net asset value (“NAV”), whereby NAV represents a discounted cash flow valuation based on projected future cash flows. For goodwill impairment testing purposes, we estimate the fair value of a gold property by applying a multiple to the reporting unit’s NAV, which is calculated based on projected cash flows from its most recent life of mine plan. For copper properties, the estimated fair value is based on their NAV and no multiple is applied. The process for determining these fair values is subjective and requires management to make estimates and assumptions including, but not limited to, projected future revenues (based on estimates of production and long-term metals prices), operating expenses, capital expenditures, remaining economic life of individual mineral properties, discount rates and NAV multiples. These estimates and assumptions are subject to change in the future due to uncertain competitive and market conditions or changes in business strategies. The projected future revenues, operating expenses, capital investment and estimated economic life for each individual mineral property is based on internal life of mine plans prepared for each property that we update in the fourth quarter of each fiscal year. Discount rates are based on a country-level real weighted average cost of capital. For individual mineral properties, the NAV multiple considers the median and/or average of observed multiples for comparable public gold companies with operations in similar geographic areas, as well as the property’s remaining economic life. In particular, our assumptions with respect to long-term gold prices and the appropriate NAV multiple to apply have a significant impact on our estimate of fair value. In fourth quarter 2007, we completed our annual goodwill impairment test using a long-term gold price of $800 per ounce and applying NAV multiples ranging from 1.0 to 2.0 depending on each property’s geographic location and remaining economic life. Based on this analysis, we recorded a goodwill impairment charge of $35 million at our Golden Sunlight mine and $7 million at our Eskay Creek mine. The goodwill charges at these mines are primarily a result of their short remaining economic lives of less than 1 year. No goodwill remains at our Eskay Creek mine and $9 million in goodwill remains at Golden Sunlight.
 
Individual mineral properties are wasting assets. Consequently, properties with a short remaining economic life are at a greater risk of incurring a near-term goodwill impairment charge. Based on our most recent life of mine plans, our Tulawaka, Henty, Pierina and Granny Smith mines have remaining economic lives of three years or less. The aggregate goodwill for these mineral properties is approximately $190 million.
 
Production Start Date
 
We assess each mine construction project to determine when a mine moves into production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant or its location. We consider various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moved into production stage. Some of the criteria considered would include, but are not limited to, the following: (1) the level of capital expenditures compared to construction cost estimates; (2) completion of a reasonable period of testing of mine plant and equipment; (3) ability to produce minerals in saleable form (within specifications); and (4) ability to sustain ongoing production of minerals.
 
When a mine construction project moves into the production stage, the capitalization of certain mine construction costs ceases and costs are either capitalized to inventory or expensed, except for capitalizable costs related to property, plant and equipment additions or improvements, underground mine development or reserve development.
 
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 and public safety 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 increase in an ARO is recorded as an adjustment to the corresponding asset carrying amount and results in a prospective increase in amortization expense. At closed mines, any adjustment to an ARO is charged directly to earnings.
 
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The fair values of AROs are measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted 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; and any instances of non-compliance 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 nears, 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 that go into the determination of an ARO, the fair value of AROs can materially change over time.
 
At our operating mines, we continue to record AROs based on disturbance of the environment over time. It is reasonably possible that circumstances could arise during or 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 our mines, following which it may be necessary to adjust the fair value of AROs. The period of time over which we have assumed that water quality monitoring and treatment will be required has 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 can be 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.
 
At one closed mine, the principal uncertainty that could impact the fair value of the 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 until such time that the less costly method can be proven as technically feasible and approved.
 
AROs at December 31, 2007

($ millions)	 	2007	 	2006	 	
Operating mines	 	$	769	 	$	683	 	
Closed mines	 	197	 	200	 	
Development projects	 	—	 	10	 	
Total	 	$	966	 	$	893	 	
 
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Deferred Tax Assets and Liabilities
 
Measurement of Temporary 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.
 
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 activities. Levels of future taxable income are affected by, among other things, market gold prices, and production costs, quantities of proven and probable gold and copper 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 the amount of valuation allowances, has been rising gold and copper 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.
 
In 2007, we released $156 million of an end of year valuation allowance in Tanzania due to the estimated effect of higher market gold prices on the ability to utilize deferred tax assets. We released other valuation allowances during 2007 totaling $88 million, partly because sources of income became available that enabled tax losses to be realized.
 
In 2006, we released $25 million of valuation allowances in the United States due to the estimated effect of higher market gold prices on the ability to utilize deferred tax assets. Also in 2006, we released $9 million of valuation allowances in a Chilean entity due to the availability of income, and we released valuation allowances of $19 million in Canada, reflecting utilization of capital losses.
 
In 2005, we released valuation allowances totaling $31 million in Argentina relating to the effect of the higher gold price environment and the anticipated commencement of sales in 2006. We released valuation allowances of $2 million in Canada reflecting utilization of capital losses.
 
Valuation Allowances at December 31

($ millions)	 	2007	 	2006	 	
United States	 	$	190	 	$	211	 	
Chile	 	105	 	110	 	
Argentina	 	26	 	46	 	
Canada	 	55	 	59	 	
Tanzania	 	30	 	217	 	
Other	 	13	 	15	 	
Total	 	$	419	 	$	658	 	
 
United States: most of the valuation allowances relate to Alternative Minimum (AMT) Tax credits, which have an unlimited carry-forward period. Increasing levels of future taxable income due to higher gold selling prices and other factors and circumstances may result in our becoming a regular taxpayer under the US regime, which may cause us to release some, or all, of the valuation allowance on the AMT credits.
 
Chile, Argentina and Tanzania: the valuation allowances relate to the full amount of tax assets in subsidiaries that do not have any present sources of gold production or taxable income. In the event that these subsidiaries have sources of taxable income in the future, we may release some or all of the valuation allowances.
 
Canada: substantially all of the valuation allowances relate to capital losses that can only be utilized if any capital gains are realized.
 
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Non-GAAP Operating Performance Measures
 
Adjusted Net Income and Adjusted Operating Cash Flow
 
Adjusted net income, adjusted net income per share, adjusted operating cash flow and adjusted operating cash flow per share, each exclude the impact of deliveries into Corporate Gold Sales Contracts. These are non-GAAP financial measures. Management uses these measures internally to better assess performance trends for the Company as a whole. Management understands that a number of investors and others who follow the Company’s performance also assess performance in this way. Barrick’s elimination of all its remaining Corporate Gold Sales Contracts in the first half of 2007 resulted in an unusually large opportunity cost of $623 million. Management believes that these measures better reflect Barrick’s performance for the current period and are a better indication of its expected performance in future periods. Barrick management’s budgeting, operational and capital investment decisions are based on production being sold at an assumed spot price, rather than the price under the Corporate Gold Sales Contracts. The presentation of these performance measures enable investors to understand performance based on selling gold production at spot market prices, which is the method expected from third quarter 2007 onwards. Adjusted net income, adjusted net income per share, adjusted operating cash flow and adjusted operating cash flow per share are intended to provide additional information, do not have any standardized meaning prescribed by US GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with US GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under US GAAP. Other companies may calculate these measures differently. The following table reconciles these non-GAAP measures to the most directly comparable US GAAP measure.
 
Reconciliation of Net Income to Adjusted Net Income and Operating Cash Flow to Adjusted Operating Cash Flow

($ millions, except per share amounts in dollars)
For the years ended December 31	 	2007	 	2006	 	2005	 	
Net income from continuing operations	 	$	1,110	 	$	1,209	 	$	395	 	
Impact of elimination of Corporate Gold Sales Contracts	 	623	 	352	 	55	 	
Adjusted net income from continuing operations	 	$	1,733	 	$	1,561	 	$	450	 	
 	 	 	 	 	 	 	 	 	 	 	
Earnings per share from continuing operations(1)	 	$	1.28	 	$	1.44	 	$	0.74	 	
Impact of elimination of Corporate Gold Sales Contracts	 	0.72	 	0.42	 	0.10	 	
Adjusted net income per share from continuing operations(1)	 	$	2.00	 	$	1.86	 	$	0.84	 	
 	 	 	 	 	 	 	 	 	 	 	
Operating cash flow from continuing operations	 	$	1,732	 	$	2,122	 	$	726	 	
Impact of elimination of Corporate Gold Sales Contracts	 	636	 	367	 	56	 	
Adjusted operating cash flow from continuing operations	 	$	2,368	 	$	2,489	 	$	782	 	
 	 	 	 	 	 	 	 	 	 	 	
Operating cash flow per share from continuing operations(1)	 	$	2.00	 	$	2.52	 	$	1.35	 	
Impact of elimination of Corporate Gold Sales Contracts	 	0.73	 	0.44	 	0.10	 	
Adjusted operating cash flow per share from continuing operations(1)	 	$	2.73	 	$	2.96	 	$	1.45	 	

(1)   Calculated using net income and weighted average number of shares outstanding under the Basic method of earnings per share.
 
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EBITDA and Adjusted EBITDA
 
EBITDA, adjusted EBITDA, EBITDA per share and adjusted EBITDA per share are non-GAAP financial measures. EBITDA and EBITDA per share represent net income, excluding income tax expense, interest expense, interest income and amortization. Adjusted EBITDA and adjusted EBITDA per share represents net income, excluding income tax expense, interest expense, interest income and amortization, adjusted to reflect the impact of the deliveries into Corporate Gold Sales Contracts. We believe that EBITDA, adjusted EBITDA, EBITDA per share and adjusted EBITDA per share trends are valuable indicators of whether our operations are able to produce sufficient operating cash flow to fund working capital needs, to service our debt obligations, and to fund capital expenditures. We currently use the results depicted by EBITDA, adjusted EBITDA, EBITDA per share and adjusted EBITDA per share for these purposes. EBITDA, adjusted EBITDA, EBITDA per shares and adjusted EBITDA per share are intended to provide additional information, do not have any standardized meaning prescribed by US GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with US GAAP. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under US GAAP. Other companies may calculate these measures differently. The following table reconciles these non-GAAP measures to the most directly comparable US GAAP measure.
 
Reconciliation of Net Income to EBITDA and Adjusted EBITDA

($ millions, except per share amounts in dollars)
For the years ended December 31	 	2007	 	2006	 	2005	 	
Net income from continuing operations	 	$	1,110	 	$	1,209	 	$	401	 	
Income taxes	 	(341	)	(348	)	(60	)	
Interest expense	 	(113	)	(126	)	(3	)	
Interest income	 	141	 	110	 	38	 	
Amortization	 	1,004	 	735	 	427	 	
 	 	 	 	 	 	 	 	
EBITDA from continuing operations	 	$	2,427	 	$	2,308	 	$	847	 	
per share(1)	 	2.80	 	2.74	 	1.58	 	
Impact of elimination of Corporate Gold Sales Contracts	 	636	 	367	 	56	 	
Adjusted EBITDA from continuing operations(1)	 	3,063	 	2,675	 	903	 	
per share(2)	 	$	3.53	 	$	3.18	 	$	1.68	 	

(1)    Calculated using EBITDA and weighted average number of shares outstanding under the Basic method of earnings per share.
 
(2)    Calculated using adjusted EBITDA and weighted average number of shares outstanding under the Basic method of earnings per share.
 
Realized Prices
 
Management uses a performance measure internally that represents revenues under US GAAP, adjusted for unrealized gains and losses on non-hedge derivatives. The use of this measure is intended to enable management to better understand the price realized each period for gold and copper sales. Management believes that this measure better reflects Barrick’s performance in each period and is a better indication of its expected performance in future periods. Changes in the unrealized mark-to-market value of non-hedge gold and copper derivatives occur each period due to changes in market factors such as spot and forward gold and copper prices. The exclusion of such unrealized mark-to-market gains and losses from the presentation of this performance measure enables investors to understand performance based on the realized proceeds of selling gold and copper production. Management includes such unrealized mark-to-market gains and losses in a list of “special items” that have affected its results. These gains and losses relate to derivative instruments that mature in future periods, at which time the gains and losses will become realized. The amounts of these gains and losses reflect fair values based on market valuation assumptions at the end of each period and do not necessarily represent the amounts that will become realized on maturity. Barrick’s realized price statistics, excluding unrealized mark-to-market value of non-hedge gold and copper derivatives, are intended to provide additional information, do not have any standardized meaning prescribed by US GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with US GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under US GAAP. Other companies may calculate these measures differently. The following table reconciles these non-GAAP measures to the most directly comparable US GAAP measure.
 
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Illustration of Impact of Excluding Unrealized Gains and Losses on Non-Hedge Derivatives from Realized Prices

($ millions, except per ounce/pound data in dollars)	 	Gold	 	Copper	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Sales(1)	 	$	5,027	 	$	4,493	 	$	2,348	 	$	1,305	 	$	1,137	 	
Sales attributable to non-controlling interests(2)	 	(38	)	52	 	(15	)	—	 	—	 	
Sales – equity basis	 	4,989	 	4,545	 	2,333	 	1,305	 	1,137	 	
Unrealized non-hedge gold/copper derivative (gains) losses	 	(2	)	7	 	—	 	(26	)	14	 	
Sales – equity basis, excluding non-hedge gold/copper derivative (gains) losses	 	4,987	 	4,552	 	2,333	 	1,279	 	1,151	 	
Sales (thousands of ounces/millions lbs)	 	8,055	 	8,390	 	5,320	 	401	 	376	 	
Realized gold/copper price per oz/lb (including unrealized non-hedge gold/copper derivative gains and losses)	 	619	 	542	 	439	 	3.25	 	3.02	 	
Unrealized non-hedge gold/copper derivative (gains) losses – per ounce/pound	 	—	 	1	 	—	 	(0.06	)	0.04	 	
Realized gold/copper price per oz/lb (excluding unrealized non-hedge gold/copper derivative gains and losses)	 	$	619	 	$	543	 	$	439	 	$	3.19	 	$	3.06	 	

(1)    As per Barrick’s income statement.
 
(2)    Gold sales include sales attributable to South Deep in 2006, included in discontinued operations.
 
Total Cash Costs
 
Total cash costs per ounce are a non-GAAP financial measure. Total cash costs per ounce include all costs absorbed into inventory, as well as royalties, by-product credits, production taxes and accretion expense, and exclude inventory purchase accounting adjustments and amortization. The presentation of these statistics in this manner allows us to monitor and manage those factors that impact production costs on a monthly basis. We calculate total cash costs based on our equity interest in production from our mines. Total cash costs per ounce/pound are calculated by dividing the aggregate of these costs by gold ounces, copper pounds sold or ore tons mined. Total cash costs and total cash costs per ounce/pound are calculated on a consistent basis for the periods presented. In our income statement, we present amortization separately from cost of sales. Some companies include amortization in cost of sales, which results in a different measurement of cost of sales in the income statement. We have provided below reconciliations to illustrate the impact of excluding amortization and inventory purchase accounting adjustments from total cash costs per ounce/pound statistics. Under purchase accounting rules, we recorded the fair value of acquired work in progress and finished goods inventories as at the date of the Placer Dome acquisition. As the acquired inventory is sold, any purchase accounting adjustments, reflected in the carrying amount of inventory at acquisition, impacts cost of sales. The method of valuing these inventories is based on estimated selling prices less costs to complete and a reasonable profit margin. Consequently, the fair values do not necessarily reflect costs to produce consistent with ore mined and processed into gold and copper after the acquisition.
 
We believe that using an equity interest presentation is a fairer, more accurate way to measure economic performance than using a consolidated basis. For mines where we hold less than a 100% share in the production, we exclude the economic share of gold production that flows to our partners who hold a non-controlling interest. Consequently, for the Tulawaka mine, although we fully consolidated this mine in our Financial Statements, our production and total cash cost statistics only reflect our equity share of the production.
 
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In managing our mining operations, we disaggregate cost of sales between amortization and the other components of cost of sales. We use total cash costs per ounce/pound statistics as a key performance measure internally to monitor the performance of our regional business units. We use these statistics to assess how well our regional business units are performing against internal plans, and also to assess the overall effectiveness and efficiency of our mining operations. We also use amortization costs per ounce/pound statistics to monitor business performance. By disaggregating cost of sales into these two components and separately monitoring them, we are able to better identify and address key performance trends. We believe that the presentation of these statistics in this manner in our MD&A, together with commentary explaining trends and changes in these statistics, enhances the ability of investors to assess our performance. These statistics also enable investors to better understand year-over-year changes in cash production costs, which in turn affect our profitability and ability to generate cash flow.
 
The principal limitation associated with total cash costs per ounce/pound statistics is that they do not reflect the total costs to produce gold/copper, which in turn impacts the earnings of Barrick. We believe that we have compensated for this limitation by highlighting the fact that total cash costs exclude amortization and inventory purchase accounting adjustments as well as providing details of the financial effect. We believe that the benefits of providing disaggregated information outweigh the limitation in the method of presentation of total cash costs per ounce/pound statistics.
 
Total cash costs per ounce/pound statistics are intended to provide additional information, do not have any standardized meaning prescribed by US GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with US GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under US GAAP. Other companies may calculate these measures differently.
 
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Illustration of Impact of Excluding Certain Costs from Total Cash Costs per Ounce/Pound

($ millions, except per ounce/pound information in dollars)	 	Gold	 	Copper(1)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Cost of sales(2)	 	$	2,842	 	$	2,348	 	$	1,198	 	$	342	 	$	393	 	
Cost of sales at South Deep included in discontinued operations	 	—	 	101	 	—	 	—	 	—	 	
Cost of sales attributable to non-controlling interests(3)	 	(15	)	(63	)	(8	)	—	 	—	 	
Inventory purchase accounting adjustments included in cost of sales(4)	 	—	 	(11	)	—	 	(9	)	(97	)	
Cost of sales – equity basis	 	2,827	 	2,375	 	1,190	 	333	 	296	 	
Amortization at producing mines – consolidated	 	865	 	648	 	409	 	119	 	68	 	
Amortization at South Deep included in discontinued operations	 	—	 	18	 	—	 	—	 	—	 	
Amortization at producing mines attributable to non-controlling interests(3)	 	(6	)	(16	)	(5	)	—	 	—	 	
Amortization at producing mines – equity basis	 	859	 	650	 	404	 	119	 	68	 	
Inventory purchase accounting adjustments(4)	 	—	 	11	 	—	 	9	 	97	 	
Cost of sales including amortization and inventory purchase accounting adjustments – equity basis	 	$	3,686	 	$	3,036	 	$	1,594	 	$	461	 	$	461	 	

(1)    The 2005 comparative periods for copper have been omitted as we did not produce any significant amounts of copper prior to the production from the copper mines acquired with Placer Dome.
 
(2)    The aggregate amount of cost of sales for gold and copper is as per Barrick’s income statement.
 
(3)    Relates to a 70% interest in Tulawaka and a 50% interest in South Deep prior to 2007.
 
(4)    Based on our equity interest.
 
Total Cash Costs per Ounce/Pound

(Per ounce/pound information in dollars)	 	Gold	 	Copper(1)	 	
For the years ended December 31	 	2007	 	2006	 	2005	 	2007	 	2006	 	
Ounces/pounds sold – consolidated (thousands/millions)	 	8,108	 	8,566	 	5,333	 	401	 	376	 	
Sales attributable to non-controlling interests(1)	 	(53	)	(176	)	(13	)	—	 	—	 	
Ounces/pounds sold – equity basis	 	8,055	 	8,390	 	5,320	 	401	 	376	 	
Total cash costs per ounce/pound – equity basis	 	$	350	 	$	283	 	$	224	 	$	0.83	 	$	0.79	 	
Amortization per ounce/pound – equity basis	 	104	 	81	 	76	 	0.30	 	0.17	 	
Inventory purchase accounting adjustments per ounce/pound	 	—	 	1	 	—	 	0.02	 	0.26	 	
Cost of sales and amortization per ounce/pound attributable to non-controlling interests(2)	 	1	 	9	 	8	 	—	 	—	 	
Total costs per ounce/pound(3) – consolidated basis	 	$	455	 	$	374	 	$	308	 	$	1.15	 	$	1.22	 	

(1)    The 2005 comparative periods for copper have been omitted as we did not produce any significant amounts of copper prior to the production from the copper mines acquired with Placer Dome.
 
(2)    Relates to a 70% interest in Tulawaka and a 50% interest in South Deep prior to 2007.
 
(3)    Includes amortization, amounts attributable to non-controlling interests and inventory purchase accounting adjustments.
 
73

 
Glossary of Technical Terms
 
AUTOCLAVE: Oxidation process in which high temperatures and pressures are applied to convert refractory sulfide 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.
 
DRILLING:
 
Core: drilling with a hollow bit with a diamond cutting rim to produce a cylindrical core that is used for geological study and assays. Used in mineral exploration.
 
In-fill: any method of drilling intervals between existing holes, used to provide greater geological detail and to help establish reserve estimates.
 
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 orebody, 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.
 
MILL: A processing facility where ore is finely ground and thereafter undergoes physical or chemical treatment to extract the valuable metals.
 
74

 
MINERAL RESERVE: See pages 137 to 138 – “Summary Gold Mineral Reserves and Mineral Resources.”
 
MINERAL RESOURCE: See pages 137 to 138 – “Summary 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.
 
OPEN PIT: A mine where the minerals are mined entirely from the surface.
 
ORE: Rock, generally containing metallic or nonmetallic minerals, which can be mined and processed at a profit.
 
ORE BODY: 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.
 
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.
 
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.
 
75

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 Exhibit 99.5

 CONSENT OF INDEPENDENT ACCOUNTANTS
        We hereby consent to the inclusion in the Annual Report on Form 40-F of Barrick Gold Corporation (the Corporation) of our report dated February 20, 2008 relating to the Corporation's consolidated financial statements and the effectiveness of internal control over financial reporting.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants, Licensed Public Accountants
Toronto, Ontario
March 27, 2008

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Exhibit 99.5
CONSENT OF INDEPENDENT ACCOUNTANTS

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 Exhibit 99.6

 CONSENT OF INDEPENDENT ACCOUNTANTS
        We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (File No. 333-14148), on Form F-9 (File Nos. 333-120133 and 333-106592) and on Form S-8 (File Nos. 333-121500, 333-131715 and 333-135769) of Barrick Gold Corporation (the Corporation) and the Registration Statements on Form F-9 of Barrick Gold Finance Company (File No. 333-120133-01) and on Form F-9 of Barrick Gold Inc. (File Nos. 333-120133-02 and 333-106592-01) of our report dated February 20, 2008 relating to the Corporation's consolidated financial statements and the effectiveness of internal control over financial reporting which appears in the Corporation's Annual Report on Form 40-F.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants, Licensed Public Accountants
Toronto, Ontario
March 27, 2008

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Exhibit 99.6
CONSENT OF INDEPENDENT ACCOUNTANTS

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 Exhibit 99.7
CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a), PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Gregory C. Wilkins certify that:
1.
I have reviewed this annual report on Form 40-F of Barrick Gold Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.
The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

5.
The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.
Date: March 27, 2008

 	
/s/   GREGORY C. WILKINS       

Name: Gregory C. Wilkins
Title: President and Chief Executive Officer	

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Exhibit 99.7

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 Exhibit 99.8
CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a), PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Jamie C. Sokalsky certify that:
1.
I have reviewed this annual report on Form 40-F of Barrick Gold Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.
The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

5.
The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.
Date: March 27, 2008

 	
/s/   JAMIE C. SOKALSKY       

Name: Jamie C. Sokalsky
Title: Executive Vice President and Chief Financial Officer	

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Exhibit 99.8

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 Exhibit 99.9
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ENACTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
Barrick Gold Corporation (the "Company") is filing with the U.S. Securities and Exchange Commission on the date hereof, its annual report on Form 40-F for the fiscal year ended December 31, 2007 (the "Report").
I, Gregory C. Wilkins, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
a)
the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

b)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 27, 2008

 	
/s/   GREGORY C. WILKINS       

Name: Gregory C. Wilkins
Title: President and Chief Executive Officer	

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Exhibit 99.9

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 Exhibit 99.10
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ENACTED PURSUANT TO
SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002
Barrick Gold Corporation (the "Company") is filing with the U.S. Securities and Exchange Commission on the date hereof, its annual report on Form 40-F for the fiscal year ended December 31, 2007 (the "Report").
I, Jamie C. Sokalsky, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
a)
the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

b)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 27, 2008

 	
/s/   JAMIE C. SOKALSKY       

Name: Jamie C. Sokalsky
Title: Executive Vice President and Chief Financial Officer	

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Exhibit 99.10