Barrick Reports Fourth Quarter and Full Year 2014 Results

TORONTO, ONTARIO--(Marketwired - Feb 18, 2015) - Barrick Gold Corp. (NYSE:ABX)(TSX:ABX)

• Barrick is a senior gold producer focused on growing free cash flow through disciplined capital allocation and operational excellence.
  
  
• The company produced 6.25 million ounces of gold at all-in sustaining costs (AISC)¹ of $864 per ounce in 2014, generating $2.30 billion in operating cash flow.
  
  
• In 2015, we intend to reduce our net debt by at least $3 billion to begin restoring our balance sheet to a position of strength.
  
  
• Barrick's return to a lean, decentralized operating model is eliminating bureaucracy and management layers. These initiatives are freeing up country and mine managers to be business owners with a focus on driving greater free cash flow.
  
  
• Production guidance for 2015 is 6.2-6.6 million ounces of gold at all-in sustaining costs of $860-$895 per ounce. The company expects to generate positive free cash flow this year at current gold prices.
  
  
• Annual gold production from our current portfolio is expected to exceed six million ounces in 2016 and 2017, with all-in sustaining costs lower than this year by 2017.
  
  
• This year Barrick will complete four prefeasibility studies, advancing growth projects near existing mines in Nevada.
  
  
• Innovation success reflected by the ramp-up of our proprietary cyanide-free processing technology at Goldstrike, accelerating cash flow from about four million stockpiled ounces of gold.
  
  

Barrick Gold Corp. (NYSE:ABX)(TSX:ABX) (Barrick or the company) today reported a fourth quarter net loss of $2.85 billion ($2.45 per share), reflecting the impact of $2.8 billion in after-tax impairment charges, primarily related to the Lumwana mine ($930 million) and the Cerro Casale project ($778 million). Fourth quarter adjusted net earnings² were $174 million ($0.15 per share) and operating cash flow was $371 million.

For the full year 2014, Barrick recorded a net loss of $2.91 billion ($2.50 per share), reflecting the impact of $3.4 billion in after-tax impairment charges. Adjusted net earnings for 2014 were $793 million ($0.68 per share) and operating cash flow was $2.30 billion.

TAKING BARRICK 'BACK TO THE FUTURE'

Barrick became the world's leading gold company by pursuing its founding purpose: the generation of wealth for its owners, employees, and the communities with which it partners. Those who founded and first led the company were committed to a culture of partnership and the values underpinning such a culture: trust, transparency, shared responsibility and accountability, and a sense of emotional and financial ownership.

That culture also nurtured a powerful operating model. In its early years, Barrick was lean and nimble, with minimal bureaucracy. A small head office managed the company with a balance of entrepreneurialism and prudence, focusing on only a few core activities: defining and implementing strategy, allocating human and financial capital, and fulfilling the obligations required of a public company. Leaders at the operational level had greater autonomy, responsibility, and accountability, functioning as business owners. Free from bureaucracy and middle management, they focused on maximizing free cash flow, and the head office focused on allocating that cash flow to maximize shareholder returns.

Over the last year, Barrick has been returning to this partnership culture and the operating model that made it so successful. We have cut our head office by close to half and eliminated all management layers between Toronto and the mines. What remains are shared service centers in the field that provide support directly to our mines and projects, with costs charged directly to the relevant operation.

Along with managing financial capital, managing our talent is a central responsibility of Barrick's leaders. Attracting, retaining and developing exceptional people is a fundamental component of our partnership culture. In 2014, Darian Rich was promoted to the role of Executive Vice President, Talent Management, elevating this critical function. Over the last six months we attracted 12 new leaders to Barrick who personify the company's original values and bring vital skills and experience that support our business objectives, such as strengthening the balance sheet, fixing Pascua-Lama, improving efficiency and productivity and building partnerships in China and beyond. This group includes people such as Kevin Thomson (SEVP, Strategic Matters), Shaun Usmar (SEVP & CFO), Sergio Fuentes (Executive Project Director, Pascua-Lama) and Melanie Miller (VP, Supply Chain) to name just a few. We have also promoted top internal talent across the organization to challenging new roles that will strengthen their capabilities. This includes Rich Haddock (SVP & General Counsel), a lawyer who intimately understands all facets of our business, and Calvin Pon (SVP, Finance & Tax) one of the brightest analytical minds in the industry.

Going "back to the future" demands that our leaders be owners. Accordingly, we have extended our innovative partnership plan to 35 leaders across the business. Each year, these leaders will be graded on their collective performance, as measured against a transparent long-term scorecard disclosed to shareholders in advance. A significant portion of their total compensation, if earned, will be long-term in nature, awarded in units that convert into Barrick common shares which cannot be sold until an individual retires or leaves the company. A smaller proportion of total compensation, if earned, will be in the form of annual bonuses, determined for each individual based on a personal scorecard tailored to the individual's specific responsibilities. This plan increases financial and emotional ownership among our senior leaders, and will deepen to include new partners over time.

Our approach to capital allocation ensures that all new investments align with our strategic focus and contribute to maximizing free cash flow in pursuit of industry-leading returns.

Investments in new projects will compete with share buybacks and acquisitions, along with our objective of paying a dividend to our owners. We expect our portfolio to deliver a 10-15 percent return on invested capital through the metal price cycle and, as such, individual projects are assessed against a hurdle rate of 15 percent. We will defer, cancel or sell projects that cannot achieve this target. We will also apply more rigor in monitoring execution to ensure that we meet our cost and schedule commitments. And we will conduct post-investment reviews to evaluate how we have lived up to our original investment promises, using what we learn to improve execution on future projects.

A portion of our capital budget is re-invested in existing mines to sustain or expand them. That capital is not spread evenly across the portfolio and our operations must compete for it. We will focus our investments at mines that meet our overall expectations for returns on invested capital. Assets that are unable to meet our capital allocation objectives over time will be sold.

RESTORING A STRONG BALANCE SHEET

For many years, Barrick had the only A-rated balance sheet in the gold industry. Prudent financial management was a bedrock principle of the company. Our current level of debt is inconsistent with that principle, and that inconsistency is reflected in the company's share price. As we return to our original values, no priority is more important than restoring a strong balance sheet.

We intend to reduce our net debt by at least $3 billion by the end of 2015. The company has a number of options to achieve this target, and we will take only those actions that make sense for the business, on terms we consider most favorable to our shareholders. Our debt reduction strategy includes the following levers:

• Maximizing free cash flow by implementing a leaner, decentralized operating model that reflects Barrick's original culture; with more efficient capital spending, reduced general and administrative costs, and profitable growth;
  
  
• Disciplined non-core asset sales, beginning with a process to sell the Porgera Joint Venture and Cowal mine;
  
  
• Joint ventures and strategic partnerships if and where they make sense.
  
  

Our strong liquidity means the company can tackle its debt in a disciplined manner. We have less than $1 billion in debt due over the next three years, a $4 billion undrawn credit facility, and $2.7 billion in cash at the end of 2014.

MAXIMIZING FREE CASH FLOW

A return to the lean, decentralized operating model that underpinned Barrick's early success is freeing up our country and mine managers to focus on maximizing free cash flow across the business.

As part of this transformation, we expect to realize $30 million in savings from reduced general and administrative expenditures and overhead costs in 2015. These savings are projected to reach $70 million on an annualized basis in 2016. And we expect more to follow, as our leaders focus on maximizing cash flow without the constraints of bureaucracy and unnecessary management layers.

We are reducing the size of our head office by close to half, from 260 positions in 2014 to 140 positions in 2015. As a result, our corporate administration expense is expected to be about $145 million this year, and even lower in 2016.

We are now reporting G&A with clarity and transparency. We have eliminated all management layers between the head office and our operations; what remains are shared service centers that provide support directly to our mines and projects. These costs will no longer be reported as G&A. They will be charged directly to the mines and projects that use the services, and will be reflected in operating costs, as they should be. Services that are not required will be eliminated, driving further cost savings.

G&A costs at Barrick will now include head office administration, stock-based compensation and administration expense from Acacia Mining plc

For a full description of G&A expenses, please read page 34 of the Management Discussion and Analysis.

In addition, we are taking steps to improve the efficiency of our procurement and supply chain practices, freeing up working capital by reducing inventories. We also expect to generate additional free cash flow over the next 12 months through better integration of mine site maintenance programs and our global procurement and logistics system.

Innovation also plays a key role in improving efficiency and unlocking the cash-generating potential of our assets. We see this in action at Goldstrike, where a revolutionary new cyanide-free processing technology developed in-house at Barrick is allowing us to accelerate cash flow from about four million stockpiled ounces of gold (see page 11 for more details). Our in-house research and development team has also developed a patented flotation technology capable of utilizing sea water, reducing demand on scarce fresh water resources. We will continue to develop industry-leading processing technologies, while expanding our focus to include more efficient ways to use water and power at our operations.

BEST ASSETS AND REGIONS

Barrick's five cornerstone mines in the Americas are expected to account for 60 percent of our production in 2015 at average all-in sustaining costs of $725-$775 per ounce. At two grams per tonne, these mines have an average reserve grade more than double that of our peer group average³. They are among the most attractive assets in the entire gold industry, generating strong free cash flow even in today's gold price environment, while offering exceptional leverage to higher gold prices.

We maintain a strong competitive advantage in Nevada and the Andean region, underpinned by proven operating experience, a critical mass of infrastructure, technical and exploration expertise, and established partnerships with host governments and communities. We believe these regions provide the best opportunities to generate returns for shareholders, and we will therefore give them the majority of our focus. Divestments outside of the Americas, including the Porgera Joint Venture and the Cowal mine, will further center the company's portfolio on its strongest assets.

Two-thirds of our 2015 exploration budget of $220-$260⁴ million is focused on high-quality, brownfield projects, with the remainder targeted at emerging discoveries that have the potential to become profitable mines. Approximately 85 percent of the total exploration budget is allocated to the Americas and about half of the budget will be directed to Nevada.

GROWTH IN THE AMERICAS

This year, Barrick is advancing growth opportunities at or near existing operations in Nevada, with four prefeasibility studies on track for completion in 2015⁵.

We also have within our portfolio a number of the world's largest undeveloped gold deposits, including Pascua-Lama, Donlin Gold and Cerro Casale. These projects offer leverage to higher gold prices, with more than 37 million ounces of gold in reserves (100 percent basis) and more than 48 million ounces of gold in measured and indicated resources (100 percent basis). They provide the company with a platform for long-term growth in a higher gold price environment. In the meantime, we will work to optimize the economics of these projects, spending the minimum required to maintain them as development options within our portfolio. As with all our investments, we will only proceed with construction if these projects meet our capital allocation objectives, including our target hurdle rate of 15 percent, with a robust execution plan to ensure execution on budget and on schedule.

Goldrush - Major new discovery near existing infrastructure

The Goldrush project, located six kilometers from the Cortez mine, is one of the largest gold discoveries of the last decade. Measured and indicated resources stood at 10.6 million ounces and inferred resources were 4.9 million ounces at the end of 2014. The prefeasibility study remains on schedule for completion in mid-2015. Infill drilling in 2014 continued to demonstrate high grade continuity and led to resource upgrades, with nearly 70 percent of the overall resource now in the measured and indicated category. A permit application for twin exploration declines that will allow the company to better explore the northern limits of the known deposit was submitted in the second quarter of 2014.

Turquoise Ridge - A core mine in the making

The Turquoise Ridge mine contains 4.5 million ounces in reserves (75 percent basis) at an average grade of 16.9 grams per tonne - the highest reserve grade in the company's operating portfolio and among the highest in the entire gold industry. Turquoise Ridge has considerable untapped potential and could become a core operation for Barrick. The company is advancing a project to develop an additional shaft, which could bring forward more than one million ounces of production, roughly doubling output to an average of 500,000 ounces per year (100 percent basis) at all-in sustaining costs of about $625-$675 per ounce⁶. The prefeasibility study was completed in January 2015 and key permits are expected in the third quarter. Pending approval by the joint venture partners, construction could commence in the fourth quarter of 2015, with initial production beginning in 2019. Preliminary estimates indicate capital expenditures of approximately $300-$325 million (100 percent basis) for additional underground development and shaft construction, and an attractive payback period of roughly two and a half years using a gold price assumption of $1,300 per ounce.

Drilling at the northern extension of the deposit confirms the ore body is larger than previously known, at higher grades. Due to the substantial thickness of the mineralization, our engineering team is also looking at the economics of introducing bulk underground mining in some parts of the ore body. Advanced ground support technology and improved reinforcement techniques have also mitigated ground stability issues that challenged previous mining operations at the site.

Cortez - High-grade underground expansion

A prefeasibility study for underground mining at Cortez below currently permitted levels will be completed in late 2015. Mineralization in this zone is primarily oxide and higher grade compared to the current underground mine, which is sulfide in nature. The limits of the Lower Zone have not yet been defined, and drilling has indicated the potential for new targets at depth. The exploration drift has been extended to the south, enabling additional step-out drilling, which is anticipated to begin in June. Drill results to date include 36.6 meters at 31.5 grams per tonne and 27.4 meters at 20.9 grams per tonne, both oxide in nature, which compare favorably with the average grade of 13.8 grams per tonne in refractory ore above the 3,800 foot level.⁷

Spring Valley - Low capital cost, heap leach project

The Spring Valley project, 70 percent owned by Barrick and located approximately 75 miles west of Cortez, is a low capital cost, oxide heap leach project with potential to become another standalone mine in Nevada. Barrick reported an initial measured and indicated resource of 1.3 million ounces (70 percent basis) averaging 0.66 grams per tonne and an inferred resource of 0.6 million ounces (70 percent basis) averaging 0.62 grams per tonne for Spring Valley at the end of 2014. In addition, there is good potential to expand the current resource at higher gold prices. The company expects to complete a prefeasibility study in late 2015.

Pascua-Lama

Pascua-Lama has 15.4 million ounces of gold reserves and more than 674 million ounces of contained silver. The mine is expected to have low operating costs and the potential to generate significant free cash flow over a 25-year plus mine life.

The unique challenges of Pascua-Lama are well known, and we have acknowledged the issues that led to the mine's suspension. But those are sunk costs, and the question before Barrick now is whether Pascua-Lama's economics going forward will justify resuming development.

Pascua-Lama's new Executive Project Director, Sergio Fuentes, reports to our Co-Presidents and comes to Barrick after nearly three decades of successfully managing the construction of complex mining projects in Chile, including high-altitude operations in the Andes. He and the team he is assembling are working hard to assess Pascua-Lama's economics going forward. To do so, they will address the project's outstanding legal and regulatory hurdles, and will complete a new execution plan to optimize remaining construction activities. If that plan aligns with our capital allocation objectives and demonstrates an acceptable return on invested capital of at least 15 percent, we will consider resuming development of Pascua-Lama.

In any scenario, the company must permit and construct a new water management system in Chile. We will submit our application for the new system by mid-year, with permitting expected to take two years.

In the meantime, we are working to minimize the costs of holding the asset. In 2015, Barrick anticipates expenditures of approximately $170-$190 million for the project, including approximately $140-$150 million for care and maintenance, including water management system costs, and approximately $30-$40 million⁸ for other project costs, including those related to permit obligations in Argentina and Chile.

FINANCIAL HIGHLIGHTS

Fourth quarter 2014 adjusted net earnings were $174 million ($0.15 per share)¹⁰ compared to $406 million ($0.37 per share) in the prior year period. This reflects the impact of 257,000 fewer ounces sold in the quarter along with lower realized gold and copper prices. The net loss for the fourth quarter was $2.85 billion ($2.45 per share) compared to a net loss of $2.83 billion ($2.61 per share) in the prior year quarter. Significant adjusting items for the quarter include:

• $2.8 billion in after-tax impairment charges, including $1.7 billion in asset impairment charges primarily related to Cerro Casale and Lumwana, and $1.1 billion in goodwill impairments, largely related to Zaldivar and Lumwana; and,
  
  
• $138 million in unrealized losses on non-hedge derivative instruments primarily related to fuel hedge positions.
  
  

Fourth quarter operating cash flow of $371 million compares to $1.02 billion in the prior year period. The decrease in operating cash flow primarily reflects lower realized gold and copper prices, partially offset by a decrease in income tax payments and a lower net loss compared to the prior year.

RESERVES AND RESOURCES

Barrick calculated its 2014 reserves using a conservative gold price assumption of $1,100 per ounce, unchanged from 2013. While this is below the company's gold price outlook and current spot prices, it reflects Barrick's emphasis on pursuing profitable ounces. Gold reserves were 93.0 million ounces¹¹ at the end of 2014, compared to 104.1 million ounces at the end of 2013. Approximately 65 percent of the reduction was attributable to ounces mined and processed in 2014, with the balance reflecting the divestiture of the Kanowna, Plutonic and Marigold mines, and the partial sale of Barrick's equity interest in Acacia Mining plc during the year.

Measured and indicated gold resources were 94.3 million ounces¹¹ at the end of 2014, compared to 99.4 million ounces at the end of 2013. The majority of the reduction relates to a lower gold price assumption of $1,400 per ounce (compared to $1,500 per ounce for 2013), with divestitures and movements to reserves more than offset by additions in the year. Inferred gold resources were 29.3 million ounces¹¹ at the end of 2014, compared to 31.9 million ounces at the end of 2013, primarily due to ounces upgraded to the measured and indicated category and from divestitures.

Copper reserves decreased to 9.6 billion pounds¹¹ from 14.0 billion pounds based on a copper price assumption of $3.00 per pound (unchanged from 2013), primarily reflecting the transfer of Lumwana reserves into resources following the company's decision to place the mine on care and maintenance. Measured and indicated copper resources decreased to 4.6 billion pounds¹¹ compared to 6.9 billion pounds at the end of 2013 based on an unchanged copper price assumption of $3.50 per pound. Inferred copper resources were 0.1 billion pounds¹¹ compared to 0.2 billion pounds at the end of 2013.

2015 OUTLOOK

Barrick's 2015 AISC guidance is $860-$895 per ounce. The company's five cornerstone mines are forecast to contribute 60 per cent of overall production at AISC of $725-$775 per ounce in 2015.

Gold production guidance for 2015 is 6.2-6.6 million ounces, with higher contributions from Goldstrike, Lagunas Norte and Acacia more than offsetting lower production from Veladero and the sale of Kanowna, Plutonic and Marigold in 2014. Copper guidance of 310-340 million pounds at C1 cash costs of $1.75-$2.00 per pound primarily reflects the planned suspension of the Lumwana mine in Zambia, partially offset by higher expected production from Zaldivar.

Detailed 2015 operating and capital expenditure guidance is as follows:

Total capital expenditures in 2015 are expected to be $1.90-$2.20 billion compared to $2.18 billion in 2014. The lower forecast expenditures primarily reflect reduced expansion capital due to the commissioning of the Goldstrike thiosulfate project in the fourth quarter of 2014 and lower sustaining and development capital at Lumwana following the decision to suspend operations. Sustaining capital expenditures are forecast to increase slightly at Lagunas Norte, Cortez and Turquoise Ridge and also reflect increased stripping activities at Porgera, Veladero and Bald Mountain.

The company anticipates higher depreciation expense of $240-$260 per ounce in 2015 due to higher depreciation at Lagunas Norte, Goldstrike, Cortez and Pueblo Viejo. We expect similar increases in depreciation expense over the next two years.

The table found in the appendix at the end of this news release outlines the material assumptions used to develop the forward-looking statements in our outlook and guidance and provides an economic sensitivity analysis of those assumptions.

Cortez

The Cortez mine produced 902,000 ounces at AISC of $706 per ounce in 2014. After several years of exceptional performance with production surpassing one million ounces at low AISC, the Cortez mine is transitioning to a greater proportion of underground mining. Barrick is advancing plans to expand profitable production from the underground mine at Cortez, which is characterized by higher grades and significant resource upside. Expected production of 825,000-900,000 ounces in 2015 reflects lower open pit tonnage due to stripping requirements and a period of lower grades from the underground mine. AISC of $760-$835 per ounce in 2015 reflects lower sales and higher sustaining capital. To mitigate cost increases at Cortez, the mine is improving shift change sequencing, revamping fleet maintenance practices, improving underground capital efficiency, installing advanced process controls, and strengthening geo-metallurgical modeling.

Cortez has considerable exploration potential, particularly in the higher grade and mostly oxide Lower Zone below the 3,800 foot level which remains open at depth and to the south.

Goldstrike

Goldstrike delivered another year of outstanding results, while further solidifying its position as one of the world's most technologically advanced gold processing centers. The mine contributed 902,000 ounces in 2014 at AISC of $854 per ounce, with the fourth quarter reflecting lower expected grades and a shutdown of the autoclave facility to complete the transition to thiosulfate processing.

First gold from the thiosulphate circuit, an innovative and proprietary technology developed by Barrick, was produced in late November. Since it was commissioned late last year, the new circuit has met our production and cost expectations. This new processing method, which does not use cyanide, will enable Goldstrike to accelerate cash flow from about four million stockpiled ounces. The new circuit is expected to process an average of 350,000-450,000 ounces annually in its first full five years. Production at Goldstrike in 2015 is expected to be 1.000-1.150 million ounces at AISC of $700-$800 per ounce including contributions from the thiosulfate leaching circuit. The mine is anticipated to continue producing at the one million ounce level for the next three years (2015-2017) at AISC below $900 per ounce.

Pueblo Viejo

Pueblo Viejo completed its ramp up in 2014, and is now the only mine in the world with annual production of more than one million ounces (100 percent basis), at AISC below $700 per ounce for the next three years (2015-2017). Our technical experts have identified opportunities to further optimize operations and increase cash flow at Pueblo Viejo. These include: increasing plant throughput by optimizing ore blending and autoclave availability and reducing costs by optimizing maintenance programs. Long-term, Pueblo Viejo has significant reserves and resources with potential to extend the life of the mine.

Barrick's 60 percent share of production from Pueblo Viejo for the year was 665,000 ounces at AISC of $588 per ounce. Production in the fourth quarter was lower due to scheduled maintenance, which more than offset higher grades. Production in 2015 is forecast to be 625,000-675,000 ounces at AISC of $540-$590 per ounce.

Lagunas Norte

Lagunas Norte contributed 582,000 ounces at AISC of $543 per ounce in 2014. As expected, production in the fourth quarter improved due to higher grade material and a faster leach cycle from stacking ore on a new area of the leach pad. Production in 2015 is anticipated to be 600,000-650,000 ounces, also benefiting from increased leach pad efficiency. AISC of $675-$725 per ounce in 2015 reflect the start of construction on the next phase of the new leach pad and the expansion of existing waste rock storage facilities.

The company is currently evaluating a plan to extend the life of Lagunas Norte by mining the refractory ore body below the current oxide ore body.

Veladero

The Veladero mine produced 722,000 ounces of gold in 2014 at AISC of $815 per ounce on positive grade reconciliations and a reduction in capitalized stripping costs. Production guidance of 575,000-625,000 ounces for 2015 reflects lower grades in the mine plan. AISC guidance of $990-$1,075 per ounce reflects lower production and higher capitalized stripping compared to 2014, related to development of the next phase of the Federico pit.

The company is working to realize cost savings at Veladero by improving the efficiency and effectiveness of inventory management and maintenance and improving productivity in equipment availability and utilization.

Turquoise Ridge

The Turquoise Ridge mine had a strong performance in 2014, contributing 195,000 ounces (75 percent basis) at AISC of $628 per ounce on increased throughput, higher grades and lower sustaining capital. The mine is expected to produce 175,000-200,000 ounces (75 percent basis) in 2015 at AISC of $875-$925 per ounce. As discussed on page five, Barrick is advancing a project to develop an additional shaft, which could nearly double production to 500,000 ounces (100 percent basis) per year at AISC of about $625-$675 per ounce.

Porgera

Higher recoveries and throughput from improved mill availability and a focus on reducing sustaining capital contributed to improved 2014 production and AISC of 493,000 ounces and $996 per ounce, respectively. Porgera is expected to produce 500,000-550,000 ounces in 2015, reflecting increased underground mining rates and mining from higher grade areas of the open pit. AISC of $1,025-$1,125 per ounce in 2015 reflects increased sustaining capital in line with the mine plan. The company is evaluating a number of initiatives with the potential to further reduce costs at Porgera. These include: lowering energy costs through an alternative electricity supply project and reducing the number of expatriate staff and other external spending.

Other Mines

Barrick's other mines - consisting of Bald Mountain, Round Mountain, Ruby Hill, Golden Sunlight, Hemlo, Cowal and KCGM - contributed 1.2 million ounces at AISC of $1,011 per ounce in 2014.

Acacia Mining

Barrick's share of full year production was 470,000 ounces, while AISC of $1,105 per ounce were at the bottom of the guidance range. Barrick's share of 2015 production from Acacia is anticipated to be 480,000-510,000 ounces at AISC of $1,050-$1,100 per ounce.

Global Copper

Copper production in 2014 was 436 million pounds at C1 cash costs of $1.92 per pound. Lower copper production for the year was primarily due to the temporary shutdown of Lumwana to repair the conveyor and fewer tons processed at Zaldivar, along with a minor disruption in leaching irrigation due to piping and pump issues.

Copper production guidance for 2015 of 310-340 million pounds at C1 cash costs of $1.75-$2.00 per pound assumes the planned suspension of Lumwana in March.

Lumwana contributed 214 million pounds at C1 cash costs of $2.08 per pound in 2014. During the quarter, the Zambian government enacted changes to the country's mining tax regime that replaced corporate income tax and variable profit tax with a 20 percent gross royalty which took effect on January 1, 2015. Given the substantial impact of the new royalty and in light of current low copper prices, Barrick intends to proceed with a suspension of operations at Lumwana unless an agreement with the government of Zambia can be reached. Assuming a suspension, the mine is expected to produce 70-80 million pounds(19) of copper in 2015 at C1 cash costs of $1.90-$2.15 per pound.

The Zaldívar mine produced 222 million pounds in 2014 at C1 cash costs of $1.79 per pound. The mine continues to be a steady generator of free cash flow and is expected to have improved production of 240-260 million pounds at C1 cash costs of $1.65-$1.95 per pound in 2015, reflecting higher mining rates and better equipment availability.

During the fourth quarter, Barrick completed the joint venture agreement with Saudi Arabian Mining Company (Ma'aden) to advance and operate the Jabal Sayid copper mine. Construction to complete safety and security installations has begun and shipments of low-cost copper-in-concentrate are anticipated in early 2016. Once the mine reaches full production, the average annual output is expected to be 100 million pounds per year, with the potential to increase to 130 million pounds.

Qualified Person

Scientific and technical information relating to exploration at the company's Cortez property contained in this news release has been reviewed and approved by Robert Krcmarov, Senior Vice President, Global Exploration of Barrick, who is a "Qualified Person" as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

APPENDIX

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained or incorporated by reference in this Fourth Quarter and Year-End Report 2014, including any information as to our strategy, projects, 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", "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 the company, 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 spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel and electricity); changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States, Zambia and other jurisdictions in which the company does or may carry on business in the future; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit rating; the impact of inflation; operating or technical difficulties in connection with mining or development activities; the speculative nature of mineral exploration and development; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; litigation; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the company; our ability to successfully integrate acquisitions or complete divestitures; employee relations; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed company.
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, copper cathode or gold or copper concentrate 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 Fourth Quarter and Year-End Report 2014 are qualified by these cautionary statements. Specific reference is made to the 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.

The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.