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building value in everything we do annual report 2010

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focus on value creation strategy of increasing net asset value production reserves and earnings ­ all on a per share basis 9 10 11 12 15 19 21 23 exceptional gold price leverage generating record earnings and cash flow nine million ounce production target within five years financial strength and flexibility `a credit rating and strong balance sheet to support our objectives operational excellence consistent track record of achieving targets project development expertise cortez hills built on time and budget world-class pueblo viejo and pascua-lama projects in construction surfacing hidden value optimizing our high quality diversified portfolio of assets industry s largest gold reserves replaced or grown for the last five straight years strong focus on responsible mining relisted on dow jones world sustainability index added to nasdaq global sustainability index

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barrick s strategy is focused on maximizing shareholder value by building gold and copper reserves through exploration investing in high return development projects realizing the potential of existing mines pursuing disciplined acquisitions and strengthening our social and environmental performance.

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financial highlights record adjusted net income in 2010 record adjusted operating cash flow in 2010 increased dividends by 20 in 20102 replaced reserves grew resources in 2010 3,279 4,783 0.40 0.40 0.44 35 65 37 32 62 76 2,899 1,661 1,810 2,254 139 140 140 0 2008 2009 2010 2008 2009 2010 0 2008 2009 2010 0 2008 2009 2010 0 adjusted net income1 us dollars millions adjusted operating cash flow1 us dollars millions dividends paid us dollars per share reserves and resources3 ounces millions inferred resources m&i resources p&p reserves record realized price in 2010 grew production in 2010 lower total cash costs in 2010 lower net cash costs in 2010 1,228 985 872 7,657 7,397 7,765 443 464 457 360 337 341 0 2008 2009 2010 2008 2009 2010 5,000 2008 2009 2010 300 2008 2009 2010 200 realized gold prices1 us dollars per ounce gold production 000s of ounces total cash costs1 us dollars per ounce net cash costs1 us dollars per ounce

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barrick delivered a strong operating performance in 2010 with higher gold production and lower total cash costs and achieved record financial results as the gold price reached new highs in millions of us dollars except per share data us gaap basis 2010 10,924 3,274 3.32 3,279 3.32 4,127 4,783 3,968 0.44 2009 8,136 4,274 4.73 1,810 2.00 2,322 2,899 2,564 0.40 2008 7,613 785 0.90 1,661 1.90 2,254 2,254 1,437 0.40 sales net income loss per share adjusted net income1 per share operating cash flow adjusted operating cash flow1 cash and equivalents dividends paid per share2 operatinghighlights gold production 000s oz average realized gold price per ounce total cash costs per ounce1 net cash costs per ounce1 copper production m lbs average realized copper price per pound1 total cash costs per pound 1 1 7,765 1,228 457 341 368 3.41 1.11 7,397 985 464 360 393 3.16 1.17 7,657 872 443 337 370 3.39 1.19 1 non-gaap financial measure ­ see pages 78­85 of the 2010 financial report 2 in july 2010 barrick increased its dividend by 20 to $0.12 per share on a quarterly basis based on converting the previous semi-annual dividend of $0.20 per share to a quarterly equivalent 3 see page 22 of the 2010 annual report for additional information on barrick s reserves and resources.

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message from the chairman message from the chairman peter munk founder and chairman fellow shareholders there are countless theories that attempt to explain why gold prices behave the way they do at its core however the gold market is not all that complicated generally speaking when people feel secure gold prices fall when people feel insecure prices rise there was a time not that long ago ­ for about a decade between 1988 and 2000 ­ that most of us in the west felt not just secure but exuberant the berlin wall came down the cold war ended american power was at its zenith in short our confidence was unsurpassed in his best-selling book of 1992 the end of history and the last man francis fukuyama declared that in the long struggle between political ideologies liberal democracy and market capitalism had clearly won the day what was there to be worried about during this period of euphoria gold prices dropped in half from about $500 per ounce to a low of around $250 per ounce by 1999 you know what happened next first in 2000 the dot-com bubble burst and the stock market collapsed one year later on september 11 2001 the whole world changed we were not so secure after all what has followed would have been unthinkable only a few years earlier two intractable wars in the middle east a massive global economic recession the collapse of the u.s housing market the bankruptcy of lehman brothers and the demise of bear stearns and on and on investors lost faith in the world s two most powerful currencies ­ the u.s dollar and the new euro then came fears of sovereign default in europe where governments desperate to restore confidence in their rattled markets were forced to intervene as i write this letter amid spreading chaos and violence in the mideast and north africa there continues to be little news to stir the confidence of investors our world is uncertain more and more people are afraid of the future the optimism of the 1990s has faded into an era of global pessimism with their confidence shaken an ever-growing number of investors are moving into gold and have been now for some 10 years as a result of course the price of gold has climbed continually increasing more than 400 in a decade this even while the s&p 500 index has fallen by 5 given how strongly gold has performed it s not surprising that some people now wonder if we re in a bubble they suggest we re at a moment not unlike 1980 when gold prices having reached unprecedented and historic highs suddenly plummeted i don t think we are in a bubble today not at all for one thing the situation today could not be more different than it was in the late 1970s and early 1980s what happened 30 years ago was clearly a kind of mania in a single year the price of gold shot up by more 2

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barrick annual report 2010 message from the chairman gold s 1980 peak vs current cycle 2,000 gold 1972 ­ 1981 gold 2001 ­ 2010 1980 bubble 850/oz 1,500 percent change 1,000 500 current cycle s gradual rise 0 0 1 2 3 4 5 6 7 8 9 10 number of years than 250 hitting an all-time record of $850 per ounce in january 1980 it was madness people around the world lined up outside banks to buy a few ounces of the metal as prices rose daily then almost as quickly as it had soared gold collapsed by contrast the past decade s rise in gold prices has displayed neither extreme volatility nor irrationality instead the ascent of gold since 2001 has been steady measured and rational what s more when compared to other commodities such as copper and oil gold prices have not appreciated disproportionately a simple glance at a chart comparing gold s frenzied rise in 1979 to the gradual build-up of the past 10 years tells the story graphically to me it clearly suggests that the behavior of gold today has none of the attributes of a bubble if the last decade fraught with insecurity has driven up demand for gold the question is what happens next none of us has a crystal ball but all of us are determined to protect the assets we own or manage ­ and for the moment at least there is little doubt that gold is one of the best ways to protect the value of those assets while equities debt markets property and currencies ­ to name some of the more obvious forms of investment alternatives ­ have begun to recover in the past 18 months or so there remain many ominous clouds on the geopolitical front new risks continue to emerge from growing political instability in the middle east to the continued threat of terrorism meanwhile excessive sovereign debt huge unfunded government entitlement programs an ever-greater use of quantitative easing stalled economic growth in developed countries stubbornly high unemployment and an aging population are just some of the problems we have yet to resolve as we embark on a new decade i can only conclude that the world is a long way from feeling secure in fact i believe we in the developed world have more reason today to be concerned and pessimistic than at any time in recent history ­ and with the outlook gloomy there is in my mind no doubt that investors will continue to turn to gold as a rare safe haven having made the case for gold generally i d like to comment on the past year at our company the world s biggest gold producer in 2010 barrick recorded the most profitable year in its 27-year history earning just under $3.3 billion we increased production to 7.8 million ounces last year ­ and despite the fact that currencies in most countries where we operate have appreciated against the u.s dollar our cash costs decreased to $457 per ounce barrick s remarkable performance led not only to record earnings but also to record margins and cash flow thanks to the strength of our balance sheet we were able to increase our dividend by 20 barrick s share 3

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message from the chairman price up 35 in 2010 outperformed both the price of gold and our peer group meanwhile our gold reserves now total 140 million ounces and as the price of gold climbs those reserves become increasingly valuable our new cortez hills mine in nevada for example produced over 1.1 million ounces of gold in its first full year of operation ­ at a total cash cost of only $312 per ounce our pueblo viejo and pascualama projects both of which we inherited through past acquisitions will soon be contributing significant quantities of gold to our total production again at low cash costs looking further ahead our next generation of projects including cerro casale and donlin creek represent some of the most valuable gold assets in the world whether it s a question of financial strength or fiscal responsibility basic operations or long-term strategic execution barrick s track record is unmatched for eight years in a row we have met or surpassed our annual targets i m also proud that we have achieved these extraordinary results while maintaining the highest commitment to corporate responsibility and integrity we believe firmly in supporting the communities in which we operate respecting the environment and treating our employees and their families with dignity from our senior management team to the individuals who work in our mines from our directors to our support staff barrick s team is composed of the most motivated and passionate people i have ever known i am grateful to them all the newest member of our board of directors nathaniel rothschild represents yet another invaluable addition to barrick s brain trust nat is not only a member of one of europe s most prominent banking families he is also an enormously successful financier and entrepreneur in his own right already nat s knowledge of and experience in mining and resources have proven to be great assets to barrick i noted earlier that i unfortunately don t have a crystal ball for one thing i can t promise that gold prices will keep rising however i can with confidence assure you that whatever happens in the world barrick will continue to lead the industry always acting in the best interest of its shareholders for nearly 30 years now regardless of the price of gold we ve done just that peter munk founder and chairman 4

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barrick annual report 2010 message from the president and ceo message from the president and ceo 2010 was a record-breaking year for the gold industry the appeal of gold as an investment grew significantly reflecting persistent concerns about the global economy geopolitical uncertainties and the outlook for global currencies in many respects the factors that have propelled gold prices to new highs intensified pushing the metal to a new record of $1,431 per ounce the macroeconomic environment continues to be price supportive for gold expansionary monetary policies and quantitative easing programs have continued in order to stimulate economic growth and address high unemployment in 2010 new sovereign debt concerns also emerged the european union announced bailouts for greece and ireland while spain and portugal were also subject to credit concerns the response to the bailouts has also led to a continued bias towards expansionary monetary policies global trade imbalances continue and a rebalancing will have an impact on the value of global currencies as a monetary asset gold s value is determined relative to the value of other currencies with downward pressure on currencies gold s relative value should continue to perform well meanwhile geopolitical concerns have intensified with civil unrest and the potential for regime change throughout the middle east creating an increased environment of uncertainty and unpredictability against this backdrop investment demand for gold reached new records in 2010 and physical buying was strong central banks became net purchasers of gold after 21 years of selling physical demand particularly from india and china has also been very strong and is expected to continue all of these factors underpin our positive outlook for gold prices going forward our efforts to position barrick as a prime beneficiary of a rising gold price including the elimination of the company s gold hedges in 2009 helped to deliver record results for shareholders in 2010 aaron regent president and chief executive officer operating results for the year met expectations with higher gold production at lower cash costs compared to 2009 gold production increased to 7.8 million ounces at total cash costs of $457 per ounce or $341 per ounce on a net cash cost basis barrick also produced 368 million pounds of copper at total cash costs of $1.11 per pound strong operational results and consistent execution reflect the quality of the company s diversified portfolio with 25 mines on four continents our solid operational performance combined with the increase in the gold price resulted in record financial results adjusted net income for the year was $3.3 billion an increase of 81 over 2009 this resulted in a return on equity of 19 adjusted cash flow from operations was $4.8 billion up 65 from 2009 our leverage to the gold price was reflected in our financial results while the gold price increased by 26 last year barrick realized record cash margins which rose 48 to $771 per ounce or $887 per ounce on a net cash cost basis the company s earnings and cash flows per share have also significantly outpaced gold prices over the last six years demonstrating the leverage we offer investors while gold was up just over 200 in this period barrick s cash flows per share have increased by over 400 and earnings per share are up over 600 with record operating cash flows and expanding margins barrick continues to have the financial strength 5

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message from the president and ceo to continue to invest in the business and meet our capital requirements while at the same time maintaining a strong balance sheet and returning capital back to shareholders at year-end the company had about $4.0 billion in cash and a further $1.5 billion available through an undrawn line of credit and we continue to have the gold industry s only `a rated balance sheet given our financial position and the positive outlook for the company the board of directors authorized a 20 increase in the common share dividend in 2010 over the past five years the dividend has increased by about 120 underpinning our annual production is a high quality and growing resource base targeted global exploration programs delivered excellent results allowing barrick to replace gold reserves in 2010 and grow gold resources the company has consistently replaced its reserves in each of the last five years and we did so again in 2010 gold reserves now stand at about 140 million ounces the largest in the industry in addition measured and indicated gold resources grew 24 to 76 million ounces and inferred gold resources increased by 18 to 37 million ounces complementing our gold reserves and resources are 6.5 billion pounds of copper reserves 13.0 billion pounds of measured and indicated copper resources and 9.1 billion pounds of inferred copper resources plus 1.1 billion ounces of silver contained within gold reserves we continued to turn our resources into producing ounces with the advancement of our project pipeline the cortez hills project in nevada exceeded expectations in its first full year of production boosting output at the cortez property to 1.14 million ounces of gold in 2010 we continued to make significant progress on our 60 owned pueblo viejo project located in the dominican republic on a 100 basis the project has gold reserves of over 23 million ounces barrick s share of annual gold production in the first full five years of production is expected to average 625,000­675,000 ounces at total cash costs of $275­$300 per ounce work continues toward achieving key milestones what we did in 2010 generated record net income and cash flow return on equity increased to 19 from 12 met targets to increase production at lower cash costs completed cortez hills project on time and budget ramp-up exceeded expectations significantly advanced high return pueblo viejo and pascualama projects acquired additional 25 ownership of cerro casale a high quality long life asset in a key region identified significant new organic growth opportunities such as the potential to transform turquoise ridge into a large open pit operation increased dividend by 20 maintained license to operate achieved 22 improvement in total reportable injury frequency rate to 0.93 · retained listings on the dow jones world and north america sustainability indexes and named to nasdaq global sustainability index · first canadian mining company to join the voluntary principles on security and human rights · implemented environmental management system at all sites maintained strong financial position and the industry s only `a credit rating · replaced reserves and grew resources completed ipo of african barrick gold 6

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barrick annual report 2010 message from the president and ceo construction at the pascua-lama project in chile and argentina is also progressing well with initial production expected in 2013 this large world-class project has approximately 18 million ounces of gold in reserves and 671 million ounces of contained silver once in operation average annual production in the first full five years is expected to be 750,000­800,000 ounces of gold at total cash costs of $20­$50 per ounce making pascua-lama one of the lowest cost gold mines in the world looking further into the future we continue to advance our next-generation projects including cerro casale donlin creek reko diq and kabanga we have completed bankable feasibility studies for both cerro casale and reko diq and we continue to work on improving the donlin creek feasibility study with the evaluation of a natural gas pipeline option for the project in 2010 we also completed the acquisition of an additional 25 of cerro casale in chile which enabled us to gain control over this project and increase our metal exposure on a per share basis at attractive rates of return a greater emphasis on internal value creation has also surfaced some excellent opportunities within the company s existing portfolio combined with the production from our new mines under construction this has positioned us to increase our production target to nine million ounces within five years beyond that horizon we are currently evaluating an opportunity to transform the turquoise ridge joint venture in nevada from a small underground mine to a large open pit operation this would add another world-class asset to our portfolio the progress we made last year and the current position of the company have been recognized by the market as reflected by our strong share price performance in 2010 barrick shares appreciated 35 last year outperforming our peer group and importantly the gold price our ability to meet our operating targets and advance our project pipeline is dependent upon maintaining a strong social license to operate this means maintaining a strong safety culture respecting the environment and achieving high standards of corporate and social responsibility what we plan to do in 2011 continue focus on increasing shareholder returns meet production and cash cost targets advance construction of pueblo viejo and pascua-lama and progress cerro casale towards a construction decision continue to grow the net asset value of the company and increase metal exposure per share by · · · · advancing our pipeline of low cost high quality projects pursuing selective acquisitions which are accretive to shareholder value advance plans to achieve nine million ounce production target within five years ensure license to operate through expanded csr initiatives preserve financial strength and the industry s highest-rated balance sheet continue trend of strong earnings and cash flow generation maximizing free cash flow from existing operations growing reserves and resources 7

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message from the president and ceo as such we continue to focus our efforts on enhancing and improving our performance in these areas at barrick we announced several initiatives in 2010 to further strengthen the company s corporate social responsibility csr performance we became the first canadian mining company to join the voluntary principles on security and human rights a set of guidelines by which companies in the extractive sector can maintain the safety and security of their operations while ensuring respect for human rights and fundamental freedoms we also announced a plan to establish an external csr advisory board that will provide advice and guidance to barrick on challenging social and environmental issues and encourage further innovation and leadership in csr consistent with these objectives barrick will also appoint an independent director to its board of directors to support our commitment to csr our efforts in this area continue to be recognized barrick was once again listed on the dow jones world sustainability index and the company was added to the nasdaq global sustainability index which tracks the world s top 100 companies in this area improving our safety performance will continue to be a priority in 2011 we achieved a significant reduction in total reportable injuries in 2010 however the success we achieved was overshadowed by six fatalities during the year this is unacceptable to me and to everyone at barrick we will not rest in our efforts to improve until every person goes home safe and healthy every day we have redoubled our efforts and have intensified our focus on critical risks visible felt leadership and incident investigation looking ahead the outlook for barrick and our industry continues to be very bright we expect the gold price will continue to be well supported our production levels in 2011 should be comparable to 2010 and will continue to trend higher as we make progress towards reaching our nine million ounce target we have made considerable progress in controlling our operating costs but they will be higher in 2011 as we mine lower grade material however the impact is expected to be more than offset by higher gold prices as a result we should have another strong year of financial performance looking beyond 2011 barrick s cost profile should be stable as we benefit from the contribution of our new low cost projects including pueblo viejo and pascua-lama in addition to these we have a deep pipeline of other projects which will be augmented over time as a result of exploration success and the acquisition of new properties our focus on value creation leveraging barrick s expertise and capabilities has yielded significant results and i am confident that more can be done in this area to create further value for our shareholders in conclusion i want to finish by recognizing the more than 20,000 employees around the world who work tirelessly to achieve the results that drive our performance when i joined barrick i visited the company s mines and offices on four continents and one thing struck me everywhere i went the exceptional quality of our people two years later my initial impressions have only intensified and i want to thank the entire barrick team for making this a great company finally i would also like to extend my gratitude to our founder and chairman peter munk and to the board of directors and our shareholders for their continued support and advice over the past year aaron regent president and chief executive officer 8

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barrick annual report 2010 focus on value creation focus on value creation at barrick our primary goal is to maximize the value of the company in a socially responsible way for the benefit of all our stakeholders our strategy is focused on increasing net asset value production reserves and earnings ­ all on a per share basis barrick has a strong track record of creating value at its existing mines and projects in 2010 our regional business units were given a clear mandate to unlock the full potential of our assets and took a fresh look at their portfolios to identify value creation opportunities and maximize free cash flow this has resulted in our target to profitably increase production to nine million ounces within five years1 and has uncovered some exciting prospects including the open pit potential at turquoise ridge and other options to surface hidden value at our existing mines in support of this sharpened focus on value creation our strategy is centered on investing in high return development projects such as pueblo viejo and pascua-lama increasing our gold and copper reserves through both exploration and selective accretive acquisitions maximizing the value of our existing mines and leveraging our technical skills and regional infrastructure to commercialize new deposits we recognize that our ability to be successful in the long run depends on a high standard of corporate social responsibility and while barrick has a strong social license we continually strive to improve our social and environmental performance our efforts are supported by our `a rated balance sheet our management bench strength and the high quality of our employees all of which position us to meet our goals barrick is focused on building long life high return projects and is one of the few companies with the expertise and broad set of resources to develop large scale mines that are expected to provide lower cost ounces to the company for the next several decades the quality of these projects also enables us to be highly disciplined with respect to external opportunities which are consistently benchmarked against our existing pipeline our commitment to creating value should not only help us achieve our targeted production growth in what we expect to be a strong gold price environment but also enable the company to continue returning additional value to our shareholders from left jamie sokalsky kelvin dushnisky peter kinver and aaron regent 1 the target of nine million ounces of annual production within five years reflects a current assessment of the expected production and timeline to complete and commission barrick s projects currently in construction pueblo viejo and pascua-lama and the company s current assessment of existing mine site opportunities some of which are sensitive to metal price and various capital and input cost assumptions 9

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exceptional gold price leverage exceptional gold price leverage barrick offers investors exceptional leverage to record high gold prices this leverage is backed by the world s largest production and reserves within a diversified portfolio largely situated in investment grade countries gold surged to record-breaking highs in 2010 above $1,430 per ounce recording its tenth straight year of price gains bullion continues to benefit from a myriad of price supportive factors which have driven robust investment demand including a macroeconomic environment reflecting accommodative fiscal policies and ongoing monetary reflation persistent sovereign debt issues in europe and significant global trade and current account imbalances the global fiscal and monetary policies designed to stimulate economic recovery have had the dual effect of reducing the value of the world s major currencies and affirming gold s role in global portfolios central banks became net buyers of gold in 2010 for the first time in 21 years in an effort to diversify their holdings and address excessive foreign exchange reserves investor demand in the emerging economies of china and india is just beginning to ramp up particularly following further measures to liberalize the chinese gold market in 2010 we expect these trends to continue along with a longer term contraction in mine supply as new discoveries become scarcer and as permitting timelines and requirements to bring new production on line have lengthened and become more complex against this positive backdrop barrick offers investors a compelling combination of exceptional leverage through the benefits of active management relative to the gold etf and lower risk compared to less diversified gold producers through our global portfolio of operations as well as a competitive dividend yield this leverage is backed by the industry s largest gold reserves and production a disciplined focus on value creation and a strong balance sheet that enables us to pursue our strategy and goals 10

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barrick annual report 2010 financial strength and flexibility financial strength and flexibility in 2010 barrick successfully grew its production and lowered its cash costs bucking the industry trend to higher costs the company achieved its fifth straight year of margin expansion with record cash margins of $771 per ounce1 or $887 per ounce1 on a net cash cost basis reflecting cash margin growth of 48 versus gold s 26 rise combined with higher production of 7.8 million ounces this resulted in record 2010 adjusted earnings and adjusted operating cash flow of $3.3 billion and $4.8 billion respectively as well as significant free cash flow of $1.5 billion1 despite making substantial investments in our projects our `a credit rating and robust financial position ­ including cash of $4.0 billion a $1.5 billion undrawn line of credit and strong operating cash flow ­ position us to continue executing on our project development plans and give us the flexibility to pursue other high return value creation opportunities within our portfolio our excellent financial results have driven growth in our return on equity to 19 and enabled us to return additional capital to shareholders while continuing to invest in our high return projects barrick has raised its dividend by nearly 120 in the past five years as gold prices have appreciated including a 20 increase in 2010 this steady dividend growth reflects both the company s continued financial strength and our favorable outlook for gold 1 non-gaap financial measure ­ see pages 78­85 of the 2010 financial report cash margins1 us dollars per ounce net cash margins1 us dollars per ounce 771 521 625 887 429 535 2008 2009 2010 2008 2009 2010 cash margins grew 48 in 2010 net cash margins rose 42 in 2010 going forward we expect to increase barrick s superior leverage to gold as our long life high quality projects in construction ­ pueblo viejo and pascua-lama ­ begin contributing substantial new low cost production in the coming years beyond this we see tremendous potential in our feasibility stage projects such as cerro casale donlin creek and reko diq and in value creation opportunities underway at operating mines such as turquoise ridge and zaldívar barrick generated record earnings and cash flow in 2010 as we increased production at lower cash costs while continuing to invest in our high return projects we were also able to return more capital to shareholders raising the dividend by 20 jamiesokalsky executive vice president and chief financial officer 11

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