• As Holt approaches the end of its mine life, now scheduled for 2004, it is mining less continuous and narrower ore lenses. 
   

• Grades mined are 10-15% lower than plan and the previous year, resulting in higher cash costs.  Because of the short mine life, drilling and development costs are being expensed, pushing cash costs higher. 
   

• The Mine expects to produce 85,000 ounces this year, 12,000 ounces less than plan, at cash costs of

Pierina (Peru)

• The higher production in second quarter 2003 (up 42%) relates to mining and processing more tons of ore at better grades than the year earlier quarter.
   
• Pierina is on track to meet its full year production and cash costs targets.  The Mine is in its last year of production in the 900,000-ounce range before stepping down to lower production levels (400,000-500,000-ounce range) as mining moves to lower grade areas in the open pit beginning next year. 

Yilgarn District (Western Australia) Plutonic

• During second quarter 2003, the underground operation experienced a smooth transition from contract mining to owner mining, with underground mining rates on plan. 
   

• Cash costs were up over the prior year period primarily as a result of higher cost open pit production due to poor weather, higher diesel costs and lower grades mined.  Costs were also impacted by the transition to owner mining in the underground. 
   

• For the full year, the Mine is expected to produce 300,000 ounces, 5,000 ounces more than plan, due to higher mill throughput than originally planned, at cash costs in line with plan. 

Darlot

• Darlot reported a 15% increase in production for second quarter 2003, due to a similar increase in tonnage mined and processed. 
   

• Darlot is on track to produce 154,000 ounces, 11,000 ounces higher than plan, as a result of higher mining and processing rates than plan, at cash costs $16 lower than plan. 

Lawlers

• The transition from contract mining to owner mining in the underground was successfully completed in first quarter 2003, with full transition achieved in second quarter 2003. 
   

• Lower production compared to the previous year related to processing more tons (up 25%) at lower grade (down 27%) than the year earlier period. 
   

• Costs rose (up 33%) as a result of lower grades processed as well as higher unit costs. 
   
• Suspension of mining at the Fairyland open pit in January will prevent the mine from meeting its full year targets.  Lawlers' full year production is now projected at 94,000 ounces, at a cash cost of $260 per ounce, about 15% below and 22% above its original targets, respectively. 

Kalgoorlie - Super Pit (Western Australia) (50% share)

• Kalgoorlie had an excellent second quarter, producing 45% more ounces than the prior year quarter due to better grades and recovery rates. 

Grades mined are 29% better than plan and the previous year, due to successful mining of high-grade pillars in the open pit and continued mining at the Mt.  Charlotte underground mine.

• Recovery rates ran almost 3% higher than the previous year and 5% higher than plan, due to better grades, as well as increased throughput through the roaster facility, which achieves higher recovery rates. 
   
• Second quarter 2003 cash costs were similar to the prior year, as the higher grades processed were offset by rising mining costs associated with the increasing depth of the pit and higher diesel costs, as well as higher processing and maintenance costs. 
   
• For the year, the Mine is expected to produce 410,000 ounces, 66,000 ounces higher than its original plan for the year, directly attributable to the superior grades being realized from the open pit, at cash costs $27 lower than plan. 

Bulyanhulu (Tanzania)

• For second quarter 2003, production was 9% lower than the prior year period, reflecting fewer tons mined coupled with lower grades.  The lower mining rate reflected lower equipment availability, while the lower grades were a result of excessive dilution and mining of incremental ore. 
   
• Cash costs for the quarter were higher than the prior year, reflecting the lower production and higher maintenance costs. 
   
• As announced in our July 7^th press release, the Mine has appointed a new Vice President and General Manager, and plans to reduce the mining rate until the underground operation is stabilized.  While their priorities will be reducing dilution and increasing underground equipment availability, the new management team will also focus on bringing down the overall cost structure at the operation. 
   
• Until the underground issues have been resolved, Bulyanhulu's mining rate has been reduced by 34% to 2,100 tons per day, a reduction of 1,000 tons per day from the original plan.  As a result, the Mine will not meet its original full year targets.  Production is now expected to be 310,000 ounces (105,000 ounces lower than plan) at a cash cost of $240 per ounce ($65 per ounce higher than plan). 

Other Properties

• The only mine remaining in this category in 2003 is our 33% interest in the Marigold Mine, which produced more gold than plan at cash costs below plan. 
   

• Lower production for this category during second quarter 2003 compared to the year earlier quarter relates to the closure of five mines in 2002 due to the depletion of reserves. 

PROJECT UPDATES Alto Chicama (Peru)

During second quarter 2003, infill drilling on 50 meter centers, as well as step out and geotechnical drilling was completed.  A geologic resource model is being prepared to support an updated mine plan. 

Construction of the Alto Chicama access road is scheduled to commence in third quarter 2003, with due diligence work on the existing power line and the design of a 40 kilometer new line now underway. 

Work during second quarter also focused on hydrological studies, project siting and basic engineering.  Metallurgical tests are complete, with basic engineering underway for a two-stage crusher, heap leach with a Merrill-Crowe recovery process, similar to our Pierina Mine. 

On the exploration front, drill targets were outlined during a surface mapping and sampling program carried out earlier this year.  Drilling began on one of the drill

targets late in the second quarter and is expected to continue through the balance of the year.  Surface exploration will continue during third quarter 2003, aimed at identifying and prioritizing additional targets in the Alto Chicama district. 

For the remainder of 2003, efforts will focus on the completion and submission of the Environmental Impact Statement and final feasibility study.  The EIS is expected to be submitted in fourth quarter 2003. 

Veladero/Pascua (Argentina/Chile)

The approval process of the Veladero Project EIS remains on schedule, with permits expected in second half of 2003.   As of the second quarter, responses have been made to all comments received from public hearings and mining authorities.  

Access road construction continues on the lower portion of the road, with completion projected for third quarter 2004.  Temporary construction camp facilities were completed in the higher elevations to facilitate construction start up. 

Detailed engineering will commence in third quarter 2003, with some segments of the engineering completed early to prepare for a fourth quarter 2003 construction start up, pending government approvals and financing.  

 Work on optimizing the Pascua-Lama feasibility study continues with a focus on incorporating synergies with Veladero and the impact of the devaluation of the Argentinean peso. 

Cowal (Australia)

During second quarter 2003, a significant milestone was reached with the signing of a Native Title Agreement, followed by the granting of a mining lease for the Cowal project.  These milestones pave the way for a production decision in the second half of 2003.  

Open pit optimization continues with hydrologic and geotechnical studies completed during the quarter and incorporated into the pit optimization.   Further optimization work is ongoing to mitigate the recent increase in the Australian dollar, which has negatively impacted the economic returns of the project.  

Progress continues on permitting for ancillary licenses and development consent planning requirements.   Construction approvals require prior development consent of emergency management plans (EMPs) by NSW authorities; submission of the EMPs is scheduled for third quarter 2003. 

AMORTIZATION

Amortization totaled $131 million, or $89 per ounce¹, for second quarter 2003, compared to $126 million or $82 per ounce¹ in the year earlier quarter.   The increase was due largely to the change in the production mix across our portfolio of mines. 

Two accounting policy changes affecting amortization took effect in first quarter 2003.  First, FAS 143 changed the method for accounting for reclamation and closure costs.  Amortization increased by $2 million for second quarter 2003 to reflect the amortization of the increase to property, plant and equipment from adopting the new standard at the beginning of this year.   The second change relates to the amortization of underground development costs to exclude estimates of future underground development costs in the current period amortization. 

The new accounting policy for our underground mines had minimal impact on our second quarter results, and is expected to have minimal impact on amortization for the balance of the year, while the new reclamation standard is expected to add $15 million to costs in 2003 over the previous policy, in line with previous guidance. 

Overall amortization is expected to total between $520-$530 million in 2003, or approximately $90 per ounce.  We would anticipate amortization to remain at approximately current levels through 2004. 

ADMINISTRATION

Second quarter 2003 administration costs were $20 million, an increase of $4 million over the year earlier period.  The increase is primarily due to legal fees incurred relating to ongoing litigation and higher insurance costs. 

For 2003, administration costs are expected to total $75 million, an increase of $5 million over the beginning of year estimate.  Administration costs are expected to remain at approximately similar levels in 2004. 

EXPLORATION AND BUSINESS DEVELOPMENT

Exploration and business development expenses totaled $34 million for second quarter 2003, an increase of $7 million over the year earlier quarter.  Over half of the expenses during the quarter were attributable to two development projects (Veladero and Alto Chicama), which have not been classified as reserves for SEC purposes and are therefore expensed. 

For the year, exploration and business development expenses are expected to total $125 million, $25 million higher than originally planned, as we expect to continue to expense most Veladero expenditures through third quarter 2003. 

Looking forward to 2004, we would expect exploration and business development expenses to remain in the $100 million range. 

INTEREST AND OTHER INCOME

The principal component of interest and other income is interest received on cash and short-term investments.  For second quarter 2003, interest and other income was $10 million, an increase of $3 million compared to the year earlier period.  Interest and other income for the quarter included interest income of $8 million and gains on the sale of various assets of $11 million, partially offset by foreign exchange translation losses of $4 million. 

For the full year, interest and other income is expected to total approximately $30 million, $5 million higher than originally anticipated, due primarily to gains on the sale of assets. 

INTEREST EXPENSE

We incurred $11 million in interest costs in second quarter 2003, compared to $16 million in the year earlier quarter, relating primarily to our $500 million of debentures, and the $200 million Bulyanhulu project financing.  The decrease over the year earlier period mainly reflects lower interest rates, including a $3 million beneficial effect of an interest rate swap used to convert interest on $250 million of our debentures from fixed to floating during the quarter. 

For the full year, we expect to incur about $55 million in interest costs, of which we expect to capitalize $5 million to our construction projects. 

NON-HEDGE DERIVATIVE GAINS (LOSSES)

The principal components of the mark-to-market gains and losses are changes in currency, commodity, and interest and lease rate contracts, and exclude our normal sales contracts. 

The total mark-to-market gain on the non-hedge derivative positions included in second quarter 2003 earnings was $10 million, compared with a gain of $12 million for the year earlier period.  The gain during the quarter primarily relates to gains recorded on hedges of Australian dollar capital expenditures, which no longer qualified for hedge accounting treatment due to changes in the timing of the underlying capital expenditures. 

Our gold sales contracts have fixed lease rates; however, for about one third of the contracts, we swapped out of the fixed lease rates for floating lease rates to take advantage of lower short-term rates.  As gold prices and lease rates decline/(increase), an unrealized mark-to-market gain/(loss) on these swap contracts is recorded, and flows through earnings each quarter.  We expect to see ongoing fluctuations in these swap contracts in the following quarters as gold prices and lease rates change. 

INCOME TAXES

In second quarter 2003, we recorded a net income tax recovery of $15 million.  The income tax recovery includes a release of valuation allowances against deferred tax assets totaling $21 million resulting from actions completed during the quarter that provided assurance of the future realization of such assets.  Excluding the valuation allowance release, our effective tax rate in the first six months of 2003 increased slightly to 9%, compared to 4% in the year earlier period.  Compared to the Canadian federal tax rate of 38%, our lower effective tax rate is mainly due to: the utilization of previously unrecognized tax loss carry forwards, which mitigated extra taxes that would have arisen from the increase in spot gold prices from $302 per ounce in 2002 to $349 per ounce in 2003; as well as non-hedge derivative gains taxed in a low tax rate jurisdiction.  Our tax rate rises as gold prices rise, as a larger portion of our earnings are taxed in higher tax-rate jurisdictions.  We estimate that if gold prices average $350 in 2003 our effective tax rate would be 15-20%, excluding the effect of changes in valuation allowances and non-hedge derivative gains and losses. 

STATEMENT OF COMPREHENSIVE INCOME

Comprehensive income consists of net income or loss, together with certain other economic gains and losses that are collectively described as "other comprehensive income" and are excluded from the income statement. 

Comprehensive income totaled $146 million in second quarter 2003, compared to $66 million in the year earlier quarter.  The primary reason for the increase in 2003 relates to the increase in value of cash flow hedges in 2003 due to strengthening of Canadian and Australian dollars (up 8% and 10% respectively) against the United States dollar. 

LIQUIDITY AND CAPITAL RESOURCES

We believe our ability to generate free cash flow from operations is one of our fundamental financial strengths.  Combined with our large cash balance of almost $1 billion at June 30, 2003 and our $1 billion undrawn bank facility which, in the second quarter, was extended for an additional year to 2008, we have sufficient access to capital resources to develop our internal projects and maintain a strong exploration program. 

OPERATING ACTIVITIES

We generated operating cash flow of $66 million in second quarter 2003, compared to $148 million in the year earlier period.  The decrease in operating cash flow in the second quarter primarily relates to higher tax payments (up $41 million) and working capital adjustments (up $36 million). 

INVESTING ACTIVITIES

Our principal investing activities are for sustaining capital at our existing operating properties, new mine development and property and company acquisitions. 

CAPITAL EXPENDITURES

Capital expenditures for second quarter 2003 totaled $69 million, compared to $61 million for the year earlier period.  The increase was due principally to spending in Australia ($28 million), primarily for underground development and new mining equipment.  Capital expenditures also included $20 million in North America for maintenance capital.  In Tanzania, capital expenditures included $9 million spent at the Bulyanhulu Mine on underground development, while in South America capital expenditures totaled $12 million at Veladero, Pierina and Alto Chicama, as well as re-engineering and development work at Pascua-Lama.  For the full year we expect to spend about $375 million, lower than plan as most development costs at Veladero are expected to be expensed through third quarter 2003.  We would expect capital spending to increase in 2004, as we expect to begin construction of Veladero, Cowal and Alto Chicama. 

FINANCING ACTIVITIES

During second quarter 2003, our cash outflow on financing activities was $130 million, compared with $14 million in the year earlier period.  The higher outflow in second quarter 2003 principally related to a debt repayment on the Bulyanhulu project financing, the buyback of 3.48 million Barrick common shares at an average price of $17.95 per share at a total cost of $63 million and a dividend payment of $60 million. 

After the share buyback was announced on May 7, 2003, we completed the regulatory filings, including a Notice to make a normal course issuer bid filed with the Toronto and New York stock exchanges, which are required to allow us to make purchases of our common shares from time to time.  Pursuant to the Notice, we may buy up to a total of 35 million common shares, which represent approximately 7% of our public float at the time, during the period covered by the filing.  Purchases of common shares pursuant to the Notice, together with all other common share purchases, whether through the Toronto Stock Exchange or otherwise, in any 30-day period will not aggregate more than 2% of the common shares outstanding at the time such purchase are made.  Any common shares purchased will be cancelled.  The normal course issuer bid expires in May 2004.  A copy of the Notice will be furnished without charge to any shareholder upon written request. 

OUTLOOK

Our objective is to grow our business organically and through compelling acquisition opportunities.  We are focused on running our existing operations as efficiently and effectively as possible, as we develop our new generation of mines, and continue with one of the largest exploration programs in the industry. 

In second quarter 2003, the flexibility in our forward sales program once again allowed us to participate in higher gold prices, selling production at the higher spot prices as gold prices increased above our 2003 floor price of $340 in May and June.  We plan to continue to take advantage of the flexibility inherent in our program and spot gold price volatility to reduce the size of our forward sales position over time, subject to market conditions. 

Overall for 2003, we are forecasting to produce 5.4 to 5.5 million ounces at an average total cash cost of $190 to $195 per ounce and a total production cost of $280-$285 per ounce.  We expect exploration and business development expenses to be approximately $125 million.  Administration expense for the year is expected to be approximately $75 million, reclamation and accretion expense approximately $45 million, and interest expense approximately $50 million.  Interest and other income is expected to be approximately $30 million, while at $350 per ounce gold our effective tax rate is expected to be between 15% and 20%, excluding the impact of accounting changes/revaluation allowances and non-derivative gains.  Capital expenditures for the year are expected to total about $220 million at our existing operations, and a further $155 million at our four development projects, for a total of $375 million. 

NON-GAAP MEASURES

We have included cost per ounce data because we understand that certain investors use this information to determine the Company's ability to generate earnings as well as cash flow for use in investing and other activities.  We believe that conventional measures of performance prepared in accordance with GAAP do not fully illustrate the ability of our operating mines to generate cash flow.  The data are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.  The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.  Where cost per ounce data is computed by dividing GAAP operating cost components by ounces sold, we have not provided formal reconciliations of these statistics.  Where GAAP operating costs are adjusted in computing cost per ounce data, we have provided reconciliations below.

1.  Approximate estimated value based on current market US dollar interest rates and an average lease rate assumption of 1.5%
2.  Accelerating gold deliveries could potentially lead to reduced contango that would otherwise have built-up over time. 
3.  Lowest expected realized price for 2003, assuming the use of certain gold sales contracts, or the spot market price of gold, whichever is higher. 
4.  Assumes delivery of 100% of expected future production against current gold sales contracts which would exhaust all remaining gold hedge positions. 
5.  At a spot gold price of $346 per ounce.

In all of our master trading agreements, which govern the terms of our gold sales contracts with our 19 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. 
   
• We have the right to accelerate the delivery of gold at any time during the life of our contracts.  This flexibility is demonstrated by the terms that allow us to close out hedge contracts at any time on two days notice, or keep these hedge contracts outstanding for as long as 15 years.  This feature means that we can sell our gold at the market price or our hedge price, whichever is higher. 

Our trading agreements with our counterparties do provide for early close out of certain transactions in the event of a material negative change in our ability to produce gold for delivery under our hedging agreements, or a lack of gold market, and for customary events of default such as covenant breaches, insolvency or bankruptcy.  The significant financial covenants are:

• Barrick must maintain a minimum consolidated net worth of at least US$2 billion - currently, it is US$3.4 billion. 
   
• Barrick must maintain a maximum long-term debt to consolidated net worth ratio of 1.5:1 - currently, it is under 0.25:1. 

The foregoing information is a summary of certain aspects of our forward sales program and is not intended to be comprehensive.  For a more complete understanding, reference should be made to the Company's website (www.barrick.com).

The estimated fair value of all derivative instruments at June 30, 2003 was approximately $354 million negative. 

The year-to-date change in the fair value of our derivative instruments is detailed as follows: