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Company press release
Barrick Sells 100% of Production at Spot Prices
For Most Of First Quarter 2003
New CEO Outlines Forward Sales Parameters
and Reduction of 1.8 million Ounces
TORONTO, Ontario, April 28, 2003 (CCNMatthews via COMTEX) --
Barrick Gold Corporation today released its first quarter
results in which it outlined activity in its forward sales
program for the quarter, the first ever in which spot gold
prices exceeded the company's contract price. As a result,
Barrick exercised its option to sell production at the
higher spot price. The program's flexibility allowed Barrick
to fully participate in rising gold prices, which ranged from
a high of $389 per ounce to a low of $326 during the quarter,
averaging $352 per ounce.
The company realized an average price for its gold sales of
$355 per ounce, based on production sold at spot prices
through mid-March, as well as deliveries into the program in
late March as gold prices declined.
Barrick fully participates in rising gold prices
quot;For the first time in 15 years we were able to demonstrate
the flexibility of our forward sales program, selling 100
percent of production through mid-March at higher spot gold
prices, and then -- as gold prices receded in mid-March --
selling 100 percent of our production at our higher contract
price,quot; said Greg Wilkins, President and Chief Executive
quot;We enjoyed full participation as gold went to its six-year
high,quot; said Mr. Wilkins, quot;and we got our 'contracted floor
price protection' when the spot price fell below our contract
CEO announces new program parameters
quot;Our program is working as designed and this quarter
enabled us to demonstrate its unique flexibility,quot; said Mr.
Wilkins. quot;We will continue to enjoy the financial benefits of
the program, however, generally we would like to see the
program both smaller and simpler: Smaller, as the program
today is about 35 percent of reserves at our operating mines,
where ideally the upper parameter would be about 20
percent, or about two years of production; and simpler, by
focusing on 'plain vanilla' spot deferred contracts -- and
eliminating variable price sales contracts.quot;
Emphasizing that these parameters represent a guideline,
with the actual level determined by market conditions, Mr.
Wilkins said that the company may opportunistically
reduce the size of the program on gold price dips but also
add to the program on gold price spikes in an effort to
continue to improve the average price of the contracts.
quot;Overall, we plan to use time and gold's volatility to
reduce the size of the program -- at minimal or no cost.quot;
Total position reduced by one third over past year
In line with those objectives, the company reduced its overall
forward sales position from 18.1 million ounces to 17.3
million ounces during the first quarter, and by an additional
1 million ounces to 16.3 million ounces by the end of April,
bringing the total reduction year-to-date to 1.8 million ounces.
And the company expects to make further reductions to the
program, particularly on gold price dips, as the year
progresses. In total, the program has declined by one
third over the past year from over 24 million ounces at
March 31, 2002.
quot;With the lowest interest rates in 40 years, our strong
financial position and our current positive outlook for the
gold price, a smaller, simpler program makes sense in
today's environment,quot; added Mr. Wilkins.