Barrick achieved higher production and lower cash costs in 2010. The company produced 7.77 million oz at total cash costs of $457/oz. The average gold price increased 26% in 2010 while full year adjusted net income rose 81% to $3.28 billion and adjusted operating cash flow increased 65% to $4.78 billion from 2009. The company anticipates next year’s production will be comparable to 2010 in the range of 7.6-8 million oz at total cash costs of $450-$480/oz.
“Looking back at 2010, we are pleased with the company’s performance,” said Aaron Regent, president and CEO, Barrick Gold. “We met our operating targets with higher production at lower costs than the previous year. This allowed us to fully benefit from the increase in the gold price, which resulted in significant expansion of our margins and record earnings and cash flow. Development of our project pipeline progressed with the successful completion and ramp up of Cortez Hills, and the continued construction of Pueblo Viejo and Pascua-Lama. And our focus on value creation opportunities within our existing asset base, has now positioned us to increase production to 9 million oz within five years.”
For the fourth quarter of 2010, the company reported a record income of $896 million. Adjusted operating cash flow set a new company record rising 56% to $1.44 billion from $921 million in the prior year period. Cash margins continued to benefit from rising gold prices increasing 35% to $882/oz from $654/oz in fourth quarter of 2009.
The newly expanded Cortez mine exceeded expectations in its first full year of production and the company continues to advance its project pipeline, including the world-class Pueblo Viejo and Pascua-Lama projects. Preproduction capital budgets are expected to be higher than previous estimates by about 10%-15% to $3.3-$3.5 billion (100% basis) and 10%-20% to $3.3-$3.6 billion for Pueblo Viejo and Pascua-Lama, respectively. Despite these increases, Pueblo Viejo and Pascua-Lama continue to have very strong economics. Once at full capacity, these two mines are anticipated to contribute about 1.4 million oz of annual production at low cash costs.
Barrick raised its proven and probable gold reserves to an industry leading 139.8 million oz at the end of 2010. Measured and indicated gold resources increased by 14.5 million oz or 24% to 76.3 million oz and inferred gold resources grew by 5.6 million oz or 18% to 37.2 million oz.