Barrick Gold Corporation

March 18, 2015 Barrick Gold Corporation Current Recommendation Prior Recommendation Underperform Date of Last Change 06/18/2014 Current Price (03/17/15) $10.33 Target Price $11.00 NEUTRAL (ABX-NYSE) SUMMARY We are retaining our Neutral recommendation on Barrick Gold. Adjusted earnings for the fourth quarter of 2014 fell year over year, but beat the Zacks Consensus Estimate. Sales dropped by double-digits on lower gold and copper pricing, and missed expectations. The company plans to significantly reduce debt in 2015. Weak gold pricing and a challenging operating environment are concerns for Barrick, along with the limited supply of gold as new deposits. Moreover, uncertainties surrounding the Pascua-Lama project continue to weigh on Barrick s share price. However, the company has a healthy cash flow profile, enabling it to invest in attractive expansion opportunities. We are also encouraged by its cost management initiatives. SUMMARY DATA 52-Week High $20.91 52-Week Low $10.17 One-Year Return (%) -46.98 Beta -0.02 Average Daily Volume (sh) 15,092,200 Shares Outstanding (mil) 1,165 Market Capitalization ($mil) $12,034 Short Interest Ratio (days) 0.76 Institutional Ownership (%) 54 Insider Ownership (%) N/A Annual Cash Dividend $0.20 Dividend Yield (%) 1.94 5-Yr. Historical Growth Rates Sales (%) 2.4 Earnings Per Share (%) -19.2 Dividend (%) -16.8 using TTM EPS 15.2 using 2015 Estimate 16.9 using 2016 Estimate 14.2 Zacks Rank *: Short Term 1 3 months outlook 3 - Hold * Definition / Disclosure on last page Risk Level * Above Avg., Type of Stock Large-Value Industry Mining -Gold Zacks Industry Rank * 62 out of 267 ZACKS CONSENSUS ESTIMATES Revenue Estimates (In millions of $) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) 2013 3,437 A 3,201 A 2,985 A 2,926 A 12,511 A 2014 2,632 A 2,432 A 2,598 A 2,510 A 10,239 A 2015 2,446 E 2,346 E 2,274 E 2,689 E 9,755 E 2016 9,756 E *Note: Quarterly revenues may not add up to the annual figure due to onetime adjustments/divestments. Earnings Per Share Estimates (EPS is operating earnings before non-recurring items, but including employee stock options expenses) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) 2013 $0.92 A $0.66 A $0.58 A $0.37 A $2.51 A 2014 $0.20 A $0.14 A $0.19 A $0.15 A $0.68 A 2015 $0.14 E $0.14 E $0.15 E $0.18 E $0.61 E 2016 $0.73 E *Note: Quarterly EPS may not add up to the annual figure due to rounding-off. Projected EPS Growth - Next 5 Years % 2 2015 Zacks Investment Research, All Rights reserved. www.zacks.com 10 S. Riverside Plaza, Chicago IL 60606

OVERVIEW Barrick Gold Corporation (ABX) is the largest gold mining company in the world, with headquarters in Toronto, Canada. The company has many advanced exploration and development projects located across five continents. Barrick had 93 million ounces (oz) of proven and probable gold reserves and 9.6 billion pounds of copper reserves at the end of 2014. Barrick is placed amongst the top gold producers with peers, such as Newmont Mining (based in U.S.) and AngloGold Ashanti (based in South Africa). The company produced 6.25 million ounces of gold and 436 million pounds of copper in 2014. Its five core mines in the Americas (Pueblo Viejo, Cortez, Lagunas Norte, Goldstrike and Veladero) accounted for 60% of its production in 2014. The company s strategy to create value for its shareholders is focused on five key areas: Maximizing the benefits of rising metal prices by meeting operational and financial targets. Increasing gold and copper reserves and production through exploration and selective acquisitions. Maximizing the value of its existing mines and properties by leveraging its expertise and regional infrastructure. Growing production by investing in and developing high return projects. Continuing to improve corporate social responsibility practices to maintain and strengthen its incense to operate. By executing on this strategy, the company expects to increase earnings and cash flow and enhance its shareholders leverage to metal prices. REASONS TO BUY Barrick has a healthy liquidity position and generates healthy cash flows, which positions it well to take advantage of attractive development, exploration and acquisition opportunities. The company continues to make high return investments in its businesses. Barrick is expected to benefit from major exploration programs. Once Pueblo Viejo and Pascua-Lama are in full production, these two mines are expected to have a significant positive impact on Barrick s overall production and cash cost profile. The company maintains a significant focus on Nevada for growth opportunities. Roughly 85% of its exploration budget for 2015 ($220-$260 million) has been allocated to North America, with around 50% of that targeted for Nevada. The company is currently conducting a pre-feasibility study for the Goldrush project near the Cortez mine with expected completion in mid-2015. Moreover, the prefeasibility study for the Turquoise Ridge project was completed in January 2015. Major permits are anticipated in third-quarter 2015 with construction is expected to start in the fourth quarter. The company also expects to complete the prefeasibility study for the Spring Valley project in late 2015. Barrick is making significant progress with its cost and efficiency improvement programs. The company s initiatives including overhead expenses cut, portfolio optimization and headcount reductions are expected to generate meaningful cost savings. Barrick is also implementing a simplified operating model which will increase efficiency and contribute to cost reduction. Its progress on cost controlling initiatives was witnessed in the most recent quarter with all-in costs declining roughly 17% year over year. Barrick expects to realize $30 million in savings in 2015 through lower general and administrative costs and overhead expenses, further increasing to $70 million in 2016. Equity Research ABX Page 2

Barrick completed the acquisition of Equinox Minerals in July 2011, adding two quality copper mines and increasing its leverage to strong copper prices while maintaining its gold exposure. The company is focused on three areas to realize the full potential of the Lumwana mine, which is located in one of the world s most prolific copper regions in Zambia. These areas include operational improvements and efficiencies, a focus on exploration to expand the resource and an ongoing evaluation to determine the optimal scope of an expansion. Barrick has taken up a number of steps, including infrastructural improvement, to boost the mine s long-term potential. The company has also started ore processing from the Chimiwungo pit, which is the primary source of ore supply for Lumwana. REASONS TO SELL The company s revenues are mainly derived from the sale of gold and copper and the market prices of these metals can swing widely due to macroeconomic factors that are beyond its control. Barrick s operating results and financial condition also highly depends on other commodity prices and foreign exchange rates, which are largely reliant on global economic health. The weak gold price environment represents a concern. Gold prices slumped to four-and-half year lows to $1,143 per ounce in November 2014 due to a strong U.S. dollar and a steady climb in the equity market. Average gold price in 2014 stood at $1,266.4 per ounce, a 10% decline from the average price of $1,411 per ounce in 2013. Depressed gold prices continue to serve as headwinds. Uncertainty surrounding Pascua-Lama is weighing on Barrick s stock price. Barrick, in April 2013, announced that it is halting construction work at the Pascua-Lama mine in Chile after a Chilean court issued a preliminary injunction citing environmental concerns. Barrick s Pascua-Lama mine overlaps the border of Chile and Argentina and the court ruled in favor of indigenous communities who complained that the project threatens their water supply. The company s shares took a hit following the announcement of the suspension. Chilean regulators, in May 2013, imposed a fine of roughly $16 million on the company for not meeting the environmental control measures at the project. Barrick submitted a plan to construct a water management system in compliance with permit conditions. The company, during fourth-quarter 2013, temporarily halted construction activities at Pascua-Lama, except the requisite activities for environmental protection and regulatory compliance. Barrick is required to build a new water management system in Chile and plans to submit application for the system in mid-2015. The company expects to spend roughly $170-190 million on account of care and maintenance and other expenses related to the mine in 2015. Sovereign debt concerns in Europe have put further downward pressure on euro, while austerity measures threaten to slow economic growth. Meanwhile, in emerging markets, the threat of rising inflation persists. Despite a decade of rising gold prices, the gold mining industry has struggled to increase supply as new deposits remain scarce and the permitting and construction environment becomes increasingly complex. Decreasing gold reserve is another concern. Barrick s gold reserves fell around 11% year over year in 2014, reflecting ounces mined and processed during the year and divestments of assets. Moreover, the company still has a debt-laden balance sheet. Its total debt was roughly $13 billion at the end of 2014, nearly five-times of its cash position. Equity Research ABX Page 3

RECENT NEWS Barrick Beats Q4 Earnings, Plans to Cut Debt - February 18, 2015 Barrick s adjusted earnings (excluding one-time items) for the fourth quarter of 2014 plummeted to $0.15 per share from $0.37 per share in the year-ago quarter but beat the Zacks Consensus Estimate of $0.12. Lower pricing for both gold and copper along with the impact of 257,000 fewer ounces sold in the quarter led to the decline in earnings. On a reported basis, loss for the fourth quarter was $2.85 billion or $2.45 per share compared with a loss of $2.83 million or $2.61 per share in the prior-year quarter. The results include $138 million in unrealized losses on non-hedge derivative instruments and $2.8 billion in after-tax impairment charges. For 2014, adjusted earnings came in at $793 million or $0.68 per share compared with $2,569 million or $2.51 per share in 2013. It beat the Zacks Consensus Estimate of $0.66. On a reported basis, net loss was $2,907 million or $2.50 per share in 2014 compared with a loss of $10,366 million or $10.14 per share in 2013. Revenues fell around 14.7% year over year to $2,510 million in the reported quarter and missed the Zacks Consensus Estimate of $2,534 million. Average realized price of gold decreased 5.3% year over year to $1,204 per ounce. All-in costs declined 16.9% to $1,094 per ounce, while all-in sustaining costs (AISC) rose roughly 2.9% to $925 per ounce in the reported quarter. For 2014, revenues fell 18.3% year over year to $10,239 million, missing the Zacks Consensus Estimate of $10,474 million. Gold production fell to 1.5 million ounces from 1.7 million ounces a year ago. Copper production declined to 134 million pounds from 139 million pounds in the prior-year quarter. Regional Results Gold The Goldstrike mine, in the North American region, produced 187,000 ounces of gold in the quarter, down 22.7% year over year, at an average all-in sustaining cost of $877 per ounce. The fourth quarter reflected lower expected grades and a shutdown of the autoclave facility to complete the transition to thiosulfate processing. The Cortez mine produced 185,000 ounces, down 24.2% year over year. Production at Pueblo Viejo increased 12.7% to 177,000 ounces. Production at Lagunas Norte mine decreased 9.7% to 176,000 ounces due to higher grade material and a faster leach cycle from stacking ore on a new area of the leach pad. Production at Veladero increased 38.7% year over year to 197,000 ounces, led by positive grade reconciliations and a reduction in capitalized stripping costs. The Turquoise Ridge produced 39,000 ounces in the quarter, down 26.4% year over year. The Porgera mine produced 126,000 ounces, down 3.8% year over year. Copper Copper production in the third quarter was 134 million pounds, down 3.6% year over year. C1 cash cost was $1.78 per pound in the quarter, down from $1.81 per pound in the year-ago quarter. Equity Research ABX Page 4

Financial Position Cash and cash equivalents were $2,699 million as of Dec 31, 2014, up roughly 12.3% from $2,404 million as of Dec 31, 2013. Long-term debt was roughly $12.7 billion, down from $12.9 billion a year ago. Update on Pascua-Lama Mine During fourth-quarter 2013, Barrick temporarily suspended construction activities at the Pascua-Lama mine, barring the requisite activities for environmental protection and regulatory compliance. The rampdown was completed on schedule and budget and the mine is now under care and maintenance. The decision to re-start will depend on certain factors like improved project economics, and legal and other regulatory requirements. Pascua-Lama s Executive Project Director, and his team are assessing the mine s economics going forward. The company must permit and build a new water management system in Chile. It will submit the application for the new system by mid-2015, with permitting expected to take two years. Guidance For 2015, Barrick forecasts AISC to be between $860 and $895 per ounce. The company expects gold production to be in the range of 6.2 6.6 million ounces, with increased contributions from Goldstrike, Lagunas Norte and Acacia. This is, however, expected to be offset by lower production from Veladero and the sale of Kanowna, Plutonic and Marigold in 2014. Barrick projects copper production in the range of 310 340 million pounds at C1 cash costs of $1.75 $2.00 per pound, which mainly reflects the planned suspension of the Lumwana mine in Zambia, partly offset by higher expected production from Zaldivar. The company's five cornerstone mines are expected to contribute 60% of overall production at AISC of $725 $775 per ounce in 2015. Total capital expenditures in 2015 are anticipated to be in the range of $1.90 $2.20 billion compared with $2.18 billion in 2014. The lower expenditure forecast mainly reflects reduced expansion capital due to the commissioning of the Goldstrike thiosulfate project in the fourth quarter of 2014 and reduced sustaining and development capital at Lumwana following the decision to suspend operations. The company expects higher depreciation expense of $240 $260 per ounce in 2015 due to rise in depreciation costs at Lagunas Norte, Goldstrike, Cortez and Pueblo Viejo. Moreover, Barrick intends to cut its net debt by at least $3 billion by the end of 2015 and has a number of options to achieve this target. These include maximizing free cash flow by implementing a leaner, decentralized operating model that reflects its original culture with more efficient capital spending, lower general and administrative expenses, and profitable growth; non-core asset sales starting with a process to sell the Porgera Joint Venture and Cowal mine; and forming appropriate joint ventures and strategic partnerships. Barrick Beats Earnings Estimates, Snips Cost Outlook - October 29, 2014 Barrick s adjusted earnings (excluding one-time items) for the third quarter of 2014 plummeted to $0.19 per share from $0.58 in the year-ago quarter but beat the Zacks Consensus Estimate of $0.16 per share. Lower pricing and volumes for both gold and copper led to the decline in earnings. Equity Research ABX Page 5

On a reported basis, profit for the third quarter was $125 million or $0.11 per share, down 27.3% from $172 million or $0.17 per share in the prior-year quarter. The results include $51 million in unrealized losses on non-hedge derivative instruments and $42 million in unrealized losses related to foreign currency translation. Revenues fell around 13% year over year to $2,598 million in the reported quarter and missed the Zacks Consensus Estimate of $2,479 million. Average realized price of gold decreased 2.9% year over year to $1,285 per ounce. All-in costs declined 17.5% to $975 per ounce while all-in sustaining costs fell roughly 8.8% to $834 per ounce in the reported quarter. Gold production fell to 1.6 million ounces from 1.8 million ounces a year ago. Copper production declined to 131 million pounds from 139 million pounds in the prior-year quarter. Regional Results North America: The Goldstrike mine in the North American region produced 239,000 ounces of gold in the quarter, up 2.6% year over year, at an average all-in sustaining cost (AISC) of $921 per ounce. Production increased due to higher processed grades. AISC were better than expected due to lower processing costs. The Cortez mine produced 273,000 ounces, down 18% year over year. Production at Pueblo Viejo increased 48.7% to 168,000 ounces. Production at Lagunas Norte mine increased 15.4% to 157,000 ounces due to processing higher grade material and a faster leach cycle from stacking ore on the new area of the leach pad. Production at Veladero increased 15.6% year over year to 178,000 ounces, led by higher grades on positive grade reconciliations. Australia Pacific: The region produced 292,000 ounces compared with 497,000 ounces in the year-ago quarter. AISC was $855 per ounce, down from $920 per ounce in the year-ago quarter. African Barrick Gold plc. (ABG): Attributable production of ABG in the quarter was 122,000 ounces, flat compared with the year-ago quarter. AISC was $1,098 per ounce in the quarter, down 13.5% year over year. Copper Copper production in the third quarter was 131 million pounds, down 5.8% year over year. C1 cash cost was $1.82 per pound in the quarter, up from $1.69 per pound in the year ago quarter. Financial Position Cash and cash equivalents were $2,705 million as of Sep 30, 2014, down roughly 18.5% from $2,283 million as of Sep 30, 2013. Long-term debt was roughly $12.9 billion, down from $14.6 billion a year ago. Joint Venture Barrick, on Jul 13, 2014, agreed to form a joint venture with a Saudi Arabian Mining Co. (Ma aden) in order to operate the Jabal Sayid copper mine in Saudi Arabia. Both Barrick and Ma aden will own 50% stake in the joint venture. Ma aden, which is controlled by the state of Saudi, has agreed to buy 50% interest in the project for $210 million. First shipments of concentrate are expected in early 2016. Equity Research ABX Page 6

Guidance For 2014, Barrick reduced its forecast of AISC, which is now expected to be between $880 and $920 per ounce versus earlier expectations of between $900 and $940 an ounce. The company reiterated its capital expenditure guidance range of $ $2.2-$2.5 billion. Barrick, also changed its full-year guidance for gold production to 6.1-6.4 million ounces from previous expectation of 6-6.5 million ounces. Copper production guidance has been increased to 440-460 million pounds from earlier expectation of 410-440 million pounds. C1 cash cost guidance has been revised to $1.90-$2 per pound from the earlier outlook of $1.90-$2.10 per pound. VALUATION Currently, Barrick is trading at 16.9x our 2015 estimate of $0.61. The company s current trailing 12-month earnings multiple is 15.2x, compared with the 18.2x average for the S&P 500 and 56.4x for the peer group. Over the last five years, Barrick s shares have traded in the range of 4.4x to 19.1x trailing 12- month earnings. The stock is also trading at a discount to the peer group, based on forward earnings estimates. Our long-term Neutral recommendation on the stock indicates that it will perform in line with the broader market. Our price target of $11 is based on 18x our 2015 earnings estimate. Key Indicators F1 F2 Est. 5-Yr EPS Gr% P/CF 5-Yr High 5-Yr Low Barrick Gold Corporation (ABX) 16.9 14.2 2.0 2.9 15.2 19.1 4.4 Industry Average 42.8 27.5 7.4 12.2 56.4 122.8 16.9 S&P 500 16.6 15.4 10.7 14.5 18.2 18.4 12.0 Sibanye Gold Limited (SBGL) 9.0 7.0 8.9 14.6 Campbell Resources Inc. (CBLRF) Newmont Mining Corp. (NEM) 18.8 20.1 6.3 20.5 27.3 9.9 AngloGold Ashanti Ltd. (AU) 14.9 7.3 7.0 80.0 112.5 3.6 TTM is trailing 12 months; F1 is 2015 and F2 is 2016, CF is operating cash flow P/B Last Qtr. P/B 5-Yr High P/B 5-Yr Low ROE D/E Last Qtr. Div Yield Last Qtr. EV/EBITDA Barrick Gold Corporation (ABX) 0.9 2.6 0.8 4.9 0.8 1.5-3.2 Industry Average 5.7 5.7 5.7-93.5-1.5 0.5-4.7 S&P 500 6.2 9.8 3.2 25.4 2.0 Equity Research ABX Page 7

Earnings Surprise and Estimate Revision History Equity Research ABX Page 8

DISCLOSURES & DEFINITIONS The analysts contributing to this report do not hold any shares of ABX. The EPS and revenue forecasts are the Zacks Consensus estimates. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts personal views as to the subject securities and issuers. Zacks certifies that no part of the analysts compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. Additional information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual objectives, the report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities herein mentioned. Zacks or its officers, employees or customers may have a position long or short in the securities mentioned and buy or sell the securities from time to time. Zacks uses the following rating system for the securities it covers. Outperform- Zacks expects that the subject company will outperform the broader U.S. equity market over the next six to twelve months. Neutral- Zacks expects that the company will perform in line with the broader U.S. equity market over the next six to twelve months. Underperform- Zacks expects the company will under perform the broader U.S. Equity market over the next six to twelve months. The current distribution of Zacks Ratings is as follows on the 1130 companies covered: Outperform - 15.1%, Neutral - 75.0%, Underperform 9.0%. Data is as of midnight on the business day immediately prior to this publication. Our recommendation for each stock is closely linked to the Zacks Rank, which results from a proprietary quantitative model using trends in earnings estimate revisions. This model is proven most effective for judging the timeliness of a stock over the next 1 to 3 months. The model assigns each stock a rank from 1 through 5. Zacks Rank 1 = Strong Buy. Zacks Rank 2 = Buy. Zacks Rank 3 = Hold. Zacks Rank 4 = Sell. Zacks Rank 5 = Strong Sell. We also provide a Zacks Industry Rank for each company which provides an idea of the near-term attractiveness of a company s industry group. We have 264 industry groups in total. Thus, the Zacks Industry Rank is a number between 1 and 264. In terms of investment attractiveness, the higher the rank the better. Historically, the top half of the industries has outperformed the general market. In determining Risk Level, we rely on a proprietary quantitative model that divides the entire universe of stocks into five groups, based on each stock s historical price volatility. The first group has stocks with the lowest values and are deemed Low Risk, while the 5 th group has the highest values and are designated High Risk. Designations of Below-Average Risk, Average Risk, and Above-Average Risk correspond to the second, third, and fourth groups of stocks, respectively. Equity Research ABX Page 9