PDF 175 KB - Barrick Gold Corporation

Barrick’s Offer for NovaGoldSUMMARY OF THE OFFER:Price• $14.50 per Share in cashExpiry• September 29, 2006 at 6:00 p.m. (Toronto time)Key ConditionsRights Plan• No material adverse change in NovaGold or any of its assets• Minimum tender condition of 50.1%• No legal restraint challenging the Offer• Shareholder Rights Plan waived or made ineffective• Application made for removal• Hearing on September 27, 20063

Barrick’s Offer for NovaGoldMYTH:• Barrick will not meet its contractual obligations to earn anadditional 40% interest in Donlin CreekREALITY IS THAT BARRICK:• Is the manager of the Donlin Creek Project• Confident we will deliver a feasibility study by November 12, 2007• Will enforce its rights to earn the additional 40% interestPrior to the announcement of the Offer, NovaGold never publiclydisclosed any material issues or concerns regarding Barrick'sability to earn in to 70% of Donlin Creek5

Barrick’s Offer for NovaGoldNovaGold’s assertions in court:• Request for temporary restraining order• Injunction against Offer due to alleged Barrickdisclosure inaccuracies• Expedited Hearing on Barrick right to 70%in Donlin Creek• Request for status conference on expeditedhearingXXXXNOT GRANTEDDENIEDDENIEDDENIED6

Barrick’s Offer for NovaGoldMYTH:• NovaGold contends that Pioneer’s property is not essential to thetimely development and value of Galore CreekREALITY IS THAT NOVAGOLD:• Made a hostile bid forPioneer• Has commenced litigationto gain control of anyPioneer sharesacquired by BarrickBarrick now owns over80% of Pioneer andwill act to protect its interests in Pioneer7

Barrick’s Offer for NovaGoldMYTH:• NovaGold contends it has millions of resource ounces making itsignificantly undervaluedREALITY:• Currently, NovaGold has no reserves• NovaGold’s latest estimate of resources used unsubstantiatedassumptions• NovaGold's recent calculations assume NovaGold retains a 70%interest in Donlin Creek• NovaGold's Galore Creek Feasibility Study has been delayed and willnot be released until AFTER Barrick's bid expiresBarrick has not seen anything in NovaGold’s recent public releasesthat has demonstrated additional value8

Barrick’s Offer for NovaGoldMYTH:• NovaGold contends it has millions of resource ounces making itsignificantly undervalued at $33/ounce of Total Enterprise Value (TEV)relative to recent comparable transactions 1,2REALITY:• Barrick is paying over $100/ounce of measured and indicated resourcesNOT including required capital expenditures and operating costs• Barrick is paying over $500 3 per ounce when acquisition, capital andoperating costs are considered• NovaGold has no comparables in the amount of capital required todevelop its resources relative to its market capitalization• Barrick is paying a fair price and assuming all permitting, development,operating, financing and commodity price risks1Total Enterprise Value (TEV) calculated as NovaGold’s market capitalization on the last trading day prior to the Barrick Offer (July 21, 2006) less cash, plus debt, plus preferred shares, plus minorityinterests. Based on measured and indicated resources and a 30% ownership of Donlin Creek.2TEV/Resource value of $33/oz as per NovaGold Director’s Circular, August 12, 2006. Based on measured, indicated and inferred resources and a 70% ownership of Donlin Creek. NovaGold August2, 2006 Statement Solicitation/Recommendation Statements Presentation.3Total Acquisition Cost (TAC) calculated as the sum of the operating, capital and acquisition costs per ounce of recoverable gold as per public documents. Donlin Creek capital expenditure amount isan average of eight equity analyst estimates for the project.9

Barrick’s Offer for NovaGoldREALITY (cont’d):• Barrick is paying over $100/ounce 1 of Total Enterprise Value (TEV), asopposed to the $33/oz number put forth by NovaGold 2Implied Offer Value (Total Enterprise Value / Resources) ($/oz)$120Enterprise Value / Total Resources ($/oz)$100$80$60$40$20$33$66+$34$99+$33$102+$3$102$0NovaGoldPresentation2ExcludingInferredResourcesUse of30% DonlinOwnershipShares Adjustedfor Coast MountainAcquisitionAggregateTotal 11Total Enterprise Value (TEV) calculated as NovaGold’s market capitalization on the last trading day prior to the Barrick Offer (July 21, 2006) less cash, plus debt, plus preferred shares, plus minorityinterests. Based on measured and indicated resources and a 30% ownership of Donlin Creek.2TEV/Resource value of $33/oz as per NovaGold Director’s Circular, August 12, 2006. Based on measured, indicated and inferred resources and a 70% ownership of Donlin Creek. NovaGold August2, 2006 Statement Solicitation/Recommendation Statements Presentation.10

Barrick’s Offer for NovaGoldMYTH:• NovaGold contends it has millionsof resource ounces making itTotal Acquisition Cost ($/oz) 3Gallery Gold (IAMGold)Viceroy (Yamana)$524significantly undervalued at $33of Total Acquisition Cost 2 Sutton Resources (Barrick Gold)$311NovaGold (Barrick)$517per ounce of Total EnterpriseBolivar Gold (Gold Fields)$501Value (TEV) relative to recentRiddarhyttan (Agnico-Eagle - 86%)$423comparable transactions 1Virginia Gold (Goldcorp)$418Getchell Gold (Placer Dome)$412REALITY:Western Silver (Glamis)$393• Barrick is paying over $500/ounceCrown (Kinross)$315Brancote Holdings (Meridian)$287$701Francisco Gold (Glamis)Pangea Goldfields (Barrick Gold)$178$253- Acquisition Costs- Capital Costs- Operating CostsAverage 3 - $393/oz1Total Enterprise Value calculated as NovaGold’s market capitalization on the last trading day prior to the Barrick Offer (July 21, 2006) less cash, plus debt, plus preferred shares, plus minority interests.TEV/Resource value of $33/oz as per NovaGold Director’s Circular, August 12, 2006.2Total Acquisition Cost (TAC) calculated as the sum of the operating, capital and acquisition costs per ounce of recoverable gold as per public documents. Donlin Creek capital expenditure amount is anaverage of eight equity analyst estimates for the project.3Average excludes NovaGold.11

Barrick’s Offer for NovaGold• NovaGold’s capital requirements are unprecedented for a junior goldcompany of its size— NovaGold’s equity requirement could represent the largest treasuryoffering ever completed by a gold company and could exceed the totalvalue of all junior gold financings completed in the last 12 monthsLargest Gold Equity Offerings ($billions) 1,2NovaGold Capital Requirement for all Projects 11.6NovaGold Pre-Bid Market Capitalization 2 1.1Newmont November 2003 Offering1.1All Junior Gold Offerings 3 (last 12 months)1.01NovaGold capital cost estimates for each of Galore Creek, Donlin Creek and Nome as per the average of analyst consensus estimates. Assumes 30% ownership of Donlin Creek by NovaGold.2NovaGold market capitalization based on NovaGold’s share price of $11.67 on the last trading day prior to the Barrick Offer, and shares outstanding on August 11, 2006 as disclosed in NovaGold’s Directors’ Circular.3Sum of all equity offerings completed by junior gold mining companies (defined as having a market capitalization of less than $1.5 billion) within the past twelve months of the Barrick Offering. Source: CIBC World Markets.12

Barrick’s Offer for NovaGoldMYTH:• NovaGold contends that Barrick's Offer is inadequateREALITY:• Barrick's all-cash Offer represents fair value and a significantpremium for NovaGold shareholdersNovaGold Share Price Performance (AMEX)$18.00NovaGold Share PriceSpot Gold Price$750NovaGold Share Price ($)$16.00$14.00$12.00$10.00July 24 Barrick Offer = $14.5023%PremiumFeb. 8 Equity Offering = $11.75$11.01Pre-Offer Share Price = $11.67$700$650$600$550$500Gold Price ($/oz)$8.00$450$6.00$40022-Sep-05 22-Nov-05 20-Jan-06 8-Feb-06 22-Mar-06 22-May-06 24-July-0620-Jul-06 19-Sep-06Source: Bloomberg Financial Markets, Reuters.13

Barrick’s Offer for NovaGoldREALITY:• All cash offer of $14.50 per share• Significant premium to:— Price preceding the July 2006 bid ($11.67 / share)— February 2006 equity issue price ($11.75 / share)— Historical share price at current gold price level ($11.01 / share)• Mitigates significant permitting, development, operating, financingand commodity price risks for NovaGold shareholders• NovaGold has not surfaced an alternative transaction• NovaGold’s legal maneuvers have failed• Barrick’s Offer represents fair valueNovaGold should let their shareholders decide14