Barrick Gold aims for most valued status

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Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] says it is making significant progress towards its goal of becoming the world’s most valued gold company. Details are revealed in the company’s 2019 annual report which was published on March 25, 2020.

Highlights include a 10-year production plan, which indicates that Barrick is capable of sustainably producing around five million ounces of gold annually and delivering significant free cash flow.

Barrick Gold emerged as the world’s second largest gold producer last year after completing a merger with Randgold Resources Ltd. It has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the Democratic Republic of Congo Senegal and the United States.

However, the company said its crowning achievement was the decision to combine its Nevada assets with those of Newmont Goldcorp Corp. [NGT-TSX; NEM-NYSE]. Nevada Gold Mines, an entity owned 61.5% by Barrick and 38.5% by Newmont Goldcorp, is now the world’s single largest gold mining complex. Consisting of eight mines and associated infrastructure, it is capable of producing 3.5 million ounces of gold annually.

Nevada Gold Mines is the value foundation of Barrick’s gold mining business and holds enormous potential for growth, the company said. Optimism is based on the fact that the Nevada operations encompass the Carlin trend, which ranks as the most significant ore controlling structural corridor in Nevada, with open mineralization at many points.

Barrick said this area is going to be one of its main hunting grounds this year and beyond.

In Canada, the company said operations at Hemlo, Ontario are being modernized and refocused to secure the gold mine’s continued viability. The company has said several programs were introduced to improve performance and the next step will be to phase out the open pit operation and move to an underground contract mining model.

This optimization is expected to upgrade Hemlo to a Tier 2 asset and extend its life-of-mine.

“There has been an encouraging turnaround in its performance and there are indications that its life-of-mine could be extended,” the company said.

Hemlo has produced more than 21 million ounces of gold and has been operating continuously for more than 30 years. It consists of an underground mine and open pit operation, located about 350 km east of Thunder Bay, Ontario.

Forecast production at Hemlo this year is between 200,000 and 220,000 ounces at an all-in sustaining cost of US$1,200 to US$1,250 an ounce. That compares to 2019 production of 213,000 ounces when the all-in sustaining cost came in a US$1,140 an ounce.

On Thursday, Barrick shares rose 0.36% or 10 cents to $27.40. The shares are currently trading in a 52-week range of $15.73 and $29.94.


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