Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] President and CEO Mark Bristow said the life of Barrick’s Veladero gold mine in Argentina has been extended to at least 10 years following a comprehensive review of the company’s strategy and business plan.
Bristow made the comments while briefing an Argentinian audience of local media, government authorities and local business and community leaders about the mine’s progress from Barrick’s offices in Chile. The briefing was broadcast via a video conference to comply with Covid-19 related travel restrictions imposed by Argentina.
“Our review included the reinterpretation of the mine’s geology and an ongoing infill drilling campaign,” Bristow said. “We established exploration and resource management teams to identify satellite orebodies with the potential to deliver an increase in resources and reserves,” he said. “Our aim is to extend Veladero’s life-of-mine beyond 2030 and elevate it to a Tier One asset.”
Barrick defines a Tier One mine as one that produces in excess of 500,000 ounces of gold per annum and has a life of at least 10 years.
Bristow said the next step in Veladero’s transformation would be to connect the mine to cleaner, cheaper power from the grid in neighbouring Chile. Once commissioned in the second half of this year, this could halve the mines carbon footprint and potentially reduce its cut-off grade, creating the opportunity to further increase mineable reserves.
Projects related to revitalizing Veladero, such as the leach pad expansion, have created new employment opportunities, with the number of direct employees and contractors rising by 1,400 to almost 5,000 since January 2019, and the number of local suppliers increasing almost three- fold. In line with Barrick’s local employment policy, 99% of Barrick’s workforce are Argentinian.
Since 2005, Veladero has contributed some $9.5 billion to the Argentinian economy through taxes, royalties, salaries and payments to local suppliers. The mine has established a new community fund which, depending on production, is expected to generate more than $88 million to local infrastructure development over the next decade.
Barrick has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the Democratic Republic of Congo Senegal and the United States. The company recently moved to consolidate its position as one of the world’s leading gold producers by agreeing to merge with Randgold Resources Ltd.
The Veladero Mine is a joint venture held 50% by Barrick and 50% by China’s Shandong Gold Group Co. Ltd. The property is located at elevations of 4,000 to 4,850 metres above sea level, approximately 374 metres northwest of the city of San Juan.
The mine is expected to produce 240,000 to 270,000 ounces of gold this year at an all-in-sustaining cost of US$1,250 and US$1,300 an ounce.
On Tuesday, Barrick shares rose 8.5% or $1.96 to $24.98 on volume of 5.5 million. The shares are trading in a 52-week range of $15.73 and $29.94.