Egyptian billionaire eyes investment in Barrick Gold project
Egyptian billionaire Naguib Sawaris, who has earned a fortune in telecom and gold, is eyeing a US$7 billion investment in Barrick Gold Corp.’s [TSX-ABX, NYSE- GOLD] Reko Diq copper-gold project in Pakistan, according to a published report.
News of a possible investment follows reports that Barrick has received the go-ahead from the government of Papua New Guinea to restart the Porgera mine, which has been held on care and maintenance for three years. The announcement paves the way for the 700,000 ounce-per-year operation to return to production. The asset hosts an orebody with a measured and indicated resource of 10 million ounces and inferred resources of 3.4 million ounces of gold. Prior to being placed on care and maintenance, Porgera produced about 600,000 ounces of gold in 2019.
A report by Bloomberg News Service, which was posted in a Scotiabank investment newsletter says Sawaris was asked whether he was interested in investing in Reko Diq. The Egyptian is a major investor in gold miners including Endeavour Mining Corp. (TSX-EDV) through his La Mancha Resources Inc.
During an interview in Islamabad, his response to the question was “yes, have an advantage compared to other investors. I know the country; I have friends here. I want to be on the Pakistan side, because I have been here for 25 years.” Pakistan’s lengthy, difficult official procedures, an unstable currency and capital restrictions are hurdles for investment, but Sawaris said he remains optimistic.
“If there is concrete in my way, I’ll drill through it and I’ll go,’’ he said. “I have never let anybody down in my life from what I wanted to achieve.”
Barrick President and CEO Mark Bristow recently outlined the potential benefits of the
Reko Diq project. It is a partnership between the company, the Balochistan provincial government and Pakistan state-owned enterprises.
Barrick believes Reko Diq to be a tier one copper-gold asset that meets its investment criteria (greater than 15% IRR at US$2.75 per pound copper and US$1,300 an ounce gold) and sees the project fitting into its development pipeline, along with the Donlin Gold Project in Alaska.
Bristow outlined the benefits after Barrick recently announced terms of a framework deal that sets the stage for development of Reko Diq. The definitive agreements underlying the framework agreement were recently being finalized by teams from Barrick and Pakistan.
Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow, with the first production of copper and gold expected in 2027 to 2028.
Barrick has said it is seeking leading project financing partners for the project that allows for project risks while potentially improving returns, the company said.
Barrick shares were largely unchanged on the news, easing 0.65% or $0.14 to $21.36. The shares are trading in a 52-week range of $28.19 and $17.88.