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Barrick approves new projects to add more than 1 Moz of gold to annual output

Barrick Gold Corp. on Feb. 22 outlined a potential increase of 1 million ounces in its average annual gold production starting in 2021.

Annual gold output between 2019 and 2022 is estimated at 4.2 million to 4.6 million ounces, with all-in sustaining costs of between US$750/oz and US$875/oz.

The Toronto-based company approved three feasibility-level projects at its Turquoise Ridge, Cortez Deep South and Goldrush mines in Nevada, while optimization on a fourth project to extend the life of the Lagunas Norte mine in Peru is underway.

Barrick, which produced 5.3 Moz of gold in 2017, recently lowered its 2018 production guidance to between 4.5 Moz and 5.0 Moz of gold, down from between 4.8 Moz and 5.3 Moz previously.

The company is defining Turquoise Ridge as a core mine, with plans to double annual production to more than 500,000 ounces with the construction of a third shaft and additional processing capacity. Barrick has a 75% interest in the property, with Newmont Mining Corp. holding the remainder.

Total CapEx is estimated at US$300 million to US$325 million. The third shaft will enable access to new areas of the deposit and is expected to reduce operating costs, increase mining productivity and increase the total life of the mine.

With permits for the construction secured, Barrick expects surface works and shaft sinking to occur in 2018 and 2019, followed by equipping of the shaft in 2020 and 2021. Initial production from the new infrastructure is expected in 2022, with sustained production to start in 2023.

Barrick noted that its attributable portion of proven and probable reserves at Turquoise Ridge is 5.9 Moz at an average grade of 15.56 g/t of gold, with the deposit remaining open in multiple directions.

In January 2017, Barrick and Newmont reached a new seven-year toll milling agreement to process ore at Newmont's Twin Creeks facility, which will support the Turquoise Ridge mine expansion.

At Cortez Deep South, Barrick anticipates a record of decision in the second half of 2019 with construction to take two years and initial production expected in 2022. Initial CapEx is estimated at US$105 million.

The miner also outlined initial CapEx of US$1 billion for the planned underground Goldrush mine, with decline construction, detailed engineering and permitting scheduled between 2018 and 2020. Construction and initial production are anticipated between 2021 and 2022, with sustained production from 2023.

A two-phase expansion is planned at Lagunas Norte, with the first phase focused on treating remaining carbonaceous oxide material and the second phase aiming to treat refractory material. Barrick secured environmental permits for the phase-one facilities, with construction permits pending and detailed engineering expected to be completed in 2019.

Meanwhile, Barrick COO Richard Williams will step down to serve as Chairman John Thornton's executive envoy to Tanzania. Williams will focus exclusively on ongoing talks with the government aiming to resolve issues facing majority-owned Acacia Mining plc.

Barrick reached a tentative agreement with the Tanzanian government in October 2017 to resolve issues including a ban on concentrate exports and taxes Tanzania says are owed by Acacia.

The company is appointing Greg Walker the senior vice president of operational and technical excellence to oversee its operations. Walker has been with the company since 2003, serving most recently as executive general manager of the Pueblo Viejo mine in the Dominican Republic.

Barrick President Kelvin Dushnisky recently indicated an increased focus by the company on its copper portfolio, which includes proven and probable reserves containing 11.2 billion pounds of copper.

The company anticipates copper production of 385 million to 450 million pounds in 2018, with all-in sustaining costs of US$2.30/lb to US$2.60/lb.

Barrick's Lumwana mine in Zambia produced 256 million pounds of copper in 2017. The company also has 50% stakes in the Jabal Sayid copper mine in Saudi Arabia and the Zaldivar copper mine in Chile.