Steady Performance By NGM Provides Stronger Quarter For Barrick
TORONTO – Barrick Gold Corporation, President and Chief Executive, Mark Bristow, said, “Barrick remains on track to achieve its 2022 production guidance despite some short-term operational challenges and rising input costs. A steady performance had paved the way for a stronger Q4, driven by access to higher grades at Nevada Gold Mines (NGM). Its exploration drive continues to build momentum and Barrick is set once again to grow its reserves net of depletion this year. Barrick’s core strategy is one of long-term value creation and our focus remains firmly on this goal. We continue to maintain a strong balance sheet and to develop our wealth of organic growth projects. We also keep a sharp lookout for M&A opportunities, but those that could pass our strict investment filters are few and far between. Sustainability is the cornerstone of our business, as it has been for the past 20 years. We have adopted a holistic and integrated approach to this critical issue, and are not only prioritizing the environment portion of ESG metrics. This is more attuned to the ethical and developmental needs of many of our host countries, and is already delivering results.
Highlights of the quarter include the completion of the public comment phase of Nevada Gold Mines (NGM) Goldrush project and continuing progress with the Pueblo Viejo expansion project, designed to extend the life of the mine beyond 2040 at an annual production rate in excess of 800,000 ounces of gold (100% basis).14 The definitive agreements on the Reko Diq copper-gold project in Pakistan have been finalized and the process now moves onto its legalization and closing stage, with potential production from 2027/2028. Barrick continues to build its copper portfolio with strong performances from Jabal Sayid in Saudi Arabia and Lumwana in Zambia, where ongoing exploration is pointing to the potential for a super-pit which could extend the mine’s life to 2060.
At NGM, the North Leeville target has reported a maiden inferred resource of 700,000 ounces and is set for further growth. Bristow said, “The Company is looking at other opportunities in Nevada and elsewhere in North America. In Africa, key structures in the Loulo district are demonstrating the potential for further discoveries and in the Democratic Republic of Congo, Kibali’s prolific KCD structure continues to deliver growth. It successfully is executing strategy to create the world’s most valued gold and copper mining company through the performance of its peerless asset portfolio and a pipeline of high-quality organic growth prospects. This is evident in its industry-leading and sustainable shareholder returns, delivered in a disciplined dividend framework.”
Barrick continues to progress towards compliance with the new Global Industry Standard on Tailings Management (GISTM), in line with its commitment as one of the main supporters of this project. Long a leader in the field of tailings management, Barrick has maintained an internal standard that has been updated regularly in line with regulatory requirements, industry guidelines and best practices. This experience enabled it to make a significant contribution to the development of the GISTM. Its tailings storage facilities (TSFs) have been subject to an independent third-party review for the past 20 years. In the course of this year, Barrick has conducted external and internal reviews of its tailings storage facilities against its internal standard and the GISTM. Based on these reviews it has taken a range of actions to further reduce the potential risk they present. These include the installation of automated data acquisition systems at numerous sites.
Bristow commented, “The successful merger of two different sets of assets, systems, people and practices into the fully integrated Nevada Gold Mines (NGM) has been a classic case of the whole exceeding the sum of its parts. The combination of Barrick’s Nevada assets’ reserves and grades with Newmont’s infrastructure has delivered industry-leading growth and performance. In the three years since the establishment of the joint venture, it has produced 10 million ounces of gold and added 14.7 million ounces of proven and probable reserves as well as 8.5 million ounces of inferred resources. Greatly improved knowledge of the orebodies supports robust 10-year mine plans and has increased the pre-merger life of mine, and new opportunities for innovations and discoveries that will support a 15-year plan have been identified. As far as the first phase of NGM’s development is concerned, I think we can safely say Mission Accomplished.”
The process of completing the final agreements and legal steps that would enable the development of the Reko Diq project is making steady progress. Once the transaction is completed, Reko Diq, one of the largest undeveloped copper-gold deposits in the world, will be owned 50% by Barrick, 25% by Balochistan province and 25% by major Pakistani state-owned enterprises (SOEs). After a four-day visit to Pakistan in October which the project team held discussions with Prime Minister Shehbaz Sharif and Balochistan Chief Minister Abdul Quddus Bizenjo and their teams, as well as Barrick’s SOE partners - with the approval of Pakistan President Dr Arif Alvi, the necessary documents for the Presidential Reference were filed on October 15, 2022 with the country’s supreme court, a significant process milestone.
Barrick visited Balochistan’s Chagai District, which hosts Reko Diq, to brief local leaders and community stakeholders on the project. Reko Diq will bring enormous benefits to the region in the form of employment, skills and economic development, as well as community initiatives focused on food security, environmental management and access to healthcare, education and potable water. Bristow said, “Barrick is setting up community development committees (CDCs) to identify priority projects and supervise their implementation.”
The incorporation of New Porgera Limited (NPL) on September 22, following execution of the New Porgera Shareholders Agreement by Barrick (Niugini) Limited, Kumul Mineral Holdings Limited and Mineral Resources Enga, marked an important step towards the long-delayed restart of the Porgera mine. Once certain conditions are fulfilled, NPL intends to apply for a new Special Mining Lease (SML). In Papua New Guinea for quarterly operational reviews New Porgera will work with the State and the Mineral Resources Authority (MRA) to ensure that the SML application process proceeded without delay and in accordance with the Mining Act and the Porgera Project Commencement Agreement (PPCA). The application and early approval of a new SML is the goal that all Porgera stakeholders should be striving for. The mine has sat idle for far too long — more than two and a half years — depriving landowners and the communities of Porgera of employment and other essential benefits that the mine delivered successfully for 30 years.
With North Mara and Bulyanhulu set to achieve a combined production in excess of 500,000 ounces for the second year running, Barrick is looking to expand its East African footprint from this base. The Twiga partnership with the Tanzanian government not only settled its long-running disputes with the mines’ previous operators but has established a model for mutually beneficial cooperation between miners and their host countries, particularly in Africa. By demonstrating that Tanzania is an investor-friendly destination it also augurs well for the future of the country’s mining industry. Both North Mara and Bulyanhulu have been ramping up production, with North Mara hitting a record 505,000 tonnes of ore and waste mined last quarter. It continues to optimize the underground operation while the change to an owner-mining strategy has boosted the expansion of both the mine and open pit operations. At Bulyanhulu, the development of the main declines to access the Deep West zone of the orebody started last quarter. The production ramp-up at both mines is being supported by fleet upgrades.
The transformation of Lumwana from a marginal copper to one of Zambia’s largest copper producers, it employs more than 4,400 people, 99.3% of them Zambian nationals. It has an exceptional safety record, with no fatalities since 2016 and a Lost Time Injury Frequency Rate19 of less than 1.0% over the past 10 years. As a lower-grade mine, Lumwana is volume-driven and there is a strong focus on driving down operational costs by achieving efficiencies through scaled operations. This year’s production has already benefited from the improved runtimes provided by a new fleet of trucks and shovels. The planned upgrade of the conveyor system will secure steady ore delivery to the plant, boosting throughput and production next year. Promising drill results at the Lubwe satellite target are increasing our confidence that we will be able to develop a super pit and still keep producing at today’s rates and more. Should the super pit prove viable, it will substantially extend the mine’s life with a two year pre-feasibility study scheduled to commence in 2023. In addition to Lubwe, the assessment of the Kamaranda and Kababisa prospects is ongoing with drill programmes planned for the fourth quarter and potential to add additional satellites. It’s worth noting that the government’s new mineral royalty tax regime, scheduled to come into effect in January next year, will unlock additional free cash flow for Barrick, allowing reinvestment in Lumwana.
Africa’s largest gold mine to replace its reserves beyond depletion will secure its position as one of Barrick’s Tier One assets well into the future. The 13-year-old mine, which has just improved its performance for the third consecutive quarter, still had an enormous upside. With its exploration prospect pipeline continuing to expand, it was well set to maintain its business plan for at least another 10 years. Kibali’s underground operations are being further extended by two years through the addition of the 11,000 Lode to the mine plan. This lode continues to deliver promising results, unlocking additional value, and remains open down plunge. Drilling is also under way at the Mengu Hill, Agbarabo, Rhino, Zambula and Makoro targets which are showing potential as additional underground and open pit satellites.
The Loulo, Gounkoto and the former Morila mines have contributed $8.7 billion to the Malian economy in the 25 years the company has been in the country and over the past decade have accounted for between 5% and 10% of its GDP. In line with Barrick’s long-term commitment to Mali, it continues to invest in exploration to extend the life of the complex, which regularly more than replaces the gold it mines each year. The Loulo district is still delivering high-quality targets and we’re upgrading the complex’s infrastructure to support both open pit pushbacks and extensions at Yalea and Gara. In the meantime, the new Gounkoto underground mine is progressing its development towards scheduled commencement of stoping next year. Loulo-Gounkoto has also significantly improved the quality of life in its surrounding communities through its investment in projects designed to provide them with access to healthcare, education, food security and potable water. A local entrepreneurship program has directly created more than 1,200 jobs.