BARRICK Gold said it was keeping tabs on developments in Zambia as it sought expansion opportunities for Lumwana, its 100%-owned, 160 million pound a year copper producer.
“We continue to monitor the situation in Zambia which could present opportunities for us to leverage our position,” said Willem Jacobs, COO of Barrick’s Africa and Middle East assets during an investor day last week.
“The best is yet to come from Lumwana. We are assessing plant expansion options … to lift the mine’s output and bring value forward,” said Jacobs.
Asked by analysts about Jacobs’ comments, Barrick CEO, Mark Bristow, said the company was interested in expansion potential near the mine. As stated last year, a fire-sale of the mine was not being considered, he said.
Lumwana was previously identified as a non-core asset in terms of Barrick’s strategy to focus on tier one quality mines which it defined in respect of its gold mines as low-cost with annual production of 500,000 oz a year over a 10-year minimum life.
Bristow said Barrick was beginning to understand the potential offered by Lumwana and that “all options” were being considered. “We have had problems in the past but now we have considerable licence to operate,” he said.
Barclays said in a note following the investor day that the strategy to seek opportunities to expand Lumwana was “surprising”.
Bristow told Miningmx a year ago that there was “a natural pressure” that would force a “re-arrangement” of Zambia’s mining sector.
The southern African country is in economic distress. On November 13, the government failed to pay the $42.5m coupon on its Eurobond debt. However, Richard Musukwa, Zambia’s mines minister, told Reuters earlier this month he did not expect state-owned mining assets would be taken by bondholders, despite the default.
LOULO
Barrick said it was pressing ahead with a new pre-feasibility study into an underground mine at the Loulo section of Loulo-Gounkoto in Mali in 2021.
The ‘merger’ between the recently geologically remodelled North Mara and Bulyanhulu in Tanzania was also underway, said Bristow.
All in all, Barrick had increased capital expenditure in its five-year outlook, but especially in 2021 and 2022. “The order of magnitude of the change from 2021 to 2024 appears to be $300m a year or $1.2bn across the years,” said Barclays.
Production would be kept at between four to five million ounces a year over the five-year period, said Barrick.
