Barrick adds to its Tier One gold portfolio through Tanzanian transformation

Mark Bristow, CEO, Barrick Gold

Barrick Gold CEO Mark Bristow believes the group’s two mines in Tanzania have the potential to achieve “combined Tier One status in Barrick’s portfolio” which explains the lengths the group has gone to in protecting its position in Tanzania following the debacle with former subsidiary Acacia Mining.

According to Bristow – reporting on the group’s June quarterly results – “when we took over these mines they were a moribund burden on the government and their investors.

“In a very short time we redesigned and re-engineered them creating what are in effect two new mines.  They are well-placed to deliver their annual production guidance and have the potential to achieve a combined Tier One status in Barrick’s portfolio meaning that they are capable of producing at least 500,000 ounces of gold annually for more than 10 years at the lower end of the cost spectrum as a combined complex.”

Bristow pointed out that since Barrick took over the two mines –  North Mara and Bulyanhulu –  in September 2019  it had invested nearly $2bn into Tanzania.  In the first half of 2022 Barrick paid $158m in taxes; $42m in distributions to the Tanzanian government in dividends and shareholder loans as well as $210m to local suppliers.

In the June quarter Barrick also paid a further $40m of its negotiated $300m settlement with the Tanzanian government over the Acacia affair bringing the  total paid so far by the group to $140m.

Bristow added, “we are continuing to replace resources depleted by mining and we are targeting new opportunities as well.  Bulyanhulu now has a life of more than 20 years and continues to deliver a significant growth in reserves over and above depletion.

“Development of its new Deep West extension is scheduled to start this quarter. North Mara’s open pit has been successfully ramped up and the new Gena pushback is planned for the second half of the year. “

Overall,  Barrick level-pegged on its performance in the June quarter this year compared with the March quarter as higher gold and copper production outweighed the impact of rising costs.

The group has maintained its quarterly dividend at US$0.2 per share which is unchanged from the dividend declared in the first quarter.

Barrick has also kept its gold production and gold cost guidance unchanged for the full year to end-2022 but has cautioned the actual cost figures reported are expected to be “either at the top end or slightly above our gold cost guidance ranges for 2022.”

Reasons are the “higher gold price environment and the impact that the invasion of Ukraine by Russia has had on global energy prices. Global energy prices remain extremely volatile and consequently the ultimate impact on our cost profile is difficult to predict.”

The gold production guidance for 2022 is maintained at 4.2m oz to 4.6m oz with production expected to improve in the second half of the year with the fourth quarter “expected to be the strongest.”

Gold cost guidance remains unchanged with cash costs estimated to be in a range of $730/oz to $790/oz while all-in sustaining costs (AISC) are estimated at etween $1040/oz and $1,120/oz and cost of sales estimated at between $1,070/oz and $1,150/oz.

Copper production guidance is maintained in the range of 420m to 470m pounds.