Barrick continues to unlock value embedded in its asset base
Colorado Springs – Barrick is projecting a 30% growth in the production of gold-equivalent ounces from its existing assets by the end of this decade1 while it continues to unlock the value embedded in its portfolio, says president and chief executive Mark Bristow.
Bristow said while Barrick was alert to potentially value-accretive opportunities generated by the consolidation of the industry, it had the rare luxury of doing so from an asset base that would support organic growth well into the future.
“Five years ago, we set out to build a sustainably profitable gold and copper business focused on world-class assets. We did not have to buy them at a premium: they were embedded in the merged portfolio of Barrick and Randgold and we just had to unlock their value,” he said.
“We have six Tier One gold mines with more in the making and our long-term plans are based on quality orebodies with industry-leading grades that drive improving cost profiles. Alongside our peerless gold portfolio, we are also building a substantial copper business, both to feed the rising demand for this strategic metal and because it enhances our growth optionality to include copper-gold porphyries.”
Bristow listed three world-class gold opportunities, all in Nevada, which he described as the world’s premier mining jurisdiction. The recently commissioned Goldrush is ramping up to a targeted 400,000 ounces per annum by 2028. Bordering on Goldrush is the 100% Barrick-owned Fourmile, which is returning grades double those of Goldrush and is another Tier One mine in the making.4 Still in Nevada, the 14-million-ounce Leeville project is developing into a major growth driver that could double or triple Carlin’s reserves, extending its life beyond 2045.
On the copper side of the business, two transformative projects are on track for first production in 2028. The Reko Diq copper-gold project in Pakistan is designed to produce 400,000 tonnes of copper and 500,000 ounces of gold per year in the second phase of its development.4 The Lumwana Super Pit project in Zambia will double the mine’s production over a +30-year life.
“Mining is a consumptive industry which requires constant replacement of the ounces it depletes. Barrick leads the industry in orebody expansion and has more than replaced the gold reserves it has mined over the past five years. Even more significantly, the ounces that have been added are at the same or better grade than the reserves that were mined,” Bristow said.
He noted that since 2019, Barrick had also built an industry-leading balance sheet, reducing net debt by $3.5 billion, investing $11.2 billion in +10 year life-of-mine plans for its key mines and returning more than $5 billion to shareholders. Its strong operating cash flows would provide the financial flexibility to fund its growth projects.
“Considering all this, it’s extraordinary how undervalued Barrick’s shares are. Based on analysts’ consensus net asset value calculations, the value of just our interest in Nevada Gold Mines and our copper portfolio almost exceeds our current market capitalization.7 This means that the rest of our business is only valued at $3.3 billion, and that includes our interest in three Tier One gold mines outside Nevada, the world-class Fourmile project, and the development projects in the pipeline.7 It also does not take into account our exploration teams’ unparallelled success in discovering new ounces. At our current share price, the case for investing in Barrick should be compelling,” he said.
