Barrick drops Long Canyon sale plan | mining

ADELLA HARDING Elko Daily Correspondent

Barrick Gold Corp.’s adjusted net earnings for the second quarter totaled $419 million, or 24 cents per share, and Barrick reported Long Canyon Mine is not being sold after all.

The company also posted Nevada Gold Mines production of 751,000 ounces in the quarter on a 100% basis.

Barrick said that NGM is no longer exploring the sale of the Long Canyon Mine in Elko County but is reviewing ways to optimize the asset’s mine life extension, including required permitting activities. The statement was in Barrick’s Aug. 8 management discussion and analysis for the second quarter.

Barrick operates NGM and holds 61.5% of the joint venture, and Newmont Corp. holds the remaining 38.5%.

The Long Canyon Mine between Wells and West Wendover is a smaller, open pit operation that Newmont opened six years ago but is now part of NGM. The joint venture stated back in March of this year that it was looking at selling the mine.

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Barrick’s president and chief executive officer, Mark Bristow, said in the earnings webinar that Long Canyon didn’t fit NGM’s portfolio for Nevada, so NGM thought the mine might be an opportunity for another company.

However, he said NGM was “not in the frame of a fire sale” for Long Canyon as slipping gold prices impacted a potential sale. He said NGM will now look again at a possible underground mine there.

Barrick’s second quarter adjusted net earnings were down from $513 million, or 29 cents per share, in the 2021 quarter, while net earnings were $488 million, or 27 cents per share, up from $411 million, or 23 cents per share, in the second quarter of last year.

Bristow said in the earnings call that due to the war in Ukraine and crisis in eastern Europe, the company continues to deal with higher energy costs and supply chain problems, but earnings beat analyst estimates.

Zacks Consensus estimate was for Barrick’s afternoon earnings adjusted to be 23 cents per share, and Barrick’s shares in early trading on Aug. 8 were at $16.41, up 81 cents.

Barrick’s averaged realized gold price in the second quarter was $1,862 per ounce, compared with $1,820 per ounce in the second quarter of last year but prices were heading down toward the end of the second quarter. The New York spot price in early afternoon trading on Aug. 8 was $1,787.80 per ounce.

Bristow also said Barrick was on track to achieve its gold production forecast for this year of 4.2 million to 4.6 million ounces, and copper production is expected to be between 420 million and 470 million pounds in 2022.

Barrick’s board announced a dividend of 20 cents per share on Aug. 8, the same amount as paid in the first quarter of this year. Graham Shuttleworth, executive vice president and chief financial officer, said in the news release that “on the back of our strong operating performance, we are once again able to provide a leading dividend to our shareholders, whilst still maintaining a strong balance sheet.”

Toronto-based Barrick also reported that during the second quarter the company repurchased $182 million in shares under the $1 billion buyback program introduced earlier this year. Bristow said this was the first buyback since program approval.

Nevada production

The Nevada Gold Mines production of 751,000 ounces for both joint venture partners combined is up from 747,000 ounces produced in the 2021 quarter, with 462,000 of those for Barrick’s 61.5% of NGM.

The 100% production for the NGM operations included:

— 394,000 ounces from Carlin, up from 373,000 ounces in the 2021 quarter

— 158,000 ounces from Cortez, down from 187,000 ounces last year

— 122,000 ounces from Turquoise Ridge, up from 109,000 ounces in the 2021 quarter

— 43,000 ounces from Phoenix, up from 37,000 ounces in the second quarter of last year

— 34,000 ounces from Long Canyon, down from 41,000 ounces in the 2021 quarter.

Cortez production is expected to be higher in the second half of the year as the mine moves from the Pipeline open pit to Crossroads, and Bristow said there is “very high-grade ore” that will be coming in the fourth quarter.

He said the Turquoise Ridge underground operations are “really doing well now,” and the underground is “ramping up as per the plan.” The third shaft is progressing on time and budget.

Meanwhile, NGM is awaiting a record of decision from the US Bureau of Land Management to start production mining at its Goldrush Project at Cortez, where test ore is already being mined from the underground project. The BLM issued a draft environmental impact statement in the second quarter for Goldrush.

Barrick stated in the earnings report that the decision is expected in the first half of 2023, which is later than expected, and Bristow said that “in the US allowing takes time.” He said Barrick, BLM and consultant teams are engaged in the process that is now in the comment period.

He also reiterated that eventually when Goldrush is in production the Cortez operations will produce one million ounces a year.

Companywide, Barrick produced 1.04 million ounces of gold in the second quarter, just slightly more than in the second quarter of last year, and all-in sustaining costs were $1,212 per ounce, up from $1,087 per ounce in the 2021 quarter.

Copper production totaled 120 million pounds, up from 96 million pounds last year, and all-in sustaining costs were $2.87 per pound, up from $2.74 per pound in the 2021 quarter.

Exploration also continues at NGM operations, and Bristow said there are a “wealth of prospects in Nevada,” including 700,000 maiden inferred resources at North Leeville north of Carlin. The North Turf deposit is heading north toward North Leeville, too.

In the Barrick earnings report, the company said that at existing NGM operations, brownfields exploration is replacing reserves depleted by mining and identifying new targets while the greenfields team is looking for new prospects.

The company additionally stated that North American exploration has extended from Nevada to active projects in Canada, and there is an intensified exploration effort in Latin America, Africa and the Middle East. Bristow also reported that Barrick is remodeling the Hemlo Mine in Canada and considering restarting the open pit mine there.

Bristow said in the webinar that Barrick now has prospects “in nearly all the world’s gold and copper regions,” including Reko Diq in Pakistan, where Barrick will be 50% owner and operator of the proposed mine with a 40-year mine life.

Barrick’s expansion project at Pueblo Viejo in the Dominican Republic is progressing but faces supply chain delays, he said, and the earnings report states that the new tailings storage facility will expand the mine’s life to 2040 and beyond.


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