Showing posts with label Barrick Gold Corp. Show all posts
Showing posts with label Barrick Gold Corp. Show all posts

Monday, October 29, 2012

African Barrick lowers guidance after ‘challenging’ quarter

London-listed African Barrick Gold has again lowered its production guidance, citing illegal mining activities at North Mara and lower-than-planned production levels at Bulyanhulu and Buzwagi.
The Tanzania-focused mining company said on Friday its 2012 production would be between 5% and 10% below the bottom of its previous range of 675 000 oz to 725 000 oz of gold.

African Barrick Gold, a unit of Canada’s Barrick Gold, is forecasting a cash cost of $900/oz to $950/oz for the financial year.
Last year, the gold miner produced 688 278 oz, which was below its forecast of 700 000 oz to 760 000 oz. In 2010, delays and fuel theft at Buzwagi forced the company to lower its forecast twice.

CEO Greg Hawkins said that the September quarter had been a challenging three months for African Barrick.

“We were expecting to see a step-up in production levels leading into the end of the year and 2013, but there have been production interruptions and issues across each of our sites.

“The ramp-up in grade at North Mara is positive and expected to continue in fourth quarter, but we have been disrupted in our efforts to mine it at a normal rate given an increase in illegal mining operations,” he said.

African Barrick produced 147 786 oz for the third quarter, which was in line with the production from the first and second quarters of the year, but a 19% decrease compared with the corresponding quarter in 2011.

The miner also reported revenue of $265-million for the period, $89-million lower than the $354-million in the third quarter of 2011, owing to lower mining activity at its operations in Tanzania.

Although production increased at North Mara by 17%, this was more than offset by the impact of lower mined grades at Buzwagi stope and mobile equipment availability issues at Bulyanhulu, and batch milling at Tulawaka.

At Bulyanhulu, mining performance was impacted by reduced stope availability, lower availability of underground mobile equipment and paste filling delays, which resulted in lower ore tons hoisted.

Mill throughput was 9% lower than the third quarter, as a result of the lower mining activity in the quarter, leading to lower production. Buzwagi saw a marked improvement in equipment availability, which led to tons mined being 53% higher than in the third quarter of last year and a 22% improvement over the previous quarter.

Further, the planned focus on the waste-stripping programme has resulted in mining of lower-grade areas of the pit and, therefore, a decrease in the head grade delivered to the plant. “It is anticipated that this would enable higher grade zones to be accessed later this year and into 2013,” the company said in a statement.

Throughput levels were also lower than expected owing to unplanned mill maintenance. At Tulawaka, there was an increased focus on underground development work aimed at extending the mine life. As a result, there was a 30% decline in ore tons mined compared with last year’s comparative period.

“Together with the lack of surface stockpiles, this led to continued batch processing of the underground material blended with mineralised waste,” it added.

At a group level, gold sales were in line with production, and 20% lower than last year, owing to the decrease in production.
Meanwhile, Hawkins said African Barrick’s acquisition of an exploration package in Kenya represented an important first step in expanding the business more broadly in Africa.

The company bought ASX-listed Aviva Corporation’s Aviva Mining Kenyan gold and base metals assets in a deal valued at A$20-million.

Edited by: Mariaan Webb

Wednesday, September 12, 2012

Barrick Gold lowers copper output on Saudi mine delay

The world’s largest gold miner Barrick Gold on Tuesday said it had lowered its copper production outlook for 2013 owing to the company’s Jabal Sayid project, in Saudi Arabia, not complying with the country’s safety and security standards.

CE Jamie Sokalsky told the Denver Gold Forum that the company was recently notified by the Saudi government that the $400-million project did not comply with the required safety and security measures, resulting in the company being restricted from using explosives at the mine.

He said Equinox Minerals designed the safety and security system to Western Australian standards, which differ to Saudi Arabia standards. This would prevent the company from mining the deposit in 2013, prompting the company to lower its copper production guidance to between 500-million and 550-million pounds of copper, down from the initial estimate of 600-million pounds.

Barrick expected to be in full compliance by 2014. The project was expected to produce 100-million to 130-million pounds of copper within its first five years of production. The company acquired the project as part of its $7.5-billion acquisition of Equinox in 2011.

Further, Sokalsky said the company was managing its free cash flow with acute oversight and projects that did not meet free cash-flow hurdles would be either deferred, shelved or divested.

The company had indeed already identified some projects that did not meet criteria for further investment. One such example was Barrick’s decision to divest African Barrick Gold, for which the company had already entered into preliminary talks to sell its 74% interest.

Sokalsky said the company was looking forward to completing mine development at the Pascua-Lama project, where significant cost overruns had taken place, owing to the prospect of significant cash flow being unlocked when production starts. The miner said lower productivity and persistent inflationary and other cost pressures had resulted in a 50% to 60% increase in capital costs at its $5-billion Pascua-Lama project, straddling the Chile/Argentina border.

The company had also decided to shelve two of its largest development projects, Donlin Gold, in Alaska, and Cerro Casale, in Chile.

Barrick had lowered its 2015 gold production guidance by one-million ounces to eight-million ounces as it shelved projects, saying that the projects were not done away with, but rather that it would revisit them when conditions favoured it.

The company’s Toronto-listed shares closed at C$38.40 on Tuesday.

Edited by: Creamer Media Reporter

Wednesday, June 6, 2012

Regent ousted as Barrick Gold CEO

Barrick Gold said Wednesday it has replaced CEO Aaron Regent because of the company's poor share price performance

Barrick Gold Corp , the world's largest gold miner, has ousted Aaron Regent as chief executive, saying it was frustrated that its stock has languished since he took the helm three years ago while bullion prices have surged.

The company said on Wednesday that Chief Financial Officer Jamie Sokalsky, a 1 9- year veteran of the company, will replace Regent, whose tenure was marred by what some analysts consider to be strategic mistakes.

But investors were not immediately impressed by the surprise shuffle, and Barrick shares had turned negative by midday after rising 2 percent at market open.

The stock has risen just 3.9 percent since the market close on Jan. 15, 2009, the day before Regent became chief executive at the age of 43. By comparison, the S&P/TSX Global Gold Index, which includes Barrick, has risen 18.8 percent in the same period.

Barrick was hit particularly hard in the aftermath of its C$7.3 billion ($7.02 billion) takeover of Equinox Minerals last year. The deal boosted the company's exposure to the cyclical copper market without adding gold assets. Some shareholders saw that as a misstep.

"It could be that they're looking for a fall guy after the disastrous Equinox acquisition, which we believe they overpaid for by about 50 percent," said George Topping, a mining analyst at Stifel Nicolaus, an investment banking and brokerage firm in Toronto.

The Lumwana copper mine in Zambia, acquired as part of the Equinox takeover, has struggled with high costs and operational hiccups.

Topping speculated that the company could have more bad news to come.

"You've got to ask yourself, why now?," he said. "Does it mean perhaps that there's more problems, particularly with the Equinox assets, that are still to come?"

GOLD SOARS

Analysts and investors have said the stock's lackluster performance may also reflect what they consider to be a less-than-generous dividend. Gold miners, reaping record profits on the high price of gold, are facing mounting pressure to give more cash back to shareholders.

Barrick pays a quarterly dividend of 20 cents a share. Newmont Mining Corp, by comparison, pays a quarterly dividend of 35 cents a share, and its shares have risen more than 25 percent since the beginning of 2009.

In the same period, gold prices have climbed more than 85 percent, hitting a high of more than $1,920 an ounce last year as uncertainties over the global economy pushed investors into bullion.

Canaccord Genuity analyst Steven Butler said Regent's decision to spin out the company's African resources into a separate company, African Barrick Gold, has failed to ignite the gold miner's share price.

"Management has also been too vague and unclear on how it will attain its stated medium-term production goal of 9 million ounces a year," said Butler in a note to clients.

Barrick plans to produce 7.3 million to 7.8 million ounces of gold this year, plus some 550 million pounds of copper.

The company is building the Pueblo Viejo gold mine in the Dominican Republic and the massive Pascua Lama gold-silver project on the border between Chile and Argentina. Production from the new mines is due in 2012 and 2013 respectively.

SHIFTING ROLES

Toronto-based Barrick, which declined interview requests from Reuters, said in a statement that Sokalsky would replace Regent as president and CEO and on the Barrick board of directors, effective immediately.

"We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance. Our board has every confidence in Jamie's experience and commitment to take our company forward," founder Peter Munk said in the statement.

Sokalsky joined Barrick as treasurer in 1993 and became CFO in 1999. He previously worked at grocery holding company George Weston Ltd for 10 years.

Barrick named an existing director, John Thornton, as co-chairman of the board, a role he will share with Munk.

African Barrick said its parent would nominate a replacement to its board after Regent's departure. Regent was non-executive chairman of the 74 percent-owned Africa-focused subsidiary.

John Hughes, a senior mining analyst with Desjardins Securities in Toronto, said the CEO shuffle could play out well among traditional Barrick investors, who are looking for a pure play gold company, not a diversified miner.

The departure of Regent could be seen as a strategic shift in focus back to the yellow metal, he said, adding that while gold prices rose sharply last year, most gold miners lost value.

"They cited share price, but do you know how many CEOs would be out the door for the same reason, in the event that was the only concern that the board may have had?," said Hughes. "We would have dozens of companies that would be looking for new CEOs."

Barrick shares slid 1.5 percent to C$43.04 on the Toronto Stock Exchange on Wednesday at midday.

Source: Reuters 2012

Sunday, May 27, 2012

Barrick Gold's Mill Canyon deal extends Cortez mine area by 7,000 acres

The world's top gold miner's deal with Victoria Gold to buy the latter's Mill Canyon property in Nevada extends its holdings around its prolific, low cost Cortez gold mine.

Barrick Gold Corp, the world's largest gold miner, will pay $24 million to buy the Mill Canyon property in Nevada from Victoria Gold Corp, extending the property it owns in the vicinity of its prolific Cortez mine by about 7,000 acres.

The acquisition fits well with Barrick's stated goal of focusing on developing its own pipeline of projects, rather than turning its attention toward major acquisitions, which typically carry higher costs and risks.

Cortez, one of Barrick's largest and lowest-cost operations, last year produced about 1.4 million ounces of gold at cash cost of $245 each. It contains reserves of about 14.5 million ounces.

The site is also home to one of Barrick's most promising new discoveries, Goldrush. Barrick has already delineated a resource of more than 7 million ounces at Goldrush and views it as one of its most significant finds in decades. It expects to boost its estimate on the size of the asset further in coming months.

Barrick already controls about 230,000 acres around Cortez.

The Mill Canyon property consists of claims that Victoria Gold bought from Newmont Mining Corp in 2003. N ewmont, the world's No. 2 gold miner, has a back-in right to earn a 50 percent interest in the property.

In a statement on Friday, Victoria Gold said the sale of Mill Canyon, combined with the recent sales of some of its other projects in Nevada, would allow it to fund the development of its flagship Eagle Gold project in Canada's Yukon Territory. (see Victoria Gold asset sale garners C$49m to help fund Yukon gold mine)

Victoria expects to raise about C$49 million from Mill Canyon and from the recent sales of its Cove and Relief Canyon properties. That excludes some potential payments and royalties that could add a further C$25 million.

The sale of Relief Canyon has already closed; the sales of the other two assets are expected to close in June.

Barrick will pay $19 million upfront for Mill Canyon and interests in the nearby Santa Fe property. It will pay Victoria a further $5 million should Newmont's right to back into a joint venture on the property expire or be eliminated.

Shares of Victoria Gold closed 2 Canadian cents higher at 25 Canadian cents on the TSX Venture Exchange on Friday.

Barrick shares closed 1.2 percent higher at C$40 on the New York Stock Exchange, while its Toronto-listed shares closed 1.8 percent higher at C$41.24.

Source: Reuters