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Digital innovation drives progress for Barrick

Workers spray shotcrete onto what will be the third set of underground portals into Barrick Nevada’s Cortez District mine. The company is still conducting exploration and permitting, but once in production, the underground operation could extend for decades.

TORONTO — Barrick Gold Corp. outlined plans and provided updates on four projects that have the potential to contribute more than 1 million ounces of gold per year starting in 2021. Three of the four highlighted projects are in Nevada, and the plan includes designating Turquoise Ridge as a core mine.

The company aims to maximize long-term value and grow free cash flow per share, with an uncompromising commitment to safety and environmental sustainability, working in partnership with host governments and communities, Barrick announced Feb. 22.

The assets are clustered in core districts throughout the Americas, and support a sustainable long-term production profile.

Nevada projects at Cortez Deep South, Goldrush and Turquoise Ridge have been approved, and are in execution. Optimization work on a sequenced project to extend the life of the Lagunas Norte mine in Peru remains underway.

Barrick is designating Turquoise Ridge as a core mine in recognition of the exceptional growth potential of the operation, facilitated by the construction of a third shaft, productivity improvements and an increase in processing capacity.

Maximizing value

Based on the company’s current asset mix, between 2019 and 2022, Barrick continues to expect average annual gold production to be between 4.2-4.6 million ounces, at an average cost of sales of $850-$980 per ounce, and average all-in sustaining costs of $750-$875 per ounce. Between 2023 and 2027, current plans indicate the potential for average annual gold production above 4 million ounces. This includes contributions from projects at Cortez Deep South, Goldrush, Lagunas Norte, Robertson, Pueblo Viejo and Turquoise Ridge.

In the near term, Barrick aims to strengthen its production profile through disciplined investment in brownfield projects and mine exploration drilling, supporting reserve replacement and the identification of new resources which, in many cases, can be quickly incorporated into mine plans, driving improvements in production and cash flow.

The core gold business is complemented by a substantial portfolio of copper assets, representing an additional source of cash flow and value. Barrick has 11.2 billion pounds of proven and probable copper reserves, and 11.7 billion pounds of measured and indicated copper resources.

Projects in execution

The construction of a third shaft at Turquoise Ridge, with an estimated initial capital investment of $300-$325 million has been approved by the company. Combined with additional processing capacity, this is expected to enable the mine to roughly double annual production to more than 500,000 ounces per year, at an average cost of sales of around $720 per ounce, and average all-in sustaining costs of roughly $630 per ounce. In addition to increasing annual production, the third shaft is expected to reduce operating costs, boost mining productivity rates, and increase total life of mine production by allowing for reduced cutoff grades. In January 2017, Barrick and Newmont Mining Corp. reached a new, seven-year toll milling agreement for ore processing at Newmont’s Twin Creeks facility, which will support the mine expansion. The agreement increases contractual annual throughput from 730,000 tons in 2017, to 850,000 tons in 2018 and 2019, and 1.2 million tons per year between 2020 and 2024.

Permits for the construction of a third shaft are in hand. Surface works and shaft sinking are expected to take place in 2018 and 2019, followed by equipping of the shaft in 2020 and 2021, with initial production from the new shaft expected to begin in 2022, and sustained production expected to begin 2023.

Located in the heart of northern Nevada—one of the world’s premier jurisdictions for gold mining—Turquoise Ridge has 5.9 million ounces of proven and probable gold at an average grade of 15.56 grams per ton—the highest reserve grade in the company’s operating portfolio, and among the highest in the gold industry. The mine added 2.1 million ounces of proven and probable gold reserves in 2017 through drilling, and the deposit remains open in multiple directions, including at depth.

Cortez Deep South

The company plans to expand mining into the Deep South area below currently permitted levels of the Cortez Hills underground mine, bringing forward production.

The Deep South project will utilize infrastructure which has already been approved under current plans to expand mining in the Lower Zone of the Cortez underground mine, including the new Rangefront twin declines and other underground infrastructure already under construction.

Permitting for Deep South was initiated in 2016 with the submission of an amendment to the current Mine Plan of Operations to the Bureau of Land Management, and is expected to take approximately three to four years, including the preparation of an Environmental Impact Statement. A record of decision is expected in the second half of 2019, followed by two years of construction, with initial production from Deep South in 2022.

Goldrush

The company plans to develop an underground mine at Goldrush, which is on track to become Barrick’s newest mining operation in the company’s core district of Nevada. Decline construction, detailed engineering, and permitting are expected to take place between 2018 and 2020, with construction and initial production expected between 2021 and 2022, and sustained production expected from 2023. The first phase of the project involves the construction of an exploration twin decline to provide access to the orebody at depth, which will enable further exploration drilling, as well as the conversion of existing resources to reserves. The exploration declines are permitted and can be converted into production declines in the future.

Goldrush currently has proven and probable gold reserves of 1.5 million ounces and measured and indicated gold resources of 9.4 million ounces, with significant potential to identify additional resources once underground access to drill the deposit is established. In addition, the company is drilling the nearby Fourmile target north of the Goldrush discovery. This area is geologically similar to the high grade Deep-Post and Deep-Star deposits in the Goldstrike area. Early drilling has intersected mineralization well above the average grade of the measured and indicated resources at Goldrush. Drilling to date suggests Fourmile and Goldrush may be part of a continuous 4-mile-long mineralized system encompassing both deposits.

Robertson property

In June 2017, Barrick completed the acquisition of the Robertson property and other claims in Nevada from Coral Gold Resources. The Robertson property is adjacent to Cortez, located less than 4 miles north of the Pipeline mill. If successfully brought into production, material from the project would provide an additional feed for the Cortez mill, with the potential to extend open pit operations in the Cortez District. Robertson also has processing synergies with the Deep South underground expansion project at Cortez. In addition, the land package contains a number of promising near-mine exploration opportunities, as well potential new exploration targets in this highly prospective and prolific district.

Brownfield evaluation

The company plans to extend the mine life of Lagunas Norte in Peru through sequenced installation of mill, carbon-in-leach, flotation and autoclave processing facilities.

In 2017, Barrick completed an initial scoping-level study for a plant expansion at the Pueblo Viejo mine in the Dominican Republic that would increase throughput by 50 percent to 12 million ton per year, allowing the mine to maintain average annual production of 800,000 ounces after 2022.

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