JOHANNESBURG (miningweekly.com) – Discovery and development are the only true drivers of value creation in the mining industry, Barrick president and CEO Dr Mark Bristow highlighted on Wednesday, when this standout gold and copper mining company once again declared a dividend in reporting its first-quarter results that position the company well to meet its full-year targets.

The year-on-year net earnings per share of the New York- and Toronto-listed company headed by South African-born Bristow increased by 143% for the quarter, while adjusted first-quarter net earnings per share grew by 36%. (Also watch attached Creamer Media video.)

Barrick’s investment thesis is that its embedded ability to grow copper and gold production will amplify its profitability in a rising commodity market.

“Exploration is to a mining company what research and development is to the pharmaceutical industry,” Bristow reiterated amid gold production by Barrick ramping up steadily and a globally significant organic copper growth project on the way in Africa.

Foreseeing the emergence of copper’s critical importance to the greening of the global grid, Barrick made the expansion of its copper portfolio a strategic priority at the time of its merging five years ago with Bristow’s highly successful Africa-linked Randgold Resources.

While global pursuit of renewable energy is boosting copper prices, with the red metal rising by 15% in the first quarter of this year, unprecedented conflicts, plus economic uncertainty have driven the gold price up 15% last year, and by the same percentage so far this year, taking the precious metal to record highs and confirming once again its status as the ultimate safe haven asset.

Disappointing for Barrick and its peers, however, is that their share prices are lagging the gold price, pointing to more belief in investment in gold than in gold producers, even with change accelerating across the world, uncertainty becoming more permanent, and chaotic events a lot more common, Bristow noted in his first-quarter presentation covered by Mining Weekly.

Meanwhile, Barrick is continuing its search for tier-one opportunities across the world's gold and copper regions, with the company’s highly successful brownfield and greenfield exploration driving Barrick’s unparalleled ability to replace its mined reserves and greenfield programmes expanding opportunities around the globe.

Even in mature gold districts, Barrick is managing to advance pipelines of exciting greenfield targets.

Continued work on its orebody models continually spotlights significant, untested potential, demonstrating how the updating of geological models can be a very fruitful stimulator of reserve growth.

Ahead of consensus for the quarter, Barrick’s attributable earnings before taxes, depreciation and amortisation margin rose by 5% to 41% and the operating cash flows remained strong at $760-million.

The quarter dividend was maintained at 10c a share and a strong balance sheet is underpinning the company’s organic growth projects, enabling a significant rising production profile to be projected for the next five years and beyond.

AFRICAN COPPER MINING REVIVAL

While the copper industry as a whole has traditionally suffered from under-investment, the search for new resources to boost production has now accelerated.

But the long lead times needed to turn discoveries into developed mines mean that supply is unable to meet the growing global demand, driven by the worldwide energy transition to stave off devastating climate change.

A thorough review of its global assets has turned Lumwana in the Central African State of Zambia, for example, into a large copper project that, once again, has a lower cost, organic rather than riskier acquisition foundation.

In a manner positive for all stakeholders, the Barrick team restructured and re-engineered the struggling Lumwana operation back to health and then embarked on a super pit expansion project that will transform Lumwana into one of the world’s largest copper mines, with a projected production of around 240 000 t a year over a life-of-mine of more than 30 years.

As is common Barrick practice, and which benefits all stakeholders, Barrick engages meaningfully with host governments and Lumwana’s very timely revival is no exception and coincides with the drive of the Zambian government to revive the country’s copper industry amid global demand being poised to significantly outstrip supply.

The accelerated feasibility study under way on Lumwana is scheduled for completion by the end of this year, with construction works expected to start next year.

AFRICAN GOLD MINING REVIVAL

The Loulo district in Mali, where the Randgold merging enabled Barrick to inherit the former Randgold’s highly successful Loulo-Gounkoto gold discovery and development, remains highly prospective.

Deep framework drilling there is targeting the potential for large-scale extensions on repetitions of the main high-grade Yalea system.

Results confirm that the Yalea system is still open with high-grade mineralisation present at depth, while shallower drilling to the south is returning encouraging intersections from the system’s main structure.

Meanwhile, at Kibali, in the Democratic Republic of Congo, exploration during the quarter further defined an immediately adjacent higher-grade trend that is similar to the massive Archean Kibali KCD deposit, on which Kibali was built by Randgold ahead of the merger.

Numerous high-grade intersections and potential load shapes are being modelled, which Bristow affirms could deliver a substantial satellite project.

CLOSING MINE NOW FLAGSHIP

In the Dominican Republic, Pueblo Viejo, a mine that was on the verge of closure five years ago, is now Barrick’s flagship organic growth project, which will increase in sustained production at 800 000 oz/y or more of gold for at least 20 years. This follows a figuring out of how to unlock its vast reserve and secure its long-term future as a tier-one gold asset that is very important for the economy of the Dominican Republic.

GREEN ENERGY GROWTH

At Loulo-Gounkoto, the use of solar energy is increasing with a 72 MW solar electricity facility and 38 MW battery energy storage system now connected to the West African complex’s micro power grid.

Solar power accounted for 28% of the total energy blend used in the first quarter of 2024, which is up from 14% in 2023 and 9% in 2022.

Energy costs were down $6-million in the first quarter with this shift to solar away from heavy fuel oil.

At Kibali, three hydropower stations provided most of the mine’s power last year. At an average cost of $0.04 per kilowatt-hour, the hydropower blend is 90% cheaper than diesel fuel.

The current expansion of the mine’s solar plant will increase the renewable energy use from 81% to 85%, with the mine running solely on renewable power during the six-month rainy season.

In South America, Argentina’s Libertadores powerline is supplying renewable power to Barrick’s Veladero gold mine from neighbouring Chile’s national grid, reducing greenhouse-gas (GHG) emissions and adding cost efficiencies.

The powerline’s first full year of operation has helped Veladero to beat its cost guidance last year.

A solar plant project at Pueblo Viejo in the Dominican Republic is also underway, with Barrick targeting an overall 30% reduction in GHG emissions by 2030, against its 2018 baseline, with the goal of achieving net-zero emissions by 2050.

In North America, 50% of the 200 MW solar electricity facility has been commissioned at Nevada Gold Mines, with the initiative being supported by US government incentives of more than $100-million, including incentives for locally manufactured solar power cells.

Formed in 2019 following the Randgold merger, Nevada Gold Mines is a joint venture between Barrick and gold mining company Newmont through the combination of their gold mining assets across northern Nevada. The assets in Nevada Gold Mines include 10 underground mines and 12 surface mines as well as related facilities.

With 100 MW of energy capacity in this first phase, the solar facility began transmitting power to Nevada Gold Mines’ operations in April. When the second and final stage is completed in the second quarter of 2024, adding the other 100 MW of power, the solar array will have the capacity to produce between 15% to 20% of Nevada Gold Mines’ yearly power demand.

That will reduce the yearly GHG emissions of the mines by 8% and Barrick’s overall emissions by 5%.

TRAINING ACADEMY IN AFRICA

In Tanzania, Barrick has opened a training academy at the old Buzwagi gold mine.

The academy, which is gearing up to also cover financial leadership, advanced computer literacy and safety courses, will be training more than 2 000 supervisors and superintendents in the next 24 months.

The opening of the academy follows the construction of an airport terminal at Buzwagi’s Kahama airstrip in January this year, which is expected to be a catalyst for regional economic growth.

The airport terminal and academy are part of Barrick’s plan to turn Buzwagi into a special economic zone (SEZ) that studies show has the potential to create 3 000 jobs a year sustainably.

With the conversion of the mine into an SEZ, investors have started setting up manufacturing industries within the government-approved area.

The Buzwagi mine, which was an economic contributor for close to 15 years, is being transformed into an alternative productive asset with an infinite horizon.

Barrick regards mine closure as being as important as new mine building.

JAMAICA EXPLORATION

Subsidiary Barrick Gold has entered into an exploration earn-in agreement with Geophysx Jamaica, which provides Barrick with access to 4 000 km² of land positions.

Barrick will have the right to work with private company Geophysx to earn up to an 80% joint venture interest in designated properties upon fulfillment of certain spending obligations and study-deliverable milestones.

Barrick will act as the operator, in partnership with Geophysx, leveraging Geophysx’s existing personnel, knowledge, facilities and equipment. Geophysx is headed by founding MD Bobby Stewart.

Geophysx, which has been engaged in Jamaican greenfield exploration in the last six years, has conducted geochemical sampling, geological mapping, and industry-leading airborne geophysical surveys.

“We look forward to partnering with the government of Jamaica to pursue projects for the benefit of the country and local communities,” said Bristow.

ELECTION OF DIRECTORS

At the election of directors on April 30, Bristow received the highest vote support of 99.7%, with the next highest of the nine directors at 98.49%.