JOHANNESBURG (miningweekly.com) – The all-time-high second-quarter (Q2) gold price is less about the forecast decline in interest rates and more about risk-on amid global economy wrestling and world deglobalisation, Barrick president and CEO Dr Mark Bristow highlighted this week, following his round-the-world travel.

“China is certainly going to recover – but not back to where it was,” Bristow forecast during the Q2 results presentation of the New York- and Toronto-listed gold and copper mining company. (Also watch attached Creamer Media video.)

Without investment, supply chains and more challenged economies stand to be hurt and a future created in which "the rich continue to get richer and the poor get even poorer,” said Bristow, in reporting 6%-higher Q2 gold production to more than one-million ounces, and 22% higher copper production to 107-million pounds.

Barrick’s operating cash flow rose by 7% to $832-million, net earnings jumped 143% to 17c a share, and adjusted net earnings increased by 36% to 19c a share, with the quarterly dividend maintained at 10c. Year-on-year, the total recordable injury frequency rate was 8% lower and greenhouse gas emissions 12% down.

The call for new advances was driven home to Bristow at the mining summit held by Barrick in Islamabad, Pakistan, where the company’s Reko Diq project is being progressed. Bristow found interesting the realisation that things need to change amid criticism of 70 years of mistakes having taken place in Pakistan, despite the country having everything needed to get on top of things.

“It’s got the people, by far, but it needs to care about them,” said Bristow, drawing on the addresses of leadership at the mining summit, which emphasised the country's need to focus on development and not just exploitation.

He found a great need for Pakistan to attract foreign investments, with Pakistan’s Minister of Petroleum spotlighting the country’s new strategy of turning red tape into a red carpet for investors – “and that’s very interesting and a massive transition in a country that has many challenges".

NEED FOR WORLD RELOOK

Barrick, through merging with Randgold Resources, has more than a quarter century of asset-building history in West Africa.

Against that background, Bristow made these points: “We’ve seen in West Africa what happens when we neglect developing countries. We’ve spoken many times to some of the major economies in the world about West Africa and the importance of staying there and engaging in conversation and working on investment, instead of just lecturing.

“The elected governments right across that region have failed and we don’t seem to want to do anything about it except lecture, and so there’s a big need for the world to relook at how it manages its business,” Bristow pointed out.

As far as the policy towards mining and metals is concerned in the US, there is a need in Bristow’s view for reflection on just exploiting other people’s natural resources rather than developing some of its own, “and engaging and supporting a real mining industry, because that’s what’s required if we’re going to have a better world ahead of us”.

“There certainly is conversation starting around those topics and I’ve spoken a lot about the importance of partnerships and development across the world and the real results that are starting to materialise in Barrick’s policy of driving partnerships with our host countries around the world.”

Regarding exploration, Bristow outlined how Barrick would be able to share real borehole results by the end of Q3 because of its success with the drill bit and community development.

Well ahead of actual mining, Barrick has already established two primary schools in Pakistan’s Balochistan province that have a more-or-less 50:50 split between boys and girls, which is seen as being a considerable achievement given the current gender retrogression in neighbouring Afghanistan.

As Barrick has done at its Kibali gold mine in the Democratic Republic of Congo, Balochistan people are being educated as future operators, well ahead of the commencement of mining at Reko Diq, the proposed multi-generational mine.

AFRICA MOST CONSISTENT PERFORMER

Bristow acknowledged Africa as “by far” the most consistent performer in Barrick’s portfolio. “Africa’s not only a reliable contributor to the bottom line, but also host to a wealth of future gold and copper opportunities."

By way of example, he pointed out that Barrick’s 80%-owned Loulo-Gounkoto complex in Mali delivered its usual strong performance and is on track to achieve its 2023 guidance as it continues to invest in greening its power supply grid, as well as replenishing its reserves and promisingly exploring for more. While this has been, in Bristow’s words, “a spectacular asset", Mali is not without its challenges. 

“We’ve had a constructive relationship with successive governments through some very turbulent times and in recent weeks I’ve personally engaged with the key members of the current leadership about their proposed new mining code, and I’m very optimistic that, as in the past, we’ll find a mutually acceptable way to keep gold shining for Mali,” Bristow commented.

"We’ve been operating there for 26 years and in that time we built Loulo-Gounkoto into one of the world’s ten largest gold mining complexes and the country’s largest taxpayer and the largest employer outside of government."

Kibali’s substantial Q2 production improvement has set it back on course to achieve its full-year guidance and underground development is supporting its new ten-year mine plan.

In Tanzania, the joint venture with the government is seen as an example for the thesis that mining can be the force that makes undeveloped countries investable, “and it’s great to see BHP putting its toe in the water in Tanzania on the nickel project”.

North Mara and Bulyanhulu were cited as examples of the top-tier mining status that can be achieved when a mining company and its host country work together to develop its natural resource endowment.

In Zambia, the Lumwana copper mine is well set to achieve its guidance for the year with a strong lower-cost second-half predicted.

“Lumwana has the potential to be equivalent to our share of the Reko Diq, that’s how significant it is.

“At the time of the merger, no one believed in Lumwana. It was a high-cost producer, making no money. Its subsequent transformation into a potential tier 1 asset in our portfolio is another one of Barrick’s big success stories, and we’re talking about significant reserve conversion on the back of the feasibility study we’re busy with,” said Bristow.

Lumwana’s projected expansion involving a new super pit will add substantially to copper production and take mine life to beyond 2060, with pre-construction starting in 2025 and advancing the expansion ahead of Reko Diq’s delivery of first concentrate.