Looking like we have a growth company here again (ggggggggg)
We better start looking for crow to boil up and feed to the naysayers here :-))
FEBRUARY 24, 2004 - 01:13 ET
Barrick Provides Update on Building New Mines
NEW YORK, NEW YORK--
All Amounts in United States dollars
Barrick Gold Corporation provided an update on its new mines
during a day-long presentation to the investment community held
in New York City, February 24, 2004.
The mines - Veladero (Argentina), Alto Chicama (Peru), Cowal
(Australia) and Tulawaka (Tanzania) - are all planned to enter
production between Q1 2005 and Q1 2006. They are expected to
drive the Company's growth profile to a target of 6.8-7.0 million
ounces of gold production in 2007. This represents a 40% increase
from the anticipated production level of 4.9-5.0 million ounces
in 2004. Overall, higher production and lower costs are expected
in the early years from these new mines. Barrick expects to make
a development decision on its Pascua-Lama project in
Chile/Argentina in the second quarter of this year and production
is projected as early as 2008. Pascua-Lama contains proven and
probable gold reserves of about 17 million ounces of gold, as
well as and about 580 million ounces of contained silver.
Senior management outlined progress and anticipated timelines at
its new generation of mines, reviewed corporate strategy through
2007 and beyond, and discussed how Barrick's financial and other
strengths allow the Company to meet today's gold industry's
growth challenges.
2004 a Year to Focus on Building New Mines
"Our focus for 2004 is to build these new mines," said Greg
Wilkins, President and Chief Executive Officer. "This should
result in a 40% increase in Barrick total production over the
period 2004-2007, at an expected total cash cost of under $200
per ounce."
"We have the global scope, the technical and international
development experience, the financial strength, and the
high-quality reserve and production base for this undertaking,"
added Mr. Wilkins.
Barrick will use these strengths to execute its growth plan that
includes:
- bringing the new mines into production on time and on budget;
- harvesting the cash flow of existing assets including a
company-wide Continuous Improvement Program; and
- consistent funding of a substantial exploration program.
New Mine and Exploration Update
Barrick's new Chief Operating Officer, Peter Kinver, provided the
update for the new mines. He first noted that they would do more
than drive future production. "They will also position us to
replace and increase reserves through brownfield exploration -
exploration around existing operations - once their
infrastructure is in place," said Mr. Kinver. "In addition, the
lower operating costs associated with our new mines will allow us
to contain or reduce operating costs for our portfolio as a
whole. For 2004, I expect that we will increase reserves after
production."
Mr. Kinver said that the four mine projects demonstrate Barrick's
global reach, its success in obtaining permits quickly and
smoothly, its emphasis on projects with district potential, and
its ability to leverage prior experience for future benefit
through proven technologies and systems.
1. Veladero, San Juan Province, Argentina
- 11.1 million ounces of proven and probable gold reserves, 169
million ounces of silver;
- construction underway; first gold pour expected Q4 2005;
- estimated average annual production of 525-550,000 ounces of
gold at total cash costs of $155-165 an ounce over the first ten
years (excluding applicable export duties and exchange rate
fluctuations), with higher production and lower costs in early
years;
- expected capital cost of $460 million;
- open pit, valley-fill heap leach operation, with Merrill-Crowe
recovery (similar to Pierina, Peru);
- potential for growth below and between the pits and along
regional strike;
- part of the Veladero/Pascua-Lama District straddling the
Chile-Argentina border, one of the largest undeveloped gold and
silver mining districts in the world, with total proven and
probable gold reserves of about 28 million ounces.
2. Alto Chicama, La Libertad Region, Peru
- 7.2 million ounces of proven and probable gold reserves;
- Environmental Impact Statement submitted and hearings complete
with approval expected in Q2 2004, with construction to follow
immediately; first gold pour expected in Q4, 2005;
- estimated annual production of 535-560,000 ounces of gold at
estimated total cash costs of $135-145 an ounce, over the first
ten years, with higher production and lower costs in earlier
year, as mining begins on high-grade surface outcroppings;
- expected capital cost of $340 million;
- open pit, heap-leach operation, with Merrill-Crowe recovery
(similar to Pierina, Peru);
- the Alto Chicama district has excellent exploration potential
for the discovery of new deposits.
3. Cowal, State of New South Wales, Australia
- proven and probable gold reserves of 2.5 million ounces;
- construction underway; first gold pour expected in Q1 2006;
- estimated annual production of 220-230,000 ounces at estimated
total cash costs of $235-245 an ounce, over 9 years;
- expected capital costs of $270 million;
- open pit mine and carbon-in-leach recovery process;
- prospective region which is part of a well mineralized terrain
that includes the 20-million ounce; Cadia/Ridgeway mines.
4. Tulawaka, Tanzania
- proven and probable gold reserves of 368,000 ounces to
Barrick's account (70/30% joint venture);
- construction underway; first gold pour expected in Q1 2005;
- open pit mine and synergies with Barrick's Bulyanhulu mine in
Tanzania;
- estimated annual production of 70-75,000 ounces (Barrick's
share) at estimated total cash costs of $170-180 an ounce, over 4
years;
- Tulawaka is the most advanced of several potential development
projects in northwest Tanzania, including Bulyanhulu South and
Chocolate Reef.
Along with the regional exploration managers, Alex Davidson,
Executive Vice President Exploration, provided an update on the
Company's exploration program. For 2004, this program includes 95
projects in 9 countries, which fill Barrick's pipeline with
projects from grassroots exploration to reserve development.
Mr. Davidson said "We're looking for 2-million ounce, low-cost
gold deposits that resemble the ones at Goldstrike in Nevada,
Pierina and our other South American assets, and Kalgoorlie and
Bulyanhulu in Australia and Africa." He said the Company will
maintain its track record of success through its focus on:
- quality deposits in the most prospective regions;
- its continued, consistent investment in exploration;
- its commitment to a robust and well-balanced pipeline; and
- its ability to advance the best projects very rapidly.
Barrick and the Gold Mining Industry
Senior Vice President and Chief Financial Officer Jamie Sokalsky
told the audience that Barrick has the financial foundation to
support this period of growth. "We have the financial strength
and liquidity to fund our growth profile," he said, referring to
the Company's 'A' credit rating, its $1 billion in cash, its $1
billion undrawn credit facility, and its strong portfolio of
cash-generating mines. He also emphasized Barrick's disciplined
history of global risk management, and its proven ability to
finance projects in new regions of the world. For 2004, Mr.
Sokalsky noted that Barrick expects to invest $590 million in
capital expenditures for its new mines, excluding sustaining
capital at its operating mines.
Mr. Sokalsky reiterated Barrick's positive view on the outlook
for the gold price due to a confluence of factors including:
continuing US dollar weakness, low interest rates, global
reflation, geo-political tensions, and declining world-wide gold
production.
"Barrick is well positioned for growth. We have four new mines
and a pipeline coming right behind, led by the Pascua-Lama
project, exploration projects, plus the technical and development
expertise, and financial strength needed for growth," added Mr.
Wilkins.
In closing, Mr. Wilkins put the investment case for Barrick Gold
Corporation. "We will have strong organic growth and the lowest
cash costs among the top 5 producers through 2007. With these
four new mines, we are growing our production, not just replacing
it, while also lowering our costs. We believe that Barrick is
undervalued compared to its peers."
Barrick is building a new generation of mines around the globe,
has the lowest cash costs among major gold producers, and the
only A-rated balance sheet, with a cash position of nearly $1
billion. Barrick's shares trade under the ticker symbol ABX on
the Toronto, New York, London and Swiss stock exchanges and the
Paris Bourse.
Reserve calculations were prepared by employees of Barrick under
the supervision of Alex J. Davidson, P. Geo, Executive Vice
President, Exploration of Barrick, and/or Rene Marion, P. Eng.,
Vice President, Technical Services of Barrick. Reserves have been
calculated using an assumed long-term average gold price of
US$325 and an exchange rate of $0.57$US/$Aus. For additional
information on Barrick's reserve methodology see Barrick's most
recent Annual Information Form on file with Canadian provincial
securities regulatory authorities and the U.S. Securities
Exchange Commission. Certain statements included herein,
including those regarding costs and amount and timing of
production constitute "forward looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. Such forward looking statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of Barrick or of the
gold mining industry to be materially different from future
results, performance or achievements expressed or implied by
those forward looking statements. These risks, uncertainties and
other factors include, but are not limited to, changes in the
worldwide price of gold or certain other commodities and
currencies and the risks involved in the exploration, development
and mining business. These factors are discussed in greater
detail in Barrick's most recent Annual Information Form and
Management's Discussion and Analysis of Financial and Operating
Results" on file with the U.S. Securities and Exchange Commission
and Canadian provincial securities regulatory authorities.
Barrick expressly disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of
new information, events or otherwise.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Barrick Gold Corporation
Vincent Borg
Vice President, Corporate Communications
(416) 307-7477
(416) 861-1509 (FAX) |
