Barrick Announces Grass Roots Exploration Discovery
Early stage results suggest gold find "Similar to Pierina," says
CEO Oliphant
All amounts in United States dollars
TORONTO, ONTARIO--Barrick Gold Corporation today announced a
significant gold discovery at its Alto Chicama property in
north-central Peru. Based on the results of wide spaced drilling,
the Company calculates an inferred resource of 61 million tons,
grading 0.057 ounces per ton, for a total of 3.5 million ounces of
gold. Consequently, Barrick will increase its 2002 exploration and
development program for Alto Chicama from $5 million to $20
million.
"While a lot of work still needs to be done, results so far
indicate that we have a sizeable discovery on our hands," said
Randall Oliphant, President and Chief Executive Officer. "At this
stage the similarities to our Pierina Property are striking, in
terms of grades, good metallurgy, gold-rich surface outcroppings
and the potential for expanding the resource." Barrick's Pierina
Mine, located 175 km from Alto Chicama, is a major, low-cost
producer with average annual production of 500,000 ounces of gold
at total cash costs of $90 per ounce, over the life of the mine.
The new Peruvian discovery is a result of a strategic decision by
Barrick to increase its grass roots exploration to offset an
industry-wide decline. "With exploration spending among the
juniors declining, we stepped up our own grass roots program over
the past few years," said Oliphant. "That effort is now starting
to pay off. Alto Chicama has the potential to provide low-cost,
organic growth."
While high-grade ore outcrops at surface enhance the potential
economics of the discovery, the mineralization is also open to the
north and south, as well as at depth. Deeper holes have
intersected higher-grade sulphide mineralization below an oxide
cap. "With the preliminary results we have in hand, we're looking
at a 2002 program of 12 drill rigs focused on infill drilling to
bring drill spacing to reserve status density. We'll also proceed
with step-out drilling to expand the resource," said Alex
Davidson, Senior Vice-President of Exploration. "We see great
potential not only to expand the resource but also to make further
discoveries on the 1,200 square km land position we have in the
area," Davidson added.
As well as an expanded drill program, objectives for the balance
of the year at Alto Chicama include metallurgical test work and
mine and process planning and permitting. The Company expects
these costs to be expensed.
Barrick has been exploring Alto Chicama since the first quarter of
2001, when it was successful in a tender by the Peruvian State
mining company, Centromin. In order to acquire a 100% interest in
the property, Barrick must spend $6 million over three years and
prepare a feasibility study for the development of a mine. When
Barrick elects to proceed with development it must pay Centromin a
further advance royalty of $2 million, which will be a credit
against Centromin's retained net smelter royalty of 2.51%.
The Alto Chicama discovery should enhance Barrick's growth
pipeline, which includes: the 25-million ounce
Veladero/Pascua-Lama district in Chile and Argentina, where the
Company is taking a unified approach to development, starting with
Veladero; the 3-million ounce Cowal Project in Australia; and the
Company's growing reserve and resource base in Tanzania. During
2002, the Company is laying the groundwork, through feasibility
studies and production planning, to take its promising projects
forward.
In total, Barrick has exploration programs on 35 properties on a
global basis, apart from those at its operating properties. "We're
looking at high-quality targets," said Oliphant, "with the
potential for low cash and capital costs -- capable of generating
rates of return of 10 percent or better -- at today's gold prices.
From what we've seen so far, Alto Chicama fits that profile."
Barrick is a leading international gold producer whose shares
trade under the ticker symbol ABX on the Toronto, New York, London
and Swiss Stock Exchanges and the Paris Bourse.
1. Resource calculations were prepared by employees of Barrick
under the supervision of Alexander J. Davidson, P. Geol, Senior
Vice President, Exploration of Barrick, and Alan R. Hill, P. Eng,
Executive Vice-President, Development of Barrick. The inferred
resource has been calculated on a block modeling basis, using
blocks of 10x10x5 meters and a cut-off grade of 0.35 g/tonnes
(0.0102 oz/ton) of gold. A total of 60 diamond drill holes have
been drilled in the area of interest, of which 45 had assay
results at the time of the resource calculation which were
considered to be within the mineralized zones. Drill hole spacing
averages 200 meters, with some sections drilled to 100 meters. A
drill hole radius of 50 meters was used for purposes of
calculating the resource. Industry standard quality assurance and
quality control procedures have been employed in connection with
the calculations. Samples were prepared on site and fire assayed
at an independent laboratory in Lima, Peru. The mineralization is
disseminated and is hosted in volcanic and sedimentary breccias
and tuffs. The deposit is of the high sulfidation type and is
similar in style to the mineralization at Barrick's Pierina mine.
2. Inferred resources do not have demonstrated economic viability.
Certain statements included herein, 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. |
