Porgera has 'tier-one' potential

BARRICK Gold boss Mark Bristow is targeting $1.5 billion of asset divestments by the middle of next year following the recently completed merger with Randgold Resources.
Porgera has 'tier-one' potential Porgera has 'tier-one' potential Porgera has 'tier-one' potential Porgera has 'tier-one' potential Porgera has 'tier-one' potential
On a conference call on Wednesday night, Bristow declined to mention specific assets as he was cautious of starting public negotiations.
 
He said there was still work to be done to "get our head around the true value" of some of the assets.
 
"And also we are mindful that any transaction we do, we're clear about maintaining our relationship with our host countries because there is no country in which we will be realising assets that isn't an important destination for ongoing exploration," Bristow said.
 
While no assets were mentioned, the company's March quarter presentation went through most of its operations, but relegated a few to a slide titled ‘Other gold mines …'.
 
Those assets were the 89.7%-owned Tongon in Ivory Coast, the 50%-owned Super Pit in Australia, Lagunas Norte in Peru, and Golden Sunlight in Montana - the latter two which are due to be put on care and maintenance this year.
 
Bristow appears to have warmed to 47.5%-owned Porgera mine in Papua New Guinea after visiting it in February.
 
Despite JP Morgan labelling the asset as "unappealing" in March, Bristow said it had the potential to be another tier one asset in the Barrick portfolio.
 
"But it really needs additional investment for more drilling programs as well as infrastructure and equipment capital to enable it to reduce its operating cost - it's really been quite a neglected asset," he said.
 
"So s real geological tier-one opportunity. This mine has been operating for 28 years. And from our assessment of it certainly got another at least 20.
 
"It's not an insignificant asset in our portfolio."
 
Barrick's March quarter group production rose 8% in the March quarter to 1.36 million ounces, in line with guidance.
 
Adjusted net earnings were US$184 million and free cashflow was $146 million.
 
Bristow said the merger skewed the results, but it was a strong quarter.
 
"So given our solid operational performance for the first quarter, Barrick, I am absolutely convinced is back and on track and it's on track to deliver against its plans for the year and beyond," he said.
 
"However, win when one looks at mine plans and replacement rates it is clear that the industry as a whole it's not in good shape, and I've been saying that for some time.
 
"And again, we see the industry toying with survival style mergers and acquisitions and again neglecting the requirement to continue to invest in the future of our industry."
 
Bristow urged Barrick shareholders to be patient.
 
"I would also stress that speed is not necessarily of the essence when you're playing a long game," he said.
 
"Don't look to us for instant gratification or easy pickings.
 
"The stakeholders, who will reap our rewards or those who share our long-term vision and invest in or work with us as partners and that's really our commitment and in fact, this industry needs that to be able to recover its rightful place and become relevant again as an industry you can invest in."
 

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