Barrick's copper caper

DESPITE being primarily a gold producer, Barrick Gold says the acquisition of copper producer Equinox Minerals was a unique opportunity and the world’s largest gold miner has big plans for its two new African copper assets.
Barrick's copper caper Barrick's copper caper Barrick's copper caper Barrick's copper caper Barrick's copper caper

Barrick's quick and painless $C7.3 billion takeover of the Australian company earlier this year is no doubt a frontrunner for the Dealer award at the Diggers & Dealers gala dinner tonight.

Speaking in Kalgoorlie yesterday morning, Barrick Asia Pacific regional president Gary Halverson said the integration process of Equinox's Lumwana mine in Zambia and Jabal Sayid project in Saudi Arabia into Barrick's portfolio was around two thirds complete.

Barrick's Asia Pacific business, which accounted for 25% of the company's global gold production last year, includes Australia, Papua New Guinea, Africa and the Middle East, so the new assets have fallen under that umbrella.

"It gives us quite a large global reach coming out of Perth," Halverson said.

He said there was significant exploration upside at Lumwana, with the ground still underexplored, and revealed the company would spend a staggering $US50 million alone on exploration at the project with plenty of greenfields and brownfields targets identified.

The exploration program will run for the next 18 months with a minimum of 16 drill rigs and the aim is to grow the reserves for the planned expansion study.

"We're pretty excited about the overall potential of the tenement package," Halverson said.

The mine is set to produce 155-175 million pounds of copper this year at cash costs of $1.75-1.95 per pound of copper.

Barrick is planning to increase production to 300Mlb per annum and is looking at a number of measures, including plant debottlenecking, pit optimisation and infill drilling to improve dilution control.

Meanwhile, at Jabal Sayid, which Equinox picked up in last year's acquisition of Citadel Resource Group, construction is continuing with first production targeted for the first half of next year.

Of the $400 million capital cost, $275 million is still yet to be spent.

The mine will produce 100-130Mlbpa of copper in its first five years and Halverson said there was the potential for further discoveries at the project.

Halverson said Barrick remained a gold producer primarily, with copper so far only accounting for around 19% of its revenue.

However, he said the company would continue to look at large-scale copper-gold porphyry projects.

Barrick is bullish on its outlook for the copper price and expects demand to grow by around 3% per annum for at least the next few years.

Halverson suggested the industry would be challenged to meet supply.

"The lack of large projects on the horizon should keep the copper market tight or in deficit," he said.


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