Barrick CEO talks slimming its gold portfolio

When Barrick Gold took over Randgold in 2019, its marketing dropped Gold from the name to reflect wider interests like copper and appeal to new investors. But it didn’t bother to change its registered moniker. Gradually, the Gold crept back in.

Now, the Gold has been guillotined, like a statement Barrick Mining (TSX: ABX; NYSE: B) means business this time.

“Most of the gold companies sort of have grasped at the opportunity to talk about copper,” CEO Mark Bristow said in an interview with MINING.COM‘s sister publication, The Northern Miner, in May. “But we actually pointedly said, ‘if you really want to be a big player in the gold business, it makes a whole lot of sense to focus on these big assets.’”  

And so it is. Barrick is developing the $9-billion (C$12.5-billion) Reko Diq gold-copper project over two stages in Pakistan for 2028 output and spending $2-billion to double the Lumwana copper mine production in Zambia. Projects that aren’t big enough may face the chopping block, like part of its name. Selling the Tongon mine in Cote d’Ivoire is well advanced, the CEO said.  

Another candidate, despite the company’s surging interest in the red metal, is Barrick’s stake in the Zaldívar copper mine in Chile. The 50-50 joint venture with Antofagasta (LSE: ANTO) that produced 80,000 tonnes of cathodes last year is said to be for sale, according to Bloomberg.  

Like Hemlo  

Officials approved Zaldívar’s environmental impact assessment early this year, extending the mine’s life to 2051. Bristow sidestepped a question on whether Zaldívar is for sale, only saying the team is focused on achieving a new mining licence. But the work at Zaldívar resembles how Barrick prepped the Hemlo mine in Ontario before putting a “For Sale” sign on it in May.  

Upgrades and drilling over the last three years expanded Hemlo’s pit and gave it a 10-year mine life, though its production remains short of Barrick’s tier one hurdle, the CEO said.  

“It’s one of those assets that, if you work hard at it, it continues to deliver,” he told a May conference call. “But it’s at a stage where we can defend its viability, and it will be an attractive asset for a mid-sized mining company.”  

Hemlo is Barrick’s last mine in Canada. And the company has mulled about moving its primary stock listing to New York from Toronto. Bristow says he’s aware of how these issues tug at sentiments about industry legend Peter Munk founding Barrick in Canada 40-odd years ago, all amid an “elbows up” attitude now among Canadians eager to defend their country.  

“The last thing we want to do is offend anyone and remember, these things are moments in time,” he said in the interview, referring to frosty U.S.-Canada relations. “We’ve participated as a major Canadian player in the economy.”  

Norris drilling 

The sale “has no bearing on our commitment to Canada,” Bristow told the conference call. The company has started a “significant” drill program at the Norris project in the southern Abitibi region in Ontario. It’s assembling property and drill permits for the Sturgeon Lake project 270 km northwest of Thunder Bay near the historical volcanogenic massive sulphide Mattabi and Lyon Lake mines.  

“We’re exploring some of the gaps between known deposits, but situated on the same big trans-crustal faults, both linked to the big historical gold deposits,” Bristow said in the interview at Barrick’s headquarters in Toronto.  

“The problem in Canada is that it’s been largely prospected,” he said. “To do really big exploration, like we do in other parts of the world, you need big land packages, and that’s really hard to get.” 

Challenges are more acute in Mali where the junta is trying to get local court approval to take over the Loulo-Gounkoto mine. Barrick suspended operations in January at a cost of $15 million a month in upkeep and $1.24 billion a year in lost revenue after the government seized $245 million in gold and four local employees. There appeared to be a $440-million deal, but talks are stymied by the regime’s lack of mining expertise, Bristow said. 

Back in North America, Barrick is focused on advancing the now feasibility-stage Fourmile project in Nevada with 16 drill rigs and baseline studies for permitting. Eventually it is to join the joint venture with Newmont (TSX: NGT; NYSE: NEM), Nevada Gold Mines, on Barrick’s list of tier one assets.   

Donlin sale  

In Alaska, Barrick sold its half-stake in the Donlin mine – a non-core asset that the CEO said couldn’t compete with Fourmile for capital spending – to hedge fund billionaire John Paulson and Novagold Resources (TSX: NG) for $1 billion in April. Bristow said Barrick would use the money to strengthen its balance sheet, buy back shares and boost the dividend.  

The CEO sees the Trump administration helping mining by shortening timelines so projects can avoid litigation, and he appreciates similar efforts in Canada to consolidate approvals among different provincial and First Nations criteria.  

“There’s a real effort to streamline that process because it attracts capital easier,” he said. “You’ve got the flow-through shares on juniors, but when you’re attracting big capital, it’s nice to be able to be more clear about the actual permitting growth.” 

Attracting capital also concerns the name change. It’s about broadening the type of investor that buys gold company stock from specialists or short-term holders, Bristow said.  

“The real gap that we’ve got in our industry is a lack of generalist investors and we want to attract those,” he said. “As you lengthen your life of mine, generalists start looking at it because you can look at a business that goes past what most investors are comfortable with.” 

Financial markets 

Yet the worrisome scenarios of high inflation and tariffs gripping most investors in financial markets these days are of less concern to Bristow. The company doesn’t need the market, he says. Barrick hasn’t had to use financial markets to raise money because it’s watched its balance sheet, sold non-core assets like Hemlo and Donlin, invested in tier one assets and lengthened their mine lives.  

“We are not beholden on the market to make us more profitable or less profitable. It’s all in our hands,” he said. “The copper price is intriguing, because if you look at the market now, it’s not the perfect storm for a copper price rise, but the copper price is showing strength.”  

The red metal has rebounded from a fall after April 2 – President Trump’s “Liberation Day” – jumping this week on new tariff threats to $4.84 a pound. While gold is trading well above its historical incentive price, copper remains just over the economic threshold, with current prices only recently clearing the bar for many new projects.  

Reserves replenished 

But Bristow isn’t looking for new projects. He says the company has added 111 million gold-equivalent oz. of reserves since 2019 at a cost of $10 per gold-equivalent oz. compared to mining M&A deals averaging over $440 per ounce.  

While gold was the initial exploration target at Reko Diq, the company soon realized the potential of a large copper-gold porphyry system. The project has proven and probable reserves of 8 billion tonnes grading 0.9 gram gold per tonne for 81 million contained ounces; and 3.9 billion tonnes grading 0.46% copper for 18 million tonnes contained metal. 

Reko Diq turned out to be one of the world’s largest undeveloped copper-gold deposits. The scale and grade of the copper-gold system were greater than originally expected, which was a fortunate outcome. 

“The one good thing about any business is luck,” Bristow said. “You can’t claim good luck as good business, but you can benefit from it. The real screw up is when you have good luck as a business and you can’t capitalize on it.”