Despite a solid 13% rise in the fourth quarter, Barrick Gold Corp saw its lowest gold production in 22 years in 2022, missing market forecasts and its own guidance as operational and geopolitical woes curbed output for the world’s second biggest gold miner.
Gold output in the fourth quarter was 1.11 million ounces, the strongest quarter in a year but still short of analysts’ expectations.
That saw Barrick produce 4.14 million ounces of gold last year, the third straight decline in annual output. In 2021 it was 4.4 million ounces.
The outcome will be disappointing as CEO Mark Bristow had said as recently as early November that Barrick was on track to achieve its annual guidance of 4.2 million to 4.6 million ounces, albeit at the lower end of the range.
That guidance range was actually lower than 2021’s 4.4 million to 4.7 million ounces of gold.
Meanwhile, annual copper production was 440 million pounds, in the mid-range of its guidance and topped estimates. That was up just over 5% from the 415 million pounds of copper produced in 2021.
The world’s second-biggest gold producer has faced challenges at its mines through 2022 that hurt production, including repairs and upgrades in Nevada and the inability to resume operations at its Porgera mine in Papua New Guinea while awaiting an agreement with the government to restart the facility.
The weak production performance underlines the stupidity of the company’s aggressive mergers and acquisition policy a few years ago under Bristow, who tried to take over bigger rival Newmont in 2019 for more than $US18 billion in an all-paper offer.
The two later settled their at times noisy and acrimonious battle for a joint venture covering their goldmines in Nevada which is majority owned by Barrick
That was after it made a $US6.8billion all paper offer for Randgold Resources in late 2018, since which time Barrick has seen its gold output slide.
Barrick’s highest annual output was in 2006, when it produced a record 8.64 million ounces in the year that saw the company take over its Canadian rival Placer Dome (which is how it got hold of the Pogera mine in PNG).
Barrick this week trumpeted the final go ahead for what could be one of its biggest mines – the multi-billion-dollar copper gold Reko Diq project will be operated by Barrick, with 50% of the project, with the Balochistan provincial government holding 25% and three Pakistani state-owned enterprises sharing the remaining 25%.
Barrick said this week that it plans to finish the Reko Diq feasibility study update by the end of next, with 2028 targeted for first production from the $US7 billion mine in the Pakistan’s Balochistan province. the first stage will cost an estimated 4US4 billion.
The project is planned to be developed in phases, starting with a nearly 40 million tonne of ore a year which could double within five years.
Barrick is scheduled to release fourth-quarter earnings results on February. 15, when it usually outlines the firm’s guidance for metals production for the coming year.
Canadian and US analysts think that Bristow will revert to his past form and try and rebuild reserves and output ahead of the new super mine starting in five years’ time with a couple of acquisitions of medium level miners.
Analysts wonder if Barrick might be tempted to return to Australia – at one stage it owned half of the Super Put in Kalgoorlie with Newmont. That is now controlled by Northern Star Resources.
