Barrick Gold Forecasts Annual Gold Production of at Least 4.5 million Ounces Through 2020

Researched by Industrial Info Resources (Sugar Land, Texas)--Barrick Gold Corporation (NYSE:ABX) (Toronto, Ontario) expects to maintain annual gold production of at least 4.5 million ounces through 2020. The mining company reported the results of studies on projects that could add or accelerate gold production at four mine operations. Industrial Info is tracking 25 active Barrick Gold projects worth $2.94 billion.

The company, which held an investor day event on Monday, reported the completion of a prefeasibility study for expanded underground mining in the Deep South zone of the Cortez mining complex in Nevada. With an initial capital investment of $153 million, the project could result in average yearly underground production of more than 300,000 ounces of gold between 2022 and 2026, according to the study. "The prefeasibility study timeline assumes permitting will take approximately three to four years and we expect to commence this process in the first half of 2016," the company said in a press statement. It added the expansion of the underground would help offset the impact of the end of mining in the Cortez Hills open pit, which is expected in 2018.

Another prefeasibility study outlined the potential for an underground mine at Barrick Gold's Goldrush deposit, located near the Cortez Hills mine in Nevada. The study estimated average annual production would be 440,000 ounces, the company said, adding, "The prefeasibility study contemplates a mine life of 21 years, with first production as early as 2021, and sustained production in 2023."

A nine-year extension of the mine life of the Lagunas Norte Refractory Ore Mine in Peru was also the subject of a prefeasibility study. An estimated $640 million would be spent on the installation of a 6,000-metric-tonne-per-day grinding-flotation-autoclave and carbon-in-leach processing circuit to treat the refractory material. Average annual production in the first five years is expected to be 240,000 ounces, the company said, with first gold production expected in late 2021.

Finally, the company said it has determined it would be better to defer the development of a third full production shaft at the Turquoise Ridge underground gold mine in Nevada in favor of a three-phase approach, including the addition of a new ventilation shaft and other activities. Eventually, the ventilation shaft would be converted into a full production shaft. Total capital expenditures would be $300 million to $325 million. Production would eventually increase from 280,000 ounces per year to 500,000 ounces.

For 2016, Barrick Gold said it expects to produce 5.0 million to 5.5 million ounces of gold. Capital expenditures for 2016 is expected to be in the range of $1.35 billion to $1.65 billion, compared with $1.51 billion in 2015.

Executives with the mining company said they implemented a new capital discipline in 2015. Barrick Gold reduced its debt by $3 billion last year, and expects to reduce debt by an additional $2 billion this year, said John Thornton, the chair of the company's governing board.

Barrick Gold operates mines in North America, South America and Africa.

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