Barrick reports a strong first quarter
Despite challenge from the COVID-19 pandemic and a legal battle over the Porgera Mine with the government of Papua New Guinea, Barrick Gold reported a solid start to the year with a rise in quarterly profit of nearly 55 percent.
In a statement released on May 6, President and CEO Mark Bristow said operational and financial delivery were on plan.
“Our sustainability and regional teams have done a great job in taking timely action to introduce comprehensive and carefully considered measures at all our sites and offices to manage and mitigate any impacts of COVID-19 on our employees and contractors. A key focus of this plan is on prevention, and all sites are working actively to head off an outbreak,” he said. “To date we have donated more than $20 million to our host countries, many of whom have limited healthcare facilities, to fund the purchase of medical equipment and PPE.”
Highlights of the quarter included the closing of the sale of the Massawa project. In Tanzania, the signing of the framework agreement with the government paved the way for the resumption of concentrate exports.
Brownfields exploration continues to replenish reserves depleted by mining while Barrick’s generative exploration programs are identifying new projects and targets, and expanding its global reach. Among other things, Barrick has formed an alliance with Japan Gold, holder of the largest exploration property portfolio in Japan.
Since the end of the quarter, the government of Papua New Guinea has announced that it will not renew Barrick Niugini Limited’s 20-year Special Mining Lease for the Porgera gold mine. Barrick has said it will contest the move, which it regards as tantamount to nationalization without due process. In the meantime, BNL has placed Porgera on temporary care and maintenance.
Bristow said regardless of new discoveries, organic growth from its existing asset base — which includes six Tier One gold mines — would sustain Barrick’s recently published 10-year plan that projects annual production of around 5 million ounces of gold (subject to adjustment based on the outcome of the process with the Government of Papua New Guinea with respect to the Porgera Special Mining Lease extension).
Barrick has also published an industry-first ESG scorecard to transparently report on its performance in terms of health and safety; social and economic development; human rights; the environment; and governance.
“Overall we scored a B grade, which we believe accurately reflects our improvement in sustainability performance over the year but also acknowledges that there is still some work to be done,” Bristow said.
The strong results help strengthen Barrick’s ability to acquire other projects, including potential copper targets.
Bristow has previously said the company aims to increase its exposure to copper because of its expected higher use in electrification.
“(A stronger balance sheet) improves our capacity to take up opportunities that might arise in the short to medium term given the dynamic nature of the global economy,” Bristow told Reuters.
Bristow has previously expressed an interest in acquiring Freeport-McMoran Inc’s flagship Grasberg mine.