It appears that Newmont’s proposed $16.9 billion acquisition of Newcrest Mining has ushered in a new wave of growth talks among the world’s top gold mining companies.

Reuters reported on Feb. 15 that Canada’s Barrick Gold Corp. seems to be open to taking over Newmont’s stake in the Nevada Gold Mines joint venture.

Barrick CEO Mark Bristow said his company is not interested in acquisitions but that it is focused on growing through exploration.
“We can't see much strategic benefit in just getting big for bigness sake, and we don’t agree with you that it builds a better company with more gravitas,” Bristow said in response to investors concerns about the potential challenge a bigger Newmont posed. “In fact, I believe it probably adds more risk.”

In regard to growth at Nevada Gold Mines, Bristow said, “I've always said that the best assets that we haven’t got are the other parts of our joint ventures,” Bristow told Reuters. “If there was a way of acquiring those assets I think we would be desirous of acquiring them.”

Announcing Barrick’s results for the 2022 year and Q4, Bristow said the company had always believed that discovering ounces was better than buying them at a premium in a sector where reserves and resources were diminishing.

“Our continued success in not only replenishing but also unlocking significant value in our asset base shows the unmatched potential of our organic growth pipeline,” he said.

Newmont’s offer implied a 21 percent premium to Newcrest’s share price. This month Reuters reported that Newmont was open to sweetening its $16.9-billion bid for rival Newcrest.

Barrick last month reported a 13.4 percent rise in gold production as access to high-grade ore at its Cortez and Carlin mines in Nevada powered a “strong finish” to the fourth quarter. Earnings for the quarter came in at 13 cents per share, while analysts on average had expected 11 cents, according to Refinitiv IBES.

Production for the year, however, was 4.1 million ounces of gold, down from 4.4 million ounces in 2021.

Barrick's all-in sustaining costs (AISC), an industry metric that reflects total expenses, rose to $1,242/oz of gold, a 28 percent increase from a year earlier. Its cost of producing copper jumped by 21 percent, to $3.18/lb from $2.62/lb.

Barrick expects costs to stabilize or lower slightly in 2023, forecasting costs of $1,170 to $1,250/oz of gold and between $2.95 and $3.25/lb of copper.

 Photo credit: Nevada Gold Mines