Engineering & Mining Journal

MAY 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 27 of 83

GOLD MINERS ROUNDUP 26 E&MJ • MAY 2019 ducing debt by a staggering 11%, which appears to jibe with the ongoing three-year trend among the majors of debt elimination. Production of 4.53 million oz, down almost 15% yoy, was within guidance, the company reported. Production has fallen nine of the past 10 years. It has been grad- ually declining since it peaked in 2006. AISC rose roughly 7% in 2018. It was the highest it has been since 2013. Average price realized per oz rose less than 1% in 2018, but was the highest it had been since 2014. The difference between price received and AISC decreased roughly 9% yoy, down to $461/oz from $508/oz. That is close to the average for the company for the preceding half decade, at $449/oz. Production at what the company la- bels Barrick Nevada, the world's biggest pure play gold mine complex, comprising Goldstrike and Cortez, fell 9% yoy. The company reported that the mine is "en- tering a period of transition as Cortez gold production moves from predominately oxide open-pit ore to mostly underground double-refractory material." Barrick reported the total ore mined fell roughly 17% yoy, and total ore pro- cessed fell almost 20%. Production increased by 27% yoy at Tur- quoise Ridge mostly due to 2017 numbers being low due to a disruption. Production fell by 11% yoy at Pueblo Viejo (Dominican Republic) and 13% at Veladero (Argentina) due to declining grade. It also fell by rough- ly 4% yoy at Lagunas Norte (Peru). In January 2018, the Chilean gov- ernment ordered the closure of the part of the Pascua-Lama project within its borders. The closure stemmed from a re-evaluation ordered by the country's environmental court. At the time, Barrick reported it was appealing the resolution. In March, the company announced the death of Peter Munk, who founded the company in 1983. Barrick announced in May (2018) it entered a subscription agreement to acquire roughly 20% of the outstanding common shares and a seat on the board of Midas Gold. And Donlin moved through the permitting process in Q3, receiving "key project permits" from the U.S. federal government. For 2018, the company reported a slight uptick in capital expenditures yoy, to $1.4 billion, due to increased spend- ing at Crossroads (Western Australia), Cortez, Goldrush and Turquoise Ridge, where a third shaft is being constructed. In September 2018, Barrick an- nounced an agreement to buy Randgold Resources, easily one of the world's top 15 pure play gold miners by annual pro- duction, to the tune of roughly $6 billion. With the "transformational merger with Randgold," Barrick reported it is the "in- dustry-leading gold company." For the moment, Barrick was, according to both its reports and the mainstream press, the "new mining champion." For 2019, Barrick reported that the Cortez Hills open-pit mine, which will mine higher grade ore at a "low cost," is "sched- uled for completion in H1," which will lead to a "structural increase in costs." A gas pipeline to Pueblo Viejo is set for com- pletion in Q4. A mining lease for Porgera (Papua New Guinea) is expected to receive approval in Q3. A drill program is planned for Bakolobi at Loulo (Mali). The company reported it could spend as much as $1.7 billion on capital expenditures. Barrick expects production in 2019 to hit somewhere between 5.1 million and 5.6 million oz with AISC between $870 and $920/oz. Barrick reported declared proven and probable gold reserves of 62.3 million oz as of the end of 2018. No. 3 AngloGold Ashanti (3.4M oz) In its annual recap, AngloGold Ashanti reported a gross profit of $772 million on the year. It reduced net debt a mind-bog- gling 17% yoy. And it increased free cash flow from $1 million for 2017 to $67 mil- lion for 2018. Production fell almost 10% yoy to the lowest level it has been since the millen- nium, attributed mostly to the sale and closure of mines in South Africa. Exclud-

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