Exploration Success, Capital Investment and Reserve Growth to Sustain Kibali’s Production Profile
Barrick Gold (NYSE:GOLD) announced that its Kibali gold mine in the Democratic Republic of Congo (DRC) is set to maintain its annual production rate of 750,000 ounces for over 15 years. The mine, Africa's largest, leverages advanced automation and renewable energy, with three hydropower stations and an upcoming solar power plant increasing its renewable energy mix to 85% by next year. Kibali has fostered significant regional growth, turning a once underdeveloped area into a thriving commercial hub with a population of over 500,000. Barrick has invested heavily in local communities, spending nearly $2.7 billion on local contractors and suppliers since 2010. Additionally, the company is committed to biodiversity, partnering to reintroduce white rhinos to the DRC and supporting local agriculture through a coffee project. Barrick expresses readiness to pursue new gold and copper opportunities in the DRC, contingent on continued government cooperation.
- Kibali gold mine will sustain 750,000 ounces annual production for over 15 years.
- Renewable energy component to increase to 85% with new solar plant.
- Significant regional growth: population increase from 30,000 to 500,000.
- Investment of $2.7 billion in local contractors and suppliers since 2010.
- Partnership in biodiversity projects, including the reintroduction of white rhinos.
- None.
Insights
Barrick Gold's Kibali mine sustaining its 750,000 ounces annual production for an extended horizon is a significant indicator of its operational efficiency and foresight in resource management. The commitment to extend the mine's production profile from 10 to 15 years or beyond suggests robust planning and effective exploration activities. This provides long-term revenue stability, which is important for maintaining investor confidence.
The $2.7 billion in payments to local contractors and suppliers reflects substantial engagement with the local economy, which can be seen as a strategic approach to secure social license to operate. Additionally, the investment in renewable energy infrastructure, such as hydropower stations and the upcoming solar power plant, indicates a forward-thinking sustainability strategy. This not only reduces operational costs in the long run but also aligns with global trends toward ESG (Environmental, Social and Governance) investing, potentially attracting more socially responsible investors.
Key Financial Insights:
- The extended production horizon translates to prolonged cash flow, reducing the risk and enhancing future earnings projections.
- Investments in local infrastructure and community development may mitigate socio-political risks, a vital factor in regions like the DRC.
- The transition to renewable energy sources potentially reduces energy costs and future-proof operations against fluctuating fossil fuel prices.
Barrick Gold's strategy to integrate more renewable energy solutions with an 85% renewable component is a strong positioning move in today's market, where ESG criteria are becoming increasingly influential in investment decisions. This substantial contribution to renewable energy not only differentiates Barrick from competitors but also enhances its appeal to green investors and funds with strict ESG mandates.
The company's commitment to community development and biodiversity projects, such as the reintroduction of white rhinos, enhances its corporate image and brand value. This holistic approach to mining operations demonstrates a balance of economic, social and environmental priorities, which is likely to foster stronger relationships with stakeholders and enhance its reputation globally.
Market Implications:
- The emphasis on sustainable practices could result in premium valuations from investors prioritizing ESG metrics.
- Long-term community investments foster goodwill, which can be critical in maintaining operational stability and minimizing disruptions.
- The successful track record in the DRC might position Barrick favorably for future mining opportunities within the region and potentially in other emerging markets.
Barrick Gold's Kibali mine has set a new standard in integrating renewable energy and community development into large-scale mining operations. The projected increase to 85% renewable energy usage is noteworthy, reducing the carbon footprint significantly and setting a benchmark for the mining industry. This transition not only aligns with global environmental goals but also lowers long-term operational risks associated with energy supply and price volatility.
The partnership with African Parks for the reintroduction of white rhinos presents a strong case of corporate responsibility towards biodiversity conservation. Such initiatives are essential for preserving ecological balance and can serve as a model for other corporations in high-impact industries. Furthermore, engaging local communities in these projects helps in creating a supportive environment, ensuring smoother operations and lesser resistance from local stakeholders.
Sustainability Insights:
- By prioritizing renewable energy, Barrick not only contributes to environmental sustainability but also enhances its risk management framework concerning energy dependencies.
- Biodiversity initiatives can serve as significant public relations assets, boosting Barrick's image as a responsible and sustainable mining company.
- Long-term benefits include potential operational synergies and reduced regulatory pressures related to environmental compliance.
All amounts expressed in US dollars unless stated otherwise
KINSHASA, Democratic Republic of Congo, July 02, 2024 (GLOBE NEWSWIRE) -- Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) – Africa’s largest gold mine, Kibali, continues to deliver growth as its strong record of replenishing reserves and resources, and further investment in technology and capacity, position it to sustain its 750,000 ounces annual production past the current 10-year horizon to 15 years and beyond.
Speaking to media and other stakeholders today, Barrick president and chief executive Mark Bristow said Kibali was not only Africa’s largest gold mine but also its most automated and, thanks to its three hydropower stations, a leader in renewable energy. When its back-up solar power plant and battery storage system are commissioned next year, the renewable component of its energy mix will increase to
“When we started building Kibali 14 years ago, this was one of the DRC’s most underdeveloped regions. The value we created and the infrastructure we built here have since transformed it into a new economic frontier and a flourishing commercial hub, with a community that has grown from 30,000 to over 500,000 people. We’ve promoted this growth through investment in community development and partnering with local businesses we have mentored. Our Azambi power station, for example, was built by an all-Congolese team. Since 2010, Kibali’s payments to local contractors and suppliers have amounted to almost
“In addition, Kibali has written a new chapter in Barrick’s long support for Africa’s biodiversity by partnering with African Parks and the DRC Government to re-introduce a sustainable population of white rhino to the DRC’s Garamba National Park, which the mine also supports in other ways. This means that, together with the Barrick coffee project in the Haut-Uele region aimed at revitalising the once vibrant Robusta coffee industry which Isiro was once renowned for, we are not only looking after our host countries in the present but also to their national heritage in the future.”
Bristow said Kibali was built on partnerships with its stakeholders, notably the government and its host communities. Based on its success, Barrick was ready to invest in new gold and copper opportunities in the DRC, provided the government continued to build alongside it.
Enquiries:
DRC country manager
Cyrille Mutombo
+243 812 532 441
Investor and Media Relations
Kathy du Plessis
+44 20 7557 7738
Email: barrick@dpapr.com
Website: www.barrick.com
Cautionary Statement on Forward-Looking Information:
Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects, plans, or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “on track”, “value-creating”, “perform”, “transform’, “expect”, “continue”, “increase”, “commitment”, “grow”, “will”, and similar expressions identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, with respect to: the anticipated benefits from Kibali’s local procurement initiatives and investment in local partnerships and communities; Barrick’s investment in community programs and projects; and Barrick’s commitment to the DRC and potential further growth opportunities.
Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); the speculative nature of mineral exploration and development; changes in national and local government legislation, taxation, controls or regulations and/ or changes in the administration of laws, policies and practices; expropriation or nationalization of property and political or economic developments in the DRC and other jurisdictions in which the Company or its affiliates do or may carry on business in the future; changes in mineral production performance, exploitation, and exploration successes; the possibility that future exploration results will not be consistent with the Company’s expectations; disruption of supply routes which may cause delays in construction and mining activities, including disruptions in the supply of key mining inputs due to the invasion of Ukraine by Russia; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; uncertainty whether some or all of Barrick’s targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; risks associated with new diseases, epidemics and pandemics; litigation and legal and administrative proceedings; employee relations including loss of key employees; increased costs and physical and transition risks related to climate change, including extreme weather events, resource shortages, emerging policies and increased regulations to related to greenhouse gas emission levels, energy efficiency and reporting of risks; and availability and increased costs associated with mining inputs and labor. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.
Barrick disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
FAQ
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