Colorado Springs, Colo. – Barrick Mining (TSX: ABX; NYSE: B) says its new Fourmile project in Nevada can be developed without new processing plants and fits within the company’s capital-returns framework.
An updated preliminary economic assessment (PEA) released this week outlines average output of about 600,000–750,000 oz. gold a year over more than 25 years on 1.5–1.8 million tonnes of mined material. Initial capital is pegged at about $1.5–1.7 billion (about C$2-C$2.3 billion), with a cost of sales of about $850–$900 per oz. and a life-of-mine all-in sustaining cost (AISC) of about $650–$750 per ounce, Barrick said.
“Fourmile is the generational discovery of the last 100 years,” former president and CEO Mark Bristow, who resigned from his role on Sept. 29, told The Northern Miner on the sidelines of the Mining Forum Americas. The location inside the Carlin–Cortez complex means Barrick “doesn’t have to build a whole mine” because “the infrastructure is already there.”
Fourmile sits next to the roasters and autoclaves at the Carlin–Cortez complex owned by a Barrick-Newmont (NYSE: NEM) joint venture (JV) called Nevada Gold Mines (NGM). The study assumes leveraging existing roaster and autoclave capacity as metallurgy dictates. Barrick owns 61.5% of the JV and is the operator, with Newmont holding the 38.5% balance.
Well received
Fourmile economics could improve over time, given the deposit’s location near current processing infrastructure, geometry, ground conditions, metallurgy and the potential for resource increases, Raymond James mining analyst Brian MacArthur said in a recent note.
The updated case “has gone down very well,” according to Bristow, positioning the deposit to anchor Barrick’s next leg of growth while keeping the balance sheet in a net-cash stance.
Fourmile keeps getting better with every update, according to BMO Capital Markets mining analyst Matthew Murphy, who sees significant net asset value upside.
“Barrick continues to grow the exploration target and outline a major gold asset with very robust economics,” Murphy said in a Sept. 17 note. “Extensive drilling is still required; however, every update on this asset gets better and current indications present significant upside potential.”
Barrick shares in New York rose about 13% in the four days after the Fourmile study was released, boosting the company’s market capitalization to $56 billion. On Sept. 19, they added 10% or $2.83, following an analyst visit to Nevada, reaching $32.90 each. Barrick also did well on the TSX, adding 12.5% in the week and 9% Friday to C$45.26.
Simple mine
Much of Fourmile is single refractory, which allows for more flexible routing through NGM facilities, Barrick says. The rest is to be processed using roasters, such as those at the Goldrush operation. As high-grade Fourmile feed ramps up, Barrick models it displacing about 1.8 grams per tonne of stockpile material across NGM, lowering the blended cost base.
As of Dec. 31, Fourmile resources stood at 3.6 million tonnes indicated at 11.76 grams gold per tonne for 1.4 million oz. of the yellow metal, and 14 million tonnes inferred at 14.1 grams gold for 6.4 million ounces. The resource covers only one-third of the known extent of the orebody, Bristow said.
Barrick plans to advance Fourmile over the next few years and expects to complete a feasibility study around 2029.
Drilling at the Fourmile project. Credit: Barrick Mining
Priority project
The company is targeting test stoping in 2029 via the Bullion Hill exploration decline and a link to the neighbouring Goldrush development, then a production ramp-up if study gates and permits pass. Barrick expects to expand the drill fleet from 16 to more than 20 surface rigs, with about 120 km of directional surface drilling planned for next year. It also plans a total of about 370 km of surface and about 80 km of underground drilling by the end of 2028 to drive resource conversion.
Bristow linked Fourmile to a larger “growth wedge” that includes Pueblo Viejo in the Dominican Republic, Goldrush, the Lumwana copper Super Pit in Zambia and Reko Diq in Pakistan. Barrick has “paid dividends all the way through from 2019,” invested in growth and kept “a very robust balance sheet,” Bristow said.
Balance sheet upside
For the three months ending June 30, Barrick reported holdings of $4.8 billion in cash and equivalents. It had a net cash position of $73 million and $268 million in buybacks this quarter. The miner has returned $6.7 billion to shareholders since the 2019 Randgold Resources merger, Bristow stated.
After years of catch-up on neglected spend, “sustaining capital is shrinking now,” Bristow said. He pointed to Goldrush’s remaining build at about $1 billion toward more than 400,000 oz. by 2028.
Under a potential future JV agreement, Raymond James’ MacArthur sees a partner stepping in and buying a portion of Barrick’s share of the project.
Fourmile could eventually be folded into NGM “at fair-market value” if criteria are met, though the project is 100% Barrick’s, Bristow said. Barrick’s PEA includes inferred resources and carries no certainty of being realized.
Mali malaise
Following a breakdown with Mali’s junta that saw workers detained, Barrick deconsolidated Loulo-Gounkoto and pulled Mali from its outlook. Management is seeking the release of staff and a durable settlement while operations remain off the books.
“Our focus is on the release of the people that have been held hostage in country and a resolution to the conflict,” Bristow said, adding that near-weekly discussions with the authorities are continuing.
The impasse has “cost the country north of $600 million,” he said, “far more than the amount the government sought which is way north of what they tried to shake us down for. So it doesn’t make sense to continue.”
Barrick’s five-year outlook now excludes production from the Loulo-Gounkoto complex. Guidance will be updated when restart timing is clearer, Bristow said.
Non-core assets
In North America, the recent sales of the Hemlo mine in western Ontario and Barrick’s Donlin interest in Alaska, both for north of $1 billion, reflect a focus on tier-one scale and cost structure, Bristow said.
Hemlo “was never going to be a core asset,” he said, describing it as complex and high cost, and arguing it needed a more entrepreneurial, geology-led niche owner.
Barrick has done well on asset disposals to-date, BMO’s Murphy says. “We expect sequential improvement in operating results in H2,” he said in a Thursday note, lifting the company’s share price target to C$38.00.
Other asset sales – such as the Tongon mine in Côte d’lvoire – are possible. Reuters in July reported China’s Zijin Mining (SSE: 601899; HKEX: 2899) as front-runner in the sale process and a price “up to $500 million.”
“Tongon is non-core and for sale,” Bristow said. The process remains open, he added.
Copper heart
Barrick is also active on the fundraising front.
Confirming financing for the $6.6 billion Reko Diq project in Pakistan is “very close,” with a target of finalizing a deal in “the next month or two,” the CEO said.
Barrick is working with 11 multilaterals and export-credit agencies. This group includes the International Finance Corp., the Asian Development Bank, the U.S. Export-Import Bank, Export Development Canada and Japan’s Bank for International Cooperation. Strong demand could increase the debt size, the executive said.
The goal is a 50/50 debt-equity structure, Bristow said. While acknowledging a vocal local anti-mining community, he said the company is focused on local hiring and suppliers. Both leading political parties in Pakistan support the project agreements, he said. These were first negotiated during a previous administration and signed under the current government of Prime Minister Shehbaz Sharif.
In Zambia, Bristow said the Lumwana Super Pit build is “ahead of schedule,” and at about today’s copper price “is self-funding out to the end of next year.” The most recent quarterly results report reiterates a step-up to about 240,000 tonnes copper a year from 2028.
Major discipline
Barrick’s growth pitch leans on discipline – a philosophy that Bristow implemented while running a tight ship at Randgold. “We’re running this business like a business,” he said, arguing Barrick has offset divestments with organic adds and avoided dilutive equity all while returning cash.
“We’re not just feeding the quacking ducks, which is often what the mining industry does,” Bristow said, arguing that gold miners make money in the peaks and often go bust in the troughs. “We’ve paid dividends all the way through from 2019, we’ve invested in capital programs and our balance sheet is still net positive cash.”
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