Exclusive: Bristow eyes copper growth as Barrick invests in junior

Barrick Gold (TSX: ABX; NYSE: GOLD) is investing in junior Hercules Silver (TSXV: BIG) as part of a plan to find porphyry copper deposits, Barrick CEO Mark Bristow says. 

Of particular interest was Hercules reporting 185.29 metres grading 0.84% copper at its self-named project in Idaho, Bristow said in a phone call to The Northern Miner on Monday. 

“That makes sense for Barrick to invest in what appears to be a possible new discovery,” Bristow said. “It’s certainly a confirmation that it’s a geological opportunity opening up and that’s what Barrick is all about: investing in early-stage value-creating discoveries.” 

The HER-23-05 drill hole intercept from 246 metres depth also showed 111 parts per million molybdenum and included 45.33 metres of 1.94% copper, Hercules said Oct. 10.  

Toronto-based Barrick spent $23.4 million for a 12% stake in Hercules, up from 2.7%, the companies said on Monday.  

The small purchase by the world’s second-largest gold miner by market value fits into its strategy to increase annual copper production to 1 billion lb. by 2031 amid the growing demand for electrification and the copper wire it needs. It comes after Barrick made overtures to buy copper producer First Quantum Minerals (TSX: FM) early this year and increased third-quarter copper output by 4.7% to 112 million lb., mainly at the Lumwana mine in Zambia.

“We’ve grown our copper exposure,” Bristow said. “What we’re interested in is investing in tier one assets in both gold and copper and porphyry generally comes with both gold and copper.” 

Monday’s investment deal stalls a takeover somewhat as Barrick agreed not to buy more than 19.9% of Hercules over the next three years and to support its decisions. Keeping at least 5% of Hercules gives it right of first refusal to Hercules selling interests in the Idaho project.

Reko Diq

Besides Lumwana, Barrick also has two 50/50 copper operations: Jabal Sayid with Ma’aden in Saudi Arabia and Zaldívar with Antofagasta (LSE: ANTO) in northern Chile. Barrick is developing the US$7 billion Reko Diq project in Pakistan, another copper-gold porphyry.

“We’re making progress,” he said. “We’re due to complete the feasibility study at the end of next year, certainly on track to do that.”  

The Hercules project is a past-producing site last mined more than a century ago. It’s about 2.5 hours by highway northwest of state capital Boise and lies on 17 sq. km mostly state-owned land. But the company has rights for exploring mining and milling.

“That whole region — the Butte mine in Montana is a very famous multi-element occurrence — and so that region is potentially prospective for porphyry copper gold deposits,” Bristow said. “This step-out hole that Hercules drilled is important in highlighting this part of the Midwest as being prospective for both copper and gold.

“This is a traditional silver-lead-zinc environment and those multi-element base metal caps are often associated with big porphyry systems, so it’s quite technical.”

Shallow depth

The silver-lead-zinc-manganese Hercules deposit is a porphyry-style mineralization that’s had 28,000 metres of historical drilling and undergoing 6,000 more metres of drilling, the junior says. It has found two zones of mineralization at shallow depth, which remain open in all directions, it said. 

“We’re very pleased with Barrick’s strategic investment into the company and the support and validation it brings to the Hercules property,” CEO Chris Paul said in the release. “We also look forward to leveraging Barrick’s U.S. experience and technical expertise in the continued drilling and advancement.”

With assistance from Cecilia Jamasmie.