Barrick Gold (ABX-T) says it met its targeted gold production and cost estimates during 2003 by producing 5.51 million oz. of gold at an average cash cost of US$189 per oz.
The world’s largest hedger also continued to trim its hedge book trimming another 600,000 oz. during the recent fourth. Barrick said it did so by delivering a portion of its production into existing contracts at prices near the prevailing spot price.
At the end of 2003, the hedge book contained 15.5 million oz., down around 14% from a year earlier. The book now covers less than 20% of the company’s proven and probable reserves. Under its recent shift in philosophy Barrick plans to eliminate its hedge position outright.
“I’m pleased that we delivered another solid quarterly operating performance consistent with our goals and that overall we bettered our 2003 production and cost targets,” said Barrick CEO Greg Wilkins.
In a prepared statement, Barrick reiterated plans to produce around 5 million oz. at US$205-US$215 apiece during 2004. The lower production and higher cost estimates reflect the mining of lower-grade ore at the Pierina mine in Peru and Betze-Post mine in Nevada.
During 2004, Barrick will build new mines with some slated for production as early as 2005. Construction is underway at the Velardero mine in Argentina, and the company recently won approval for the Tulawaka project in Tanzania.
At Veladero, plans call for a US$425-million valley-fill heap leach operation capable of producing 530,000 oz. annually at US$155 per oz. for 13 years. The mine will target reserves totalling 230 million tonnes running 1.27 grams gold per tonne, for 9.4 million contained ounces. The mine is expected to begin production in late 2005.
A proposed open-pit operation at Tulawaka is expected to begin producing about 100,000 oz. per year in early 2005. Cash operating costs are figured at US$168 per oz. over a four-year life span. Reserves sit at 1.4 million tonnes averaging 11.5 grams per tonne.
At the end of 2003, Barrick had around US$1 billion in cash and no net debt.
The company will release its 2003 financial results on Feb. 12.
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