New Barrick Gold Sees Costs Higher This Year Than Before Merger
(Bloomberg) -- Barrick Gold Corp. says its costs to produce the metal will be at least 7.9 percent higher this year following its recently completed merger with Randgold Resources Ltd.
All-in sustaining costs are forecast at $870 to $920 an ounce in 2019. That compares with $806 an ounce in 2018 for Barrick as a stand-alone company.
The cost guidance “primarily reflects the planned completion of mining at the comparatively high-grade, low-cost Cortez Hills open pit in the first half of the year,” Barrick said Wednesday in a statement, referring to one its operations in Nevada.
The Toronto-based miner provided the first nitty-gritty glimpse of what production and costs are expected to look like for the combined company. All-in-sustaining costs have been creeping up for the industry as a whole since the second quarter of 2017. Last year, Barrick backed away from a $700 goal announced in 2016, citing inflation and falling production as headwinds.
On Wednesday, Barrick said it will be able to reduce those costs going forward.
“Every indication is that we’ll bring those costs down toward that” goal, Barrick Chief Executive Officer Mark Bristow said in an interview in Bloomberg’s Toronto office, declining to give a time frame. He noted that the company will provide five-year guidance later this year but, for now, is just offering a 12 month forecast.
Barrick expects to produce less gold in 2019 than the company and Randgold’s combined total last year. Bristow has said the company will sell some of its less-attractive assets to improve the quality of the portfolio.
“We are working on disposal strategies and engaged with interested parties,” Bristow said in the interview. He declined to say whether he intends to shed everything this year or sell the assets one at a time to get a better price.
Barrick fell 2.5 percent at 8:03 a.m. before the start of regular trading in New York. The shares declined 1.3 percent this year through the close of trading Tuesday.
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