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Barrick Gold taking final steps towards developing large ‘super tier one’ copper/gold project in Pakistan

Thursday, May 5th, 2022

Barrick Gold CEO Dr Mark Bristow

Barrick Gold CEO Dr Mark Bristow

“It’s not just tier one. This is a super tier one,” says Barrick Gold president and CEO Dr Mark Bristow of the proposed Reko Diq project, one of the largest undeveloped copper/gold porphyry deposits in the world.

“I hanker after world-class assets and there’s nothing like this available in the world today,” Bristow enthused in an interview.
The partnership agreement between Barrick Gold, the federal government of Pakistan and the provincial government of Balochistan is expected to bring substantial economic and social benefits to Pakistan and Balochistan.

The cost of securing Reko Diq has centred largely on the effort of engaging and arriving at a framework agreement, the signing of which was one of the highlights of Barrick’s dividend-rich presentation of first quarter (Q1) results.
Bristow is scheduled to meet Pakistan’s new Prime Minister later this month to review progress on restarting the Reko Diq copper/gold project.

When fully developed, the operation will produce 400 000 t of copper concentrate and about 400 000 oz of gold a year.

The capital is described as being very moderate and Barrick expects to be in production in five to six years from today.

The New York- and Toronto-listed company’s net cash balance at the end of Q1 stood at $743-million, reflecting cash flow from the operations, the continuing sale of noncore assets, and its share of a further $0.6-billion in cash distributions by Kibali.

Since agreement on the repatriation of revenue from Kibali was reached with the Democratic Republic of Congo last year, Kibali has delivered $1.2-billion (on a 100% basis) in the form of dividends and debt repayments, inclusive of distributions received subsequent to March 31, 2022.

Regarding Reko Diq, Barrick is working towards the final agreement, which is expected to be confirmed through Acts of Parliament and the Supreme Court.

“As I’ve done in the past, it’s a 50:50 down the middle,” said Bristow. Twenty-five percent of the shareholding will be held by three state enterprises that have got strong balance sheets and cash, 25% will be a fully funded equity position for the Balochistan government, and Barrick will hold 50% and control.

The existing feasibility study is expected to be updated in 18 months to 24 months.

“We’ve got a full set of data but to make the environmental impact study be in line with global best practice, we need to refresh those numbers and then we’ll be ready to roll.

“The processing infrastructure and mining investments is what we do every day. The challenge is about power and water,” said Bristow.

There is sufficient reservoir water to start the mine but in the long-term, the piping of desalinated seawater is under consideration, as is the possible building of a power station.

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