Barrick eyes Nevada Gold Mines as Newmont ramps up deal pressure

15th February 2023

By: Reuters


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Barrick Gold would be open to taking over Newmont's stake in its Nevada Gold Mines joint venture, CEO Mark Bristow said on Wednesday, after Newmont's $16.9-billion bid for Newcrest ramped up pressure on gold miners to do deals.

The Newcrest acquisition by Newmont, if successful, could result in the enlarged company shedding some assets.

"I've always said that the best assets that we haven't got are the other parts of our joint ventures," Bristow told Reuters in an interview. "If there was a way of acquiring those assets I think we would be desirous of acquiring them."

Barrick beat analysts' estimates for quarterly profit and announced a share buyback of up to $1-billion after record payouts to shareholders last year.

Bristow stuck to the company's 'build, not buy' approach and ruled out the possibility that Barrick would launch a counter bid for Newcrest.

"If you’re paying a premium to the inherent value of what you’re purchasing, the only way you make money is if the gold price goes up, or the copper price or both, Bristow explained. Adding that if the above variables don't come through then companies have to find a way to add more value to those assets.

Newmont's offer implied a 21% premium to Newcrest's share price. Earlier this month Reuters reported that Newmont was open to sweetening its $16.9-billion bid for rival Newcrest.

Barrick last month reported a 13.4% rise in gold production as access to high-grade ore at its Cortez and Carlin mines in Nevada powered a "strong finish" to the fourth quarter. Earnings for the quarter came in at 13 cents per share, while analysts on average had expected 11 cents, according to Refinitiv IBES.

Production for the year, however, was 4.1-million ounces of gold, down from 4.4-million ounces in 2021.

Barrick's all-in sustaining costs (AISC), an industry metric that reflects total expenses, rose to $1 242 per ounce of gold, a 28% increase from a year earlier. Its cost of producing copper jumped by 21%, to $3.18 per pound from $2.62 per pound.

Barrick expects costs to stabilise or come down slightly in 2023, forecasting costs of $1 170 to $1 250 per ounce of gold and between $2.95 and $3.25 per pound of copper.

The company returned a record $1.6-billion to shareholders in 2022 through dividends and buybacks.

Edited by Reuters


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