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UPDATE 2-Barrick Gold eyes assets, exploration as it plots new phase

Published 2018-11-16, 05:25 p/m
© Reuters.  UPDATE 2-Barrick Gold eyes assets, exploration as it plots new phase
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(Adds Lagunas Norte sale process, background)

By Susan Taylor and Zandi Shabalala

TORONTO/LONDON, Nov 16 (Reuters) - Barrick Gold Corp ABX.TO , soon to become the world's largest bullion miner, is interested in adding more copper assets as long as the red metal is accompanied by bullion, executives said on Friday.

Barrick, which expects to complete its $6.1 billion takeover of Randgold Resources RRS.L Jan. 1, outlined plans for exploration, expansion, streamlining and asset sales at an investor presentation in London. under regions in North America, South America and Africa and the Middle East, Barrick spent the last four days focusing on where to take the merged company, said Randgold Chief Executive Officer Mark Bristow, who will be Barrick's new CEO.

Barrick is open to copper assets "as long as that copper is a component or co-product to the gold," said Rod Quick, who heads Randgold's projects and evaluation and will do the same in the merged company. "Or, unless that copper project will enhance our strategic partner network."

In Africa, Barrick is open to exploiting its "substantial footprint" in the Democratic Republic of Congo to acquire world-class deposits, said Willem Jacobs, who heads Randgold's operations in central and east Africa and becomes Chief Operating Officer of Barrick's Africa and Middle East region.

In Zambia, Barrick aims to lower costs at its "relatively low-grade" Lumwana copper mine, he added, noting the country's new mining code stands to materially affect margins.

Barrick said it is keen on exploration outside its operating base, flagging South America's Guyana Shield, which crosses Suriname, Guyana and French Guyana. It also wants more exposure in Canada.

Rob Krcmarov, executive vice president of exploration, said Barrick is interested in "copper opportunities" within its operating regions that meet investment criteria.

To approve projects with potential for more than 5 million ounces of gold, Barrick will require a 15-percent rate of return, based on a $1,000 gold price, said Quick. Projects with more than 3 million ounces of gold, need a 20-percent return.

Barrick expects stronger operating cash flows, non-core asset sales and lower overhead and interest costs will help it increase future dividends, said Randgold Chief Financial Officer Graham Shuttleworth, who takes the same role at Barrick.

Talks are underway to sell Barrick's Lagunas Norte mine, said Mark Hill, COO of Latin America. Barrick said in August the Peru mine was an example of the non-core mines it would look at selling. Reuters reported last year that Barrick was exploring options, including the sale of all or part of, Lagunas Norte.

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