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Barrick: 2018 Gold Output Within Guidance; Continued Loulo-Gounkoto Investment

Kitco News

Editor's Note: Updating earlier story with company announcement on Loulo-Gounkoto complex.

(Kitco News) - Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) reported late Monday that preliminary 2018 gold production of 4.53 million ounces was in line with its guidance of 4.5 million to 5 million ounces.

Then Tuesday morning, officials outlined further investment at the Loulo-Gounkoto complex in Mali.

The company said preliminary fourth-quarter output was 1.26 million ounces, just above guidance of 1.25 million listed in Barrick’s third-quarter earnings release. The average market price for gold in the fourth quarter was $1,226 per ounce.

The production results exclude those from Randgold Resources Ltd., as the merger between the two gold-mining companies did not go into effect until the start of this year. Nevertheless, the Barrick announcement included Randgold’s results for “information purposes only.” Randgold produced 1.28 million ounces in 2018, which was just below guidance of 1.3 million to 1.35 million ounces due to a week of industrial action at Loulo-Gounkoto. Preliminary fourth-quarter gold production listed at 375,000 ounces.

Barrick said its all-in sustaining costs in the fourth quarter will be approximately 3% to 5% percent higher than the third quarter. The fourth-quarter cost of sales per ounce are expected to be approximately 15% to 17% higher than in the third quarter, primarily as a result of a non-cash inventory impairment on Lagunas Norte’s long-term stockpiles.

Preliminary full-year copper production of 383 million pounds was in line with guidance of 345 million to 410 million pounds. Preliminary copper production in the fourth quarter was 109 million pounds, while the average market price for copper in the fourth quarter was $2.80 per pound.

The company said it now expects its full-year 2018 effective tax rate to be approximately 52% to 56%, up from its previous estimate of 48% to 50%. The increase is primarily due to lower-than-anticipated sales from operations in lower-tax jurisdictions, and higher-than-anticipated sales in higher-tax jurisdictions, Barrick said.

Barrick is scheduled to report its fourth-quarter financial results on Feb. 13.

Meanwhile, Barrick issued an upbeat assessment of the Loulo-Gounkoto complex that was acquired in the merger with Randgold.

Loulo-Gounkoto has posted four consecutive quarters of improvement in gold production, despite a work stoppage that caused it to miss its full-year 2018 production guidance of 690,000 ounces by 4%, Barrick said. Also, 2018 was a record throughput year with more than 5 million tonnes at close to the complex’s reserve grade. 

Barrick’s new president and chief executive officer, Mark Bristow, said the company is exploring for additional reserves and upgrading plant and equipment at the complex.

“A preliminary economic assessment of the Loulo 3 open pit and underground project has been completed and drilling continues to expand the area of high-grade mineralization south of the Yalea ore body,” he said. “Exploration of the Faraba structure on the Gounkoto permit has shown the potential for multiple zones of mineralization to be extended.

“At the existing operations, we’ve commissioned the second crusher at Yalea, the full integration of the automated dispatch system at Gounkoto and the second radar for the geotechnical monitoring of the Gounkoto pit. The complex has also completed the striker belts project at Gara and moved ahead with the expansion of the tailings treatment facility.”

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