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I don't think I'd be sitting here if we hadn't done that - Barrick CEO on debt reduction over M&A

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(Kitco News) - Barrick Gold CEO Mark Bristow underlined his company's focus on debt reduction over M&A.

This week Bristow spoke to Kitco Mining correspondent Paul Harris at Mines and Money London.

Barrick Gold (NYSE:GOLD) let some deals pass during the recent run up in gold. In 2020 Barrick Gold was in discussions to acquire Great Bear Resources. The company eventually fell to Kinross for $1.8 billion.

Bristow said he takes lessons from the last company he ran, Randgold Resources. In 2018 Barrick Gold acquired Randgold Resources for $18.3 billion. Bristow became Barrick's CEO after the acquisition.

"You'll remember back in 2011 when gold peaked for the second, everyone rushed off to do these big, large, premium M&As," said Bristow. "Randgold at the time had a lot of debt because we were building out three projects simultaneously, and I took two decisions: one, that we wouldn't change the gold price in which we allocate our capital; and two, we wanted to bring down the debt.

"We used those margins rather than chase M&A transactions. That really put Randgold into a standalone position in the industry. I don't think I'd be sitting here today representing Barrick if we hadn't done that."

He also noted that the cupboard is bare stating that there is a lack of projects that would fit within Barrick, namely tier one assets.

"I don't think they're any tier one assets in Canada that fit our criteria, and that is you've got to be more than 500,000 ounces for more than 10 years in the bottom half of the cost curve."

Bristow said work with Pakistan on advancing Barrick's Reko Diq project was "energizing." The company said that the project is one of the largest undeveloped copper-gold deposits in the world. Barrick has a 50% stake in the project. Balochistan province has 25%, and Pakistani state-owned enterprises hold the remainder.

Bristow said the negotiation had to take place with the ruling and opposition parties to get buy-in.

"How do you build a real partnership? [Pakistan] has been a really energizing engagement on a personal scale where we've been able to complete over two years of negotiation...a framework agreement which plots out where we need to build," said Bristow. "I don't think there has ever been a more transparent agreement."

Coverage of Mines and Money London sponsored by Discovery Group.


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