Barrick continues its record pace

American Barrick Resources (TSE) has reported record production, earnings and cash flow for the eighth consecutive year.

The Toronto-based company increased reserves in 1993 by 20%, adding 5 million oz. at its Goldstrike and Holt-McDermott mines in Nevada and northeastern Ontario, respectively. The result was a net increase of 3.5 million oz. after production and an increase in Barrick’s gold reserves to 30.6 million oz.

Net income increased 22% to US$213.4 million on revenue of US$667.5 million, compared with US$174.9 million on revenue of US$540.4 million in 1992. Gold output in 1993 totaled 1.6 million oz., more than 130,000 oz. higher than the company’s target and well above year-earlier production of 1.3 million oz. Of major significance was a 30% production increase to 1.4 million oz. at the low-cost Goldstrike mine.

Operating costs averaged US$170 per oz., compared with US$164 in 1992. The increase reflects the conversion to sulphide processing and a decline in leach production at Goldstrike.

Barrick’s gold-hedging program enabled it to realize an average price of US$409 per oz. of gold sold (a US$49-per-oz. premium over the average spot price for 1993). Barrick has sold gold forward to 1996 at an average price of US$400 per oz. In addition, the company will be able to take advantage of an upward movement in the gold price, should a substantial increase occur. Meanwhile, Barrick and Power Corp. of Canada have formed a joint company in Asia to pursue development of gold properties, specifically in the Liaoning province of northeastern China. Power will have a 25% interest in the proposed company through its wholly owned subsidiary Power Pacific, with Barrick holding the balance.

Barrick has also concluded an option agreement to earn a 75% interest in the Corona gold-copper porphyry project in northern Peru, where significant mineralization has been identified. Under way is a 6-month delineation program consisting of four drills. The company previously signed its first agreements for two early-stage exploration projects in north-central and southern Peru.

Barrick’s production targets for 1994 and 1995 are 1.8 million oz. and 2 million oz., respectively. The company has interests in four producing mines in Nevada, Utah and Ontario. Meanwhile, development is proceeding at its Meikle gold project in Nevada.

Barrick plans to spend about $17 million on exploration this year, up from $7 million in 1993. Part of the budget will be allocated to Canadian properties which are in the first stage of exploration.