By ’91 Barrick could produce a million oz from North America

American Barrick Resources could be the first Canadian mining company to top one million oz in annual production with its output coming solely from North America, says a report by Merrill Lynch mining analyst Robert Cook.

If Barrick’s underground Betze and Post deposits at the Goldstrike property near Elko, Nev., are put into production simultaneously with the Post surface orebody, the Toronto-based company will reach one million oz by 1991.

Barrick recently signed a tentative contract to mine its surface Post deposit from a huge open pit with neighbor Newmont Gold. With reserves of 20 million tons of 0.053 oz on Barrick’s side, the Toronto company expects to increase its Goldstrike production considerably from 52,000 oz this year.

Nevertheless, its the newer Deep Post and Betze deposits which could put American Barrick into the one-million-oz leagues if it is successful in mining the three deposits together.

As reported (N.M., Nov 16/87), the Deep Post has a possible reserve of 2.8 million tons at a grade of 0.39 oz and an additional possible reserve of 2.7 million tons at 0.40 oz.

Barrick says the Betze deposit contains a probable reserve total of 3.7 million tons at 0.22 oz and a possible reserve of 4.2 million tons at 0.21 oz.

However, a Barrick exploration manager has said that his company is about to run another reserve update which will move Betze’s 4.2 million-ton possible reserve estimates into the probable category.

If he is correct and efforts to mine the Deep Post and Betze using underground mining techniques are successful, production from Goldstrike could outstrip all of the famed Hemlo mines combined.

In his Nov 2 report, Cook notes that with production from Golden Giant (301,000 oz), Page Williams (430,000 oz) and David Bell (190,000 oz) Hemlo output will amount to 921,000 oz by 1991.

That compares with 160,000 oz from Post surface, 400,000 oz from Post underground and 300,000 oz from Betze underground which adds up to a Goldstrike total of 860,000 oz by 1991 under a best-case scenario.

With an additional 285,000 oz coming from Barrick’s other six producing mines, total production from all operations would add up to 1,145,000 oz in 1991, according to the Merrill Lynch report.

“With production coming solely from North America, Barrick could have the highest growth rate in annual production among North American gold producers,” said Cook.

Newly formed Placer Dome Inc. will cross the one-million-oz mark in 1989 when production is estimated at 1,284,000 oz but much of that is attributable to operations in Australia, and Papua New Guinea.

According to a recent Shearson Lehman report, gold production from all Placer Dome operations will total 1,487,000 oz by 1992.