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Kalgoorlie Super Pit JV unlikely to meet 2019 guidance

Barrick Gold owns 50% of the Super Pit.

The Kalgoorlie Consolidated Gold Mines (KCGM) Super Pit joint venture between Barrick Gold and Newmont Goldcorp experienced a 2 per cent increase in production from the June quarter.

This rise is attributed to higher grade and recovery rates at the Western Australia mine.

Barrick, however, believes 2019 production is likely to be impacted by up to 40,000 ounces due to exclusion zones that have been put in place on the site’s east and west walls for safety reasons.

It doesn’t expect the Super Pit to meet its 2019 guidance.

As a whole, Barrick produced 1.31 million ounces of gold in the September quarter, up from 1.14 million ounces during the same time last year.

Barrick also anticipates its group production to flatline between 2020 and 2024, in line with its current 2019 guidance of 5.1 to 5.6 million ounces.

The company is also riding the waves on gold prices continuing their six-year high, nearly tripling its adjusted profit this quarter with $US264 million ($384 million) compared with September last year.

Barrick has also finalised its buy-out of Tanzanian company Acacia Mining, with the company agreeing on a settlement of Acacia’s tax and fiscal issues with the Tanzanian government.

The terms of the agreement include a $US300 million payout to settle all outstanding tax and other disputes, lifting the concentrate export ban, sharing the mine’s future economic benefits on a 50/50 basis and establishing an Africa-focussed international dispute resolution framework.

Barrick president and chief executive Mark Bristow said the company was engaging with the mines’ host communities to restore their social license.

Bristow said Tanzanian locals were already being employed at the site and trained to replace expatriate staff, which Barrick has done successfully at its other African operations.

“Rebuilding these operations after three years of value destruction will require a lot of work, but the progress we’ve already made will be greatly accelerated by this agreement,” he said.

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