Barrick’s Kibali Gold Mine Finds Strong Start to 2019

Barrick Gold’s (TSX:ABX,NYSE:GOLD) Kibali gold mine has “made a strong start” to 2019 following record-setting production in 2018, the company announced on Tuesday (April 16).

The asset, which is a joint venture between Barrick Gold, AngloGold Ashanti (ASX:AGG,NYSE:AU) and the Democratic Republic of Congo’s (DRC) state miner Sokimo, continues to break records as it speeds toward its 2019 guidance of 750,000 ounces of gold. In March, 285,000 tonnes of ore were hoisted through the shaft at the property.

Kibali set records in 2018 with production of 807,251 ounces of gold. Its guidance was 750,000 ounces that year as well. As of December 31, 2018, the mine had an estimated resource of 8.3 million ounces.

“With Kibali producing at this rate, we are intensifying our focus on reserve and resource replacement. Drilling is targeting the extensions of the KCD Gorumbwa complex of ore bodies, along the 30 kilometers gold bearing KZ structure, and the western extensions of the Kibli Graben,” said Mark Bristow, president and CEO at Barrick.

“This has confirmed that there is a substantial potential for replenishing the reserve and resource base.”

Kibali is one of Barrick’s five tier one gold mines, a category of Barrick mines that have over 500,000 ounces of gold and over 10 years of mine life remaining, among other prerequisite factors. Throughput and recovery at the mine remained at or above nameplate levels in Q1, as the company continues to add new technology to operations.

Barrick further confirmed its local development commitment during a meeting with DRC President Felix Tshisekedi, which took place earlier this month in Washington, DC. The meeting was used as an anchor for the miner to show its support for advancing the country’s gold mining industry.

“The DRC government is one of our most important partners and we look forward to working with them to create an economic climate capable of attracting large and long-term investments such as the one we made in Kibali,” Bristow said.

However, Bristow pointed out that greater levels of investment also require a mining code that “equitably balances the interests of the State and the capital providers” so that both sides are involved with the creation of greater mining value.

Because of this, the CEO acknowledged it is pertinent to maintain engagement with the government on issues around the mining code introduced in the DRC last year, which raised royalties and added taxes.

As of 11:30 a.m. EDT on Wednesday (April 17), Barrick was trading at C$17.50.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.