Barrick Eyes New Mines, Not Deals, for Future Growth
Barrick Gold Corp Chief Executive Mark Bristow spent years
burnishing his reputation as an aggressive dealmaker, but he says now he is
focused on new mines that he hopes will boost profit and the company's sagging
stock price.
The strategy eschews the acquisition appetite that made
Barrick what it is today and instead pins the company's growth on exploration
projects in Egypt, Nevada, Guyana and elsewhere.
"The very foundation of our future has to be our
geologists and where we are investing," Bristow told Reuters on the
sidelines of the MINExpo conference in Las Vegas, the quadrennial gathering of
industry executives and suppliers. "Organic growth is always a winner when
it comes to value."
Barrick's shares have lagged rival Newmont Corp and the
S&P 500 this year, putting pressure on Bristow and his management team. But
Bristow said that by funding exploration, rather than striking deals, Barrick's
costs should drop over time, boosting revenue.
"We've got to balance the short-term-ism that fund
managers want ... with the fact that we are investing capital for the long
term," he said. "You've got to be patient."
Bristow, 62, has long implored his fellow CEOs to buy each
other. Last autumn, he called for industry consolidation as the best way to
avert a "serious reserve crisis" looming for the sector.
He formed the existing Barrick when it bought his
Africa-focused Randgold Resources in 2019. A few months later, Bristow made an
$18 billion hostile bid for Newmont, a deal that eventually fizzled but not
before both companies formed a Nevada joint venture.
Integrating all those corporate cultures was complicated,
Bristow said, but a process almost complete that should help the company focus
on growing.
The newfound focus on internal growth comes as Bristow
pushes the mining industry to better invest in host communities.
"They are stakeholders that are as important as our own
shareholders," he said.
"BETTER FISH TO FRY"
Bristow said the company will strike a deal should an
appealing one present itself, which he described as a mine that can produce
500,000 ounces of gold annually "for a long time" and be profitable
at gold prices of $1,200 an ounce. But he stressed that acquisitions would be a
secondary focus.
As a tangible sign that his deal interest may be cooling,
Bristow said he has no interest in buying a stake in Zambia's Mopani Copper
Mines, which government-controlled mining investment arm ZCCM-IH took control
of from Glencore Plc earlier this year. ZCCM has said it is searching for an
external investment partner.
Bristow also in the past year repeatedly floated a buyout of
rival Freeport-McMoRan Inc, saying such a tie-up would make logical sense. Now,
though, that interest is gone.
"It was absolutely the right thing to consider,"
Bristow said. "But right now, today, I think there are better fish to fry
than Freeport."
Toronto-based Barrick has no interest in nickel, lithium or
other metals used to make electric vehicles and will deepen its focus on copper
and gold, which are often found together geologically, Bristow added.
Separately, Bristow said he supports Zambian President
Hakainde Hichilema's plan to rework mining policies and boost industry
investment.
He added that he is eager to complete a deal with Papau New
Guinea Prime Minister James Marape to restart the Porgera gold mine after a
protracted licensing fight.
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