Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Barrick Gold (TSX: ABX) (NYSE: GOLD) said on Saturday that significant exploration successes could extend the life of its Tongon gold mine in the Ivory Coast.
Speaking at a local media briefing, the company’s president and CEO, Mark Bristow, said 10 years after it went into production Tongon could get a new lease on life thanks to promising results from near-mine exploration campaigns designed to replace the mine’s depleted reserves.
According to Bristow, in addition to work on the Seydou North and Tongon West targets, Tongon has filed the documentation for the extension of its Nielle mining licence by a further 10 years, to support the drive to add to its life-of-mine.
Tongon has filed the documentation for the extension of its Nielle mining licence by a further 10 years
“The successful commissioning of Tongon in the midst of a civil war was a landmark achievement in the development of a gold mining industry in the highly prospective but underexplored Côte d’Ivoire,” Bristow said. “Since then, the mine has been consistently profitable — it has just declared a $150 million dividend for the second quarter of this year — and boasts one of the best safety records in the Barrick group. Over time it has invested $1.77 billion in the Ivorian economy in the form of taxes, salaries, payments to local suppliers and infrastructure developments.”
In February, Barrick made a similar announcement, stating that positive exploration results and the conversion of resources to reserves allowed it to extend the mine’s life to 2023.
Turned into one of the miner’s most valued assets after almost being sold in 2019, Tongon produced 284,863 ounces of gold in 2020, at the top end of its guidance for the year.
The mine was built and commissioned in the midst of country-wide conflict and it has since operated in an unstable socio-political environment. It has also been impacted by a broad range of problems, including a mill fire, recurring technical issues, and an erratic grid power supply.
Barrick has a nearly 90% stake in the gold mine, which is located 682 kilometers north of the coastal city of Abidjan. The Ivorian government and local investors own the remainder interest.
