Barrick CEO Says Gold Industry Still Needs to Consolidate
(Bloomberg) - According to the top executive at Barrick Gold Corp. the gold industry needs to be more consolidated so that exploration can be increased to increase depleted reserves, attract more general investors and improve efficiency.
The barrage of business that has shaped the sector for the past two years is likely to continue as Australian miners "leave their mark" on the industry, CEO Mark Bristow told a virtual South African mining conference. Mergers and acquisitions are likely to dominate the sector in Africa and are required in Canada, which is home to the world's second largest gold mining company.
"The industry still needs to be consolidated," said Bristow on Wednesday. "Canada needs more consolidation work."
After the mega-merger between Barrick and Randgold Resources Ltd. in 2018 and the subsequent acquisition of Goldcorp Inc. by Newmont Corp. a rush for business, but buying slowed as the gold rally rose to an all-time high this year in assets.
According to Bloomberg, gold mining deals worth around $ 14 billion have been signed or negotiated this year, compared to around $ 26 billion in 2019.
Bristow warned producers not to rearrange the lounge chairs merely by doing business. Gold miners must invest in finding new deposits to replace reserves, he said.
For his part, Barrick remains keen to acquire additional Tier 1 assets, including Freeport-McMoRan Inc.'s Grasberg mine in Indonesia, Bristow said.
“As you know, Barrick is completely and purposefully focused on Tier 1 assets. Hence, it will be of interest to us as there aren't many Tier 1 assets left that we don't own or of which we own a part. " he said.
Tier 1 gold investments are generally assumed to have annual production of at least 500,000 ounces and long-term costs at the lower end of the industry average.
(Updates with the value of the offers in the fifth paragraph)
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