Barrick Gold’s report of its 2014 financial and operating results, issued February 18, included brief status reports on four growth projects at or near its existing mines in Nevada. A prefeasibility study was completed in January for an expansion at its 75% owned Turquoise Ridge mine, and prefeasibility studies are scheduled for completion before year-end at its Goldrush, Cortez underground expansion and Spring Valley projects.
|Barrick's Turquoise Ridge mine will get an additional production shaft.|
The Turquoise Ridge mine, located about 70 km northeast of Winnemucca, Nevada, is owned 75% by Barrick and 25% by Newmont Mining. The mine produced about 260,000 oz of gold in 2014 (100% basis) and has about 6 million oz of gold in reserves at an average grade of 16.9 g/metric ton (mt), the highest reserve grade in Barrick’s operating portfolio and among the highest in the entire gold industry.
Barrick is advancing a project to develop an additional shaft at Turquoise Ridge that could bring forward more than 1 million oz of production, roughly doubling output to an average of 500,000 oz/y at all-in sustaining costs of about $625 to $675/oz. Key permits are expected in the third quarter of 2015. Pending approval by the joint venture partners, construction could begin in the fourth quarter of 2015, with initial production beginning in 2019.
Preliminary estimates indicate capital expenditures of $300 million to $325 million for additional underground development and shaft construction and a payback period of roughly 2.5 years, using a gold price assumption of $1,300/oz.
Drilling at the northern extension of the Turquoise Ridge deposit confirms the orebody is larger than previously known, at higher grades. Due to the substantial thickness of the mineralization, Barrick is also looking at the economics of introducing bulk underground mining in some parts of the orebody.
|Barrick said it's Goldrush project is one of the largest gold discoveries of the last decade.|
The Goldrush project is located 6 km from Barrick’s Cortez mine and is one of the largest gold discoveries of the last decade. Measured and indicated resources at the end of 2014 totaled 10.6 million oz, and inferred resources totaled 4.9 million oz. A prefeasibility study is scheduled for completion in mid-2015.
Infill drilling in 2014 continued to demonstrate high-grade continuity and led to resource upgrades. A permit application for twin exploration declines that will allow the company to better explore the northern limits of the known deposit was submitted in the second quarter of 2014.
CORTEZ UNDERGROUND EXPANSION
A prefeasibility study to extend underground mining at Cortez below currently permitted levels will be completed in late 2015. Mineralization in this Lower Zone is primarily oxide and higher-grade than underground ore currently being mined, which is sulphide in nature. The limits of the Lower Zone have not been defined, and drilling has indicated potential for new targets at depth.
An exploration drift has been extended to the south, enabling additional step-out drilling, which is anticipated to begin in June. Drill results to date include 36.6 m at 31.5 g/mt and 27.4 m at 20.9 g/mt, both oxide in nature, which compare favorably with the average grade of 13.8 g/mt in refractory ore above the 3,800-ft level.
The Spring Valley project is located about 75 km west of the Cortez mine and is owned 70% by Barrick and 30% by Midway Gold. The low-capital-cost, oxide heap-leach project has the potential to become a stand-alone mine. Barrick expects to complete a prefeasibility study in late 2015.
Barrick reported an initial measured and indicated resource of 1.3 million oz (70% basis) averaging 0.66 g/mt and an inferred resource of 0.6 million oz (70% basis) averaging 0.62 g/mt for Spring Valley at the end of 2014. There is good potential to expand the current resource at higher gold prices.