Bristow rings in new Barrick growth phase
- 9 May 2025
Mark Bristow has drawn parallels between newly minted Barrick Mining Corporation’s next growth phase and the halcyon days of the company he founded, telling analysts high-margin production expansion built on organically grown gold and copper inventories can make Barrick a standout sector performer over the next decade.
Speaking after delivering strong first-quarter net earnings (US$474 million) and free cash flow ($375m) on production of 758,000oz of gold and 44,000 tonnes of copper, Barrick’s CEO said the company would remain focused on increasing low-cost output from “tier one” sources and “replacing and growing reserves through the drill bit and not through overpriced M&A”.
“I’ll take you back to 2011 to 2015 when people used to complain that Randgold was ex-growth because all we were doing was growing cash flow,” he said.
“Growth comes in many different facets and the most exciting one is when you’ve got long-term growth [options] and you grow your profits and your cash flow.”
Randgold was the Africa-focused gold miner Bristow founded in 1995 which became a London-listed market darling up to the $18 billion merger of Randgold and Barrick Gold in 2018. Barrick Gold just became Barrick Mining Corp and ‘B’ on the New York Stock Exchange, reflecting its growing copper market presence.
“Since the merger we’ve added 111 million gold-equivalent ounces of reserves at a cost of just $10 per gold-equivalent ounce compared to M&A deals in the sector averaging over $440 per ounce, and in some cases more than double that,” Bristow said.
“It’s a disciplined strategy that underpins our growth plans and reinforces the long-term value of our business.
“We’re looking at 30% gold-equivalent [production] growth out to the end of the decade.
“We're excited about the next phase [for] Barrick because it does bring real growth.
“And again, not too dissimilar to the Randgold situation in the 2005-to-2013 [period] when we built out Loulo, Tongon and Kibali together; we took debt on and we were able to build three new mines and capture that big spike in 2011 [through Loulo and Tongon] and when everyone else was running around doing M&A we were paying our debt back.
“It’s pretty much what we've [Barrick] been doing in the last couple of years, is really keeping a close eye on our balance sheet and looking at ways to actually leverage our per share value through investments.
“The precursor to delivering value per share is to actually have the reserves per share starting to trend in the right direction.”
The former Randgold mines and Barrick’s reinstated Tanzania operations underpin projected Africa gold output of 1.35-1.5 million ounces a year at AISC of $1150-1250/oz to the end of the decade, when expanded production from the Lumwana copper mine in Zambia is expected to give the company a plus-3Mozpa attributable GEO (gold-equivalent oz) profile in the region.
Lumwana and the other potential jewel in Barrick’s copper crown, half-owned Reko Diq in Pakistan, again bring echoes of Randgold’s playbook with life-of-mine bottom-quartile (projected) AISC portending resilient FCF over the long term.
Barrick’s December 2024 Lumwana feasibility study outlined life-of-mine AISC of $2.38-$2.48/lb and LOM FCF of $17 billion, a $4.5b NPV (at an 8% discount rate) and 59% after-tax IRR at a $4.20/lb long-term copper price.
Bristow said Randgold used a $450/oz gold price to build its foundation mines. The yellow metal ran up to c$1900/oz late in 2011.
“The challenge in copper has been that the inventory sitting in, particularly the large copper miners, as well as the diversified miners, is of such a nature that they’re not viable at $4.20-to-4.50/lb, so you’ve got this inventory but you've got no investment in capital,” he said.
“What you’ve seen is the copper industry investing in brownfields extensions, accepting higher operating costs because they can bring that copper production in quickly and at lower capital, or what people talk about today as lower capital intensity.
“The challenge is that [like the gold sector] we haven’t been exploring and so the supply side of that inventory is not forthcoming. You need a higher copper price to really unlock it. And you need a copper price that goes high enough for the industry to be comfortable it'll stay there, because building a copper mine takes time.
“That’s what makes Lumwana and Reko Diq such standout assets, because [they make] real returns at $3 copper and can comfortably carry the capital requirements to do so.
“This is the best time to build copper mines if they are viable at lower copper prices because you bring the production in at a time when demand picks up.”
While Barrick should feast on US-centric gold earnings, from 61.5%-owned Nevada Gold Mines, at current gold prices, it is deploying growth capital heavily in Pakistan and Africa to grow its copper exposure and maintain 10-year operating visibility at key gold assets and, according to Bristow, won’t change its stance on M&A even with windfalls from asset sales such as Donlin and Hemlo in Canada.
“We don't lurch from one M&A transaction to another,” he said. Peers were “constantly buying assets that just a year and a half ago weren’t viable, and paying a premium for them”. He added keeping debt low was a priority as the world went through “a very dynamic period to say the least” as was maintaining respectable dividend flows. “And the best investment we can do right now – it’s accretive on every metric – is buy our stock.”
Bristow said despite the $1 billion sale of 50% of Donlin and continuing quest to find a buyer for Hemlo, “this has no bearing on our commitment to Canada”.
“On the contrary we’ve launched a significant drill program in the southern Abitibi [gold belt] … marking a significant step in rebuilding our exploration pipeline in the region. And we continue to progress and evaluate other project opportunities.”
On the broader question of jurisdictional risk and value discrepancies, Bristow was again quick to highlight the difference short and long-term perspective made.
He said after Randgold and Barrick merged, “Tanzania was closed, Pakistan [Reko Diq] was nationalised and [Porgera in] Papua New Guinea hadn’t had its permit renewed”.
“It was the African assets that really allowed us to fix all the neglect in Nevada and deliver Nevada as we see it today. It’s worth looking at the profile of Nevada when we put the two assets together … and then look at the life-of-mine profile today. And we’ve been through some challenging times in Nevada, on jurisdiction and royalties and things, that are no different to some of the challenges we have elsewhere in the world.
“If you want to be world class you need to be global.
“You’ve seen just in [recent] history, too, Rio Tinto going to Mongolia. You've seen Rio go into Guinea .... after a coup. You’ve seen Newmont buy into Papua New Guinea, both going concerns and development projects. And you've seen everyone focusing in on central Africa because that's where the big copper and other critical minerals sit.
“So I think we get hung up sometimes on, or confused about, short-term harvesting and jurisdiction.
“This is the echo chamber that’s developed in the market.
“But what’s driving the valuation in these so-called lower risk jurisdictions is harvesting. No-one in the analyst fraternity looks at life-of-mine, you just look at the next quarter or the next year, and there’s a lot of harvesting, a lot of dividend flow and that’s what the fund managers have been baying for.
“When you’re not replacing reserves your sustaining capital comes off very quickly and it looks good. But most of us have been around long enough to have experienced what happens when you come off on the production and you haven’t got any alternate. You can buy for so long but that also runs out.
“If you look back over the last two decades the real value comes with long-term delivery.
“So I would argue very differently. It’s landing as safe jurisdictions but it’s actually harvesting M&A transactions.
Barrick closed the week at $18.86, up about 18% year-to-date, capitalising the company at $33 billion.
