Barrick Gold Corporation (GOLD – Free Report) recently announced the official start of the development of a Super Pit at the Lumwana copper mine in Zambia.
The feasibility study for the Super Pit Expansion is expected to be completed by the end of the year and construction will begin in 2025. Once completed, the $2 billion project has the potential to transform Lumwana into a long-term, high-return top 25 company. copper producer and Tier One copper mine.
The expansion entails a doubling of the throughput capacity of the current process circuit and a significant increase in mining volumes. The plant’s production capacity will increase from 27 million tonnes to 52 million tonnes, doubling the mine’s annual copper production from 120 kt to an average mine life of 240 kt. The development of the process plant is supported by a gradual increase in total mining volumes, which are expected to rise from 150 million tonnes in 2025 to around 240 million tonnes in 2028 and then to an average rate of 290 tonnes per year from 2030.
The Super Pit expansion was Barrick’s focus on establishing a lasting legacy by developing local capacity in the region, which would benefit local communities and businesses during the construction and operational phases. The expansion will require approximately 550 additional staff to support the expansion over the next five years, and a further 2,500 construction workers over a three-year period ending in 2028.
The company also plans to build vital infrastructure such as an industrial supplier park and an airstrip. This will allow key suppliers to establish themselves there and form an economic hub that will promote growth and development in the wider region.
Barrick shares are up 35.4% in the past year, compared to the industry’s rise of 45.9%.
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For 2024, Barrick expects attributable gold production to be between 3.9 and 4.3 million ounces. All-in sustaining costs (AISC) are expected to be $1,320-$1,420 per ounce. Cash costs per ounce are estimated at $940-$1,020. The company also expects retail costs to be $1,320-$1,420 per ounce.
GOLD expects copper production of 180,000-210,000 tonnes at an AISC of $3.10-$3.40 per pound, cash costs per pound of $2-$2.30, and selling costs of $2.65-$2.95 per pound.
Capital expenditures for 2024 are expected to be between $2,500 and $2,900 million.
Zacks Rank and Other Key Picks
GOLD currently has a Zacks Rank #2 (Buy).
Other top stocks in the basic materials space include Timmermans Technology Company (CRS – Free report), IAMGOLD company (IAG – Free report) and Centrus Energy Corp. (LEU – Free report).
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