I don't think I'd be sitting here if we hadn't done that - Barrick CEO on debt reduction over M&A
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- čas přidán 30. 11. 2022
- Barrick Gold CEO Mark Bristow underlined his company's focus on debt reduction over M&A.
This week Bristow spoke to Kitco Mining correspondent Paul Harris at Mines and Money London.
Barrick Gold (NYSE:GOLD) let some deals pass during the recent run up in gold. In 2020 Barrick Gold was in discussions to acquire Great Bear Resources. The company eventually fell to Kinross for $1.8 billion.
Bristow said he takes lessons from the last company he ran, Randgold Resources. In 2018 Barrick Gold acquired Randgold Resources for $18.3 billion. Bristow became Barrick's CEO after the acquisition.
"You'll remember back in 2011 when gold peaked for the second, everyone rushed off to do these big, large, premium M&As," said Bristow. "Randgold at the time had a lot of debt because we were building out three projects simultaneously, and I took two decisions: one, that we wouldn't change the gold price in which we allocate our capital; and two, we wanted to bring down the debt.
"We used those margins rather than chase M&A transactions. That really put Randgold into a standalone position in the industry. I don't think I'd be sitting here today representing Barrick if we hadn't done that."
He also noted that the cupboard is bare stating that there is a lack of projects that would fit within Barrick, namely tier one assets.
"I don't think they're any tier one assets in Canada that fit our criteria, and that is you've got to be more than 500,000 ounces for more than 10 years in the bottom half of the cost curve."
Bristow said work with Pakistan on advancing Barrick's Reko Diq project was "energizing." The company said that the project is one of the largest undeveloped copper-gold deposits in the world. Barrick has a 50% stake in the project. Balochistan province has 25%, and Pakistani state-owned enterprises hold the remainder.
Bristow said the negotiation had to take place with the ruling and opposition parties to get buy-in.
"How do you build a real partnership? [Pakistan] has been a really energizing engagement on a personal scale where we've been able to complete over two years of negotiation...a framework agreement which plots out where we need to build," said Bristow. "I don't think there has ever been a more transparent agreement."
Coverage of Mines and Money London sponsored by Discovery Group.
Follow Paul Harris on Twitter: @paulharrisgold ( / paulharrisgold )
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0:30 - Gold sector highlights in 2022
3:52 - Paying down debt at Barrick Gold
9:35 - Health of gold miners overall in a higher interest environment
11:45 - Value in the current market with the low valuations
12:51 - Barrick acquiring tier two assets
14:39 - Mark Bristow on Canadian juniors and developers
Great ceo! Great company! 1 billion buybacks this year, plus way undervalued at current stock price. Dividend are great! Solid company. 2024 gold will shine, so will barrack gold.
The best mining ceo on planet earth!
Do you recommend this stock?
Visionary leadership at his best..
Great interview!! Thanks Paul.
Thanks to you both, great interview! 👍
Ive been in the mining business for 25 years. This guy is the best of the best. The only risk to Barrick is that something happens to him or he retires.
Nice to hear from the 2nd largest gold mining company.
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Wish Barrick would buy Eldorado
long in the tooth and no M&A?
Seems genuine but they recently lowballed Kirkland . Buying back stock doesn't improve value! does buying back debt that was at lower interest than today really make value? No prophet here just lots of questions. trust your gut.
buying back cheap stock does create value for shareholders as multiples go lower and dividend increases.
Your finished Recovery consistently reflect passionate determination and enthusiasm. Keep it up Loatedcyber And thanks for retrieving my usdt back completely.....