Nevada Gold Mines exceeds expectations, says Barrick

Nevada Gold Mines. Image from Barrick.

Barrick Gold's (NYSE:GOLD) (TSX:ABX) Nevada Gold Mines (NGM), established one year ago Wednesday, posted an exceptional performance in its first 12 months of operation, CEO Mark Bristow said in a media statement Wednesday.

Barrick, the world's second-largest gold miner, operates NGM - the world's largest gold mining complex - and owns 61.5% of the business, with Newmont (NYSE: NEM), the world's largest gold miner, holding the remaining 38.5%.

The business combination is expected to generate savings of $500 million a year within the first full five years. It includes Barrick's Goldstrike, Cortez, Turquoise Ridge and Goldrush, and Newmont's Carlin, Twin Creeks, Phoenix, Long Canyon, along with associated processing plants and infrastructure of both companies.

NGM is expected to produce 2.1 to 2.25 million ounces of gold in 2020. In May, Barrick reported Q1 gold production and costs were consistent with full-year guidance.

In its first year of combined operation, NGM met the production and cost targets set out at the start of the joint venture, despite the covid-19 pandemic

In its first year of combined operation, NGM met the production and cost targets set out at the start of the joint venture, despite the covid-19 pandemic, Bristow said, adding that the joint venture had required the integration of multiple assets, including three tier one mines into a unified complex under a new leadership team.

"The new team was drawn from both legacy companies. It started with a clean slate in a fit-for-purpose structure, integrating the two bodies of knowledge to produce new models and fresh opportunities, and introduced a strong geological focus to the operations," Bristow said. "It was the strength of the team and the structure, incidentally, that enabled NGM to deal so quickly and effectively with the unprecedented threat posed by the pandemic."

Barrick said the joint venture has created a platform from where both companies see NGM as the industry leader.

In March, Barrick unveiled a 10-year production plan aimed at becoming the most valued bullion company. The strategy, outlined in its first annual report since its merger with Randgold Resources, includes boosting Barrick's production to about 5 million ounces of gold a year, with the bulk coming from its North American operations.

At the time, Bristow said Nevada Gold Mines would be the "value foundation" of its business moving forward.