Exploration success - Barrick Gold Corporation
Operational Excellence
success EXPLORATION IS AN INTEGRAL PART OF OUR OVERALL STRATEGY, and has a compelling value proposition for us. Barrick’s Exploration team has a measured and disciplined approach to monitoring and exploring for flagship deposits. Secondly, we explore near our existing assets and also look for new deposits in our Regions which have the
potential to materially grow our production profile. We have consistently funded exploration1 over the years and our efforts have paid off. Since 1990, we have mined about 118 million ounces of gold, acquired 110 million ounces and we have found 148 million ounces of gold through exploration. In fact, since 1990, we have spent about $2.5 billion on exploration for a low overall
finding cost of approximately $17 per ounce. One of Barrick’s strengths is our ability to identify and deliver new ounces following any acquisition. Through our effective collaboration with the Regions, and the Corporate Development and Evaluations team, we have a remarkable track record in realizing upside. There is not a single acquisition we have made, where
“In 2011, we announced two new major gold discoveries in Nevada, Red Hill and Goldrush, in close proximity to our exceptional Cortez mine. Drilling results continue to expand mineralization and show they merge into a single deposit. Undoubtedly, these discoveries are the most exciting I have seen in my 25-plus-year career and our Exploration team looks forward to providing our shareholders with progress updates and resource expansions as we focus our efforts on this district in 2012.” Rob Krcmarov, Senior Vice President, Global Exploration
1. Barrick’s exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick. For information on the geology, exploration activities generally, and drilling and analysis procedures on Barrick’s material properties, see Barrick’s most recent Annual Information Form/Form 40-F.
22
Barrick Annual Report 2011 | Exploration Success
Since the announcement of the Red Hill and Goldrush discoveries in 2011, drilling has confirmed that the two deposits merge and also continues to grow the potential at this greenfield discovery.
History of Gold Reserve Growth Proven and probable – millions of ounces
140 Moz 148 TOTAL EXPLORATION
20 Moz 20 118
110
TOTAL MINED
TOTAL ACQUIRED
about 45% of the total budget, the majority of which is targeted for Nevada. Barrick’s Nevada land holdings are strategically located on three well-established and producing gold trends. About 20% is expected to be spent in the Australia Pacific region and about 20% for copper in Zambia. Approximately 10% will be targeted for the South America region with the remainder for ABG.
0
2011
0
1990
we have not gone on to subsequently add substantially to reserves and resources, and we expect to do the same at the Lumwana copper mine in Zambia, which was acquired with the Equinox transaction. As a result of exploration success in 2011, which contributed to the reserve and resource development, as well as opportunities within our portfolio, the 2012 budget has increased to $450 – $490 million, the highest in the Company’s history. The budget is weighted towards near-term resource additions and conversion at existing mines while still providing support for earlier stage exploration in operating districts and other emerging areas. North America is expected to be allocated
DIVESTED
Acquisition Exploration
In Nevada, recent drilling continues to grow the potential at Red Hill and Goldrush. As of year-end 2011, a resource of approximately 1.3 million ounces 2 at Red Hill was calculated in the indicated category and about 3.3 million ounces 2 in the inferred category and the resource remains open in multiple directions. Step-out holes have intersected mineralization a further 2,800 feet
Members of the Red Hill and Goldrush discovery team from left, Alejandro Ly, Project Geologist; Kevin Creel, Chief Exploration Geologist, Cortez; and Mark Bradley, District Geologist.
2. See pages 181–188 of the 2011 Annual Report for additional information on reserves and resources.
23
Exploration Success
New Discovery Mineralized Deposit Current Producer Former Producer
Gold Acres CORTEZ PIPELINE CRESCENT VALLEY Cortez Pits
CORTEZ MOUNTAINS
Horse Canyon CORTEZ HILLS
RED HILL GOLDRUSH
0 miles
2
4
6
8
10
north beyond the initial 2010 resource as well as extended mineralization at least 1,000 feet to the southwest. Selected highlights of major step-out drilling include 90 feet at 0.15 ounces per ton (opt), 120 feet at 0.32 opt, 20 feet at 1.18 opt, and 110 feet at 0.12 opt. Infill drilling between the deposits has shown that Red Hill and Goldrush merge into a single deposit. A small portion of the Goldrush deposit had sufficient drill density to report an initial inferred resource of about 2.5 million ounces. The step-out drilling results continue to suggest a high likelihood of major resource expansion.
24
ET Blue
A total of 468,000 feet of drilling is planned at Red Hill and Goldrush in 2012 to test the full extent of the mineralized system and further expand and upgrade the resource base and a scoping study has commenced. A significant drilling program is planned for Red Hill and Goldrush in 2012 to test the full extent of the system and further expand and upgrade the resource base.
At Lumwana, activity has been ramped up with 17 drill rigs on the property focusing on resource definition drilling at the Chimiwungo deposit to convert inferred resources into the indicated category and step-out drilling to the south and east to extend the mineralization. Drilling to date has confirmed the thickened eastern shoot of Chimiwungo and selected highlights include 44 meters grading 1.00% copper, 44 meters at 1.07%, 41 meters at 0.80%, 37 meters at 0.91% and 20 meters at 1.60%. In addition to these strong results within the resource area, drilling further to the east is intersecting shallower than expected mineralization.
Barrick Annual Report 2011 | Exploration Success
At the Lumwana mine in Zambia, the Chimiwungo deposit is undergoing an aggressive drill program, which will focus on resource definition to upgrade resources and step-out drilling to the south and east to extend the mineralization.
For the sixth year in a row, Barrick replaced proven and probable gold reserves to about 140 million ounces at the end of 2011 and also has measured and indicated gold resources of
80 million ounces and inferred gold resources of 40 million ounces. Copper reserves nearly doubled from 6.5 billion pounds to 12.7 billion pounds, measured and indicated copper resources
rose 17% to 15.3 billion pounds, and inferred copper resources increased 117% to almost 20 billion pounds with the addition of Lumwana and Jabal Sayid.
Reserves and Resources Summary Proven and Probable Reserves
Measured and Indicated Resources
Inferred Resources
139,931
80,399
40,183
North America South America Australia Pacific Africa Other
59,041 52,775 15,429 12,633 53
47,354 10,329 15,810 6,893 13
17,362 6,471 13,141 3,208 1
Other Metals Copper (M lbs) Nickel (M lbs)
12,693 –
15,288 1,080
19,866 596
Proven and Probable Gold Reserves
Measured and Indicated Gold Resources
Inferred Gold Resources
1,067,515 5,768
249,974 1,330
64,018 1,652
at December 31, 2011 (Barrick’s equity share)
Gold (000s oz)
Other Metals Contained in:
Silver (000s oz) Copper (M lbs)
25
success EXPLORATION IS AN INTEGRAL PART OF OUR OVERALL STRATEGY, and has a compelling value proposition for us. Barrick’s Exploration team has a measured and disciplined approach to monitoring and exploring for flagship deposits. Secondly, we explore near our existing assets and also look for new deposits in our Regions which have the
potential to materially grow our production profile. We have consistently funded exploration1 over the years and our efforts have paid off. Since 1990, we have mined about 118 million ounces of gold, acquired 110 million ounces and we have found 148 million ounces of gold through exploration. In fact, since 1990, we have spent about $2.5 billion on exploration for a low overall
finding cost of approximately $17 per ounce. One of Barrick’s strengths is our ability to identify and deliver new ounces following any acquisition. Through our effective collaboration with the Regions, and the Corporate Development and Evaluations team, we have a remarkable track record in realizing upside. There is not a single acquisition we have made, where
“In 2011, we announced two new major gold discoveries in Nevada, Red Hill and Goldrush, in close proximity to our exceptional Cortez mine. Drilling results continue to expand mineralization and show they merge into a single deposit. Undoubtedly, these discoveries are the most exciting I have seen in my 25-plus-year career and our Exploration team looks forward to providing our shareholders with progress updates and resource expansions as we focus our efforts on this district in 2012.” Rob Krcmarov, Senior Vice President, Global Exploration
1. Barrick’s exploration programs are designed and conducted under the supervision of Robert Krcmarov, Senior Vice President, Global Exploration of Barrick. For information on the geology, exploration activities generally, and drilling and analysis procedures on Barrick’s material properties, see Barrick’s most recent Annual Information Form/Form 40-F.
22
Barrick Annual Report 2011 | Exploration Success
Since the announcement of the Red Hill and Goldrush discoveries in 2011, drilling has confirmed that the two deposits merge and also continues to grow the potential at this greenfield discovery.
History of Gold Reserve Growth Proven and probable – millions of ounces
140 Moz 148 TOTAL EXPLORATION
20 Moz 20 118
110
TOTAL MINED
TOTAL ACQUIRED
about 45% of the total budget, the majority of which is targeted for Nevada. Barrick’s Nevada land holdings are strategically located on three well-established and producing gold trends. About 20% is expected to be spent in the Australia Pacific region and about 20% for copper in Zambia. Approximately 10% will be targeted for the South America region with the remainder for ABG.
0
2011
0
1990
we have not gone on to subsequently add substantially to reserves and resources, and we expect to do the same at the Lumwana copper mine in Zambia, which was acquired with the Equinox transaction. As a result of exploration success in 2011, which contributed to the reserve and resource development, as well as opportunities within our portfolio, the 2012 budget has increased to $450 – $490 million, the highest in the Company’s history. The budget is weighted towards near-term resource additions and conversion at existing mines while still providing support for earlier stage exploration in operating districts and other emerging areas. North America is expected to be allocated
DIVESTED
Acquisition Exploration
In Nevada, recent drilling continues to grow the potential at Red Hill and Goldrush. As of year-end 2011, a resource of approximately 1.3 million ounces 2 at Red Hill was calculated in the indicated category and about 3.3 million ounces 2 in the inferred category and the resource remains open in multiple directions. Step-out holes have intersected mineralization a further 2,800 feet
Members of the Red Hill and Goldrush discovery team from left, Alejandro Ly, Project Geologist; Kevin Creel, Chief Exploration Geologist, Cortez; and Mark Bradley, District Geologist.
2. See pages 181–188 of the 2011 Annual Report for additional information on reserves and resources.
23
Exploration Success
New Discovery Mineralized Deposit Current Producer Former Producer
Gold Acres CORTEZ PIPELINE CRESCENT VALLEY Cortez Pits
CORTEZ MOUNTAINS
Horse Canyon CORTEZ HILLS
RED HILL GOLDRUSH
0 miles
2
4
6
8
10
north beyond the initial 2010 resource as well as extended mineralization at least 1,000 feet to the southwest. Selected highlights of major step-out drilling include 90 feet at 0.15 ounces per ton (opt), 120 feet at 0.32 opt, 20 feet at 1.18 opt, and 110 feet at 0.12 opt. Infill drilling between the deposits has shown that Red Hill and Goldrush merge into a single deposit. A small portion of the Goldrush deposit had sufficient drill density to report an initial inferred resource of about 2.5 million ounces. The step-out drilling results continue to suggest a high likelihood of major resource expansion.
24
ET Blue
A total of 468,000 feet of drilling is planned at Red Hill and Goldrush in 2012 to test the full extent of the mineralized system and further expand and upgrade the resource base and a scoping study has commenced. A significant drilling program is planned for Red Hill and Goldrush in 2012 to test the full extent of the system and further expand and upgrade the resource base.
At Lumwana, activity has been ramped up with 17 drill rigs on the property focusing on resource definition drilling at the Chimiwungo deposit to convert inferred resources into the indicated category and step-out drilling to the south and east to extend the mineralization. Drilling to date has confirmed the thickened eastern shoot of Chimiwungo and selected highlights include 44 meters grading 1.00% copper, 44 meters at 1.07%, 41 meters at 0.80%, 37 meters at 0.91% and 20 meters at 1.60%. In addition to these strong results within the resource area, drilling further to the east is intersecting shallower than expected mineralization.
Barrick Annual Report 2011 | Exploration Success
At the Lumwana mine in Zambia, the Chimiwungo deposit is undergoing an aggressive drill program, which will focus on resource definition to upgrade resources and step-out drilling to the south and east to extend the mineralization.
For the sixth year in a row, Barrick replaced proven and probable gold reserves to about 140 million ounces at the end of 2011 and also has measured and indicated gold resources of
80 million ounces and inferred gold resources of 40 million ounces. Copper reserves nearly doubled from 6.5 billion pounds to 12.7 billion pounds, measured and indicated copper resources
rose 17% to 15.3 billion pounds, and inferred copper resources increased 117% to almost 20 billion pounds with the addition of Lumwana and Jabal Sayid.
Reserves and Resources Summary Proven and Probable Reserves
Measured and Indicated Resources
Inferred Resources
139,931
80,399
40,183
North America South America Australia Pacific Africa Other
59,041 52,775 15,429 12,633 53
47,354 10,329 15,810 6,893 13
17,362 6,471 13,141 3,208 1
Other Metals Copper (M lbs) Nickel (M lbs)
12,693 –
15,288 1,080
19,866 596
Proven and Probable Gold Reserves
Measured and Indicated Gold Resources
Inferred Gold Resources
1,067,515 5,768
249,974 1,330
64,018 1,652
at December 31, 2011 (Barrick’s equity share)
Gold (000s oz)
Other Metals Contained in:
Silver (000s oz) Copper (M lbs)
25
