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DECEMBER 6—19, 2021 / VOL. 107 ISSUE 25 / GLOBAL MINING NEWS · SINCE 1915 / $5.25 / WWW.NORTHERNMINER.COM
Bristow on value gap between fund managers and miners GMS
Newcrest’s growth strategy is Americas focused, not just in Canada C-SUITE INTERVIEW
| Company looks for
long-lived, low-cost assets
| Mining veteran shares his thoughts on the industry
BY HENRY LAZENBY
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Barrick president and CEO Mark Bristow (centre) with personnel in the field. BARRICK GOLD
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BY HENRY LAZENBY
he global gold mining industry is generally caught between a rock and a hard place when it comes to the disconnect between fund managers and the business of producing sustainable metal and delivering margins. It leaves much value unrealized for owners, Barrick Gold (TSX: ABX; NYSE: GOLD) said during The Northern Miner’s recent Q4 Global Mining Symposium. Speaking to Anthony Vaccaro, president of The Northern Miner Group during a keynote session, Bristow said fund managers’ ambition to gain more relevance often meant shareholders didn’t get the best value from the opportunities at hand. “My critique is that actually through the behaviour of many fund NorthernMiner_CMYK_Nov.pdf managers, we keep forcing the gold
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industry into a trading platform and not developing long-term value,” said Bristow. Since the merger of Randgold Resources and Barrick took place early in 2019, it sparked off a wave of consolidation at the top. In coming out of 2018 and his engagement with Barrick, the deal was followed by the joint venture in Nevada with Newmont (TSX: NGT; NYSE: NEM), Newmont’s acquisition of Goldcorp, and again, Barrick’s acquisition of Acacia Mining. This was followed by the Endeavour Mining (TSX: EDV; LSE: EDV) consolidation in West Africa, and subsequently the Kirkland Lake Gold (TSX: KL; NYSE: KL; ASX: KLA) acquisition of Detour Gold. “Those were all great deals. And they were at the right time of the market, and10:46 theyAM delivered value,” 2021-11-24 said Bristow.
However, according to him, many deals were left on the table despite significant interest to consolidate the industry, and it was a good time to do it. The timing was near the bottom of the market. “The single-asset companies should be wrapped up because then you can invest on the back of that investment. And fixing broken assets in an industry where the average life of mine is ten to 15 years — right now it’s under ten — makes it more difficult, and it makes it more difficult to consolidate the industry. And so then the fund managers want to have that control,” said Bristow. “I think that’s unhealthy because the capital under management in these big public funds is looking for more and more relevance. So, See BRISTOW / 6
ustralia-based Newcrest Mining (ASX: NCM; TSX: NCM; PNGX: NCM) is building critical mass in Canada with the second significant acquisition announced as the mining major sets its sights on organic and mergers and acquisitions-based growth in the Americas, managing director and CEO Sandeep Biswas tells The Northern Miner. In 2019, Newcrest took a 70% interest in Imperial Metals’ (TSX: III) Red Chris copper-gold mine in northern British Columbia, and more recently, the $3.84 billion (US$2.8 billion) acquisition of Pretium Resources, announced on November 9, to gain control of its high-grade Brucejack operation in British Columbia. “Newcrest specializes in what I call tier-one deposits,” Biswas says in an interview. “We have a clear strategy where we want to continue to gain exposure to tier-one deposits, which in our terminology is typically 300,000-plus ounces per year equivalent comprising copper if available, and gold.” Further, the company has a penchant for long-lived assets, typically 15 years or longer and assets also must be low-cost with the ability to go into the first quartile range, according to Biswas. “If you look at Brucejack, it fits all the criteria. And it’s in a tier-one jurisdiction as well, which gives us some geographical spread and reduces the geographical risk as well. “And the other thing that’s good about Brucejack is its exploration potential. I mean, we are explorers. It’s in our DNA,” says Biswas. Newcrest feels very comfortable with the geology. “The latest results, even at the recent Golden Marmot
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discovery, show that there is a high likelihood of finding more epithermal gold, and there may even be some porphyry potential at the extremities of the property. So, all this excites us,” says the executive. Newcrest was also drawn in by the proximity (about 150 kilometres) of the Brucejack asset to its existing Red Chris operation. This opens an opportunity to extract more significant synergies from an operating and senior personnel standpoint, as well as greater procurement and logistics synergies. Biswas also says Newcrest will bring its extensive block-caving and epithermal vein experience to the table, which could entail a philosophical step-change for how the future Brucejack asset will be operated. The company intends to maximize value at Brucejack via a threeSee NEWCREST / 16 PM40069240