Barrick announces new mine development plan in Africa

Tuesday, Oct. 19, 1999 | 12:01 p.m.

Barrick, the largest gold producer in Canada and one of the two largest in Nevada, acquired the Bulyanhulu property as part of its $281 million acquisition of Vancouver-based Sutton Resources Ltd. in March.

"We see Bulyanhulu making a strong contribution to production, earnings and cash flow from the very start," Barrick president Randall Oliphant said at a news conference today.

"We are pleased with our recent acquisition, which met every one of our investment criteria, including a welcoming political climate."

Bulyanhulu is expected to have average annual gold production of 400,000 ounces at cash operating costs of $130 an ounce over an estimated life of 15 years, the Toronto-based producer said. Barrick is expecting to double the current gold reserves from four to eight million ounces.

"A truly exciting announcement in the mining biness is the unveiling of a new mine development," said John Carrington, the company's chief operating officer. "We are going full bore to bring Bulyanhulu into production. It will provide significant low-cost production for Barrick for at least 15 years."

Newmont Gold and Barrick are the top two producers in Nevada, which ranks behind only South Africa and Atralia in overall gold production.

Among other development plans for the African mine, Barrick said:

- It has already awarded major contracts for engineering, shaft sinking and underground development work and development mining and infrastructure construction has begun.

- Construction of the 2,500-tonne-a-day process plant will begin by the end of the year and 700 employees and contractors are working on the site, 90 per cent of whom are Tanzanian.

- Work on project financing with a syndicate of major international banks and governmental agencies has begun and is expected to be finalized by early next year. The financing will represent approximately two-thirds of the $280 million investment.