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Barrick Gold Commences Major Lumwana Super Pit Expansion

Barrick Gold Corporation has announced the launch of its Super Pit development at Lumwana copper mine in Zambia, a potential milestone towards escalating copper production. The $2 billion project aims to position Lumwana as a leading name in copper production while supporting local economic growth.

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AI Rating:   7

Analysis of Barrick Gold Corporation's Expansion Announcement

Barrick Gold Corporation (GOLD) has unveiled the commencement of the Super Pit Expansion at its Lumwana copper mine, which could significantly impact its future performance and stock prices.

Project Details

The Super Pit Expansion entails a substantial investment of $2 billion, with expectations to double both the process circuit's throughput and the mine's annual copper production. The projected output doubles from 120kt to an average of 240kt over the mine's life. This move is expected to enhance Barrick's position as a top copper producer, possibly improving profitability and long-term growth.

Production Forecast

Looking ahead, Barrick anticipates its attributable gold production for 2024 to be between 3.9-4.3 million ounces. The all-in-sustaining costs (AISC) are estimated at $1,320-$1,420 per ounce, with cash costs expected to range from $940-$1,020 per ounce. These projections may indicate solid profit margins, assuming market prices for gold remain favorable.

For copper, the company forecasts production at 180,000-210,000 tons with an AISC of $3.10-$3.40 per pound. This structured approach and clear forecasting could instill confidence in investors about the company's operational stability and growth potential.

Capital Expenditures

Projected capital expenditures of $2,500-$2,900 million for 2024 reflect significant investment in both gold and copper production. Such expenditures could impact free cash flow in the short term but are generally seen as positive for long-term growth if executed well.

Market Performance

Barrick's shares have risen by 35.4% over the past year, albeit slightly below the industry average increase of 45.9%. This discrepancy may influence investor sentiment, as the company strives to align performance with industry growth trends.

Rating

Overall, the announcements suggest a positive outlook for Barrick Gold Corporation. The expansion of the Lumwana project signifies a move towards enhanced production capabilities and local economic development.

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