Alamos Gold CEO John McCluskey says Barrick is trying to achieve ‘critical mass’ so it can sell off its less-impressive mines
Barrick Gold Corp.’s sudden expansionist desires are driven by the same concerns as the rest of the industry — it’s getting harder to find gold and more expensive to mine it, according to John McCluskey chief executive of Alamos Gold Inc.
McCluskey said he thinks Barrick, and its new chief executive Mark Bristow, is concerned about the company’s gold reserves — meaning the amount of yellow metal left at its mines — and wants to increase its size so that it can comfortably sell off less-impressive mines without cutting down its profitability.
Barrick, with $29 billion in market capitalization, is multiple times larger and in some ways a different beast than Alamos, which has $2.5 billion in market cap. Those two questions generated ample discussion throughout the Prospectors and Developers Association of Canada conference in downtown Toronto, which drew tens of thousands of mining investors and executives for several days before it ended on Wednesday.
In August, his company released a report, titled ‘Top Gold Producers Reserves in Decline,’ that looked at 20 major gold producers and found that as a group their remaining years of production based on reserves fell by on average five years over the last decade to 15 years, from 20. Barrick’s Bristow has said he could find $4.7 billion in synergies in Nevada over the next two decades, and even large Newmont shareholders have said they believe a JV makes sense.
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