Aug. 7 (Bloomberg) -- Barrick Gold Corp., the world’s biggest gold producer, is studying buying new mines as it completes a review to reduce costs at existing assets.
“Perhaps there’s more M&A opportunities today than there were a year ago and as a company we’re looking at those assets on a daily basis,” Mike Feehan, regional president of the Toronto-based company’s Australia and Pacific operations said today at the Diggers & Dealers mining conference in Kalgoorlie, Australia. “If we could find a few million ounces of gold deposit that’s probably pretty good.”
Barrick Chief Executive Officer Jamie Sokalsky is revising costs and reviewing the company’s other development projects after taking over last month from Aaron Regent, who was fired. After 11 straight years of gains which have seen gold rise more than fivefold, the price of the precious metal is up just 3.1 percent this year, giving producers less room for maneuver and pushing them to focus on returns instead of output.
Demand for gold will be driven by central bank purchases for the metal as a store of value, as well as rising jewelry demand in China and India, Feehan said, declining to offer his outlook on price. Gold for immediate delivery gained 0.3 percent to $1,614.50 an ounce at 5:18 p.m. Perth time. It may gain to $1,800 by the first quarter of next year, according to the median of 18 analyst estimates compiled by Bloomberg.
Barrick plans to spend 20 percent of this year’s $450 million to $490 million exploration budget for projects in Australia and Papua New Guinea, he said. It spent $90 million in the Australia Pacific region last year, according to data compiled by Bloomberg.
Barrick reaffirmed its gold production forecast for this year of 7.3 million to 7.8 million ounces in a statement today. Copper production will be 460 million to 500 million pounds. The Lumwana copper mine in Zambia, which it acquired in July last year, will improve production in 2013, with an expected output of around 250 million ounces, it said today.
The company reiterated its forecast for 2012 gold cash costs of $550 to $575 per ounce, having increased it earlier this year from $520 to $560.
To contact the reporter on this story: Soraya Permatasari in Melbourne at email@example.com