Barrick Confirms Cost View but No Imminent M&A Deal

A senior executive of Barrick Gold said Tuesday the world's largest gold producer will meet its cost expectations for this year, and that no big merger and acquisition plan was imminent.

When asked if Barrick will meet its full-year cost outlook of $425 to $455 an ounce, Alex Davidson, executive vice president for exploration and corporate development, told Reuters in an interview at the Denver Gold Forum that "We will definitely make the guidance."

Davidson cited lower cost pressure because of crude oil's decline from its peak of nearly $150 per barrel.

No M&A plan imminent

In terms of growth strategy, Davidson said Barrick will focus on both organic growth and acquisitions.

"We look at the assets first to see if they are a good fit with our own asset portfolio, and then we decide what to do from there," Davidson said.

"We are more interested in projects and areas that we are already in," he said.

When asked if there will be another large-scale acquisition in the gold mining industry, Davidson said "We are certainly not planning anything imminent."

The company is also waiting for Argentina and Chile to conclude a tax agreement at Barrick's Pascua Lama deposit, which straddles the border of the two countries.

"We are confident that the (Pascua Lama) situation is going to get resolved. It's a project that we want in our stable and we will continue with it," Davidson said.

Pascua Lama straddles a shared border in the Andes at about 5,500 meters above sea level, and holds a treasure trove of some 17 million ounces of gold and one of the world's largest deposits of silver.

Construction of the project has been delayed for years, first as the company worked its way through environmental permitting and subsequently as Chile and Argentina try to work out which taxes should be paid on which side of the border.

Davidson said that once the company gets the final green light on the $2.4bn project, it will take between two and a half to three years to build a mine.

by Pav Jordan in Chile; editing by Marguerita Choy.