Barrick has outlined a series of organic investments to drive long term value. The construction of a third shaft at Turquoise Ridge, with an estimated initial capital investment of $300-$325 million (100% basis) has been approved by the company. Combined with additional processing capacity, this is expected to enable the mine to roughly double annual production to more than 500,000 ounces per year (100% basis), at an average cost of sales of around $720 per ounce, and average all-in sustaining costs of roughly $630 per ounce.
In addition to increasing annual production, the third shaft is expected to reduce operating costs, boost mining productivity rates, and increase total life of mine production by allowing for reduced cutoff grades. In January 2017, Barrick and Newmont Mining Corporation reached a new, seven-year toll milling agreement for ore processing at Newmont’s Twin Creeks facility, which will support the mine expansion. The agreement increases contractual annual throughput from 730,000 tons in 2017, to 850,000 tons in 2018 and 2019, and 1.2 million tons per year between 2020 and 2024.
Permits for the construction of a third shaft are in hand. Surface works and shaft sinking are expected to take place in 2018 and 2019, followed by equipping of the shaft in 2020 and 2021, with initial production from the new shaft expected to begin in 2022, and sustained production expected to begin 2023.
Barrick is designating Turquoise Ridge as a core mine in recognition of the exceptional growth potential of the operation, which will be facilitated by the construction of a third shaft, productivity improvements, and an expansion of processing capacity, as noted above. Located in the heart of northern Nevada—one of the world’s premier jurisdictions for gold mining—Turquoise Ridge has 5.9 million ounces of proven and probable gold reserves (Barrick’s 75% share) at an average grade of 15.56 grams per tonne—the highest reserve grade in the company’s operating portfolio, and among the highest in the gold industry. The mine added 2.1 million ounces of proven and probable gold reserves in 2017 through drilling (Barrick’s 75% share), and the deposit remains open in multiple directions, including at depth. “We are confident that Turquoise Ridge has significant potential to add additional resources in the future, as the third shaft opens up access to new areas of the deposit, in particular the North zone, where 80% of existing proven and probable reserves are located.”
Barrick is also expanding mining into the Deep South area below currently permitted levels of the Cortez Hills underground mine, bringing forward production.
The Deep South project will utilise infrastructure which has already been approved under current plans to expand mining in the Lower Zone of the Cortez underground mine, including the new Rangefront twin declines and other underground infrastructure already under construction.
Permitting for Deep South was initiated in 2016 with the submission of an amendment to the current Mine Plan of Operations to the Bureau of Land Management, and is expected to take approximately three to four years, including the preparation of an Environmental Impact Statement. A record of decision is expected in the second half of 2019, followed by two years of construction, with initial production from Deep South in 2022.