Yahoo Finance Barrick to Boost Throughput and Production at Lumwana With Expansion
Barrick Gold Corporation GOLD announced that the feasibility study for the expansion of its Lumwana mine in Zambia is expected to be completed by the end of this year, with construction slated to commence in 2025.
GOLD outlined how the expansion could transform the mine into a long-life, high-yielding operation, placing it among the top 25 global copper producers and achieving Tier One copper mine status. The expansion includes doubling throughput by twinning the existing process circuit and significantly increasing mining volumes. As a result, plant throughput is expected to grow from 27Mt to 52Mt, with annual copper production projected to double from 120kt to a life-of-mine average of 240kt.
Mining volumes are set to increase incrementally, rising from 150Mt in 2024 to 240Mt by 2028 and reaching 290Mt annually from 2030. The phased ramp-up is expected to improve cost competitiveness, with operating and free cash flow projected to increase by as much as 85% and 60%, respectively, based on long-term copper price consensus.
Barrick Gold Corporation Price and Consensus
Barrick Gold Corporation price-consensus-chart | Barrick Gold Corporation Quote
These improvements are anticipated to add $1.7 billion to the mine’s net present value (NPV), delivering an incremental internal rate of return (IRR) of 20% and a total mine IRR of more than 50%. With long-term average copper prices estimated at $4.13/lb, the initial capital outlay is expected to be recovered within nearly two years post-expansion. Costs are projected to decline, with the cost of sales and C1 cash costs estimated at $2.36/lb and $1.85/lb, respectively.
Barrick also confirmed that process plant engineering is progressing, with major equipment vendors selected and orders placed for long lead equipment, including mills and crushers. Detailed engineering work will begin this quarter, and pre-construction preparation activities are scheduled to commence next year.
Commissioning of the new process plant is planned for the second half of 2027, after which planned shutdowns to the existing circuit will take place to allow GOLD to install upgrades and ensure uninterrupted copper delivery. The permitting process is underway, with the Environmental and Social Impact Assessment already submitted to Zambian authorities and approval expected by the end of 2024.
Barrick’s shares have gained 22.6% in the past year compared with a 35.2% rise in the industry.
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Zacks Rank & Key Picks
Barrick currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Hawkins, Inc. HWKN, Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hawkins’ current fiscal-year earnings is pegged at $4.14, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN’s current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has rallied around 98.5% in the past year.
The Zacks Consensus Estimate for Carpenter Technology’scurrent-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’ earnings beat the consensus estimate in each of the trailing four quarters, the average earnings surprise being 15.9%. The stock has surged nearly 97.2% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 75.1% in the past year.
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