Barrick Gold has a problem: it is running out of gold – by Niall McGee (Globe and Mail – July 21, 2018)

It’s not just a Barrick problem, either: many major producers have seen their reserves fall dramatically, raising concerns of a supply shock

Gold financier Pierre Lassonde thought it was time to cash in his chips. Thanks to a smart investment in a Nevada gold mine, shares in his royalty company, Franco Nevada, which he ran alongside his buddy Seymour Schulich, had run up from 65 cents a share to $17. By early 1988, Mr. Lassonde was ready to sell the company.

But after talking to the geologist who discovered the mine, he had second thoughts. Brian Meikle told him there was a humongous ore body yet to be exploited. “The discovery of three lifetimes” is how he described it. Similar logic had persuaded Barrick Gold Corp.’s Peter Munk and Bob Smith to buy the property about a year earlier.

That conversation with Mr. Meikle was a defining moment for Mr. Lassonde. He decided to hold on to the company. “[Franco] bought it for $2-million,” he said of the royalty on the mine. “If I had known, I would have bought it personally.” Given the wonderfully apt name Goldstrike, the mine would become one of the biggest in history. Since 1987, it has produced more than 45 million ounces of gold. Franco’s investment has yielded more than a billion dollars.

“The best thing that I ever did – and unfortunately the first,” Mr. Lassonde said. “The rest of my life, I’ve been chasing.” Barrick Gold, too, has been chasing ever since. While it has acquired huge mines such as Cortez, also in Nevada, and Pueblo Viejo in the Dominican Republic through acquisitions, it has never come close to finding a virgin deposit on par with Goldstrike.

After three decades of output, Goldstrike is well past its peak. Last year it produced 865,000 ounces of gold, a respectable amount that still places it among the world’s biggest mines – but nowhere near the 2.5 million ounces it yielded in 2000. Goldstrike is about two-thirds done, with the last ore expected to be mined in 2032.

Later this year, Barrick will in all likelihood relinquish its crown as the world’s biggest gold producer to U.S. rival Newmont Mining Corp.

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