February 22, 2018 / 4:51 PM / in 10 months

UPDATE 2-Barrick sees gold output drop; won't do deals just to grow

(New throughout, adds chairman’s comments on M&A, growth from investor presentation)

By Susan Taylor

TORONTO, Feb 22 (Reuters) - Barrick Gold on Thursday predicted lower gold production over the next decade, risking its rank as the world’s biggest bullion producer, but executives insisted they will not make acquisitions simply to sate a call for growth.

The Toronto-based company, whose output could be eclipsed this year by rival Newmont Mining Corp, considered a number of deals over the past year that offered growth, but passed on them all, said Chairman John Thornton.

While growth is a “conundrum” which Barrick has failed to deliver, “we will not yield to the pressure to ‘just find something’ in order to ‘grow’,” he said at the outset of a three-hour webcast presentation.

Barrick forecasts annual production of more than 4 million ounces of gold between 2023 and 2027, a steady view that contrasts with last week’s market-rattling outlook for lower output and higher costs in the near term. For 2018, Barrick cut its forecast output to 4.5-5 million ounces of gold and predicted annual production of 4.2-4.6 million ounces from 2019 to 2022.

Newmont expects to exceed that forecast, projecting 2018 production of 4.9-5.4 million ounces of gold and 4.6-5.1 million ounces annually through 2022.

Still, Barrick flagged four projects that could add more than 1 million ounces to annual output starting in 2021, including three Nevada developments approved to proceed.

Notably, the $300-$325 million Turquoise Ridge project will nearly double annual output, to more than 500,000 ounces, said Barrick, which owns 75 percent of the mine. Newmont owns the remaining 25 percent.

The long-range forecast reflects potential gains from the Cortez Deep South, Goldrush and Turquoise Ridge mines and Robertson property in Nevada; Lagunas Norte in Peru; and Pueblo Viejo in the Dominican Republic.

It does not include contribution from large-scale ‘greenfield’ projects: Alturas, Donlin Gold, a Norte Abierto joint venture, or Pascua-Lama.

The long-stalled Pascua-Lama project does not currently meet Barrick’s investment criteria and the company said it plans to seek a partner. Shandong Gold, which owns half of Barrick’s Veladero mine in Argentina, has formed a working group with Barrick to study a potential partnership.

Barrick also said Chief Operating Officer Richard Williams is stepping down to take on a new role focused on talks with Tanzania for the company’s troubled Acacia Mining unit.

Senior Vice President Greg Walker will be responsible for operations, Barrick said. The Toronto-based miner told Reuters the COO title does not exist at this time. (Reporting by Susan Taylor; Editing by Bernadette Baum, Paul Simao and David Gregorio)

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