* Says new discoveries remain open in multiple directions
* Says new discoveries are located on its Cortez property
* Barrick shares close 1.7 pct higher on the NYSE (Adds analyst comment, share price move)
TORONTO, Sept 7 (Reuters) - Barrick Gold (ABX.TO) has made two major gold discoveries on its Cortez property in Nevada, highlighting the miner’s increased emphasis on exploration to expand its resource base and sending its shares higher.
The world’s top gold miner said on Wednesday the new discoveries, known as Red Hill and Goldrush, are located about 6 kilometers (3.6 miles) southeast of its Cortez Hills mine and are geologically similar to the deposit it is currently mining on the property.
“The mineralization in both deposits remains open in multiple directions,” said head of exploration Rob Krcmarov. “We have more work to do, but these discoveries have the potential to become truly world-class deposits.”
Barrick has outlined a 3.5 million-ounce inferred resource at Red Hill, and it is drilling at the site to upgrade and expand the resource. The company has yet to outline a resource for the Goldrush discovery.
In a note to clients, Dundee Capital markets analyst Paul Burchell said Barrick would likely use its existing facilities at Cortez Hills to tap the new deposits,
“Given the size of the current resource, we expect the new discoveries to be additive to Cortez Hills, rather than representing a new stand-alone operation,” said Burchell.
Burchell, who has a “buy” rating at a C$60 price target on the stock, said the brokerage firm would review its valuation after Barrick finished presentations to investors on Wednesday.
“These two discoveries highlight the potential value and opportunities that can be created through a well-structured and disciplined exploration program,” said Chief Executive Aaron Regent in a statement.
Given Barrick’s size and scale, costly takeovers typically do little to move the needle in terms of its gold resources. Regent has long argued that expanding its resource base through a more cost effective exploration program is the best way forward for the company.
Over the last two decades, the company’s global exploration program has added about 140 million ounces of gold reserves, at an average discovery cost of about $16 per ounce.
Barrick plans to spend between $370 million and $390 million on its exploration program this year.
Gold has had a dream run this year. Spot prices touched a record high of $1,920.30 an ounce on Tuesday, as the global economic recovery has spluttered and concerns about sovereign debt issues on both sides of the Atlantic have risen.
Despite the 4 percent pullback in the price of gold on Wednesday, Barrick’s New York-listed shares ended the day up 1.7 percent at $54.48. Barrick’s Toronto listed shares ended the day up 1.1 percent at C$53.71. (Reporting by Euan Rocha; Editing by Frank McGurty)