World's largest gold mining complex beats first-year targets despite coronavirus

The COVID-19 pandemic didn't stop the world’s largest gold mining complex from surpassing all expectations during its first year of operation, according to Barrick Gold Corp. CEO Mark Bristow.

The Elko, Nevada-based Nevada Gold Mines, a joint venture between Barrick and Newmont Corp., met both production and cost targets during its first full year, which ended on June 30.

Ticker	Security	Last	Change	Change %
GOLD	BARRICK GOLD CORP.	18.24	+0.12	+0.66%
NEM	NEWMONT CORP.	43.37	+0.06	+0.14%

“It's been a hectic time, but it really did create something special, something that everyone had been talking about for decades,” Bristow told FOX Business.

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Nevada Gold Mines, which comprises eight mines, including three Tier 1 assets, is spearheaded by top management from both Barrick and Newmont who took down the fences between the two firms and extracted synergies from roasters, used to heat ore during processing, at Barrick’s Goldstrike and Newmont’s Carlin operations. The Nevada sites are adjacent to each other.

A Tier 1 asset is a mine that has produced more than 500,000 ounces of gold per year for at least 10 years at the lower half of the cost curve.

The project is mining almost 4 million ounces of gold a year at a long-term price of $1,200 per ounce. The precious metal finished Wednesday at $1,773.20 an ounce.

The surging price reflects the disruption that the COVID-19 pandemic inflicted on world economies, forcing some companies to shutter operations and others to set new healthcare guidelines to lower infection risks.

Investors responded by moving money from more volatile assets, such as stocks, into gold, which has historically been viewed as a safer store of value.

Nevada Gold Mines, which employs slightly more than 7,000 workers, calculated its single-biggest risk during the pandemic was that more than half its workforce would need to be isolated at one time.

However, at most, 590 workers were isolated at once and that number has since fallen to about 100 despite the number of infections in Nevada surging to a new high. Workers are given a temperature check upon arriving at the mine each day and are asked to perform self-assessments.

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“Until you have a vaccine, you've got to be absolutely clear that you wear facemasks, you keep your distancing, you manage your personal space and then you can go about your reasonably normal life,” Bristow said.

Barrick, which owns 61.5 percent of Nevada Gold Mines, sees a “slightly softer” second quarter due to the virus causing some production to be pulled forward and a portion of maintenance work being delayed until the April-to-June period. Still, Bristow said the company is on track to meet its first-half and full-year guidance.

Bristow sees “more upside on the gold price than downside right now” due to the money-printing and bond-market purchases taking place at central banks around the world, and said the company has been “very busy” looking at its mergers and acquisitions options.

“This is a good time to be in the gold industry,” he said.

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Barrick shares rose 44 percent this year through Tuesday, outperforming the S&P 500's 4 percent decline.