Barrick's Strategic Shift: From Chilean Copper Mine to Pakistani Reko Diq

Barrick Gold Corp. is reportedly exploring the sale of its 50% stake in the Zaldivar copper mine in Chile, as the company shifts its focus towards larger and more lucrative operations. The firm has appointed advisors and reached out to potential buyers for its interest in the relatively small mine, which produced around 80,000 tons of copper last year. Antofagasta Plc owns the other 50% of the mine.

This strategic move aligns with Barrick's goal of expanding its copper portfolio and contributing to the global energy transition. The company is particularly interested in the Reko Diq copper-gold project in Pakistan, which is expected to generate approximately $74 billion in free cash flow over the next 37 years, based on consensus long-term prices. The project, in which Barrick has a 50% stake, is expected to have a transformative impact on Pakistan's economy and the underdeveloped Balochistan province.

Reko Diq's high copper grade of 0.53% and estimated reserves lasting 37 years make it an attractive investment opportunity for Barrick. The project is expected to create significant dividends, royalties, and taxes for Pakistan, which currently has around $11 billion in foreign reserves. Additionally, the project's life of at least 38 years as a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate further enhances its appeal.

Barrick's potential sale of its Zaldivar stake and focus on the Reko Diq project demonstrate the company's commitment to expanding its copper footprint and contributing to the energy transition. By redirecting resources towards larger and more promising copper projects, Barrick can maximize shareholder value and create long-term value for its stakeholders.