Mark Bristow used his keynote address at the 2020 PDAC conference to stress the importance of exploration for miners.
“It’s geologists and exploration that drive value creation and delivery in our industry,” said Bristow, president and CEO of Barrick Gold (TSX: ABX; NYSE: GOLD). “The need to invest in its human capital as well as the physical activity itself is pressing.”
“Discovery and development is still the surest route to deliver value, but it’s a long and arduous one, which demands tenacity of purpose and a long-term commitment.”
“Exploration success is measured not only in primary discoveries, but also in the acquisition of early stage projects, where geological skills can add significant value.” He cited two examples from Barrick’s portfolio where exploration turned acquired projects into world-class assets: Goldstrike in Nevada and Kibali in the Democratic Republic of the Congo.
“The industry has been increasing its exploration spend, but it has little to show for it. That’s because it has been investing in safe places — those comfort zones — which are largely mature and have limited potential.”
“Simply sticking to our geographic comfort zones is not going to produce an adequate return on that exploration investment. … If you’re hunting elephants … you have to venture into elephant country.”
Bristow’s Barrick is only interested in finding “tier one” mines, which produce at least 500,000 oz. gold annually for at least 10 years at below-average costs. The CEO presented a world map with circles around regions with the most potential for such discoveries, including many “places that are infrastructurally and geopolitically challenged” such as Venezuela, sub-Saharan Africa and North Korea.
The development of the Kibali mine by Randgold Resources, which Bristow helmed prior to its merger with Barrick, shows the commitment required for successful discovery in the 21st century. “Before we could start fully evaluating the project, we had to build a 180 km road through the jungle.”
Adding to their importance, he said, geologists have become brand ambassadors. “They represent the first contact with the local population and set the tone for an all-important future relationship.”
Environmental, social and governance issues are “rapidly becoming a major factor in investment decisions,” Bristow said. “Mining companies have a moral obligation, as well as a commercial motivation, to help develop economies and uplift people through investment, skills transfer, opportunity creation and quality of life improvement.”
“Barrick’s recently concluded framework agreement with the Tanzanian government is a model of the kind of partnership that industry should seek, especially in emerging countries,” he noted. The January deal followed a $300 million tax settlement with Barrick and includes a benefit-sharing agreement and provides for increased government oversight and participation in operations.
Activists from the Mining Injustice Solidarity Network (MISN) attended the event and played jackhammering sounds throughout the presentation. Once Bristow paused to take audience questions, an activist stood up and shouted at him. “I’m here to disrupt PDAC in solidarity with communities around the world facing down the barrel of a gun at the hands of your projects. Disrupt PDAC, shut down Canada.”
While the activists walked out of the room Bristow responded: “When you go outside, have a look at the city and understand the impact that [mining] has on the society. … If you take away all the items that mining produced to build this city Toronto, you would just have a heap of rubble.”
MISN helped organize a protest on the opening day of PDAC. A Twitter account linked to the organization gave it credit for the stunt during Bristow’s presentation. “We just crashed the keynote at #PDAC2020, surrounding the room with loud, continuous sounds of drilling — sounds that communities all over the world have to hear as mining companies explore with no consent.” MISN specifically cited its opposition to Ontario’s “free entry” system for mineral claims staking and exploration. “These laws are colonial from top to bottom.”