Australia Pacific
Barrick’s Australia Pacific region is headquartered in Perth, Western Australia and is comprised of the following 8 operating mines — Kalgoorlie (50% interest); Kanowna, Plutonic, and Yilgarn South (Granny Smith, Darlot and Lawlers) in Western Australia; Cowal in New South Wales; and Porgera (95%) in Papua New Guinea. At the end of 2009, the Australia Pacific region contained 18.0 million ounces of proven and probable gold reserves, representing 13% of the Company's total reserve base1. The region produced 1.98 million ounces of gold at total cash costs of $588 per ounce and 91 million pounds of copper at total cash costs of $1.15 per pound in 20092.
The Australia Pacific region also includes the Reko Diq project, a large copper-gold porphyry mineral deposit on the Tethyan belt, located in southwest Pakistan in the province of Balochistan. At the Reko Diq project, in which Barrick owns a 37.5% interest, the initial mine development feasibility study together with an environmental and social impact assessment are being finalized. The feasibility study indicates pre-production capital of approximately $3.3 billion (100% basis) based on a 120,000 ton per day processing plant, which is capable of future expansions. Barrick’s share of average annual production for the first five full years of operation is expected to be about 100,000 ounces of gold at total cash costs of $420-$450 per ounce and 150-160 million pounds of copper at total cash costs of $1.00-$1.10 per pound3. Discussions with the Governments of Pakistan and Balochistan continue on such matters as investment protection, the outcome of which will inform the next steps taken by Barrick to advance the project.
Disposition of Osborne
In May 2010, we finalized an agreement to divest our Osborne copper/gold mine for cash consideration of approximately $15 million and a royalty from any future production to a cap of approximately $13 million. The divestiture is expected to close in third quarter 2010 and we expect to record a gain of approximately $12 million as a result of the transaction. The current mining plan had production from Osborne ceasing in 2010 and therefore the sale does not have a significant impact on our copper production guidance. This transaction allows us to monetize the remaining value associated with the fixed assets at the mine and the remaining mineral resources that were not included in our mining plan.
1 Click here for more information regarding reserve and resource measurements.
2 Click here for more information regarding the calculation of total cash costs.
3 Based on copper and gold price assumptions of $2.20 per pound and $925 per ounce, respectively.