TORONTO, Sept 10 Barrick Gold Corp (ABX.TO) hopes to
hedge nearly one-third of its energy costs through acquisitions of
oil and gas assets, and also expects to control costs through
opening new low-cost mines, a company official said on Wednesday.
Barrick, the world's largest gold producer, recently acquired
Cadence Energy, and will soon close an offer for certain assets of
Daylight Resources DAY_u.TO, which should provide the company with
about 4,500 barrels of oil equivalent a day.
"We anticipate about 30 percent of our annual direct fuel
consumption will be economically hedged," Alex Davidson, executive
vice president for exploration and corporate development, said in a
presentation at the Denver Gold Forum.
The move comes as soaring oil prices -- along with rising costs
for labor and equipment -- have driven up extraction costs for
Despite the cost inflation, Barrick's margins have continued to
expand, Davidson said.
And while gold prices have fallen about 22 percent in the last
two months, he said the company is bullish on the metal.
Key to controlling costs down the road will be the opening of
new mines such as Buzwagi in Tanzania, Cortez Hills in Nevada, and
Pueblo Viejo in the Dominican Republic, over the next few years, he
Asked how Barrick planned to provide power for Pueblo Viejo --
which Barrick hopes to expand through additional exploration --
Davidson said the company recently purchased a heavy fuel oil power
generation plant and is close to buying another one.
(Reporting by Cameron French; Editing by Marguerita Choy)