Is Barrick Gold Legit? The Truth About Barrick Gold

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  • Post published:February 10, 2024
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Barrick Gold Corporation is one of the largest gold mining company around the globe, with operations across North and South America, Africa, Australia and Asia.

The Canadian company, headquartered in Toronto, Ontario, has faced scrutiny over the years for environmental and human rights issues. But with its massive global footprint, Barrick also wields tremendous economic influence in many countries.

So is Barrick Gold legit? In this in-depth article, we’ll explore Barrick’s operations, controversies, community impact and more to help readers gain a balanced understanding of this mining giant.

Is Barrick Gold Legit or Scam – Detailed Overview

The extraction and trade of gold and other precious metals is an industry as old as human civilization itself. Yet modern gold mining has evolved into a multi-billion dollar business thereby dominated by a handful of powerful companies.

Barrick Gold, founded in 1983, has grown over 4 decades into the world’s largest gold producer. In 2019 alone, the company mined 5.5 million ounces of gold and over 400 million pounds of copper across facilities in 13 countries.

It currently has gold mining operations in Argentina, Canada, Chile, Côte d’Ivoire, Democratic Republic of Congo, Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, Tanzania, the United States and Zambia.

With a market capitalization of over $30 billion dollars as of early 2022, Barrick employs over 20,000 people worldwide. The company is listed on both the New York and Toronto stock exchanges. Its share price has closely doubled in the past two years as gold prices surged during the COVID-19 pandemic.

But Barrick’s meteoric rise has not been without controversy. The company has been associated with environmental degradation and human rights abuses at some of its mines in developing nations. Its aggressive mergers and acquisitions approach has also earned critics. Still, Barrick maintains mining operations and partnerships with many countries and communities.

This article will analyze the key facts about Barrick Gold Corporation, including:

  • History and leadership
  • Mining operations and locations
  • Economic impact
  • Environmental and safety record
  • Human rights controversies
  • Community relations and development programs
  • Recent mergers and acquisitions
  • Financial performance and outlook

Examining the full context around Barrick and the modern gold mining industry can help readers answer: is Barrick Gold legit?

A Brief History of Barrick Gold

Barrick Gold was founded in 1983 by businessman Peter Munk, who sought to create a company focused solely on gold at a time when diversified mining conglomerates were the norm. It was initially called Barrick Resources Corporation before adopting its current name.

The company’s first major acquisition came in 1986, when it purchased the Goldstrike mine complex in Nevada. This massive high-grade gold deposit transformed Barrick into a major player. A series of mergers and takeovers over the ensuing decades rapidly expanded Barrick’s production capacity across the Americas.

Key acquisitions included:

  • Lac Minerals (1994) – Added mines in Canada and South America
  • Arequipa Resources (1996) – Acquired Pierina mine in Peru
  • Homestake Mining Company (2001) – Made Barrick the 2nd largest gold miner globally
  • Placer Dome (2006) – Took ownership of Cortez Hills mine in Nevada

Barrick made international headlines in 2018 with its $6 billion merger with Africa-focused Randgold Resources. This joined two of the world’s gold mining giants and further cemented Barrick’s position as the largest gold company globally.

The company has been led by Executive Chairman John Thornton and CEO Mark Bristow since 2019. Founder Peter Munk retired in 2014 after building Barrick into a mining powerhouse over 3 decades.

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Mining Operations and Locations

Barrick Gold has 16 operating mines across 4 continents. The company’s assets produced over 5 million troy ounces of gold and 430 million pounds of copper in 2019.

Its largest gold mines are:

  • Nevada Gold Mines, USA (61.5% ownership) – One of the world’s largest gold mining complexes, located in Nevada and jointly owned with Newmont Corporation. Produced 1.8 million ounces in 2019.
  • Pueblo Viejo, Dominican Republic (60% ownership) – Open pit mine accounted for over 400,000 ounces of gold in 2019. Barrick’s largest contribution to the country’s economy.
  • Loulo-Gounkoto, Mali (80% ownership) – Underground mine complex produced over 500,000 ounces in 2019. Significant taxes and dividends paid to the government of Mali.
  • Kibali, Democratic Republic of Congo (45% ownership) – Combined open pit and underground operation. Ranked among the largest gold mines in Africa and 10th biggest worldwide, producing over 330,000 ounces in 2019.

Other major assets include the Veladero mine in Argentina, Porgera in Papua New Guinea, and Bulyanhulu in Tanzania. Barrick also operates copper mines in Chile, Saudi Arabia and Zambia.

The company has mining and exploration projects across North and South America, Australia, and East Africa. Barrick regularly acquires new deposits to expand its global asset base.

Is Barrick Gold Legit – Barrick’s Economic Impact

As one of the largest mining companies worldwide, Barrick has a substantial economic influence both locally and internationally. Here are some key facts about the company’s financial footprint:

  • Over $11 billion in annual revenue – Barrick reported over $11 billion in revenue in 2019 from its mining operations and metal sales.
  • Employs over 20,000 people – The majority are nationals from countries where the company operates mines. This provides direct and indirect job opportunities in often remote regions.
  • Barrick Paid $2.1 billion+ in taxes and royalties in 2019 – Tax payments make Barrick a major source of public revenue for governments.
  • $5.4 billion returned to shareholders in 2019 – Through dividends on common shares and stock repurchases. Indicates strong profitability.
  • Capital investments of $1.5 billion in 2019 – Spending on projects to extend mine life and expand operations. Provides economic stimulus.
  • Supports over 10,000 local suppliers – Procurement of goods and services is a key way mining activity benefits local economies.

Clearly Barrick generates substantial economic value for shareholders, governments and employees in the countries where it operates. However, critics argue that Barrick and other foreign mining companies do not contribute their fair share to public revenues and local communities. This issue is explored later in the human rights controversies section.

Environmental and Safety Practices of Barrick Gold Corp.

Modern mining companies are under intense scrutiny on their environmental impacts and safety record. This is especially true for Barrick, as a major multinational corporation operating large mines globally.

Here are some key facts on Barrick’s environmental and safety practices:

  • Reports sustainability and environmental data – Barrick publicly discloses data on environmental incidents, energy/water use, waste generation and greenhouse gas emissions.
  • Cut greenhouse gas emissions 29% since 2013 as of 2019 – On track to achieve 30% reduction by 2030 vs 2018 levels.
  • 95% of water used recycled – Demonstrates efforts to improve water efficiency in mining.
  • Member of the Dow Jones Sustainability Index – Scores Barrick’s sustainability practices against peers.
  • Aims for “zero harm” on safety – Reports a lost time injury frequency rate of 0.19 per 200,000 work hours in 2019, below industry average of 0.27.
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However, Barrick has experienced environmental incidents and tailings spills at some mines:

  • Cyanide solution spills at Veladero, Argentina (2015, 2016, 2017) – Resulted in charges against employees and a $9.8 million fine after the first incident.
  • Riverine tailings disposal at Porgera, Papua New Guinea – Criticized as contaminating rivers and deposing waste on land.
  • Police burn hundreds of houses near Porgera (2014) – Done to evict illegal miners but condemned as forced evictions by Amnesty International.

Overall, Barrick has improved sustainability but still faces criticism on environmental issues and transparency. Its size makes incidents highly visible – but also shows Barrick’s importance in meeting industry-wide challenges.

Human Rights Controversies

Barrick’s global operations, especially in developing countries, have made human rights a sensitive issue for the company. Key controversies include:

  • Reports of sexual assault by security personnel at Porgera mine, Papua New Guinea – Human Rights Watch identified a pattern of abuse, with compensation later paid to over 100 victims.
  • Police and security force violence at mines in PNG and Tanzania – Reports of injuries to illegal miners and use of force during evictions.
  • Land evictions and resettlements – Barrick has displaced communities near projects like Pascua Lama in Chile and North Mara in Tanzania.
  • Violent protests and clashes between miners and police/security – Fatalities and injuries reported at mines in Dominican Republic and Peru.
  • Tax evasion and export under-reporting allegations against former subsidiary – Acacia Mining charged with fraud before Barrick re-took control in 2019.

Barrick has taken some steps to remedy its human rights record, including:

  • Joining the UN Global Compact on human rights in 2009
  • Instituting a human rights compliance program and community grievance mechanisms
  • Conducting remedy programs, including compensation for victims of sexual assault at Porgera

But critics say Barrick still fails to adequately engage affected groups, address legacy issues, and prevent new incidents. The company’s size also means any failures have large impacts.

Community Relations and Development Initiatives Review

With mines located near indigenous communities worldwide, Barrick also invests significantly in community programs and social development. Some key initiatives include:

  • $76 million community investment in 2019 – Supports health, education, cultural and economic programs.
  • Prioritizes local hiring – 96% of employees are nationals in country of operation.
  • $10 million+ to fight COVID-19 – Donations for medical equipment and food relief.
  • $65 million Western Shoshone Scholarship Fund (2008) – Supports education for indigenous tribes affected by mining in Nevada, US.
  • Partnership programs with NGOs – Like conservation in Papua New Guinea with The Nature Conservancy.

Critics argue Barrick should invest more in communities to offset negative mining impacts. But the company’s community spending significantly exceeds most miners. Whether these programs truly benefit affected peoples is also debated.

Analysing Barrick Gold’s Recent Mergers and Acquisitions

Barrick has expanded through major mergers, acquisitions and joint ventures since its founding. Some recent deals include:

  • Randgold Resources (2018) – $6 billion merger – Created world’s largest gold miner. Added African mines.
  • Nevada Gold Mines JV (2019) – 61.5% Barrick, 38.5% Newmont – Combined Nevada mines into largest gold complex globally.
  • Sale of 50% stake in Super Pit mine (Australia) for $750 million (2019) – Exited a non-core asset at favorable valuation.
  • Reko Diq project partnership (Pakistan) – In March 2022, Barrick and Pakistan finalized a framework to restart the $10 billion Reko Diq copper-gold mine.
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This deal-driven approach builds Barrick’s scale but also carries risks if acquired assets under-perform or liabilities emerge. The joint ventures demonstrate Barrick’s power to create dominant partnerships within the gold industry.

Financial Performance and Outlook Review

Despite past controversies, Barrick has delivered generally strong financial results driven by high gold prices. Some key metrics on performance include:

  • Produced 5.5 million ounces gold and 432 million pounds copper in 2019
  • Reported adjusted net earnings of $3.7 billion in 2019, up 47% year-over-year
  • Quarterly dividend raised three times in 2020 to 22 cents per share
  • Net debt reduced by 48% from 2018 to 2019 to $2.2 billion
  • All-in sustaining costs for gold of $894/ounce and copper of $2.52/pound in 2019 – Below industry averages indicating efficient operations.

With development projects in Saudi Arabia, Dominican Republic and elsewhere, Barrick forecasts steady gold and copper output over the next decade. Rising production combined with higher gold prices paints a positive financial outlook. Barrick’s stock rose 48% in 2020, outperforming gold mining peers.

Assuming stable geopolitics and strong execution, Barrick seems positioned for continued growth. Yet risks remain should gold prices retreat or political winds shift against mega-miners.

Final Verdict: Is Barrick Gold Legit or Scam?

Barrick Gold sits at the apex of the modern gold mining sector. Its rise from a fledgling company in 1983 to the world’s most valuable gold miner tracks growth in demand for precious metals.

Yet Barrick’s globally diversified operations also expose the company to an array of political, environmental and social challenges. Its treatment of these issues has frequently fallen short. Relationships with local communities and governments remain tense at some mines.

Nonetheless, Barrick’s massive economic influence provides jobs, tax revenue and community investment for developing nations. No company is perfect, but Barrick has improved sustainability and governance. Its long-term success relies on building trust with stakeholders worldwide.

Given its complex role across so many countries, Barrick provokes passionate criticism from activists and support from investors. There is truth on both sides. On balance, the company appears to be making progress on its social and environmental practices. But meeting the highest standards remains a work in progress.

For shareholders, Barrick’s production profile, reserves and profitability make it among the most attractive large gold miners. Yet investment in any mining company demands assessing and engaging on responsible stewardship of natural resources.

Is Barrick Gold legit? In my judgement, the company has weaknesses but adds real value to stakeholders across its global footprint. Rather than good or bad, Barrick’s story reflects the urgent need to transform mining into a truly sustainable industry.

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