The Democratic Republic of Congo (DRC) has approved the payment of about US $500m in joint venture cash to Barrick Gold and its partner, AngloGold Ashanti, earned from the central African country’s Kibali gold mine.
In terms of an agreement with the DRC, 60% of revenue earned from the Kibali mine has to be repatriated to the central African country for economic development purposes, internal dividends, and to pay creditors. The balance of the revenue is paid into a joint venture offshore account to pay creditors and to meet other obligations.
The joint venture partners are, however, allowed to extract any excess revenue from the DRC. However, this requires the approval of the DRC authorities. As that approval has been slow coming, the monies have built up over time and were estimated to be $500m at the close of the last quarter.
According to Barrick Gold CEO, Mark Bristow, discussions with the government is going extremely well. He further added that Barrick has received approval from the central bank to send back the money.
Bristow said in comments to the group’s numbers that forecast production of at least 500,000 ounces a year for 10 years would be derived from the firm’s resuscitated Tanzania mines – Bulyanhulu and North Mara – at a cost of production that would place them among the Canadian group’s tier one mines.
Barrick said it would pay a second quarter dividend of $0.08 per share – more than double the dividend announced at the time of the merger in 2018. This was on the back of steady gold production for the six months to end-June of 2.4m oz, at the mid-point of Barrick’s 4.6m to 5 million oz annual guidance, as well as a higher gold price of US $1,725/oz compared to US $1,589/oz in the first quarter and $1,317/oz in the first quarter of the 2019 financial year.
