Barrick delays Reko Diq project in Pakistan
The IFC loan represents its first mining investment in Pakistan, helping to lay the foundation for further investment in mining and to support resilience in a fragile economic region. Photo (file)
Barrick Mining is extending its review of the massive Reko Diq copper-gold project in Pakistan and slowing development activity amid escalating security concerns in the country and the Middle East.
The exercise is likely to affect previously disclosed budgets and timelines, a company spokesperson said on Thursday.
The Reko Diq project, located in Pakistan's Balochistan province, is one of the world's largest undeveloped copper-gold deposits.
Barrick's decision follows preliminary findings from a review announced on February 5 examining all aspects of the project, including capital allocation, amid mounting security concerns. The review will now be extended by 12 months from July.
"During that period, development activity will be slowed but remain under active management," the company said Thursday in an emailed statement to Bloomberg, adding that budgets and timelines for the project will likely be impacted. "Barrick continues to believe in the long-term value of Reko Diq," it said.
Bloomberg reports that shares of Barrick fell as much as 3.2% in New York, tracking declines of other gold producers as bullion prices fell, before paring losses to trade 0.4% lower as of 10:43am local time.
RBC Capital Markets analyst Josh Wolfson told Bloomberg the development remains "highly out of favour" with investors given its elevated geopolitical risk.
"A decision to postpone the project could improve investor perceptions of Barrick's geopolitical risk" and improve its interim free cash flow, Wolfson said in a Thursday note to clients. "A delay could also represent a precursor to a potential sale process for the project."