The Commentary below why ABX mulled buying Kirkland Lake but backed away once it calculated that Kirkands total AISC was above $1200 per ounce.
ie that is Kirkland would not be free cash flowing if POG falls to $1200 per ounce.
Examining Kibali"'S total cash costs and AISC, it is forecasting $590-$640 per ounce for the former and $800 to $850 for the latter.
Note that this is for both open pit and underground mines at Kibali and underground mines have higher sustaining costs.
Kibali average long term grades are 2.17 gms per ton open pit and 5.1& gms per ton underground.
Adumbi average pit grade is 2.33 gms per ton and it's underground grades for the 200 m drilled today should easily match that of Kibali.
So, Adumbi will be competing with Kibali as the lowest cost mine in Africa .
It easily needs ABX $1200 smell test, so ABX will be in the bidding mix along with a few others who have stringent standards of costs..
Globe says Barrick mulled bidding for Kirkland Lake
2021-11-05 08:24 ET - In the News
Also In the News (C-AEM) Agnico Eagle Mines Ltd
Also In the News (C-KL) Kirkland Lake Gold Ltd
The Globe and Mail reports in its Friday edition that Barrick Gold considered buying Kirkland Lake Gold, but says it ultimately passed because the big Canadian gold miner did not meet its standards for investment returns. The Globe's Niall McGee writes that Agnico Eagle in September reached a friendly agreement to acquire Kirkland Lake in an all-stock, no-premium acquisition worth more than $13-billion. The deal will see Agnico increase its footprint significantly in Canada and Australia. Earlier this week, Kirkland Lake said in a regulatory filing that it engaged in takeover talks with two other unnamed companies, one of which went as far as making an offer for Kirkland, but that was rejected as too low. Talks with the other company went nowhere. Mark Bristow, chief executive officer of Barrick, told The Globe that while Barrick looked at Kirkland, he did not see sufficient value to pull the trigger. "We're religious with our investment filters. It's hard for things to pass our filters. Therein is the answer," Mr. Bristow said.
One veteran precious metals portfolio manager in New York, Joe Foster at VanEck, said Barrick is right to be cautious about buying large mines that do not pass the $1,200 "smell test."