Barrick Gold Corporation’s (ABX) Cortez properties include the Cortez mine and the Cortez Hills underground mine. The Cortez mine is located 100 kilometers southwest of Elko, Nevada, in Lander County.
Current mining operations for Cortez include the Pipeline complex and the Cortez Hills complex. Cortez employs about 1,250 employees and 350 contractors. Cortez has 11 Moz (or million ounces) of proven and probable reserves.
The Cortez mine is one of the largest and lowest-cost mines in the world, with huge upside exploration potential. It is Barrick’s largest-producing mine and contributes close to 15% and 18% of the total production at a cost per unit—$433 per ounce—less than the company’s overall costs—$865 per ounce.
Mining methods adopted
Deposits within the Pipeline complex are being mined using conventional open pit methods. Mining at the Cortez Hills Complex is scheduled through 2018 at the open pit and through 2026, underground. Production rates for all mining activity at Cortez will average about 125 million tons per year.
To learn more about open and underground mining, read Market Realist’s, The ins and outs of gold mining for companies like Barrick Gold.
Cortez produced ~1.3 million ounces of gold at AISC (or all-in sustaining costs) of $433 per ounce in 2013. In 2012, it produced 1.4 million ounces AISC of $608 per ounce. Other gold companies, such as Kinross Gold Corporation (KGC), Newmont Mining Corp (NEM), and Goldcorp Inc. (GG), have production costs in the range of $900-$1,200 per ounce. So, Cortez is one of the mines crucial to Barrick’s low-cost profile.
Ore grades decreasing
Barrick expects 2014 production to range between 925 and 975 thousand ounces. It’s expected to be lower than 2013 production mainly due to a decrease in open pit mining and underground ore grades. The decrease in grade is primarily due to the transition from higher-grade phase ore in 2013 to lower-grade phase ore in 2014, and a transition to a lower-grade underground zone.