Barrick to spend about $2 billion in US, Peru gold projects

Canada’s Barrick Gold (TSX, NYSE: ABX) said Monday it plans to spend about $2 billion developing four projects located in the U.S. and Peru with construction beginning no later than 2019.

The Toronto-based miner, which expects to generate at least 4.5 million ounces of gold a year through 2020, said the targeted projects would help Barrick maintain and grow free cash flow beyond the end of the decade.

The world’s largest gold producer will spend $1 billion as initial capital investment on its Goldrush asset, with construction expected to start in 2020. This Nevada-based project is expected to produce 440,000 ounces of gold a year, with all-in sustaining costs of $665 per ounce.

Barrick will also spend $300 to $325 million at its Turquoise Ridge mine to boost production, and another $153 million at its Cortez mine, both in Nevada.

Barrick will also spend $300 million to $325 million at its Turquoise Ridge mine to boost production. It plans to allocate another $153 million to its Cortez project, with construction starting between 2019 and 2020. Both assets are also located in Nevada.

When it comes to its South American project, Barrick said it would spend $640 million to extend the life of it Lagunas Norte mine, in Peru, by about nine years.

The addition of a refractory processing facility could also unlock other potential refractory ore sources in the region, Barrick said in a statement.

Average annual production in the first five years after completion of the project is expected to be 240,000 ounces of gold, at all-in sustaining costs of $625 per ounce.

In a separate announcement, the gold giant said it has began an offer to buy back as much as $750 million in bonds as it works on strengthening its balance sheet following three annual gold-price declines.

The offer for bonds, due 2018 to 2026, is Barrick’s third debt tender in the last six months. The miner said the move should help cut debt by at least $2 billion this year.