Mark Bristow, President and CEO of Barrick Gold, cautioned against over-exuberance in the gold sector during his appearance at the Gold Forum Americas / XPL-DEV 2024 conference in Colorado. Despite gold hitting multiple record highs in 2024 and gold miners, represented by the GDX, rising 32% year-to-date, Bristow emphasized the need for fiscal discipline. Barrick itself has lagged behind its competitors, gaining only 18% over the same period.
The surge in gold prices has sparked significant industry deals, such as AngloGold Ashanti’s $2.5 billion acquisition of Centamin and Gold Fields’ $2.16 billion all-cash purchase of Osisko, both occurring within the past month. However, Bristow warned that the sector may be moving too quickly.
Reflecting on his time leading Randgold Resources in 2010 when gold prices first surpassed $1,000, Bristow noted that many in the industry raced to update their valuations with higher gold prices. However, Randgold remained conservative, keeping estimates at $1,000 due to stable input costs. “You can raise the gold price,” Bristow said, “but it often dilutes the value of your asset if input costs don’t change.”
Bristow highlighted the risks of expanding operations based on inflated gold prices, pointing to the sharp decline that followed the early 2010s gold boom. By 2013, the GDX had plummeted by nearly two-thirds.
“If you price gold beyond your ore body limits, you risk diluting your feed grade, forcing you to spend more on expanding processing facilities just to maintain production levels. That doesn’t make sense,” Bristow cautioned.
