Enterprise Risk Management at Barrick|Enterprise Risk Management|Case Study|Case Studies

Enterprise Risk Management at Barrick

            
 
Case Studies | Case Study in Business, Management, Operations, Strategy, Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : ERMT-015
Case Length : 16 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Barrick
Industry : Gold
Countries : USA

To download Enterprise Risk Management at Barrick case study (Case Code: ERMT-015) click on the button below, and select the case from the list of available cases:

Enterprise Risk Management | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

Price:
For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Shipping & Handling Charges extra

Enterprise Risk Management Case Studies
Short Case Studies
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Case Studies by Area
Case Studies by Industry
Case Studies by Company


Custom Search


Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

<< Previous

Introduction

Barrick was North America's #2 gold producer behind Newmont Mining, with nearly 87 million ounces of gold in proven and probable reserves. The company's operations were located mainly in USA, Canada, Australia, Peru, Tanzania, Chile and Argentina.

About 60% of the company's production came from its 7,000-acre Goldstrike Property, located in Nevada's Carlin Trend gold-producing region. Its other important properties included the Bulyanhulu Mine in Tanzania, the Alto Chicama Mine in Peru, and the Holt-McDermott Mine in Canada. The company expected future revenues to come from its development projects in Argentina, Australia, Chile, and Peru.

Enterprise Risk Management | Case Study in Management, Operations, Strategies, Enterprise Risk Management, Case Studies

In late 2001, Barrick acquired 125-year-old Homestake Mining (US) in a $2.3 billion stock deal. In 2002, Barrick produced 5.7 million ounces of gold and recorded sales of $1967 million and net income of $193 million.

Barrick had major plans for capacity expansion. Barrick's $95 million development budget, the industry's largest, was intended to increase production by over 20% by 2006.

Barrick was also exploring gold deposits near its existing mines, a strategy it considered as having the lowest risk and highest potential for returns. Barrick was one of the more successful hedgers in the industry. The company estimated its hedging strategy had added more than $2 billion to profits since the late 1980s. Barrick believed its shares represented a unique asset class with a different risk profile, fulfilling a special role in the financial markets. Investors used gold-related investments to diversify their portfolio risks. The price of gold typically rose in times of uncertainty when prices of other financial assets fell.

Background Note

Barrick Gold started in 1983 when Peter Munk merged three small mining and oil and gas companies as Barrick Resources Corp. and took the company public. The company's early mining activities included stakes in Camflo Mines Ltd., the Renabie Mine in Ontario, and the Valdez Creek Mine in Alaska. Its oil and gas properties and interest in two coalmines were sold in the mid-1980s.

Barrick Resources grew rapidly by buying up North American gold mines. It was renamed American Barrick Resources in 1985 after it acquired the Goldstrike Property. In 1988, American Barrick had seven producing mines in Alaska, Nevada, Utah, Ontario and Quebec. That year the company opened the Holt-McDermott Mine, the first property it developed all the way from exploration to production. Also in 1988, American Barrick completed a $23 million ore-processing complex at Goldstrike.

Enterprise Risk Management at Barrick - Next Page>>


 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.