Barrick Gold 1Q Adjusted Profit Rises On Higher Gold Prices
(Kitco News)- BarrickGold Corp. (NYSE, TSX: ABX) reported late Monday that first-quarter adjustedearnings rose from a year ago despite lower production, with the company’sprofitability helped by higher gold prices.
Adjusted net earnings climbed 5% to $170million, or 15 cents per share, from $162 million, or 14 cents, in the first quarterof 2017. According to news reports, this was slightly ahead of marketexpectations for earnings per share of 13 cents.
The company reported net earnings of $158million, or 14 cents per share, for the January-March period, down from $679million, or 58 cents, a year ago. However, the prior-year earnings wereinflated by a net impairment reversal of $1.13 billion ($522 millionafter taxes and non-controlling interest), in connection with Barrick’sdivestment of 25% of the Cerro Casale project.
Thecompany said gold production andcosts for the first quarter were in line with expectations. Barrick produced1.05 million ounces of gold in the first quarter at all-in sustainingcosts of $804 per ounce. In the year-ago quarter, output was 1.31 millionounces at AISC of $772 per ounce.
However, the amount of money that Barrick received per goldounce rose to $1,332 per ounce from $1,220.
Barrick said the year-on-year output decline was expected due tothe sale of 50% of the Veladero mine on June 30, 2017, lower throughput atAcacia as a result of reduced operations at Bulyanhulu, lower grades processedthrough the oxide mill and roaster at Barrick Nevada, and lower throughput andgrades at Hemlo and Lagunas Norte. Also, an earthquake that damaged powerinfrastructure in Papua New Guinea also impacted production at Porgera.
Meanwhile, Barrick produced 85 million poundsof copper in the first quarter, down from 95 million in the year-ago period.AISC rose to $2.61 per pound from $2.19. However, the average realizedprice rose to $2.98 per pound from $2.76.
Barrick has cut its debt from $13.1 billion atthe end of 2014 to $6.4 billion. The company envisions whittling this down somemore.
“Our goal remains to reduce our total debt from$6.4 billion at present to around $5 billion by the end of 2018,” Barrick saidin its earnings statement. “To achieve this, we will use cash flow fromoperations and cash on hand. Having materially strengthened the balance sheet,Barrick does not intend to sell further assets for the purposes of debtrepayment.”
Any proceeds from additional any additional “portfoliooptimization” will be reinvested to enhance the project pipeline or else returnedto shareholders, Barrick said.
The company maintained its full-year guidance for goldproduction of 4.5 million to 5 million ounces at AISC of $765 to $815 perounce.
“We expect gold production in the second quarter to be roughlyin line with the first quarter at around 1 million ounces, mainly due to theimpact of a scheduled maintenance shutdown at the Barrick Nevada roaster,”Barrick said.
The company maintained full-year copperproduction guidance of 385 million to 450 million pounds at AISC of $2.30 to $2.60per pound.
By Allen SykoraFor Kitco News
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