Barrick Gold (TSX: ABX; NYSE: GOLD) announced that it will reduce power supply to townships near the Porgera gold mine to save costs.
The company said in a statement from mine operator Barrick (Niugini) Ltd that "due to necessary cost reductions" electricity the mine provides free to nearby communities would only be supplied for 12 hours a day starting on July 17.
In May, Barrick cut its original 2020 production guidance after the dispute began with the government of Papua New Guinea over Porgera.
In April, the government of Papua New Guinea refused to extend an expired lease for the Porgera gold mine, forcing the company to put the mine on care and maintenance and lower its full-year attributable gold production forecast.
The company expects a 15% decline in second-quarter gold production, due to coronavirus-induced disruptions at an Argentinian mine and the dispute in Papua New Guinea.
The company reported preliminary second-quarter sales of 1.22 million oz. gold and 123 million lb. copper, as well as preliminary second-quarter production of 1.15 million oz. gold and 120 million lb. copper.
Barrick's gold production for the first six months of 2020 was 2.4 million oz., at the midpoint of the company's 4.6-5 million oz. guidance for the year.
Barrick CEO Mark Bristow said the results positioned the company well to achieve its guidance for the year, despite the impact of the Covid-19 pandemic and the resulting lockdowns.
"Comprehensive programs to counter the spread of Covid-19 are in place at all of Barrick's operations, and it continues to take the necessary steps to manage the impact of the pandemic on its business," Bristow said in a July 16 news release.
Barrick said second-quarter cost of sales per ounce gold is expected to be 4% to 6% higher, total cash costs per ounce gold are expected to be 2% to 4% higher, and all-in sustaining costs (AISCs) per ounce gold are expected to be 7% to 9% higher, respectively, than the first quarter of 2020.
Sales of 123-million lb. copper were also higher than the previous quarter.
Copper cost of sales per pound were expected to be 5% to 7% higher than the prior quarter; C1 cash costs per pound were expected to be in line; and copper AISCs are expected to be 4% to 6% higher, respectively, than the first quarter of 2020.
Barrick is to report its second-quarter financial results on Aug. 10.
Anita Soni of CIBC described Barrick's operating results "as an overall positive ... showcasing its robust asset base." She has a 12-18 month target price on the company of US$36 per share. At presstime in New York, the company was trading at US$26.93 per share.