Barrick Gold delivers record cash flow of US$3.4 billion

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Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] reported a better than expected fourth quarter profit Thursday February 18 thanks to a rise in the bullion price, which was driven by pandemic-related economic uncertainty.

On an adjusted basis, profit rose to US$616 million or 35 cents per share in the fourth quarter ended December 31, 2020 up from US$300 million or 17 cents a year earlier. That was ahead of the consensus estimate of 32 cents.

Other highlights from Thursday’s earnings announcement included the declaration of a $0.09 quarterly dividend per share, plus a proposed US$750 million capital return that is derived from the US$1.5 billion in proceeds from the sale of non-core assets since 2019.

The capital return will be delivered in three tranches in May, August and November, 2021.

Barrick shares were down slightly the news, falling 1.25% or $0.33 to $26.08 on volume of 3.33 million. The shares are currently trading in a 52-week range of $41.09 and $17.52.

The gold mining giant met its production targets for 2020 thanks to consistent operating performance across the group that demonstrated management’s ability to manage the impact of the COVID-19 pandemic and other challenges.

Barrick has gold and copper mining operations and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia.

The portfolio includes half of the world’s top 10 Tier one gold assets (defined as having a mine life of over 10 years, at least 500,000 ounces of annual production and in the bottom half of global total cash costs).

They include Cortez and Goldstrike in Nevada, Kibali in the Democratic Republic of Congo, Loulo-Gounkoto in Mali, and Pueblo Viejo in the Dominican Republic.

Barrick expects to produce between 4.4 million and 4.7 million ounces of gold this year, compared to 4.8 million ounces in 2020.

Copper production this year is expected to be in the range of 410 to 460 million pounds, compared to 457 million pounds in 2020.

The gold production target is slightly lower than expected due to lower production from the Veladero mine in Argentina, which was affected by COVID more than the other operations, at higher costs.

However, higher gold and copper prices delivered annual operating cash flow of US$5.4 billion and record annual free cash flow of US$3.4 billion.

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