Barrick sees flat gold production through 2024

A Newmont Mining gold pour in Nevada. Source: Newmont Mining Corp.

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Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] released its third quarter financial results on Wednesday November 6 and predicted that its annual gold production will remain flat at between 5.15 and 5.6 million ounces over the next five years.

The forecast came after the world’s second largest gold miner beat street estimates by reporting an adjusted third quarter profit of US$264 million or US15 cents a share. That was ahead of the consensus forecast of US12 cents a share, and compares to a year ago profit of US$89 million or US$0.08 per share.

Meanwhile, Barrick said it remains on track to achieve the upper end of its production forecast in 2019 (5.15-5.6 million oz), while costs are expected to be at the lower end of the forecasted US$870 to US$920/oz.

The company said its guidance for copper production this year remains unchanged at 375-430 million pounds at an all-in-sustaining-cost range of US$2.40 to US$2.90/lb.

Barrick has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the Democratic Republic of Congo Senegal and the United States. The company recently moved to consolidate its position as one of the world’s leading gold producers by agreeing to merge with Randgold Resources Ltd.

On Wednesday, Barrick shares rose 2.6% or 56 cents to $22.34 on volume of just over 3.0 million shares traded. The shares are currently trading in a 52-week range of $15.37 and $26.69.

Investors are being guided to expect flat production in the next few years after Barrick produced 1.31 million ounces of gold and 112 million pounds of copper in the third quarter, up from 1.14 million ounces of gold and 106 million pounds of copper in the third quarter of 2018. The 2019 numbers include the impact of Barrick’s Nevada Gold Mining joint venture with Newmont Goldcorp Corp., [NGT-TSX; NEM-NYSE], which was established on July 1, 2019.

In the quarter ended September 30, 2019, Barrick posted a net profit of US$2.3 billion, compared with a loss of US$412 million in the same quarter in 2018.

Third quarter revenue jumped to US$2.68 billion from US$1.83 billion in the comparable quarter a year ago. Other highlights from Wednesday’s results included an increase in the quarterly dividend by 25% to $0.05 per share.

Barrick said the strong quarter of performance across its portfolio reflected the progress management has made in rebuilding the company.

In Canada, the company said operations at Hemlo, Ontario are being modernized and refocused to secure the gold mine’s continued viability. The company said several programs were introduced to improve performance and the next step will be to phase out the open pit operation and move to an underground contract mining model.

This optimization is expected to upgrade Hemlo to a Tier 2 asset and extend its life-of-mine. Hemlo produced 49,000 ounces of gold in the third quarter compared to 41,000 ounces in the third quarter of 2018.


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