Barrick beats forecasts, hikes dividend by 40% as gold prices soar

Barrick Gold  shared a better-than-expected quarterly profit and gave investor a more than welcome 40% dividend increase thanks to strong gold prices.

The world’s second largest producer of the yellow metal said adjusted net earnings in the three months to December reached $300 million, or 17 cents a share, up from $264 million recorded in the previous quarter. Analysts’ average estimate was 14 cents a share.

“The board believes the dividend increase is justified by the significant reduction in net debt and strong balance sheet, together with the growth in free cash flow supported by a robust 5-year plan which we have shared with the market,” executive vice-president and chief financial officer, Graham Shuttleworth, said in a statement .

“The results, along with Barrick halving its debt to $2.2 billion over the course of 2019, allowed the miner to declare a dividend of 7 cents a share, up from 5 cents in third quarter, payable on March 16”.

Gold prices increased about 18% last year, as investors sought safe-haven assets due to global uncertainty triggered by the long-drawn out trade war between the United States and China.

Barrick’s realized prices for gold jumped by 21% compared to Q4 2019 to $1,483 per ounce, while average realized prices for copper remained at $2.76 per pound.

Barrick has also benefited from the $1 billion fetched through asset sales since chief executive Mark Bristow  took the helm in January 2019

Eyes on copper

Full-year production, in turn, rose to 5.5 million ounces of gold, from 4.5 million ounces a year earlier. The miner churned out 432 million pounds of copper, a metal in which the miner has set eyes on.

While Bristow denied last week  that  the company was mulling a merger with Freeport-McMoran, he did say the miner’s Grasberg copper and gold operation in Indonesia was an attractive asset.

Last month, the company signed a deal with the Tanzanian government to formalize a joint venture  related to the three mines Barrick has there, ending a long-running tax dispute with the African country.

For 2020, the gold giant forecasts consolidated production of between 4.8 million and 5.2 million ounces of gold at all-in sustaining cost of $920-$970 per ounce, and 440 million to 500 pounds of copper at AISC of between $2.20 and $2.50 per pound.

source: mining.com