(Kitco News) – Despite slightly weaker gold production in the first quarter, Barrick Gold (NYSE: GOLD, TSX: ABX) remains optimistic about meeting its annual target as higher gold prices continue to drive profits.
Expected Production Ramp-Up
In its earnings report on Thursday, Barrick Gold stated that gold production is expected to ramp up steadily throughout the year, with support from the completion of the Pueblo Viejo plant expansion and the resumption of operations at the Porgera mine. The company also reassured investors that copper production remains on track to meet the full year’s guidance.
Financial Performance
Prior to the North American trading session, the second-largest gold producer in the world announced adjusted net earnings of $333 million, or $0.19 per share. Barrick reported a 143% year-over-year increase in net EPS, a 36% rise in adjusted net earnings, and a 7% increase in attributable EBITDA to $907 million. Additionally, the company’s operations generated $760 million in operating cash flow for the quarter.
Gold Production and Prices
In the first three months of the year, Barrick produced 940,000 ounces of gold, slightly down from the previous year. However, the company saw a significant boost in profits due to higher gold prices, with a realized gold price of $2,075 per ounce in the first quarter.
Production Challenges and Rising Costs
Barrick attributed the lower production numbers and increased costs to the delayed ramp-up at Pueblo Viejo, maintenance at Nevada Gold Mines, and mine sequencing at other sites. The company reported All-in-Sustaining Costs (AISC) of $1,474 per ounce, reflecting a rise from the previous year.
Copper Production
Regarding copper production, Barrick maintained its output at 40,000 pounds in the first quarter, with slightly higher AISC at $3.59 per pound. Realized copper prices were lower compared to the same period last year.
Future Outlook
Despite production challenges and cost increases, Barrick’s president and chief executive, Mark Bristow, expressed confidence in the company’s ability to grow production and profitability. Bristow highlighted key organic projects that will secure Barrick’s production profile for the future.
Dividend Announcement
Following solid earnings, Barrick announced a dividend of $0.10 per share for the first quarter of 2024. The company’s senior executive vice-president and chief financial officer, Graham Shuttleworth, emphasized the strength of Barrick’s balance sheet and global asset base, allowing for continued dividend distributions and investments in business growth.
Insight:
It is essential for mining companies like Barrick Gold to strategically manage production challenges and rising costs while capitalizing on favorable commodity prices. This balance is crucial for sustaining profitability and long-term growth in the industry.
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