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Barrick Gold Reports Profit In First Quarter After Merger

Kitco News

Editor's Note: The article was updated to include adjusted profit topping consensus estimate.

(Kitco News) - Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) Wednesday reported a profit during its first quarter of operations since it acquired Randgold Resources Ltd.

Officials also said they expect a joint venture with Newmont Goldcorp., for the two companies’ Nevada mines, to be completed by the end of the current quarter.

Adjusted net earnings for the period from January through March were $184 million, or 11 cents per share, compared to $170 million, or 15 cents, in the same quarter a year ago. This was also an improvement from $69 million, or 6 cents, in the fourth quarter.

Analysts with Credit Suisse said the results topped consensus estimates that had called for adjusted earnings of around 9 cents per share. 

Net earnings dipped to $111 million, or 6 cents, from $158 million, or 14 cents, in the year-ago period.

The company acknowledged that any comparisons to last year are skewed by the merger with Randgold that went into effect at the start of the year.

Barrick announced a dividend for the first quarter of 4 cents per share payable on June 17 to shareholders of record at the close of business on May 31. Officials said this was in line with the commitment the company made when the merger with Randgold was announced last fall.

January-March gold production rose to 1.367 million ounces from 1.049 million in the first quarter of 2018 and 1.262 million in the fourth quarter. All-in sustaining costs were $825 an ounce, up from $804 a year ago.

First-quarter copper output rose to 106 million pounds from 85 million in the same quarter of 2018. Fourth-quarter production was 109 million pounds. Copper AISC were $2.46 a pound in the first quarter, down from $2.95 in the fourth quarter and $2.61 in the first quarter of 2018.

The average realized gold price fell to $1,307 from $1,332 in the same quarter a year ago,

Mark Bristow, president and chief executive officer, said the key operations all performed according to company plans.

“We have gone a long way towards integrating the organizations, streamlining the processes and ensuring that all the sites have the geological, operational and technical capability to meet their business objectives,” Bristow said.

“We’re also well advanced in establishing our new joint venture with Newmont, which has been named Nevada Gold Mines. The organizational structures are being finalized and we’re working together with Newmont to realize the synergies and cost-reduction opportunities offered by the joint venture, which is scheduled for completion by the end of the second quarter.”

The CEO said Barrick is on track to meet its plans for the year. The company projected 2019 guidance of 5.1 million to 5.6 million ounces of gold at AISC of $870 to $920 an ounce.

Copper-production guidance was listed at 375 million to 430 million pounces at AISC of $2.40 to $2.90 a pound.
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