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Barrick Gold 4Q earnings top estimates; dividend hiked

Kitco News

(Kitco News) - Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) reported a higher fourth-quarter adjusted profit that beat analysts’ estimates Wednesday and also announced a dividend hike and an increase in gold reserves.

The company reported adjusted fourth-quarter earnings – excluding special items – of $300 million, or 17 cents per share, up from $264 million, or 15 cents, in the third quarter. The result beat the consensus estimates of analysts, which news and analyst reports put at 14 to 15 cents per share.

Barrick, which acquired Randgold Resources at the beginning of 2019 and later formed a joint venture with Newmont Corp. for the two companies’ Nevada mines, compared its results to the third quarter in its earnings release rather than the year-ago period.

The company said its board of directors declared a fourth-quarter dividend of seven cents per share, up from the previous quarter’s dividend of five cents. It will be payable on March 16 to shareholders of record as of the close of business on Feb. 28.

This was the third dividend increase in roughly a year, said Graham Shuttleworth, chief financial officer. The dividend had been three cents at the time of the Barrick-Randgold Resources merger.

“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 five-year plan which we have shared with the market,” Shuttleworth said.

Fourth-quarter gold production was listed at 1.439 million ounces, with all-in sustaining costs of $923 an ounce. Output was up from 1.306 million ounces in the third quarter, when AISC were $984. Barrick reported an average realized gold price of $1,483 an ounce in the fourth quarter, up from $1,476. The company also produced 117 million pounds of copper. 

Barrick said its debt, net of cash, was halved in 2019 to $2.2 billion.

For full-year 2019, Barrick said adjusted earnings came in at $902 million, or 51 cents a share, up from $409 million, or 35 cents, in 2018. Full-year gold production of 5,465,000 ounces was at the top end of its guidance range and exceeded 4,527,000 in 2018, while copper production of 432 million pounds was above guidance.

“We started the year with five tier-one gold mines and ended it with six, thanks to the Nevada deal,” said chief executive Mark Bristow. “We’ve also succeeded in replenishing our reserves and resources, net of depletion, at a higher grade.”

Barrick said its gold mineral reserves increased by 14.5%, with a 7.7% higher grade, after depletion, following a year in which the company acquired Randgold, formed the joint venture with Newmont and disposed of its share of Kalgoorlie Consolidated Gold Mines in Australia. Reserves now stand at 1,300 million metric tons at 1.68 grams per ton for 71 million ounces of gold. Measured and indicated resources at $1,500-an-ounce gold rose to 170 million ounces, while another 39 million are classified as inferred.

The company listed copper reserves of 13 billion pounds and silver reserves of 150 million ounces.

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