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Barrick Gold reports 55% rise in 1Q adjusted profit

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(Kitco News) - Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) announced a 55% year-on-year increase in its first-quarter adjusted profit Wednesday, reporting that production and costs were consistent with full-year guidance while there was a jump in average realized gold prices.

After adjustments for special items, earnings were $285 million, or 16 cents per share, up from $184 million, or 11 cents, in the first quarter of 2019. The company’s adjusted earnings matched consensus estimates, analysts said.

Net earnings rose to $400 million, or 22 cents a share, from $111 million, or 6 cents, in the year-ago period. Free cash flow tripled to $438 million from $146 million.

The company maintained its dividend at 7 cents per share after having hiked it at the end of the previous quarter.

Barrick produced 1.25 million ounces of gold from January through March, compared to 1.37 million in the year-ago quarter. All-in sustaining costs rose to $954 from $825. Meanwhile, the average realized gold price rose to $1,589 an ounce from $1,307 a year ago.

Copper output climbed to 115 million pounds from 106 million. All-in sustaining costs fell to $2.04 a pound from $2.46.

Mark Bristow, chief executive officer, said the company’s operations performed as planned despite a focus during the latter part of the quarter on dealing with the global COVID-19 pandemic, both putting in health and safety measures and dealing with government restrictions. He added that Barrick has donated more than $20 million to the countries where it operates, many of which have limited health-care facilities.

“Our sustainability and regional teams have done a great job in taking timely action to introduce comprehensive and carefully considered measures at all our sites and offices to manage and mitigate any impacts of COVID-19 on our employees and contractors. A key focus of this plan is on prevention, and all sites are working actively to head off an outbreak,” he said.

The company said that debt, net of cash, was reduced by a further 17% from the fourth quarter to $1.85 billion, with no significant maturities until 2033.

The company’s dividend of 7 cents per share is payable on June 15 to shareholders of record at the close of business on May 29. This maintains the dividend at the same level as in the fourth quarter after the company increased the payment three times in the last year.

“The board believes that the current dividend level is justified by the group’s profitability, continued reduction in net debt and overall strength of our balance sheet supported by the robust five-year and 10-year plans which we have shared with the market,” said Graham Shuttleworth, chief financial officer.

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