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Barrick Gold reports 14% rise in dividend amid soaring gold prices, on track to achieve 2020 production guidance

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(Kitco News) Barrick Gold Corp. (NYSE:GOLD, TSX:GOLD.TO) said on Monday that it increased its Q2 dividend to shareholders by 14% to 8 cents per share, citing robust performance and strong balance sheets amid record-high gold prices. 

The company also noted that its dividend more than doubled since the Barrick-Randgold merger announcement in September 2018. 

“The Board believes that the dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7 billion, including a cash balance of $3.7 billion as of the end of the second quarter, and no material debt repayments due before 2033,” said Senior executive vice-president and chief financial officer Graham Shuttleworth.

On top of that, Q2 earnings revealed that Barrick is currently on track to achieve its annual production guidance despite the COVID-19 impact. 

Q2 numbers showed year-to-date gold production of 2.4 million ounces, which is right around the mid-point of its 4.6 million to 5 million ounce 2020 guidance, the company said in a press release. That target was lowered back in May, when the company cited a conflict with the Papua New Guinea’s government over the Porgera mine.

The production activity is being largely driven by the Nevada Gold Mines (NGM) in the U.S., Loulo-Gounkoto in Mali, and Kibali in the Democratic Republic of Congo. 

“The operating cash flow exceeded $1 billion for the quarter and free cash flow was $522 million. Net earnings per share was 20 cents. Adjusted net earnings per share was 23 cents, up 44% from Q1 and well ahead of the market consensus, [and] debt net of cash was reduced by almost 25% to $1.4 billion from the end of Q1,” the company said.  

Barrick Gold’s president and chief executive Mark Bristow highlighted strong cash generation, higher gold prices, management’s success, and the company’s skillful handling of the COVID-19 pandemic. 

“Our flattened and decentralized management structure was a major factor in contending with Covid-19 while at the same time continuing to meet short-term targets and making significant progress towards our strategic objectives. Our major projects, including the expansion of Pueblo Viejo, the Goldrush development and the Turquoise Ridge shaft, remain on track. The only exception was Veladero, where the heap leach and cross-border Chilean power line projects were impacted by the Argentine government’s pandemic quarantine restrictions,” Bristow said.

The all-in sustaining costs were up 8.1% to $1,031 an ounce in Q2 from the previous quarter.

Spot gold is up more than 30% since the start of the year as prices breached $2,000 an ounce level and kept hitting new all-time highs last week before retreating on some healthy profit-taking on Friday. 

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