Gold lifts Barrick despite stale performance

Barrick Gold has reported net earnings of US$295 million on revenue of revenue $2.7 billion for the March 2024 quarter, a 146% increase over the same period in 2023, with average realised metals prices of $2075pa for gold and $3.86 for copper.

The company produced 940,000oz of gold at an all-in sustaining cost of $1474/oz, 1.3% fewer ounces than a year ago, but at a 7.6% higher all-in sustaining cost (AISC). Barrick also produced 40,000t of copper, the same as in the prior year, although its AISC increased to $3.59/lb.

"Lower production was offset by the higher gold price," said Barrick Gold chief executive Mark Bristow during the company's results conference call.

Barrick said the lower production and higher costs reflected the delayed ramp up at the Pueblo Viejo mine in Dominican Republic following reconstruction of the conveyor, in addition to planned maintenance at Nevada Gold Mines (NGM) in Nevada, USA and mine sequencing at other sites. It said its results were in line with guidance and that the company is on target to to meet its full year guidance." He said.

"The gold price is up 15% in 2023 and the same again so far this year, … but Barrick's share price, like the rest of the sector, lags the gold price, which begs the question, if you believe in gold, why not invest in the producers?" said Bristow.

Barrick saw its cash position fall slightly to $3.9 billion while its long-term debt remained $4.7 billion. The company maintained its 10c per share quarterly dividend.

The company is accelerating the ramp-up of the Goldrush mine in Nevada after it received its Record of Decision late last year. The company also began drilling for a prefeasibility study at its wholly-owned nearby Fourmile project.

"Goldrush will accelerate Fourmile's progress up the value curve. We started drilling this month leading to a prefeasibility study decision expected by the end of the year," said Bristow.

Bristow said Nevada remains highly prospective tier one terrain for exploration. "There is significant untested potential highlighted in the updating of our geological models. I anticipate these will result in substantial additions to the high-grade Turquoise Ridge endowment.

The Pueblo Viejo plant expansion is substantially complete, with the company now shifting its focus to the tailings storage facility, with a feasibility study expected to be completed in the September quarter.

Bristow said a feasibility study on the Lumwana super pit is due by year-end, with construction to start in 2025 and the first production in 2028, which will transform it into a major copper mine with a life of more than 30 years. "When we have finished the Lumwana expansion and Reko Diq, our copper production will be on a par with Anglo American's copper production today, which is undervalued," he said, reflecting on BHP's bid for Anglo American.