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Feb 18, 2021

Barrick beats on earnings with gold output up and costs down

Barrick Gold's $750M capital to shareholders keeps balance sheet strongest in industry: CEO


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Barrick Gold Corp., the most profitable major bullion producer in the past year, delivered a sixth straight earnings beat after lifting production and reducing costs.

The Toronto-based miner navigated the pandemic to meet its full-year gold guidance, with the fourth-quarter bringing higher output and a 3.8 per cent decline in costs.

Key Insights

  • Barrick said last month it expected all-in sustaining costs for gold in the fourth quarter would be 3 per cent-5 per cent lower than the US$966 an ounce reported in the third quarter. Costs came in within that range for the October-to-December period, at US$929 an ounce.
  • Gold output last year was 4.76 million ounces, within the company’s guidance that was revised after a dispute with Papua New Guinea’s government halted operations at the Porgera mine in April. Barrick left Porgera out of a 2021 output forecast of 4.4 to 4.7 million ounces, which is below the average analyst estimate of 4.77 million ounces.
  • Barrick maintained its regular quarterly cash dividend at 9 cents per share, with the new indicated yield 76 basis points below peers. On Wednesday, top gold miner Newmont Corp. increased its dividend by 38 per cent. Barrick proposed to pay investors 42 cents a share for a “capital distribution” from proceeds of dispositions.

Market Reaction

Barrick shares climbed 5.6 per cent in the past year in New York, lagging the almost 50 per cent gain of a Bloomberg Intelligence index of senior gold miners. The shares were up 2.4 per cent before the start of regular trading Thursday.

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  • Barrick’s fourth-quarter adjusted earnings of 35 cents a share exceeded the average analyst estimate of 31 cents and rose from 17 cents a year ago.