Barrick Gold Corp. has built up stockpiles of mining inputs such as explosives to help counter inflation and supply-chain snarls that have been exacerbated by the war in Ukraine. 

After trimming inventories of consumable materials to about a one-month supply after its 2019 takeover of Randgold Resources Ltd., Barrick extended that to three months when the pandemic hit. Then when Russia invaded Ukraine in February, the company added reserves of inputs like explosives and cyanide to boost flexibility, since Russia was a significant contributor of raw materials that go into those products.

“We built the inventory and we are managing it now,” Chief Executive Officer Mark Bristow said in a Wednesday interview.

While Bristow has coped better than peers with inflationary headwinds, there’s only so much a CEO can do to manage unprecedented supply-chain upheavals. Barrick lifted its 2022 inflation guidance to 8 per cent from 5 per cent on Wednesday amid pricier freight, energy and other inputs. He’ll continue to chase efficiencies, particularly in Nevada, to mitigate that.

“This is a dynamic situation,” Bristow said. “You can’t deny the fact there is inflation around. On the one hand, it does add costs, but on the other hand it is a significant driver of the gold price.”

The world’s No. 2 gold producer posted better-than-expected first-quarter earnings earlier Wednesday and doubled its quarterly dividend as price gains helped counter higher costs and lower output. Its shares were up slightly before the start of regular trading in New York.

Barrick is forecasting a stronger performance in the second half of the year and said it remains on track to meet its annual production guidance. All-in sustaining costs for gold rose 14 per cent from a year ago, while realized gold prices were up 5.6 per cent. Those costs were up 20 per cent from the fourth quarter, partly due to lower production and the mix of products sold.

Bristow is scheduled to speak to analysts on an 11 a.m. conference call, where he may lay out the prospects for improved performances at the company’s Nevada and Argentine operations, the resumption of output in Papua New Guinea and an update of plans in Pakistan.