Barrick Gold Corp. exceeded earnings estimates, raised dividends and unveiled a share buyback program as the world’s second-largest bullion supplier contains costs and lifts production.

The Toronto-based miner said its board authorized the repurchase of as much as US$1 billion in common shares over the next year and increased its regular quarterly cash dividend by 11 per cent after capping a 10th straight quarterly earnings beat. Its shares rose.

After cutting debt, tidying up the asset portfolio, lifting reserves and navigating supply-chain snarls, Chief Executive Officer Mark Bristow is delivering on promises to reward shareholders. The gold and copper producer joins other major miners like Glencore Plc in shelling out generous capital returns.  

The South African executive sees Barrick shares as cheap, with recent under-performance against No. 1 gold supplier Newmont Corp. “a head-scratcher for me,” he said in an interview Wednesday. “Strategically, we are bang on track.”

Barrick is getting back to year-ago production levels and coping better than most with tight labor markets and pricier freight and energy. Earnings before items came in at 35 cents a share for the quarter, compared with the 30-cent average estimate. That was up from the previous quarter and matched the year-ago result. 

The company’s shares have benefited from a bounce in bullion prices over the last few weeks. Still, Barrick is down 6.6 per cent in the past 12 months while Newmont has gained 7.4 per cent. Bristow sees the precarious global economy as supportive of bullion prices.
 

COST CONTROL

He likes to tout efforts to mitigate pricing and cost pressures such as migrating to a younger workforce and his paranoid approach to managing complex shipping lines. In addition, the firm may still be unlocking savings following its takeover of Randgold.

With regards production, Barrick has returned to year-ago levels after improvements at its Nevada joint venture with Newmont. On an earnings call at 11 a.m. New York time, Bristow probably will provide an update on development work in Nevada, Tanzania and Papua New Guinea, where the company is looking to restart operations in July after local shareholders took a 51 per cent stake.

The CEO is also set to tout Barrick’s success in boosting reserves, bucking an industry trend as miners prioritized debt reduction and dividends. Investors will be looking for his take of deal-making opportunities in an industry that’s widely expected to continue consolidating via purchases of more single-asset players.

In an interview before the call, he said while Barrick is focused on its own projects, it’s well positioned to pounce on opportunities that may come along. The company isn’t shy about looking at big deals, although it maintains a disciplined approach, Bristow said.