Barrick Mining reported second-quarter profit below estimates as higher costs at its gold operations offset rising bullion prices, while it struck a $1.95 billion deal with Newmont to settle disputes over Nevada Gold Mines, the companies said.
Newmont consented to Barrick’s planned North American gold IPO as part of the agreement, according to a release on Monday.
Higher fuel costs are adding to pressure on gold miners as the U.S.-Israeli conflict with Iran disrupts oil flows and keeps energy prices elevated.
Barrick said fuel expenses, lower grades and higher royalties contributed to an 11 per cent rise in gold all-in sustaining costs.
U.S. shares of Barrick fell nearly 6 per cent in premarket trading.
The Canadian gold miner reported adjusted profit of 82 cents per share for the three months ended June 30, compared with analysts’ average estimate of 88 cents per share, according to data compiled by LSEG.
Its second-quarter realized gold price rose 34 per cent from a year earlier to $4,417 per ounce, while gold output was flat at 796,000 ounces.
Barrick said lower grades processed at Carlin, Cortez and North Mara, along with higher fuel costs and royalties associated with the stronger realized gold price, drove the increase in gold costs.
Its gold cost of sales rose 20 per cent in the second quarter to $1,993 per ounce, while gold’s all-in sustaining cost, a key industry measure of the total cost of producing gold, including sustaining capital spending, rose 11 per cent to $1,866 per ounce.
NEWMONT DEAL CLEARS IPO PATH
Newmont will pay Barrick $1.95 billion in cash within 30 days. Barrick will transfer its Fourmile project to the Nevada Gold Mines joint venture, while Newmont will transfer its Mike and Fiberline projects.
The agreement will create a nearly 100-million-ounce gold complex in Nevada, Barrick said.
Barrick’s planned North American IPO will include its interests in and operatorship of Nevada Gold Mines and Pueblo Viejo, the Fourmile project and other North American exploration properties, along with the assets contributed by Newmont.
It expects to complete the IPO by the end of 2026.
Reporting by Varun Sahay in Bengaluru; Editing by Pooja Desai
