Print Friendly and PDF

Gold Price Boosts Barrick Profit
as Miner Eyes Copper Deals

(Reuters) – Barrick Gold Corp (NYSE: GOLD; TSX: ABX) reported a nearly 55% rise in quarterly profits as gold prices surged, bolstering its ability to snap up mines including in copper, its chief executive said.

Investors' anxiety about a global economy brought to its knees by the coronavirus pandemic has boosted "safe-haven" gold by 12% so far this year, while copper, seen as a bellwether for economic growth, is down about 15%.

Barrick CEO Mark Bristow has previously said the world's No. 2 gold miner aims to increase its exposure to copper because of its expected higher use in electrification.

He added the relative price performance between copper and gold made deals more attractive. "(A stronger balance sheet) improves our capacity to take up opportunities that might arise in the short to medium term given the dynamic nature of the global economy," Bristow told Reuters.

Bristow has previously expressed an interest in acquiring Freeport-McMoran Inc's flagship Grasberg mine.

Barrick, which maintained its quarterly dividend of 7 cents per share, trimmed its annual production forecast for gold after shutting its mine in Papua New Guinea.

The Canadian miner now expects attributable gold production of 4.6-5.0 million ounces versus 4.8-5.2 million previously.

The government of Papua New Guinea announced in April it would not renew a 20-year special mining lease for the Porgera gold mine, which is jointly owned by Barrick and China's Zijin Mining, due to environmental damage and social unrest.

Barrick has said it will contest the move, which it regards as "tantamount to nationalization without due process", and in the meantime has placed Porgera on temporary care and maintenance, while suspending 2020 guidance for the mine.

Bristow said a mediator would be appointed to help negotiations if initial talks between the government and Barrick failed.

Tax

Barrick Niugini Limited (BNL), the local venture in which both miners have a 47.5% stake, also received on April 9 a notice from Papua New Guinea's Internal Revenue Commission asking for $191 million in back taxes after audits for the years 2006 to 2015.

Barrick said the adjustments have "no merit" and it will contest the request.

However, in a sign of relations with Tanzania improving after a tax dispute there, Bristow said gold concentrate is currently being shipped from the country after an export ban was lifted in January. Barrick, which operates in North and South America and Africa, has not closed any of its mines due to coronavirus restrictions, unlike many of its competitors.

Larger rival Newmont, which was forced to shutter some mines in Canada and South America, warned on Tuesday of a financial hit in the second quarter.

Barrick's first quarter production fell 9% to 1.25 million ounces. Excluding one-off items, Barrick reported a profit of 16 cents per share, in line with analyst estimates.

Bristow maintained 2020 capital expenditure guidance, but said spending could come in towards the bottom of the $1.6 billion to $1.9 billion range.

GOLD STOCK NEWS

Copyright 2018 - 20 || All Rights Reserved
Reproduction in whole or part is strictly prohibited without prior written permission.


NOTE: Gold Stock News does not itself endorse or guarantee
the accuracy or reliability of information, statements or opinions
expressed by any individuals or organizations posted on this site


Gold Stock News is published by
BULL & BEAR MEDIA GROUP, INC.
Editor@TheBullandBear.com

Website Designed & Maintained by Gemini Communications

PLEASE READ DISCLAIMER