Barrick’s profit of US22 per share was up slightly from the corresponding quarter of 1999, when the company made US$79 million on revenue of US$331 million.
The major finished the first nine months of 2000 with earnings of US$230 million on revenue of US$953 million. Gold production to the end of September was 2.7 million oz., putting the company on-track to produce 3.7 million oz. by year-end.
By the end of September 1999, Barrick had made US$250 million on revenue of US$1.1 billion and production of 2.8 million oz. Compared with 1999 figures, production was down at the Pierina mine in Peru and at Barrick’s Canadian operations, which were in development phases for part of the year.
Barrick is delaying the start of construction at its Pascua-Lama project, on the Chilean-Argentine border, because some regulatory permits have yet to be issued. Work that had been scheduled to begin at the end of the year is now expected to start in 2001. Production is still scheduled for 2003.
The poor gold market continued during the quarter, favouring committed hedgers such as Barrick. The company realized an average US$360 per oz. during the quarter, US$78 higher than the period’s average London spot price. Altogether, this added up to an extra US$73 million in revenue.
The mainstay of the company’s hedging program is a 13.8-million-oz. portfolio of spot deferred contracts with an average price of US$352 per oz. These are, in turn, partly financed by the sale of call options that can be converted to spot deferred contracts. Barrick also receives interest on the deferred revenue from the contracts.
Barrick’s production costs moved slightly higher in the quarter, to US$142 per oz. on an operating basis and US$208 on a total-costs basis, as cash costs increased at all its operations except Holt-McDermott in northeastern Ontario (where they fell to US$113 from US$133 the year before) and Pierina in Peru (where they remained steady). But all the operations kept a positive cash flow.
The Goldstrike operation in Nevada, including both the Betze-Post and Meikle mines, has seen drastically increased production since the completion of a new roaster. The unit has performed consistently above capacity.
The two mines poured 611,000 oz. gold in the quarter, about 25% higher than a year before. In the first nine months of this year, Goldstrike produced 1.6 million oz., up from 1.5 million in the first nine months of 1999.
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