Barrick announces record output, earnings for 1992

For the seventh consecutive year, American Barrick Resources (TSE) has posted record production and earnings.

The company produced more than 1.3 million oz. gold in 1992 compared with 789,846 oz. in 1991. Barrick anticipates that production will increase to two million ounces annually by 1995 as a result of a revised mine plan for the Betze-Post deposit at the Goldstrike mine in Nevada. The revised plan is the result of an agreement signed with Newmont Gold (NYSE) in late 1992 which calls for joint development of the two gold producers’ common lands along the northern sector of the prolific Carlin Trend.

Barrick President Robert Smith is optimistic that more reserves will be outlined at Goldstrike and that output will continue to grow after 1995. Barrick currently has reserves of 27.2 million oz. — the largest gold reserves in North America.

Net income for 1992 increased 89% to US$174.9 million, or US$1.22 per share, on revenue of US$540.4 million. Operating costs declined significantly to US$164 per oz. compared with US$205 per oz. in 1991. The lower operating costs reflect the sharp increase in low-cost production from Goldstrike. Barrick’s gold hedging program enabled it to realize an average price of US$422 per oz. on its gold sales, compared with the Comex average for the year of US$345 per oz. Chief financial officer Gregory Wilkins says that the company’s production is fully hedged until the end of 1994 and that it will realize prices of US$400 per oz. Wilkins adds that Barrick can roll the contracts forward to take advantage of any increases in the gold price. On the exploration front, Barrick is conducting most of its activities in North America. The company plans to spend US$4.5 million in 1993 on exploration in the Goldstrike area of Nevada. Exploration is also being carried out in Utah and on the Holt-McDermott mine property near Kirkland Lake, Ont., where 1992 production totalled 46,325 oz. gold at a cost of US$356 per oz.

Internationally, Barrick is exploring in Mexico and Chile, two countries where it thinks the political risk is minimal.