Barrick beats forecasts, hikes dividend

Barrick Gold (TSX: ABX; NYSE: GOLD) posted a better-than-expected quarterly profit and rewarded investors with a 40% dividend increase, thanks to strong gold prices.

The world’s second-largest gold producer reported adjusted net earnings in the three months to December of US$300 million, or US17¢ a share, up from US$264 million and US15¢ recorded in the third quarter. Analysts’ average estimate for the fourth quarter was US14¢ a share.

The results, along with Barrick halving its debt to US$2.2 billion over the course of 2019, allowed the miner to declare a dividend of US7¢ a share, up from US5¢ in the third quarter, payable on March 16.

“The board believes the dividend increase is justified by the significant reduction in net debt and strong balance sheet, together with the growth in free cash flow supported by a robust 5-year plan, which we have shared with the market,” executive vice-president and chief financial officer Graham Shuttleworth, said in a statement.

Gold prices increased 18% last year, as investors sought safe-haven assets due to global uncertainty triggered by the long, drawn-out trade war between the United States and China.

Barrick’s realized prices in the fourth quarter jumped 21% to US$1,476 per oz., up from US$1,216 per oz. in the fourth quarter of 2018, while average realized prices for copper in the fourth quarter remained at US$2.76 per pound.

Barrick has also benefited from the $1 billion fetched through asset sales since chief executive Mark Bristow took the helm in January 2019.

Full-year production rose to 5.5 million oz. gold, up from 4.5 million oz. in 2018. The miner also churned out 432 million pounds of copper compared with its 2018 total of 383 million pounds.

In other news, CEO Mark Bristow denied rumours last week that the company is mulling a merger with Freeport-McMoran (NYSE: FCX), but he did say the miner’s Grasberg copper and gold operation in Indonesia was an attractive asset.

Last month, Barrick signed a deal with the Tanzanian government to formalize a joint venture related to the three mines it has there, ending a long-running tax dispute with the African country.

For 2020, the gold giant forecasts consolidated production of between 4.8 million and 5.2 million oz. gold at all-in sustaining costs (AISCs) of US$920-$970 per oz., and 440 million to 500 lb. copper at AISCs of between US$2.20 and US$2.50 per pound.

This article first appeared in our sister publication, MINING.com.