American Barrick reports 9-month earnings increase

A 33% increase in production from seven gold mines has enabled American Barrick Resources (TSE) to report record third-quarter and 9-month earnings.

The Toronto company increased its gold production to 224,288 oz in the first nine months of 1988 from 168,838 oz during the same period last year.

As a result, net income was up 31% to $23.2 million or 39 per share for the nine months ended Sept 30 from $17.7 million or 34 per share at the same time last year.

Nine month revenues increased to $121.1 million from $83 million during the first nine months of 1987.

“Barrick’s 9-month performance reflects strong growth in production, a substantial increase in operating income and a higher average realized gold price,” said President Robert Smith.

During the first nine months of 1988, Barrick delivered 217,049 oz gold at an average price of $450 per oz compared with 158,886 oz at an average $392 per oz last year.

Much of Barrick’s increased gold production is attributable to the Goldstrike mine in Nevada where a new 4,500-ton-per-day oxide mill began operations in the first week of August. It is now running at full design capacity and with gold output standing at 66,093 oz on Sept 30 (compared to 28,006 oz at the same time last year) Smith expects the mine to achieve its targeted 1988 production level of 115,000 oz.

Production from Goldstrike and the new Holt-McDermott mine at Kirkland Lake, Ont., also had a marked effect on the company’s third quarter results which showed significant improvements from last year. Barrick’s third quarter net income increased to $9.1 million or 15 per share from $7.3 million or 13 per share last year. Third quarter revenues were ahead to $47.2 millon compared to $32.3 million a year earlier.

Through it gold-linked financings and hedging programs, the company has secured a minimum average of $430(US) per oz for about 75% of its production over the next three years.

The company’s shares were recently listed for trading on the Swiss Stock Exchange.