Barrick Gold (ABX-T) has budgeted up to US$500 million for a share buyback program aimed at propping up its faltering share price.
The world’s third-largest gold producer plans to buy up to 35 million, or 7% of its of its public float during the yearlong program.
Barrick’s President and CEO Greg Wilkins said in a prepared statement, “Our shares are trading in a price range that does not reflect the value of the company or our future business prospects. This program demonstrates the confidence that we have in our existing operations, development pipeline and exploration program.”
At the end of March, Barrick had more than US$1.1 billion in cash, no net debt and a portfolio of operating mines generating substantial cash flows.
Barrick recently posted a first-quarter profit of US$29 million (or US5 per share) on revenue of US$459 million, compared with year-ago earnings of US$46 million (US9 per share) on US$478 million. The drop in earnings is attributed falling production and rising costs.
In other news, Barrick has declared a dividend of US11 per share, payable on June 16 to shareholders of record at the close of business on May 30.
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