Barrick posts first quarter profit of US$51 million

Barrick Gold‘s (ABX-T) net income in the first quarter of 2005 totaled US$51 million, almost double that of the same period a year earlier.

The net income translates to US10 per share, double the earnings of the year-earlier period.

The company produced 1.1 million oz. of gold at total cash costs of US$248 per oz. Production was down compared with the first quarter of 2004, when 1.3 million oz. were produced. Cash costs, on the other hand, were up in 2005 by US$49 per oz.

In North America, both Goldstrike and Eskay Creek mined lower grade ore resulting in lower production. Goldstrike produced 432,102 oz. gold, (39,472 oz. less than the previous year’s total during the same period) and Eskay Creek saw gold production fall by 10,868 oz. to 54,805 oz.

The company’s Peruvian Pierina mine saw a large decline in production from 231,898 oz. during the first quarter of 2004 to 145,983 oz. this year. The average grade of ore processed was 0.026 oz. per ton, down from 0.049 oz. per ton during the same period last year. The mine has however achieved higher production in the first quarter of this year than in the last quarter of 2004.

Barrick’s 50%-owned Kalgoorlie operation in Australia produced significantly (22,311 oz.) more gold than in the first quarter of 2004: 124,523 oz. up from 102,212 oz. The Plutonic mine, also in Australia, produced 70,418 oz. gold, down 12,430 oz. from a year earlier.

Gold production was down at the Bulyanhulu mine in Tanzania: 73,374 oz. were produced, compared with 81,018 in the same period of 2004. The operation processed less ore, partly due to interruptions to its power supply and technical difficulties with the hoist mechanism.

The average realized gold price over the period ended March 31 was US$428 per oz., US$1 higher than the average spot price. Last year during the same period the company realized an average gold price of US$382 (US$26 below the average spot price at the time).

Barrick has a lot of projects in the works and expects to boost production as the year progresses. The company’s 70%-owned Tulawaka mine in Tanzania began production during the first quarter, managing to produce 4,554 oz. gold.

Greg Wilkins, President and Chief Executive Officer of Barrick, was enthusiastic about the company’s plans for this year, stating “2005 represents a landmark year in the history of Barrick with the expected start-up of three new mines.”

The Peruvian Lagunas Norte mine should begin production in mid-June and Veladero, in Argentina, is set to begin production in the fourth quarter.

In addition the company’s Cowal project in Australia is under development. Pre-stripping has commenced, but production is not expected until the first quarter of next year.

Plans to mine Pascua-Lama are progressing; the company hopes to have the environmental impact assessments for the project, which straddles the Chile-Argentina border, approved by year-end.