Barrick Gold Corp.
) adjusted net earnings (excluding one time items) rose 8% to $1.09
per share in the first quarter of 2012 compared with $1.01 in the
prior-year quarter. The results came in line with the Zacks
Consensus Estimate. Earnings were driven by higher average realized
gold price. Profit, as reported, rose roughly 3% year over year to
$1.03 billion (or $1.03 a share).
Revenues came in at $3,644 million, up 18% from $3,087 million
in the year ago quarter, missing the Zacks Consensus Estimate of
$3,758 million. The company produced 1.88 million ounces of gold in
the quarter versus 1.96 million ounces in the year-ago period.
Copper production in the quarter amounted to 117 million pounds,
a 56% jump from the year ago production of 75 million pounds. Total
gold cash costs jumped 24.7% to $545 per ounce of gold, while total
cash cost for copper increased to $2.08 per pound from $1.25 per
pound in the prior-year quarter.
North America region produced 0.89 million ounces of gold at
total cash costs of $485 per ounce compared with 0.86 million
ounces at total cash costs of $396 per ounce a year ago. Strong
performance by Cortez mine due to higher than budgeted grades led
to the growth in production.
Production at Goldstrike was, however, hampered by maintenance
activities and construction at the autoclaves. For 2012, production
for the North America region is expected to be in the range of
3.425-3.60 million ounces at total cash costs of $475-$525 per
: This business region's production in the quarter was 0.45 million
ounces at total cash costs of $421 per ounce compared with 0.42
million ounces at cash costs of 340 per ounce. Production from
South America in 2012 is expected to be in the range of 1.55-1.7
million ounces at total cash costs of $430-$480 per ounce.
This business region produced 0.43 million ounces in the quarter,
compared with 0.46 million ounces in the year-ago quarter. Total
cash costs were $748 per ounce in the reported quarter compared
with $585 per ounce in the year-ago quarter. Australia Pacific is
forecast to produce 1.80-1.95 million ounces at total cash costs of
$700-$750 per ounce in 2012.
African Barrick Gold plc. (ABG):
Attributable production from ABG in the first quarter of 2012 was
0.11 million ounces at total cash costs of $925 per ounce compared
with 0.13 million ounces at total cash costs of $658 per ounce in
the prior-year quarter. Barrick Gold expects to produce 0.5-0.535
million ounces at total cash costs of $790-$860 per ounce in
The company declared a 33% hike in its quarterly dividend to 20
cents per share, up from the previous payout of 15 cents. The
increase was driven by strong earnings and operating cash
Cash and cash equivalents stood at $2,665 million at the end of
March 31, 2012, compared with $2,745 million at the end of March
31, 2011. In the first quarter of 2012, operating cash flows
decreased 11.6% to $1,272 million.
Barrick Gold maintained its 2012 forecast of 7.3 -7.8 million
ounces of gold and 550 -600 million pounds of copper. Total cash
costs for 2012 for gold are expected to be in the range of
$520-$560 per ounce and net cash costs are expected to be within
the band of $400-$450 per ounce. The company expects copper cash
costs of $1.90-$2.20 per pound for 2012.
Barrick Gold increased its exploration budget to $450-$490
million from the prior year actual expenditure of $350 million as a
result of exploration success in 2011.
The company remains on track to advance construction at Pueblo
Viejo and Pascua-Lama, with first production expected in mid-2012
and mid-2013, respectively. The two projects in combination are
expected to generate average annual production of 1.5 million
ounces with total average annual EBITDA of approximately $2.5
billion in their first full five years.
We currently have a long-term Neutral recommendation on Barrick
Gold. The company, which competes with
AngloGold Ashanti Ltd. (
Newmont Mining Corp.
), maintains a Zacks #3 Rank, which translates into a short-term (1
to 3 months) Hold rating.
BARRICK GOLD CP (ABX): Free Stock Analysis
ANGLOGOLD LTD (AU): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis
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