Barrick Gold Corporation 's ( ABX ) adjusted earnings
(excluding one-time items) fell to 92 cents per share in the first
quarter of 2013 from $1.10 per share in the year-ago quarter, but
were ahead of the Zacks Consensus Estimate of 86 cents.
On a reported basis, net earnings came in at $847 million or 85
cents per share, a roughly 18% fall from earnings of $1.04 billion
or $1.04 per share recorded in the year-ago quarter. Lower gold and
copper prices and reduced sales volumes weighed on the bottom
Revenues fell 5.7% year over year to $3,437 million in the
reported quarter and missed the Zacks Consensus Estimate of $3,649
million. Average realized price of gold decreased 3.7% year over
year to $1,629 per ounce. Total cash costs increased 3.9% to $561
per ounce while all in sustaining costs crept up 1.1% to $919 per
ounce in the reported quarter.
Gold production declined to 1.80 million ounces in the quarter
from 1.88 million ounces a year ago. Copper production, on the
other hand, increased to 127 million pounds from 117 million pounds
in the prior year. All-in sustaining and total cash costs benefited
from strong performances at Goldstrike, Cortez, and Veladero.
North America: Barrick's North American unit
produced 0.87 million ounces of gold in the quarter compared with
0.89 million ounces in the prior-year quarter. All-in
sustaining and total cash costs stood at $770 per ounce and $487
per ounce, respectively, in the reported quarter.
Production at Cortez and Goldstrike was higher, reflecting
higher-than-expected grades and recoveries. The Pueblo Viejo mine,
which achieved commercial production in January, produced 96,000
ounces of gold.
South America: Production from South America in
the quarter was 0.37 million ounces compared with 0.45 million
ounces in the year-ago quarter. All-in sustaining and total cash
costs were $638 per ounce and $405 per ounce, respectively.
Australia Pacific: The region produced 0.45
million ounces in the quarter, compared with 0.43 million ounces in
the year-ago quarter. All-in sustaining and total cash costs were
$1,096 per ounce and $785 per ounce, respectively.
African Barrick Gold plc. (ABG): Attributable
production from African Barrick Gold in the quarter came in at 0.11
million ounces, almost at par with the year-ago quarter. All-in
sustaining and total cash costs were $1,561 per ounce and $931 per
ounce, respectively, in the quarter.
Cash and cash equivalents stood at $2,342 million as of Mar 31,
2013, compared with $2,665 million as of Mar 31, 2012. Net debt was
roughly $14.1 billion as of Mar 31, 2013, versus $12.1 billion as
of Mar 31, 2012. First quarter operating cash flow was $1.09
billion compared with $1.37 billion in the first quarter of
Barrick said that the Pascua-Lama mine, which is the highest
gold mine in the world, will produce an average of 800,000-850,000
ounces of gold and 35 million ounces of silver in its first full
five years of operation at all-in sustaining and total cash costs
of $50-$200 per ounce and negative $150 to $0 per ounce,
Barrick, earlier this month, announced that it is halting
construction work at the Pascua-Lama mine in Chile after a Chilean
court issued a preliminary injunction citing environmental
concerns. Barrick's Pascua-Lama mine overlaps the border of Chile
and Argentina and the court ruled in favor of indigenous
communities who complained that the project threatens their water
supply. Barrick is working to address the environmental and other
regulatory requirements on the Chilean side of the project.
Barrick reiterated its 2013 gold production guidance of 7-7.4
million ounces at total cash costs of $610-$660 per ounce. The
company reduced its full year all-in sustaining cost guidance to
$950-$1,050 per ounce from the previous guidance of $1,000-$1,100
Barrick will curtail its capital spending to the range of $5.2
billion and $5.7 billion from $5.7 billion to $6.3 billion expected
earlier. Barrick is also reducing exploration spending to a range
of $300 million to $340 million, which is $100 million lower than
earlier expectations. The company is taking these measures to
ensure that production results in returns for investors.
For 2013, production for the North American region is expected
in the range of 3.55-3.70 million ounces at all-in sustaining and
total cash costs of $820-$870 per ounce and $495-$545 per ounce,
respectively. The company expects ramp up of Pueblo Viejo to full
production in the second half.
Production from South America is expected to be in the range of
1.25-1.35 million ounces in 2013. The all-in sustaining and total
cash costs are expected to be in the range of $875-$925 per ounce
and $550-$600 per ounce, respectively.
Australia Pacific is expected to produce 1.70-1.85 million
ounces this year for at all-in sustaining and total cash costs of
$1,200-$1,300 per ounce and $880-$950 per ounce, respectively.
Barrick's share of production at African Barrick Gold is
expected to be in the range of 0.40-0.45 million ounces at all-in
sustaining and total cash costs of $1,550-$1,600 per ounce and
$925-$975 per ounce, respectively, in 2013.
We believe that higher costs may affect Barrick's results moving
ahead. Moreover, challenging economic conditions remain a concern
for the company along with the limited supply of gold as new
Another copper and gold company Freeport-McMoRan Copper
& Gold Inc ( FCX ) recently released
its first quarter results. The company's adjusted earnings
(excluding one-time charges) of 73 cents per share for the quarter
beat the Zacks Consensus Estimate by a penny but trailed the year
ago earnings of 96 cents.
Other gold mining companies, Newmont Mining
Corporation ( NEM ) and
Goldcorp Inc. ( GG ) are slated to
release their results on Apr 29 and May 2, respectively.
Currently, Barrick retains a Zacks Rank #5 (Strong Sell).BARRICK GOLD CP (ABX): Free Stock Analysis
ReportFREEPT MC COP-B (FCX): Free Stock Analysis
ReportGOLDCORP INC (GG): Free Stock Analysis ReportNEWMONT MINING (NEM): Free Stock Analysis
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