Yesterday, Thursday, November 2, Barrick Gold (GOLD) reported earnings of 24 cents a share for the company’s this quarter. That was ahead of the 21 cents a share consensus estimate among Wall Street analysts. In the third quarter of quarter of 2022, the company reported earnings of 13 cents a share.
The surprise was the fourth for Barrack in the last four quarters.
But to me other news overshadowed the earnings themselves.
It looks like costs, which have been a killer for aLl mining companies in the last year, ar finally, maybe, headed lower. The company’s all-in sustaining cost for gold fell to $1255 an ounce from $1355 an ounce in the second quarter. Costs were even slightly below the $1269 an ounce in the third quarter of 2022.
The copper cost story–and the company produced 112 million pounds in the third quarter, up from 107 million pounds in the second quart4r, but down from the 123 million pounds produced in the third quarter of 2022–wasn’t nearly as positive. All-in sustaining costs were $3.23 a pound, up from $3.13 a pound in the second quarter and $3.13 in the third quarter of 2022.
But in an interview after the results CEO Mark Bristow said that while higher oil prices continue to pressure costs the company is seeing some relief in what he called everyday costs for items such as logistics.
The best news on production, however, was from the copper side. The company said that gold production in the fourth quarter would be marginally below the low en of annual guidance. Copper is on track to meet production estimates.And the company’s key growth projects-—the development of the Reko Diq copper and gold mine in Pakistan, and the expansion of the Lumwana copper mine in Zambia—-look to be on schedule for first production from Reko Diq in 2028 and production from the expansion of Lumwana also on schedule for 2028. Reko Diq will rank among the world’s top 10 copper producers when it reaches full production, while the expanded Lumwana mine is forecast to produce at an annual production rate of 240,000 tonnes of contained copper.
“Growing the copper portfolio is one of our strategic priorities, and when these two mines are in full production, they will promote Barrick to the premier league of copper producers alongside its peerless gold portfolio,” said CEO Bristow. “In the meantime, we’re using our very successful Jabal Sayid copper mine in Saudi Arabia as a springboard for the discovery of new opportunities within the Kingdom and around the Red Sea to Egypt, where we believe the Arabian-Nubian Shield is poised to become a major new mining destination,” Bristow said.
Since its merger with Randgold Resources in 2019, Barrick has replaced 125% of its depleted reserves (exclusive of divestments and acquisitions on a gold equivalent basis).
The company ended September with $4.3 billion in cash and cash equivalents on hand.
The stock has been a member of my Jubak Picks Portfolio since June 21, 2019. The position was up 2.88% as of the close on November 2.
The stock pays a 2.81% dividend.
