Barrick Gold Corporation has reported its results for the first quarter of 2021, noting that with gold and copper production on plan, it was well positioned to achieve its annual guidance.
Production in the latter half of the year is expected to be higher than the first, mainly due to mine sequencing at Nevada Gold Mines, the commissioning of the new leach pad facility at Veladero in Argentina, the ramp-up of underground mining at Bulyanhulu and higher anticipated grades at Lumwana in Zambia.
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Barrick’s Tier One gold mines all delivered strong financial performances in Q1 while revenue from its copper mines rose by 31% due to higher copper prices. Net cash increased by $0.5 billion despite an advanced tax payment to the state of Nevada on the back of operating cash flow of $1.3 billion and free cash flow of $0.8 billion.
The company announced a 9 cents per share quarterly dividend, which will be topped up by a three-tranche return of capital distribution totaling $750 million through the course of the year. This would take the per share yield based on yesterday’s closing share price to 3.5% for 2021.
Major growth projects advanced during the quarter include the plant and tailings expansion of the Tier One Pueblo Viejo mine in the Dominican Republic, the third shaft at Turquoise Ridge in Nevada and Goldrush exploration development, also in Nevada, which has intersected first ore.
President and chief executive Mark Bristow said Barrick’s intensified focus on exploration was paying dividends, with exciting brownfields and generative results from multiple targets across the group. Kibali in the Democratic Republic of Congo was on course to replace reserves depleted by mining for the third successive year and there were also particularly encouraging results from Nevada, Loulo-Gounkoto in Mali, PV in Dominican Republic and Jabal Sayid in Saudi Arabia.
Bristow said, “As detailed in Barrick’s recently published Sustainability Report for 2020, the company has improved its ESG performance against virtually all metrics. It has increased its 2030 emissions reduction target from 10% to 30%, with the ultimate aim of achieving net zero emissions by 2050.
“When we announced the merger between Barrick and Randgold back in September 2018, we said that its rationale was to combine the industry’s best assets with its best managers to build the most valued gold business. Our management team’s record speaks for itself, and as far as assets are concerned, Barrick majority-owns and operates five of the world’s 10 largest gold mines, with a sixth in the form of Turquoise Ridge waiting in the wings. Each of our core mines has a high-confidence 10-year plan in place — and those are plans, not forecasts, which we plan to grow,” he said.
“The rise in the gold price has prompted a resurgence of the short-termism which has plagued the market, with some investors focusing on short-term gains rather than sustainable growth. But Barrick is building a business for the long term and our focus remains firmly on the future and on the creation and delivery of long-term value to our shareholders and all our other stakeholders.”
Key Performance Indicators
- Solid start to the 2021 year puts Barrick on track to achieve production targets
- Strong financial results from Tier One assets with leading margins
- Copper revenues increased 31% compared to the prior quarter due to stronger copper prices driving solid profitability with disciplined cost control
- Net cash increased by $0.5 billion even after advance tax payment in Nevada
- Operating cash flow of $1.3 billion and free cash flow of $0.8 billion
- Net earnings per share of 30 cents and adjusted net earnings per share of 29 cents
- Framework agreement in PNG puts Porgera on track to resume operations
- Sustainability Report highlights improvements against most ESG metrics
- Exploration delivers exciting drill results from multiple targets
- Donlin approves 2021 follow-up drill program after successful 2020 results
- Turquoise Ridge Third Shaft sinking reaches final station
- Goldrush exploration development intersects first ore, in line with guidance
- First $250 million ($0.14 per share) return of capital distribution announced in addition to a $0.09 quarterly dividend