HomeEast AfricaBarrick profit plummets

Barrick profit plummets

A night shot
of one of
Barrick’s Tanzanian gold
Toronto, Canada — MININGREVIEW.COM — 30 April 2009 – Barrick Gold Corporation – the world’s biggest gold producer – has announced that its profit for the quarter ended 31 March 2009 dropped by 28%, as higher costs and weaker copper prices squeezed the company’s earnings.

A news release issued here revealed that Barrick had earned US$371 million (R3.3 billion), or 42 cents a share, in the first quarter of the year. That was down from US$$514 million (R4.6 billion), or 59 cents a share, a year earlier.

The release added that gold production had risen 0.6% to 1.76 million ounces, while copper production had jumped 9% to 95 million pounds. While realised gold prices had dipped slightly to US$912 an ounce from US$925, copper prices had fallen 16%, which had helped pull revenue down 6.6% to US$1.8 billion (R16.1 billion).

Barrick said this should change over the rest of the year, in part due to the opening of the Buzwagi mine in Tanzania, which chief executive Aaron Regent said in a statement was “essentially complete” and ready to pour its first gold shortly.

“Our outlook for gold remains positive, providing a favourable backdrop for the development of our next generation of lower-cost mines,” added Regent, who took over as CEO in January.

Barrick operates nearly 30 mines around the world, and hopes to reduce its average cost per ounce by opening new mines over the next few years.

“The company is on track to meet its 2009 forecast for gold production of 7.2 million to 7.6 million ounces at costs of US$450 to US$475 an ounce,” the release said, “while 2010 output is expected to increase to about 7.7 million to 8.1 million ounces at lower cash costs.
Caption, Pic 1: A night shot of one of Barrick’s Tanzanian gold mines.