Barrick Gold Higher Production Doubles Profits With Rising Prices

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    Canadiian miner Barrick Gold Corp, the world’s second-largest…



    [size=5]Gold breaks out to a fresh 6-year high up $25 to $1517 as risk trades come off.[/size]


    Argus Raised Barrick Gold to Buy from Hold With New Target $22.

    Competes with Newmont Goldcorp Corp. (NYSE: NEM) over which is the largest gold miner by market cap, both at almost $31 billion.

    The Argus earnings estimates are $0.48 per share for 2019 and $0.55 per share for 2020. The call implied an upside total return of 16%, if you include Barrick’s the dividend

    Barrick Gold’s total gold production rose 27% to 1.08 million ounces and its copper production was up by 17% to 97 million pounds. The company’s all-in sustaining costs for gold also rose, to $869 per ounce from $856 per ounce a year ago. The company’s cost of sales for copper fell to $2.04 per pound from $2.45 a year earlier, and its all-in sustaining costs for copper fell to $2.28 from $3.04 per pound.

    Barrick’s management also forecast 2019 gold production to be at the high end of its previous forecast range of 5.1 million to 5.6 million ounces, and its cost of sales estimate of $910 to $970 per ounce was unchanged, with an all-in sustainable costs estimate of $870 to $920 per ounce.

    Barrick’s shares have risen about 45% in the past three months alone, and the shares were up over 70% from a year ago. Also worth noting is that the street-high sell-side analyst price target from Refinitiv is now $22.50.

    On July 19, Barrick agreed to acquire all the shares of Acacia that it did not already own.
    On July 1, Barrick closed on its joint venture agreement with Newmont Goldcorp.
    The combined Barrick-Randgold operation also is said to have five of the world’s 10 tier-one gold mining assets, which are mines producing over 500,000 ounces of gold per year.

    Barrick is said to trade at 37.9 times the Argus 2019 EPS estimate and 33.1 times its 2020 EPS estimate. That compares to a peer average of 35.6 for 2019. It is also trading at 2.0 times its book value, well under the peer group’s average of 4.6 times book and under the midpoint of a five-year historical range of 0.7 to 3.7 times book.

    The Argus report also talked up Barrick’s financial strength and its dividend:

    We rate Barrick Gold’s financial strength as High, the top of our five-point scale. The company receives average scores on our main financial strength criteria of debt levels, fixed-cost coverage, cash flow generation, and profitability. The company’s debt is rated BBB/stable by Standard & Poor’s and Baa2/stable by Moody’s. The company has worked to pay down debt, which fell to $5.8 billion at the end of the second quarter of 2019 from $6.4 billion at the end of the second quarter of 2018. The company has repaid $10 billion of its debt over the past five years. Most GOLD debt does not mature until after 2023. At the end of 2Q19, Barrick had cash and equivalents of $2.15 billion, up 3% from the end of 2Q18. Debt, net of cash, was $3.65 billion at the end of the second quarter of 2019, down 15% from the prior year… In May 2019, the company raised its quarterly dividend from $0.03 to $0.04, or $0.16 annually. It also paid a special dividend of $0.07 per share in January 2019.


    Barrick Gold Sells West Africa High-Grade Massawa Gold Project To Teranga Gold

    Repositioning as Low-Cost, Mid-Tier Producer

    Massawa to transform neighbouring Sabodala into top tier complex, and extend mine life with higher grade

    CDN$140 million (US$106 million) bought deal equity offering announced

    Teranga to acquire one of the highest-grade undeveloped open-pit gold reserves in Africa(2)
    The historical mineral reserves base of the Massawa project is 2.6Moz from 20.9Mt at 3.94 g/t Au and is one of the highest-grade undeveloped open-pit gold reserves in Africa. This will augment Sabodala’s mineral reserves base of 2.4Moz from 55.7Mt at 1.35 g/t Au


    Barrick Gold buys 800,000 antibody test kits

    Chief executive Mark Bristow says miner has taken lessons on tackling coronavirus from experience of Ebola outbreak
    Mark Bristow: ‘It’s not a definitive test, but it’s good enough for screening’ © Bloomberg

    Barrick Gold has purchased more than 800,000 finger-prick antibody testing kits to screen workers and the communities living close to its mines.

    Chief executive Mark Bristow said the Canada-based company had invested a lot in the tests, which can be used to detect if a person’s immune system has Covid-19 or has recovered from it.

    “We’ve got 300,000 kits on the way. We’ve got about 150,000 in the country already and another 400,000 that we have just finalised [buying],” Mr Bristow said in an interview from Johannesburg, where he is working from a home he hasn’t lived in for 12 years

    “We buy them from all over the place. South Korea, China. We’ve bought some from the UK. There are also some local tests available in the Dominican Republic.”

    Barrick is one of one of the world’s biggest mining companies, with assets spread around the globe from Papua New Guinea to Nevada and the Dominican Republic.

    Experts say antibody testing will be a critical part of easing lockdowns around the world as countries seek to restart economies ravaged by the pandemic.

    While there are broad concerns about the accuracy of antibody tests for coronavirus — the UK government, for example, has said none of the 17.5m kits it has ordered are good enough to be used — Mr Bristow said they had helped shield Barrick’s operations and host communities from the virus.

    “It’s not a definitive test but it’s good enough for screening,” Mr Bristow. “And we’ve had some very good success . . . where we have screened and stopped the person coming into the [mine] gate.”

    Barrick was quick to recognise the threat posed by coronavirus, starting in mid-February when it started to increase supplies of key commodities, such as fuel, and counselled its employees about the symptoms of the virus and the risk of contracting the infection.

    Mr Bristow said the response was rooted in his experience in combating Ebola outbreaks around Barrick’s west African operations. These mines were acquired through the purchase of Randgold Resources, the London-listed gold producer Mr Bristow founded and sold to Barrick in 2018.

    “I don’t want to underplay the severity and unprecedented situation that we are dealing with but we have been through two Ebola pandemics . . . so we had the protocols and rolled them out,” he said.

    Mr Bristow, a fast-talking South African geologist, said the company had already started to see a drop in absenteeism because of the general improvement in hygiene across the organisation because “people are not getting sick like they usually do”.
    Coronavirus: Ian Bremmer on tackling a global pandemic in a leaderless world

    While some mining companies have been hit by protests from local residents worried that foreign workers could infect nearby towns and villages, Mr Bristow said Barrick had been careful to work closely with its indigenous communities.

    “In both Canada and Nevada we have worked with our first-nation communities to lock them down because that was a big social risk,” he said. “Their view is they always get really damaged in pandemics like this. So we put in place support structures . . . gave them support on food and medicine and everything else.”

    Overall Mr Bristow said Barrick’s operations had suffered minimal disruption because of the virus and production was in line with its full-year guidance of 4.8m-5.2m ounces of gold.

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