The Canadian miner is on track to meet its 2020 production guidance after a strong quarter in which rising commodity prices lifted profits
Soaring gold prices in 2020 have helped push Canadian miner Barrick Gold to bumper profits in the third quarter of the year, enabling it to increase its three-month dividend by 12.5%.
Adjusted net earnings for the period stood at $726m – a 75% increase on the second quarter, and up 175% from a year earlier.
Gold has enjoyed a significant price surge this year, as investors turned to the commodity amid ongoing disruption to financial markets caused by coronavirus. Prices since the start of the year have climbed roughly 28% to around $1,947 per ounce.
Barrick produced 1.2 million ounces of the metal during the third quarter, while in the year-to-date it has mined 3.6 million ounces – putting it on track to meet its full-year guidance of up to five million ounces.
“In the face of unprecedented challenges we have succeeded in beating our earnings consensus, reinforcing our 10-year plan and capitalising on the gold price to maintain an industry-leading balance sheet,” said Barrick’s chief executive Mark Bristow.
The Toronto-based miner said it is increasing its quarterly dividend to $0.09 per share – the third time it has been raised this year.
It also generated company-record cash flow during the period, up 151% on the previous quarter to $1.3bn.
Operational uptime during pandemic has boosted Barrick Gold profits in 2020
Despite the global disruption caused by lockdowns, social distancing measures and travel restrictions this year, Barrick Gold said the majority of its operations had remained uninterrupted during the quarter.
These included the construction of the third shaft at Turquoise Ridge, the twin declines at Goldrush and the underground mine at Gounkoto – as well as a process plant and tailings expansion plan at Pueblo Viejo, the commissioning of the group’s first solar power plant at Loulo and the resumption of underground mining at Bulyanhulu.
In Tanzania, where the company has partnered with government agencies on the Twiga Minerals venture to revive the country’s North Mara and Bulyanhulu mines, operations are on track to develop a Tier One asset – a gold mine capable of producing more than 500,000 ounces of gold annually for at least 10 years in the lower half of the industry’s cost curve.
Barrick also recently agreed in principle to partner with the government of Papua New Guinea to develop the country’s Porgera mine, which is currently closed for care and maintenance.
Bristow, who has led the miner since its 2018 merger with Randgold Resources, said the company’s “consistently strong performance” since the merger is a reflection of having “a combination of the best assets with the best people”.
He added: “It shows that a business flourishes when it is driven by a clear strategy, and not by the whims of the market.”