Barrick Gold Corporation’s first quarterly results since its merger with Randgold Resources Limited show solid results across the board from the new group, which also reported rapid progress with the integration of the two businesses as well as with the implementation of key strategic initiatives.
While quarter on quarter comparisons are skewed by the merger, group gold production was up 8% in line with guidance, net cash from the operations rose by 27%, net earnings per share increased by 106% to $0.06, adjusted net earnings per share1 increased by 83% to $0.11, and debt, net of cash was down 12% to $3.65 billion. A dividend of $0.04 per share was declared in respect of the first quarter of 2019.
Financial and Operating Highlights
Financial Results Q1 2019 Q4 2018 Q1 2018
Realized gold price2,3 ($ per ounce) 1,307 1,223 1,332
Net earnings (loss) ($ millions) 111 (1,197 ) 158
Adjusted net earnings1 ($ millions) 184 69 170
Net cash provided by operating activities ($ millions) 520 411 507
Free cash flow4 ($ millions) 146 37 181
Net earnings (loss) per share ($) 0.06 (1.02 ) 0.14
Adjusted net earnings per share1 ($) 0.11 0.06 0.15
Total Attributable Capital Expenditures5 ($ millions) 361 368 320
Gold Q1 2019 Q4 2018 Q1 2018
Production (000s of ounces) 1,367 1,262 1,049
Cost of sales6 (Barrick’s share) ($ per ounce) 947 980 878
Total cash costs7 ($ per ounce) 631 588 573
All-in sustaining costs7 ($ per ounce) 825 788 804
Production (millions of pounds) 106 109 85
Cost of sales6 (Barrick’s share) ($ per pound) 2.21 2.85 2.07
C1 cash costs8 ($ per pound) 1.66 1.98 1.88
All-in sustaining costs8 ($ per pound) 2.46 2.95 2.61
Key Performance Indicators
Integration and strategic initiatives on track across the group following Barrick-Randgold merger
Nevada Joint Venture agreement signed and implementation expected by second quarter-end
Group gold production up 8% quarter on quarter and in line with guidance
Net cash provided by operating activities up 27% quarter on quarter
Net earnings per share increases 106% quarter on quarter to $0.06
Adjusted net earnings per share1 up 83% quarter on quarter to $0.11
Copper operations deliver significant improvements
Debt, net of cash down 12% quarter on quarter to $3.65 billion
Nevada performs ahead of plan as the Cortez Hills open pit ramps down
Veladero posts encouraging operational improvements
Pueblo Viejo makes progress with expansion project and benefits from operational efficiencies
African operations perform well as Kibali makes a good start to the year
Sustainability core to group as team effectiveness workshops are rolled out
Greenfields and brownfields exploration make good progress
Key growth projects on track
Barrick declares $0.04 quarterly dividend per share, up from Q1 2018
President and Chief Executive Officer Mark Bristow said the key operations had all performed on plan and within guidance. Nevada exceeded plan as the Cortez Hills open pit ramps down, Veladero posted encouraging improvements and Pueblo Viejo progressed its expansion project and benefited from operational efficiencies. Led by Kibali, the African operations made a good start to the year and the copper operations delivered significant improvements. Key growth projects were on track and greenfields and brownfields exploration were augmenting reserves and identifying new opportunities.
“We have gone a long way towards integrating the organizations, streamlining the processes and ensuring that all the sites have the geological, operational and technical capability to meet their business objectives,” Bristow said.
“We’re also well advanced in establishing our new joint venture with Newmont, which has been named Nevada Gold Mines. The organizational structures are being finalized and we’re working together with Newmont to realize the synergies and cost reduction opportunities offered by the joint venture, which is scheduled for completion by the end of the second quarter.”
Bristow said the assets that did not pass Barrick’s strategic filters had been identified and once optimized would be brought to account in a way that would recognize the importance to the remaining stakeholders with the objective of being well advanced by mid-2020. Management was also dealing with some legacy challenges, including the long stand-off between Acacia and the Tanzanian government.
“Given our solid operational performance for the first quarter, Barrick is on track to deliver against its plans for the year. Considering the shortage of good assets and the industry’s underinvestment in its own future we believe we are well positioned as the industry’s value leader. Barrick stands apart from the rest of the industry on four counts: the quality of our assets; our significant potential for portfolio optimization; the very real synergies that we expect to be delivered by Nevada Gold Mines; and our superior exploration and pipeline of development efforts,” Bristow said.
“This quarter has seen a great start for our first year as the ‘new and improved’ Barrick and I am confident that we are well on the way to achieving our strategic objective of becoming the world’s most valued gold mining business. It is our commitment to get there by finding, developing, owning and operating the best assets in our industry, with the best people, to deliver stand out returns for our owners and partners.”