Barrick Gold beats expectations in Q1 earnings call, despite lower production

The world’s second largest gold producer – Barrick Gold – yesterday doubled its quarterly dividend after beating analyst estimates for profit, largely due to higher gold and copper prices in the period.

Barrick’s Q1 revenue of US$2.9 billion was actually 3% lower than the corresponding quarter last year, as the gold-copper miner faced COVID-related labour shortages and other disruption across its global assets.

However, strong commodity prices counterbalanced the impact of a 10.1% reduction in gold output. Russia’s invasion of Ukraine created significant momentum in the gold price, which scaled above $2,000 per ounce in early March. Overall, realised gold prices rose 5.6% to $1,876 per ounce in Q1, compared to a year earlier. Copper also jumped near 14% to $4.68 per pound.

The quarter’s results and the dividend showed the company is solving some integration challenges from its 2018 buyout of Randgold Resources, Barrick’s CEO Mark Bristow said in an interview. “A lot of the issues that have been worrying some people have been addressed,” Bristow told Reuters. “There were a lot of big steps made this quarter,” he added.

Barrick is forecasting a stronger performance in the second half of the year and said it remains on track to meet its annual production guidance. The company also noted the double-edged sword of inflation, which – while boosting the gold price – has resulted in a 14% increase in the company’s all-in sustaining costs to $1,164 per ounce of gold, from $1,018 a year earlier.