Barrick Gold (TSX: ABX) (NYSE: GOLD) posted on Wednesday a better-than-expected quarterly profit and gave investor a more than welcome 40% dividend increase thanks to strong gold prices.
The world’s second-largest producer of the yellow metal said adjusted net earnings in the three months to December reached $300 million, or 17 cents a share, up from $264 million recorded in the previous quarter. Analysts’ average estimate was 14 cents a share.
The results, along with Barrick halving its debt to $2.2 billion over the course of 2019, allowed the miner to declare a dividend of 7 cents a share, up from 5 cents in the third quarter, payable on March 16.
“The board believes the dividend increase is justified by the significant reduction in net debt and strong balance sheet, together with the growth in free cash flow supported by a robust 5-year plan which we have shared with the market,” executive vice-president and chief financial officer, Graham Shuttleworth, said in a statement.
Gold prices increased about 18% last year, as investors sought safe-haven assets due to global uncertainty triggered by the long-drawn-out trade war between the United States and China. Related: Tesla Reopens Chinese Factory After Coronavirus Scare
Barrick’s realized prices for gold jumped by 21% compared to Q4 2019 to $1,483 per ounce, while average realized prices for copper remained at $2.76 per pound.
Barrick has also benefited from the $1 billion fetched through asset sales since chief executive Mark Bristow took the helm in January 2019.
Eyes on copper
Full-year production, in turn, rose to 5.5 million ounces of gold, from 4.5 million ounces a year earlier. The miner churned out 432 million pounds of copper, a metal in which the miner has set eyes on.
While Bristow denied last week the company was mulling a merger with Freeport-McMoran, he did say the miner’s Grasberg copper and gold operation in Indonesia was an attractive asset.
Last month, the company signed a deal with the Tanzanian government to formalize a joint venture related to the three mines Barrick has there, ending a long-running tax dispute with the African country.
For 2020, the gold giant forecasts consolidated production of between 4.8 million and 5.2 million ounces of gold at all-in sustaining cost of $920-$970 per ounce, and 440 million to 500 pounds of copper at AISC of between $2.20 and $2.50 per pound.
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