Barrick Gold Corp. (TSE:ABX) (NYSE:ABX), the world’s largest producer of the metal by both production and market value, reported first-quarter earnings that exceeded analysts' expectations.
Net income declined 90% to US$88 million, or 8 cents per share, in the three months ended March 31, from US$847 million, or 85 cents per share, a year earlier, the Toronto, Ontario-based company said in a statement today.
A decline in metal prices and lower gold volumes impacted earnings during the quarter.
Adjusted operating cost to produce an ounce of gold in the first quarter was US$582 per ounce, compared with US$564 a year earlier and the US$614 average of three estimates.
Production slid to 1.59 million ounces of gold from 1.8 million ounces a year earlier, but was slightly above the 1.58 million average of four estimates.
Average realized gold prices retreated to US$1,285 an ounce, from US$1,629 an ounce a year earlier. Gold prices slumped 28% in 2013, the largest annual decline since 1981.
Earnings excluding currency losses and other unusual items were 20 cents per share, squeaking the 19-cent average of 19 estimates tracked by Bloomberg.
Sales dropped 23% to US$2.63 billion from US$3.4 billion, below the US$2.75 billion average estimate.
Barrick's U.S.-listed shares inched up 0.7% to US$17.80 at 8:13 a.m. in New York.
Faced with weaker gold prices, Barrick has undergone an enormous transition over the last 12 months, selling non-core mines and focusing on maximising cash flow at its existing operations. Gold prices are more than 30 percent below their 2011 highs.
“Barrick is a considerably different company today than it was a year ago — leaner, stronger and more financially flexible,” Chief Executive Officer Jamie Sokalsky said in the statement.
"We continue to focus on assets that can generate the most attractive risk-adjusted returns and free cash flow for Barrick and its shareholders, and we are decisively addressing our under-performing operations."
Looking ahead, the company lowered its copper production forecast for the year amid issues at the Lumwana mine in Zambia. Barrick cut forecast to between 410 and 440 million pounds, from between 470 and 500 million pounds.
Barrick's earnings results come just two days after merger talks with U.S.-based Newmont Mining Corp. (NYSE:NEM) were terminated, bringing to an end months long negotiations to create a global mining giant.
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