Barrick Gold reported an almost threefold rise in adjusted third-quarter profits on the back of surging prices that its chief executive believes have not yet peaked.
Mark Bristow told the Financial Times on Thursday that gold — which hit a record of more than $2,000 an ounce this year — would surpass that level as developed economies continued to print money to stimulate their economies in the face of the pandemic.
“The deep structural damage to the global economy and society at large will be with us for a lot longer, it will be like the second world war crisis,” he said. “The peak [in gold] will be higher than we’ve seen.”
Gold miners are enjoying record profits this year amid sustained investor demand for gold, which has pushed prices up 26 per cent.
Shares in Toronto-listed Barrick, the world’s second-biggest, have risen by 48 per cent this year while those of Newmont Mining, the number one, are up 50 per cent.
That performance has attracted some of the world’s largest investors with Warren Buffett’s Berkshire Hathaway taking a 1 per cent stake in the Barrick Gold in the second quarter.
Barrick reported adjusted profit of $726m for the third quarter, or 41 cents a share, up from $264m a year earlier. Analysts had expected earnings of 32 cents a share.
Barrick said it had produced 3.6m ounces of gold this year, putting it on track to meet its guidance of between 4.6m and 5m ounces for the year.
Mr Bristow said the company was looking at growth in gold output from its mines in Tanzania following the settlement in January of a three-year tax dispute in the east African country.
The North Mara and Bulyanhulu mines could become its next “tier one” asset with production of more than 500,000 ounces a year at a low cost, he said.
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Barrick was working to sort out community, land and environmental issues at the two mines, Mr Bristow said, and had begun to drill for new gold.
“Tanzania has not seen real exploration for all of 10 years,” Mr Bristow said.
Mr Bristow added that once gold prices had reached a new peak they would fall to a higher base level than they did in 2011, when gold prices fell from a high above $1,900 a troy ounce and took six years to recover.
“I think there’s still a second peak coming and I do believe the base is going to be a lot longer than six years,” he said.
Gold prices rose 1 per cent on Thursday to trade at $1,919 a troy ounce.
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