Gold prices have added a third of their value this year, last week surpassing $2,000 a troy ounce for the first time
Gold prices have added a third of their value this year, last week surpassing $2,000 a troy ounce for the first time © REUTERS

Barrick Gold's second-quarter profit beat forecasts to more than double, in the wake of a record rally in the yellow metal's prices.

The world’s second-largest gold miner reported adjusted profit of $415m, or 23 cents a share, from $154m a year earlier. That is better than analysts’ expectations of 19 cents a share. Revenues rose 48 per cent from the same period a year earlier to $3.1bn.

Gold prices have added a third of their value this year, last week surpassing $2,000 a troy ounce for the first time as investors turned away from depressed bond yields and sought safety amid fears of the Covid-19 impact on the global economy. Shares in Toronto-based Barrick have risen 60 per cent this year to trade at C$38.60.

At the same time, however, gold miners have had to contend with disruptions to mine sites caused by the spread of coronavirus.

Barrick said its gold production fell 15 per cent in the second quarter from a year earlier to 1.1m ounces due to coronavirus-related disruptions in Argentina. Production at its Veladero mine in the country fell 35 per cent in the second quarter from a year earlier, it added.

Still, the miner remains on track to meet its annual production guidance of between 4.6m to 5m ounces of gold. That forecast was already lowered in May following a dispute with the government of Papua New Guinea that caused Barrick to shut its Porgera gold mine in the country in April.

Barrick said its cost of gold production also rose 19 per cent to an all-in sustaining cost of $1,031 an ounce during the second quarter.

Mark Bristow, the chief executive of Barrick, said management cuts he had made since taking over in early 2019 and efforts to move decision-making from headquarters to different regions were a “major factor in contending with Covid-19”.

Barrick, which operates in 12 countries, said it had trained its own teams to lessen their reliance on external contractors so as to avoid spreading coronavirus. The company employs 21,000 contractors at its mines globally.

The miner’s main expansion projects at its Pueblo Viejo mine in the Dominican Republic and in Nevada in the US were on track despite coronavirus, Mr Bristow said. The only exception was the Veladero mine in Argentina which was delayed by government quarantine restrictions, he said.

Barrick declared a dividend of $0.08 per share, an increase of 14 per cent from the previous quarter.

Get alerts on Barrick Gold Corp when a new story is published

Copyright The Financial Times Limited 2020. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article