Shares jump 3.4% Tuesday

On Monday, Barrick Gold said its net income fell to US$158 million in its fiscal first quarter, down more than 300 per cent from the same time a year ago.

Analysts’ reaction to the earnings were mixed. CIBC rated the stock neutral with a price target of $17 in the next 12 to 18 months, far above its trading price of $12.92 on Tuesday morning.

“The continued focus on cost efficiency yielded another solid quarter in earnings, which should be wellreceived,” CIBC analysts David Haughton and Terry Hsui wrote in a note to clients.

They noted Barrick reported adjusted quarterly earnings of 15 cents per share, above their estimate of 10 cents and the consensus of 14 cents.

Andrew Kaip, an analyst at BMO Capital Markets, wrote that while Barrick delivered slightly better-than-expected earnings per share, its cash flow and free cash flow — of US$507 million and US$181 million, respectively — “lagged our expectations.”

This March, Barrick paid a dividend of US3 cents per share for the quarter, but Raw said there was no immediate plan to increase that amount but it would be reviewed during the year.

She also said the company has suspended a pre-feasibility study of Pascua-Lama, an open pit gold, silver and copper mine in Chile, which regulators ordered permanently closed last year following court battles about environmental concerns.

Last year, Barrick announced the Shandong Gold Group, its joint partner in the Veladero mine in Argentina, would help move the Pascua-Lama project forward but Barrick President Kelvin Dushnisky said it is still in a holding pattern.

“It’s not our priority for 2018,” Raw said.

He said the company is focused on Nevada, where its Cortez and Goldstrike properties produced 2.3 million ounces of gold last year — about half of its production. Now, it has identified a new area called Fourmile that it believes is geologically similar to Goldstrike and contains high grade gold deposits.

“Nevada remains a key area of focus for our drill exploration program,” said Dushnisky.

Investors appeared to like Barrick’s news. Shares jumped 3.4 per cent Tuesday, closing at $17.15 in Toronto trading.