Golden quarter for Barrick, Newmont

Barrick Gold Corp and Newmont Corp unveiled higher dividends as the world's top two gold producers share with investors the benefits of higher prices for the metal after trouncing Wall Street earnings estimates.

A 25 per cent surge in gold prices last year, supported by unprecedented stimulus measures, has offered miners a lifeline following production disruptions due to the COVID-19 pandemic.

Cost-conscious executives are also prioritizing investor returns over production growth, hesitating to spend on pricey projects that often take years to break even.

Barrick left its quarterly payout unchanged at 9 cents per share, while proposing a US$750 million special dividend for 2021 after it sold assets worth US$1.5 billion last year.

The special payout provided an opportunity for Barrick to assess the economic environment before deciding on any formal dividend policy, the Toronto-based miner's chief executive Mark Bristow told Reuters.

Barrick's capital return plan comes days after Warren Buffett's Berkshire Hathaway Inc exited its stake in the miner.

While Bristow did not comment on the Berkshire move, he said there remains significant interest from generalist funds in the stock.

On an adjusted basis, Barrick earned 35 cents per share for the reported quarter, beating estimates of 32 cents, according to Refinitiv IBES data.

Bristow said the group expected to get US$500 million belonging to its Kibali gold mining joint venture out of Congo next month, adding that the advent of President Felix Tshisekedi's new government should help.

The gold miner has been in discussions with Democratic Republic of Congo over the money for more than a year.

“With the new government now we're pretty sure that that blockage will be unblocked and we'll be able to go back to normal activities,” Bristow told Reuters.

Tshisekedi has consolidated control over the Congolese government and appointed a new prime minister on Monday, capping a series of victories over his once-dominant predecessor Joseph Kabila.

Under Congo's 2018 mining code, miners must return 60 per cent of revenue from mineral sales to the country to help develop the economy. The US$500 million is excess cash left over after Kibali repatriated 60 per cent of revenue and paid in-country expenses.

Barrick's Toronto-listed shares rose about 21 per cent through 2020, while Newmont gained about 39 per cent. The stocks have given up some gains since the start of this year.

Newmont raised its quarterly dividend by 38 per cent and pledged to return up to 60 per cent of incremental free cash flow to shareholders, provided gold prices stay above US$1,200 per ounce.