Barrick hikes dividend on rising gold price

Gold prices have risen 16 per cent this year to a six-year high

Barrick Gold raised its dividend on Wednesday as earnings jumped on the back of higher gold prices.

However, the world’s second biggest gold miner said output would be flat over the next five years at 5.15 to 5.6 million ounces — or roughly what it expects to produce in 2019.

Barrick, which is led by Mark Bristow, a fast-talking South African, has announced a string of deals over the past year in an effort to boost output and answer questions about its long- term growth prospects. Barrick’s annual production has fallen from more than 8m ounces a decade ago.

These have included the acquisition of Randgold Resources, the buyout of Tanzania-focused Acacia Mining and a joint venture with arch rival Newmont Goldcorp in Nevada.

“We have prepared detailed fiveyear plans for each region which we are sharing with the market this quarter,” said Mr Bristow said in a statement.

“These will be followed by a 10year production plan, scheduled for publication with our next annual report. The objective is to make capital allocation, budgeting and forecasting more dynamic.”

In the three months to June, Barrick posted adjusted net earnings of $264m, or 15 cents a share, up 70 per cent on the previous and beating analyst forecasts that were pitched around 11 cents.

That allowed the Toronto-based company to declare a dividend of $0.05 cents a share, up 25 per cent on the previous quarter. Net debt fell 14 per cent to $3.2bn.

Gold prices have risen 16 per cent this year to a six- year high around $1,500 an ounce, as investors have looked for safe places to park warehouse cash amid rising economic and geopolitical uncertainty.

This has boosted the share prices of major gold producers including Barrick, which is up 18 per cent.

Barrick said it had realised an average gold price of $1,476 in the quarter, up from $1,317.

During the quarter Barrick produced 1.31m ounces of gold, down from 1.35m in the preceding three months, which it blamed on the suspension of operations at its North Mara in Tanzania.

However, Barrick said it still expects to hit the top end of its existing guidance range of 5.1m to 5.6m ounces at a cost of $870 to $920 an ounce.

In October, Barrick paid $300m to settling a long-running dispute with the government of Tanzania, that shredded at profit at Acacia Mining.

“Following the Acacia buyout, Barrick and the Tanzanian government have agreed in principle on a settlement of that company’s tax and fiscal issues. A dedicated team is currently working on evaluating and stabilising the North Mara and Bulyanhulu mines,” Barrick said.

Mr Bristow said the planned disposal of non- core assets was progressing as scheduled and was expected to realise $1.5bn or more by the end of next year.