Barrick Gold second-quarter profit beats expectations on higher copper output

Barrick Gold reported a nearly 19% rise in second-quarter profit on Monday, beating analysts’ expectations thanks to higher copper output, even as inflation drove the miner’s cost of production up.

The world’s second-biggest gold miner stuck to its cost forecast for the year and said it was on track to meet copper and gold production guidance.

Barrick produced 120-million pounds of copper in the second quarter, up 25% from the first quarter, while gold output rose marginally to 1.043-million ounces from 1.041-million ounces. Copper and gold are often found in the same ore, making copper a common byproduct of gold mines.

Net earnings stood at $488m, or 27c per share, for the quarter ended June 30, compared with $411m, or 23c per share, a year earlier. Earnings and revenue for the quarter beat analysts’ estimates, according to Refinitiv data.

However, in a sign of the impact surging inflation is having on Barrick, all-in sustaining costs per ounce of gold — a measure of the cost of production — for the first half increased 13% from the same period last year, while all-in sustaining costs per pound of copper jumped 15%.

For the first half, adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) was down 10% from the same period a year ago, due in part to a 5% fall in gold production.

Project capital expenditure also jumped by 23% in the first half of this year as Barrick pushed ahead with expanding its Pueblo Viejo mine in Dominican Republic, while free cash flow fell by 24%.

Reuters