Picture: REUTERS
Picture: REUTERS

Miner Barrick Gold Corp reported a rise of nearly 55% in quarterly adjusted profit on Wednesday, benefiting from a surge in the gold price, but trimmed production outlook for the metal over a mining lease issue in Papua New Guinea.

The Canadian miner now expects attributable gold production to range from 4.6-million ounces to 5-million ounces compared with the earlier range of 4.8-million ounces to 5.2-million ounces.

Papua New Guinea's government announced in April that it would not renew a 20-year special mining lease for the Porgera gold mine, owned jointly by Barrick and China’s Zijin Mining, due to environmental damage and social unrest.

Barrick (Niugini) Ltd (BNL), the local venture in which both miners have a 47.5% stake, produced about 597,000 ounces of gold in 2019 from the Porgera mine.

Barrick has said it will contest the move as “tantamount to nationalisation without due process”, and in the meantime placed Porgera on temporary care and maintenance while suspending the 2020 outlook for the mine.

The outlook cut also comes at a time when gold prices have gained about 12% this year, fuelled by growing investor appetite for a safe haven as fears mount over economic damage caused by the coronavirus.

The gold and copper miner, with operations in north and South America and Africa, has already taken steps to ensure it has an uninterrupted supply chain as the industry braces for a heavy hit from lockdowns in several regions to slow the spread of the coronavirus. Larger rival Newmont warned on Tuesday of a financial affect in the second quarter.

Barrick’s realised gold prices jumped 22% to $1,589 an ounce, while production fell 9% to 1.25-million ounces.

Excluding items, Barrick reported a profit of 16c per share, in line with Street estimates, as per Refintiv data. The miner maintained its quarterly dividend of 7c per share.