Barrick Golds Profit Surges on Higher Prices, Outputadmin
Barrick Gold Corp., the world’s largest gold producer, said fourth-quarter profit more than doubled as prices climbed, and acquisitions and new mines boosted production.
Net income surged to $418 million, or 48 cents a share, from $175 million, or 32 cents, a year earlier, the Toronto-based company said today in a statement. Sales gained 74 percent to $1.35 billion.
Barrick overtook Newmont Mining Corp. as the biggest gold producer with its $10 billion acquisition of Placer Dome Inc. in March, adding mines in Nevada, Australia and Tanzania. Chief Executive Officer Gregory Wilkins increased output by 48 percent in the quarter.
“Barrick gives you an exposure to the bullion,” Benoit Brillon, who manages C$6 billion ($5.1 billion) including Barrick at Natcan Investment Management Inc. in Montreal, said before the earnings announcement. “The cost structure is a bit better at Barrick” than Newmont, he said.
Shares of Barrick rose 92 cents to C$37.25 yesterday in Toronto Stock Exchange trading. The have risen 13 percent in the past year, compared with a 23 percent rally in gold and a 17 percent decline in Denver-based Newmont.
Gold output in the fourth quarter rose to 2.44 million ounces from 1.65 million ounces, Barrick said.
Production in 2007 will be 8.1 million to 8.4 million ounce, down from 8.64 million in 2006, Barrick said. Copper output will climb to 400 million pounds in 2007 from 367 million last year.
Gold futures on the Comex division of the New York Mercantile Exchange averaged 27 percent higher at $616.95 an ounce during the quarter as investors sought an alternative to a declining dollar and a hedge against inflation. Prices reached a 26-year high of $732 on May 12.
In the fourth quarter, Barrick failed in a hostile bid to buy NovaGold Resources Inc. to expand in Alaska and British Columbia.
NovaGold, based in Vancouver, is a partner with Barrick at the Donlin Creek project in Alaska. NovaGold’s Galore Creek project in British Columbia is 75 kilometers (47 miles) northwest of Barrick’s Eskay Creek mine.
(Barrick will hold a conference call at 9 a.m. New York time. at http://www.barrick.com )