Barrick Gold profit rises 22 percent, sees cost rise
By Cameron French
TORONTO (Reuters) - Barrick Gold's (ABX.TO: Quote) quarterly profit climbed 22 percent as higher gold prices outpaced the rising costs of production, the world's top gold miner said on Thursday, driving its shares higher.
Barrick also warned 2008 production would come in on the low end of its previous range of 7.6 million to 8.1 million ounces of gold due to lower mining rates and grades at some of its mines. A halt in operations at its Getchell gold mine in Nevada in April due to safety concerns also held back output.
"The main challenges that face Barrick, and I think I may as well speak for the industry at large, are the cost factors. They are relentlessly moving upwards," Barrick Chairman and acting Chief Executive Peter Munk said on a conference call.
Net income rose to $485 million, or 55 cents a share, in the second quarter, from $396 million, or 45 cents, in the year-before period.
Analysts had expected a profit of 56 cents a share.
The market seemed comfortable with the results, as Barrick shares rose 76 Canadian cents, or 1.8 percent, to C$44.12 on the Toronto Stock Exchange.
Quarterly revenue climbed to $2 billion from $1.6 billion, as higher gold prices -- $896 an ounce in the quarter, up from $667 a year before -- outpaced cash cost increases.
Costs rose to $417 an ounce from $340 an ounce, driven primarily by a 91 percent year-on-year rise in oil prices. Continued...