(Reuters) - Barrick Gold Corp, the world’s largest gold miner by production, reported better-than-expected quarterly earnings on Wednesday as its mining costs fell and said it would begin talks with the Tanzanian government next week about an export ban.
Barrick subsidiary Acacia Mining has three mines in Tanzania, which introduced an export ban on concentrates of gold and copper ore in March.
Acacia’s operations affected by the ban account for about 6 percent of Barrick’s 2017 gold production forecast. Even so, Barrick left unchanged its forecast at between 5.3 million and 5.6 million ounces of gold, but it cautioned that this could change.
“Barrick continues to monitor the situation and should Acacia revise its full-year outlook Barrick will evaluate the impact to its own guidance at that time,” the Toronto-based miner said in its earnings statement.
Any effect will depend in large part on the duration of the concentrate export ban, Barrick said.
Acacia, of which Barrick owns 63.9 percent, is caught up in sweeping changes to Tanzania’s mining industry spearheaded by President John Magufuli, who believes the East African country is not getting its fair share of profits from the sector.
Barrick’s chairman John Thornton met Tanzania’s president in mid-June and they agreed to hold discussions to resolve the row.
Barrick reported adjusted net earnings of $261 million, or 22 cents a share, in the three months to end-June, up from $158 million, or 14 cents a share, in the year-ago period on the back of lower mining costs and higher gold and copper sales volumes.
That beat the 18 cents a share that analysts had expected, on average, according to Thomson Reuters I/B/E/S.
Net earnings for the quarter surged to $1.08 billion, or 93 cents a share, from $138 million, or 12 cents a share, in the year-ago period. This reflected gains related to the sales of stakes in its Veladero gold mine in Argentina and a project in Chile, Barrick said.
With mines in Nevada, Australia, South America and Tanzania, Barrick produced 1.43 million ounces of gold in the quarter, up from 1.34 million a year ago, at an all-in sustaining cost of $710 an ounce compared to $782 per ounce last June quarter.
Barrick said normal leaching operations resumed at its Veladero mine in mid-July. Argentine regulators had restricted operations in late March after a third cyanide solution spill in 18 months.
Reporting by Nicole Mordant in Vancouver. Additional reporting by Susan Taylor in Toronto; Editing by David Gregorio and Richard Chang