TORONTO (Reuters) - Barrick Gold Corp, the world’s largest gold producer, reported a rise in second-quarter profit on Wednesday and said it plans to sell its 50 percent stake in a western Australia mine to carve more from its debt.
Toronto-based Barrick, which has been selling off non-core mining assets and using cash flow to pay down debt, said it will explore selling half of the Kalgoorlie mine in Australia to improve its balance sheet.
The chief executive of Newmont Mining, Barrick’s joint venture partner at Kalgoorlie, said last September that he was interested in buying out the rest of the mine.
Barrick said it has reduced its total debt by $968 million so far this year, and remains on track to cut debt by $2 billion in 2016. Over the medium term, it aims to reduce total debt to under $5 billion from $9 billion, and chop its all-in sustaining costs, the industry cost benchmark, to below $700 by 2019.
The miner said its adjusted profit rose to 14 cents a share, matching analyst expectations, from 5 cents a share in the same period last year. The gain reflects lower costs, notably fuel and energy, foreign exchange gains, lower royalty payments and operating efficiency, the company said.
Revenue fell to $2.01 billion from $2.23 billion.
The company, which has mines in the Americas, Australia and Africa, said gold production fell 7.5 percent to 1.34 million ounces in the second quarter after it sold assets.
All-in sustaining costs fell nearly 13 percent to $782 per ounce.
Barrick reaffirmed its full-year gold production guidance of 5.0-5.5 million ounces and lowered its all-in sustaining cost forecast to $750-$790 per ounce from $760-$810 per ounce.
Copper output was increased to 380-430 million pounds from 370-410 million pounds with the start of commercial production at the Jabal Sayid copper mine in Saudi Arabia, which is 50 percent owned by Barrick.
Capital spending was trimmed to $1.25-$1.4 billion from $1.35-$1.55 billion in the first quarter.
Barrick stock has soared 175 percent this year, lifted by a 26 percent climb in the price of gold, as investors have sought a safe haven during increasing geopolitical uncertainty and declining real interest rates.
Reporting by Susan Taylor; Editing by Sandra Maler, Leslie Adler and David Gregorio