October 27, 2011 / 11:35 AM / 7 years ago

UPDATE 3-Barrick profit lifted by surging bullion price

* Q3 EPS $1.36 Vs $0.94 a year earlier

* Q3 adjusted EPS $1.39 Vs $0.93 a year earlier

* Gold output forecast affirmed; copper view trimmed

* Barrick, Goldcorp see no impact from Argentina order (Adds details on new Argentine law; Figures in U.S. dollars, unless noted)

By Euan Rocha

Oct 27 (Reuters) - Barrick Gold (ABX.TO), the world’s top gold miner, reported a 45 percent increase in quarterly profit on Thursday, driven by a sharp increase in bullion prices.

Barrick’s solid results mirrored those of Canada’s No. 2 gold miner Goldcorp (G.TO), which also reported a big earnings increase late on Wednesday. [ID:nN1E79P23Q]

In separate conference calls on Thursday, executives of both gold miners touted their respective growth prospects from development projects currently in the pipeline.

Both played down the impact of Argentina’s surprise move on Wednesday to order oil, gas and mining companies to cash in all their export revenue on the local foreign-exchange market. [ID:nN1E79P0HX]

The chief executives of both miners said the move, aimed at protecting Argentina’s dwindling central bank reserves and stemming losses in the Argentine peso, won’t have a material impact on operations or planned investments in the country.

Barrick, which operates the Veladero mine in Argentina, is also in the midst of developing the massive Pascua Lama mine on the border of Chile and Argentina. Goldcorp owns a minority stake in the Alumbrera mine in Argentina and it also owns the Cerro Negro project in the country’s Santa Cruz province.


Earlier, Toronto-based Barrick said its third-quarter net income rose to $1.37 billion, or $1.36 a share, from a year-earlier profit of $942 million, or 94 cents.

Excluding one-time items, profit rose to $1.39 billion or $1.39 a share, from $912 million or 93 cents.

The company said its third-quarter gold production was 1.93 million ounces, at total cash costs of $453 per ounce.

Barrick said it remains on track to meet its 2011 operating outlook, with production expected to be between 7.6 and 7.8 million ounces, at total cash costs of $460 to $475 per ounce.

The company said it now expects total copper production of between 450 million and 460 million pounds in 2011, slightly lower than its previous forecast of 455 million to 475 million pounds.

Total copper cash costs in 2011 are expected to be between $1.60 and $1.70 a pound, at the upper-end of its previously forecast range of $1.55 to $1.70 a pound.

Barrick’s New York-listed shares rose 2.2 percent to $48.90 in afternoon trading, while its Toronto-listed shares were up less than 1 percent at C$48.50.


Barrick said development work at its Pueblo Viejo project in the Dominican Republic and its Pascua-Lama gold-silver project are on track, with first production expected in mid-2012 and mid-2013, respectively.

The two mines are at the center of Barrick’s growth plans and are expected to contribute between 1.4 million and 1.5 million ounces of average annual gold production in the first full five years of operation, at costs much lower than Barrick’s current cost profile.

Barrick on Wednesday said its board authorized a 25 percent increase in its quarterly dividend.[ID:nN1E79P1TM]

Analysts had called on the world’s top gold miner to raise its dividend for a few months now, as it last increased it more than a year ago and its payout ratio trailed that of many of its smaller peers in the sector.

The surge in the price of gold has significantly boosted the earnings of gold miners this year and many companies, including Goldcorp (G.TO), Kinross (K.TO), Newmont (NEM.N) and others had already boost dividend payouts earlier this year.

Barrick said it is raising its dividend to 15 cents a share from 12 cents. The quarterly dividend is payable on Dec. 15 to shareholders of record at the close of business on Nov. 30, the company said. ($1=$1 Canadian) (Reporting by Euan Rocha in Toronto)

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