The world's largest gold miner’s move was welcome by investors, who have been calling for a bigger piece of the pie for years, arguing this would help push up share prices that have underperformed increases in the gold price over the last decade.
In a statement, Barrick said it had $1.03 billion of net earnings, or $1.03 per share, up from US$1 billion in net earnings or $1 per share in the first quarter last year.
Adjusted profit was reduced by $93 million in impairment charges, primarily related to the writedown of its investment in Highland Gold.
The Canadian miner sold its 20.4% stake in Russian gold company Highland Gold Mining Ltd. for $130 million last week. Barrick had bought the stake in Highland almost a decade ago with the purpose of using it as a way to tap into the Russian market, containing the second-largest gold reserves after South Africa.
Highland, however, failed to increase its production, pushing Barrick to focus on other easier and more profitable markets, such as the U.S. and Latin America.
The company also said its giant Pueblo Viejo mine in the Dominican Republic and Pascua-Lama (on the border between Chile and Argentina) are both on track to enter production in mid-2012 and mid-2013, respectively. The prior cost estimates for those projects were maintained.
The company is also working to develop Cerro Casale in Chile, one of the world’s largest undeveloped gold-copper deposits, and the Donlin Gold project in Alaska, which it holds jointly with NovaGold Resources.
Barrick’s long-term goal is to produce nine million ounces of gold a year by 2016.