Barrick shares slammed after results disappoint

Shares in Canada’s Barrick Gold (TSX, NYSE:ABX) were hammered in after hours trade on Wednesday after the world’s top producer of the precious metal by output, announced second quarter earnings below expectations.

The Toronto-based miner was trading down 2.8% in New York giving up most of its gains during regular hours on the back of a jump in the gold price after reporting revenues of just over $2 billion and adjusted earnings per share of $0.14, missing analysts expectations on both measures.

Year to date Barrick is still up 189% for a market cap of $25.7 billion. Gold futures was last trading at $1,347 an ounce, up 1.5% on the day.

The world's hardest working gold mines

Cortez – Barrick Gold

Barrick did report progress in terms of cutting its debt and reducing costs, trimming liabilities by $962 million year to date. Barrick said it's on target to reach its goal of slashing debt by $2 billion this year. According to news reports yesterday Barrick is close to selling a majority stake in its African subsidiary Acacia Mining (LON:ACA) for as much as $1.9 billion.

Barrick said it's on target to reach its goal of slashing debt by $2 billion this year

Gold production in the second quarter was 1.34 million ounces at an all-in sustaining costs of $782 per ounce. Compared to the first half of 2015 all-in sustaining costs are down 19%.

For the full year Barrick said it expects cost of sales applicable to gold to be in the range of $5.2–$5.5 billion. All-in sustaining cost guidance for 2016 has been reduced to $750-$790 per ounce, down from $760-$810 per ounce at the end of the first quarter, and below the company's original 2016 guidance of $775–$825 per ounce.

For the full year Barrick continues to expect gold production of 5.0–5.5 million ounces for the year, keeping its position as top producer just ahead of Denver's Newmont Mining.

 

Barrick also announced that commercial production has commenced at the Jabal Sayid copper mine in Saudi Arabia which prompted it to lift its 2016 copper guidance to 380-430 million pounds, up from our the original forecast of 370-410 million pounds.