The world’s no. 2 gold miner, Barrick, (NYSE:GOLD) said on Thursday it expected a 15% decline in second-quarter gold production due to coronavirus-induced disruptions at an Argentinian mine and a dispute in Papua New Guinea.
In May, Barrick cut its original 2020 production guidance after encountering conflict with the government of Papua New Guinea over the Porgera gold mine.
In April, the government of Papua New Guinea refused to extend an expired lease for Porgera gold mine, forcing the company to put the mine on care and maintenance and lower its full-year attributable gold production forecast.
The company reported Thursday preliminary second-quarter sales of 1.22 million ounces of gold and 123 million pounds of copper, as well as preliminary second-quarter production of 1.15 million ounces of gold and 120 million pounds of copper.
Barrick’s gold production for the first six months of 2020 was 2.4 million ounces, at the midpoint of the company’s 4.6 to 5 million ounce guided range for the year.
CEO Mark Bristow said the results positioned Barrick well to achieve its guidance for the year, despite the impact of the global covid-19 pandemic and the resultant lockdowns.
“Comprehensive programs to counter the spread of covid-19 are in place at all of Barrick’s operations and it continues to take the necessary steps to manage the impact of the pandemic on its business,” Bristow said in a media release.
Barrick said second-quarter gold cost of sales per ounce are expected to be 4% to 6% higher, total cash costs per ounce are expected to be 2% to 4% higher and gold all-in sustaining costs (AISC) per ounce are expected to be 7% to 9% higher, respectively, than the first quarter of 2020.
Copper sales of 123-million pounds of copper were also higher than the previous quarter. Copper cost of sales per pound were expected to be 5% to 7% higher than the prior quarter, C1 cash costs per pound were expected to be in line and copper AISC are expected to be 4% to 6% higher, respectively, than the first quarter of 2020.
Barrick also announced Thursday that will reduce power supply to townships near Porgera gold mine to save costs.
The company said in a statement from mine operator Barrick (Niugini) Ltd that “due to necessary cost reductions” the electricity the mine provides free to nearby communities would from Friday only be supplied for 12 hours a day.
Midday Thursday, Barrick’s stock was down 2.31% on the NYSE. The company has a $46.73 billion market capitalization.
Barrick said it will report its second quarter financial results on August 10.