Gold Mining Giant Barrick Disappoints with Q3 Earnings
Higher Costs and Lower Production Weigh on Profits
Barrick Gold, the world’s second-largest gold miner, fell short of Wall Street expectations for its third-quarter profit, citing increased costs and reduced production at its Nevada mines. The company’s total gold output at Nevada Gold Mines decreased to 385,000 ounces in the July-September quarter, a decline from the 401,000 ounces produced in the preceding three months.
Rising Costs a Major Concern
All-in sustaining costs (AISC) for gold, a key industry metric, surged to $1,507 per ounce in the quarter, up from $1,255 per ounce last year. This increase in costs had a ripple effect, causing the company’s U.S.-listed shares to slip 1.6% in premarket trade. Notably, Newmont, the world’s largest gold miner, also reported a rise in costs during the same period, attributed to higher contractual labor costs.
Gold Prices Rally Amidst Global Uncertainty
Despite the challenges, Barrick’s realized price for gold rose an impressive 29.4% to $2,494 per ounce during the quarter, tracking a rally in bullion prices sparked by the U.S. Federal Reserve’s 50 basis point rate cut and safe-haven demand amidst the Middle East conflict.
Copper Costs Also on the Rise
Copper AISC increased 10.5% year-over-year, although it did decline quarter-over-quarter. The company remains optimistic about its prospects, citing production ramp-ups at Pueblo Viejo in the Dominican Republic and higher output from its Nevada mines, which are expected to drive improved performance in the fourth quarter.
Full-Year Production Guidance Revised
Barrick reiterated that full-year production at its Loulo-Gounkoto project in Mali, where it is currently embroiled in a dispute with the government, would reach the top end of its forecast. On an adjusted basis, the company posted a profit of 30 cents per share for the quarter ended September 30, slightly below analysts’ average estimate of 31 cents.
Looking Ahead
While Barrick’s Q3 earnings may have disappointed, the company remains committed to improving its performance in the coming quarter. With production set to ramp up at several key projects, investors will be watching closely to see if the gold mining giant can regain its footing.
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