Second-quarter earnings by Barrick Gold (ABX-T) were steady at US$59 million, as the company completed its first six months as a half-hedger in the gold market.
Barrick’s profit of US11 per share came on revenues of US$490 million, down from US$518 million in the second quarter of 2001. Last year, second-quarter earnings were US$58 million.
With the gold price going up, Barrick actually realized a higher price for its metal this quarter than it had a year before, although its margin over the average spot price was smaller. In the three months ended June 30, Barrick’s sales averaged US$341 per oz., a premium of US$28 over the average London fix. In the corresponding period of 2001, Barrick’s realized price was US$320, a US$52 bulge over spot.
Production, at 1.35 million oz., was about 250,000 oz. lower than in the second quarter of 2001, and company-wide cash production costs rose to US$171 per oz. from US$155.
The company’s star performers on cost were the Eskay Creek gold-silver mine in British Columbia, which turned out 91,614 oz. gold at an average US$32 per oz. after silver credits, and the Pierina gold mine in Peru, where cash costs averaged US$80 per oz.
During the quarter Barrick also announced a revision of the resource estimate at its new Alto Chicama gold discovery, 175 km north of Pierina. The resource there is now estimated at 122 million tonnes grading 1.85 grams gold per tonne.
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