Barrick plans buyback (May 19, 2003)

Barrick Gold (ABX-T) has budgeted up to US$500 million for a share buyback program aimed at propping up its faltering share price.

The world’s third-largest gold producer plans to buy up to 35 million shares, or 7% of its public float during the year-long program.

“Our shares are trading in a price range that does not reflect the value of the company or our future business prospects,” says President Greg Wilkins. “This program demonstrates the confidence we have in our existing operations, development pipeline, and exploration program.”

At the end of March, Barrick had more than US$1.1 billion in cash, no net debt and a portfolio of operating mines generating substantial cash flows.

The major posted a first-quarter profit of US$29 million on revenue of US$459 million, compared with year-earlier earnings of US$46 million on US$478 million. The drop in earnings is attributed to a falling production and rising costs.

In other news, Barrick has declared a quarterly dividend of US11 per share.