New Barrick chief says back to basics

Barrick Gold’s (ABX-T) newly installed chief executive officer, Gregory Wilkins, intends “to refocus the company on the core values which served it so well in the past.” Barrick’s principal core value, that of making money, seems to have been honored in 2002, as the company posted net income of US$193 million, or US36 per share, on revenue of US$2 billion.

Barrick’s performance was an improvement over 2001, when it earned US$96 million on revenues of US$2 billion, after large year-end writedowns that left it with a US$109-million fourth-quarter loss that year. This year’s fourth quarter was much brighter: US$54 million in earnings on revenue of US$526 million.

Production, including attributable ounces from joint venture mines, dipped 7% year-on-year, as the company produced just under 5.7 million oz. gold. It realized an average price of US$339 per oz., a premium of US$29 over average spot prices; the previous year realized prices averaged US$317 but were US$46 above spot.

Barrick’s average total cash production cost in 2002 was US$177 per oz., an increase of US$15 over the 2001 figure. Significant cost increases came at the Kalgoorlie Super Pit in Western Australia, Hemlo in north-central Ontario, and the Meikle mine in Nevada.