Barrick Gold reports in-line results, guidance is positive



4Q14 results above estimates

Barrick Gold Corporation (ABX) has reported in-line results for 4Q14 and full year 2014. The company’s 4Q14 operating earnings per share (or EPS) was $0.15, which is above the consensus estimate of $0.13.

Reported EPS was -$2.45 after impairment charges of $930 million at the Lumwana mine and $778 million at the Cerro Casale Project.

Barrick Gold’s (ABX) gold production was in line with market expectations at 6.25 million ounces at all-in sustaining costs (or AISC) of $864 per ounce in 2014. The company generated $2.30 billion in operating cash flow.

Production declined 13% year-over-year due to lower production at the Cortez mine. This was offset somewhat by higher production at other mines.

For the full year 2014, Barrick Gold recorded a net loss of $2.91 billion, or $2.50 per share. This reflects the impact of $3.4 billion in after-tax impairment charges. Adjusted net earnings for 2014 were $793 million, or $0.68 per share.

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Back to the future

Barrick Gold (ABX) has initiated a so-called back-to-the-future campaign in which it will focus on its previous strategy of being lean and nimble. This demands that its leaders be the owners. So the company has extended its innovative partnership plan to 35 leaders across the business. We’ll discuss this in detail later on in the series.

Guidance for 2015

Barrick Gold (ABX) intends to reduce its net debt by at least $3 billion in 2015. We’ll discuss how it intends to do this in detail in a later part of this series.

Production guidance for 2015 is 6.2 million to 6.6 million ounces of gold at AISC of $860 to $895 per ounce. The company expects to generate positive free cash flow this year at current gold prices.

Newmont Mining (NEM) reported better-than-expected 4Q14 results. Goldcorp’s (GG) 4Q14 results were a slight miss.

Investors can gain access to the gold industry through gold-backed ETFs such as the SPDR Gold Trust (GLD) and the VanEck Vectors Gold Miners ETF (GDX). GDX invests in these three stocks, which combined make up 26.3% of its holdings.


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