Barrick Gold’s mixed operating results
Barrick Gold (ABX) reported its third-quarter earnings results after the market closed on October 24. It reported adjusted EPS of $0.08, which beat analysts’ expectation by $0.01. Its revenue was $1.84 billion, which slightly missed expectations. Its results stood in contrast to its second-quarter earnings miss.
In the third quarter, Barrick produced 1.15 million ounces of gold, up 7.4% sequentially, mainly due to better throughput and grades at Barrick Nevada. The debottlenecking improvements at Pueblo Viejo also helped the sequential increase.
While the company has maintained its copper and gold production guidance for the year, it expects its gold production to come in at the lower end of 4.5 million–5.0 million ounces.
While Barrick stock remains weak YTD (year-to-date), it surged following the announcement of its merger with Randgold Resources (GOLD). In contrast to its YTD stock performance of -8.7% as of November 5, the stock has risen 26.2% since the merger announcement on September 24.
Since the merger news, the VanEck Vectors Gold Miners ETF (GDX) has gained 4.2%, while its close peers have risen marginally or have fallen. Goldcorp (GG), Newmont Mining (NEM), and Kinross Gold (KGC) have returned -10.3%, 2.6%, and -7.1%, respectively.
In this series, we’ll look at Barrick Gold’s recent results as well as what they mean for the company’s future. We’ll also discuss whether the company’s merger with Randgold is enough to turn its fortunes around or whether it needs to iron out its issues before it can rise sustainably.