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What Is Barrick Gold Doing to Increase Its Production?

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May. 15 2019, Updated 2:36 p.m. ET

What impacted Barrick Gold’s production?

Production growth is a crucial variable for miners, and along with realized metal prices, it drives a company’s revenue. In the first quarter, Barrick Gold’s (GOLD) gold production grew ~30% YoY (year-over-year) and 8% sequentially to 1.36 million ounces. This jump was expected due to Barrick’s merger with Randgold Resources, which came into effect on January 1. To learn more, read Is Barrick Worth a Look after Its Merger with Randgold?

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Future production

This year, the combined company is expecting to produce 5.1 million–5.6 million ounces of gold. This production is 18% higher YoY at the midpoint due to its merger with Randgold. The company expects its production to be slightly higher in the second half of this year than the first half.

As of 2018, Barrick had reported lower annual production for eight consecutive years. Investors were questioning Barrick’s production growth plans. Its declining production was one motivation behind its merger with Randgold.

Barrick Gold’s peers

Barrick Gold’s peers (GDX) (GDXJ) are also focusing on maximizing profitable production by optimizing their asset portfolios. Newmont Mining (NEM) acquired Goldcorp in April to increase profitable production and shareholder returns. Agnico Eagle Mines (AEM), whose production profile is looking attractive after many of its projects came online this year, expects record gold production this year, of 1.75 million ounces. To learn more, read AEM’s Cash Harvesting Phase Is Coming Up.

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