Barrick Gold Corp.(TSE:ABX, Mkt cap 11.71B, P/E – , Div/yield 0.03/1.04, EPS -3.01, Shares 1.16B) has reported positive cash flow for the second straight quarter after a long period of negative cash flow, the Financial Post reports.
As well as posting solid third quarter earnings, the world’s biggest gold producer also reported to having reduced its cost guidance in the period and said it is edging ever closer to its US$3 billion debt reduction target for 2015.
Adjusted net income in the third quarter exceeded the average analyst estimate at US$131 million, or 11 cents a share.
Barrick’s free cash flow was up from US$26 million in Q2 to US$256 million (not counting a streaming sale), while the net loss in the quarter was US$264 million, due to an impairment tied to the Zaldivar mine.
The results suggest that the company is pressing on under Chairman John Thornton, in spite of the weak gold marker, the FT notes. Since becoming chairman last year, he has sought to shed non-core assets and replace most of the management team.
Thornton aims to streamline Barrick back into profit and eliminate the strategic errors that crippled its balance sheet. By cutting its overall debt in the first nine months of the year from US$13.1 billion to US$11.2 billion, it indicates the company is headed in the right direction.
“As we move into 2016 and beyond, we will continue to take prudent steps to strengthen our balance sheet, balancing debt repayments with investments in profitable production that will drive growth in free cash flow,” the miner said in a statement.
However, investors are said to still be concerned about the firm’s balance sheet, as well as the health of the gold market.
Barrick Gold Corp is a Canadian gold mining company with headquarters in Toronto. The Company is engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company operates in segments: eight individual gold mines, Acacia and Pascua-Lama project. The remaining operating segments have been grouped into two other categories: its remaining gold mines and its two copper mines. The Company sells its production in the world market through the distribution channels: gold bullion is sold in the gold spot market; gold and copper concentrate is sold to independent smelting companies, and copper cathode is sold to various manufacturers and traders. The Company has 14 producing gold mines, located in Canada, the United States, Peru, Argentina, Australia, the Dominican Republic and Papua New Guinea. It also holds a 63.9% equity interest in Acacia Mining plc (Acacia) that owns gold mines and exploration properties in Africa.
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