Barrick Gold Corp. (TSE:ABX) Higher-than-expected first-quarter earnings, a share price that has doubled since the start of the year and a lower all-in sustaining cost guidance for 2016 has given Barrick Gold Corp.’s chairman John Thornton the opportunity to declare: “Barrick is back.”
The turnaround in fortunes will come as welcome relief for Barrick’s directors and senior management, the Financial Post reports.
At last year’s meeting, shareholders were up in arms over Thornton’s compensation. Prior to that, the Toronto-based company were forced to deal with the aftermath of its failed attempt to merge with Newmont Mining Corp. In 2013, meanwhile, there was yet another controversy over Thornton’s pay.
However, some might now argue that Thornton is worth every penny that has been paid to him. In shaking up the senior management team, shrinking the head office and increasing co-operation between mine managers, the former Goldman Sachs executive has ensured a strong set of operating results.
On Tuesday, the company reported better-than-expected first-quarter earnings of US$127 million (on an adjusted basis) and lowered all-in sustaining cost guidance for 2016 by as much as 8% (to between US$760 and US$810 an ounce).
The solid performance has restored investors’ faith in Barrick, too, but Thornton acknowledged that there is more work to be done – especially when it comes to reducing debt.
“This is just the beginning,” he said. “We do not believe in victory laps. We set the bar higher and go back to work.”
Barrick has made a good start, announcing on Tuesday that it reduced debt by US$842 million in the first quarter, meaning it’s well on its way to its target of US$2 billion by the end of 2016.
Barrick Gold Corp. is a Toronto based gold mining company. 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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