Shares of Barrick Gold Corp. (GOLD, Financial) closed 1.18% lower at $12.57 on Wednesday after the mining company reported first-quarter 2019 results.
Non-GAAP earnings of 11 cents per share exceeded consensus estimates by 2 cents, GAAP earnings of 6 cents per share were 3 cents shy of expectations and revenue of $2.09 billion was $7 million short of projections.
Key operations performed well and were in line with Barrick’s expectations. Despite a 1.9% year-over-year decrease in the realized gold price to $1,307 per ounce and higher costs, revenue grew 16.8% and adjusted net income increased 8.2% to $184 million.
In the first quarter, Barrick produced 1.367 million ounces of gold, up 30.3% year over year, and 106 million pounds of copper, an increase of 24.7%.
Cost of sales rose 7.9% to $947 per ounce of gold and 6.8% to $2.21 per pound of copper. Cash costs jumped 10.1% to $631 per ounce of gold and tumbled 11.7% to $1.66 per pound of copper. The all-in sustaining cost increased 2.6% to $825 per ounce of gold and decreased 5.7% to $2.46 per pound of copper.
The operating net cash flow was also 2.6% higher at $520 million. In contrast, free cash flow declined 19.3% as a result of higher financial resources allocated to project development and mine maintenance.
As of March 31, Barrick Gold had $2.15 billion available in cash on hand and equivalents and $5.81 billion in total debt.
In a statement, President and CEO Mark Bristow said that “considering the shortage of good assets and the industry's underinvestment in its own future, we believe we are well positioned as the industry's value leader.”
For full-year 2019, the Canadian miner guided for gold production of 5.1 million to 5.6 million ounces at an all-in sustaining cost of $870 to $920 per ounce. Copper production is projected to range from 375 million to 430 million pounds at an all-in sustaining cost of $2.4 to $2.9 per pound.
Total attributable capital expenditures are anticipated to be $1.4 billion to $1.7 billion, of which 77.4% will be for mine care and maintenance and 22.6% for the development of mineral projects.
On Wednesday, the bullion closed at $1,285.20 per troy ounce on the London market, up 0.3% from the previous day. Copper futures closed at $2.771 per pound, down 0.61% from Tuesday.
From the beginning of the second quarter through May 8, gold averaged $1,285.14 an ounce, down 1.7% from the average price Barrick Gold realized in the first quarter. Copper averaged $2.89 per pound, down 5.9% from $3.07 realized in the first quarter.
Closing at $12.6 on Wednesday, the stock has fallen 7% over the past year to below the 100- and 50-day simple moving average lines. The share price is still above the 200-day line. The market capitalization is $22.03 billion.
The 52-week range is $9.53 to $14.54.
The 14-day relative strength index of 42 suggests the stock is neither overbought nor oversold.
Wall Street issued a hold recommendation rating with an average target price of $14.50, reflecting 15.1% upside from the closing price on Wednesday.
Disclosure: I have no positions in any securities mentioned.
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