Third quarter results
Barrick Gold Corp ABX
Shares issued 375,645,771 Oct 20 close $32.15
Wed 21 Oct 98 News Release
Mr. Paul Melnuk reports
Barrick Gold had a 16 per cent increase in earnings and an 11 per cent
increase in cash flow for the nine months ended Sept. 30, 1998. The growth
was attributed to higher production, lower costs and the premium earned on
the company's gold sales.
Net income increased to $218-million (U.S.), 58 U.S. cents per share, for
the nine months ended Sept. 30, 1998 from $187-million (U.S.), 50 U.S.
cents per share, in the year earlier period (before a non-cash provision in
1997) on revenues of $928-million (U.S.) compared to $936-million (U.S.).
Operating cash flow rose to $390-million (U.S.), $1.04 (U.S.) per share,
for the nine month period compared with $350-million (U.S.), 94 U.S. cents
per share.
For the third quarter in 1998 net income rose to $76-million (U.S.), 20
U.S. cents per share, from $70-million (U.S.), 19 U.S. cents per share, in
the year earlier quarter (before a non-cash provision in 1997) on revenues
of $327-million (U.S.) compared to $316-million (U.S.). Operating cash flow
was $146-million (U.S.), 39 U.S. cents per share, compared to $128-million
(U.S.), 34 U.S. cents per share.
These strong results reflect Barrick's focus on generating consistent and
sustainable growth in earnings and cash flow per share, regardless of the
price of gold. The company continues to benefit from its excellent
operating performance and the premium received on its gold sales.
Gold production rose 5 per cent to 2.3 million ounces for the nine months
ended Sept. 30, 1998. Barrick's 1998 production target is 3.1 million
ounces.
Cash operating costs declined 14 per cent to $160 (U.S.) per ounce in the
nine month period, compared to $186 (U.S.) in the same period last year.
Barrick's focus on productivity improvements has resulted in lower unit
costs at all operations. Total cash costs, including royalties and
production taxes, declined to $181 (U.S.) per ounce compared to $209 (U.S.)
per ounce in the year earlier period.
Production at the Goldstrike property increased 10 per cent to 1.7 million
ounces, with the Meikle mine producing nearly 700,000 ounces during the
first nine months of 1998. The property should achieve both record
production and cash operating costs for the year, benefiting from a strong
second half performance from the Betze-Post mine and continued success at
the Meikle mine.
Barrick's efforts to increase production at its low cost properties are
creating profitable growth. The Meikle mine, in particular, exceeded all
targets and was a major contributor to the company's performance.
For the nine month period ended Sept. 30, 1998, the company realized an
average $400 (U.S.) per ounce, a premium of $105 (U.S.) per ounce over the
average spot price of $295 (U.S.), generating $241-million (U.S.) in
additional revenue. Barrick has 10.4 million ounces sold forward, including
production through the year 2000, at an average price of $400 (U.S.) per
ounce. This allows the company to enhance revenue for its gold production
while maintaining full participation in a rising gold market.
Barrick's balance sheet is the strongest in the gold industry with cash of
more than $400-million (U.S.), shareholders' equity of $3.5-billion (U.S.)
and a debt-to-capitalization ratio of 0.12 to 1, at Sept. 30, 1998. Barrick
is the only gold mining company with an A credit rating.
Barrick's next low cost operation, the Pierina mine in Peru, is on budget
and on schedule to begin production later this month. Pierina is expected
to produce 750,000 ounces of gold annually at a total cash cost of $50
(U.S.) per ounce.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
OPERATING HIGHLIGHTS
Three months ended September 30
(U.S. dollars)
1998 1997
Operations
Gold production
(ounces) 797,154 757,476
Gold sold (ounces) 810,242 746,360
Average spot gold
price $290 $324
Average price
realized per
ounce sold $400 $420
Cash operating costs
per ounce $166 $177
Total cash costs per
ounce (1) $184 $199
Financial results
(millions of dollars)
Revenue from gold
sales $324 $314
Net income (loss)
before provision 76 70
Net income (loss)
after provision 76 (315)
Operating cash flow (2) 146 128
Net income per
share before
provision 20 cents 19 cents
Net income per
share after
provision 20 cents (84 cents)
Operating cash
flow per share 39 cents 34 cents
OPERATING HIGHLIGHTS
Nine months ended September 30
(U.S. dollars)
1998 1997
Operations
Gold production
(ounces) 2,320,895 2,201,204
Gold sold (ounces) 2,298,084 2,207,000
Average spot gold
price $295 $340
Average price
realized per
ounce sold $400 $420
Cash operating costs
per ounce $160 $186
Total cash costs per
ounce (1) $181 $209
Financial results
(millions of dollars)
Revenue from gold
sales $919 $928
Net income (loss)
before provision 218 187
Net income (loss)
after provision 218 (198)
Operating cash flow (2) 390 350
Net income per
share before
provision 58 cents 50 cents
Net income per
share after
provision 58 cents (53 cents)
Operating cash
flow per share 34 cents $1.04 94 cents
(1) Includes royalties and production taxes.
(2) Includes working capital adjustments.
GOLD PRODUCTION AND COST SUMMARY
Three months ended September 30
1998 1997
(ounces & cash
operating costs
per ounce)
Goldstrike property
Betze-Post mine 397,018 426,296
$177 $164
Meikle mine 189,444 152,554
$75 $106
--------- ---------
586,462 578,850
$150 $149
--------- ---------
Canadian properties
Bousquet mine 45,844 38,857
$191 $206
Holt-McDermott mine 35,585 21,722
$135 $166
--------- ---------
81,429 60,579
$167 $192
--------- ---------
Other properties (1)
Bullfrog mine 52,995 48,992
$216 $267
Tambo mine 45,632 21,423
$234 $395
El Indio mine 27,360 11,645
$272 $354
Pinson mine (2) 3,276 6,257
$260 $333
Mines sold or
closed (3) - 29,730
- $317
--------- ---------
129,263 118,047
$236 $315
--------- ---------
Total production 797,154 757,476
========= =========
Cash operating
costs per ounce $166 $177
GOLD PRODUCTION AND COST SUMMARY
Nine months ended September 30
1998 1997
(ounces & cash
operating costs
per ounce)
Goldstrike property
Betze-Post mine 1,015,188 1,107,169
$183 $175
Meikle mine 684,516 440,721
$74 $100
--------- ---------
1,699,704 1,547,890
$140 $154
--------- ---------
Canadian properties
Bousquet mine 133,242 122,431
$192 $203
Holt-McDermott mine 104,670 88,410
$128 $143
--------- ---------
237,912 210,841
$164 $178
--------- ---------
Other properties (1)
Bullfrog mine 160,195 157,876
$232 $273
Tambo mine 137,155 98,355
$250 $310
El Indio mine 71,706 64,037
$251 $353
Pinson mine (2) 14,223 18,732
$300 $327
Mines sold or
closed (3) - 103,473
- $324
--------- ---------
383,279 442,473
$244 $307
--------- ---------
Total production 2,320,895 2,201,204
========= =========
Cash operating
costs per ounce $160 $186
(1) Operations being phased out, closed or sold.
(2) Barrick's 50 per cent proportional share.
(3) Doyon mine sold January 1998; Mercur mine operations ceased December
1997; and Golden Patricia mine operations ceased March 1997. |
