Barrick Gold Corp. (ABX), the largest producer of the precious metal, reduced its forecast for operating costs this year after reporting third-quarter expenses that beat analysts’ estimates.
So-called all-in sustaining costs will be $880 to $920 an ounce, compared with a previous range of $900 to $940, Toronto-based Barrick said yesterday in its third-quarter earnings statement.
Barrick is among gold producers that have reined in spending and delayed growth plans after the metal’s 28 percent decline last year. Third-quarter costs fell 8.8 percent to $834 an ounce, compared with the $916 average of three estimates.
“Their earnings look reasonably good, the cash costs are good, the guidance looks good,” David Christensen, chief executive officer of San Mateo, California-based ASA Gold & Precious Metals Ltd., said in a phone interview. His company manages $250 million including Barrick shares. “All in all, it looks like they’ve done a good job.”
Earnings excluding one-time items were 19 cents a share, topping the 17-cent average of 23 estimates compiled by Bloomberg. Sales declined 13 percent to $2.6 billion, exceeding the $2.49 billion average estimate.
The results were released after the close of regular trading in New York yesterday, where Barrick rose 0.9 percent to $12.94 at 7:59 p.m.
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While the company’s leadership, helmed by Chairman John Thornton, seeks to position Barrick as the “investment of choice among gold producers,” it faces headwinds including high debt levels and a faltering gold price. Barrick shares have dropped 23 percent this year in Toronto and closed yesterday at the lowest since May 1992.
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