BARRICK Gold increased the quarterly dividend to 7 US cents per share on the back of a strong fourth quarter performance.
The results brought the curtain down on a stellar year, the first since Barrick merged with the UK-listed Randgold Resources.
The fourth quarter dividend – 40% higher than the previous third quarter payout – was on the back of a buoyant dollar gold price, but it also reflected 12 months of vigorous corporate activity that included the sale of Kalgoorlie and Massawa gold mines in Australia and Senegal respectively.
Barrick also bought out minority shareholders in Acacia Mining and signed its assets into a joint venture with the Tanzanian government thereby ending a three-year dispute following government allegations of Acacia’s tax evasion.
Mark Bristow, CEO of Barrick, declared the company was independent of the “vagaries of capital markets” having halved net debt to $2.2bn, and that the firm was now positioned to embark on its 10-year production path, due to be unveiled in March.
“The significant reduction in Barrick’s debt and the growth in its liquidity means that the company is now capable of managing its business and taking advantage of new opportunities independent of the vagaries of the capital markets,” he said.
In addition to asset sales (with possibly more to come), Barrick also formed a joint venture with Newmont Mining – after first raising the prospect of its takeover – which contributed to an increase in attributable reserves to 1.3 billion ounces. At a grade of 1.88 grams per ton, Barrick has 71 million oz in mineable gold in its locker.
“We now have agile multi-disciplinary teams capable not only of executing complex, industry-leading corporate transactions but also of running our operations efficiently while pursuing new growth opportunities,” said Bristow in a statement.
Full year production came in at 5.47 million oz which was at the high end of guidance whilst copper production of some 432 million pounds exceeded guidance. Full year earnings were $2.26 per share whilst on an adjusted basis, earnings were 46% higher year-on-year. Shares in the company were 37% higher over the last 12 months.
Bristow’s comments about having won some freedom of the capital markets will raise the ante on where he may take the company next.
Most recently, Bristow was connected with the possible merger or purchase of assets with Freeport McMoRan, the US copper company. Confirming previous comments on the matter with Miningmx, Bristow said on February 3: “I run the world’s most valuable gold company and we are focused on tier one assets. The best tier one asset we do not own is Grasberg. So, sure, I should be talking to Freeport.
“Secondly, Grasberg (McMoRan mine) is the world’s biggest copper mine. If you look at the gold industry ten years ahead, the migration is away from pure gold provinces towards the younger geology such as the Pacific Rim where you get copper and gold together.
“I am just saying there is an intellectual conversation to be had just like there was about Barrick and Newmont and Goldcorp,” he said.
“So, as an industry, we have been saved by the gold price again and Barrick is making out like a bandit. We have everything in our favour – we have tier one assets with more than 10 years life but the question still is – how do we position Barrick for the future because that’s what drives our value?”
