Barrick raises Q2 gold output but copper price weakness to weigh in 2022

Molten nickel matte is poured at the Vale Copper Cliff Nickel Smelter in Sudbury, Ontario. Photographer: Cole Burston/Bloomberg via Getty Images

BARRICK Gold increased second quarter gold production but said it had received a lower average price for copper amid a recent sell off in the metal.

The price of copper has weakened 23% year-on-year and 30% in the last quarter. It is currently trading at about $7,160 per ton, down from $7,311/t the previous day. The slide in price is owing to concerns regarding global economic slowdown and possible recession.

“We see modest headwinds from realised prices, higher-than-expected costs, and potentially some delayed shipments in copper,” said BMO Capital Markets in a report on the production numbers. “We expect to see more challenges through the base metals sector with earnings results,” it added.

“Copper shipments were below production volumes, potentially due to issues with rail and port congestion,” said BMO Capital Markets in its report on Thursday.

Barrick’s gold production for the second quarter totalled 1.04 million ounces against first quarter output of 990,000 oz. Copper production of 120 million pounds (lb) was 19 million lb higher quarter-on-quarter, but sales were 113 million lb for the quarter under review.

The average copper price for the period was $4,32/lb compared to a closing price for the quarter of $3,83/lb. “The company’s second quarter realised copper price is expected to be 13% to 15% below the average second quarter as a result of provisional pricing adjustments reflecting the fall in prices near quarter end, Barrick said.

Barrick said the improvement in gold production was down to better operating performances at its Carlin, Turquoise Ridge, Valedero, Bulyanhulu and North Mara mines, the latter two in Tanzania. Cortez, a mine in Nevada, had a poor quarter however.