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Barrick Boosts Dividends 14% With Windfall From Gold’s Rally

(Bloomberg) — Barrick Gold Corp. is returning some of the windfall it’s getting from gold’s record rally to its shareholders.

The world’s second-largest gold miner increased its quarterly cash dividend 14% to 8 cents per share, the company said Monday in its second-quarter earnings statement.

“The board believes that the dividend increase is sustainable and reflects the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet,” the company said.

Chief Executive Officer Mark Bristow said the strong cash generation demonstrated the quality of Barrick’s assets and management’s ability to capture the full benefit of higher gold prices.

Key Insights

All-in sustaining costs increased 8.1% to $1,031 an ounce in the second quarter from the previous three months amid precautions for the coronavirus.Barrick said last month those costs likely increased 7% to 9% in the second quarter, compared with the previous three months.Spurred by pandemic-induced economic concerns, gold prices have skyrocketed this year, providing a tailwind for producers of the metal.A Bloomberg Intelligence index of senior gold miners has gained 59% in 2020.Spot gold prices were up more than 30% on average in the second quarter compared with a year earlier, and last month they shot past the all-time record set in September 2011.Barrick is on track to meet its guidance for 2020 production estimated at a range of 4.6 million to 5 million ounces.That target was lowered in May in part because of a conflict with the government of Papua New Guinea over its Porgera mine.

Market Reaction

Barrick rose 1.3% to $29.25 at 9:37 a.m. in New York. The shares have climbed 57% this year.

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Adjusted earnings came in at 23 cents a share versus the average analyst estimate of 18 cents.For additional details on the news, click here.

(Updates with share price in regular New York trading.)

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