ABX Barrick Gold Corp. (BC) (delisted)

Barrick Gold Corporation’s (ABX) adjusted earnings (excluding one-time items) fell to $1.11 per share in the fourth quarter of 2012 from $1.17 per share in the year-ago quarter, but exceeded the Zacks Consensus Estimate of $1.09.

On a reported basis, the company slipped to a loss of $3.06 billion or $3.06 per share compared with profit of $0.96 billion or 96 cents per share in the year-ago quarter. The bottom line was hit by tax impairment charges of $4.2 billion, mainly related to the company’s copper business.
 
For ful-year 2012, adjusted earnings were $3.82 per share, down 18.2% year over year, missing the Zacks Consensus Estimate of $4.11. After including tax impairment charges, the company reported a loss of 66 cents per share compared with earnings of $4.49 per share a year ago.

Revenues jumped 11.4% year over year to $4,189 million in the reported quarter and exceeded the Zacks Consensus Estimate of $4,044 million. Average realized price of gold increased 3% year over year to $1,714 per ounce. C1 cash cost of copper increased 5.6% year over year to $2.07 per pound.

Gold production jumped to 2.02 million ounces in the quarter from 1.81 million ounces a year-ago. Copper production declined to 130 million pounds from 143 million pounds in the prior year.
 
For the full year, revenues increased 2.2% year over year to $14,547 million but missed the Zacks Consensus Estimate of $15,029 million.

Regional Results

North America: Barrick’s North American unit produced 0.96 million ounces of gold in the quarter at total cash costs of $482 per ounce compared with 0.76 million ounces at total cash costs of $498 per ounce a year ago. Production at Goldstrike was lower, reflecting lower grades and lower tons processed through the autoclave.

South America: Production from South America in the quarter was 0.46 million ounces at total cash costs of $528 per ounce compared with 0.45 million ounces at cash costs of $357 per ounce.

Australia Pacific: The region produced 0.47 million ounces in the quarter, compared with 0.49 million ounces in the year-ago quarter. Total cash costs were $801 per ounce in the reported quarter compared with $677 per ounce last year.

African Barrick Gold plc. (ABG): Attributable production from African Barrick Gold in the quarter came in at 0.13 million ounces at total cash cost of $958 per ounce compared with 0.12 million ounces at total cash cost of $779 per ounce in the prior-year quarter.

Financial Position

Cash and cash equivalents stood at $2,093 million as of Dec 31, 2012, compared with $2,745 million as of Dec 31, 2011. Net debt was roughly $11.6 billion at the end of 2012 versus $10.3 billion at the end of 2011. Operating cash flow was a record $5.44 billion in 2012 compared with $5.32 billion in 2011.

Project Updates

The company said that the Pascua-Lama mine, which is the highest gold mine in the world, will produce an average of 800,000-850,000 ounces of gold and 35 million ounces of silver in its first full five years of operation at total cash costs of $0.00 to negative $150 per ounce. During the fourth quarter, the cost estimate and schedule for the project was finalized.

Outlook

Barrick expects to produce 7–7.4 million ounces of gold in 2013 at total cash costs of $610-$660 per ounce. Copper production in 2013 is expected to increase to 480-540 million pounds, primarily reflecting improved production from Lumwana. Total C1 cash costs are expected to be in the range of $2.10-$2.30 per pound.

For 2013, production for the North American region is expected in the range of 3.55–3.70 million ounces at total cash costs of $495–$545 per ounce. The company expects ramp up of Pueblo Viejo to full production in the second half, partly offset by lower expected production from Goldstrike and Cortez.

Production from South America is expected to be in the range of 1.25–1.35 million ounces in 2013 at total cash costs of $550–$600 per ounce. Australia Pacific is expected to produce 1.70-1.85 million ounces this year at total cash cost of roughly $880-$950 per ounce. Barrick’s share of production at ABG is expected to be in the range of 0.40-0.45 million ounces at total cash cost of $925-$975 per ounce for 2013.

Barrick expects total capital expenditures of $5.7-$6.3 billion in 2013, reflecting accounting changes that result in higher capitalization of operating costs associated with waste stripping and capitalization of Goldrush exploration expenses.

Currently, Barrick retains Zacks Rank #4 (Sell).

Other companies in the gold mining industry having favorable Zacks Rank are AngloGold Ashanti Ltd. (AU), Banro Corporation (BAA) and Primero Mining Corp. (PPP). All three hold a Zacks Rank #2 (Buy).
 

 
BARRICK GOLD CP (ABX): Free Stock Analysis Report
 
ANGLOGOLD LTD (AU): Free Stock Analysis Report
 
BANRO CORP (BAA): Free Stock Analysis Report
 
PRIMERO MINING (PPP): Free Stock Analysis Report
 
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