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Barrick (ABX) Releases Preliminary Q2 Production Numbers

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Barrick Gold Corporation released preliminary production results for second-quarter 2018.

Preliminary gold production and sales for the second quarter were 1.07 million ounces and 1.04 million ounces, respectively. Average market price for gold during the quarter was $1,306 per ounce. Preliminary copper production and sales totaled 83 million pounds and 74 million pounds, respectively. Average market price for copper was $3.12 per pound.

Notably, second-quarter gold production figures were roughly in line with the first quarter while all-in sustaining costs (AISC) per ounce is expected to increase around 5-7%. The increase in unit cost stemmed from scheduled maintenance at the Pueblo Viejo autoclaves and the Barrick Nevada roaster.

Barrick has maintained full-year 2018 gold production guidance in the range of 4.5-5 million ounces at AISC of $765-$815 per ounce and cash costs of $540-$575 per ounce. The company expects higher gold production during the second half of 2018, considering the completion of major scheduled maintenance shutdowns during the first half.

Second-quarter preliminary copper production was modestly lower. The company anticipates an increase in its consolidated copper cost of sales per pound by roughly 17-19% on a quarter-over-quarter basis due to higher crusher repair costs. Consolidated AISC is also expected to increase around 15-17% compared with the first quarter as a result of higher capitalized stripping at Lumwana.

Based on these factors, the company has lowered copper production guidance for 2018 to 345-410 million pounds from 385-450 million pounds expected earlier. AISC for copper is also expected to be $2.55-$2.85 per pound compared with the initial guidance of $2.30-$2.60 per pound. Per the company, revisions in the copper production and cost guidance mainly reflect operational challenges at Lumwana during first half of 2018. However, it expects a steady improvement in grade and improved crusher reliability in the second half, which is likely to boost production at Lumwana in the second half of this year.  

The company’s shares have lost 0.7% over the past three months compared with the industry’s 2.7% decline.



Zacks Rank & Stocks to Consider

Barrick currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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