Barrick Mining beats profit estimates, hikes dividend despite Mali crisis and production dip

Barrick Mining announced on Monday an increase in its dividend and an expansion of its share buyback program.

This followed the company reporting an adjusted quarterly profit that surpassed estimates. 

Stronger gold prices contributed to the positive results, helping to counterbalance a decrease in production.

According to interim CEO Mark Hill, the Canadian mining company is shifting its focus "firmly on North America" for future growth. 

Hill was quoted as saying in a Reuters report that North America is considered the next key area for gold growth, and this will be the company's primary focus moving ahead.

The miner has a joint ownership of the Nevada Gold mine with Newmont. Additionally, the company is focused on the development of the Fourmile gold mine, also located in Nevada.

Following the announcement of its quarterly results, Barrick's US-listed shares saw a gain of almost 4% in premarket trading.

Mali issues

Barrick, the world's third-largest gold producer, has experienced a tumultuous year. 

This period has included a $1 billion write-off following the loss of control over its gold mine in Mali. 

Adding to the company's challenges, Mark Bristow stepped down as chief executive officer. 

The board, headed by mining executive Brett Harvey, is currently tasked with finding a new president and CEO. 

Furthermore, the company is embroiled in a dispute with Mali over its new mining tax code, which has resulted in the imprisonment of four Barrick employees.

Hill emphasised that his primary goal is to secure the release of the detained employees, acknowledging that the company must adjust its strategy regarding the situation. 

Separately, Barrick initiated arbitration against Mali. However, the World Bank's dispute tribunal recently denied the company's appeal for an expedited hearing on the matter.

Hill said:

Gold prices and realisations

Sensitive to both geopolitical and financial instability, gold prices saw a significant increase in the third quarter. 

The average price reached $3,574.95 per ounce, which marks a rise of over 16% from the previous quarter and a substantial 43% jump compared to the same period a year ago.

Safe-haven demand, fueled by uncertainty surrounding US President Donald Trump's tariff plans and rising geopolitical tensions, pushed up the precious metal's prices and stoked inflation concerns.

During the third quarter, Barrick's average realised gold price saw a significant increase, rising to $3,457 per ounce compared to $2,494 per ounce in the previous year.

Quarterly production saw a decrease, falling from 943,000 ounces last year to 829,000 ounces.

Since mid-January, Barrick has been in a prolonged standoff with Mali's military-led government, resulting from the forced suspension of its operations.

The government initiated that action by seizing three tons of bullion, detaining some Barrick executives, and blocking the company's exports for two months.

In the third quarter, the company's all-in sustaining costs (an industry metric for total expenses) increased to $1,538 per ounce of gold, up from $1,507 per ounce.

Barrick's board has authorised a $500 million expansion of the current share repurchase program, alongside announcing a 25% increase in the quarterly dividend, raising it to $1.25 per share.