Barrick Gold (NYSE:GOLD) expects to meet its production guidance for 2020, despite the impact of the global covid-19 and the resultant lockdowns.
The company reported preliminary second quarter sales of 1.22 million ounces of gold and 123 million pounds of copper, as well as preliminary second quarter production of 1.15 million ounces of gold and 120 million pounds of copper.
Barrick gold production for the first six months of 2020 was 2.4 million ounces, at the midpoint of the company’s 4.6 to 5.0 million ounce guided range for the year.
The miner expects a 15% decline in second-quarter gold production
“These results positioned Barrick well to achieve its guidance for the year, despite the impact of the global covid-19 pandemic and the resultant lockdowns,” said Mark Bristow, president and CEO of Barrick.
“Comprehensive programs to counter the spread of covid-19 are in place at all of Barrick’s operations and it continues to take the necessary steps to manage the impact of the pandemic on its business.”
The miner expects a 15% decline in second-quarter gold production mainly due to coronavirus-induced disruptions at Veladero in Argentina and a dispute in Papua New Guinea.
In April, the government of Papua New Guinea refused to extend an expired lease for Porgera gold mine, forcing the company to put the mine on care and maintenance and lower its full-year attributable gold production forecast.
Barrick and China’s Zijin Mining, which each own 47.5% of the Porgera mine, have served a dispute notice to the Papua New Guinea government over the country’s refusal to renew the license.
The miner announced that will reduce power supply to townships near the mine, to save costs amid the dispute. The company said in a statement that “due to necessary cost reductions” electricity the mine provides free to nearby communities would from Friday only be supplied for 12 hours a day.
Production was also hit by a planned shutdown at Barrick’s Pueblo Viejo mine in the Dominican Republic.
Sales
Second quarter gold cost of sales per ounce are expected to be 4% to 6% higher, total cash costs per ounce are expected to be 2% to 4% higher and gold all-in sustaining costs (AISC) per ounce are expected to be 7% to 9% higher, respectively, than the first quarter of 2020.
Copper sales of 123-million pounds of copper were also higher than the previous quarter.
Copper cost of sales per pound were expected to be 5% to 7% higher than the prior quarter, C1 cash costs per pound were expected to be in line and copper AISC are expected to be 4% to 6% higher, respectively, than the first quarter of 2020.