oto shows Barrick Goldstrike Mines’ Betze-Post open pit near Carlin, Nevada. (AP Photo/Elko Daily Free Press, Adella Harding, file) Barrick Mining reported an increase in second-quarter profit, boosted by increased gold prices, and reached a $1.95 billion agreement with Newmont to settle disputes over Nevada Gold Mines.
Newmont has agreed to Barrick’s proposed initial public offering of its North American gold assets, the firms announced, clearing the way for the IPO, which Barrick plans to execute by the end of the year.
Barrick is seeking a new CEO to lead its non-North American operations. CEO Mark Hill, who would lead Barrick’s North American operations, stated that his personal preference would be for an internal candidate.
Get the most recent updates on corporate news here. According to LSEG data, the Canadian gold miner earned 82 cents per share, meeting analysts’ profit estimates.
It made C$1.22 billion ($875.37 million), or 73 Canadian cents per share, in the three months ended June 30, compared to $811 million, or 47 Canadian cents per share, the previous year.
Barrick shares were down 8% on the Toronto Stock Exchange at 1:00 p.m. ET (1800 GMT).
Gold miners are facing increased fuel expenses due to the US-Israeli confrontation with Iran, which has disrupted oil exports and raised energy prices.
According to Barrick, fuel charges, lower grades, and higher royalties led to an 11% increase in gold all-in sustaining costs.
Its second-quarter realized gold price increased 34% from the previous year to $4,417 per ounce, while gold output remained constant at 796,000 ounces.
Barrick attributed the increase in gold costs to lower processing grades at its Carlin and Cortez gold mines in Nevada and North Mara mine in Tanzania, as well as higher fuel costs and royalties due to the higher realized gold price.
Its gold cost of sales increased by 20% in the second quarter to $1,993 per ounce, while gold’s all-in sustaining cost, a key industry indicator of the overall cost of producing gold that includes sustaining capital spending, increased by 11% to $1,866 per ounce.
NEWMONT DEAL CLEARS IPO PATH. Barrick holds 61.5% and Newmont 38.5 percent of the Nevada Gold Mines joint venture. Reuters reported earlier this year that Barrick will need Newmont’s consent to proceed with its intended North American spin-off, as Newmont has first right of refusal if Barrick sells its stake.
Newmont had disagreements with Barrick over operational concerns at Nevada Gold Mines.
In the arrangement announced on Monday, Barrick will transfer its Fourmile project to the Nevada Gold Mines joint venture, while Newmont will surrender its Mike and Fiberline projects and pay Barrick $1.95 billion in cash within 30 days.
According to Barrick, the agreement would establish a gold complex in Nevada with a capacity of over 100 million ounces.
Barrick’s planned North American IPO will comprise its ownership and operation of Nevada Gold Mines and Pueblo Viejo, as well as the Fourmile project and other North American exploration projects, in addition to the assets donated by Newmont.
