Commodities & Metals
Will a Dividend Cut and More Asset Sales Turn Barrick Around?
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Beginning with the payment scheduled for September, Barrick is reducing its dividend from $0.05 per share to $0.02 per share. The company raised its dividend from two cents to five cents two years ago, after dropping it from 15 cents in 2012.
Barrick has cut its estimated full-year gold production from a prior range of 6.2 million to 6.6 million ounces to a new range of 6.1 million to 6.4 million ounces. The cut is due primarily to asset sales, which the company said have totaled $2.45 billion so far this year.
In the second quarter, Barrick produced 1.45 million ounces of gold at an all-in sustaining cost of $895 per ounce and 115 million pounds of copper at cash costs of $1.94 per pound. The average realized price for gold in the second quarter was $1,192 per ounce and the copper price was $2.66 per pound.
The estimate for full-year all-in sustaining costs has been lowered from a prior range of $860 to $895 per ounce to a new range of $840 to $880 per ounce.
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Barrick said that over the next several weeks it intends to begin a formal process to sell all or part of six additional non-core assets in Nevada and Montana.
In its outlook for the rest of 2015, Barrick estimates an average gold price of $1,100 per ounce and $2.50 per pound for copper.
Shares of Barrick traded up about 2% in premarket trading Thursday, at $6.67 in a 52-week range of $6.52 to $19.36. The low was posted on Wednesday. Thomson Reuters had a consensus analyst price target of $11.98 before this report.
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