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Company: Barrick Gold (ABX)
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  Second Quarter Net Income Jumps

The world’s largest gold producer recorded a 22% jump in second-quarter net income and unveiled plans to sell a portfolio of non-core royalties to Royal Gold (RGLD).

For the quarter ended June 30, Barrick recorded adjusted EPS of $0.51, below Canaccord Adams’ estimate of $0.55 and consensus of $0.56. Meanwhile, production was 1.86 Moz at $417/oz compared to Canaccord Adams’ forecast of 1.93 Moz at $428/oz.

Guidance

Management revised guidance for both gold and copper output to the lower end of previously established ranges.

Commenting on the quarter, Chief Executive Peter Munk told analysts,

“There has been a lot of focus on rising costs in the gold industry, but perhaps we sometimes forget that these rising energy costs and inflationary expectations are one of the reasons for the move in the gold price above $900 per ounce that we are currently enjoying.”

Updates on several projects were provided, including Buzwagi, Pueblo Viejo and Cortez Hills. Barrick announced that it had restructured its royalty positions at the Cortez Pipeline Mining Complex in Nevada, selling over 100 positions to Royal Gold in a deal that will see Barrick earn $150 million. These positions netted Barrick about $12 million last year.

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