Barrick Gold’s Q3 2016 Earnings Review: Company Well-Poised To Tackle Lower Gold Prices After Strong Q3 Results


Barrick Gold reported strong Q3 earnings results, driven by elevated gold prices and the success of the company’s cost reduction initiatives. Barrick’s average realized gold price stood nearly 19% higher year-over-year as macroeconomic uncertainty in the wake of the UK’s June EU referendum and global economic weakness drove prices higher in the third quarter. [1] A reduction in Barrick’s operating costs, achieved through a combination of operational improvements and the sale of high-cost mines, added to the positive impact of higher gold prices on the company’s earnings. Besides cost reduction, Barrick continues to focus on debt reduction, having achieved 70% of its debt reduction target of $2 billion for 2016 year-to-date. A combination of lower cost operations and lower debt would stand the company in good stead in an environment of subdued gold prices. With gold prices dipping after the highs of Q3 in anticipation of a Fed interest rate hike in December, Barrick’s cost and debt reduction initiatives have certainly been well timed.

ABX Q3 2016 Earnings

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Barrick Gold

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Notes:
  1. Barrick Gold’s Q3 2016 Earnings Release, Barrick Gold Website []