Barrick Gold surpasses expectations with strong Q4 performance amid rising gold prices

Canada’s Barrick Gold Corporation exceeded analysts’ expectations for fourth-quarter profit, reporting higher earnings than anticipated. 

The company attributed this positive performance to a combination of factors, including increased gold prices and a rise in gold production during the quarter. 

This achievement highlights Barrick Gold’s ability to capitalise on favorable market conditions and operational efficiencies to deliver strong financial results.

The world’s second-largest gold miner reported an adjusted profit of 46 cents per share for the quarter ended December 31, surpassing the LSEG consensus estimate of 41 cents per share, according to a Reuters report. 

Gold production for the company during the quarter exceeded expectations, reaching 1.08 million ounces.

This output surpassed the 1.05 million ounces produced in the same quarter of the previous year.

The increase was primarily attributed to strong performance in the company’s North America, Africa, and Middle East operations, all of which met or exceeded their production targets.

Gold’s stellar 2024

In 2024, gold prices experienced a substantial surge, marking their most significant yearly increase since 2010.

The remarkable 27% rise was primarily fueled by several key factors.

Firstly, the escalating geopolitical tensions and economic uncertainties throughout the year triggered a surge in safe-haven demand for gold. 

Investors, seeking a reliable store of value amidst turbulent times, flocked to gold as a hedge against potential market volatility and currency fluctuations.

Secondly, the decision by several central banks, especially the US Federal Reserve, to implement interest rate cuts further bolstered the appeal of gold. 

Lower interest rates reduce the opportunity cost of holding gold, which does not yield interest, making it a more attractive investment option compared to interest-bearing assets.

Lastly, the increased buying activity from central banks around the world contributed significantly to the upward trajectory of gold prices. 

Central banks, recognizing the importance of diversifying their reserves and hedging against potential currency risks, actively added gold to their holdings, thereby driving up demand and prices.

Overall, the confluence of these factors – safe-haven demand, interest rate cuts, and central bank buying – created a favorable environment for gold, propelling its price to remarkable heights in 2024.

Sharp rise in average gold prices realised

Barrick reported a significant increase in their average realised gold prices during the fourth quarter of last year.

The realised price for gold reached $2,657 per ounce, marking a substantial rise from the $1,986 per ounce reported during the same period in the previous year.

This increase in realised gold prices reflects a favorable market environment for the company and contributed to its overall financial performance in the fourth quarter of 2024.

Meanwhile, the all-in-sustaining costs (AISC), a key industry metric that provides a comprehensive view of the total expenses associated with producing an ounce of gold, experienced a notable increase.

Specifically, AISC climbed to $1,451 per ounce during the quarter, compared to $1,364 per ounce in the same period in 2023. 

This rise in AISC indicated that the company faced higher costs in various areas of its operations, which could include expenses related to mining, processing, exploration, and sustaining capital expenditures.

The company replaced its existing share buyback program, which began on February 14, 2024, with a new $1 billion share buyback program.

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