Although Sterne Agee analysts Michael S. Dudas and Satyadeep Jain currently rate Barrick Gold Corporation (NYSE:ABX) (TSE:ABX) as Neutral, they are relatively sanguine on the future prospects for the stock. They summarize their point of view in the overview of the report. “We expect Barrick to be almost free cash neutral in 2014E with potential for almost $1B in free cash generation in 2015E. We believe shares may be range bound near-term, but supported by improving gold prices.”
Barrick Gold’s first quarter 2014 earnings
The SA report points out that Barrick Gold Corporation (NYSE:ABX) (TSE:ABX) posted relatively strong Q1 2014 results, including significantly higher than expected earnings. First quarter adjusted earnings for Barrick rose to $0.20 vs. our $0.15 and analyst consensus estimate of $0.17.
The company reported producing 1.6 million ounces of gold in the first quarter at $582/oz cash cost (vs. SA’s $590/oz estimate) as well as 104 million pounds of copper at $2.11/pound. Of note, the first quarter 2014 all-in-sustaining cost of $833/oz (ounces) dropped almost $100/oz year-on-year (y/y). Barrick Gold Corporation (NYSE:ABX) (TSE:ABX)’s five main mines — the Cortez, Goldstrike, Lagunas Norte, Veladero and Pueblo Viejo projects — reported 0.94 million ounces or 60% of first quarter total production at an AISC of just below $672/oz.