Barrick Gold Corporation (ABX) is the largest gold mining company in the world. Profitability is increasing due to rising gold prices and synergies from the Placer Dome acquisition. The company is likely to benefit from the various expansion projects in the pipeline. The 100% acquisition of the Cortez mine will boost gold production.
In the first quarter, the company reported earnings of $514 million ($0.59 per share), compared to the net loss of $159 million ($0.18 per share) in the year-ago period. High gold prices bolstered the strong rise in net income. All production was sold at prevailing market prices for a realized price of $925 per ounce, up 140% from the prior-year quarter, as gold prices reached 27-year high.
For the full year 2008, the company maintains its production guidance of 7.6 8.1 million ounces of gold at total cash costs of $390-$415 per ounce. It aslso guided to 380-400 million pounds of copper at total cash costs of $1.15-$1.25 per pound.
The total cash cost guidance is based on an assumed gold price of $900 per ounce and an assumed oil price of $100 per barrel, which is up from the previous assumptions of $800 for gold and $90 for oil. The company also announced that its board of directors has increased its June 2008 dividend by 33% to $0.20 per share from $0.15 per share. The dividend is payable on June 16, 2008 to shareholders of record at the close of business on May 30, 2008.
The companyâs financials are solid. As a result, we rate the shares a Buy with a target price of $43. This is 17.9x 2008 earnings.
Read the full analyst report on ABX.
Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Equity Research. See all todays Analyst Blog entries on Zacks.com.