(Reuters) – Miner Barrick Gold Corp reported a nearly 55% rise in quarterly adjusted profit on Wednesday, benefiting from a surge in gold prices, but trimmed production outlook for the precious metal over a mining lease issue in Papua New Guinea.
The Canadian miner now expects attributable gold production to range between 4.6 million ounces to 5 million ounces compared with the earlier range of 4.8 million ounces to 5.2 million ounces.
The government of Papua New Guinea had announced in April that it would not renew a 20-year special mining lease for the Porgera gold mine, which is jointly owned by Barrick and China’s Zijin Mining, due to environmental damage and social unrest.
Barrick (Niugini) Limited (BNL), the local venture in which both miners have a 47.5% stake, had produced about 597,000 ounces of gold in 2019 from the Porgera mine.
Barrick has said it will contest the move, which it regards as “tantamount to nationalization without due process”, and in the meantime has placed Porgera on temporary care and maintenance, while suspending 2020 outlook for the mine.
The outlook cut also comes at a time when gold prices have gained about 12% this year, fueled by growing investor appetite for a safe haven as fears mount over economic damage caused by the coronavirus.
The gold and copper miner, with operations in North and South America and Africa, has already taken steps to ensure it has an uninterrupted supply chain, as the industry braces for a heavy hit from lockdowns in several regions to slow the spread of the coronavirus. Larger rival Newmont warned on Tuesday of a financial impact in the second quarter.
Barrick’s realized gold prices jumped 22% to $1,589 per ounce, while production fell 9% to 1.25 million ounces.
Excluding items, Barrick reported a profit of 16 cents per share, in line with Street estimates, as per Refintiv data. The miner maintained its quarterly dividend of 7 cents per share.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna Chandra Eluri)