By Maria Armental
Cost-cutting and a surge in gold prices in 2016 drove Barrick Gold Corp., the world's largest gold miner by production, to its first annual profit since 2011.
Shares, up 58% over the past 12 months, rose 2% to $19.72 in after-hours trading as results beat expectations.
The Toronto-based miner, which has aggressively moved to cut costs and pay down debt to shore up finances, on Wednesday said it intended to cut its debt to $5 billion by the end of 2018, a roughly $2.9 billion reduction, with about half of the cuts expected this year.
Barrick also raised its production targets for 2017. It now expects to produce 5.60 million ounces to 5.90 million ounces of gold at all-in sustaining costs of $720 to $770 an ounce, compared with its previous view of 5 million ounces to 5.5 million ounces, and affirmed its annual target of at least 4.5 million ounces of gold through 2021.
Meanwhile, it projects 400 million to 450 million pounds of copper, up from its previous view of 370 million to 410 million pounds.
In the most recent period, average realized gold price rose to $1,217 an ounce from $1,105 an ounce a year earlier, while copper's average realized prices rose to $2.62 a pound from $2.16 a pound a year earlier.
Over all, Barrick swung to a $425 million profit, or 36 cents a share, from a year-earlier loss of $2.62 billion, or $2.25 a share. The year-ago results reflect more than $2 billion in impairment charges.
Excluding certain items, profit rose to 22 cents a share from 8 cents a share a year earlier.
Meanwhile, revenue rose 3.6% to $2.32 billion.
Analysts had projected 19 cents a share on $2.21 billion in revenue.
Gross profit margin improved to 37.3% from 21% a year earlier.
For the year, it swung to a $655 million profit, from a $2.84 billion loss, while revenue fell 5% to $8.56 billion.
Write to Maria Armental at email@example.com